Pfizer, Biocon calls off $350 million deal

A big blow for relations between Indian drugmaker and its global partners has come out after Biocon-Pfizer divorced their joint partnership.

Pfizer is the world’s largest U.S. drugmaker has ended a deal to sell insulin products produced by Biocon Ltd (BION.NS), India’s biggest biotech company due to the individual priorities and threat of intellectual property protection in such countries.

Pfizer- Biocon jointly revealed a statement on Tuesday, “The companies have agreed that due to the individual priorities for their respective biosimilars businesses of insulin and insulin analog products, it is in their best interest to move forward independently.”

The joint agreement that gave Pfizer rights to commercialize bio-similars of human insulin Glargine, Aspart and Lispro developed by iocon was signed in October 2010 and now will revert to Biocon as of March 12 the reason of scrapped partnership.

Biocon that earned hundreds of millions of dollars in royalties under the deed will keep possession of royalties worth $150 million from Pfizer and stands to receive an undisclosed amount from the U.S. drugmaker as a severance payment, reportedly said the Biocon Chairman and Managing Director Kiran Mazumdar Shaw.

Splitting action has also affected shares of Biocon that fell by 11 per cent in trading on the BSE in the early morning.

An analyst at Mumbai-based brokerage IIFL, Bino Pathiparampil said about Indian drug maker situation, “The development is definitely negative for Biocon’s insulin sales as it will have to look for new partners.”

It will be really difficult for Biocon to sell its insulin products without a key profit-driver in global markets. However Biocon held such tragic situation after a day while Germany’s Bayer lost a landmark ruling in India, forcing it to grant a compulsory licence for its cancer treatment Nexavar to Natco Pharma.

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