Pfizer Invests up to $350 Million in Indian Biosimilar Deal

by: ChinaBio Today

Pfizer (NYSE: PFE) has struck a deal worth up to $350 million with Biocon Ltd., the company that claims to be India’s biggest biotech drugmaker. The two will collaborate on diabetes drugs, combining Pfizer’s marketing power and Biocon’s low-cost manufacturing ability. The products involved are Biocon's biosimilar versions of insulin and insulin analog products: Recombinant Human Insulin, Glargine, Aspart and Lispro.

The deal gives Pfizer exclusive worldwide marketing rights to four injectable insulin products, except for India, Germany and Malaysia, where the two companies will jointly market the products.

Biosimilars are a hot item throughout the world. Although India currently has a lead over China in cGMP biologics manufacturing, China is racing to catch up. The PRC government is funding projects in Shanghai, Tianjin, Suzhou, Guangzhou and other regions of China. VCs based in the US are also supporting biosimilar ventures, with three known projects. Also, major manufacturers, including Boehringer-Ingelheim, Lonza (OTCPK:LZAGF) and DSM are said to be eying the market. In fact, DSM held their annual executive meeting in Shanghai this year, the first time it has held the meeting outside its home base in the Netherlands.

Biocon said it will invest about $300 million in the next three years to ramp up its biosimilar capacity in India. It may also build in Malaysia. The company believes it has enough capacity to meet the needs of Pfizer for the next five years.

Under the terms of the agreement, Pfizer will pay Biocon $200 million upfront and up to an additional $150 million for development and regulatory costs. Biocon’s drugs will give Pfizer a major foothold in the $14 billion global market for insulin, putting pressure on the present heavyweights in the market: Novo Nordisk A/S (NYSE:NVO), Sanofi-Aventis SA (NYSE:SNY) and Eli Lilly & Co. (NYSE:LLY).

Biocon has an oral insulin product in Phase III trials in India, which may also be a reason behind Pfizer’s interest in the Indian company. An insulin product that does not require injection could dominate the market, and many drugmakers have similar projects underway to develop such a product. However, Pfizer put a lot of time and money into its inhaled insulin product, Exubera, actually winning approval for it in the US and Europe. But Exubera was not accepted in the marketplace, and Pfizer ended up writing off the project’s $5 billion cost.

Disclosure: none.