ICDR rules in favor of Glenmark over Crofelemer

Indian drugmaker Glenmark Pharmaceuticals saw its shares rise 2.3% to 415 rupees yesterday after the company revealed that the International Centre for Dispute Resolution (ICDR) ruled in favor of the company on the arbitration claim it filed on August 8, 2011 against Napo Pharmaceuticals relating to Crofelemer, a proprietary proanthocyanidin for the treatment of diarrheal diseases.

The ICDR ruled that Glenmark’s exclusive rights to commercialize and distribute Crofelemer include the exclusive right to distribute Crofelemer through relief agencies into the 140 countries that comprise the Glenmark territory. The ICDR also ruled that Glenmark has two years from the time Crofelemer is approved in India (on an indication by indication basis) to file for regulatory approval in the 140 countries in its territory. Finally, the ICDR found that Napo breached the Collaboration Agreement by disclosing confidential information concerning the manufacture of Crofelemer to Aptuit Laurus and enjoined Napo from disclosing such confidential information to third parties and from purchasing or obtaining Crofelemer from Aptuit.

Napo also had filed a claim in the same proceeding seeking a ruling that Glenmark had materially breached the collaboration agreement between the parties by failing to, among other things, commercialize Crofelemer in all 140 countries in its territory and to manufacture a pediatric formulation for Crofelemer. In its ruling, the ICDR rejected Napo’s material breach claim, finding that Glenmark has complied with all of its obligations under the agreement.