Glenmark Pharma
BSE Code: 532296
Volume: 466794
CMP: 285.45
Glenmark’s latest out-licensing deal with Sanofi will restore some confidence in the company’s R&D effort. Besides some option value being built into the stock, it would also ease some of the pressure on Glenmark’s cash flows by funding its proprietary R&D spends. Glenmark will receive an upfront payment of USD 20 mn, milestone payments (which could reach a total of USD 325 mn) and royalties on sales. Sanofi will have exclusive marketing rights for North America, EU & Japan while Glenmark retains co-marketing rights in the US and 5 Eastern EU countries. Sanofi will retain co-marketing rights for 10 other countries, including Brazil, Russia and China. Glenmark retains exclusive rights in other markets. The cash flows from the deal would allow Glenmark to fund its proprietary R&D spend without depending too much on its generic cash flows. The stock may witness some northward move from the present levels and can be looked upon for both short- and medium-term gains.