Glenmark – Will Innovation Pay?

Glenmark Pharma –

Q1 FY 25 concall and results highlights –

Revenues – 3244 vs 3036 cr, up 7 pc
Gross margins @ 66 vs 61 pc
EBITDA – 588 vs 437 cr, up 35 pc ( margins @ 18 vs 14 pc )
PAT – 340 vs 173 cr, up 98 pc

R&D expenses @ 241 cr ( 7.4 pc of sales- very healthy )

Geography wise sales breakup –

India – 1196 vs 1069 cr, up 12 pc ( 37 pc of sales ) – Witnessed strong growth in Derma, Respiratory and Cardio segments in India. Entered into a partnership with Beigene for marketing and distribution of Tislelizumab ( to treat Eesophagal cancer ) and Zanubrutinib ( to treat blood and bone marrow cancers ) in India

India consumer care division ( having brands like – Candid, LaShield and Scalp ) grew by 12 pc

Glenmark Pharma is ranked 2nd in both Derma and Respiratory segments in Indian Mkt. Company ranks 5th in the Cardiac segment

North America – 780 vs 818 cr, down 5 pc ( 24 pc of sales ). Filed for gFlovent ( for treatment of Asthma ) in May 24. Aim to focus on Respiratory and Injectables business in US – going fwd

Europe – 695 vs 573 cr, up 21 pc ( 21 pc of sales ). All key mkts recorded double digit growths. Poland and Czech Republic grew > 20 pc. Branded respiratory portfolio ( including RIYALTRIS – anti-histamine nasal spray ) continues to do well. Awaiting approvals for 4 more respiratory products field in Q4 LY. Planning to launch WINLEVI ( Acne – cream, in-licensed by Glenmark Pharma ) in select mkts in Europe in FY 26

RoW – 570 vs 552 cr, up 7 pc ( 18 pc of sales ). RIYALTRIS got approval in Mexico. RIYALTRIS is doing well in RSA, Kenya and KSA

Brand Updates –

Riyaltris – commercialised across 40 mkts. Will be launched in 10 additional mkts in FY 25. Has been witnessing strong sales in US,EU, RSA

Envafolimab – company has In-Licensed this drug from China. It’s an Immuno-Onco drug. Company plans to file Envafolimab in more than 20 Mkts and expect to commence launches in FY 26 ( this drug can potentially be as big as Riyaltris )

WINLEVI – company has in-licensed it for 15 mkts in EU

FY 25 guidance – Sales > 13500 cr, EBITDA margins around 19 pc, PAT margins in double digits

Company feels that US business should see a recovery in US business in H2. They have filed a lot of respiratory products in the US. As and when they r approved and launched ( most probably in H2 ), business should pick up. The company’s Monroe’s facility is due for USFDA inspection ( currently under OAI status – since Nov 22 ). If the FDA observations are resolved, should further add to business momentum. Company’s Goa site is also awaiting re-inspection post receipt of OAI status in Dec 22

Generally, company’s H2 is better than H1 as their respiratory portfolio’s ( one of their strengths ) sales picks up

Company is looking to enter into some partnerships wrt their Novel molecules pipeline ( should happen by FY 26 )

Company’s four main sites for the US mkt are – Goa, Monroe, Aurangabad and Indore. Baddi site is not a major contributor to the US business

Company’s gross margin guidance @ 65-67 pc

Riyaltris sales for Q1 were around $ 20 million. On track for $ 80 million sales for FY 25. China launch of Riyaltris is still > 1 yr away – that should be another big mkt

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation