Release Date: August 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Glenmark Pharmaceuticals Ltd (BOM:532296, Financial) reported a year-over-year revenue growth of 6.9% for Q1 FY '25.
- The India formulation business recorded a robust growth of 11.9%, outperforming the industry average.
- The North America business registered a quarter-over-quarter growth of 3.3%, with new product approvals and launches.
- Glenmark's Europe operations saw a significant year-over-year growth of 21.4%, driven by strong performance in key markets.
- The company has entered into strategic collaborations and launched differentiated products in key therapeutic areas, enhancing its market presence.
Negative Points
- The US business remains challenging, with recovery expected only in the second half of the year upon approval of respiratory products.
- The Monroe facility is awaiting FDA inspection, which has impacted the US market supply.
- The Asia Pacific region recorded subdued growth in secondary sales across key markets.
- R&D expenditure remains high, with significant investments in innovation efforts through IGI.
- Forex loss of INR 22 crores was recorded in Q1, impacting the overall financial performance.
Q & A Highlights
Q: You have seen a good pickup in India, but the US remains soft. What are your expectations for US sales recovery, and do you have any visibility on FDA regulation for the Monroe plant?
A: The US business remains challenging, but we expect recovery in the second half of the year with the approval of respiratory products. The FDA has scheduled a meeting in September regarding the Monroe facility, and we hope to restart operations soon. (Glenn Saldanha, Executive Chairman and Managing Director)
Q: You delivered healthy margins this quarter. What will be the key contributors to achieving the 19% margin guidance for the full year?
A: Key contributors include strong performance in India, continued success of RYALTRIS, and respiratory product approvals in Europe. Additionally, lower R&D expenses compared to last year will help us reach close to 19%. (V. S. Mani, Global Chief Financial Officer)
Q: What is the status of the Goa and Baddi sites concerning the US FDA?
A: We have completed remediation for the Goa site and are lobbying for an FDA inspection. The Baddi site is less significant for the US market, with our focus on Goa, Indore, Aurangabad, and Monroe for US supply. (Glenn Saldanha, Executive Chairman and Managing Director)
Q: How much were the RYALTRIS sales for the quarter, and what is the potential for the China market?
A: RYALTRIS sales were close to $20 million this quarter. We anticipate $80 million in sales for the full year. The China market launch is still a year or two away, and we are not yet guiding specific figures for it. (V. S. Mani, Global Chief Financial Officer)
Q: What should we look forward to in Ichnos over the next 12 to 18 months?
A: We will present clinical data for 2001 at the ASH conference in December, which should generate excitement. We aim to secure a partnership for 2001 next year. (Glenn Saldanha, Executive Chairman and Managing Director)
Q: How is the launch of liraglutide progressing in India?
A: The initial offtake is very good, but we are facing some supply issues. The GLP-1 market is about INR 1,000 crores, but it is underpenetrated. We expect to gain market share in the second half of the year. (Glenn Saldanha, Executive Chairman and Managing Director)
Q: Why was the depreciation and tax quite low this quarter, and what are the expectations for the rest of the year?
A: Depreciation and tax will be consistent throughout the year. Last year's write-downs helped reduce depreciation. Tax rates will be between 25% and 27%, driven by lower tax rates in some regions. (V. S. Mani, Global Chief Financial Officer)
Q: What is the outlook for working capital for the rest of the year?
A: We aim to maintain working capital at 70 to 75 days. Currently, we are at 62 days, but there may be an increase due to business growth, especially in receivables. (V. S. Mani, Global Chief Financial Officer)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
