US drugmaker Pfizer scraps insulin deal with Biocon

Pfizer, the world's largest drugmaker, has scrapped a deal to sell insulin products made by Biocon Ltd, leaving India's biggest biotech company without a partner to sell a key profit-driver in global markets.

The two companies cited "individual priorities" as the reason for the split in a joint statement released on Tuesday, which ends with immediate effect a relationship that stood to earn Biocon earn hundreds of millions of dollars in royalties.

"The development is definitely negative for Biocon's insulin sales as it will have to look for new partners," said Bino Pathiparampil, an analyst at Mumbai-based brokerage IIFL.

"This is mainly because of strategy confusion...Pfizer's business strategy has been changing over the last two to three years, which probably has lead to this development."

Biocon said in November that it was searching for a global partner for its experimental oral insulin pill, which if commercialized, could have entered the market as a direct competitor to the Pfizer-marketed drugs.

"The companies have agreed that due to the individual priorities for their respective bio-similars businesses, it is in their best interest to move forward independently," the two companies said in the joint statement.

The October 2010 deal gave Pfizer exclusive rights to commercialize bio-similars of human insulin Glargine, Aspart and Lispro developed by Biocon.

Pfizer made upfront payments of $200 million to Biocon and the Indian drugmaker was eligible to receive additional development and regulatory milestone payments of up to $150 million, on top of royalties on sales.

The United States alone has 18 million diabetic patients and a healthcare cost of approximately $200 billion per year associated with the disease. By 2030, the number of people living with diabetes in the United States is expected to hit 30 million.

Biocon in January blamed poor financial results for the quarter to end-December on lower licencing income, and said it expected income from sales of its products by others would be the key driver of its growth.

"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," Kiran Mazumdar Shaw, Biocon managing director, said in the statement.

All rights licenced to Pfizer revert to Biocon as of March 12, the statement said.

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US drugmaker Pfizer scraps insulin deal with Biocon

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