Glenmark eyes big growth in US with cholesterol drug launch

The drug maker earns about 35% of its revenue from the US market

Drugmaker Glenmark’s US business has received a boost with the launch of the first generic version of cholesterol drug Zetia in the market.

Glenmark has 180 days exclusivity for the sale of generic version of the drug, which has a market size of $2.6 billion, and the company aims to use the sale proceeds to reduce debt. The product was launched on Monday. 

The drugmaker earns 35 per cent of its revenue from the US market. Overall, generic drugmakers are facing an impact of channel consolidation and price erosion in the US market. Indian companies have also come under fire from the US drug regulator for deviations in good manufacturing practices and this has impacted product approvals and sales. 

 

Unlike its peers, Glenmark has not come under the scanner for quality concerns and its US business is showing growth. In the first half of FY17, its US sales grew 26 per cent aided by product launches and price hike of skin infection cream Mupirocin. 

The launch of generic version of Zetia is expected to give it a further boost. Analysts expect the generic version of the drug to generate sales of $400-450 million during the exclusivity period and expect Glenmark to earn half the amount. Glenmark has partnered Par Pharmaceutical to distribute the product in the US on a profit-sharing basis. 

Domestic brokerage IIFL expects 40 per cent growth in the company’s US sales in FY17 on the back of sales of generic Zetia and other new products. The company is expected to file for 20 products in FY17 and dermatology, respiratory and oncology therapies will be the focus areas for the company. ICICI Securities expects the company’s US sales to grow at a compounded annual growth rate of 21 per cent till FY19 on the back of new launches.

Glenmark is aiming to cut its debt from increased revenue this year. It has a debt of Rs 4,600 crore comprising long-term loans of Rs 3,375 crore and the balance raised through foreign currency convertible bonds earlier this year.

“The cash flow position will strengthen over the next few quarters from both the base business and from the launch of generic Ezetimibe (Zetia) in the US. The company will utilise all the cash flow to pay down the debt,” chairperson Glenn Saldanha had said in October.