Viatris unloads biosimilar business to partner Biocon for $3.3B

Viatris is leaving the biosimilar field just months after winning the landmark FDA approval for the first interchangeable biosimilar product.

Biocon Biologics, a subsidiary of Biocon, will buy Viatris’ biosimilars franchise for up to $3.335 billion in a cash-and-stock deal. Viatris’ employees within the biosimilar business are also expected to hop over, Kiran Mazumdar-Shaw, executive chairperson of Biocon Biologics, said during a press call Monday.

The two companies had built collaborations on multiple biosimilar products before Viatris formed from Mylan’s acquisition of Pfizer’s Upjohn established medicines business. While Biocon has been taking care of R&D and manufacturing under the partnership, the Indian company is now buying Viatris’ commercial capabilities.

“The deal will enable [Biocon Biologics] to attain a robust commercial engine in the developed markets of U.S. and Europe and will fast-track our journey of building a strong global brand,” Mazumdar-Shaw said in a statement.

By housing the complete workflow under one roof, the deal provides “strategic agility and operational efficiencies, which will help us mitigate pricing pressures in a competitive global biosimilars landscape,” Arun Chandavarkar, managing director of Biocon Biologics, said in a statement.

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The transaction gives Biocon full control of Semglee, a biosimilar referencing Sanofi’s blockbuster insulin med Lantus and the first FDA-approved interchangeable biosimilar.

Following the interchangeability label in July and its official launch in November, the drug has enjoyed a big uptick now reaching over 10% market share, Mazumdar-Shaw said during a press call Monday. With the combination, Biocon aims to be “more aggressive” in grabbing share, she added.

In addition to Semglee, Viatris and Biocon are also partnered on marketed biosimilars to Roche’s HER2 cancer drug Herceptin and Amgen’s neutropenia med Neulasta. The entire Viatris biosimilar portfolio is expected to generate an estimated $875 million revenues in 2022, and the number could surpass $1 billion next year, Biocon said.

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All told, Biocon already has 20 biosimilar programs, including 11 that are teamed with Viatris, Mazumdar-Shaw said. Both companies have partnerships elsewhere. Through a 2018 deal, Biocon is also developing biosimilars in the field of immunology with Novartis’ generics unit Sandoz, which is currently under a strategic review.

Viatris’ portfolio also includes non-Biocon-partnered assets including a Humira biosimilar with Fujifilm Kyowa Kirin Biologics. Viatris is also partnered with Revance Therapeutics on a preclinical biosimilar candidate referencing AbbVie’s Botox. The U.S. firm also has an investigational copycat of Regeneron and Bayer’s top-selling eye drug Eylea with Momenta Pharmaceuticals, which is now part of Johnson & Johnson.

Biocon is for now leaving the Eylea biosimilar out of the full-on acquisition amid patent disputes with Regeneron, but the Indian company retains an option to acquire the drug’s rights.

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Upon closing of the deal, which is expected in the second half of 2022, Viatris will receive $2 billion in cash and $1 billion worth of Biocon Biologics shares, which add up to a stake of about 12.9%. Viatris will pay Biocon $50 million to fund certain capital expenditures. Biocon will shell out another $160 million in 2024, plus $175 million if it decides to opt in on the Eylea copycat.

After shedding biosimilars, Viatris will focus on several established brands such as Lipitor, Viagra and EpiPen as well as generics and injectables.

Elsewhere in the biosimilar market, Novartis is evaluating whether to sell Sandoz, with biosimilars being touted as a key pillar of the unit’s growth potential. Merck & Co. recently spun off its biosimilar projects, along with women’s health drugs, into Organon. Samsung Biologics is buying Biogen’s near-50% stake in their biosimilar joint venture, Samsung Bioepis, for $2.3 billion. 

Editor's Note: The story has been updated to reflect that the Botox biosimilar that Revance has with Viatris is in preclinical stage.