R&D spin-off may help Glenmark Pharma to cut investment risks, reduce debt

But US growth hinges on product approvals and pace of price erosion

Glenmark Pharma plans to spin off its research unit into a separate US-based subsidiary to de-risk its investments, bring down debt, and improve its focus on the base business. The innovation subsidiary, which will house both the conventional as well as the biomolecules, research and development centres, and about 400 employees, is likely to start operations as an independent entity in 2019-20 (FY20). The company may engage strategic or financial investors to fund the research programme.

Saion Mukherjee and Prateek Mandhana of Nomura believe the creation of an innovation subsidiary will limit the gap between money spent on innovation and