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Glenmark Life Sciences, whose initial public offer is set to open on July 27, said the company is focused on scaling up its complex active pharmaceutical ingredients (API) portfolio and contract development and manufacturing services business.
The focus will be on developing and launching niche and complex molecules such peptides, oncology and iron compounds, Yasir Rawjee, MD and CEO of the company, said in an interview to Moneycontrol.
“Our profitability has been consistent, with EBITDA margins of 30-31 percent in the last three-four years. The kind of portfolio build we had in the last few years and the regulated market focus is helping our growth. So we expect consistent growth, helped by niche and complex pipeline. The CDMO (contract development and manufacturing) business is also expected to come up in a big way in three-four years and will further accelerate the growth momentum,” Rawjee said.
The Glenmark Life Sciences IPO is open from July 27 to 29, with shares offered in a price band of Rs 695-Rs 720 each. The offer comprises of a fresh issue of Rs 1,060 crore and a sale of up to 6.3 million shares by the promoters of Glenmark Pharmaceuticals.
The Mumbai-based company said the net proceeds would go towards paying the outstanding purchase consideration to the promoter for the spin-off of the API business and funding capital expenditure and R&D requirements.
Charting own course
Like other Indian drug makers, Glenmark began manufacturing APIs to cater to its internal consumption, but over the years it started supplying outside clients. In 2019, Glenmark spun off its API division into a separate company called Glenmark Life Sciences with the intent of unlocking value and giving it the deserved focus.
Rawjee said the company competes just as any other API manufacturer to get supply contracts from its parent, Glenmark Pharma.
“Now, about two-thirds of GLS revenues come from outside clients such as Teva, Torrent Pharma and Aurobindo Pharma,” Rawjee said.
According to Rawjee, what sets GLS apart is the company’s supplies of high-value, non-commoditised APIs in chronic segments like hypertension and diabetes and getting about two-thirds of revenue from regulated markets, with the rest from emerging markets.
About 10 products including Olmesartan, Rosuvastatin, Oxcarbazepine, Voriconazole, Telmisartan, Teneligliptin and Etoricoxib contribute about 70 percent of the company’s revenue.
Rawjee said the company plans to develop eight to 10 molecules each year including high-value and high-volume APIs. It is also looking at participating in the production-linked incentive scheme announced by the government.
The Indian API market has shown steady growth of 9.1 percent since FY19 and is expected to increase at a CAGR of 9.6 percent from 2021 to 2026, outpacing the global market growth. India’s share in the global API market of $181 billion is only 6.1 percent and much lower than China’s 32.4 percent.
However, after the COVID-19 pandemic, most pharmaceutical companies are on a drive to safeguard supply chains and are looking beyond China to source APIs. This is expected to help Indian API companies. The share of India API supplies is expected to increase to 9.3 percent by FY26.
Glenmark Life Sciences has filed 403 drug master files – documents submitted to regulators in intended markets – and certificates of suitability across the US, Europe, Japan, Russia, Brazil, South Korea, Taiwan, Canada, China and Australia.
