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Indian drugmaker Biocon Ltd is in talks with generic drugmaker Mylan for a merger of their biosimilar businesses, financial news website Moneycontrol reported on Thursday, citing sources with direct knowledge of the matter.

Biocon will seek to hold a controlling majority stake in the merged entity and the companies will also look for an initial public offering (IPO) for the entity post-merger in which they will seek a valuation of over $10 billion, the report said.

Spokespersons for Biocon and Viatris Inc, the company which was formed after combining Mylan with Pfizer Inc's off-patent branded drugs business, said that the companies do not comment on market rumours and speculation.

Biocon's biosimilar business, Biocon Biologics, and Viatris already have an extensive collaboration agreement under which they develop, manufacture and commercialise a broad portfolio of biosimilars and diabetes generic drugs including insulin injection Semglee.

In September, Biocon said the biosimilar unit will sell a 15% stake to a Serum Institute of India subsidiary for access to millions of vaccine doses, including COVID-19 shots. The deal valued Biocon Biologics at about $4.9 billion.

Biocon Biologics has also raised capital through several rounds this year and last year from high-profile names such as Abu Dhabi-based ADQ, Goldman Sachs and Tata Capital Growth Fund.

Shares of Biocon were down 1.9% as of 0626 GMT in a weak Mumbai market.

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