Glenmark Pharmaceuticals’ outlook has been revised to Positive by Crisil Ratings, following its exclusive licensing deal with AbbVie for ISB 2001. The deal includes an upfront payment of USD 700 million and potential milestone payments up to USD 1.225 billion, plus royalties. The improved financial risk profile and expected better business performance drove the rating revision. The company reported a 13% revenue increase in fiscal 2025.
Rating Upgrade Rationale
Crisil Ratings upgraded Glenmark Pharmaceuticals’ outlook to Positive, reaffirming its ‘Crisil AA’ rating. This decision reflects the anticipated benefits from its licensing agreement with AbbVie for ISB 2001. The agreement is expected to significantly boost Glenmark’s financial standing through substantial upfront and future payments.
Licensing Deal Details
The licensing deal grants AbbVie global rights to develop and commercialize ISB 2001, an innovative tri-specific antibody. Glenmark received an initial payment of USD 700 million and is eligible for up to USD 1.225 billion in milestone payments, in addition to royalties on net sales. This deal is considered one of the largest biotechnology agreements involving an Indian company.
Financial Performance and Outlook
In fiscal 2025, Glenmark’s revenues increased by 13%. Domestic formulations saw strong growth of 32%. The company expects revenue growth of 10-12% going forward, driven by domestic and European market performance. R&D expenses have been reduced to approximately 7% of sales. Crisil expects Glenmark’s profitability to gradually improve, averaging 20-22% over the medium term.
Risks and Considerations
The company recorded an exceptional loss of Rs 372.8 crore in fiscal 2025 due to settlement costs and restructuring. Another exceptional loss of Rs 323 crore occurred in Q1 FY26 related to a lawsuit settlement in the US. Glenmark continues to manage working capital requirements and regulatory risks, including inspections by the US FDA.
Liquidity Position
Glenmark maintains a strong liquidity position, with unencumbered cash of Rs 1,675 crore as of March 31, 2025. The expected influx of USD 700 million from the AbbVie deal should further bolster this position. Average bank limit utilization was at 61% for the year ended March 2025.
Source: BSE
