World's largest drugmaker, Pfizer has announced its exit from a deal under which it was to sell insulin products made by Biocon, which is India's leading biotechnology company.
The two companies released a joint statement announcing the scrapping of the deal and cited individual priorities as the reason for ending of the deal. Biocon was expected to earn millions of dollars in royalties through the deal and now it is left without any partner to distribute its products in the US and other global markets.
Biocon will now have to look for new partners and it is likely to loose millions of dollars in expected earnings because of falling apart of the deal. According to analysts, Pfizer's business strategy has been changing over the last two to three years and this might be the reason behind scrapping of the deal by the company.
Biocon has the right to retain the milestone payments hat it received form Pfizer and will receive further undisclosed amount from the American company, according to Kiran Mazumdar Shaw, chairman of Biocon.
Pfizer has already given $200 million to Biocon and it was to pay additional development and regulatory milestone payments amounting to $150 million besides the royalties on the sale of the products.
Biocon's shares fell more than 7 percent in early trading on Tuesday.