Glenmark, Paul Capital Partners sign royalty deal for $27 million to build generic dermatology portfolio

By E. Janene Geiss

Philadelphia, June 5 - Glenmark Pharmaceuticals Inc., a wholly owned subsidiary of Glenmark Pharmaceuticals Ltd., announced Monday a royalty deal with Paul Capital Partners' Royalty Fund.

Under the agreement, Paul Royalty said it will invest up to $27 million to finance the development of 16 dermatological products by Glenmark for the U.S. market, according to a company news release.

In return, Paul Royalty said it will receive undisclosed royalties on net sales following Food and Drug Administration approval and launch of each product.

The products in the portfolio have a total U.S. market revenue of about $1 billion, officials said.

DSP Merrill Lynch and Greenberg Traurig LLP were Glenmark's financial and legal advisers, respectively, for the deal.

Under the agreement, Glenmark said it will be responsible for preclinical development, will manage the clinical trials and manufacture the products.

Glenmark said it will be responsible for filing the abbreviated New Drug Applications and, upon approval, marketing the products in the United States.

Glenmark India also will supply active pharmaceutical ingredient for some of the products.

Paul Royalty said it will finance product development through milestone payments to Glenmark over the next two years. In return, Paul Royalty said it will receive a royalty on net sales for these products, with the percentage varying by product and performance.

This dermatological portfolio ranges from the easier to more complex product development, near- and medium-term revenue opportunities and a mix of Para I-III and Para IV filings.

Clinical trials for two of the products already have been initiated and abbreviated New Drug Application filings will begin from the end of 2006 and continue over the next two years.

All 16 products are expected to be launched over the next five years with the first product launch occurring in 2007, officials said.

Glenmark said its previous efforts to accelerate its portfolio have involved in-licensing generics from U.S.-based manufacturers, collaboration agreements for joint development with other companies and also acquisition of abbreviated New Drug Applications.

Glenmark is a Mumbai, India, research-based pharmaceutical company.

Paul Capital Partners is a New York-based health care investment fund.

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