As part of what it terms as a “reshaping plan,” Viatris plans to divest its biosimilars assets to Biocon Biologics, a Bangalore, India-based bio/pharmaceutical company, for $3.35 billion, which includes an equity stake in Biocon Biologics. The move is part of an overall plan by Viatris to achieve $9 billion in pre-tax proceeds through the Biocon Biologics transaction and the divestment of other non-core assets.

Under the agreement, Viatris will divest its biosimilars portfolio and related commercial and operational capabilities to Biocon Biologics for $3.335 billion. Viatris will receive $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity for a 12.9% stake in Biocon Biologics. Viatris will also receive up to $335 million as additional cash payments that are expected to be paid in 2024. Viatris will also have certain priority rights with respect to certain liquidity events.

The deal is expected to occur in the second half of 2022, subject to satisfaction of closing conditions, including certain regulatory approvals.

Upon closing, Biocon Biologics will target an initial public offering in India as early as late 2023. Viatris also has the right to designate one member of the Biocon Biologics Board and intends to appoint its President, Rajiv Malik, to this seat. The companies will also enter into a transition services agreement under which Viatris will provide certain transition services for an expected two-year period, including commercialization services.

Biocon Biologics currently has a portfolio of 20 biosimilars with 2022 estimated revenue of approximately $875 million. Viatris and Biocon have been partners in biosimilars. In 2009, Biocon formed an alliance with Mylan, Viatris’ predecessor, to develop monoclonal antibody biosimilars. In 2013, the partnership expanded to include insulin biosimilars. Viatris was formed in 2020 through the merger of Mylan and Upjohn, Pfizer’s off-patent branded and generic established medicines business.

Viatris and Biocon have collaborated for biosimilars such as Semglee (insulin glargine-yfgn), a biosimilar interchangeable of Sanofi’s Lantus (insulin glargine), a long-acting insulin to treat Type 1 and Type 2 diabetes. The companies have also partnered on biosimilars to Roche’s Herceptin (trastuzumab) to treat certain HER2-positive breast and gastric cancers, and Amgen’s Neulasta (pegfilgrastim), a drug to stimulate white-blood cell production after chemotherapy.

While not disclosing additional details about its further reorganization plan, Viatris says that the company expects to enter additional transactions by the end of 2023. Viatris says it expects to continue to evolve its operating model by removing inefficiency and complexity within its portfolio, simplifying the organization, and reducing execution risk.

Source: Viatris and Biocon