Biocon shares rise on Pfizer drug deal report

Biocon shares rise on Pfizer drug deal report

Bangalore: Shares in Biocon Ltd rose 8.2% to an all-time high on Thursday after media reported India’s top listed biotechnology firm would outlicense its insulin portfolio for diabetes treatment to Pfizer.

Citing unidentified sources, ET said Pfizer would pay the Indian firm $200 million upfront for rights to market the drugs in the United States, the European Union and some emerging markets. The deal would be announced end-October, it said.

“We do not comment on rumours and speculation," Pfizer said in a statement, while officials at Biocon were not available for comment immediately.

“Biocon shares have risen on this," said Ranjit Kapadia, vice president, institutional research at HDFC Securities. “Pfizer’s Lipitor is coming off patent. They will have to bridge that gap somehow."

Lipitor is a blockbuster cholesterol fighting drug, which is set to face generic competition in 2011.

Emerging markets are a priority for Western drug companies such as Pfizer, as they face slowing sales in their home markets and cheap off-patent drugs that can be sold in high volumes under a multinational brand are an attractive market opportunity.

Biocon shares surged to Rs412, the highest since they were listed in 2004, in a subdued Mumbai market. 2:30pm, the shares were at Rs396.80up 4.2% Kapadia has a ‘hold´ rating on Biocon.

Bangalore-based Biocon’s experimental oral insulin for diabetes is undergoing late-stage clinical trials in India and initial trials in the United States. Its diabetes medicine brand Insugen is sold in India and some emerging markets.