Buy Glenmark Pharmaceuticals Ltd For Target Rs. 2,545 By Choice Broking Ltd
ISB 2001 Licensing and Core Expansion to Drive Glenmark 3.0
Ichnos Glenmark Innovation (GNP’s wholly owned subsidiary) recently signed a licensing deal with AbbVie for its multiple myeloma asset, ISB 2001, valued at USD 1.925 Bn, including a significant upfront payment of USD 700 Mn—globally one of the largest of its kind. The deal makes IGI self-sustaining, easing GNP’s innovation funding burden and supporting a robust EBITDA margin expansion, with management guiding for 23% margins over the next three years (~535 bps improvement over FY25).
View and Valuation: This development, along with GNP’s strong growth initiatives, supports its ‘Glenmark 3.0’ roadmap. Hence, we revise our FY26E and FY27E earnings estimates upward by 20.0% and 7.1%, respectively, and introduce FY28E. Given the long-term revenue visibility from ISB 2001 (royalties, milestone payouts) and upcoming respiratory launches, we shift to a DCF-based valuation (see Exhibit 1), raising our target price to INR 2,545 (from INR 1,670 in Q4FY25), maintaining our BUY rating on the stock. We continue to remain positive on GNP’s ability to grow its core operations. Key Monitors: Glenmark’s ability to scale its core business and secure necessary regulatory approvals for ISB 2001 remains a key risk to our investment thesis.
Key Management Commentary | GNP Investor Day 2025
* Over the next five years, management aims to accelerate growth in the innovative and branded business by strengthening the product portfolio and increasing its presence in high-growth EU and emerging markets.
* Strategic focus areas include: a. launching Winlevi in Europe and expanding the dermatology portfolio with low-competition products; b. scaling up Ryaltris across new geographies and broadening respiratory offerings; and c. selectively targeting high-value oncology products across various dosage forms.
* We believe this positions GNP well to drive both product and market expansion, with sustained growth.
* Additionally, with IGI now self-sustaining, management expects lower expenses to support ~23% EBITDA margins, likely to sustain in the near term.
Glenmark’s ISB 2001 Secures USD 1.9 Bn Deal with AbbVie
* Discovered by Ichnos Glenmark Innovation (IGI) in 2020, ISB 2001 is a firstin-class trispecific T-cell engager currently in Phase 1 clinical trials.
* The asset has been granted USFDA Fast Track Designation, aimed at accelerating its review process.
* Under the recently signed agreement, AbbVie will hold exclusive rights to develop, manufacture, and commercialize ISB 2001 in North America, Europe, Japan, and Greater China, while Glenmark retains rights everywhere else.
* The chart below demonstrates ISB 2001's consistent and robust efficacy, with Overall Response Rates (ORR) ranging from 71% to 84% across various high-risk and heavily pretreated multiple myeloma patient subgroups.
* Given its novel mechanism and potential to address significant unmet needs in multiple myeloma, we believe ISB 2001 could emerge as a blockbuster asset.
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