Why Glenmark Pharma Share Price is Rising

Picking the right stocks in the pharmaceutical industry can be tricky.

Exciting discoveries and steady growth are certainly possible, but strict regulations, patent expirations, and generic competition can cause wild price swings.

However, there's a recent development that might pique the interest of pharma investors.

Glenmark Pharma share price has been on an upward trajectory, raising some eyebrows. Let's take a look at the upward trajectory of the pharma company's share price.

In the past year alone, Glenmark share price has climbed over 98%. This positive trend continued in 2024, with an additional increase of more than 37%.

Notably, the last five days have seen a further rise of more than 15%.

Let's explore the potential factors driving Glenmark Pharma's upward climb.

#1 Change in Management

Glenmark Pharma appointed a new president and business head for its North American business. The company's North American business was slowing down pulling down the overall performance of the company.

Hence, a new management leader with a winning track record injects optimism. He's seen as a catalyst for better strategies, efficiency, and ultimately, profits.

The pharma company appointed Mark T Kikuchi as president and business head of the North American business. The appointment was effective from 28 May 2024.

Before joining Glenmark Pharma he was with Dr Reddy's Laboratories since 2019 as a head of the North American business. Overall he has experience of about 30 years in the pharma industry.

New leadership often brings a clear strategy for navigating challenges and achieving sustainable growth. A successful new leader can create a buzz about potential turnaround strategies.

#2 Overall a Good Financial Year 2024

Despite reporting net loss for Q4 FY24 investors remain confident about Glenmark Pharma. Its share price is on an upward trajectory ever since the company declared its quarterly results.

Glenmark Pharmaceuticals reported a net loss of Rs 12.4 billion (bn), compared to a net loss of Rs 5.5 bn in the corresponding period last year.

The global pharma major's revenue from operations in the fourth quarter of FY24 stood at Rs 30.6 bn, compared to Rs 30 bn reported in the year-ago period.

At the operational level, its earnings before interest, taxes, depreciation and amortisation (EBITDA) for the March 2024 quarter rose 26.7% to Rs 5 bn, compared to Rs 3.9 bn in the corresponding period last year. EBITDA margin improved to 16.5% from 13.3% annually.

On a segmental view, company's North American business dragged down the performance of all other markets.

North America's business registered a revenue decline of 12.4% in the March quarter, on account of lack of new product launches and delay in scale-up of recent launches.

In Q4 Europe revenues rose 0.7% to Rs 6.1 bn due to softness in the tender market, while the rest of the world (RoW) recorded growth of 9.7% to Rs 7.5 bn.

In FY24, its Europe business registered a growth of 33.7% for the full year. Its RoW business recorded a growth of 16.1%, driven by all key markets. Its Indian business grew 12.9% YoY to Rs 9.4 bn in Q4FY24.

The company also divested a majority stake in Glenmark Life Sciences, concluding the year in a strong net cash positive position.

For FY24, the pharma company's board recommended a dividend of 250%, i.e. Rs. 2.5 per share (face value of Re. 1 each).

What Next?

Despite facing headwinds in the US market, Glenmark Pharma's branded medicines continued to deliver robust growth, particularly in Europe and other key international markets.

According to IQVIA data for March 2024, the company rose two spots in FY24 to become the third-largest player in the Indian Pharmaceutical Market's (IPM) Cardiac segment.

Looking ahead, two key developments hold promise for its future growth: The progress of Winlevi in Europe and Ryaltris globally.

As of March 2024, marketing applications for Ryaltris have been submitted in over 80 countries, with commercialisation already underway in 34 major markets, including the US, Europe, Australia, Russia, South Africa, and South Korea.

It is also actively bolstering its product pipeline. In Q4 alone, they filed two abbreviated new drug application (ANDA) applications, adding to a total of six ANDA applications filed in FY24.

Additionally, the company partnered with Pfizer in January 2024 to launch Abrocitinib in India for treating moderate-to-severe atopic dermatitis (AD).

Further strengthening their innovation engine, the pharma company announced a strategic alliance with its subsidiary, Ichnos Sciences, in the same month.

This alliance, named Ichnos Glenmark Innovation (IGI), merges Glenmark's expertise in small molecule research and development with Ichnos' strength in novel biologics, aiming to accelerate new drug discovery in the critical field of cancer treatment.

While these developments are promising, the pharmaceutical industry faces inherent challenges. The stringent regulatory environment, particularly for new drug approvals by the FDA, can significantly impact timelines and overall success.

Even promising drugs like Winlevi and Ryaltris may encounter unexpected delays or even rejection during the approval process. Investors should carefully consider these industry-wide risks alongside Glenmark Pharma's positive developments.

How Glenmark Pharma Share Price has Performed Recently

In the past five days, Glenmark Pharma share price has rallied more than 15%. In the last month, it is up 10.1%.

In 2024, so far its share price surged 37.9% and more than 98.4% in the last year.

The stock touched its 52-week high of Rs 1,183.3 on 29 May 2024 and a 52-week low of Rs 588 on 30 May 2023.

About Glenmark Pharma

Glenmark Pharma is actively involved in the discovery of new molecules, NCEs (new chemical entity) and NBEs (new biological entity).

It is engaged in developing pharmaceutical product formulation and active pharmaceutical ingredients in regulated and semi-regulated markets.

The company has several molecules in various stages of pre-clinical and clinical development focused in the areas of oncology, respiratory, and rermatology.

Its branded generics business has a significant presence in markets across emerging economies, including India.

The API business sells products in over 80 countries, including the US, various countries in the EU, South America, and India.

For more details, see the Glenmark Pharma company fact sheet and quarterly results.

For a sector overview, read our Pharma sector report.

You can compare Glenmark Pharma with its peers:

Glenmark Pharma vs Lupin

Glenmark Pharma vs Abbott India

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