Glenmark Pharma rallies over 3% on talks to sell oral contraceptive unit

NEW DELHI: Glenmark PharmaceuticalLtd rallied a little over 3 per cent in morning trade on Thursday, a day after ET reported that the drugmaker has put on the block its oral contraceptive product division which makes the generic anti-pregnancy medicine and sells it in the American market.

The company promoted by Glenn Saldanha has begun talks with some of the leading local and global drugmakers, ET reported quoting two sources. Glenmark Pharmaceuticals declined to comment on the matter.

At 09:20 a.m.; Glenmark Pharma pared some of the morning gains and was trading 1.9 per cent higher at Rs 547.30. It has hit a low of Rs 542.50 and a high of Rs 554.65 in trade today.

This niche hormonal product made at the company's factory in Goa has a market size of more than $2.5 billion in the US. Glenmark has almost the entire range of about 19 variants of the oral contraceptive, which includes its existing product line and ANDAs pending approvals, added the report.

It is a high-margin product because not many players managed to enter this segment due to its complex manufacturing technology, said an analyst with a foreign brokerage who did not wish to be named because he is not authorised to speak to the media.

The market of oral contraceptive market in the US is growing at about 10 per cent every year and has very few players. "Given complex manufacturing processes and high investments, the competition is low in the oral contraceptive segment and typically attracts only a few players," said the analyst.

Glenmark has reported a net profit of Rs 128 crore on a turnover of Rs 1,237 crore in the quarter-ended June. The company has 90 products which can be sold in the US market and 53 ANDAs are pending approval with the USFDA.