Biocon considers selling generic API biz; turn into biosimilar major

Pharma major Bicocon is considering a plan to sell its generic active pharmaceutical ingredient (API) business to reduce its overall debt, according to a report in The Economic Times (ET). Biocon's API business is valued at around $1.5 billion. The company has not taken any concrete action in this direction, ET reported.

Citing its sources, the ET report said, "Discussions with investment banks have taken place but the plan (for sale of generic API business) is still on the drawing board."

However, on December 15, Biocon issued a statement denying the ET report.  It said, "The API business is a strategic business segment of Biocon Limited and a key growth driver for the company’s small molecules business."

"Biocon continues to strengthen this business and has an ongoing investment of over half a billion dollars in Capex and R&D. The company has a strong pipeline of niche fermentation-based APIs, peptides and high potent API products for the near- and long-term growth of its integrated APIs and Generic Formulations business," the spokesperson of the company said. 

Significance of the generic API business for Biocon

The generic API business has been one of the primary businesses for Biocon, however, in recent years, the segment's contribution towards the company's consolidated financials has declined. Moreover, the company, in a strategic move, has taken steps towards becoming a global biosimilar major, the ET report said. Biosimilars were 50 per cent of Biocon's topline of Rs 11,550 crore in financial year 2022-23, the report added.

Biocon's bet on biosimilars

Biocon has made a huge bet on biosimilars. To this end, the company acquired a portfolio of drugs from global drug major Viatris for $3.34 billion in November last year. Biocon Biologics took a $1.2 billion loan to complete this acquisition. This deal was funded by debt taken by Biocon Ltd and Biocon Biologics.

What are biosimilars?

A biosimilar, as the name suggests, is a medicine that is very close in structure and function to a biological medicine. A biologic, or biologic drug is a medicine made in a living system, such as yeast, bacteria, or animal cells, according to cancer.org.

Notably, generic drugs and biosimilars are different. A generic drug is an exact copy of a brand name drug and works the same way as their brand name drugs do.