Glenmark's research arm will be self-funded soon, says Glenn Saldanha

Pharma major evaluating opportunities to out-license key cancer asset ISB-2001, deal likely in H1CY25

Pharma major Glenmark’s innovation and research arm will soon be self-funded, as the Mumbai-headquartered company is looking to out-license one of its key cancer assets (ISB-2001) within the next few months.

 

The company’s Chairman and Managing Director Glenn Saldanha told Business Standard that post the deal, Glenmark would not need to fund its innovation arm Ichnos Glenmark Innovation (IGI) anymore.

 

“Very clearly we are hoping to conclude something in this year and post that, IGI will be self-funded and adequately funded to support its research and development (R&D) activities going forward,” Saldanha said.

 

He has fought a long battle to pursue his ambitions around innovation, and has already tasted success with several key partnerships it forged with players like Almirall and Astria for innovation assets.

 

Saldanha feels that ISB-2001 is going to be a game-changer for the company and its innovation story. The candidate is targeted to fight against multiple myeloma (MM) and in July 2023, had received orphan drug designation from the USFDA for the treatment of MM. Phase-1 trial in human study is underway, and dose escalations are being tested now. The company feels that due to its mechanism of action, ISB 2001 can also potentially be a viable therapeutic option for various autoimmune indications. 

 

Analysts too are betting on the molecule. In an April report Motilal Oswal said that following the completion of the dose optimisation study for ISB-2001, Glenmark is now working on a dose expansion study or part B or phase-1 trial.

 

“Given the promising clinical outcomes of this molecule, the company is actively evaluating out-licensing opportunities for this product,” the analysts noted.

 

Glenmark has had its tryst with managing R&D spending, its debt and cash flows over the years. In 2019, Glenmark had spun off its research unit into a separate subsidiary to de-risk its investments, bring down debt and improve focus on base business. Earlier, the cash flows from the base business were deployed in the high-risk innovation programme, which several analysts had felt was a drag on shareholder value.

 

A successful out-licensing of ISB 2001, which makes IGI self-sufficient in terms of funding, is thus a significant milestone in Glenmark’s innovation journey. Whether the money from the deal goes back into funding IGI’s R&D or is ploughed back to Glenmark is not clear.

 

“I can't give you the full visibility on what we'll do with the cash and how we'll deploy it, okay. But the reality is, IGI won't need funding from Glenmark going forward for many years to come, I mean, that's the way to think about it,” Saldanha said.

 

Motilal Oswal analyst Tushar Manudhane noted that Glenmark is on track to optimise R&D spending on its innovation assets. From 8 per cent (Rs 800 crore) of total sales in FY19, the company has reduced innovation R&D spend to 4.5 per cent (Rs 600 crore) in FY24, and further to 3.5 per cent of sales in 9MFY25, Manudhane noted.

 

“Glenmark’s continued efforts toward cost optimisation in innovation R&D are expected to support improved profitability going forward,” he added.

 

IGI had entered into an exclusive global licensing agreement for another innovation asset ISB 880 in autoimmune diseases with Spanish firm Almirall in December 2021. Glenmark got $320 million for upfront payment, development, regulatory and sales milestone payments, plus tiered royalties on global sales.

 

Within the terms of the agreement, Almirall assumed full cost and responsibility for the global development and commercialisation of the compound. The deal includes development and commercial milestone payments and tiered royalties based upon future global sales. Almirall initiated a phase-1 study in 2022, to evaluate the safety, pharmacokinetics, pharmacodynamics and clinical activity of the licensed asset.

 

In another major deal, IGI entered an exclusive global licensing agreement for ISB 830 and its follow-on ISB 830-X8 (monoclonal antibody for atopic dermatitis) with Astria Therapeutics in October 2023. In January 2025, Astria announced initiation of a phase-1 clinical trial of STAR0310, a potential best-in-class OX40 antagonist for the treatment of Atopic Dermatitis. Glenmark received Euro 20.8 million for upfront payment, plus development, regulatory and sales milestone payments, and tiered royalties on global sales.

 

Glenmark open to expanding Monroe facility in US

 

Glenmark Pharma hopes that its injectables facility in Monroe, North Carolina, in the US would be back on track in FY26, and that they are open to expanding it further. This assumes significance in the face of potential tariffs on imports into the US. The facility has faced scrutiny from the USFDA and got a warning letter from the US drug regulator in 2023. Glenn Saldanha, CMD, Glenmark, said that they will have significant benefits flowing through the Monroe facility and that they are well positioned in terms of having a manufacturing base. “Our view is, depending on how the whole environment plays out, we are happy to look at further expanding our Monroe site,” he said, adding that he is confident that the facility will be back on track in FY26. Monroe facility can make injectables, which is a drug shortage area in the US and thus provides a “differentiated” offering. “It could clearly assist the American consumer, and could fit well into the current narrative of make in America,” Saldanha said.

 

Booster shot

 

-----IGI can fund its R&D going forward post the out-licensing deal

 

-----Glenmark on track to optimise R&D spending on innovation assets 

 

-----R&D spending on innovation assets down from 8% of sales in FY19 to 3.5% of sales in 9MFY25