Glenmark Pharma to hive off generics biz

Glenmark Pharmaceuticals today announced plans to hive off its generics business to a new company Glenmark Generics (GGL).

The reorganisation is aimed at building build end-to-end integration, scale and capabilities in pursuing its generic business with GGL, and global capabilities similar to a big pharma company with the parent company Glenmark Pharmaceuticals.

GGL will be a wholly-owned subsidiary of Glenmark Pharmaceuticals, and will be listed on the Indian bourses by Q1FY09.

The new company will handle the development, manufacture and marketing of generic formulation and API businesses. Glenmark Pharmaceucitcals will continue to directly manage the novel R&D and branded formulation businesses of the group including India, Brazil, Rest of Latin America (excluding Argentina), Russia/CIS, Africa and Asia.

The generics business will inherit Glenmark's Goa plant for formulations, the three API plants in India, sales units in the USA and UK and the Argentina oncology operations. In addition, a group from R&D focused on API and formulation development will also move to the generics company.

The branded business will remain with the parent company and retain all remaining assets, branded generic sales groups in India and overseas and all remaining R&D operations related to NCEs, biologics and formulation development for brands.

Terrance Coughlin, currently president (API and US generics) of Glenmark Pharmaceuticals, will take over as CEO of Glenmark Generics. Glenn Saldanha, CEO & MD of Glenmark Pharmaceuticals, will be the chairman of the new company.

Glenn Saldanha said: "Both our specialty and generics business have now grown immensely, posing a growth challenge of managing two large but diverse businesses. The sheer size of the business now has its own set of management challenges. To address these challenges, strengthen our focus on R&D and accelerate our growth in the generics and API business, we are happy to announce a plan to reorganise our businesses by moving the generics and API businesses into a wholly-owned subsidiary Glenmark Generics. The new company will handle the development, manufacture and marketing of generic formulations and APIs."

Terrance Coughlin said: "We would not be diluting more than 30% of Glenmark Generics through a fresh issue of shares. We will use capital in GGL to acquire/build specialty US front end with late stage pipeline and / or marketing, further expand GGL's generic foot print globally through acquisitions, expand capacity for generics and focus on expansion into other niche segments."

The 2015 target for GCL is to become a globally integrated generic & API leader with more than 170 generics in the US market, more than 70 generic dossiers for the EU markets, and build presence in Japan, South Africa and  other generic markets, be a preferred supplier of APIs and build front ends in Japan and key EU markets in addition to North America.