Updated on 15 January 2013
Biocon witnessed a sharp fall in licensing income in the third quarter ending December 2011 from the exceptional levels recorded last fiscal, which resulted in flat earnings overall. Commenting on the fall, Ms Shaw said licensing income is a timing issue and subject to periodic variability.
In a statement Diem Nguyen, general manager- Biosimilars, Pfizer, said, "We continue to be dedicated to developing a broad portfolio of biosimilars medicines, including monoclonal antibodies and recombinant protein products, both internally and through collaborations. In addition, we will continue to be active in our own research and business development efforts for diabetes, which represents a huge unmet medical need, and we remain committed to seeking new solutions to help physicians and patients."
Financially, the termination will not impact Biocon that has retained $200 million in its kitty that, market analysts predict, could be used for R&D investments towards their biosimilars products. "Biocon's products are yet to be rolled out and commercialized in the developed and emerging markets. Hence, financially the impact would be minimal," says Mr Sudarshan Padmanabhan, research analyst, Prabhudas Lilladher. In fact, some experts also opined that the amount was significant enough for Biocon to set up its own facility, though the company would any day opt for a strategic alliance.
From a market perspective, it is definitely a blow for Biocon as the company will again need to scout for a partner with a strong presence in the insulin market, both in the developed and emerging markets of the world. Pfizer proved to be an ideal strategic fit towards this goal. "Pfizer has a strong marketing presence in regulated markets such as the US and Europe. Pfizer would have given Biocon the opportunity to access such markets where the insulin market is huge," says Mr Ranjit Kapadia, vice president, Centrum Capital. Scouting for an apt partner who could give access to these highly regulated markets would be a time-consuming process for Biocon.