Glenmark and Eli Lily have suspended development of osteoarthritis molecule for which the Mumbai-based pharma firm had already received $45 million for development of the molecule GRC6211. The Glenmark deal with Eli Lily was potentially worth $350 million.
Vikas Dandekar of Pharmasianews.com feels the suspension is definitely a blow to Glenmark's pipeline. ''With GRC6211 there were a couple of other follow-on molecules that were out-licensed to Lily. We don't know about that particular possibility. But GRC6211 was seen as a big breakthrough in the pain management category. So, it is definitely a blow to Glenmark's pipeline."
CNBC-TV18 shares with domain-b the verbatim transcript of the exclusive interview with Dandekar on.
How bad could this be potentially for Glenmark?
A little bit of an indication had already come about two months back when there was a mail that had floated around in all the brokerages, which indicated that Eli Lily may call off this particular deal.
At that time, everyone was very surprised and Glenn Saldanha himself had said that it is all unfounded. Now it comes to the fore that the $245-300 million kind of deal is called off.
Out of the total value of the deal, $45 million was already paid. When contacted Lily's top licensing director about the particular possibility, she had said, "At this stage we don't want to comment about this."
It is quite a big blow for the company. With GRC 6211 there were a couple of other follow-on molecules that were out-licensed to Lily. We don't know about that particular possibility. But GRC 6211 was seen as a big breakthrough in the pain management category. So, it is definitely a blow to Glenmark's pipeline.
We believe the deal was worth $350 million. What happens to the $45 million already paid in cases like this? Is it returned by the company in question ie Glenmark?
It could be upwards of $300 million or $350 million. I may be wrong on that. But the payments are not returnable. This is upfront, and on the basis of further milestones the company that takes it forward, gives the milestones to the company that licenses it out. So, I don't think there will be any return of the payment.
Now Glenmark will have to take it back just the way it did with GRC 8200 a year ago, when it was given the metabolic disorder molecule back from Merck of Germany. So, there is no question about the money being given back.
But what happens next and on what basis has this molecule been dropped is the question because it has hardly been a year that Lily signed this deal, and it was very enthusiastic to take this forward.
(Also see: Exelixis says GSK drug research deal to end)