Deals

Paul Capital invests in Indian drugmaker

The US-based firm will use its royalty fund to help the company develop a US portfolio of dermatology drugs.

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Paul Capital Partners will invest $27 million in India-based Glenmark Pharmaceuticals, an investment that will be used to build a generic dermatology product portfolio in the US and finance the development of 16 dermatological products for the US market over two years.

The investment was made through Paul Capital Partners’ Royalty Fund, a healthcare investment vehicle. The fund will receive undisclosed royalties on net sales following the US Food and Drug Administration’s approval and the launch of each product. The firm said the market for the products in the United States is worth $1 billion.

Headquartered in Mumbai, India, Glenmark has generic formulation interests in over 90 countries across the world, including the highly regulated markets of the United States and Europe. The formulation business spans several product segments such as dermatology, internal medicine, pediatrics, gynecology and diabetes.

Ken Mcleod, a principal with the firm, said the US dermatology market has very few players because of a number of entry barriers such as high clinical trial costs and FDA approval timeliness. However he said Glenmark has the infrastructure to meet these challenges.

“We’re taking their amazing experience in development, manufacturing and marketing in the home market and then applying that to the US market,” he said. “We’re seeing that Indian pharmaceutical companies are becoming much more assertive and actually expanding into the European countries and into the US. Glenmark is one of the companies that is very much at the forefront of that.”

Glenmark is the second largest dermatology company in their home market of India, behind GlazoSmithKline. The company’s previous efforts to accelerate its portfolio build-up have involved in-licensing generics from US based manufacturers and collaboration agreements for joint development with other companies.

The investment is coming from Paul Capital’s $650 million second royalty fund, which was raised in 2003. With about 65 percent of its capital committed, the fund is focusing exclusively on healthcare.