India’s largest bio-pharmaceutical major Biocon has entered a licence and supply pact with a subsidiary of China Medical System (CMS) for three generic formulation products in China. With this, the company gets access to the second biggest pharma market in the world.
As part of the agreement, Biocon will be responsible for the development, manufacturing and supply of the products, while CMS will be responsible for registration and commercialisation of the products in the neighbouring country. The company, however, did not name the three products which are a part of this deal.
Arun Chandavarkar, CEO and Joint Managing Director of Biocon, said, “This collaboration will allow us to take our US approved generic formulations to patients in China, allowing us an early entry in the world's second largest, and rapidly growing generics market.”
According to IQVIA data, the total market size for these three generic products in China is about $0.8 billion. The initial term of the agreement is for 10 years from the date of commercialisation, extendable by two years on a product basis by mutual consent. This collaboration can be extended to a broader portfolio in the future.
In the previous quarter, the Bengaluru-headquartered company’s small molecules business had reported a revenue growth of 20 per cent at Rs 480 crore, led by a robust performance of its generic formulations business.
According to a report by Bank of America Merrill Lynch, amid stiff competition in the US market, Indian pharmaceutical firms are lining up for business in China, mainly through joint ventures. The Chinese generics market is pegged at around $84 billion.
Last month, India’s largest drug marker Sun Pharma had entered a deal with a subsidiary of CMS to develop and commercialise seven generic products in Mainland China. Aurobindo Pharma is also not far behind and had in August entered a JV with Chinese firm Shanghai LongJin Investment Company and Sveva Capitals, Hong Kong, to develop, manufacture, market and sell pharmaceutical products for China, excluding Taiwan, Hong Kong and Macau. Dr Reddy's Laboratories has also identified about 70 products for China to be launched in a few years and is also planning to build a new plant there.