The company has been seeking a valuation of $600-700 million (₹5,000 crore) for the API business and hired Jefferies to run the sale process. “A few buyers, including Goldman Sachs, had evaluated the API asset, but none has taken any serious interest in the asset,” said one of the sources mentioned above. A mail sent to Viatris spokesperson last week did not elicit any response till the press time, while a Goldman Sachs spokesperson declined comment. “Viatris’ API business has a high exposure towards antiretroviral (ARV for HIV/ AIDS) sector, which see very low volume of sale,” said one of the sources.
In 2019, Mylan NV and Upjohn, a division of Pfizer, were merged to form Viatris. Earlier in 2015, Mylan acquired women’s healthcare business Famy Care from the Taparia family for $800 million as part of expanding its women care portfolio. Last November, Viatris sold its global biosimilars business to Biocon Biologics, a subsidiary of Biocon, for $3.34 billion. On October 11, Bloomberg reported that Viatris was weighing in on sales of its European consumer OTC business at about $3 billion. The company has identified ophthalmology, gastroenterology and dermatology as key therapeutic areas it wants to focus and expand on.
It scooped up Famy Life Sciences the ophthalmology business from the Taparia family for $281 million in November. It also bought Oyster Point Pharma, another ophthalmology business. Together it is estimated the company spent $700-$750 million for the two buyouts.
Viatris’ net sales from emerging markets decreased by $529 million or 17% for the year ended December 31, 2022 from the prior year. This decrease was primarily driven by lower volumes of Covid-19 related products in India, primarily remdesivir and ambisome, and lower sales of ARV products because of competitive market conditions. These decreases were partially offset by higher volumes in certain markets in Asia, according to recent company report.
“The price erosion in generics in the US has made a severe impact on Indian companies, which have about 30-60% of their exposure to the US market. “The 15-20% price erosion in the US generic market has hit the API margins, which also derailed several pharma deals in the market,” said a Mumbai-based investment banker.
Globally, more biological products are being approved compared to new chemical compounds, forcing the API manufacturers to change their current strategies, said a partner at a domestic private equity fund. “Also, growth challenges and margin pressures hurt the valuation of Indian pharmaceuticals businesses,” he added.