Glenmark Pharma, Sanofi ink licensing deal for $613 mn

Glenmark Pharmaceuticals SA, a wholly-owned subsidiary of Glenmark Pharmaceuticals Ltd, today said it has out-licenced its novel monoclonal antibody, GBR 500, to French drug-maker Sanofi for as much as $613 million.

"We have entered into an agreement with Sanofi to grant the latter the license for developing and commercialisation of GBR 500, a novel monoclonal antibody for the treatment of Crohn's Disease and other inflammatory conditions," Glenmark Pharmaceuticals Managing Director and CEO Glenn Saldanha told reporters here.

This is the second deal the company has entered with Sanofi. The transaction is expected to close next month, he said.

Under the agreement, Glenmark will receive an upfront payment of $50 million, which will be used to repay debt, he said. The net debt of the company an of March 31 stood at Rs 1,900 crore.

"The total of these payments could reach $613 million. In addition, Glenmark is eligible to receive tiered double-digit royalties on sales of products commercialised under the licence," he said, adding that the bulk of the payment will flow by 2017.

In addition, Glenmark could receive potential success-based development, regulatory and commercial milestone payments, he said.

Sanofi will have exclusive marketing rights for products developed using GBR 500 in North America, Europe, Japan, Argentina, Chile and Uruguay, while it will co-market the products with Glenmark in Russia, Brazil, Australia and New Zealand.

Glenmark will retain exclusive marketing rights in India and other countries in the rest of the world.

Phase 1 of testing for GBR 500 is already complete and Phase 2 will begin as soon as the deal is completed, he said.

The company has six different molecules under different stages of development, including GBR 401, GBR 600, GBR 900, he said.

Glenmark had acquired GBR 500 and GBR 600 from a Canadian pharmaceutical company at the early stages of its development, he said. In FY12 the company is expected to spend about Rs 200 crore on a revenue of Rs 4,000 crore, he said.

Shares of Glenmark Pharma opened 10% up and went as high as 19% on the BSE after the deal was announced.