Updated on 15 January 2013
Biocon, Pfizer decide to go back on multi-million dollar deal
It was a path-breaking deal that had many eye balls rolling. Industry soothsayers predicted it to be the beginning of an exponential growth for the biotech industry in India. The landmark $350-million deal inked between global pharmaceutical player Pfizer and India's top biotechnology company Biocon, signed on October 2010, was viewed as a catalyst bolstering confidence of multinational firms in Indian companies, which could spur more such R&D collaborations in the future.
According to the strategic deal, Pfizer had to pay $200 million for exclusive rights to globally commercialize several of Biocon's insulin products -- Recombinant Human Insulin, Glargine, and Lispro. Biocon was to receive an additional payment of $150 million from Pfizer towards further development of drugs and to meet regulatory milestones. Biocon was also to receive payment linked with Pfizer's sale of the insulin products.
Indeed a win-win situation for both parties, bringing together Pfizer's strong marketing and commercialization capabilities, especially in the highly regulated developed markets of the world, and Biocon's expertise in biotech R&D. The insulin products were slated to roll out in the emerging markets by 2011, followed by Europe and the US in 2012 and 2015, respectively.
The industry was in for a shock when this much-talked about deal was amicably shelved in less than 18 months. While the reasons for calling off of the deal is yet to be revealed in a press statement, both companies mentioned that their individual priorities for their respective biosimilars businesses propelled them to move forward independently. As of March 12, 2012, all rights licensed to Pfizer will revert to Biocon, and all insulin distributed under the brand names Univia and Glarvia will be commercially available from Biocon only, and will be exclusively manufactured, supplied, marketed and supported by Biocon. Also, Biocon would retain the upfront payment of $100 million and also the $100 million that Pfizer paid as an escrow account for Biocon to develop insulin products. It will, however, have to forgo the $150 million that it would have received from Pfizer for further developments and meeting regulatory milestones.
Reacting to the developments, Ms Kiran Mazumdar-Shaw, chairman and managing director, Biocon, said, "We remain committed to delivering our biosimilars insulins portfolio to global markets in our endeavor to make a difference to diabetic patients across emerging and developed economies. We will continue to work with our existing partners in several markets and will pursue a commercial strategy on our own and through new alliances in other markets."