Although Viatris seems to be cashing out its biosimilar portfolio, it is taking a 12% stake in Biocon Biologics as part of a $3.3 billion deal announced with the company February 28.
According to Viatris President Rajiv Malik, “Our successful collaboration with Biocon Limited, the majority shareholder of Biocon Biologics, began more than a decade ago and has a shared history of many accomplishments. This transaction is the right natural next step for our partnership.” In Viatris’ press release, he stated, “Creating what we expect to be a unique vertically integrated global biosimilars leader is a continuation of our biosimilars journey and enables us to participate in this space in a more optimized way while unlocking substantial trapped value.”
Biocon Biologics’ Executive Chairperson Kiran Mazumdar-Shaw stated, “This acquisition is transformational and will create a unique, fully integrated, world-leading biosimilars enterprise. Our long-standing global partnership with Viatris has enabled us to achieve many firsts, setting new benchmarks for the global biosimilars industry. This strategic combination brings together the complementary capabilities and strengths of both partners and prepares us for the next decade of value creation for all our stakeholders.
“The deal will enable [Biocon Biologics] to attain a robust commercial engine in the developed markets of US and Europe and will fast-track our journey of building a strong global brand. It will also make us future-ready for the next wave of products.”
Viatris complex generics and biosimilar business combined resulted in 4% growth in 2021, to $1.34 billion globally. Viatris estimated global revenues from the biosimilar business being transferred to Biocon is approximately $875 million, split among 5 biosimilars being actively marketed.
Biocon has 8 approved and marketed biosimilars around the world, the most recently approved being its interchangeable biosimilar Semglee® (insulin glargine), which is marketed in the US by Viatris. Others include Fulphila® (pegfilgrastim) and Ogivri® (trastuzumab), and two that are marketed outside the US (Hulio® [adalimumab] and Nepexto® [etanercept]).
It is unclear whether Viatris will take its upfront $2 billion cash payment and $1 billion in equity and utilize this to extend its biosimilar business. Viatris seems more focused on gaining up to $9 billion in pretax proceeds, which it believes is “trapped value.” In the meantime, the company has authorized a share repurchase program of up to $1 billion, according to the release. Biocon will pay Viatris another $335 million in 2024, after a two-year transition period. It does seem superficially, at least, that the creation of Viatris, from the combination of Pfizer’s Upjohn business and Mylan’s biosimilars, did not result in a resounding commitment to the biosimilar industry. Despite the fact that both Viatris and Biocon have a deep, shared pipeline, Biocon may need to build the marketing and commercialization structure in the US—or partner once again with another player.