The transition related expenses to integrate the acquired Viatris’ biosimilar business are weighing on the operating margins of Biocon Biologics. The company meanwhile is trying to reduce debt it has accumulated to fund the $3.34 billion acquisition of Viatris’ biosimilar business and it has pared down $200 million in Q3FY24. It still has a net debt of $1.2 billion.
In an interview to ET, Shreehas Tambe, CEO and managing director of Biocon Biologics, said other than a few statutory and regulatory requirements in certain countries, Biocon Biologics has completed the integration of Viatris biosimilar business in 120 countries one year ahead of schedule.
“Our strategy was to preserve (the acquired business), consolidate, and grow,” Tambe said.
“We are in the consolidation phase, because now that we have taken control, we want to make sure we consolidate this business in FY25, and then we grow the business after that,” Tambe added.
Tambe said in the US market, Biocon has gained steady market shares of its biosimilars such as pegfilgrastim, trastuzumab, and glargine in the last one year to 18%, 12% and 12%, respectively.
Tambe said biosimilar glargine has a higher market share of around 16-17% – due to uptick in the sales of unbranded version in US through a closed-door pharmacy network, not reflected in the reported market shares and added that the company has secured several new contracts in the US for pegfilgrastim, trastuzumab, and adalimumab.Advanced markets like US and Europe, among others, contribute about 75% of Biocon Biologics revenue, while the US is the single largest market.As part of the integration of Viatris’ biosimilar business, Tambe said the company is assessing each market and its unique requirements, and putting in place an appropriate commercial model that includes a self-led, partner led or a combination of both self and partner led to take on higher market shares.
For instance, it has licensed biosimilars against cancers trastuzumab and bevacizumab in Australia to Sandoz, and adalimumab to Sandoz for the Japanese market. On debt reduction, Tambe said it remains the key focus and all the company is evaluating various potential options including private equity investments.
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