Glenmark to get USD 9 mn upfront: CEO; stk at 52-wk high

Moneycontrol Bureau

Shares of Glenmark Pharmaceuticals rose over 2 percent to a 52-week high of Rs 512.65 on Monday morning following its agreement with Forest Laboratories on a collaboration for development of inhibitors to treat chronic inflammatory conditions, including pain. "Glenmark has identified clinical candidates and is currently conducting pre-clinical studies and other development activities required to support the initiation of first-in-human dosing," the Mumbai-based company said.

Also read: FDC denies stake sale plans, says looking to buy pharma cos Under the deal, Forest will make a USD 6 million upfront payment to Glenmark and provide an additional USD 3 million to support the next phase of work. Forest will make other future payments in the next financial year (FY14) to support the advancement of the ongoing mPGES-1 inhibitors programne and has an exclusive option to obtain license rights to the programme once the phase-I clinical trials are complete, Glenmark added. The partnership combines Glenmark's expertise in product development and manufacturing network with Forest's development and regulatory expertise and a strong commercial footprint, said Glenn Saldanha, CMD, Glenmark. The collaboration between Glenmark and Forest will be managed by a joint development committee with equal representation from both companies. At 10:00 hrs, Glenmark traded at Rs 508.40, up 1.8 percent on NSE.

In an interview to CNBC-TV18, Glenn Saldanha,chief managing director, Glenmark gives the details of the deal.

Below is the edited transcript of Saldanha's interview to CNBC-TV18. Q: Tell us about deal between Glenmark and Forest Laboratories. What kind of upfront payments are involved? How soon do you think it is going to hit the Phase 1? A: The deal we have signed with Forest is a Development Agreement where we have given Forest an option to license one of our mPGES-1 programs. We get a USD 9 million upfront payment which should come to us immediately and then there are further milestones which we will receive next year, in FY14. At the end of Phase 1, both Glenmark and Forest will sit down and Forest has a first right of negotiation on establishing a further collaboration agreement thereafter. 

Q: Can you give us an indicative timeline of when Phase 1 could see completion? A: We anticipate that in FY14, we will have a Phase 1 candidate. Once we get into the clinics, it will take us about six to nine months to complete Phase 1.

Q: Your press release says that Forest will make a USD 6 million upfront payment to Glenmark and provide an additional USD 3 million to support the next phase of work. Also, there will be other future payments in FY14. Any indication of what those payments could look like?
A: The USD 6 million and USD 3 million we will receive immediately. I cannot comment on future payments.

Q: What is the potential size of the market that you are hitting with this product though? What could the upsize be?
A: mPGES-1 inhibitors are primarily for pain and inflammation. So, it is a very large market. If this candidate makes it to market, clearly this is a multi-billion dollar opportunity for both the companies.