Bioton announced on March 7th that it had signed a Term Sheet with Actavis covering the two companies’ planned co-operation to develop Bioton’s portfolio of insulins, which includes insulin analogues. According to the press release, the two companies will set up a JV that will both develop and commercialise the insulin products in the EU, USA, Japan, Switzerland, Iceland and the countries of former Yugoslavia, with costs and profits being shared equally between them. Actavis will also pay Bioton €55.5m, in unspecified instalments, to reflect the value of the product rights that have been put into the JV. According to Bioton, the intention is to finalise an agreement between itself and Actavis by the end of April 2011.
Although the Term Sheet doesn’t specify this, we assume that Bioton is keeping the rights to its own products in central Europe as well as Poland. In the CIS, it has already announced an out-licensing agreement with GSK and this may be extended to encompass other emerging markets including Asia Pacific (outside China and Japan), Latin America, the Middle East and Africa. In China, Bioton signed an agreement with Bayer back in 2009 that gave the German company rights to the insulin being made by Bioton’s Singaporean subsidiary, SciGen, in return for a €31m up-front payment and a double-digit royalty.
All these deals are a reflection of Bioton’s stretched financial condition following a string of acquisitions previously. A the time, the company clearly hoped to be able to extend the success that it had had with its generic human insulin in Poland to other parts of the world, including India, China, Russia and Ukraine, but mounting debts combined with its failure to get a biogeneric version of interferon-β approved by the EMEA led to a change of tack (and management). Now Bioton seems to have shrunk its focus back to its domestic market, with the Actavis deal providing it with an option to expand westwards if the development and approval programme goes well. For Actavis, it might have been simpler just to buy the rights to Bioton’s products rather than working through a joint venture, but the upside is that it gets to spread out the up-front payment and share the development costs, which are probably important considerations given that its own financial resources remain limited.
Posted on 9th March 2011