Biocon is reportedly mulling a $1.5 billion sale of its generic API business to trim debt, with talks ongoing and plans in early stages
Biocon is reportedly considering the sale of its generic active pharmaceutical ingredient (API) business, which is valued at approximately $1.5 billion. The company is exploring this option as part of a strategy to lower its overall debt. However, as of now, no definitive steps have been taken in this regard, according to sources cited in a report.
One source mentioned that talks with investment banks have occurred, but the proposal for the sale of the generic API business is still in the planning stages, as per a report by the Economic Times.
While the generic API business was formerly the primary driver for Biocon, its influence on the company's consolidated financials has waned over time. Biocon has deliberately repositioned itself to emerge as a significant player in the global biosimilars market. In the fiscal year 2022-23, biosimilars accounted for almost 50 per cent of Biocon's total revenue, amounting to Rs 11,550 crore.
Biocon, led by Kiran Mazumdar-Shaw, made a significant $3.34 billion investment in biosimilars through the acquisition of the drugs segment from Viatris last November. Funding for the deal, involving both Biocon Ltd and Biocon Biologics, included a $1.2 billion loan taken by Biocon Biologics.
To fund the acquisition of Viatris' biosimilar assets, Biocon has reportedly divested a portion of its stake in Syngene, as per sources cited in ET's report.
Included in Biocon's API portfolio are the essential ingredients used in the production of medicines for treating diabetes, cardiac ailments, multiple sclerosis, immune reactions resulting from organ transplants, and anti-cancer drugs.