In a move that showcases its R&D strength, Glenmark Pharma has struck an out-licensing deal, the largest for an Indian company, with Sanofi for developing and commercialising Glenmark's anti-inflammatory drug.
Codenamed GBR 500, the drug, a monoclonal antibody, is said to treat Crohn's disease and multiple sclerosis.
The deal is expected to close in the coming month and would help the Glenmark lower its debt and fund its R&D initiatives. It would also help restore investor confidence in the company's R&D capability, considering that it is the second such deal with Sanofi in over a year.
Only in May 2010, Glenmark had signed a similar out-licensing deal with Sanofi for its molecule GRC 15300. The stock price closed Monday 11.5 per cent higher at Rs 306.
The big deal
Under the terms of the deal, Glenmark will receive $25 million (about Rs 113 crore) upfront, followed by a second tranche of $25 million, contingent on data provided. The total milestone payments could go up to $613 million (about Rs 2,759 crore), including payments based on regulatory clearance and other milestones.
Glenmark would also be eligible receive double-digit royalties on sales of product commercialised. Note that Glenmark has completed phase I dosing of GBR 500 in the US. The company had reported a consolidated sales and profit of Rs 2,949 crore and Rs 457 crore respectively for the March 2011 fiscal.
According to the deal, while Sanofi will have exclusive marketing rights for North America, Europe, Japan, Argentina, China and Uruguay, the two companies will co-market the product in Russia, Brazil, Australia and New Zealand. Glenmark, however, has retained the exclusive marketing rights in India.
Implications
The deal puts Glenmark's R&D strengths in good light, especially in the biologics arena. That the deal's a first novel biologics out-licensing deal from an Indian company may put it in perspective. The financial implications, for most part, may not be immediate but for the $50 million payment that would come upfront.
On a larger canvas, the deal also highlights a reversal in trend of sorts, with global pharma companies beginning to sign drug development deals. In October 2010, Biocon had signed a $350-million marketing deal with Pfizer for its biosimilar versions of insulin.