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In its second licensing deal with France's Sanofi in 12 months, Glenmark has granted the multinational drug-maker a licence to develop and commercialise a biological compound targeting Crohn's disease and other inflammatory conditions.
The deal is valued at $613 million (about Rs 2,697 crore), which the Mumbai-based drug-maker expects to get as milestone payments as the product gets developed. Glenmark stock-price shot-up 20 per cent on the news, closing up about 12 per cent at Rs 305, on Monday.
As part of the agreement, Glenmark will receive an upfront payment of $50 million on out-licensing its prospective molecule GBR 500 — a novel monoclonal antibody. However, half this amount will be paid on closing the transaction, “which is contingent upon Sanofi's positive assessment of certain data to be provided by Glenmark,” the company said, without giving details. The projected timeline for the drug to hit the market is 2017, by when most of the payment is expected to come through, company officials said. In May last year, Glenmark had out-licensed its prospective pain molecule to Sanofi.
Glenmark's business model is through partnering, said Mr Glenn Saldanha, Managing Director and Chief Executive, of the company, adding that, it was the first time a novel biological product (from a living cell) was being out-licensed by an Indian company. The money will be used to part-service the company's debt of Rs 1,900 crore, he said. The transaction is slated to close in June.
Glenmark will also receive tiered double-digit royalties on sales of the products commercialised under the licence.
Licensing travails
Glenmark was among the earliest off the block in licensing out molecules that showed the promise of making it to a full-fledged drug. But with some of these deals failing or coming back into the Glenmark stable in 2008, Mr Saldanha said, the environment for licensing was “challenging”. Big Pharma was in the process of changing its strategic intent, there was the down-sizing of companies — closing of research facilities and laying-off of scientists, he said, adding, “Companies need to have the ability to stay in the game for the long run.”
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