Global brokerage HSBC has upgraded Glenmark Pharmaceuticals to a ‘Buy’ rating from ‘Hold’ and raised the target price to ₹1,785 from ₹1,630, implying a potential upside of around 22%. The upgrade is driven by a combination of emerging upside from Glenmark’s novel tri-specific antibody candidate, ISB 2001, and improving visibility on operating margin expansion in its core business.
Glenmark, through its novel biologics arm Glenmark Ichnos Innovation (IGI), is in advanced discussions with potential global partners to out-license ISB 2001, an investigational tri-specific antibody targeting relapsed or refractory multiple myeloma (RRMM). The company had published encouraging early clinical data from the dose-escalation phase of its Phase 1 trial in December 2024. HSBC notes that while the therapy is not directly comparable to existing bispecific antibodies, preliminary data suggests ISB 2001 has the potential to become a significant therapeutic option in the RRMM space.
Two major licensing deals in the tri-specific antibody space so far in 2025 have further reinforced market optimism around this modality. HSBC expects that if Glenmark successfully seals a deal for ISB 2001, it could serve as a major re-rating trigger for the stock. The brokerage has modeled a potential sales opportunity of over $500 million for ISB 2001 based on early assumptions, though timelines and deal specifics remain uncertain.
Beyond the optionality of ISB 2001, Glenmark’s base business is expected to benefit from several margin drivers. These include reduced R&D spend at IGI (down to $60–70 million annually from ~$110 million a few years ago), the upcoming commercialisation of the Monroe plant in the U.S. which is currently incurring ~$25 million in operating costs with no corresponding sales, and the anticipated launch of inhaler products such as gFlovent in 1HFY26. The gFlovent product is manufactured at the company’s Aurangabad facility, which successfully cleared an FDA inspection in September 2024 with zero observations.
HSBC believes that these factors together can drive a 200 basis point expansion in Glenmark’s core EBITDA margins over the next two years. As a result, it has switched its valuation methodology to a Gordon Growth-based PE multiple (from an EV/EBITDA approach), citing normalisation in earnings volatility post the challenging prior year.
With a better risk-reward profile and multiple catalysts lined up in the near term, HSBC now sees Glenmark as well-positioned for a potential re-rating, both from fundamental margin improvements and the monetisation of its innovative R&D pipeline.
