India's Glenmark surges on up to $325 million deal with Sanofi-Aventis for pain compounds

Indian drugmaker Glenmark Pharmaceuticals saw its shares rise as much as 13% to a 52-week high of 303.80 rupees (before settling the day up 3.4%, after the company yesterday announced that it has entered into an agreement with French drug major Sanofi-Aventis for the development and commercialization of novel agents to treat chronic pain.

Under the terms of the deal, Glenmark will receive an upfront payment of $20 million, as well as development, regulatory and commercial milestone payments. All such payments could reach a total of $325 million. In addition, Glenmark is eligible to receive tiered double-digit royalties on sales of products commercialized under the license.

'Investors have been waiting for such a big deal for Glenmark for the past two years. The news will bring back the confidence of investors into the company's R&D pipeline,' says Sriram Rathi, an analyst with Centrum Broking quoted by the Wall Street Journal.