Glenmark, Eli Lilly suspend trial on drug

Glenmark Pharmaceuticals Ltd. | Pharmaceuticals & Drugs | Healthcare | BSE: 532296 | NSE: GLENMARK

27 Oct 2008 Evaluate

Mumbai-based drug formulations maker Glenmark Pharmaceuticals Ltd has reported that its US outlicensing partner Eli Lilly and Co. has suspended clinical trials of its pain drug molecule. The potential treatment for arthritis-related pain was Glenmark’s lead molecule covered in a $260 million (about Rs1,290 crore) licensing deal signed in October 2007

Eli Lilly has decided to stop further development of the drug molecule, GRC 6211, after certain adverse findings in early October. But the suspension doesn’t exactly mean the deal is terminated at this point of time. Both the companies will now discuss the ways to take the deal.

The suspension of molecule which is valued at Rs 65-104 a share would be a major setback for Glenmark. Eli Lilly’s decision comes a year after it entered into a $350 million licensing deal with Glenmark to take the molecule and a portfolio of other pain drugs through the final stages of clinical trials, in return for marketing rights in the US, Europe and Japan.

Glenmark, which was to be the co-promoter of the drug in the US, had received an initial payment of $45 million at the time of the deal and the remaining sum was to be paid at different stages of drug development. It was entitled to additional milestone payments of up to $90 million for other uses of the molecule.

The susoension will impact the company in the long term as the product has gone out of its portfolio both in terms of milestone revenue as well as royalty and launch pipeline. Currently, Glenmark has 11 drug compounds at various stages of research development for treatment of diseases such as inflammation, heart ailments, metabolic disorders and cancer. The company has so far received $105 million as upfront payment in the deals for licensing out molecules.

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