Viatris is letting go of the equity stake it’s held in Biocon’s biosimilar subsidiary Biocon Biologics for $815 million, allowing Biocon to fully integrate its subsidiary.
The Viatris stake is one of several that Biocon is buying back as it makes Biocon Biologics a wholly owned subsidiary. The Indian company’s strategy committee weighed multiple options, such as a merger and an IPO, before deciding this route as the “most efficient and value-accretive path forward,” Biocon explained in a Dec. 6 release.
In addition to Viatris’ share, Biocon also bought out Serum Institute Life Sciences, Tata Capital and Activ Pine in a share swap that values Biocon Biologics at $5.5 billion. The company will raise additional capital through a qualified institutional placement, which will help fund the cash portion of its Viatris deal.
Integrating its biosimilar subsidiary will help Biocon leverage its global commercial infrastructure, simplify its corporate structure and strengthen its position in specific therapeutic areas, including the “rapidly expanding ‘diabesity’ market,” the company said, referencing the diabetes and obesity GLP-1 drug arena.
“The integration of Biocon Biologics Limited into Biocon Limited represents the next chapter in our evolution,” Biocon’s chairperson Kiran Mazumdar-Shaw commented. “Strategically, Biocon will be one of the few companies offering both biosimilars and generics at a global scale. As the only company with biosimilar insulins and generic GLP-1 peptides, Biocon is uniquely positioned to comprehensively address the needs of patients living with diabetes.”
When the integration wraps up in March 2026, the new Biocon will be led by current Biocon Biologics CEO Shreehas Tambe. Current Biocon CEO Siddharth Mittal will meanwhile take on a “leadership role” within the group, the company said.
Biocon currently markets 10 biosimilars and over 90 generic medicines. In 2022, the company bolstered its biosimilar portfolio with the hefty addition of Viatris’ biosimilars, the next step in a pre-existing biosimilar partnership between the two.
Viatris got $3.3 billion from the cash-and-stock deal, which was inked just months after it led the first FDA-approved interchangeable biosimilar, a copy of Sanofi’s blockbuster insulin Lantus, across the regulatory finish line. At the time, Biocon expected Viatris’ biosimilars to generate $875 million in 2022 and possibly more than $1 billion in 2023. Last year, the company’s biologics subsidiary delivered on that $1 billion revenue goal after integrating Viatris’ global presence.
Biosimilar moves for Viatris
Biocon’s business move is a boon for Viatris as well, as it can both monetizd its stake in Biocon and re-enter the biosimilar market in “another important step in Viatris' evolution,” CEO Scott Smith said in a company release. Biocon is taking on Viatris’ equity for $815 million in total, including $400 million in cash and $415 million in newly issued equity shares of Biocon.
The stake sale will accelerate the expiration of the biosimilars non-compete restrictions previously imposed on Viatris through the 2022 deal, the company explained. With the transaction expected to close in 2026’s first quarter, the restrictions will let up immediately at the time of close for all markets outside of the U.S. and in November 2026 in the U.S.
"Monetizing the value of our equity stake in Biocon Biologics and regaining access to the biosimilars market globally provides significant additional optionality as we continue to build a portfolio of generics, established brands and innovative brands that can contribute to our future growth,” Smith said.
Viatris, which formed in 2020 from Mylan’s acquisition of Pfizer’s Upjohn established medicines business, markets a wide-spanning generic portfolio alongside a collection of popular branded products including, Zoloft, Xanax and Viagra. The company is currently fighting legacy parent Mylan’s battle to sell a generic version of Novo Nordisk’s lucrative semaglutide and recently launched one of the first generic threats to CSL’s iron replacement therapy Venofer.
A return to the biosimilar space would be well-timed as the FDA looks to increase the availability of U.S. biosimilars with new measures to reduce clinical testing burdens, cutting down development costs and streamlining the path to market.