Glenmark Pharma to spin off Glenmark Generic company

Glenmark Pharmaceuticals Ltd on November 07, 2007 has announced its plans to reorganize its businesses into Specialty and Generics. The new Generic entity called Glenmark Generics Ltd will be a wholly owned subsidiary of the Company and will be listed on the Indian bourses by Q1 FY 2008-09.

Mr. Terrance Coughlin, currently President API and US Generics, will take over the role of the CEO while Mr. Glenn Saldanha will function as the Chairman of Glenmark Generics Ltd.

Speaking on this development, Mr. Glenn Saldanha, CEO & MD of the Company, 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 in R&D and accelerate our growth in the generics and API business, we are happy to announce a plan to reorganize our businesses by moving the generics and API businesses into a wholly owned subsidiary Glenmark Generics Ltd. The new Company will handle the development, manufacture and marketing of generic formulation and API businesses."

The objective of the reorganization of the business is to build end to end integration, scale and capabilities in pursuing a generic business, on the GGL side, and to build end to end Global capabilities similar to a Big Pharma Company on the Specialty side. The new Company will handle the development, manufacture and marketing of generic formulation and API businesses. The Company will continue to directly manage the novel R&D and branded formulation businesses of the Glenmark 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, our 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 in the 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.

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

Speaking of the objectives of the planned IPO for GCL, Mr. Terrance Coughlin, currently President - US Operations, and Head API Sales, of the Company Said, "We would not be diluting more than 30% of Glenmark Generics Ltd (GGL) 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".

After the reorganization the Company will play two roles. The first will be investor in the generics business through its subsidiary. The second will be running the specialty, original drug development and branded generics businesses of the Glenmark group "In effect, the biggest benefit of the reorganization is the advantage the organization will get from giving both the generic and the brand businesses the separate focus they deserve, managing the scale that both businesses have now achieved" Mr. Saldanha added.