Glenmark Pharma
BSE: 532296 | NSE: GLENMARK | ISIN: INE935A01035 | Pharmaceuticals
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Chairman's Speech | Year : Mar '09 |
Its been an exciting decade and an eventful year for all of us associated with Glenmark. As we look back from the threshold of 2010, we see the company growing from strength to strength over the past decade, exceeding expectations and constantly delivering on its promise of performance. Glenmark established its identity as a research led, fully integrated, global pharmaceutical company. However, FY 0809 was a mixed year- the excitement of a rapidly progressing innovative pipeline clouded by a below par business performance. The global economy is still reeling under the effect of the financial crisis and few saw it coming. We too started the year with an aggressive revenue guidance and were confronted mid-year by a nose-diving global economy Iconic companies went down under and trillions of dollars have been pumped into the system by leading governments trying to bail out global giants. Factors impacting specialty business: Currencies in key markets decreased sharply vis-a-vis the dollar. With a substantial part of the specialty business coming from these markets, the impact on revenues was sudden and severe. Devalued currencies and troubled financial conditions impacted distributors in emerging markets leading to large scale trade de-stocking and extended cash cycles. At the same time the market witnessed a severe lack of liquidity in the system and tight credit availability, leading to a spike in cost of borrowing whereby rapidly expanding companies like ours were adversely affected. On the R&D side the company was also impacted by the inability to monetize any portion of its pipeline in FY 0809. A financially conservative and cautious Big Pharma caused delays in out-licensing from our New Chemical Entity (NCE)/ New Biological Entity (NBE) portfolio. Further, the setback on GRC 6211 (part of TRPV1 portfolio out-licensed to Eli-Lilly) was the first reversal we faced on a fairly advanced NCE. Though disappointing, I must also comment that in the discovery domain true innovation is circumspect without occasional set-backs. On the generics front, delays by the US Food & Drug Administration (FDA) in generic Abbreviated New Drug Applications (ANDA) approvals in the US led to below expected growth. Glenmark Generics was also hit by price erosion on Trileptal (Oxcarbazepine) in the US market. These factors had a significant impact on the generics business. In the last two quarters of FY 0809. These ranged from re-structuring of operations in emerging markets such as Brazil & Russia in order to consolidate business, to stalling operations in new markets such as Australia & China where near-term payback would have been untenable. We deferred major capital spend and scaled back plans for any merger & acquisition in the near term. Steps were taken to enhance operational efficiency, improve working capital cycle, tighten fiscal discipline and maximize cash flow from operations. These corrective measures will positively impactfinancials in FY 0910. we have steered our rich, innovative pipeline further towards fruition. The strength of our intent to carry out high quality research has been proven by the steady progress of our NCEs and NBEs. The recently completed Phase II B trials of Melogliptin (DPP IV inhibitor indicated in Type II diabetes) demonstrated potential for offering class leading improvements in glycemic control and metabolic function. Global phase HI trials are likely to start by end 2009. In addition to Melogliptin, we also expect Oglemilast (PDEIV inhibitor indicated in Asthma/ COPD) to enter phase 111 trials, subject to successful Phase II B results, in FY 0910. Of the other four molecules currently in clinics, two are likely to enter Phase II B in FY 0910. Notably, we became the first Indian company to get IND approval of an NBE from the USFDA, when we received the nod for Phase I for our novel biologic GBR500 (VLA-2 Antagonist). Crofetemer, a molecule in-licensed by us from Napo Pharmaceuticals, USA, is also progressing well in Phase III trials in US and Phase IIB in India. This is a potential first-in-class anti-secretory anti-diarrheal agent for multiple indications including HIV-associated diarrhoea. It has received fast-track designation from the FDA and we holds rights to 140 Rest of the World (RoW) countries, where the launches could begin in CY2010. We continue to be passionate about innovation, working on best-in-class targets as well as novel target areas. The near-term possibility of being part of the first Indian company to discover and take a new molecule to market keeps the team impassioned,driving them tosurpass their own standards in discovery research. This was the year of implementation of a first-of-its- kind business re-organisation in the Indian pharma market. FY 0809 witnessed both Glenmark Pharmaceuticals Ltd (GPL) and Glenmark Generics Ltd (GGL) progress well on their paths towards becoming future forces in their respective domains of proprietary and generic business. The reorganization has helped to promote sharper focus on specialty and generics as separate businesses with distinctive skill-set needs, objectives and growth imperatives, driven by aligned management teams. And made a concerted effort to strengthen business fundamentals in key GPL markets. We grew the base business (excluding the out-licensing revenues) by 20% over FY 0708. All major markets registered strong secondary growth and new regions like Central & Eastern Europe (C EE) rapidly expanded business and grew the generics business by 25% over FY 0708. Despite a slowdown in ANDA approvals and Oxcarbazepine price erosion, we grew the US business by 30% over the previous year Glenmark Generics Europe launched its first product, Perindopril, in Western Europe and continues to grow well. Despite the mixed year Glen-Tark has faced in FY 0809, it gives me great pride to affirm that we have not dithered from the path we chose tor ourselves nearly a decade back. We have not wavered from our commitment to high quality discovery research ana our ambition of pioneering cutting-edge innovation out of India. We have always worked towards growing our base business to a size and scale that enables us to fund our research activities ourselves, and we are close to realizing our aspirations. We are recognised as one of the leaders in innovation amongst Indian Pharma and for the first time harbour plans to invest a significant amount in the R&D effort in FY 0910, out of our own accruals, with a comfortable profit margin on the base business. This moves us several notches closer to being a self-reliant innovator who can carry a new molecule from ideation to fruition. We are also sure that with expected improvement in working capital management & strong cash flows from base business, the financial profile and debt levels of the company will improve multifold in FY 0910. We are steadily gaming an identity as a serious innovator and in December 2008, Glenmark bagged the prestigious SCRIP wards for the Best Pharma Company in the World SME and the Best Company in Emerging Markets at the 2008 award function at London. Glenmark is the only Indian company to have receciveu this prestigious recognition. As we step into a new financial year, I re-affirm that the path we have chosen for Glenmark may be the one lesser taken, but is undoubtedly our passage to greater heights. We are well on our way to being an innovator at par with the biggest and the best. With you reposing your faith in us, we are sure to achieve what we set out to do - Challenge old dogmas and discover a new way for a new world. Glenn Saldanha |
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| Source : Religare Technova | |
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