Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Shilpa Medicare Ltd (BOM:530549, Financial) reported a 15% year-on-year growth in top-line revenue, reaching INR302 crores.
- The company achieved a gross profit margin of 68%, up from 66% in the same quarter last year.
- EBITDA for the quarter increased by 66% year-on-year, reaching INR83 crores, with EBITDA margins improving to 28% from 19%.
- The company has secured prelaunch orders for two NDA molecules in the oncology segment, indicating strong future revenue potential.
- Shilpa Medicare Ltd (BOM:530549) successfully completed the ANVISA-Brazil GMP audit for 29 products, opening opportunities in the Brazilian market.
Negative Points
- The US formulation segment saw a significant decline, dropping from INR30 crores to INR10 crores quarter-on-quarter.
- The company faces high tax rates, with an expected rate of around 35% for FY25.
- There is uncertainty regarding the commercialization timeline for some key products, including the breakthrough designation NDA molecule.
- The company has a high net debt of INR514 crores as of June 30, 2024, despite a reduction from INR912 crores at the end of March 2024.
- The albumin product's excipient grade market entry is still in early stages, with no clear timeline for significant sales.
Q & A Highlights
Q: Can you provide more details on the Phase 2 for albumin?
A: We have completed a Phase 1/Phase 2 study for albumin, evaluating safety, immunogenicity, and efficacy. Typically, Phase 2 is needed if safety isn't established in Phase 1, but our study covered these aspects.
Q: What is the expected timeline for the global launch of albumin after Phase 3 trials?
A: We plan to run two parallel studies: one for India and emerging markets, and another for Europe. The European study will be more elaborate, possibly extending to 15 months. The excipient grade DMF is already filed, and we are focusing on promoting albumin for excipient use.
Q: Can you provide more color on the breakthrough designation NDA molecule and its commercialization timeline?
A: Our partner plans to file the NDA by the end of this year, with potential approval in the next financial year. The molecule represents a niche opportunity, and we expect more advancements and long-term arrangements in the coming quarters.
Q: What are the next steps for liraglutide and semaglutide?
A: For liraglutide, plant validation is complete, and we will start promoting it to customers. We also developed our own formulation, planning to scale up in Q3 FY25. For semaglutide, lab-scale development is finished, and we aim to complete plant validation and DMF filing within the next financial year.
Q: What is the status of the pemetrexed induction post-launch sales?
A: Amneal has sold over 1,000 vials in the US market. They are awaiting K-code approval for insurance reimbursement, expected this quarter, which should boost sales in the coming quarters.
Q: How significant is the UDCA opportunity, and are there any conflicts with the previous joint venture?
A: UDCA presents a significant opportunity, especially in export markets. The joint venture concluded a few years ago, and we have developed an independent process, so there are no conflicts.
Q: What is the expected tax rate for FY25 and beyond?
A: We expect the tax rate to be around 35% for FY25. The higher rate this quarter was due to inter-company interest and pre-capitalization stage interest not hitting the P&L. We are correcting this by converting loans to equity.
Q: Can you explain the increase in the loss from JV and associates this quarter?
A: The increase was due to certain losses reported by an associate company in earlier periods, which we had to account for this quarter.
Q: What is the CapEx requirement for this year and next year?
A: For this year, the CapEx requirement is around INR125 crores, including INR50 crores for the albumin project, INR50 crores for maintenance CapEx, and INR25 crores for tranexamic acid expansion.
Q: What is the strategy for out-licensing albumin before or after Phase 3?
A: These are strategic decisions and confidential. We are initiating Phase 3 studies and will provide more details in future quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
