Hardly five months after it entered into an exclusive product development and supply pact with global generic drug major Mylan, the country’s biggest biotech firm, Biocon, has started receiving milestone payments from its US-based partner.
The company received Rs 10 crore as product development fee during the quarter ended September and expected almost the same amount for at least the next five to six quarters, said Kiran Majumdar Shaw, chairman and managing director of Biocon. Under the partnership, Biocon is to develop four biosimilar products (low-cost versions of patented biotechnology products) and supply them to Mylan for selling globally.
“We have identified the products that need to be developed in the first stage. Biocon has successfully developed several bio-similars and will be able to develop these products within the mutually-agreed time span. The milestone payments that we are to receive are hence predictable” Shaw said.
While pharmaceutical companies have entered into such agreements in conventional medicines, the Biocon-Mylan pact is the first of its kind in the biotechnology sector.
The milestone payments will contribute to Biocon’s top line during the product development phase, but it will be the manufacturing contract that will lead future revenues. Under the pact, Mylan has exclusive commercialisation rights in the US, Canada, Japan, Australia, New Zealand and in the European Union and the European Free Trade Association countries through a profit-sharing arrangement with Biocon. Mylan also has co-exclusive commercialisation rights with Biocon in all other markets. “We have one of the richest research pipelines among Indian biotechnology companies. All these products, once developed, will enter global markets through partnerships,” Shaw said.
An estimated $25 billion worth of biotechnology medicines are expected to lose patent protection by 2016, creating a significant market opportunity for protein therapeutics like insulin and its analogs, erythropoietin, human growth hormone, monoclonal antibodies, etc.
