Biocon Plunges After Ending Pfizer Pact: Mumbai Mover
All rights to the products returned to Biocon yesterday and insulin under the Univia and Glarvia brands will now be sold by the Indian company, the two drugmakers said in a joint statement today. Biocon received $100 million in upfront payments in October 2010 after Pfizer agreed to sell four of the Bangalore- based company’s medications globally while another $100 million was kept in escrow pending certain milestones.
The change “negatively impacts” prospects for Biocon’s insulin products, particularly in developed markets such as the U.S. and Europe, Bino Pathiparampil, an analyst at IIFL Ltd. wrote in a note to clients. As part of the settlement, Biocon will keep all the upfront and milestone payments it has received and that should help “neutralize the impact,” he wrote.
As many as 10 percent of the estimated 366 million people affected by diabetes worldwide have the Type 1 form that’s marked by the inability to produce insulin, a hormone that turns blood sugar into energy, according to the International Diabetes Federation in Brussels.
“Biocon will continue to work with its existing partners in several markets and will pursue a commercial strategy on its own and through new alliances in other markets,” Chairman Kiran Mazumdar Shaw said in a statement. The two drugmakers have agreed it is in their “best interest to move forward independently,” the companies said.
The agreement with Biocon was aimed at helping Pfizer, the world’s biggest drugmaker, tap the more than $14 billion global market for insulin, which is dominated by Novo Nordisk A/S (NOVOB), Sanofi and Eli Lilly & Co. (LLY)
A change of business priorities at Pfizer led to the end of the pact, Shaw said in an interview on the Bloomberg UTV television channel today. Biocon received a “substantial portion” of the $100 million kept in escrow, she said.
Pfizer, based in New York, will continue developing a portfolio of medicines both internally and through collaborations, Diem Nguyen, Pfizer’s general manager for biosimilars, said in the statement.
“We will continue to be active in our own research and business development efforts for diabetes, which represents a huge unmet medical need,” he said.
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