shares information on pharmaceutical companies Glenmark Pharmaceutical

Glenmark Pharmaceutical (updated - 17 Feb 2010)
Glenmark Pharmaceuticals’ performance for the December 2009 quarter was unimpressive, even as its consolidated net profits rose 15.5 per cent yearon-year to Rs 94 crore. That’s because the profit growth was aided by a lower tax outgo of Rs 4.4 crore (against Rs 53.5 crore in the December 2008 quarter) and secondly, operating profit margins fell 640 basis points to 26.3 per cent.

Consolidated revenues increased 11.3 per cent year-onyear to Rs 648.3 crore. The growth was helped by the specialty business (55 per cent of sales), which grew 11 per cent to Rs 338 crore. The generics business (45 per cent of sales), however, reported flat revenues at Rs 280 crore. In the specialty segment, domestic formulations continued to show momentum, rising 17 per cent year-on-year.

While Glenmark’s Latin America business remained under pressure on account of the ongoing restructuring at Brazil, the European Union and rest of the world markets reported a growth of 82 per cent (Rs 35 crore) and 9 per cent (Rs 90 crore), respectively, in the specialty business.

In September 2009, Glenmark raised Rs 413.56 crore through a Qualified Institutional Placement, which was utilised to lower debt levels to around Rs 1,700 crore. This helped keep a tab on interest costs which grew 7 per cent to Rs 36.8 crore in the December quarter (it was down nearly 20 per cent sequentially). The company plans to reduce debt levels to Rs 1,400 crore by March 2010, which should help contain interest costs.

On the R&D front, the company has a pipeline of seven new chemical entities and is developing a pipeline of new biological entity. It has in-licensed Crofelemer (for HIVassociated diarrhoea) which is progressing well in the Phase-III trials in the US.

Going ahead, the trigger for the stock should come from the listing of its generics subsidiary, Glenmark Generics, and the likely R&D out-licensing deal that could bring in milestone payments of $3540 million. Restructuring of Latin American operations and lowering of debt burden are other triggers. At Rs 256.30, the stock trades at a P/E of 14.8 times its 2010-11 analysts’ consensus earnings estimates.
source - BS

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Glenmark Pharmaceutical (updated - 16 April 2010)
Glenmark Pharmaceuticals’ out-of-court settlement with GlaxoSmithKline LLC (GSK) over the launch of a generic version of anti-malarial drug brand Malarone, though positive, may not add significantly to its financials. The company has a Para-IV on Malarone (Atovaquone and Proguanil Hydrochloride 250 mg/100 mg tablets with sales of $56 million in 2009), which gives it a180-day exclusivity prior to the patent’s expiry in 2014. With this settlement, Glenmark will now be able to start selling it earlier than scheduled.

According to the settlement agreement, subject to review by the Federal Trade Commission and Department of Justice, Glenmark will be able to sell its generic tablets under a royalty-bearing licence from GSK from the third quarter of 2011, or earlier under certain circumstances.

Analysts say since Glenmark is the only generic filer for the drug, even if a new player files for an abbreviated new drug application (Anda), it will take at least 30 months for it to enter the market. Hence, Glenmark will face limited or no competition for at least a year beginning the September 2011 quarter.

“With Glenmark and GSK being the only two players marketing the product, there can be 25 per cent price erosion. With a 50 per cent market share, 10 per cent sales royalty payment to GSK, and a50 per cent profit after tax (PAT) margin, we expect this drug to add revenues of $14.2 million, PAT of $7.1 million in 2011-12 and earnings per share of Rs 1.1 to Glenmark’s 2011-12 earnings,” says Vikas Sonawale, analyst, Religare Institutional Research.

“The conclusion of an outlicencing deal would reaffirm strength in the new chemical entity pipeline and could thus spring a positive surprise,” states a Sharekhan report.
Over a two year period, analysts expect Glenmark’s revenues and net profit to grow at a compounded annual growth rate of 18 per cent and 29 per cent, respectively, on account of balance sheet restructuring, cost containment and management of working capital cycle.

While the counter had seen steady gains since end March 2010, it is down by 3.4 per cent (including Thursday’s 1 per cent gain) post the announcement on April 12. At Rs 269.30, it trades at a P/E of 16.5 times 2010-11 estimated base business earnings.
source - business standard

Glenmark Pharmaceutical (updated - 11 Aug 2010)
The performance of Glenmark Pharmaceuticals has been positively affected by improving overseas operations. Sales in its key US generics market have achieved six per cent growth, after posting adecline in eight consecutive quarters.

The US market contributed around 26 per cent to the company’s net revenue of around Rs 696 crore during the quarter. According to analysts at Elara Capital, “We believe the event is important, as it’s a precursor to the company’s return to robust growth trajectory in the US.” The core business earnings before interest, tax, depreciation and amortisation (Ebitda) improved 100 basis points to Rs 144.5.1 crore due to a turnaround in US generics and better growth traction in Latin America. Glenmark has developed a portfolio of low-competition niche generics in the last two years, which will drive growth in the near to medium term with larger stability, say analysts.

After restructuring of product portfolio and operations in the Latin American business, the company has achieved 21 per cent (annual) growth in branded formulations (in Brazil) and 10 per cent growth in the oncology business. The geographical expansion in this market, other than Brazil and Argentina, is one of the main contributors to growth, say analysts.

In the domestic formulations market, the company achieved 17 per cent growth on the back of its prominent brands in dermatology, cardiology and respiratory segments. Employee costs, however, shot up as the company made additions to its field force – 200 in India and 100 worldwide.

Analysts expect a better performance, as the company has been getting a slew of approvals in the US. This will improve volume growth and help the company maintain margins. Analysts expect a rise in the research and development expenses, as the company looks to enter new markets. Another factor will be the working capital management, which may strain net earnings, say analysts.
source - business standard

Glenmark Pharmaceutical Ltd (updated - 11 Nov 2010)
Glenmark Pharma’s Crofelemer, a first-inclass anti-diarrhoeal drug, has successfully completed Phase-III trials for HIV related diarrhoea. With this, Glenmark is close to becoming the first Indian company to develop an original novel chemical entity (NCE) to treat diseases.

Glenmark says Crofelemer, likely to be launched in about 140 countries in two years, will open at least a $80 million opportunity. Glenmark has already seen strong domestic growth on the back of 24 product launches in two years which contribute 25% to revenues.

The branded formulations segment grew 19.2 per cent at `397 crore in the September quarter, while domestic formulations grew 21.5 per cent to `224 crore.

The growth was spread evenly, with contributions from both small and large brands.

The robust growth (19 per cent) in domestic formulations in the first half of the financial year looks sustainable as secondary sales have grown 30 per cent, according to the ORG (a pharmaceutical research firm) data.

Generic sales grew 26.2 per cent to `250.4 crore, boosted by the US business. Glenmark’s second launch on exclusivity pertaining to Tarka generics (anti-hypertension tablet) contributed around `20 crore, likely to continue till 2013-14, as filings by competitors are yet to be seen. An out-of-court settlement for generics of Zetia (expected to contribute from 2011-12) has also been made with the innovator and Glenmark plans three-four launches upon exclusivity.