Glenmark Pharmaceuticals said on Tuesday it has sought an arbitration in the US as Napo Pharmaceuticals has no basis for terminating a collaboration agreement with it to develop and market an HIV-associated diarrhoea drug.
Napo Pharma had terminated the pact on November 10, according to a press release posted the US-based firm's website. The move is a fresh hurdle to Glenmark's ambitious plans to exclusively market the drug, Crofelemer, in 140 countries.
The shares of Glenmark declined more than 6% in the morning trade to finally close at R294.2, down 4.1% at the Bombay Stock Exchange.
Glenmark, along with US-based partners Napo and Salix Pharmaceuticals has developed Crofelemer, the first ever drug developed by an Indian firm.
According to the licensing agreement, Glenmark holds the exclusive rights to distribute Crofelemer in 140 countries while Salix would sell it in regulated markets such as North America, Japan and Europe.
Napo Pharma was the initial developer of the molecule who licensed it out to Glenmark and Salix. Glenmark on Tuesday denied Napo had any basis to terminate the agreement and that it was seeking a declaration from an arbitration panel that Napo's claims of breach were unfounded.