Biocon seals Rs 1,550 cr pact with Pfizer

Source: The Economic Times, Oct. 19, 2010

BANGALORE: Bangalore-headquartered biotech firm Biocon has entered into a $350-million (Rs 1,550 crore) strategic alliance with drug-major Pfizer on Monday for marketing Biocon’s insulin products. The agreement includes the commercialisation of Biocon’s biosimilar versions of insulin and insulin analog products: recombinant human insulin, glargine, aspart and lispro, Biocon said.
The potential market for these four products, according to Kiran Mazumdar Shaw , chairman and MD of Biocon, would roughly be around $20 billion by 2015. Biocon hopes to combine the synergies of Pfizer’s marketing and distribution networks and its own cost-effective developing and manufacturing capabilities to grab a piece of the $14-billion biosimilar market.

Their main competitors would be Novo Nordisk, Sanofi Aventis and Eli Lilly. The rival companies are betting on the fact that by 2015, a number of insulin analogs are expected to lose patents. This would create large opportunities in the biosimilar market which would, in turn, give them a first-mover advantage.

In addition to the $350 million, the company will also receive additional payments linked to Pfizer’s sales of its four insulin biosimilar products across global markets, the company added. Under the terms of the agreement, Pfizer will make upfront payments of $200 million. Biocon is also eligible to receive an additional development and regulatory milestone payment of up to $150 million.

Rakesh Bamzai, marketing head, Biocon, said the firm would be investing around $300 million in the next three years to ramp up its biosimilar capacity in India and also look at manufacturing facilities in Malaysia. Ms Shaw added that currently there is enough capacity to meet the needs of Pfizer for the next five years. Pfizer will have exclusive rights to commercialise these products globally, with certain exceptions, including co-exclusive rights for all of the products with Biocon in Germany, India and Malaysia, it said. The market for diabetes drugs and devices in 2010 is estimated at $40 billion with insulins accounting for $14 billion or 35% of the diabetes segment.