As reported by Mint, Biocon revenue up 16% but profit hit by loss of licensing. Licensing is surely important source of revenue generation. Biocon’s net profit has declined which is due to loss of licensing income from Pfizer, Divestment of Axicorp stake and licensing income from other partners such as Mylan Inc.
Biocon and Pfizer
On October 18, 2010, Biocon and Pfizer entered into a strategic global agreement for the worldwide commercialization of Biocon’s biosimilar versions of Insulin and Insulin analog products: Recombinant Human Insulin, Glargine, Aspart and Lispro. Pfizer received exclusive rights to commercialize these products globally, with certain exceptions, including co-exclusive rights for all of the products with Biocon in Germany, India and Malaysia. Pfizer also got co-exclusive rights with existing Biocon licensees with respect to some of the products, primarily in a number of developing markets.
Under the terms of the agreement, Pfizer made upfront payments totaling $200 million. Biocon was eligible to receive additional development and regulatory milestone payments of up to $150 million and additional payments linked to Pfizer’s sales of its four Insulin biosimilar products across global markets.
But on March 12, 2012, all rights licensed to Pfizer reverted to Biocon, and all insulin distributed under the brand name Univia and Glarvia are now commercially available from Biocon only, and are exclusively manufactured, supplied, marketed and supported by Biocon.
Biocon and Axicorp
In February 2008, Biocon had picked up 70 per cent stake in AxiCorp GmbH for a consideration of €30 million. Post the stake acquisition, Axicorp became the licensee for Biocon’s biosimilar insulin and glargine in Germany and had the sole responsibility for commercialising these products.
On 28 April 2011 Biocon made divestment decision following deal with Pfizer and said the divestment decision was in line with its focus on global alliances that would include Germany and not need a separate unit for the region.