Pfizer ($PFE) and Biocon ($BIOCON) have gone their separate ways. The two companies had planned to jointly market Biocon's biosimilar diabetes drugs, but now they've chosen to go it alone. Pfizer will pursue an independent diabetes strategy, while Biocon will seek new marketing partners to take its products to other emerging markets, the U.S. and Europe.
The Pfizer deal was huge for Biocon, with hundreds of millions in upfront and milestone payments, not to mention hundreds of millions more in potential royalties down the line. The deal covered four diabetes products, including insulin and insulin analogues.
"Biocon will continue to work with its existing partners in several markets and will pursue a commercial strategy on its own and through new alliances in other markets," Chairman Kiran Mazumdar-Shaw (pictured) said in a statement.
Mazumdar-Shaw said via Twitter the parting was amicable, while also telling Bloomberg television the breakup stemmed from Pfizer's changing business priorities. Biocon is "confident" it can commercialize the drugs worldwide--probably with the help of multiple regional partners rather than one global partner. Meanwhile, Pfizer said in a statement it will continue developing its own diabetes products, internally and with partners.
Analysts are already revisiting their sales estimates for the Indian company. "The development is definitely negative for Biocon's insulin sales as it will have to look for new partners," IIFL analyst Bino Pathiparampil said, as quoted by Reuters. "This is mainly because of strategy confusion ... Pfizer's business strategy has been changing over the last two to three years, which probably has led to this development."
Editor's Note: Story was updated to correct spelling of chairman's name. We regret the error.