Bioton seals JV with Actavis

2012-01-30



Bioton on 30 January signed a long-heralded joint-venture agreement with Actavis about the development and commercialisation of recombinant human insulin and short- and long-acting insulin analogs for the markets of the European Union, the United States, Japan, Albania, Bosnia and Herzegovina, Croatia, Montenegro, Iceland, Kosovo, Lichtenstein, Macedonia, Norway, Serbia and Switzerland, with an option to extend to other markets.
The Polish biotech group will receive a total of €55.5m from Actavis, including €22.25m upfront and the remaining part in tranches, subject to the achievement of certain milestones (submission of registration dossiers to the EMA and the FDA and obtaining of marketing authorisations). Bioton estimates that during the first seven years of the agreement sales on these markets should exceed €1.5bn. All profits and costs are to be shared 50/50 between the two firms.
Under the agreement, Bioton and Actavis will establish a 50/50 company, Actavis Bioton GmbH, headquartered in Zug in Switzerland, to which some of Bioton’s assets will be transferred pertaining to the development and commercialisation of insulin products (marketing authorisations, sales and distribution rights, selected intellectual property rights).
Bioton will be responsible for the manufacture of insulin products at its plant in Macierzysz, whereas Actavis will take care of their distribution and sales on the markets covered by the agreement. Actavis Bioton GmbH will be responsible for obtaining marketing authorisations on these markets and for continuing R&D work on insulin analogs, with financing to be provided by Bioton and Actavis.
The parties also signed a preliminary agreement for 24 additional markets, including Australia and Turkey, where sales could begin at the turn of 2012 and 2013. If it is finalised, Actavis will pay Bioton up to €1.9m in additional remuneration. According to Bioton, the additional agreement should be closed in a matter of weeks.

It is very probable that Polish manufacturers will focus on export sales in the coming years. This would be a way to cope with growing difficulties on the Polish market due to very restrictive reimbursement policies. In the coming years, especially in 2012, it will be very difficult to generate high sales on the domestic market. This also refers to Bioton.
However, Bioton's current expansion strategy − which consists in setting up partnerships − differs from e.g. that of Polpharma. At first sight it seems to be safer as it does not require as extensive expenses as in the case of acquisitions, which allows the company to appear on quite distant markets. On the other hand, the company incurs losses, which suggests that maybe the number of agreements and expectations as regards revenues have been too high and the related plans too optimistic.

Monika Stefańczyk
Head Pharmaceutical Market Analyst
PMR Publications