Generic drugmaker Actavis has withdrawn from its joint venture with Biocon focusing on the development of biosimilar insulins, with Mylan stepping into the breach.
As a result, Biocon said it plans to buy its share of the Actavis JV - first set up in 2010 - in order to secure exclusive rights to its biosimilar insulins in the US, EU and Japan.
Actavis said it elected to exit the collaboration because of a change in focus resulting from its acquisition by Watson Pharmaceuticals last year, creating the third-largest global generics company with 2012 revenues of around $8 billion.
Watson - now renamed Actavis - has indicated that the decision to exit the joint venture was based on a different development strategy in the wake of the merger, with a focus on biologic drugs other than insulins.
Step forward Mylan, which took the opportunity to forge its own strategic collaboration with Biocon for the development of three inulin analogues, namely biosimilar versions of Sanofi's Lantus (insulin glargine), Eli Lilly's Humalog (insulin lispro) and Novo Nordisk's NovoLog (insulin aspart) which collectively turned over around $11.5 billion in 2012.
"We believe we have the opportunity to be one of the first generic entrants in developed markets into the rapidly growing diabetes area, helping to address unmet needs and reduce the economic burden to those battling the disease and to the global healthcare system," commented Mylan's chief executive Heather Bresch.
Insulins proved resistant to generic competition for years - despite the maturity of the product category - because they are relatively hard to develop and manufacture, cutting into potential profit margins for copies of established brands.
The burgeoning diabetes epidemic around the world has encouraged some generic drugmakers to rethink, however, and in particular biosimilar versions of insulin analogues are viewed as having immense growth potential.
Under the terms of the deal, Mylan and Biocon will share the costs of bringing the biosimilars to market.
Mylan will have exclusive commercialisation rights in the US, Canada, Australia, New Zealand, the EU and European Free Trade Association (EFTA) countries via a profit-share arrangement with Biocon and co-exclusive rights with Biocon in certain other markets around the world.