Biocon denies plans to sell $1.5 billion generic API business

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Biocon has denied evaluating any plan to sell its generic active pharmaceutical ingredient (API) business – estimated to be worth $1.5 billion – to reduce its overall debt.

“The Company is neither evaluating any divestment options for its APIs business nor consulting any bankers for this,” a company spokesperson said in a stock exchange filing.

This was in response to a report by ET that the company was weighing selling the API business, as informed by people familiar with the matter.

“The API business is a strategic business segment of Biocon Limited and a key growth driver for the Company’s small molecules business,” the spokesperson said.

Biocon keeps working to make this business stronger and is currently investing more than $500 million in CAPEX (capital expenditure) and R&D (research and development), the spokesperson added.

Biocon’s generic API business, which was once Biocon’s mainstay, has gradually reduced its contributions to the company’s overall financial performance. Biocon strategically shifted its focus to becoming a prominent global biosimilars player, with biosimilars now contributing almost half, about 50%, to Biocon’s total revenue of ₹11,550 crores in the fiscal year 2022-23.Helmed by Kiran Mazumdar-Shaw, the company made a significant investment in biosimilars when they acquired a portfolio of drugs from the global drug company Viatris for $3.34 billion in November 2022. To finance this deal, Biocon Ltd and its biosimilars division, Biocon Biologics, borrowed money, with Biocon Biologics securing loans of $1.2 billion for the acquisition.”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 said.

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