Upfront

Glenmark splits business into specialty and generics

Glenmark Pharmaceuticals announced plans to roll its generics business into a new subsidiary and list it through an IPO by middle of next year. The company plans to dilute 15-30 percent of the new subsidiary, Glenmark Generics, Glenn Saldanha, CEO and Managing Director, Glenmark, told a press conference. The funds raised from the IPO would be used to acquire a marketing firm in the US, build the parent's speciality drug business and build a late state research pipeline, he added. The process is scheduled to complete by April 2008.

"I do not think it is the question of scale, it is a question of focus," Saldanha said when asked about the reason for the reorganisation.

Responding to questions on whether shareholders would get shares of the new company, "It is too early, we have not yet decided the modus operandi of the issue," he said.

The generics business has revenues of $90 million in the financial year to March 2007, while for the speci-ality drug business it was $197 million, he said. Saldanha said that in the current financial year, the generics business is expected to double to $180 million and speciality drug would be $306 million.
Glenmark Generics will handle the development, manufacture and marketing of generic formulation and API businesses, whereas Glenmark Pharmaceuticals will manage novel research and branded formulation businesses of the group.

Glenmark was recently in the news for entering into an agreement with Eli Lilly for its prospective pain molecule, GRC 6211. The deal projected a potential of $350 million, and Glenmark has already received an upfront payment of $45 million.

The deal was the largest for Glenmark, which had also out-licensed its prospective asthma and diabetes molecules in the past as well. The Eli Lilly deal includes co-marketing rights for the US market.