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Glenmark to spin off its innovation business into new company in the US

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The new innovation company will house the current innovative pipeline of eight assets, which includes five clinical and three pre-clinical assets; and innovation-related R&D centres, manufacturing infrastructure and technology

Glenmark Pharmaceuticals announced that its Board of Directors has given an in-principle approval to spin off the innovation business into a new company in the US. Setting up of the new company will provide an enhanced focus to the innovation business and help accelerate the pipeline towards commercialisation.

The new innovation company will be a wholly-owned subsidiary of Glenmark and will be based in the US. It will have an independent board and a new Chief Executive Officer. The other members of the management and the team remain unchanged.

According to the plan, all innovative molecules in the pipeline, including preclinical assets and technology; the R&D centres in Switzerland, R&D centre at Paramus in the US and R&D centre at Navi Mumbai, India related to the innovation business, and the biologics manufacturing facility in Switzerland along with all employees associated with innovative R&D will be part of the new company.

The new company will have over 400 employees as part of this business. The specialty and generics business will continue to be housed in the parent company and will not be part of this new company. The transfer of the assets and employees to the new innovation company is expected to be completed in the next six to nine months.

“Glenmark has built strong capabilities in the area of innovation in terms of world class infrastructure, talent pool, and technology. We currently have a pipeline of 8 NMEs most of which are first-in-class globally. The cutting edge work that the innovation team has delivered over the years has resulted in numerous achievements most notably among them being the fact that we have out-licensed our novel molecules to big pharmaceutical organisations consistently. With the pipeline at an advanced stage, we believe it’s the right time for the innovation business to be an independent entity and charter its own journey towards becoming a leading biotech organisation globally. This change will provide enhanced focus to the business, a better operating ecosystem and additional opportunities to unlock value for the parent company in future,” said Glenn Saldanha, CMD, Glenmark Pharmaceuticals.

The company has posted its Q3 FY 2018-19 results. Consolidated revenue was at 15.95 per cent to
₹ 25,550.45 million, the consolidated net profit at 11.07 per cent to ₹ 1,163.41 million and consolidated EBITDA at 34.70 per cent to ₹ 4,346.80 million.

India business grew by 15.39 per cent to ₹ 6,675.30 million. US business grew by 16.28 per cent to
₹ 8,556.75 million, Europe Business grew by 43.15 per cent to ₹ 3,217.39 million; ROW business grew by 5.58 per cent to ₹ 3,401.20 millio; Latin America business grew by 12.91 per cent to ₹ 1,014.33 million and the API business grew by 3.28 per cent to 2,392.47 million.

In the third quarter ended December 31, 2018, Glenmark’s consolidated revenue was at ₹ 25,550.45 million as against ₹ 22,036.62 million in the previous corresponding quarter, recording an increase of 15.95 per cent. Consolidated net profit was at ₹ 1,163.41 million for the quarter ended December 31, 2018 as compared to ₹ 1,047.43 million in the previous corresponding quarter, registering an increase of 11.07 per cent. Consolidated EBITDA was at ₹ 4,346.80 million in the quarter ended December 31, 2018 as against ₹ 3,226.93 million in the previous corresponding quarter, an increase of 34.7 per cent.

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