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Glenmark Pharma spurts after settling patent litigation

Capital Market / 15:14 , Nov 17, 2009

Glenmark Pharmaceuticals surged 4.80% to Rs 241.10 at 14:56 IST on BSE, extending Monday's advance, after its US subsidiary settled all pending litigations with the Arizona-Based Medicis Pharmaceutical

The company made this announcement during trading hours on Monday, 16 November 2009, when the stock rose 1.47%.

Meanwhile, the BSE Sensex was down 9.30 points, or 0.05%, to 17,023.21

On BSE, 6.53 lakh shares were traded in the counter as against an average daily volume of5.83 lakh shares in the past one quarter.

The stock hit a high of Rs 244.50 and a low of Rs 229.10 so far during the day. The stock had hit a 52-week high of Rs 346 on 1 December 2008 and a 52-week low of Rs 119.15 on 5 February 2009.

The mid-cap stock had underperformed the market over the past one month till 16 November 2009, falling 4.21% as compared to the Sensex's 1.68% fall. It also underperformed the market in the past one quarter, sliding 9.18% as compared to the Sensex's return of 10.52%.

The company's equity capital is Rs 26.97 crore. Face value per share is Re 1.

The current price of Rs 241.10 discounts the company's Q2 September 2009 annualized EPS of Rs 8.53, by a PE multiple of 28.26

Glenmark Pharmaceuticals' US subsidiary Glenmark Generics Inc settled all pending litigations with Medicis Pharmaceutical relating to patent actions regarding Fluocinonide. Fluocinonide is the generic version of Medicis' Vanos cream and Ciclopirox Olamine, the generic version of Medicis' Laprox gel.

Under the terms, Glenmark Pharmaceuticals will be able to market and distribute its generic version of Vanos cream under license from Medicis in early December 2013. In addition, Glenmark would have a license to launch a generic version of Laprox gel, supplied by Medicis immediately.

Meanwhile, Glenmark Pharma signed a pact with Medicis Pharmaceuticals to co-develop and commercialize a specialty pharmaceutical product in North America. Glenmark Pharma will receive a one-time upfront payment of $5 million. The company is also eligible to receive additional payments upon achieving certain development milestones and royalty upon commercialization. The product is used for treating acne vulgaris.

On 14 November 2009 Glenmark Generics Inc., US-based subsidiary of Glenmark Pharmaceuticals, received abbreviated new drug application (ANDA) approval from the United States Food and Drug Administration for Ciclopirox Olamine cream, used in the treatment of dermatological infections.

Glenmark Pharmaceuticals' US subsidiary Glenmark Generics reportedly filed the draft red herring prospectus (DRHP) with Securities and Exchange Board of India (Sebi) on 1 October 2009 to raise funds from sale of shares in an initial public offer (IPO). Glenmark Pharmaceuticals would to raise up to Rs 550-600 crore by diluting about 20% of its stake in Glenmark Generics. The price band was tipped to be in the range of Rs 350-400 per share.

Glenmark Pharmaceuticals' net profit declined 14% to Rs 57.50 crore on 4.4% rise in net sales to Rs 235.83 crore in Q2 September 2009 over Q2 September 2008.

Glenmark Pharmaceuticals manufactures and markets pharmaceutical ingredients. Currently, the company has 11 drug compounds at various stages of research development for treatment of diseases such as inflammation, heart ailments, metabolic disorders and cancer.

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