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Investing.com - ICICI Securities downgraded Glenmark Pharmaceuticals (NSE:GLEN) Ltd. (NSE:GNP) from Reduce to Sell on Friday, while simultaneously raising its price target to INR1,620.00 from INR1,300.00.
The rating change follows Glenmark’s subsidiary Ichnos Glenmark Innovation (IGI) out-licensing its oncology asset ISB 2001 to Abbvie in a deal valued at USD 1.925 billion, which includes USD 700 million upfront, USD 1.225 billion in milestones, and tiered double-digit royalty on net sales.
ICICI Securities noted that the upfront payment from the deal is expected to fund IGI’s R&D needs for the next 2-3 years at approximately USD 70 million annually, while a portion may be transferred to Glenmark to reduce its INR 22 billion debt and fund INR 8 billion annual capital expenditure plans.
The brokerage maintained its near-term growth outlook for most of Glenmark’s businesses, acknowledging management’s goal to scale up EBITDA margins to approximately 23% in FY26.
ICICI Securities justified its downgrade by pointing out that Glenmark stock has risen 34% in the last month on news of the Abbvie deal, and its current valuation "does not capture any potential risks arising in ISB 2001’s clinical trial and launch."
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