Dr Ajaykumar Sharma, practice head - Pharma, Healthcare Practice, South Asia & Middle East, Frost and Sullivan, agrees on this. "In the short term, Biocon will have to continue with regional partners and look forward to expanding its core business. This means some growth plans will have to take a back seat. In the long run, it will continue its growth by pushing into other biosimilars areas that the company is currently not serving," he says.

Mr Ranjit Kapadia of Centrum Capitals says the challenge for Biocon will be to look for a partner who is equally or better than Pfizer. "Or it can invest in setting up its own facility with the money that it has in hand. But the fact remains that both are time-consuming processes," he adds.

Divesting its 70 per cent stake in its German arm, Axicorp GmbH, post the global alliance with Pfizer could be a missed opportunity for Biocon. "If Biocon had retained its stake in its German arm, Axicorp would perhaps have given Biocon access to the EU market today," points out Mr Kapadia.

For Pfizer too, the deal termination could prove to be a setback. The company is already reeling under the pressure of a sharp drop in revenues post the patent expiration of a slew of its blockbuster products starting 2012. It is exploring profit-making avenues to make up for this loss. Biosimilars is one such growth area and a deal with Biocon would have given the company access to the burgeoning global insulin market. Insulin is a $14 billion global market and, by 2015, a number of insulin analogs will be out of patent protection, resulting in a significant opportunity for biosimilars.

"For Pfizer, it means looking at other areas of investment to make up for the loss of revenues due to some key drugs going off patent between 2010 and 2020," adds Dr Ajaykumar Sharma of Frost & Sullivan. The company has already reported a drop in its fourth quarter (Q4 2011) revenues due to expiration of patent of Lipitor, one of its biggest drugs. The Q4 2011 revenues were $16.7 billion, a decrease of four percent from $17.4 billion for the same period a year ago. Expiry of patent for its next big product, Viagra, too will be a big revenue dampener in the coming year. Against such a backdrop, business in biosimilars and generics through partnerships could help mitigate its anticipated drop in revenues.