Glenmark Pharma jumps over 20% after CLSA upgrades to 'buy' from 'sell'

Extending their gains, shares of Glenmark Pharmaceuticals rallied over 20 per cent to Rs 363.65 apiece on the BSE on Monday after global brokerage firm CLSA upgraded the stock to 'buy' from 'Sell', citing attractive valuation.

At 01:43 am, the stock was trading over 20 per cent higher at Rs 361.40 apiece on the BSE as compared to 0.18 per cent decline in the S&P BSE Sensex. In the last two sessions, the stock has zoomed 36 per cent (from Thursday's closing price) and has surged 23 per cent from its 52-week low, touched on the same day.

CLSA has increased the target price of the firm to Rs 410 from Rs 350 earlier and raised its FY20-22 earnings per share (EPS) by 3 per cent - 22 per cent. The brokerage firm, in its review report, said the US sales momentum is expected to remain strong whereas India should continue growing above the industry rate. It also noted that all geographies witnessed year-on-year (YoY) growth for the first time in over three years.

On the flip side, CLSA added that leveraged balance sheet remains a concern and it doesn't see any reduction in net debt in 1HFY20. Besides, the company is expected to do high research and development (R&D) spending in the medium term.

Last week, the pharma company posted a consolidated net profit to Rs 255.54 crore for the second quarter ended on September, 2019. It had posted a net profit of Rs 414 crore in the July-September quarter a year ago.

Net sales of the company stood at Rs 2,763.73 crore, up 8.81 per cent, during the period under review as against Rs 2,539.85 crore of the corresponding quarter previous fiscal.

Glenmark Pharma gets USFDA approval for prostate cancer treatment drug

Drug firm Glenmark Pharmaceuticals on Thursday said it has received final approval from the US health regulator for Abiraterone Acetate tablets, used to treat prostate cancer.

The approved product is a generic version of Zytiga tablets, 250 mg, of Janssen Biotech.

"Glenmark Pharmaceuticals Inc., USA has been granted final approval by the United States Food & Drug Administration (USFDA) for Abiraterone Acetate tablets USP, 250 mg," the company said in a regulatory filing.

Quoting IQVIA sales data for the 12 month period ending August 2019, Glenmark said the Zytiga tablets, 250 mg market achieved annual sales of approximately $794.1 million.

Glenmark's current portfolio consists of 162 products authorised for distribution in the US marketplace and 46 ANDA's pending approval with the USFDA.

Shares of Glenmark Pharma were trading 0.15 per cent higher at Rs 286.00 apiece on the BSE.

S&P revises Glenmark outlook to 'negative' on weak operating performance

Standard and Poor's (S&P) has revised the outlook for pharma major Glenmark to 'negative' on weaker-than-expected operating performance and refinancing risk for notes that mature in 2021.

"Glenmark's weaker-than-expected operating performance and elevated capital spending will result in low financial headroom over the next 12 months", rating agency S&P said in a statement on Wednesday. The drugmaker's rating has been affirmed at 'BB-'.

"The India-based generic drugmaker's free operating cash flow generation will be insignificant, despite lower capital spending guidance by the company's management and our modest growth assumptions", S&P added.

"The company's revenue growth in fiscal 2019 (the year ended March 31, 2019) was in line with our expectation of 8 per cent-10 per cent, but its EBITDA margins slipped to 16.7 per cent, compared with our estimates of 18 per cent-20 per cent. This resulted in a ratio of funds from operations (FFO) to debt of 19.9 per cent, just below our downgrade trigger of 20 per cent," said the rating agency.

"Glenmark's operating performance for the first quarter of fiscal 2020 remains weak, with profit slipping further by about 90 basis points, compared with fiscal 2019," rating agency said.

Glenmark's revenue growth of 7.3 per cent was also slightly below our 8 per cent-10 per cent estimate for fiscal 2020. This was attributable to the absence of major product launches, subdued sales for its generic Mupirocin cream, continued pressure on dermatology products in the US. The volatile performance of Latin American markets also impacted performance.

The company's operations may not be able to deleverage meaningfully over the next 12 months, S&P added.

Glenmark is expected to generate less than Rs 200 crore of free operating cash flow (FOCF) in FY20, compared to a negative FOCF of Rs 260 crore in FY19. The improvement is largely due to management's lower capital expenditure (capex) guidance of Rs 800 crore, compared to Rs 1,220 crore spent in FY19.

Glenmark's capex for the first quarter of fiscal 2020 was Rs 190 crore, which was in line with its guidance.

Glenmark gets US health regulator nod for generic breast cancer injection

Drug firm Glenmark Pharmaceuticals on Friday said its US arm has received the final approval from the US health regulator for its Fulvestrant injection used for the treatment of advanced breast cancer.

The product is a generic version of AstraZeneca Pharmaceuticals LP's Faslodex Injection in the same strength, the company said in a statement.

Glenmark Pharmaceuticals Inc USA has been granted final approval by the United States Food and Drug Administration (USFDA) for Fulvestrant injection in the strength of 250 mg/5 mL (50 mg/mL), it said.

According to IQVIA sales data for the 12-month period ending June 2019, the Faslodex injection, 250 mg/5 mL (50 mg/mL) brand and and all available therapeutic equivalents achieved annual sales of approximately $549.9 million, Glenmark said.

The company's current portfolio consists of 159 products authorised for distribution in the US marketplace and 56 abbreviated new drug applications (ANDA's) pending approval with the USFDA, it added.

Shares of Glenmark Pharmaceuticals were trading at Rs 360.95 on BSE, up 0.39 per cent from the previous close.

Glenmark signs deal with Novartis for 3 respiratory products in Brazil

Drug major Glenmark Pharmaceuticals Monday said its subsidiary Glenmark Farmacutica has entered into an exclusive partnership agreement with Novartis Biosciences SA for three respiratory products in Brazil.

The products involved in the agreement are Seebri (Glycopyrronium bromide), Onbrize (Indacaterol) and Ultibro (combination of Indacaterol and Glycopyrronium), which are indicated for relief of symptoms in adults with chronic obstructive pulmonary disease (COPD).

Under the terms of the agreement, Novartis will remain the holder of the registration of these medicines and will be responsible to manufacture them with all technical excellence in line with its global commitment to quality, effectiveness and safety, Glenmark said in a regulatory filing.

Glenmark will be responsible for promoting, commercialising and distributing of these products in Brazil, the company added.

This agreement will be effective from July 1, 2019 onwards.

Glenmark Pharmaceuticals Chairman and Managing Director Glenn Saldanha said this arrangement with Novartis Biosciences SA will strengthen its respiratory franchise in Brazil.

"This partnership is in line with our vision to expand our respiratory product offerings for patients and prescribers in Brazil and further consolidate our position in this segment," Saldanha said.

Shares of Glenmark Pharma were trading 6.08 per cent lower at Rs 469.80 apiece on BSE.