Pfizer - Biocon alliance has called off due to individual priorities and in Shares of Biocon fell more than 8% on Tuesday morning after US pharma major Pfizer scrapped a deal to sell insulin products made by the Bangalore-based biotechnology company.
All rights licensed to Pfizer revert to Biocon as of March 12. Insulin distributed under the brand names Univia and Glarvia will be commercially available from Biocon, the company said.
Investors were disappointed that the deal struck only in October 2010 had ended so abruptly and feel this is a major blow to Biocon. At 10:15 hrs, the stock was down over 6% at Rs 251 on NSE.
"Biocon remains committed to delivering its Biosimilar Insulins portfolio to global markets in its endeavour to make a difference to diabetic patients across emerging and developed economies. 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." said Kiran Mazumdar Shaw, Biocon's CMD.
Separately on Twitter, she said the two companies had parted ways amicably and changed priorities at Pfizer had led both companies to pursue independent paths.
Pfizer's GM – Biosimilars said in a statement that the pharma giant would continue to develop a broad portfolio of biosimilars medicines and it would continue to be active in its own research and business development efforts for diabetes.
The Insulin market is dominated by only three players -- Novo Nordisk, Sanofi and Eli Lilly and tough to crack, which may have also prompted Pfizer to walk away from selling Insulin products, say analysts.
Biocon has partnerships in emerging markets, so selling Insulin there won't be a problem. But the regulated markets of US and Europe, which accounts for 70-80%, is where the company will struggle, they say.
"Pfizer may have seen difficulties in selling Insulin in US and Europe given dominance of three players. If even the world's biggest pharma player doesn't want to do it, then surely for Biocon penetrating those markets will be a big headache," Hitesh Mahida, an analyst at Fortune Equity Brokers told moneycontrol.com.
Biocon is receiving around USD 150-200 million as severance pay from Pfizer, which will be invested in developing Insulin products. But Mahida says the company will require more funds (around USD 160 million) to set up manufacturing facility in Malaysia. So it will have to look at some kind of fund raising going ahead, which Biocon would have otherwise got from Pfizer.
READ MORE ON Biocon, Pfizer, , alliance , Univia , Glarvia, deal, insulin, US, Europe, Eli Lilly, Sanofi, Novo Nordisk, Kiran Mazumdar Shaw, CMD
Set email alert for
ADS BY GOOGLE
video of the day
See fresh highs before Budget; like Maruti: Kotak Inst