CHENNAI: Glenmark Pharmaceuticals will sell a 75% stake in its subsidiary, Glenmark Life Sciences (GLS), for Rs 5,651.5 crore at a price of Rs 615 per share. The company has entered a definitive agreement with Nirma Limited, it said on Thursday. The deal values Glenmark Life Sciences at 7,535.4 crore.
Post divestment, Glenmark Pharma will own 7.84% of GLS. Nirma will make a mandatory open offer to all public shareholders of GLS after completion of the deal, it said. The divestment decision is based on Glenmark’s bets on its core business and its product pipeline focused on dermatology, respiratory and oncology, the company said in a release. The drug maker targets ‘high double-digit’ compounded annual growth in Europe and the rest of the world markets.
The company aims to increase contribution from branded business globally, generating two-thirds of its
consolidated revenue from branded products and markets. The company also hopes to launch multiple complex generics in the US market. It has also cited the changing dynamics of the United States generics market for the move.
Glenn Saldanha, Chairman and managing director of Glenmark Pharmaceuticals, called it a significant milestone in shaping an independent growth trajectory for GLS. “This deal aligns with Glenmark Pharmaceuticals’ strategic intent of moving up the value chain to become an innovative, brand-led organisation, with continuous focus on our core therapeutic areas of dermatology, respiratory and oncology,” he said. This will also enhance the overall return profile, he added.
Glenmark Pharmaceuticals generics business caters to developed markets such as the United States and Western Europe, as well as the Indian market. Glenmark Life Sciences sells active pharmaceutical ingredients (API) products in over 65 countries. Glenmark Life Sciences will continue to operate as an independent API company under the new ownership, Dr Yasir Rawjee, its MD and Chief Executive Officer said.