Another biosimilars retreat, this time from Viatris

The biosimilars businesses owned by Viatris and Biocon have been intertwined for many years, and the partnership is heading for fuller consummation. The Indian group is paying $3.3bn to take control of the partnership, allowing Viatris to pay down debt and focus on fewer, higher-margin areas. The terms see Biocon hand over $2bn in cash and $1bn of Biocon Biologics shares, equivalent to around a 13% stake; this biologics division will be spun off via IPO towards the end of 2023. A further $335m will be paid if Biocon choses to opt in on an Eylea biosimilar. Notably, the deal does not include a Botox copycat; this project remains Viatris’s most important pipeline project, analysts at Evercore ISI noted today. How Viatris plans to keep expanding is a big question for investors, as biosimilars was considered one of its fastest-growing business areas. Perhaps this explains why Viatris shares dropped 23% on the news, even as the sellside came out largely in support of the valuation. The company is far from the first to step back from this area: Biogen sold its stake in a biosimilars joint venture last month.