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Drugmaker Glenmark Pharmaceuticals Ltd has decided to spin off its innovation business into a new company in the United States, a move that will get it closer to the research-led ecosystem.
Explaining the rationale, Glenn Saldanha, Chairman and Managing Director of the company, told BusinessLine that being in the US would give the business a better focus, attract talent and, later, unlock value for the parent company in terms of getting strategic partners or investors on board.
But that would be a decision for the new company’s management to take, he said, adding that it would have an entirely new board and Chief Executive Officer. The aim is to focus on innovation and grow in the direction of being a leading biotech company with its operations extending out of India, Switzerland and New Jersery (US), where the management would be based. The transfer of the assets and employees to the new innovation company would be completed in six to nine months, he added.
On Thursday, Glenmark’s board gave its in-principle approval for the spin-off that would also help accelerate its innovation business towards commercialisation. The innovative pipeline includes products focussed on the immunology, oncology and pain management segments.
The new company will be a wholly-owned subsidiary of Glenmark and will hold all innovative molecules in the pipeline, including pre-clinical assets and technology; the research and development centres in Switzerland, R&D centre in the US, and the R&D centre at Navi Mumbai, related to the innovation business, and the biologics manufacturing facility in Switzerland along with all employees associated with innovative R&D. The new streamlined operations would have over 400 employees.
The specialty and generics business will continue to be housed in the parent company, Glenmark clarified. In 2014, it had merged these two businesses that had been seperated about seven years ago.
Glenmark was among the early birds to have worked on drug discovery and development; the latest move will pitch it onto a global research platform, competing with the big boys on their turf. Till date, Glenmark has generated about $250 million through 8 out-licensing deals for novel molecules to global pharma companies, including Merck, Eli Lilly, Sanofi and Forest Laboratories, the company said.
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