Biocon-Pfizer Breakup: Why Diabetes Alliances Don’t Work for Indian pharma?
In a very surprising move, Pfizer and Biocon announced today that they have called off their 17-month old commercialization alliance for generic insulin. â€œThe companies have agreed that due to the individual priorities for their respective biosimilars businesses, it is in their best interest to move forward independently,â€ said the press release. This was followed by many tweets from Biocon CMD Kiran Mazumdar-Shaw saying the parting has been â€œamicableâ€, clinical development of biosimilars is on track, Glargine global Phase I nearing completion, etc.
Itâ€™s still a million dollar question what went sour in the relationship â€“ between the worldâ€™s biggest drug maker and Indiaâ€™s largest biotech firm.
Biocon says the priorities changed on both sides and in the absence of any plausible reason, sources are raising the issue of â€œqualityâ€ and â€œmissing systems and processesâ€ at Bioconâ€™s end and of â€œconfusedâ€ strategy at Pfizerâ€™s.
Analysts are busy calculating the costs on both sides. For one, Biocon will certainly not get all of $350 million of the deal amount, let alone the several hundreds of millions it could have made in royalty. It will have to search afresh for new regional partnership in marketing its insulin biosimilars; it is already scouting for a new partner for its oral insulin (that was not part of the Pfizer deal) that failed to meet the final endpoints in its Phase III trial last year.
For Pfizer, which has said clearly that it is not abandoning diabetes portfolio and will continue to be active in their â€œown research and business development efforts for diabetes, which represents a huge unmet medical needâ€, getting a solid foothold in India remains as unresolved as it was 17 months ago.
Hopefully, weâ€™ll eventually know what didnâ€™t work in this partnership but for now I canâ€™t help but think why diabetes partnerships for Indian pharma run into trouble?
The first kid off the block was Dr Reddyâ€™s Laboratories which out-licensed two diabetes molecules to Novo Nordisk and Novartis in 1998 and 2001 respectively. That class of molecules – insulin sensitizers â€“ was initially promising but later the big pharma dropped it and that brought an end to DRLâ€™s innovation in diabetes drugs. In 2008, Glenmark faced a similar situation when Eli Lilly suspended work on a diabetes drug that was out-licensed by Glenmark.
Smarting from these setbacks, and also the raised bar that the US FDA has placed on approval for metabolic drugs (diabetes and cardio vascular disorders), both Glenmark and Dr Reddyâ€™s have exited this therapeutic area. Though itâ€™s another issue altogether that as diabetes and cardiac disorder patient populations grow, esp in India, even the biggest drug companies are shying away from developing new drugs for these diseases. The new rules slapped by the FDA just donâ€™t make the proposition attractive.
So do such broken deals!