Glenmark may sell stake in Glenmark Generics to cut Rs19 bn debts: Reports

Glenmark Pharmaceuticals Ltd may sell a portion of its stake in generic unit Glenmark Generic to raise fund to service mounting debts, reports said.

Glenmark is planning to launch an initial public offering or sell shares of Glenmark Generics Ltd. to private equity firms to minimise the huge debt burden by the end of March, Glenmark’s chief executive officer Glenn Saldanha was quoted as saying.

However, Mr Seldanha didn’t disclose how much money Glenmark is planning raise through the sake sale.

Glenmark had registered a debt of Rs 19 billion at the end of the past fiscal year on March 31, 2009.

Glenmark’s net debt to equity ratio increased to 1.3 as on March 31 from 0.5 a year earlier, mainly due to high capital expenditure, fewer generic drug approvals in the U.S., and lack of licensing revenues, according to reports.

Glenmark Pharmaceuticals had spun off its generic drugs business in late 2007 to make research driven speciality drugs development its core focus area.

Soon after declaring Glenmark Generic into a separate business, Glenmark had planned to raise funds through an initial public offering of the unit in the past fiscal year.

A few days ago, Glenmark Pharmaceuticals has made an announcement saying that it was planning to raise about Rs 12 billion (US$250 million) from overseas markets or by private placement of shares, the company said in an official announcement.

The Mumbai-based Glenmark would raise US$250 million by Global Depository Receipts, American Depository Receipts and Foreign Currency Convertible Bonds or by private placement of shares or by qualified institutional investors.

Glenmark’s shareholders have approved to raise US$250 million. Glenmarks share holders have also approved an option to raise an additional funds if the issue is oversubscribed, Glenmark Pharmaceuticals said in a filing to the Bombay Stock Exchange.

Recently, Glenmark Pharmaceuticals reportedly raised Rs 413 crore ($85 million) from share sale to institutional investors. Glenmark sold 1.87 crore shares to large investors at Rs 221 per share.

Last week, Glenmark Generics received approval for its generic version of hypertension drug verapamil extended release tablets from US FDA.

Glenmark currently has over 45 ANDA’s filed with the US FDA pending approval.

Glenmark joined hands with Aurobindo in July to launch thier generic versions of hypertension drugs fosinopril sodium and hydrochlorothiazide – the therapeutic equivalent of Bristol-Myers Squibb’s Monopril-HCT – in the US market.

Glenmark Generics Inc., which received the approval from US FDA to market fosinopril sodium and hydrochlorothiazide tablets, will market fosinopril sodium and hydrochlorothiazide (HCTZ) pills in both 10mg/12.5mg and 20mg/12.5mg strengths and are indicated for the treatment of hypertension.

Glenmark has got first-to-file status for Zetia, with the generic name Ezetimibe, Tarka (Trandolapril + Verapamil) and Cutivate (Fluticasone lotion).

In August, Glenmark Pharmaceuticals and US partner Forest Laboratories said oglemilast – a drug they were developing to treat chronic obstructive pulmonary disease (COPD) failed in a mid-stage trial COPD has an estimated market worth about $5 billion.

Glenmark posted a net profit of 534.5 million rupees on net sales of 5.44 billion rupees in the first quarter ended June 30.