Good afternoon everyone. On behalf of the IIM Ahmedabad Healthcare Alumni Special Interest Group, a warm welcome to this online fireside chat. We are honored to have with us Mr. Glenn Saldanha, Chairman and Managing Director of Glenmark Pharmaceuticals, and Professor Tarun Jen of IIM Ahmedabad. Mr. Saldanha is a visionary leader who transformed Glenmark into an innovation-led pharmaceutical company. He has been instrumental in breakthrough research in oncology and immunology. Professor Tarun Jen is our moderator. Over to you, Professor.
Thank you so much. I also want to welcome Glenn to this conversation. IIM's healthcare alumni are very accomplished and keen to hear from you. Glenmark Pharmaceuticals stands out as an innovation-driven company with about 60% of revenues from branded products in dermatology, respiratory, and oncology. The big internal news is Glenmark 3.0, a plan to increase the innovation part of the portfolio. Glenn does not do a lot of media, so this is particularly valuable. My role today is to nudge the conversation along. I hope Glenn will do almost all the talking.
Thank you, Tarun, for having me. It's truly an honor to address the IIM alumni forum. I've been running Glenmark for 25 years, moved back from the US in 1998, and was appointed CEO in 2000. We IPOed the company in 2000, raised $10 million at a $40 million market cap, and put that into innovation, building our facility for innovative research in Navi Mumbai. Our strategy over the last 25 years has been to scale the company by leveraging India's low-cost manufacturing on one hand and moving up the innovation value chain on the other. It's been a difficult journey with many successes and failures. But the recent deal with AbbVie was transformational, putting us on the world map with a best-in-class drug for multiple myeloma. We've partnered with AbbVie, and over the years we've done over 10 licensing deals, getting about $1 billion through innovation. Now, with all the learnings behind us, we hope to move up the value chain with more molecules. Glenmark 3.0 is about being more innovation-driven.
No, thanks so much, Glenn. This is a nice segue. The Glenmark DNA has become about doing innovation, which is a key point. Innovation is tough, and it's rare for Indian firms to do it. I want to understand the ecosystem. In the US, industry and academia collaborate closely, with bright professors doing science that gets taken over by pharma companies when it becomes closer to a product. That model doesn't exist as much in India. I want your vision for academia-industry collaboration. How do we get this engine started?
Sure. Innovation is global, independent of geography. The Americans were way ahead, and now China is making headway. To be part of innovation, you have to think globally and tap the best talent and research pools worldwide. On academia specifically, the American system is far ahead with incubators and licensing to pharma companies. But the Chinese model is different. In India, the government is pushing academic institutions to get more involved. But you have to navigate globally to figure out where to get the best talent and knowledge to get innovation going.
Yeah. So in some ways what you're suggesting is that Indian pharmaceutical companies can scout for talent all over the world. That's also true for biotech startups. The US system is heavy on biotech startups, but in India the biotech world is thinner. I'd love your perspective on that, and any advice for IIM alumni running VC or PE firms who interact with the startup space. So would love your thoughts on the biotech space.
The biotech world is amazing. Most biotechs started in the US with a lot of capital raised at every stage. Companies like Regeneron and Vertex have scaled from small biotech to major pharma. Biotechs typically go all-in on one asset, and if it succeeds, they hit a home run; if not, they're done. VCs take multiple bets to get one success. That environment gives individuals with great ideas opportunities to raise capital and pursue their dreams. Many Indian companies have acquired biotechs to scale their innovative aspirations. That's a great space.
The biotech space shows that compensation structures are such that rewards come only at a payday. People are driven by that delta and are ready to risk a lot to pursue a dream. Big pharma companies like ours have realized the value of biotechs. We spun out Glencark Innovation (IGI) as a 100% owned subsidiary with a biotech environment, management motivation, and incentives. The goal is to eventually list it in the US. IGI has a platform technology for antibodies, and 2001 is the first asset. If it fails, it's done; if it succeeds, it's big. Many big pharma firms now take out biotechs daily. Yesterday, Pfizer did a $4.9 billion deal for an early-stage GLP-1 asset for weight loss. It's an exciting space if you're in the right area and doing the right science.
Right, so just a related point: Do you feel that Indian pharmaceutical industry is today ready to pay top dollar or top rupee for scientific as well as managing talent?
I think so. There are a handful of Indian companies with aspirations to be innovative. They are pretty large and advanced, and they are happy to pay those kinds of salaries to find the best people. Other companies without those aspirations follow a different business model. The handful that want to do something transformational are ready to place those bets. The deal with AbbVie, where we got $700 million upfront, is probably one of the largest payments worldwide. Hopefully, that will incentivize more companies to look at the innovation space and fuel the India innovation story.
So I want to turn a little bit to policy matters. Since we are on what fuels the India innovation story, if you had to talk to the government and regulators, what are your top three or four things you wish the government of India did that might benefit your firm and spark more innovation? What could facilitate more on the talent side, capital side, or regulatory side?
The Indian government is now doing a lot for innovation. They have the PRIP scheme and another large scheme deploying almost one lakh crores into various sectors including pharma. So from a capital perspective, the government is doing its bit. The other critical element is reimbursement of expensive medicines. In China, the government reimburses expensive innovative medicines, giving companies a captive market and the ability to scale. India doesn't have that model; it's all out of pocket. A reimbursement model would propel further innovation because then patients have access to sophisticated medicines and companies have a home market. Also, from a talent perspective, India has sharpest minds, and many Indian-origin people abroad would come back if given the right opportunities and platforms. The two challenges are capital (being addressed) and the captive market through reimbursement.
Yeah. In some way this is a story across Indian industry: we wish we had more domestic demand, which becomes the basis for a bigger sandbox to try more innovation. Many products will fail, but the successful ones cover that. Right now, you try many things and demand is not there. But I interrupted you. Go ahead.
No, and I think from a talent perspective, India has some of the sharpest minds worldwide. Given what's happening in the western world, many would long to come back if provided the right opportunity and platform. We are well positioned to get people back from the US or those already in India aspiring to learn more about innovation. The two challenges are capital, which the government is addressing, and the captive market through reimbursement of expensive medicines, which changes the whole landscape for companies to succeed in India.
That's true. In some ways, demand and supply are the two classic economic drivers. So, almost like two or three times now you've mentioned this Chinese innovation. If you looked at Chinese pharma companies 20-25 years back, there were none of global significance. Now they've risen massively. India prides itself as the pharmacy of the world, aspiring to be the laboratory, but China is doing it. What's special about the Chinese model? We wish our government provided demand, but what else is happening in China? And maybe not just replicating, but what can we do from an ecosystem perspective in India, from the lab side or manufacturing side? People are interested in quality, evaluating investments in companies that build early assets for collaboration with universities. So, please share your thoughts on China.
So if you look at China, 25 years ago they were nowhere. They leapfrogged the generic industry completely, which India dominated. They focused their energies on innovation, coming up with transformational products, and have been extremely successful. Some Chinese companies spend 29-30% of revenues on innovation research, compared to Indian companies which max out around 7-8%. That's the gap. They have government backing through reimbursement, so they know there's a captive market. They run clinical trials quickly, launch in the Chinese market, and then take it worldwide or find partners. They've been smart about building their innovation capabilities. If we adopt some of those learnings, we can move up quickly to becoming a powerhouse in innovation, especially on the clinical end.
We have tremendous capabilities. We are a large population, just like China, so patient recruitment becomes much quicker. That's a great platform to move forward. I think the R&D spends, of course, our capital markets are not that forgiving where they allow you to spend that kind of capital. Most of the Chinese companies have Hong Kong listings and they are able to get valued for the innovation work they're doing, whereas in India we're still not at a point where we are actually rewarding companies for doing innovation. I'm hoping that will change over time. With a few more successes, automatically people will look at Indian pharma companies quite differently in terms of our ability to innovate consistently. That's a key element. That evolution will take some time, but I'm sure we'll get there.
It sounds wonderful. I already see a couple of questions around this. There's a lot of interest in knowing more about the journey of Glenmark's innovation bets. It's a 25-year bet, but it remains a bet because the nature of innovation is that you don't know what you'll wake up to tomorrow. I'm looking at the attendee list and some of the stalwarts of our special interest group, many leaders from the IMA healthcare community have logged in. I'd love to get some questions from the audience. If there are audience members who want to ask questions, this is a good opportunity. If you want to unmute yourself, I'll press the button so you can speak up. While people are still thinking and typing, I want to get some feedback on what has been happening this week. It's been an active week for US trade policy and US workforce policy. The Indian pharmaceutical industry has always seen the US as a major market, and Indian talent in healthcare has flown to the US extensively. Since those are active areas in the news, do you have any reactions or thoughts on the impact and how to take advantage of this? Policy shifts always create winners and losers. How do we make sure we're amongst the winners?
Right. I think on the workforce side, I don't think there is any major impact for our industry. The Indian pharma industry is pretty well insulated from that because a lot of the work gets done locally. On the tariffs, there's still a lot of uncertainty. On the generic side, so far it's been great. There's no move there, but on the innovation side, there is a lot of uncertainty. I think all that will sort itself out over time. The only difficulty is that you don't know what tomorrow or next week will bring.
But on the tariffs, there's still a lot of uncertainty. Particularly on the generic side, so far it's been great. There's no move there, but on the innovation side, there is a lot of uncertainty. Again, I think all that will sort itself out over time. At the end of the day, the only difficulty is that you don't know what tomorrow or next week will bring.
Anyway, so you know, Shalesh Aanganger, I've unmuted him. Shalesh, do you want to...?
Thank you, Professor Jane and Glenn. Great to be listening to you. For the rest of the audience, I know Glenn from the early 2000s. He started the journey and simply outstanding work. Congratulations, Glenn. Super proud of what you and your team have been able to achieve. Very quickly, Glenn, responding to Professor Ji's questions on what could be done in our country to create another Glenmark or the kind of ecosystem he was talking about. I was reflecting on what happened in China during my early days when I was in OPI. One of the things they told us was that in China, there are no two associations. The Chinese companies and the multinationals have one association, and they are interested in what is good for China. That led to consistency of messaging required to be given to the government, and that's how they came up with policy interventions that helped Chinese companies go towards the innovation ecosystem. For example, one thing they did was data protection they gave to Chinese companies when they innovated, making sure it was not copied by another Chinese company. It was required because otherwise, innovation with all the hard work that companies like Glenmark do can get into a difficult situation. Similarly, biotech processes were simplified. Multinationals were given an ecosystem to promote their innovative products and they got reimbursement, so they were happy and did not come in the way. That's how the whole system appeared. During my time, I tried, and you were also president of IPA. I think it is something we need to think through as an industry. The old days are gone. In the new world, there is a need for rethinking how we should come together as an industry to do what is right for India, not just get stuck with the philosophy of our parent companies, especially in MNCs. This is just a thought. I know it's a bit vague, but I thought it was necessary to think of creating that ecosystem in our country.
Great. So we have Dr. Dh Da. Dr. Da, I've put you on.
Yeah. Thanks very much. Can you hear me?
Yes, we can hear you.
Yes.
Excellent. Thank you very much for getting me in here. Hi Glenn, I've known you since my Vocart days and Airon days.
