Glenmark gets USD 15m plant upgradation advance from Salix

Glenmark Pharmaceuticals today said it has received USD 15 million (over Rs 65 crore) from Salix Pharmaceuticals Inc, USA, as an advance payment to upgrade its plant for production of Crofelemer, used for treating diarrhoea.

"This is as per an agreement for advance against commitment fee, which is to cover Glenmark's risks associated with upgrading its manufacturing facilities to meet Salix's anticipated increased requirements in demand for Crofelemer," Glenmark Pharmaceuticals said in a statement. As per the terms of the agreement, Salix had agreed to pay Glenmark USD 21.6 million (about Rs 95 crore) as a commitment fee in five equal annual installments, with the first annual installment due in July, 2012, it added. After remitting the advance of USD 15 million to Glenmark, Salix will pay the Indian firm the remaining USD 6.6 million of the commitment fee in five equal annual installments, it added. The company said the commitment fee is in addition to the compound purchase price payable by Salix to Glenmark. Shares of Glenmark Pharmaceuticals were being quoted at Rs 339.55 apiece in afternoon trade on the BSE, up 3.22% from their previous close.