Reorganisation of Glenmark into 3 entities to be concluded this fiscal: Saldanha

Drug firm Glenmark Pharmaceuticals has initiated the process of reorganising itself into three different entities and expects the process to be completed in the current fiscal year, according to its Chairman and MD Glenn Saldanha.

This reorganisation is designed to place Glenmark on an accelerated trajectory and these three different entities will together make up the Glenmark group of companies, he said said in the company's annual report 2018-19.

In his message to the company's shareholders, Saldanha said the three entities will focus on different verticals -- generics, branded and specialty products; active pharmaceutical ingredients (API); and breakthrough innovative drugs.

"We have consistently identified these as the main pillars of our strategic vision and to that extent, there is no departure from the past," he added.

With the separation - completed partially in FY 2018-19 and to be concluded in FY 2019-20 - each business will maximise its potential by sharpening its focus, unlocking value and leveraging resources and partnerships to achieve goals faster than before, Saldanha said.

The group's flagship Glenmark Pharmaceuticals will focus on generics, branded and specialty products. The API and innovation units will reside in two separate subsidiaries spun out of the flagship, he added.

"With the spin-off, each company improves its strategic focus and is free to raise capital at valuations that reflect the potential of its business," Saldanha said.

Each company can enter into alliances or partnerships to further its business interests and recruit global talent that has the passion, requisite skills and capabilities to deliver on the firm's goals and objectives, he added.

"In spite of the headwinds of greater regulatory rigor and pricing pressure, the global generics market will continue to offer a significant opportunity to bring value to patients and medical professionals who are looking for affordable, high-quality substitutes for expensive innovator brands," Saldanha said.

With operations that straddle five continents, state-of-the-art Indian and overseas manufacturing and an accent on consistent quality compliance across the organisation, Glenmark Pharmaceuticals is well-placed to fulfil this demand, he added.

On the API front, Saldanha said, an unprecedented opportunity is being created by the curtailing of API manufacturing in China, owing to tighter pollution control norms.

Company's API subsidiary, Glenmark Life Sciences is ideally placed to leverage this opportunity in a cost-effective and quality-conscious manner. Moreover, we expect the API business to grow at a good pace, he added.

"The innovation business, in the process of being transferred to an as yet-unnamed new company or NewCo, is at an inflection point" Saldanha said.

With two candidates completing proof-of-concept in humans, it is "our belief that the separation will accord this unit the independence and focus that are needed to expedite the development of its pipeline," he added.