The Hindu : Business : Glenmark to merge with TASC Pharmaceuticals

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Friday, Mar 11, 2005

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Business

Glenmark to merge with TASC Pharmaceuticals

By Our Staff Correspondent

The Managing Director of Glenmark Laboratories, Mark Saldanha, and the Managing Director of TASC Pharmaceuticals, Vijay Thakkar, at a press conference in Mumbai on Thursday. — Photo: Paul Noronha

MUMBAI, MARCH 10. Glenmark Laboratories Ltd. (GLL), a niche formulation and biopharmaceutical player, today announced an integrated alignment pact with TASC Pharmaceuticals, a research driven API (Active Pharmaceutical Ingredient) company that will lead to the formation of an amalgamated entity valued at Rs. 1,200 crores.

The alignment is being proposed in the ratio of 1.8:1, that is, the shareholders of GLL will get 1.8 shares of TASC for every share held by GLL. Accordingly, TASC will issue an additional 2.29 million shares to the shareholders of GLL. The ratio is being arrived at on the basis of fair business valuation of GLL by Deloitte Haskins & Sells that valued GLL at Rs. 750 crores The combined entity will be an integrated player in pharmaceuticals and biopharmaceuticals with presence in the entire value chain valued at more than Rs. 1,200 crores (arrived at by summing up the valuation of GLL and market capitalisation of TASC at Rs. 450 crores).

The name for the merged entity would be decided in the next few weeks and GLL was still to move the courts for the merger process that could take around two months, said Mark Saldanha, Managing Director, Glenmark Labs. "Companies that are fully vertically integrated, having presence in the entire value chain and having global presence offering bouquet of niche products, will be better positioned in the new scenario and our amalgamation pact with TASC will not only allow us to backward integrate in terms of our API requirements but also allow us to enhance our true potential.''

Mr. Saldanha will take over as Managing Director and the board of directors of the merged entity will be constituted in due course. GLL has a formulation plant in Goa built to USFDA guidelines and expects USFDA and South African MCC approval by December. The unit is the largest soft gelatine plant in Asia. Mr. Saldanha said that after USFDA approval, exports to U.S. markets would be significant.

In biopharmaceuticals, some products under development include interferon alpha 2B, granulocyte colony stimulating factor (GCSF), erythropoietin and a novel drug delivery system for equitable growth factor (EGF).

TASC Pharma has two large API facilities in Pune, which are being made USFDA compliant over the next year. The company expects to launch 15 new products in 2005-06 in cardiovascular, anti-depressant, anti-histamine, anti-allergic and lifestyle-related drugs. While 73 per cent of the sales revenue came from the domestic market in 2003-04, exports are likely to go up to 70 per cent in 2005-06.

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