Glenmark Pharma raises Rs413 crore through QIP

Glenmark Pharma raises Rs413 crore through QIP

Mumbai: Glenmark Pharmaceuticals has raised Rs413 crore through its recently concluded qualified institutional placement (QIP), which will be used towards its debt reduction plan, a top company official said.

“Our recently concluded QIP generated a good response from investors. The proceeds to the tune of Rs413 crore will go towards debt reduction. Overall, we expect strong performance out of both the specialty and generic business domains in the financial year 09-10," Glenmark Pharma’s managing director and CEO, Glenn Saldanha, told shareholders at the company’s annual general meeting (AGM) here on Friday.

In FY 09-10, Glenmark plans to invest substantially in R&D out of its own accruals, while maintaining a comfortable profit margin on the base business, he said.

“We are also sure that with improvement in working capital management and healthy cash-flows from base business, the financial profile and debt levels of the company shall improve multifold," Saldanha said.

The company has already witnessed a healthy upswing in business in this financial year. The first quarter registered a growth of 18% in the overall business, he said.

The specialty business registered a growth of 37% overall, driven by strong growth numbers in semi-regulated markets, India and Central & Eastern Europe, Saldanha said.

This year has also witnessed key abbreviated new drug application (ANDA) approvals in the US market such as alclomethasone, verapamil and others and the generics business is sure to grow at a rapid pace, Saldanha said.

“The past financial year has been a period that held tremendous challenges for us. It was probably the first year that we suffered a temporary break in the momentum of rapid growth witnessed over the last decade," he said.

“On the R&D side, despite a rapidly growing innovative pipeline, we also had to face a few setbacks. The company was impacted by the inability to monetise any portion of its pipeline during the financial year. We faced our first reversal on a fairly advanced NCE with GRC 6211, part of TRPV1 portfolio out-licensed to Eli-Lilly. Recently, Oglemilast, a PDE IV inhibitor from our pipeline, posted disappointing results in phase IIb trials on COPD," Saldanha said.

Saldanha pointed out that the company was not discouraged. “I am confident that our proven capabilities in high-quality research will surely hold us in good stead," he said.

On the generics front, delays by the US Food & Drug Administration in generic ANDA approvals in the US lead to below expected growth.

Glenmark Pharma re-structured operations in key markets and scaled back plans for any merger and acquisition in the near term. Steps were taken to enhance operational efficiency, improve working capital cycle, tighten fiscal discipline and maximise cash-flow from operations. These corrective measures will positively impact financials in FY 10, Saldhana said.

FY 09 also witnessed both Glenmark Pharmaceuticals and Glenmark Generics (GGL) progress well in their distinct domains of proprietary and generic business. The reorganisation has helped to promote sharper focus on specialty and generics as separate businesses with distinctive requirements, he said.

Glenmark Pharmaceuticals has consolidated existing markets and made a concerted effort to strengthen business fundamentals.

“We grew the base business, excluding the in-licensing revenues, by 20% over FY 08. We initiated operations in new markets such as Thailand, Egypt and the UAE and registered rapid growth in central and eastern Europe. In GGL, we focused on efficiencies and grew the generics business by 25% over FY 08," Saldanha said.

“Despite a slowdown in ANDA approvals, we grew the US business by 30% over the previous year. We launched our first product in Western Europe and filed several marketing authorization applications across Europe," he said.