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Sanofi deal lessens Glenmark’s pain

Sanofi deal lessens Glenmark’s pain
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First Published: Mon, May 03 2010. 09 22 PM IST
Updated: Mon, May 03 2010. 09 22 PM IST
New Delhi: The research arm of Glenmark Pharmaceuticals Ltd, that has witnessed several setbacks in the past year, has licensed its portfolio of chronic pain-relief molecules to French firm Sanofi-Aventis SA.
The deal involves an initial payment of $20 million (Rs89.2 crore) and could be worth as much as $325 million if the molecules make it to the market, according to statements of the firms. It is Glenmark’s first big deal in around 18 months and also Sanofi’s first research and development (R&D) deal in India. Shares of Glenmark gained 3.63% on Monday to close at Rs279.65 each on the Bombay Stock Exchange, when the benchmark Sensex index fell 0.98% to 17,386.08 points.
On Monday, Glenmark and Sanofi announced that they had entered into a licensing deal for Glenmark’s anilloid receptor (TRPV3) antagonist molecules. The portfolio includes a first-in-class clinical compound GRC 15300, which is currently in the first phase of human clinical trials.
According to the licence, Sanofi will have exclusive marketing rights in North America, the European Union and Japan, subject to Glenmark’s right to co-promote the products in the US and five Eastern European countries. Sanofi-Aventis will also have co-marketing rights in 10 other countries, including Brazil, Russia and China, whereas Glenmark will retain exclusive rights in India and the rest of the world.
“First, the deal gives them (Glenmark) upfront cash that will help them fund their R&D, rather than trying to get money from the rest of the business to invest in this. Second, it restores some investor confidence in their R&D capability to some extent since it has been validated by a third party (Sanofi) now,” said Prashant Nair, Mumbai-based pharma analyst with Citi Investment Research and Analysis. He added that in the absence of such deals, Glenmark had relied on cash from its generics business to fund its research arm.
Glenmark’s research arm has faced several setbacks. Last year, its outlicensing partner Forest Laboratories Inc. had announced that its lead respiratory disease molecule Oglemilast had failed in the second phase of clinical trials. In 2008, its outlicensing partner Eli Lilly and Co. had suspended clinical trials of a painkiller drug molecule after certain adverse findings. In 2007, Germany’s Merck KGaA ended a licensing deal for Glenmark’s diabetes drug after it decided to drop diabetes projects from its research portfolio.
“There was a lot of negative sentiment around our R&D and this (deal) shows that we continue to do well in that area. And you will see similar deals going forward from us,” said Glenn Saldanha, managing director and chief executive, Glenmark. Meanwhile, the firm continues to scout for partners for its diabetes molecule Melogliptin that recently completed second phase clinical trials.
“GRC 15300 and its associated programme brings an innovative approach to Sanofi-Aventis’ pain portfolio...which we believe may have promise to address a significant gap in treating chronic pain,” said Marc Cluzel, executive vice-president, research and development, Sanofi-Aventis.
The molecule has the potential of becoming a once-a-day oral medication for treatment of various chronic pain conditions, Sanofi said in an emailed response. The pain medication market is estimated at $10-15 billion. Glenmark expects the molecule to be a blockbuster with annual sales over a billion dollar if it gets commercialized.
However, being a first-in-class molecule, there is also a high degree of risk associated with it. “Logically, there is a higher risk element to it. But today’s environment is such that most big pharma companies are interested in first-in-class compounds because that opens up a much larger market size,” Saldanha said.
Being first-in-class has helped the firm get a good initial payment for its molecule, said Ranjit Kapadia, an analyst at HDFC Securities Ltd. But everything now depends on the molecule’s future performance, he added.
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First Published: Mon, May 03 2010. 09 22 PM IST
More Topics: Sanofi | Pharma | Glenmark | Eli Lilly | Merck |