WTO Trade Agreements
Biocon and U.S. drug firm Pfizer called off their $350 million deal on March 13th, 2012 to commercialize the similar versions of insulin and insulin analog products.
Both the companies have agreed that due to the individual priorities for their respective bio-similar businesses, it is in their best interest to "move forward independently."
In October 2010, the two firms had signed an agreement for the worldwide commercialization of Biocon's biosimilar versions of insulin and insulin analog products: recombinant human insulin, glargine, aspart and lispro.
Initially, Pfizer was supposed to make upfront payments of $200 million and Biocon was eligible to receive additional milestone payments of up to $150 million. Moreover, Biocon was eligible to receive added payments linked to Pfizer's sales of its four insulin products globally.
But 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 Ltd. only, and will be exclusively manufactured, supplied, marketed and supported by Biocon.
However, Biocon remains committed to delivering its biosimilar insulin portfolio to global markets in its endeavor to make a difference to diabetic patients across emerging and developed economies.
Moreover, both the companies said they are committed to continuity of patient care and will work to effect a seamless transition.
The termination of what appeared to be a promising deal comes at a time when Biocon is not in the best shape. It has not been performing well since the last couple of quarters, mired by under-performance of its biopharma business, low licensing income, and a squeeze on margins.
The company has been one of the worst performers in the BSE Healthcare index in the past year registering a drop of over 20% against gains of 10.5% logged by the index.
However, when asked about the reason for discarding the deal with Pfizer, the managing director of Biocon Ms Kiran Mazumdar Shaw said that almost all multinational pharmaceutical giants were cutting costs.
And Pfizer was doing nothing different. She further said that it was trying to get out of non-core businesses like nutritional and animal health. It also had its own biosimilar programme.
Analysts are of the opinion that in the absence of a big formidable player such as Pfizer to partner with, Biocon will find it difficult to launch its biosimilar insulin in overseas markets.
Meanwhile, Ms Mazumdar Shaw said the company remains committed to the Malaysian project which has been set up to manufacture biosimilars.
Biocon is a fully integrated healthcare company that delivers innovative biopharmaceutical solutions. From discovery to development and commercialization, they have the defining science, cost-effective drug development capabilities and significant manufacturing capacity to move ideas to market.
Pfizer, Inc. is an American multinational pharmaceutical corporation founded in 1849. The company is headquartered in Midtown Manhattan, New York City. Pfizer produces Lipitor, Lyrica and many other drugs.