Paul Royalty to finance drug development by Glenmark

05 June 2006

Chennai: Glenmark Pharmaceuticals Inc (GPI), a wholly owned subsidiary of Glenmark Pharmaceuticals Limited (Glenmark), has announced a unique royalty deal with leading international healthcare investment fund, Paul Capital Partners'' Royalty Fund (Paul Royalty).

Under the terms of the arrangement, Paul Royalty will invest up to $27 million to finance Glenmark to develop 16 dermatological products for the US market. In return Paul Royalty will receive undisclosed royalties on net sales following the approval of these products by the US FDA and their launch. The investment to be made will be based on the milestones achieved over a period of two years. The royalty amount varies from product to product and also its performance.

The products in the portfolio currently have a total US market revenue of about $1 billion. DSP Merrill Lynch and Greenberg Traurig LLP were Glenmark''s financial and legal advisors respectively for the deal.

Under the agreement, Glenmark will be responsible for pre-clinical development, managing clinical trials and manufacturing the products; GPI will be responsible for filing the abbreviated new drug applications (ANDA) and, upon approval, marketing the products in the US.

Glenmark will also supply active pharmaceutical ingredient (API) for some of the products.

This dermatological portfolio ranges from the easier to the more complex product development, near- and medium-term revenue opportunities. Clinical trials for two of the products have already been initiated and ANDA filings will commence from the end of 2006 and continue over the next two years. All 16 products are expected to be launched over the next five years with the first product launch occurring in 2007.