Glenmark Pharma tumbles after Q3 earnings

Glenmark Pharmaceuticals fell 6.67% to Rs 567.65 at 14:30 IST on BSE after consolidated net profit rose 11.08% to Rs 116.34 crore on 15.58% increase in net sales to Rs 2,509.78 crore in Q3 December 2018 over Q3 December 2017.

The result was announced after market hours yesterday, 14 February 2019.

Meanwhile, the S&P BSE Sensex was down 65.61 points, or 0.18% to 35,810.61.

On the BSE, 2.26 lakh shares were traded in the counter so far compared with average daily volumes of 26,000 shares in the past two weeks. The stock had hit a high of Rs 612 and a low of Rs 555.30 so far during the day. The stock hit a 52-week high of Rs 711.55 on 10 September 2018. The stock hit a 52-week low of Rs 483.60 on 30 May 2018.

Consolidated EBITDA was at Rs 434.68 crore in Q3 December 2018 as against Rs 322.69 crore in Q3 December 2017, an increase of 34.70%.

"We have reported healthy numbers in Q3 on the back of good growth in our key markets like the US, India and Europe. We continue to receive approval for niche generic products in the US, whereas in India and Europe, increased market penetration and product launches continue to drive growth," said Glenn Saldanha, chairman and managing director, Glenmark Pharmaceuticals. He added, "We have expanded our presence in the US market through our foray into the branded dermatology segment and we continue to invest in furthering our specialty products' pipeline. We have also decided to spin off our innovation business into a new company in the US to provide enhanced focus to the business and accelerate the innovative assets' pipeline towards commercialization."

Meanwhile, 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 commercialization.

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 6 to 9 months.

Glenmark Pharmaceuticals is a research‐driven, global, integrated pharmaceutical organization.

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