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Thursday, Apr 21, 2005

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Corporate - Restructuring

Glenmark to revamp domestic formulations

C.R. Sukumar

Hyderabad , April 20

GLENMARK Pharmaceuticals Ltd (GPL) has embarked on a business-restructuring programme in its domestic formulations strategic business unit (SBU).

With three divisions in the domestic formulations SBU, the company proposes to create three more divisions for better brand building, speciality development and business management, the GPL Director, Domestic Formulations, Mr A.S. Mohanty, told Business Line.

The three divisions of SBU include Glenmark (gynaecology), Gracewell (dermatology) and Healtheon (diabetology).

As a part of the revamp process, Glenmark plans to add another speciality division, Majesta, to focus on internal medicine, while Gracewell would carve out a speciality division called Intergrace with a focus on orthopaedics. Healtheon would have a new division, Zoltan, focussing on cardiology.

"We are not expecting major improvements in our performance during this fiscal on account of the business restructuring in domestic formulations SBU. We will attain a growth of 10-12 per cent this year," Mr Mohanty said.

Glenmark, which had out-licensed its asthma lead molecule GRC-3886 to the US-based Forest Labs in a $190-million deal, expects to receive fresh milestone payment of $10 million shortly as the molecule recently completed phase-I clinical trials. The company expects to receive an additional $30 million before the molecule enters phase-II trials in early 2006, he added.

The company's new formulations facility at Baddi in Himachal Pradesh, taken up at a capital outlay of Rs 35 crore, is expected to take off in July-August.

"The new facility will be dedicated to domestic formulations business. While the Goa unit will focus on the US market, the Nashik facility will cater to the needs of Europe and other regulated markets.

"The Baddi facility, having a capacity of 10 lakh tablets and one lakh bottles per day in the first phase, will be scaled up later depending on the market demand," Mr Mohanty said.

Expecting a major consolidation process in the domestic pharma industry, Mr Mohanty said Glenmark was looking for an attractive opportunity for acquisitions, especially in the complementary therapeutic segments. However, he said the company has not initiated any active scouting process in this direction.

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