Glenmark buys Czeck company

Glenmark Pharmaceuticals Ltd's wholly-owned Swiss subsidiary Glenmark Holdings SA, has acquired 90 per cent shares of pharma company Medicamenta of Czech Republic. This is Glenmark's first acquisition in Europe.

Glenmark's acquisition of Medicamenta, which is projected to post a turnover of $ 8 million (Rs 34.7 crore) in 2007, is for an undisclosed consideration. Medicamenta has sales and marketing operations in both Czech Republic and Slovakia and has 60 employees. It has a product basket of 29 solid dose and semi-solid products.

The Medicamenta  has a manufacturing plant in Vysoke Myto, Czech Republic spread over 13,000 sq. metres and is approved by the Czech Regulatory Agency (SUKL). Glenmark plans to make use of Medicamenta's plant capacity to support its broader operations, by providing additional manufacturing, packaging, quality release and warehousing for its European business, said a company release.

Two years ago, Glenmark had acquired Bouwer Bartlett Pty Ltd  of South Africa and Servycal of Argentina, both sales and marketing companies. Prior to that, Glenmark had acquired Laboratorios Klinger of Brazil for a consideration of $ 5.2 million (Rs 22.5 crore).  The new acquisition provides a strategic entry point for Glenmark into Czech Republic and Slovakia, two of the fastest-growing pharmaceutical markets in Europe, dominated by branded generics.

Glenmark expects Medicamenta to provide a base for its branded business in Europe and will also look to develop and expand Medicamenta's current portfolio of pharmaceutical products. Medicamenta's leading product, Ataralgin, is a household brand in Czech Republic  and Slovakia. It is a product for treatment of headache, cold and pain, said Glenmark.

"The purchase of Medicamenta is a landmark event for Glenmark in Europe. It is another part of our long-term strategy to emerge as a speciality brand company marketing novel drugs, by acquiring front-ends in key branded generics markets," said Glenn Saldanha, managing director and CEO of Glenmark.

Under Czech Law, a holding of more than 90 per cent shares in a company will trigger a mandatory takeover bid for the remaining shares. Glenmark was advised by Nomura International plc, the European arm of the Japan based global investment bank, on the acquisition of Medicamenta.

Sources said Glenmark's solid dosage formulations plant in Goa and its API plant in Ankleshwar were both recently inspected by the UK's Medicines and Healthcare products Regulatory Agency (MHRA). A final cGMP approval for both plants in the near future would help the company increase its activities in Europe, bolstering its hopes for regulatory product approvals and commercial relationships with other generics companies in Europe.

Thanks to the acquisition news, Glenmark's share prices went up in the Bombay Stock Exchange (BSE) on Monday by 4.86 per cent, up from the previous close of Rs.592.35 to Rs.621.15.