Glenmark Pharmaceuticals has entered into a licensing agreement with French multi-national Sanofi Aventis for the development and commercialisation of new molecules to treat chronic pain.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The deal includes one of Glenmark’s novel molecule GRC 15300, which is currently in the first phase of human trials as a potential treatment for neuropathic and osteoarthritic pain.

As part of the deal, Glenmark is set to receive about $20 million as upfront payment as well as regulatory and milestone payments, all of which could total $325 million. Moreover, there would be double-digit royalties on sales of the products.

Experts see it as a big booster for Glenmark, which is reeling under Rs 1,600 crore debt and failure of its key novel molecule oglemilast.

“Glenmark needs the money and the $20 million upfront payment is a sure positive, despite the deal happening when the molecule is at an early stage (Phase I),” says Bhavin Shah, research analyst, Dolat Capital Market.

The opportunity is huge. With 20 million patients, the market for osteoarthritic pain is estimated at $4 billion, and with 40 million patients, the market for neuropathic pain is seen at $5 billion.

Marc Cluzel, executive vice-president, R&D, Sanofi Aventis, said there is a medical need for safer and more efficacious products for these maladies.

GRC 15300 belongs to a class of compounds called TRPV3, of which none, barring GRC 15300 has entered human clinical trials. In 2007 Pfizer had inked a deal with Hydra Biosciences for a TRPV3 compound, with deal size, including upfront and milestone payments, totalling $195 million.

Sriram Rathi, analyst, Centrum Broking, said the deal will bring back investor confidence in the R&D pipeline of Glenmark, which had taken a hit after oglemilast.

In August 2009 Glenmark had suffered a blow when its key molecule oglemilast, which was targeted at chronic obstructive pulmonary disease, fared poorly in the second phase of clinical trials. It was outlicensed to US-based Forest Labs in 2004.

“After the oglemilast failure, there was no news at all from the company on the novel molecule front. Hence this agreement comes as a breather,” says Shah.

Sanofi will have marketing rights in North America, European Union and Japan, subject to Glenmark’s right to co-promote the products in US and five East European countries.

Sanofi will also have co-marketing rights in 10 countries including Brazil, Russia, China, whereas Glenmark will retain rights in India and rest of the geographies.