MUMBAI - Months of widespread speculation over a likely deal between Pfizer and India's biotechnology flag-bearer Biocon finally came true as the two companies announced a comprehensive global commercialization pact to bring to market a range of insulins including analogs like glargine, aspart and lispro.

These are amongst the largest insulin therapies market by Sanofi-Aventis, Novo Nordisk and Eli Lilly under brand names Lantus, Novolog and Humalog.

The largest deal signed by any Indian company in the field of biotechnology will see Pfizer dole out $200 million in upfront payments with Biocon eligible for further milestone payments of up to $150 million. Biocon will also be entitled to additional payments linked to Pfizer's sales of its four insulin biosimilar products across global markets.

The two companies were believed to be in talks for several months over biotechnology-based medicines (Also see "Pfizer, Biocon Brush Off Deal Talks As Speculative, But Is There Fire Behind The Smoke?" - Scrip, 3 September, 2010.)

Blending Cost-efficient Manufacturing And Marketing Strength

Biocon is presently marketing glargine in India along with its own recombinant insulin brand Insugen and together with the biosimilars, the company will take about 15 percent of the total insulin market in India.

As part of the deal, Biocon will take up clinical development, manufacture and supply of the biosimilar insulin products and regulatory activities needed for approvals in various geographies. As of now, Biocon's recombinant human insulin formulations are approved in 27 countries in developing markets, and commercialized in 23 markets.

During a same-day global conference call, Biocon Chairwoman Kiran Mazumdar Shaw described the deal as an "opportunity [for Biocon] to be present worldwide for research, manufacturing and marketing excellence. Pfizer brings brand strength and a vast and unrivaled global marketing network that will enable Biocon to realize its objective of seeing its insulin portfolio have a worldwide presence."

Biocon is currently conducting clinical trials of its insulin in certain European countries and noted that the roll-out of its insulin products should be ready by the time the patents expire and regulations for biosimilar insulins are in place.

Through the deal with Biocon, Pfizer locked in exclusive rights to commercialize the products globally, with certain exceptions, including co-exclusive rights with Biocon for all of the products in Germany, India and Malaysia. Pfizer said it will also have co-exclusive rights with existing Biocon licensees with respect to some of the products, primarily in a number of developing markets.

Going Big On Biosimilars

David Simmons, president of Pfizer's Established Products Business Unit explained the rationale of the agreement, stressing the huge increase in the number of diabetics in the world. Simmons has played an instrumental role in Pfizer's alliances with a few other Indian companies like Claris, Aurobindo and Strides Arcolab (Also see "Pfizer Delves Deeper In Generics Partnership With Strides Arcolab" - Scrip, 17 May, 2010.).

Drawing on the biosimilars ambitions of the world's-largest pharmaceutical company, Simmons said, "This collaboration supports our stated efforts to become a strong player in follow-on biologics as well as in the diabetes disease area, by adding to Pfizer's broad biotherapeutics portfolio, ranging from biosuperiors to biosimilars, across multiple therapeutic areas, which we've said we will supplement with both our in-house development efforts and selective collaborations."

Pointing to an aggressive pricing strategy for the products, Simmons said they will "provide attractive, cost-effective treatment options to more diabetes patients."

Citi analyst Prashant Nair wrote in an Oct. 18 note that Pfizer would adopt a phased approach, "both in terms of products (Human Insulin, Glargine, Lispro & Aspart) as well as markets (emerging markets, Europe & finally the US)." He noted that India will likely be the first market Pfizer enters.

Biocon: No Conflict With Existing Partners

Notably, a few years ago Biocon had struck a product development partnership with Bristol-Myers Squibb for certain applications of insulin. But on that question, Shaw told PharmAsia News that the deal had been called off by Bristol-Myers Squibb several years ago. She emphasized there was no conflict of interest with any of the existing partners that Biocon has for biosimilars or otherwise.

Biocon has also hammered out a deal with the world's third-largest generic drug maker Mylan for development of certain biosimilars of existing monoclonal antibodies. (Also see "Biologics Beckon: Biocon, Mylan Strike Deal; Combine To Take Teva, Sandoz Head-on" - Scrip, 29 June, 2009.)

Pfizer's Simmons added that the U.S. pharma has done its due diligence, which proved that Biocon is "clearly in the lead" to enable a very significant market opportunity for Pfizer.

Earlier, Rakesh Bamzai, Biocon's marketing president, informed PharmAsia News that Biocon has licensed a few of its products to some players in developing markets but Pfizer will share co-exclusive rights with them.

Rush To Market

From initial indications, it appears that the deal will be put into action quickly, as Simmons noted that Pfizer should be able to cater to the potential demand for the next five years, though the senior executive did not want to quantify the production capacity in units.

According to Pfizer, the market for diabetes drugs and devices is estimated at $40 billion with insulins accounting for $14 billion, or 35 percent of the diabetes market.

"By 2015, a number of insulin analogs are expected to lose patent protection, resulting in a significant opportunity for the biosimilars market. With this alliance, Pfizer and Biocon expect to be well positioned to be first movers in this potentially large market opportunity," the company noted.

That year, 2015, appears to be a popular milestone for biosimilar efforts by big pharma. Merck, for instance, has said it will invest $1.5 billion in follow-on R&D through 2015 while it awaits guidance from FDA on implementation of a new biosimilars pathway (Also see "Merck Prepares To Test Drive Biosimilar Pathway In The U.S." - Pink Sheet, 5 July, 2010.).

- Vikas Dandekar (v.dandekar@elsevier.com)

With Biocon Deal, Pfizer Expects To Gain First Mover Advantage In Global Biosimilar Insulin Market

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