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UBS Investment Research
Glenmark Pharmaceuticals
O utlicenses GBR500 to Sanofi
Event: Glenmark outlicenses GBR500 to Sanofi Aventis
Glenmark today outlicensed its novel biological entity (NBE), GBR500, to Sanofi.
NBE is targeted at Crohn’s disease and other chronic autoimmune disorders and is
currently completing Phase-I studies. Sanofi will have exclusive mktg. rights for
North America, EU, Japan, Argentina, Chile and Uruguay and co-marketing rights
for Russia, Brazil, Australia and New Zealand.
Impact: Upfront milestone payment and tiered royalty structure
Glenmark will receive US$25mn of upfront milestone payments and another
US$25mn as on positive assessment of certain data to be provided by Glenmark.
Incl. upfront payment, Glenmark can receive potential milestone payments of up to
US$613mn depending on successful completion of various development,
regulatory and commercial milestones. The co. will receive double-digit royalty on
sale of the product which can increase on achievement of certain sales targets.
Action: Raising PT and FY12 earnings estimate
While we do not value GBR 500, given the molecule remains in early phase of
development, we now value the innovative R&D unit at US$200mn based on 10x
Avg. research spend of US$20mn p.a. We raise our FY12 EPS by Rs 7.51/share or
42% to incorporate the US$50mn of milestone payment in FY12.
Valuation: Maintain Buy, Raise PT to Rs 380 (from Rs 350)
We derive our 12mth price target based on sum of the parts using DCF-based
methodology (VCAM) for the base generic business and Rs 33/share for the
innovative R&D business.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Glenmark Pharmaceuticals
O utlicenses GBR500 to Sanofi
Event: Glenmark outlicenses GBR500 to Sanofi Aventis
Glenmark today outlicensed its novel biological entity (NBE), GBR500, to Sanofi.
NBE is targeted at Crohn’s disease and other chronic autoimmune disorders and is
currently completing Phase-I studies. Sanofi will have exclusive mktg. rights for
North America, EU, Japan, Argentina, Chile and Uruguay and co-marketing rights
for Russia, Brazil, Australia and New Zealand.
Impact: Upfront milestone payment and tiered royalty structure
Glenmark will receive US$25mn of upfront milestone payments and another
US$25mn as on positive assessment of certain data to be provided by Glenmark.
Incl. upfront payment, Glenmark can receive potential milestone payments of up to
US$613mn depending on successful completion of various development,
regulatory and commercial milestones. The co. will receive double-digit royalty on
sale of the product which can increase on achievement of certain sales targets.
Action: Raising PT and FY12 earnings estimate
While we do not value GBR 500, given the molecule remains in early phase of
development, we now value the innovative R&D unit at US$200mn based on 10x
Avg. research spend of US$20mn p.a. We raise our FY12 EPS by Rs 7.51/share or
42% to incorporate the US$50mn of milestone payment in FY12.
Valuation: Maintain Buy, Raise PT to Rs 380 (from Rs 350)
We derive our 12mth price target based on sum of the parts using DCF-based
methodology (VCAM) for the base generic business and Rs 33/share for the
innovative R&D business.
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