Aurobindo working on second deal with Pfizer

Aurobindo Pharma is working on yet another deal with
Pfizer Inc, the world’s second-largest drugmaker, to supply 40 more products to key markets including Japan, Korea, Taiwan and Australia, according to two people familiar with the situation.
This deal is expected to be signed shortly.

According to another source, the second deal would alter the relationship between the two companies.

“Aurobindo will emerge as a strategic partner and not just a supplier. Aurobindo will have to rework on the logistics to cater to the demand from Pfizer considering the volumes and the number of products,” the source explained.

“This would add another $200 million to the inflows from Pfizer at its peak by March 2014,” one person said.

The deal may see a licensing fee of about $70 million, he said.
That would mean the Hyderabad-based company would reel in more than $700 million in revenues in fiscal 2013-14.

Company chairman P V Ramprasada Reddy had said in the past that the first contract with Pfizer would bring in about $500 million or 25% of total revenues of $2 billion targeted by March 31, 2014.

Currently, revenues accruing from Pfizer are ramping up at a snail’s pace.

Aurobindo signed its first licensing and supply agreement with Pfizer about 20 months back, to supply over 80 products for onselling in Asia, Latin America, Africa and the Middle East.

The deal, with a license fee of $120 million, is for about 15 years. The products under this deal include injectibles and oral dosages in key segments such as central nervous system, cardiovasculars and anti-infectives. 

While not willing to disclose the revenues from Pfizer, a company spokesman said, “We are targeting a minimum of about $450 million and a maximum of about $700 million from all multinational deals during calendar year 2013. But, we will not be able to provide the break up of the expected revenue in terms of contribution of each multinational.”

Apart from Pfizer, Aurobindo has supply deals with other multinationals including AstraZeneca and GlaxoSmithKline.