Global Managed-Care Offering to Help Bring Down Treatment Costs for 366 Million Diabetics
WARSAW, Poland, Jan. 30, 2012 /CNW/ - Actavis and Bioton (WSE:BIO) announced today that they have formed a joint venture company for the development and registration of insulins, including analogue insulins. Within the framework of the joint-venture, Bioton will be responsible for the development and manufacture of insulin products, while Actavis will be granted an exclusive licence to commercialise those products under the Actavis brand throughout the European Union and the United States of America, as well as in Albania, Bosnia & Herzegovina, Croatia, Iceland, Japan, Kosovo, Lichtenstein, Macedonia, Montenegro, Norway, Serbia and Switzerland. In Poland, both companies will offer the insulin products under their respective brands, Bioton being a Polish company.
The announcement, at a press conference in Warsaw today, was made jointly by Ryszard Krauze, Chairman of the Supervisory Board of Bioton, and Claudio Albrecht, CEO of the Actavis Group and Chairman of the Actavis Board of Directors.
Actavis has agreed to remunerate Bioton with the aggregate amount of EUR 55.5 million, of which EUR 22.25 million at signing today. The remainder (EUR 33.25 million) will be paid in instalments in accordance with agreed milestones relating to the registration process involving recombined human insulin (RHI).
Based on the sales volumes estimated by the parties, the Actavis' revenues from the sale of the Insulins by Actavis into the markets in the initial period of 7 years from launch are expected to exceed EUR 1.5 billion. Pursuant to the agreement, the parties will share on an equal '50/50' basis the profits from the sale of the insulins performed by Actavis, as well as the development and registration costs related to Bioton insulins.
In addition to the above, the Bioton Group have also signed memoranda of understanding with Actavis for the sale of insulins in 24 additional territories, including Turkey and Australia. Actavis will pay an additional consideration of up to EUR 1,900,000, including EUR 1,000,000 at signing. Both parties expect that sales of Bioton's recombinant human insulin by Actavis into some of the additional territories shall commence on the turn of 2012 and 2013. The profits from the sale of the insulins in these additional territories will again be shared on an equal basis (50/50). Formal documentation of these arrangements is expected to be concluded in the following weeks.
Actavis CEO Claudio Albrecht believes the new alliance will create tremendous value for Actavis and Bioton and their respective shareholders. "The recombinant- and analogue insulins alone should add around EUR 900 million (USD 1.2 billion) to our enterprise value. Thanks to the collaboration agreement with Bioton, we will be among the leading manufacturers of insulin, including analogue insulins," predicted Albrecht.
Chairman of the Supervisory Board of Bioton S.A. Ryszard Krauze commented, "The cooperation with Actavis has a strategic importance for Bioton. We will jointly introduce modern insulins, including analogue insulins. For the last two years, we have been consistently increasing the sales of our products based on collaborations with leading global pharmaceutical firms such as Bayer HealthCare in China and GlaxoSmithKline in Russia. Today, we are pleased to welcome another large pharmaceutical firm to our group of partners - Actavis."
DIABETES - A GLOBAL EPIDEMIC
New data released by the International Diabetes Federation (IDF) indicates that more than 366 million people worldwide are living with diabetes. Due to poor diet and sedentary lifestyles, diabetes is rapidly becoming a global epidemic, and the number of diabetes patients is expected to rise to a figure in excess of 550 million by 2030. The World Health Organisation (WHO) projects that the global insulin market will grow from the present level of approximately USD 14 billion to USD 54 billion over that same period.
On average, a patient with diabetes type 2 takes almost 30 different medicines over the course of the disease. In light of that fact, the collaboration with Bioton represents a more fundamental and strategic concept in terms of treating diabetes, according to Claudio Albrecht.
"The diabetes idea for us is a much wider one than just promotion and sale of recombinant human insulin or insulin analogues," he said. "We are encountering competitor giants when it comes to insulin and we have to maximise the competitive advantages that we clearly have. Bioton's insulin products have a market presence of more than 10 years' standing, with an excellent safety and efficacy profile. This puts us in a situation where we can overcome more easily any potential doubts that key opinion leaders might have when it comes to biosimilars."
"Furthermore, we differ in one aspect very strongly in comparison with the originators," Albrecht added, highlighting the extensive range of generic type-2 oral diabetes drugs that Actavis already offers. Actavis' pipeline also includes high-value 'gliptin' products and several fixed dose combinations with Metformin.
COMPREHENSIVE CARE OFFERING
Albrecht noted that the opportunity to market a much broader portfolio in the context of diseases related to diabetes is a great one. "Actavis is the only company that can offer such a broad diabetes- and related diseases portfolio. We can tell payers that we cover the whole diabetes segment for a cost that is probably considerably less than they have been paying to date."
CEO of Bioton SA Slawomir Ziegert said, "For Bioton, the collaboration with Actavis will, in addition to bringing direct financial benefits, fuel faster expansion into high-margin markets, while supporting the implementation of our product synergy strategy and further growth in the area of cardio diabetology. Patients value highly the unique and comprehensive care offered by Bioton, a package which includes insulin, injectors, glucometers, oral diabetes medicines and an educational programme. All these elements provide an opportunity to extend our collaboration with Actavis in many markets around the world."
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