Allowed

1. Mylan Inc, 2. Biocon Biologics Limited, 3. Serum Institute Life Sciences Private Limited

CCI13 Jun 2022C-2022/04/924

Case brief

AI extract

What is this about?

The Competition Commission of India approved a proposed combination involving the acquisition of Viatris' global biosimilars portfolio by Biocon Biologics and an equity infusion into Biocon by Serum. After assessing market overlaps and competitive constraints, the Commission found no appreciable adverse effect on competition.

What did the court decide?

The Proposed Combination is approved under Section 31(1) of the Competition Act, 2002.

1. Mylan Inc, 2. Biocon Biologics Limited, 3. Serum Institute… — Company and Corporate | CCI (2022)

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COMPETITION COMMISSION OF INDIA (Combination Registration No.C-2022/04/924)

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13.06.2022

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Notice under Section 6(2) of the Competition Act, 2002 jointly filed by Mylan Inc., Biocon Biologics Limited and Serum Institute Life Sciences Private Limited

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CORAM:

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Mr. Ashok Kumar Gupta Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member

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Order under Section 31(1) of the Competition Act, 2002

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On 29.04.2022, the Competition Commission of India ( Commission ) received a notice under Section 6(2) of the Competition Act, 2002 ( Act ) jointly filed by Mylan Inc. ( Mylan ), an indirect subsidiary of Viatris Inc. ( Viatris ), Biocon Biologics Limited ( Biocon Biologics) and Serum Institute Life Sciences Private Limited ( Serum ). The notice has been filed pursuant to the transaction agreement dated 27^th February 2022 ( Transaction Agreement ), entered into between Viatris and Biocon Biologics (Hereinafter, Mylan, Biocon Biologics and Serum are collectively referred to as Parties ).

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The proposed transaction involves the: (i) sale of the global biosimilars portfolio of Viatris (the indirect parent entity of Mylan) to Biocon Biologics and its subsidiary for cash and stock consideration; and (ii) acquisition of one common equity share and compulsory convertible preference shares convertible into common equity shares, representing at least 12.9% of the fully diluted equity of Biocon Biologics by Mylan as

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Combination Registration No. C-2022/04/924

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part consideration for the acquisition of the global biosimilars business of Viatris. Further, prior to the closing of the proposed transaction, an equity infusion in Biocon Biologics by Biocon Limited ( Biocon ) (parent entity of Biocon Biologics) and Serum will be carried out ( Proposed Combination ).

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During the course of review of the Proposed Combination, certain information(s)/ clarification(s) necessary for the assessment of the Proposed Combination were sought, and responses to the same were received on 19.05.2022 and 02.06.2022.

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PARTIES TO THE COMBINATION

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Mylan is a corporation incorporated in the United States of America ( USA ) and is an indirect, wholly owned subsidiary of Viatris.

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Viatris is a global pharmaceutical company headquartered in Pennsylvania, USA. It offers a variety of medicines, including brands, generics and biosimilars, and over-the-counter products across the world. It is stated that Viatris operates manufacturing sites globally, which produces oral solid doses, injectables, complex dosage forms and active pharmaceutical ingredients.

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Biocon Biologics is a company limited by shares, incorporated in India, and is a subsidiary of Biocon. Biocon Biologics is engaged in the manufacturing and commercialization of pharmaceutical formulations such as biosimilars, insulins and drug substances in India. Within India, Biocon Biologics also has a branded formulation business which is responsible for direct B2C sales.

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Serum is a private limited company incorporated in India and is a subsidiary of the Serum Institute of India Private Limited. Serum Institute of India Private Limited belongs to the Serum Group ( Serum Group ). It is mentioned that Serum was established as a company in India for further development and commercialization of vaccines and therapies against COVID-19. It also has plans to further develop vaccines against other infectious diseases. All the commercialization and marketing activity of Serum group in relation to “COVISHIELD” in India is carried out through Serum. Serum sells COVISHIELD in

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Combination Registration No. C-2022/04/924

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India and exports the same to foreign countries (under a Government of India (GoI) initiative, i.e., Vaccine Maitri).

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Identification of Overlaps and Relevant Market

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With regard to the biosimilars business, it is submitted that, while Biocon Biologics is engaged in manufacturing and/or supply of Insulin, Glargine, Trastuzumab, Bevacizumab, Rh-Insulin, Erythropoietin, Nimotuzumab, Darbepoetin Alfa and Itolizumab in India, Viatris Group currently supplies only two biosimilar products in India, i.e., Trastuzumab and Bevacizumab. Thus, there are two overlapping products between the biosimilars business in India. Further, it was submitted that, post the Proposed Combination, Viatris Group‟s global biosimilar business will be acquired by Biocon Biologics, therefore, the two biosimilar products supplied by the Viatris Group in India (i.e., Trastuzumab and Bevacizumab) will be acquired by Biocon Biologics ( Acquired Products ).

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Further, it was submitted that Biocon Biologics and Viatris have an existing collaboration on agreements for certain biosimilar products (Trastuzumab and Bevacizumab), wherein: (i) Biocon Biologics manufactures and supplies these biosimilar products to Viatris; and (ii) Both Biocon Biologics and Viatris have commercialization rights in India.

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The Parties submitted that the relevant market for biosimilar overlaps (Acquired Products) may be defined as „Market for biological drugs based on Trastuzumab, including its biosimilars in India‟ ( Relevant Market I ) and „Market for biological drugs based on Bevacizumab, including its biosimilars in India‟ ( Relevant Market II ). It is also submitted that there are no horizontal overlaps between the biosimilars business of Viatris being transferred to Biocon Biologics and Serum (including its group and affiliate entities) in India.

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It is mentioned in the notice that Biocon Biologics is engaged primarily in the supply of branded formulations in India and does not manufacture any APIs and/or branded formulations for supply to third parties. However, it manufactures only three branded formulations, i.e., Liraglutide DLP, GA 20 and GA 40, and the same is supplied only to its parent entity, i.e., Biocon. It is also submitted that, post the Proposed Combination, Viatris Group and Biocon Biologics will continue to independently compete in the

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Combination Registration No. C-2022/04/924

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relevant markets for the supply of various branded formulations in India ( Non-Acquired Products).

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The Parties have submitted that the relevant market in relation to Non-Acquired Products for the purpose of the Proposed Combination may be delineated as follows: Market for the supply of Fosaprepitant in India ( Relevant Market III ); Market for the supply of a combination of Imipenem and Cilastatin in India ( Relevant Market IV ); Market for the supply of Meropenem in India ( Relevant Market V ); Market for the supply of Tacrolimus in India ( Relevant Market VI ); Market for the supply of Teicoplanin in India ( Relevant Market VII ); Market for the supply of Tacrolimus Ointment and Pimecrolimus in India ( Relevant Market VIII ); Market for the supply of Tigecycline in India ( Relevant Market IX ); Market for the supply of Everolimus in India ( Relevant Market X ); Market for the supply of Mycophenolate Sodium/Mycophenolate Mofetil in India ( Relevant Market XI ); Market for the supply of Abiraterone Acetate in India ( Relevant Market XII ); Market for the supply of a combination of Cefoperazone and Sulbactum in India ( Relevant Market XIII ); Market for the supply of Glimepiride in India ( Relevant Market XIV ); Market for the supply of a combination of Glimepiride and Metformin in India ( Relevant Market XV ); Market for the supply of Telmisartan in India ( Relevant Market XVI ); Market for the supply of Apremilast in India ( Relevant Market XVII ); Market for the supply of Metformin in India ( Relevant Market XVIII ); Market for the supply of Posaconazole in India ( Relevant Market XIX ); Market for the supply of Remdesivir in India ( Relevant Market XX ); Market for the supply of combination of Telmisartan and Hydrochlorothiazide in India ( Relevant Market XXI ); Market for the supply of Favipiravir in India ( Relevant Market XXII ); Market for the supply of combination of Ceftriaxone and Tazobactam in India ( Relevant Market XXIII ); Market for the supply of Ceftriaxone in India ( Relevant Market XXIV ); and Market for the supply of combination of Telmisartan and Amlodipine in India ( Relevant Market XXV ) (hereinafter, Relevant Market III to Relevant Market XXV, will be referred to as Non-Acquired Products – Relevant Markets ).

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The Commission decided to leave the exact delineation of the relevant market open, as it was observed that the Proposed Combination, for the reasons detailed in the ensuing

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Combination Registration No. C-2022/04/924

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paragraph, is not likely to cause an appreciable adverse effect on competition in any of the possible alternative relevant markets that could be delineated.

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COMPETITION ASSESSMENT

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With respect to Relevant Market I , based on the submissions in the Notice, it is noted that the combined market share of Viatris and Biocon is in the range of (15-20)% and the increment market share is in the range of (0-5)%. Further, there are other players, such as Dr. Reddy, Alkem, Cipla, Reliance Life Sciences and Cadila, who will continue to exert competitive constraints on Biocon Biologics post the Proposed Combination.

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With respect to Relevant Market II , based on the submissions in the Notice, it is noted that the combined market share of Viatris and Biocon is in the range of (15-20)% and the incremental market share is in the range of (0-5)%. Further, there are other players, such as Intas, Cadila, Lupin, Reliance, Cipla and Hetero Healthcare, who will continue to exert competitive constraint on Biocon Biologics post the Proposed Combination.

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In relation to Non-Acquired Products, based on the submission of the Parties, it is noted that the combined market shares of the Parties in each of the Non-Acquired Products – Relevant Markets: (i) in terms of value, is less than 20%, except in Relevant Market VI and Relevant Market XX and (ii) in terms of volume, is less than 20%, except in Relevant Market VI, Relevant Market X, Relevant Market XIX and Relevant Market XX. Further, it was noted that the incremental market share is in the range of (0-5)% in each of these relevant markets, including in Relevant Market VI, Relevant Market X, Relevant Market XIX and Relevant Market XX (both in terms of value and volume). Besides, there are other players in each of these Non-Acquired Products – Relevant Markets who will continue to pose competitive constraints to the Parties post the Proposed Combination.

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Considering the material on record, including details provided in the Notice given under Section 6(2) of the Act and assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

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Combination Registration No. C-2022/04/924

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This order may be revoked if, at any time, the information provided by the Parties is found to be incorrect.

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The information provided by the Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

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The Secretary is directed to communicate to the Parties accordingly.

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1. Mylan Inc, 2. Biocon Biologics Limited, 3. Serum Institute Life Sciences Private Limited

Case brief

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1. Mylan Inc, 2. Biocon Biologics Limited, 3. Serum Institute Life Sciences Private Limited

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