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Glenmark gets favourable interim order against Napo Pharma

P. T. Jyothi Datta/M. Ramesh
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A file photo of Glenn Saldanha, Chairman and Managing Director, Glenmark Pharmaceuticals.
Business Line A file photo of Glenn Saldanha, Chairman and Managing Director, Glenmark Pharmaceuticals.

Dispute over exclusive rights on anti-diarrhoeal drug

Drug maker Glenmark came in for some good news on its dispute with Napo Pharmaceuticals Inc regarding the commercialisation of anti-diarrheal compound Crofelemer.

In the arbitration claim filed about a year ago, the International Centre for Dispute Resolution (ICDR) has ruled in favour of Glenmark Pharmaceuticals, the company said.

Exclusive rights

Among other things, Glenmark had sought exclusive rights to develop, commercialise and distribute Crofelemer in 140 countries for the treatment of diarrheal diseases. And this included the exclusive rights to distribute though relief agencies in these countries.

It also sought an injunction prohibiting Napo from sharing confidential information concerning the manufacture of Crofelemer.

The ruling today is an interim award addressing the issues currently before the ICDR, Glenmark said. Other issues between the parties have been deferred to a second phase.

Glenmark Pharmaceuticals has an exclusive licence from Napo Pharmaceuticals Inc to distribute and commercialise Crofelemer in 140 emerging countries including India for indications related to HIV, use in acute adult and pediatric diarrhea.

ICDR ruling

The ICDR has ruled that Glenmark has exclusive rights to commercialise and distribute Crofelemer include the exclusive right to distribute Crofelemer through relief agencies in the 140 countries that comprise the Glenmark territory, Glenmark said.

The ICDR also ruled that the company has two years from the time Crofelemer is approved in India (on an indication by indication basis) to file for regulatory approval in the 140 countries in its territory.

Finally, the ICDR has found that Napo has breached the collaboration agreement by disclosing confidential information concerning the manufacture of Crofelemer to Aptuit Laurus (“Aptuit”) and enjoined Napo from disclosing such confidential information to third parties and from purchasing or obtaining Crofelemer from Aptuit, Glenmark added.

“We are delighted that the arbitrators have reaffirmed Glenmark’s rights to commercialise Crofelemer through relief agencies. Diarrhea is a big concern around the world, especially in emerging markets and globally millions of patients suffer from diarrhea every year. This ruling will allow Glenmark to further its commitment to working with relief agencies to distribute Crofelemer to affected populations. We also are pleased that the arbitrators have prevented Napo from sharing confidential information concerning the manufacture of Crofelemer with our competitors and other third parties,” said Glenn Saldanha, Chairman & Managing Director of Glenmark, in a statement.

Napo has also filed a claim in the same proceeding seeking a ruling that Glenmark had materially breached the collaboration agreement between the parties by failing to, among other things, commercialise Crofelemer in all 140 countries in its territory and to manufacture a paediatric formulation for Crofelemer.

In its ruling today, the ICDR rejected Napo’s material breach claim, finding that Glenmark has complied with all of its obligations under the collaboration agreement.

Meanwhile, Glenmark achieved a turnover of Rs 1,565 crore (standalone) in 2011-12 and a net profit of Rs 265 crore.

For the first quarter of the current year, the company announced a turnover of Rs 392 crore (against Rs 327 crore in the same period last year, and Rs 455 crore in the previous quarter). Its net profit fell to Rs 55 crore from Rs 72 crore in Q1 last year and Rs 148 crore in the previous quarter.

On the BSE today, the Glenmark share, which is of face value of Re 1, is trading at Rs 413.30, which is Rs 8.10 higher than the previous close.

jyothi@thehindu.co.in

ramesh.m@thehindu.co.in

(This article was published on August 23, 2012)
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