World's largest drug maker Pfizer has called off a $350-million deal to sell Indian biotech company Biocon's insulin products globally.
In a joint statement, Pfizer said it plans to develop its own insulin drug, while Biocon said it will strike new alliances to market the drug globally. Biocon's stocks plunged 6.31 per cent to Rs 250.8 following the announcement.
Split amicable
Biocon's Chairman and Managing Director, Ms Kiran Mazumdar Shaw, told
According to the agreement signed in 2010, Pfizer was to pay $200 million as well as additional development and regulatory milestone payment of up to $150 million to Biocon. The company is not likely to refund the amount made as milestone payments by Pfizer so far.
Rights WILL revert
The joint statement said “as of March 12, 2012, all rights licensed to Pfizer will revert to Biocon, and all insulin distributed under the brand name ‘Univia' and ‘Glarvia' will be commercially available from Biocon only, and will be exclusively manufactured, supplied, marketed and supported by Biocon.” Ms Mazumdar Shaw said the company's rh-Insulin is nearing completion of Phase III trials in Europe, while the global development for Glargine (insulin variant) is nearing completion of Phase I and has an active US IND (investigational new drug) in place.
An analyst with a broking firm said the break-up will hurt Biocon only in the near term. “The split does not necessitate any remittances by Biocon to Pfizer and only does away with the $150 million payment that was subject to commercialisation and related milestones. Biocon remains adequately funded to support its R&D obligations over the four products (rh-Insulin, Glargine, Aspart and Lispro),” said Mr Bhavin Shah, an analyst with Dolat Capital.
“We view this event as negative as Pfizer's exit has limited the scope of monetisation of Biocon's insulin biosimilars in key regulated markets — future growth catalyst,” he added. The decision to call off the deal is expected to impact the fourth quarter results of the company.
The latest development comes a day after Germany's Bayer lost out to Hyderabad-based Natco Pharma when the Indian Patent Office granted the latter a compulsory licence for cancer treatment drug Nexavar.
Malaysian project
Meanwhile, Ms Mazumdar Shaw said the company remains committed to the Malaysian project which has been set up to manufacture biosimilars. “Please remember, this project predates the Pfizer deal; so, was on the cards long before Pfizer came on board,” she said. “We have existing regional partners and we look for new partners over time for developed markets.”