BIOCON, Inc., Pfizer Inc. In Potential $350 Million Insulin Licensing Deal

Creating an alliance to deliver insulin treatments worldwide, Biocon and Pfizer have entered into a global commercialisation agreement. Pfizer will make an upfront payment of USD 200 million in a licensing deal for Biocon’s biosimilar insulin portfolio for diabetes treatment. As per the agreement, Biocon will also be eligible to get additional payments of up to USD 150 million. These payments will be linked to sales of Biocon’s insulin biosimilars.
In an interview with CNBC-TV18, Vikas Dandekar of gave his perspective on the deal.
Vikas Dandekar, Mumbai Bureau Chief,

Q: What do you make of this arrangement? First of all tell is what is the potential the market size as far as this insulin is concerned and what does this mean both for Biocon and Pfizer?
A: A number of biosimilars are scheduled to be launched in the European market. A number of trials are going on, on insulin and this is a big potential of about USD 4 to 6 billion in all of the total market. These are also for analogs of insulin. There is Glargine which is Lantus developed by Sanofi-Aventis. Then we have Novo Nordisk’s Novolog which is Aspart. We also have Lispro which is Eli Lilly’s product.
These are all very big products, very big companies which have dominated this insulin scenario for many years. Once the patents for all of these insulin expire, it will be a very big opportunity which Pfizer does not want to miss out right now.
So the question is how will Pfizer share the revenues. The fact that it has already committed a massive sum of about USD 200 million, the question is Biocon has a deal going on with Bristol-Myers Squibb (BMS). So there will be a couple of issues there which have still not come out. Maybe from Biocon’s side it will be explained later.
But all in all, it makes a very strong revenue projection for Biocon. There will be a lot of price issues because a number of companies are going to be launched. So those are a couple of doubts.
Q: Why do you think that Pfizer has actually chosen to go ahead with Biocon for this arrangement?
A: Biocon has developed a strong portfolio of the insulin and insulin analog. As I pointed out earlier that there are only 3-4 companies which have been dominating this insulin scenario – Novo Nordisk, Sanofi-Aventis and Eli Lilly.
Going forward being the largest company in the world and diabetic population is also going to rise, and also earlier in 2007 Pfizer actually failed in its oral insulin ambition when Exubera was called back because of certain adoption issues. So the ambition for Pfizer to be a strong player in diabetes remains that way.
Probably insulin is also something that is close to Biocon. They are also developing their IN105 which is the oral insulin. They have filed the IND (investigational new drug), and phase-III data is still awaited. Going forward there is a lot of potential that Biocon has in this particular segment. Probably this is what opens the doors for them.
Q: So this is the first kind of arrangement for Biocon as far as BMS is concerned?
A: No. Biocon has a very strong collaboration with BMS. They are working together on a large number of pre-clinical candidates through their Bangalore R&D centre. They also have some work going on insulin as well.
That will be a big question to be answered as to how this model is going to be shared if BMS is also one of the parties to be playing a role in this insulin opportunity. Also biosimilars is a wider opportunity for Biocon because Mylan has also got a deal with Biocon. So there are a number of big players which have got gravitated towards Biocon.

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