Monday, 1 July 2013

Investment Ideas - Glenmark Pharmaceuticals Limited


Glenmark is currently ranked among the World's top 100 Pharmaceuticals & Biotech companies. Glenmark was incorporated in the year 1977 under the name Glenmark Pharmaceuticals Limited. In the year 1979, the well known Candid Cream was launched catering to the dermatology segment. In the year 1981 it started its exports and soon the sales crossed one Crore. In 1984 a Research and Development facility was set up at its Nasik Plant. Another important formulation Ascoril was launched in the year 1987.

In 1996 the company incorporated – Glenmark Exports Private Limited – a subsidiary purely to look after its overseas business activities. 

The year 2000 was significant for the company. Its Initial Public Offer issue was oversubscribed 65 times. In this year it acquired some brands brand from another Pharmaceutical company Lyka Labs. In the following year the company entered Active Pharmaceutical Ingredient (API) manufacturing business by commissioning it’s a manufacturing facility in Kurkumbh, Maharashtra. The company acquired another manufacturing facility in Gujarat from Glaxo Smith Kline.

The year 2005 was full of events for the company. The company reached agreements with Teijin Pharma of Japan. It also entered into agreement with Napo Pharmaceuticals Inc. for its anti–diarrheal compound Crofelemer. In Argentina the company acquired Servycal S.A. which had exposure in the Oncology segment. Another acquisition made in South Africa namely Bouwer Bartlett Pty. Ltd. It was in this year the company started a new manufacturing facility at Baddi, Himachal Pradesh India

Glenmark is one of the leading Pharma Company in the discovery of new molecules. It has successfully evolved around its researched based products to be where it stands today. It employs over 10,000 people in over 80 countries. Its presence in in branded generic products is well accepted. Its manufacturing activities are spread in four countries with five Research and Development centers. Being a research driven Pharmaceutical Company, the company has made substantial investment in R&D both in India and Overseas. It has a state-of-the-art R&D facility in Oxford, UK for molecules in clinical development. This facility is responsible for Glenmark's development of  both small molecules (NCEs) and biologics (NBEs). Another investment in R&D facility has been made in Switzerland where Glenmark's bio-pharmaceutical research is done The centre is dedicated to the inventing and development of novel monoclonal antibodies (mAbs)

Glenmark has actively followed a strategy of out-licensing its molecules in clinical development to large multinational pharmaceutical organizations. This strategy has proved to be successful and beneficial for the company. In about seven deals struck by the organization in the last nine years amounted to the value of USD 206 mn.

Glenmark’s formulations business revolves around four regions – India, Latin America, Central Eastern Europe and Semi Regulated Markets of Africa/Asia/CIS. 

The formulations business focuses on key therapeutic areas like dermatology, anti-infectives, respiratory, cardiac, diabetes, gynecology, CNS, and oncology. Among the regions India remains the largest market in terms of revenue.

 The company’s Dividend history speaks well about the company itself. It has been consistently paying dividends above 40%. Its current face value is Re. 1/-.  During the year 2008 the share value of the company came down from725 to 120 levels. But since the beginning of the year 2009 the value of the company climbed steadily to reach 608. At the time of writing this note, the company’s shares were trading at Rs. 548. From an investor point of view this company is a safe investment. Pharma shares are regarded as a safe haven during difficult times. This company is not an exceptional. Investments can be made in this company with a long time frame and certainly the decision will be rewarded.

1 comment:

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