Actavis said today that it is considering the purchase of a 51% stake in Biopartners, the Swiss subsidiary of the quoted Polish company Bioton. The cost of this is to be determined, but will depend on the future investment needs of the business – given that Biopartners has very low revenues and substantial R&D spending, we assume that the up-front payment will be negligible but that the subsequent costs will be rather more significant.
Biopartners’ portfolio consists of EMEA-approved versions of human growth hormone and ribavirin (the latter given its MA only in April this year) and a disclosed development pipeline consisting of a single product, sustained-release hGH. The company had also been developing a biogeneric version of interferon-beta but had it turned down by the EMEA and has clearly decided not to invest in the work necessary to gain an approval. Actavis appears enthusiastic about the once-weekly hGH, but it is unclear whether it is also ready to cover the cost of any new pipeline products for Biopartners, which works in collaboration with its manufacturing partner, LG of Korea.
Apart from buying in to Biopartners, Actavis also plans to distribute Bioton’s recombinant human insulin (although it was not disclosed which markets this agreement covers) and to co-fund a Hepatitis B vaccine being developed by Bioton’s Singapore subsidiary, SciGen. How the finances of either of these elements of the deal will work has yet to be seen, and neither is it clear that Actavis actually has the infrastructure to market insulin, since its existing hospital business is essentially tender-based and its diabetes franchise centres around oral therapies dispensed by retail pharmacists.
The fact that Actavis’s new CEO has strong contacts in Poland has surely helped the company to put together what appears to be a rather complex and confusing deal. The benefit for Bioton – which has recently been concentrating on improving the state of its balance sheet by disposing of non-core assets – is presumably that it reduces its future R&D spend and boosts its marketing strength in insulin, while Actavis gets to pick up some biosimilar products at what we guess will be a very low cost.