The Hindu Business Line : Glenmark reorganises biz into speciality and generic

On restructuring path: Mr Glenn Saldanha (right), CEO & Managing Director, Glenmark Pharmaceuticals Ltd, and Mr Terrance Coughlin, President (US) and Head, API Marketing, at a press conference in Mumbai on Wednesday. —

Our Bureau

Mumbai, Nov. 7 Thirty-year-old Glenmark Pharmaceuticals Ltd (GPL) announced the reorganisation of its businesses into speciality and generic segments. The separation of the two businesses is to be more focused besides being present in both ends of the pharmaceutical segment, said Mr Glenn Saldanha, Chief Executive Officer and Managing Director of the company. The process is slated to complete by April 2008.

Similar to the Novartis/Sandoz strategy, where Novartis focuses on innovative products and Sandoz is its generic drugs arm — Glenmark seeks to straddle both the low-cost generic drugs and differentiated speciality medication segment, he explained.

The new generic entity will be called Glenmark Generics Ltd (GGL), which will be a wholly-owned subsidiary of GPL and it will get listed on the Indian bourses by the first quarter of 2008-09. Mr Saldanha said that the company is open to diluting between 15- 30 per cent equity in the generic entity, but he did not divulge details on the money the company is looking to raise. Funds raised through GGL’s IPO would support growth plans of GPL, the parent company, besides supporting acquisition plans of the generic arm.

Revenues

Speciality products accounted for $197 million, as compared to $90 million for fiscal 2007. And the projected break-up for fiscal 2008 is that speciality products including milestone payments received by the company for drugs out-licensed by it would stand at $306 million, while sale of generics doubles to clock $180 million.

GPL has about 5,000 employees world-wide and a large section of them would remain with the company after the separation, he indicated.

Split-up details

GGL, the generics entity, will handle the development, manufacture and marketing of generic formulation and Active Pharmaceutical Ingredient businesses (API). The generics business will also inherit Glenmark’s Goa plant for formulations, the three API plants in India, sales units in the US and UK and the Argentina oncology operations. Also, a research group focused on API and development of finished dosage forms of medicine will move to the generics company.

The parent GPL, meanwhile, will directly manage the novel research and branded formulation businesses of the Glenmark group including India, Brazil, rest of Latin America (excluding Argentina), Russia/CIS, Africa and Asia, he said.

Also, the branded business will remain with GPL and it will retain remaining assets, branded generic sales groups in India and overseas and research related to new chemical entities (NCE), biologics, he said. By 2015, GCL targets becoming a global, integrated generic player with more than 170 generics in the US, more than 70 generic dossiers in the EU, besides a presence in Japan, South Africa and other generic markets, he explained.

Glenmark shares closed at Rs 486.45 on the BSE on Wednesday.

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