GLENMARK: Crofelemer completes Phase-III trials: Motilal Oswal

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GLENMARK: Crofelemer completes Phase-III trials; Launch in phases beginning FY13 in emerging markets; No major upsides

Its partner – Napo Pharma – has successfully completed Phase-III trials for Crofelemer.  This is in-line with Glenmark’s past guidance about completion.

-          It has in-licensed the product from Napo and holds marketing rights for 140 emerging markets.  Launch across 140 emerging markets will be in a phased manner.

-          The profitability of this product will not be very high due to the difficulty in manufacturing such products and payment of single-digit royalty on sales

 

-          We expect Glenmark to record 16.8% topline CAGR for FY10-12 led by 23% CAGR for the generic business, while the branded generic business is expected to grow at a more gradual 14% CAGR.  The stock currently trades at 25.8x FY11E and 20.3x FY12E earnings with about 14-16% RoE.