INDIA – Viatris and India’s Biocon Biologics are debating whether to further integrate their already deeply entwined biosimilar businesses into a US$10 billion standalone company, according to Moneycontrol, an Indian financial news site, citing sources with direct knowledge of the discussions.

According to Moneycontrol, the Indian biosim player is considering buying out Viatris’ stake and listing it as a standalone company worth up to US$10 billion.

The two companies are already working together on several biosimilar projects, including the recent historic launch of Semglee, which is based on Sanofi’s insulin Lantus and is the first interchangeable biosimilar in the United States.

In addition to Semglee, the companies have collaborated on biosimilars to AbbVie’s Humira, Roche’s Herceptin and Avastin, Amgen’s Neulasta, and others.

Biocon has previously emphasized the two companies’ distinct strengths. According to Biocon, in their current collaboration, the Indian company contributes its manufacturing and biologics development capabilities, while Viatris leverages its regulatory strategy and commercialization presence.

Earlier this summer, the two companies received the first highly coveted interchangeability designation for Semglee, a biosimilar insulin that is interchangeable with Sanofi’s Lantus.

However, due to the peculiarities of the US insulin market, the companies were forced to launch two versions of the interchangeable — one at a 65 percent discount and one at a much higher price — in order to gain market share.

A deal like this would bring together two companies that are already developing, manufacturing, and commercializing a portfolio of biosimilars and insulin analogs, including Humira, Herceptin, Neulasta, and Enbrel biosimilars.

Viatris, which had approximately US$1 billion in net sales from its complex generics and biosimilars business in the first nine months of 2021, has exclusive commercialization rights for the biosimilars in the United States, Canada, Australia, New Zealand, the European Union, and European Free Trade Association countries.

Biocon Biologics has exclusive commercialization rights in Japan and a few other emerging markets. In the rest of the world, they have co-exclusive commercialization rights.

Biocon’s latest investment portfolio

Biocon’s biosimilar unit has recently received several rounds of investment. Goldman Sachs contributed US$150 million in November, and ADQ contributed US$75 million in January.

In September, the Indian company offered a Serum Institute of India subsidiary 15% of its stake in exchange for access to 100 million doses of various vaccines annually for 15 years, including COVID-19 shots. Biocon Biologics was valued at around US$4.9 billion at the time.

Viatris’ portfolio of biosimilars, for its part, remains a small part of its overall business. Complex generics and biosimilars increased sales by 2% at constant currency to US$994 million in the first nine months of 2021, accounting for 7.4% of the company’s total revenue during the period.

The biosimilar market is becoming increasingly competitive, with several major players vying for market share, including Biogen, Pfizer, Novartis’ Sandoz, and Amgen.

However, some large pharmaceutical companies appear to be moving away from biosimilars.

Merck & Co. recently spun off its biosimilar portfolio, as well as its women’s health franchise and established medicines, as Organon. And Novartis has recently initiated a strategic review of Sandoz.

On January 7, 2022, Viatris is expected to hold an investor event to lay out its strategic roadmap for 2022 and beyond.

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