Glenmark Pharmaceuticals today said it has received $15 million (over Rs 65 crore) from Salix Pharmaceuticals Inc, USA, as an advance payment to upgrade its plant for production of Crofelemer, used for treating diarrhoea.
“This is as per an agreement for advance against commitment fee, which is to cover Glenmark’s risks associated with upgrading its manufacturing facilities to meet Salix’s anticipated increased requirements in demand for Crofelemer,” Glenmark Pharmaceuticals said in a statement.
According to the terms of the agreement, Salix had agreed to pay Glenmark $21.6 million (about Rs 95 crore) as a commitment fee in five equal annual instalments, with the first annual instalment due in July 2012, it added.
After remitting the advance of $15 million to Glenmark, Salix will pay the Indian firm the remaining $6.6 million of the commitment fee in five equal annual instalments, it added.
The company said the commitment fee is in addition to the compound purchase price payable by Salix to Glenmark.
Shares of Glenmark Pharmaceuticals were being quoted at Rs 339.55 apiece in afternoon trade on the BSE, up 3.22 per cent from their previous close.