Glenmark has outlicensed a handful of molecules in the past. How stable is the business?
Clearly Glenmark's model is heavily predicated around out-licensing as far as the R&D goes. And over the years we have got around $210 million in cash by out licensing our innovation, which is clearly ahead of what any other company has established. So that will continue to be our business model. Going forward, you will see further out-licensing deals and more licensing income. So the model remains intact. While continuing to persist with the out-licensing model, we will simultaneously build capabilities to do late stage development R&D work as well.
Seven out-licensing deals since 2004. But none of the molecules show any success so far?
That drug discovery is fraught with risks and failures is a given. But the important thing is that we are addressing that critical area of global medical needs that are not met with. The next financial year is important for us as we will be getting crucial data points for some of our molecules in the pipeline. Some of these results, if positive are expected to trigger out-licensing activities over the next 12 months.
Paragraph IV filings worth $10 billion has been submitted. What’s the update?
A key driver for our US business, the largest business for Glenmark in terms of sales, has been our niche Para IV strategies. Glenmark has close to 20 Para IV ANDA’s pending approval with the US-FDA. We launched Malarone and Cutivate in the last financial year. Based on litigation settlements, we will be launching Hydrocortisone Butyrate Cream, by the end of fiscal year 2013-14. In addition, we have Ezetimibe (Zetia) which is expected to be launched by December 2016.
What is the revenue earned from sales of Cutivate, Malarone?
In case of Malarone and Cutivate, we were the sole First to File (FTF) player, which meant that we enjoyed sales exclusivity for a comparatively long period. Recently Authorized Generics (AGs) of the two products have been launched so we have lost some sales on account of that. But we have done exceedingly well in other product launches, specially the host of oral contraceptives. So it is a host of new products that we launched over the last 12 to 18 months which are now beginning to see some good traction as far as the US business goes.
Which are the areas of focus in the US market?
Our strategy for the US market has always been focused towards capturing niche segments with limited competition, such as dermatology, hormones, controlled substances and modified release categories. In third quarter of the current fiscal, we have seen the US business grow in excess of 35% and going ahead also we expect good growth coming out of this market.
No acquisitions were made in recent past?
Mergers & acquisitions are not part of the company’s strategy atleast for the next 2-3 years. We will be focused on organic growth. We are growing at a healthy growth rate of over 20% CAGR and we are confident of maintaining this. Also, our focus is to generate more free cash for the business.
How do you plan reducing high debt of Rs 1,924 crore?
The business continues to generate free cash. The free cash generated over the next two-three years will all go towards debt repayment. So, debt should continue to come down, as we go forward on a much stronger EBITDA base.
Are you expecting any of the NCEs to hit market soon?
The approval for Crofelemer has paved the way for Glenmark becoming the first Indian company to launch a New Chemical Entity (NCE) across multiple geographies. Glenmark has the rights to market and distribute Crofelemer in 140 emerging markets while Salix Pharma has the rights in developed markets. The estimated potential peak sales for Glenmark in 140 emerging markets for HIV associated diarrhea is $80 million.
What’s the update on NBEs (new biological entities) such as GBR 500, 900?
GBR 500, a “first in class” monoclonal antibody for the treatment of Crohn's Disease and other inflammatory conditions, was licensed to Sanofi in the previous Financial Year (FY12). Phase I studies for GBR 500 have been completed in the US. A Phase II proof of concept study in ulcerative colitis has been initiated in Q2 FY 2012-2013 and is currently ongoing. Pre-clinical research on the GBR 900 project is being carried out at Glenmark's Biologics Research (GBR) centre at La Chaux-de-Fonds, Switzerland and is progressing well. Phase 1 enabling toxicity studies for GBR 900 have been initiated. Glenmark plans to file for a Phase I study in Q1 FY 14.
Update on Revamilast?
Revamilast has completed a Phase IIb trial for Rheumatoid Arthritis in Europe and Asia. Topline data from this study has shown a favourable side effect profile but failed to show evidence of competitive efficacy for the primary end-point. In depth analysis of the data from this study is currently ongoing. Glenmark anticipates topline data from another Phase IIb trial for Revamilast in Asthma in Q2 2012.
Plans of restructuring the domestic business?
Glenmark's growth in the Indian market is driven by new brand introductions and focused strategy of divisionalisation. Cardiometabolic, Respiratory and Dermatology, our key segments continue to register growth. The India business is on a strong base and we are confident that this business has the ability to outpace industry growth going ahead also. We have taken lot of measures to drive this growth like augmenting our sales force.
