Glenmark Pharmaceuticals Ltd. stock got a booster Monday after the company said it has agreed to license out development and commercialization rights of a biologic treatment to France’s Sanofi-Aventis S.A.
Shares in the company zoomed up almost 20% to 327.80 rupees ($7.31) – the highest price in a month – before paring some of the gains. In afternoon trade on the Bombay Stock Exchange, Glenmark was up 12% at 306.60 rupees, while the benchmark Sensex was down 0.7%.
This is the sixth such deal that the Indian drug maker has signed in its endeavor to create a new product under a licensing agreement with a foreign pharmaceutical company. The strategy is aimed at helping finance costly and lengthy research.
The difference this time is that Glenmark isn't licensing out a chemicals-based molecule. It is selling the licenses for an experimental biological drug – complex proteins manufactured in living cells – aimed at treating Crohn’s disease and other conditions such as multiple sclerosis.
Under the deal, Sanofi could potentially pay Glenmark $613 million for the drug, code-named GBR500, achieving certain development, regulatory and commercial milestones, including $50 million as upfront payment.
Glenmark claims that it’s the first Indian company to have successfully sold a license for a biologic treatment.
“It’s the first novel biologic out-licensing deal coming from any Indian company,” Glenmark Chief Executive Glenn Saldanha told reporters in Mumbai Monday.
Macquarie Capital analyst Abhishek Singhal told television news channel CNBC-TV18 that the deal “reinforces the credibility of Glenmark’s innovation pipeline where they have been able to crack an out-licensing deal on a novel biological entity.”
Mr. Singhal said Glenmark is one of Macquarie’s preferred pharmaceutical stock picks. Macquarie has a target pric [...]
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