In a significant positive for Glenmark Pharmaceuticals Ltd, its US partner in a drug development and marketing agreement, Napo Pharmaceuticals Inc, will not be able to terminate a deal thanks to an arbitration order.
The Indian company won exclusive rights in 2005 to develop and commercialise the anti-diarrhoeal drug, Crofelemer, in 140 countries.
According to Napo, Glenmark had not filed for regulatory approvals in any of the 140 countries as per the agreement and announced the termination of the deal in early December.
Glenmark contended in its response that Napo had no basis for terminating the agreement. Glenmark later announced the Drugs Controller General of India had granted it permission to conduct phase three clinical trials for the drug.
In a filing to the Bombay Stock Exchange yesterday, Glenmark said Napo could not terminate the deal unless the American Arbitration Association amended the interim order in a hearing that would take place in March, Glenmark.
Glenmark's shares were up 2.75 per cent to Rs312.30 on BSE, on a day that saw Sensex gain 0.73 per cent to end at 16,154.62 points.
The next arbitration hearing is scheduled for end of March, Glenmark said.