Pfizer Parts with Indian Biotech - Analyst Blog

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Pfizer ( PFE ) and Indian biotech company Biocon recently announced the termination of their global agreement for biosimilars of insulin and insulin analog products. Pfizer and Biocon said that they intend to move forward on their own based on their priorities for their respective biosimilars businesses.

The companies will work together towards the seamless transition of the deal. All licensing rights will go back to Biocon. Biocon will exclusively manufacture, supply, market and support insulin distributed under the brand names Univia and Glarvia.

Biocon said that it remains committed to bringing biosimilar insulins to market and intends to work with existing partners in several markets. The company will most likely seek new partners for additional markets.

Meanwhile, Pfizer also remains committed to its biosimilars initiative and intends to pursue the same through collaborations as well as in-house efforts.

Pfizer had announced the Biocon deal at a time when several global pharma companies were looking towards Indian companies to help strengthen their presence in emerging markets. The Biocon deal involved upfront payments from Pfizer of $200 million, an additional $150 million on the achievement of development and regulatory milestones and payments related to product sales.

Per the terms of the deal, Pfizer would have commercialized the products across the world excluding certain territories. Pfizer was to share commercialization rights with Biocon for all the products in Germany, India and Malaysia. In case of several developing markets, Pfizer would have shared commercialization rights with existing licensees.

With the termination of this deal, Biocon has lost a major marketing partner and is now facing the task of looking for another marketing partner with a global presence. Biocon shares were down 6% following the announcement.

We currently have a Neutral recommendation on Pfizer, which carries a Zacks #3 Rank (short-term Hold).


 
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