Glenmark Pharmaceuticals And Paul Capital Partners Sign Unique Royalty Deal For USD 27 Million To Build US Generic Dermatology Portfolio
MUMBAI, India, LONDON and NEW YORK, June 5 /PRNewswire/ -- Glenmark Pharmaceuticals Inc. [GPI], a wholly owned subsidiary of Glenmark Pharmaceuticals Ltd. [Glenmark], the research-led global pharmaceutical company, today announced a unique royalty deal with Paul Capital Partners' Royalty Fund [Paul Royalty], a leading, international healthcare investment fund. Under the terms of the arrangement, Paul Royalty will invest up to USD 27 million to finance the development of 16 dermatological products by Glenmark for the US market. In return Paul Royalty will receive undisclosed royalties on net sales following US Food and Drug Administration approval, and launch of each product. The products in the portfolio currently have a total US market revenue of about USD 1 Billion. DSP Merrill Lynch and Greenberg Traurig LLP were Glenmark's financial and legal advisors respectively for the deal.
Under the agreement, Glenmark will be responsible for pre-clinical development, will manage the clinical trials and manufacture the products; GPI will be responsible for filing the abbreviated new drug applications [ANDAs] and, upon approval, marketing the products in the US. Glenmark India will also supply active pharmaceutical ingredient [API] for some of the products. Paul Royalty will finance product development through milestone payments to GPI over the next two years. In return, Paul Royalty will receive a royalty on net sales for these products, with the percentage varying by product and performance.
This dermatological portfolio ranges from the easier to more complex product development, near and medium term revenue opportunities, and a mix of Para I-III and Para IV filings. Clinical trials for two of the products have already been initiated and ANDA filings will commence from the end of 2006 and continue over the next two years. All 16 products are expected to be launched over the next five years with the first product launch occurring in 2007.
Glenn Saldanha, Managing Director and CEO of Glenmark Pharmaceuticals remarked, "This deal marks many firsts including the first time an Indian company is entering the US market with an entire portfolio of dermatology products, a unique deal structure and the first risk-sharing financing deal of its kind. Sharing clinical and operational risks inherent in the portfolio and reducing the impact of generic R&D expenditure on the P&L are among the key reasons we have entered into this deal. We have chosen Paul Royalty to partner with us in this risk-sharing deal for their deep experience in healthcare investment and understanding of the processes involved. Along with our strength and experience in dermatology formulations, we believe that this partnership combine is well equipped to take on the challenge."
Terrance Coughlin, President of Glenmark Pharmaceuticals Inc., USA stated, "Developing a dermatological range fits into the niche products strategy that Glenmark is pursuing and will give us an edge in the US generics space."
Ken Macleod of Paul Capital Partners said, "This deal is unique in that it combines the flexibility of financing provided by the Paul Royalty Fund with the experience and commitment of Glenmark. Furthermore, it highlights the growing importance of the generic segment of the pharmaceutical industry and the prominent role now being played by companies like Glenmark in the growth of that market. The US dermatology market has very few players due to a number of entry barriers, including high clinical trial costs, investment in infrastructure and FDA approval timelines. However, we believe Glenmark has the necessary expertise and infrastructure, particularly its new dermatological manufacturing facilities in Goa and Baddi, to tackle these requirements."
Glenmark's previous efforts to accelerate its portfolio build-up have involved in-licensing generics from US based manufacturers, collaboration agreements for joint development with other companies and also acquisition of ANDAs. The Company closed FY 2006 with a portfolio of 17 ANDAs filed with the US FDA; the Company's partners have filed 3 ANDAs till date. Glenmark had also purchased 2 ANDAs from Clonmel Healthcare Ltd. in FY 2005. GPI is currently marketing six generics in the US and is expecting to launch 7-8 more over the next 6 months, including niche controlled substance generics recently in-licensed from Aspen and Lehigh Valley Technologies.
About Glenmark
Glenmark Pharmaceuticals Ltd. is a global, fully integrated, research- based pharmaceutical company headquartered in Mumbai, India. The Company has generic formulation and API business interests in over 80 countries across the world including the highly regulated markets of USA and Europe. The formulation business spans several product segments such as Dermatology, Internal Medicine, Paediatrics, Gynaecology, ENT and Diabetes.
The Company in also engaged in cutting-edge research in discovering new molecules and runs discovery projects in the areas of inflammation [Asthma/COPD, etc] and metabolic disorders [Diabetes, Obesity, etc]. Its first Asthma/COPD molecule, Oglemilast [GRC 3886], was licensed out to Forest Laboratories and Teijin Pharma Limited for the North American and Japanese markets, respectively. This compound subsequently completed Phase I clinical trials successfully and has recently entered Phase II clinical trials in the US. The Company's second lead GRC 8200, a DPP-IV inhibitor for Type II Diabetes, is in Phase II clinical trials in South Africa at a US FDA approved CRO. Glenmark's third lead is a compound named GRC 10389, a CB-I receptor antagonist for the treatment of Obesity. This compound is completing pre- clinical studies and is expected to be filed for a Phase I trial in H1 FY07. The Company has three other programmes across inflammation and pain management at the pre-clinical stages. [www.glenmarkpharma.com]
About Paul Capital Partners and Paul Royalty Fund
Paul Capital Partners manages nearly $5 billion in equity capital commitments for its three investment platforms that include Healthcare Royalty and Revenue Interests, Private Equity Secondaries and Top Tier Fund-of-Funds. The firm has offices in New York, San Francisco, Paris, London and Toronto. The Paul Royalty Fund is one of the largest dedicated healthcare funds globally, with approximately $1 billion in equity capital commitments. The Paul Royalty Fund has made investments in the pharmaceutical, biotechnology, and medical device sectors valued at more than $625 million. These investments are focused on commercial stage companies and products, and consist of investments in the form of royalties, revenue interests and equity. For more information on Paul Capital Partners and the Paul Royalty Fund visit www.paulcapital.com.
Glenmark Pharmaceuticals Inc.; Paul Capital PartnersCONTACT: Ms. Vaijayanti Karande, Sr. Manager - Corporate Communications,Glenmark Pharmaceuticals Ltd., +91-22-6758-9913, or Fax, +91-22-6758-9986,vaijayantik@glenmarkpharma.com; Dr Ken Macleod, Paul Capital Partners,+44-20- 7514-0754, kmacleod@paulcap.com, Dr Walter Flamenbaum, Paul CapitalPartners, +1-646-264-1116, w.flamenbaum@paulcap.com; Ms Kellie Walsh, LazarPartners, +1-646-871-8480, kwalsh@lazarpartners.com