Biocon Rises to Record After $350 Million Pfizer Deal
Oct. 19 (Bloomberg) -- Biocon Ltd., India's biggest biotechnology company, rose to a record after announcing a 15.5 billion rupee ($350 million) agreement with Pfizer Inc. to sell four injectable insulin products worldwide.
Biocon rose 12.9 percent to 454.95 rupees, the highest level since it listed in April 2004, as of the 3:30 p.m. close in Mumbai. The stock surged as much as 17.2 percent earlier.
Pfizer, the world's biggest drugmaker, will pay Biocon $200 million upfront and an additional $150 million for development and regulatory costs, the companies said in a statement yesterday. Biocon's drugs will allow Pfizer to enter the $14 billion global market for insulin, which is currently dominated by Novo Nordisk A/S, Sanofi-Aventis SA and Eli Lily & Co.
Pfizer, based in New York, will have the right to market the drugs exclusively in all countries except India, Germany and Malaysia, where both companies will be able to sell the products, the statement said. The companies did not disclose information about the timing of the payments.
"We see this partnership as a first step in exploring further benefits," David Simmons, president and general manager at Pfizer's established products business, said in a call with reporters yesterday.
Biocon, based in Bangalore, is also developing an insulin pill, which is in the final stage of clinical trials in India. A pill would allow diabetes patients to take insulin in a tablet instead of an injection.
The company is looking to license the rights to the compound to a global pharmaceutical company, which can conduct the clinical trials required to get regulatory approval from U.S. and European authorities, Managing Director Kiran Mazumdar-Shaw said last year.
"It is the only oral insulin compound at this stage worldwide," Priti Arora, an analyst at Kotak Securities Ltd., said in an interview today.
A competing product by Novo Nordisk, the world's biggest insulin maker, is in early stages of development, the Danish drugmaker said in December.
As many as 10 percent of the estimated 284 million people affected by diabetes worldwide have the type 1 form that's marked by the inability to produce insulin, a hormone that turns blood sugar into energy, according to the International Diabetes Federation.
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