Viatris to Sell Biosimilar Operations in Late 2022; Doubling Down on Core Generics Business

Viatris was formed in 2020 through the merger of Mylan with Pfizer’s Upjohn business unit, combining a leading global generics manufacturer with a portfolio of off-patent branded drugs (Lipitor, Viagra, and Celebrex, among others). Generic drug manufacturers with large exposure to the U.S. have fared very poorly compared with the overall market over the past few years due to a highly deflationary generic drug price environment. To combat further margin deterioration, the largest, most capable manufacturers have invested more heavily in developing and marketing complex generics and biosimilars, which face much less steep competition and price erosion compared with small-molecule generics. The Viatris deal improves cash flow to the firm to fund research and development costs to replace the company's portfolio. In Feburary 2022, the company announced the upcoming sale of its biosimilar business for $3.3 billion.