When the RM 500m ($162m) plant opens in 2014 Biocon will use it to produce biosimilar insulin for its October 2010 agreement with Pfizer. Biocon will produce biosimilars and insulin analogs for Pfizer to market.
“Given the branded nature of the biosimilars in regulated markets, Pfizer with its strong marketing prowess, will be able to leverage this opportunity better”, Motilal Oswal Securities, an India-based financial services firm, said in an analyst note.
Biocon is building the plant in the Bio-XCell biotechnology park. Last year Frost & Sullivan said Malaysia is “an ideal location to manufacture generics”. Biocon plans to expand production at the plant beyond insulin by adding capacity for other biopharmaceuticals later.
Progress setting up insulin capacity could benefit Biocon financially. “Biocon [is] eligible for additional $100m milestone payment which will accrue in phases to Biocon depending on the progress on setting up a new $160m insulin facility in Malaysia”, Motilal Oswal Securities said.
Biocon is also collaborating with Mylan on biosimilars. “We view this [partnering strategy] as a long-term positive since it allows Biocon to participate in the biogeneric opportunity without significantly depressing its profitability”, Motilal Oswal Securities said.
Biocon has also begun manufacturing ingredients for Pfizer’s Lipitor (atorvastatin calcium), Bloomberg reports. In recent years Biocon has inked deals for supply of atorvastatin to generic companies and is an established producer of the simvastatin API.
Commenting on the statins market Motilal Oswal Securities said: “Biocon has tied up with a few generic companies for the supply of atorvastatin API. We expect intense competition among generic players in this market as the product is not fermentation based and hence has low entry barriers.”