Merck’s withdrawal from diabetes drugs research may help Glenmark

Merck’s withdrawal from diabetes drugs research may help Glenmark

India’s Glenmark Pharmaceuticals Ltd is likely to gain from German drug giant Merck KGaA’s decision to withdraw diabetes projects from its research portfolio. The restructuring, announced by Merck earlier this week, will likely see the development rights on the diabetes molecule, named GRC 8200, revert to Glenmark, giving it an opportunity for re-licensing the molecule to another global company.

Last year, Merck paid €25 million (around Rs142 crore) upfront to Glenmark when the company signed a €190 million licensing deal for the molecule, which was in initial human trials at the time of deal. Since then, the development has progressed towards more advanced human tests, Glenmark said in a statement on Friday.

Glenmark retained marketing rights of the drug in India while Merck had the rightsfor North America, Europe and Japan.

Merck on Wednesday announced that it will stop its diabetes research and partner out any current programmes after a review following its third quarter financial results. A media statement from Merck stated “it has decided to focus its R&D on specific therapeutic areas, namely, oncology, neuro degenerative diseases, autoimmune and inflammatory diseases, fertility and, in development, on certain areas within endocrinology. As a consequence, Merck is considering not investing further into diabetes research and development but is investigating partnerships for its existing diabetes R&D projects."

A person familiar with the development, who did not want to be identified, said in the Glenmark partnership, “Merck is likely to work out two options—first being the return of the molecule to Glenmark as the deal has joint marketing rights specified in it and the other would be sub-licensing the molecule to a third party with the consent of Glenmark."

The Mumbai company will benefit from both these options as it can negotiate afresh the licensing deal as the molecule has already progressed in development, this person added.

The immediate future of the diabetes molecule, a Glenmark spokesperson said, would not be impacted by the Merck decision. “All development of GRC 8200 is ongoing as per plans. We are in discussion with Merck to find the best way forward with respect to future development and partnership related activities," said a Glenmark spokesperson.

Merck, which posted a 61% growth in revenue at €1.7bn, mainly from the acquired business of Serono SA, has one diabetes product Glucophage in the market—more than six million patients are prescribed this medicine—and has at least two other diabetes drugs in its research pipeline, one of which was the Glenmarkmolecule.

However, it is not clear that the exemption of diabetes portfolio will include the diabetes treatment products Merck already has in the market.