Biocon’s Pact with CCM Pharmaceuticals, Malaysia Is No Big Deal

In a recent development Biocon has inked a licensing and distribution agreement for its insulin products with CCM Pharmaceuticals. CCM is a subsidiary of Chemical Company of Malaysia and the agreement gives it an exclusive licence and distribution rights for insulin products of Biocon in Malaysia and Brunei. CCM in a press release has said that through this deal they are targeting an insulin market of about Rs 160 crore.

Biocon has been facing challenges on the business front for quite some time now. In fact from its earlier days when it was billed to be a company which could change the med scenario out here, it hasn’t really gone too far. Earlier, in March 2012, Biocon and Pfizer has parted ways announcing the closure of their alliance to commercialize Biocon’s biosimilar versions of Insulin and Insulin analog products. The pact gives Biocon a second chance to market its insulin products.

This pact with CCM gives the company a smaller addressable market which is worth a mere Rs 160 crore. This market is dominated by pharma giants like Eli Lilly and Sanofi. Therefore, it will take a lot of effort on the part of both the companies to get their feet firmly in place in this market. This does not look to be a big development for Biocon and the market has reacted to the news appropriately. The stock has been trading almost flat even after the news broke out.

Last month, Biocon had signed a deal with Bristol-Myers Squibb giving it exclusive rights to develop and commercialise its oral insulin, provided the outcome of the clinical trials are positive. Accordingly, following the successful completion of the Phase II trials, Biocon will receive a license fee in addition to potential regulatory and commercial milestone payments and royalties on commercial sales of IN-105 outside India. Biocon will retain exclusive rights to IN-105 in India.