The Troubled Rupee
A top official said the government has options to stem a fall in the rupee but did not offer any specifics, turning the focus on the RBI to stem a rout that sent the rupee to record lows. Full Article
- "Hazardous" air, murky skies in Singapore from Indonesian fires
- Rupee at record low as India seen lacking options to brake fall
- Rupee slumps to record low; bonds, stocks slump
- UPDATE 1-U.S. states, greens delay lawsuit, await Obama climate plan
- Finance minister holds meeting with officials over rupee fall
Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
Pfizer scraps insulin deal with Biocon
MUMBAI (Reuters) - Pfizer Inc (PFE.N), the world's largest drugmaker, has scrapped a deal to sell insulin products made by Biocon Ltd (BION.NS), leaving India's biggest biotechnology company without a partner to sell the drugs in key markets such as the United States.
Pfizer cited other priorities in its biosimilar program for the split, which immediately ends a relationship that stood to earn Biocon hundreds of millions of dollars in royalties. Shares of Biocon fell 6.3 percent.
"The development is definitely negative for Biocon's insulin sales as it will have to look for new partners," said analyst Bino Pathiparampil of Mumbai brokerage IIFL.
Pfizer's move shows how the drugmaker has been narrowing its focus, said MKM Partners analyst Jon LeCroy. For example, Pfizer is looking at selling or spinning off its animal health and nutrition businesses.
"They realize they can't do everything," LeCroy said. "They're not a diabetes company. Other than to be playing in biosimilars, it didn't make a lot of sense for their core business anyway."
Pfizer spokeswoman Joan Campion said the company was focusing on other programs in the growing market of biosimilars, which are low-cost versions of biotechnology medicines. It is developing biosimilars for oncology, pain and rare diseases, but none are yet being tested in humans, she said.
"Pfizer continues to be dedicated to developing a broad portfolio of biosimilars medicines," Diem Nguyen, Pfizer's general manager for biosimilars, said in a statement.
Biocon will retain payments already received from Pfizer, Kiran Mazumdar Shaw, the Indian company's chairman, told Reuters after the announcement of the split on Tuesday.
"(We) will receive additional amounts as settlement from escrow," she said, without providing details.
Pfizer made upfront payments of $200 million to Biocon, which was eligible to receive additional development and regulatory milestone payments of up to $150 million, as well as royalties.
"We are tweaking down our estimates for Biocon for the fiscal year 2013 after this news, for sure," said analyst Siddhant Khandekar of ICICI Direct in Mumbai. "We expect a 1.5 to 2 rupees hit on their earnings per share, from 20.4 rupees down to around 18.4 rupees."
Deutsche Bank cut its target price for Biocon shares by 9 percent to 215 rupees after Pfizer's exit, citing increased risk for the Indian drugmaker.
The Biocon-Pfizer divorce, the latest blow for relations between Indian drugmakers and their global counterparts, comes a day after Germany's Bayer (BAYGn.DE) lost a landmark ruling in India, forcing it to grant a compulsory license for its Nexavar cancer treatment to Natco Pharma (NATP.NS).
The Bayer ruling is likely to unnerve international pharmaceutical companies that see emerging markets like India as a major growth opportunity, but remain worried about intellectual property protection in such countries.
Biocon said in November that it was searching for a global partner for its experimental oral insulin pill, which if commercialized, could have entered the market as a direct competitor to the Pfizer-marketed drugs.
"The companies have agreed that due to the individual priorities for their respective biosimilars businesses, it is in their best interest to move forward independently," they said in the joint statement.
The October 2010 deal gave Pfizer exclusive rights to commercialize biosimilars of human insulin Glargine, Aspart and Lispro developed by Biocon. At the time, Pfizer had projected gaining approval for the products as early as this year in Europe and 2015 in the United States.
The United States alone has 18 million diabetic patients and a healthcare cost of about $200 billion per year associated with the disease. By 2030, the number of people living with diabetes in that country is expected to hit 30 million.
In January, Biocon blamed poor financial results in the December quarter on lower licensing income and said it expected income from sales of its products by others to be its key growth area.
"We have several strong regional partners," Mazumdar Shaw said. "Now that Pfizer is not there, we will obviously now leverage these regional partners to expand their business." The company will also explore new alliances, she added.
All rights licensed to Pfizer reverted to Biocon on March 12, the statement said.
For its part, Pfizer said it was still evaluating opportunities for biosimilar insulins. Its shares were up 1 percent at $21.76 in morning trading on the New York Stock Exchange.
(Additional reporting Lewis Krauskopf in New York and Sakthi Prasad in Bangalore; Writing by Henry Foy; Editing by Matt Driskill and Lisa Von Ahn)
- Tweet this
- Share this
- Digg this