Biocon Limited (NSE: BIOCON) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Saurabh Paliwal — Head, Investor Relations
Kiran Mazumdar Shaw — Executive Chairperson
Shreehas P Tambe — Deputy Chief Executive Officer
Matthew Erick — Chief Commercial Officer, Advanced Markets
Analysts:
Unidentified Participant
Damayanti Karai — Analyst
Surya Patra — Analyst
Neha Manpuria — Analyst
Sham Srinivasan — Analyst
Tushar Manudhane — Analyst
Neha Kharodia — Analyst
Vipul Kumar Shah — Analyst
Nitin Agarwal — Analyst
Presentation:
Saurabh Paliwal — Head, Investor Relations
Good morning everyone. Thank you for joining us on this call to discuss Biocon’s first quarter results for FY26. I am Sourabh Paliwal from Biocon’s Investor Relations team. Before we get started, let me introduce the management on this call we have today Biocon’s Chairperson, Dr. Kiran Zumdar Shaw Mr. Siddharth Mittal, CEO and Managing Director, Biocon Limited and Mr. Shrihas Tambe, CEO and Managing Director, Biocon Biologics, along with other senior management colleagues across our business segments. A few Housekeeping Points we will start the call with the opening remarks by Kiran which will be followed by an interactive Q and A session.
All external participant lines are muted and are in the listen only mode. There will be an opportunity for you to ask questions after the opening remarks conclude. If you need to ask a question, please select the Raise Hand option under the Reactions tab of your Zoom application. We will call out your name and unmute your line to enable you to ask the question. Please note that this webinar is being recorded. The recording will be made available on our website within a day and the call transcript will be made available subsequently. Before we begin, I want to remind everyone about the safe harbor related to today’s call.
Comments made during the call may be forward looking in nature and must be viewed in relation to the risks that our business faces that could cause our future results, performance or achievements to differ significantly from what is expressed or implied by such forward looking statements. With this, I would like to turn the call over to Kiran for her opening remarks. Over to you Kiran.
Kiran Mazumdar Shaw — Executive Chairperson
Thank you Saurabh. Good morning everyone. I’m pleased to present an overview of the Biocon Group’s performance for 1Q26 FY26 and before we get into the segmental and financial details, let me highlight some of the key developments during the quarter. Let me start with Equity fundraise. As a part of our strategy to strengthen the group’s financial position and reduce our exposure to structured equity investments, we successfully completed a Qualified Institutions placement OR QIP of 4500 crores which is our first equity raise since Firecon’s IPO in 2004. The offering was oversubscribed and received strong interest from a diverse and mix of global and domestic institutional investors reflecting confidence in our long term strategy and value creation potential.
The funds raised will enable us to increase our stake in biocon Biologics by facilitating the exit of structured equity investors which reinforces our strategic focus on the huge biosimilars opportunity ahead. Product launches and approvals we achieved several significant milestones this quarter that strengthen our global biosimilars portfolio. The US FDA approved Kirsty, our biosimilar insulin aspart, making it the first and only interchangeable rapid acting insulin in the us. This marks a major regulatory milestone and builds on the strong foundation established by Sendri, our long acting insulin, further reinforcing our leadership in the US insulin market. We launched the first biosimilar aflibercept ESA filly in Canada and this marks our 10th biosimilar to reach commercial markets globally.
Underscoring our expanding global footprint. We also secured approvals for biosimilar denisumumab from both the European Commission and UK’s MHRA and these approvals mark Biocon Biologics anticipated entry into the bone health therapy area, opening up a new therapeutic segment for our biosimilars business. I would like to touch upon, of course, facility expansions and strategic capability building. Our injectables facility, primarily focused on GFP1s, has been commissioned with commercial supply expected to begin in FY27. This facility strengthens our position in the fast evolving metabolic and diabetes care space and is part of our broader commitment to building advanced manufacturing capacity aligned with future portfolio needs.
At Syngene we inaugurated a state of the art Peptide laboratory adding to our integrated discovery and development platforms which already include monoclonal antibodies, antibody drug conjugates, oligonucleotides and protax, thus reinforcing our position as a technology driven research partner on sustainability. We continue to make meaningful strides in our sustainability journey. Biocon received a Gold rating in the 2024 EcoVadis Corporate Sustainability Assessment with an improvement score of 77 up from 70 last year. This places us in the top 5% of companies globally and represents our highest sustainability rating to date. Syngene was recognized by Time Magazine and Statista as one of the world’s most sustainable companies in 2025 and it ranks number one among Indian pharma and biotech firms, placing it in the top 20 globally within its sector.
This recognition underscores our collective commitment to responsible growth, environmental stewardship and sustainable business practices. I will now move into Performance Summary we commenced FY26 on a strong note, adjusting for the one time gain from the divestment of our branded formulations India business in Q1 FY25 on a like for like basis, the group delivered 15% year on year growth in operating revenue led by accelerated growth in biosimilars, continued growth in CRDMO and a steady performance in Generics. I’m sorry the slides have not coincided with my my speech, but please move to the next slide. Let me walk you through the financial highlights.
Operating revenue stood at 3942 crores up 15% year on year. Biosimilars grew 18% on a year on year basis. CRDMO, which is really our research services business which pertains to Syngene, grew 11% year on year and generics grew 6% year on year. Core EBITDA was 1003 crores up 11% year on year with a margin of 25%. R&D investments were at 205 crores or 7% of revenues excluding sink Jeep reflecting continued pipeline investment reported EBITDA grew 19% year on year to 829 crores on a like for like basis and profit before tax excluding exceptionals rose 71% to 97 crores on a like for like basis.
I would now like to discuss our business performance in a segmental manner. Let me begin with the Generics segment. The generics business delivered in line with expectations. The exceptional revenue spike that we saw in Q4 of FY25 was driven by the launch of Lenalidomide or Generic Rev limit which should be viewed as a one time upside. Growth in Q1 was supported by new product launches including liraglutide in the US, lenalidomide and dasatinib in the US in the liraglutide in the EU and lenalidomide and Dasatinib in the US. Stronger volumes in key APIs were seen this quarter and continued traction in our Peptide portfolio with Liraglutide approved for diabetes in India is expected to be launched shortly through our commercial partners.
When it comes to revenue from operations it was at 697 crores up 6% year on year. Product sales grew 13% year on year. EBITDA reflects ramp up costs linked to operationalizing new facilities including our Peptide API plant, our expanded fermentation capacity in Vizag and our Cranberry, New Jersey facility in the U.S. and while these costs impact margins in the near term these new capacities are expected to deliver strong ROCE as utilization ramps up, especially in GLP1. S. R&D spend was at 70 crores or 10% of segment revenue primarily directed towards advancing our GLP1 portfolio. Higher interest and depreciation costs from recent CAPEX also impacted PBT performance. I will now move to Biosimilars Q1. FY26 marks our sixth quarter as a fully integrated global biosimilars company and following on last year’s consolidation, we have now entered the accelerate phase where we are focusing on scaling existing commercial products, deepening our presence in key markets and preparing for future launches to drive sustainable and profitable growth before we dive into Biocon Biologics business performance, I’m very pleased to share that we have had a successful outcome with NHS securing four out of seven regional awards for Yesa Fini.
This marks a 100% success rate across our national tender submissions in the UK and highlights the team’s consistent strategic execution. Now coming to key highlights North America received U.S. fDA approval for Kirsty, our interchangeable biosimilar insulin Aspart, the first and only rapid acting insulin with this designation in the us. I would like to also talk about partnering with Civica Inc. To locally manufacture insulin as part in the us enhancing supply, security and affordability. Our oncology portfolio delivered strong performance with Ogivri or Biosimilar Trastuzumab and fulfiller Biosimilar Pegfil grastim both maintaining 27% market share. Yesentech our biosimilar ustecinumab emerged as a leader in early immunology uptake with strong formulary coverage across major payers including CBS, UnitedHealth Express scripts and Blue Cross Blue Shield plans.
Coming to Europe Coolio, which is our biosimilar Adelai Mumab continues to be one of the market leaders in Germany with a market share of 18%. Our oncology portfolio led by Abemi or Biosimilar Bevacizumab and Ogibri Biosimilar Trastuzumab demonstrated strong momentum on the back of successful tender wins in major markets. Yes Intech our biosimilar usteculumab received a very strong reception in key EU markets including Germany, Spain, Italy and Portugal. When it comes to emerging markets, growth was led by our strategic focus on eight high impact self led markets, significantly increasing revenue share. We secured large tenders including a multi year contract with Malaysia’s Ministry of Health for RH Insulin and Insulin Glargine.
When it comes to segmental financials, revenue was up 18% year on year at 2,458 crores. EBITDA was up 36% year on year on a like for like basis at 645 crores. EBITDA margin including excluding Forex and other Items was at 24% with an approximately 300 basis points year on year expansion reflecting improved operating leverage and the benefits of economies of scale. Now coming to our CRDMO Business Our research services business segment has been renamed as crdmo, representing the new profile of Syngene’s business. Syngene had a positive start to FY26 with revenue of 875 crores which is 11% year on year increase EBITDA of 224 crores which is a 19% year on year increase with a 25% margin and growth was driven by pilot programs transitioning into long term contracts as well as continued client traffic.
Trust in Syngene Scientific and operational Excellence Biologics manufacturing has made good progress in terms of capacity expansion. Unit three, which is our biologics facility in Bengaluru, is now operational. The Bayview facility in the US Remains on track for commissioning later this year. Despite macroeconomic uncertainty, Syngene sees robust demand from large and mid sized pharma clients and remains on Track to deliver FY26 guidance. So to wrap up I would like to basically end with some concluding remarks where I would like to summarize a few key points. All three businesses, namely our Biosimilars, CRDMO and Generics are seeing accelerated growth.
Each has clear growth drivers and focused leadership working to strengthen fundamentals and improve return ratios. The progress we’ve made on product launches, market share and customer traction demonstrates that we are winning in the market. Our balance sheet is stronger through our qip. We’ve enhanced financial flexibility to increase our stake in biocon Biologics, provide an exit to structured equity investors and reduce interest burden and improve leverage ratios. We are aligning our business with shifting global policy and supply chain dynamics. Biocon and syngene have now two manufacturing setups in the U.S. the oral solid dosage facility in Cranberry, New Jersey, whose capacity has been significantly expanded to support our U.S.
sales, is going to be shortly inaugurated through our Civic alliance in the US Local manufacturing of insulin will assure access and affordability and Syngene’s Bayview Biologics facility will enhance capacity and give direct access to the US Biologic CRDMO market. Additionally, the facility will also be utilized by biocon Biologics for select biosimilars for the US Market. Our growing global manufacturing and commercial footprint reflects our agility and readiness to serve patients and partners worldwide in an increasingly localized world. In terms of an outlook, I’d like to say that we made a strong start to FY26. Biosimilars is well positioned to build on its momentum with recent launches and approvals expected to fuel accelerated growth.
Crdomo continues to benefit from favorable demand trends and Syngene is actively investing to future proof its capabilities. And in generics, our early investments in GLP1s and peptide APIs are indeed gaining traction. Multiple product launches are planned in the coming quarters which will support strong double digit growth for the full year. And with this I’d like to now open it up for a Q and A.
Questions and Answers:
Saurabh Paliwal
Thank you Kiran. We’ll wait a moment for the question queue to assemble. Ladies and gentlemen, please use the Raised Hand tab in your Zoom application if you wish to ask a question. We’ll take the first question from Damayanti Karai from hsbc. Please go ahead.
Damayanti Karai
Hello, am I audible?
Saurabh Paliwal
Yes.
Damayanti Karai
Okay. Thank you for the opportunity. My first question is when you look at when we look at your performance year on year for biosimilar segment you have recorded growth of 18%. At the same time generics and CD syngene also grew year on year. But when we look at the gross margin part there’s decline of say 150 basis point or so. So just want to understand specifically from biosimilars sale, whatever incremental sales you are recording, is that coming from more discounted tender channels etc and how should we look at the trend ahead? If you can explain this please.
Over.
Kiran Mazumdar Shaw
To you Shreyas and Kedar.
Shreehas P Tambe
Thank you for the for the question. I think if you noted Kiran’s commentary, the biosimilars biologics business has performed very strongly in the quarter. Not only has the revenue grown 18% year on year, there’s also been an improvement in the EBITDA margin. There’s a 36% increase in the EBITDA margin on a quote on a quarter, on quarter basis there’s a 300 basis point improvement that we are demonstrating which is actually coming on the back of operating leverage that you see starting to play out. So I would say the biosimilars business Damenti has really been in a very good shape.
We are starting to see margin improvement as we go forward and as the business scales up further with the new launches that we are expecting to start to show towards the later part of the year and in the subsequent financial year we see this only getting better from where it is today.
Damayanti Karai
Shias, thank you for that. I understand at the EBITDA level but I was trying to understand more at the gross level performance. Thank you.
Shreehas P Tambe
Do you want to comment on this? I think my sense is the gross margins are also quite strong but.
Kiran Mazumdar Shaw
No, no.
Shreehas P Tambe
Just to add to what Shreya said, the gross margins in biologics business have held quite, quite steady and operating leverage has played out. That’s why EBITDA growth is stronger. We can take this offline but the biologics gross margins have held steady and OPEX as a percentage of revenue is started seeing an improving trend.
Damayanti Karai
Sure. So I just have another question on interest expense. So before that if you can say like what is the debt level at the parent as well as the biological Bio. Biocon Biologics Ltd. Level and we have been talking about debt reduction for couple of quarters but when we look at the interest expense for the quarter I think it has gone up. Can you explain that as well?
Shreehas P Tambe
Yeah, maybe. Siddharth, you want to take the group level interest questions?
Damayanti Karai
Sure.
Kiran Mazumdar Shaw
So I think the Minthy the debt. I think we have said that mainly it’s at biocorn biologics level. We have a net debt of roughly 1 point billion in June at biosimilars level approximately 100 million at generics level and 120 million cash positive in research. And the funds that we have raised through QIP as you’re aware has been used partially to retire the OCD of Goldman Sachs. And the interest that we were accruing on that OCD would start showing a reduction from quarter two onwards. But the bank interest will continue for foreseeable future because these are primarily on the bonds which are five years bond which will be due for repayment in 29th.
So and as we also retire some of the NCDs with Kotak and Needle during the course of this fiscal we will gradually start seeing interest costs come down. But there’s been no increase, there’s been no increase per se in the interest costs compared to Q1 of last year. So it’s remains stable because the amount of instruments whether OCD and NCD the bank debt has remained at the similar levels in Q1 at least.
Damayanti Karai
Okay, so with some of these repayments on the way, should we assume interest burden to go down from 2Q itself or it will happen in a more gradual manner?
Kiran Mazumdar Shaw
See Q2 will definitely go down for Goldman Sachs which had the 5% coupon on $180 billion. So that would go down and as I mentioned Kotak and Eidl will be more later part of this fiscal.
Damayanti Karai
Okay, so that just like this 1.1 billion net debt that is at the parent level. Sorry I missed the.
Kiran Mazumdar Shaw
That’s at biocon Biologics level. So Biocon Biologics has 1.15 of net. Debt and parents parent as I mentioned. Biocon has 100 million of debt.
Damayanti Karai
Okay. 100. Okay, got it. Got it. And my last question is.
Kiran Mazumdar Shaw
To take this offline because your understanding of increased interest is not correct. So I think you should take this offline with.
Damayanti Karai
Sure, sure ma’, am, I’ll do that. My last question is for biosimilars. Can you give us the regional split say like US and other market.
Shreehas P Tambe
Yeah. See this quarter emerging market is about 23%. Advanced markets is about 77. But on a full year basis you should factor 75, 25 domain and within 75 of the advanced markets us the norm will be 40 plus and the balance will be Europe.
Damayanti Karai
Okay. Okay, thank you. I’ll get back in the queue.
Saurabh Paliwal
Thank you. Dementi. We’ll take the next question from Surya Patra from Philip Capital. Please go ahead.
Surya Patra
Yeah, thank you for this opportunity. First again clarification, the gross data is. Sorry, I missed that. So what is the gross date level that we are having right now? On the consolidated level basis.
Kiran Mazumdar Shaw
It’S that $1.1 billion. So again I’ll repeat. Biocoin Biologics has a net debt of 1.15. 100 million debt in generics, 100 million cash in Singi. So when you add the three it’s 1.15 which is primarily the debt at Biocon Biologics.
Surya Patra
Okay. And continuing with the generic business. So you we have seen in that in this current quarter there is a kind of impact from the EBITDA level, both YOY as well as sequential levels. So here two things. Whether there is no rev limit sale in this quarter, that is one. And is there any one time kind of a spend because of the facility commercialization and all that and which may not there in the subsequent quarter. Is it that right? Understanding. And if that is yes, can you quantify the one time impact?
Kiran Mazumdar Shaw
So the rev limit launch impact as we mentioned was in quarter four of last year which had boosted the profits and revenue in fourth quarter of FY25. We did have a very small component of sale in quarter one which of course did not have a significant impact. So. And till the product is launched in an unlimited quantity which is going to happen at the beginning of next calendar year, we are not going to have any more continuing sales of Lenalidomide for at least the first three quarters of this fiscal. And as far as the cost is concerned, we did have three facilities as Kiran mentioned in her opening remark which were capitalized in last fiscal.
These are very large investments of the immunosuppressants facility in Vizag, the drug substance facility for Peptides in Bangalore as well as the new Cranberry facility that we had acquired in the US and the impact of all these facilities operating costs are in the P and L which is going to be on an ongoing basis. The impact is roughly 60 crores a quarter. So when you look at the EBITDA or the margins or gross margins from the sales that generics businesses recorded, it is in line with the quarter one of last year ebitda. But that has been impacted by these facility payroll and other operating costs for these three facilities and which will continue through for now going forward.
Surya Patra
Okay, so then if I just extrapolate it about the margin for the consolidated business level because we are anticipating a kind of a moderated margin scenario for the Syngen business due to the capacity implementation unit, the, the stylus unit and sure, generics that we will have some pressure while we would be seeing a kind of a ramp up on the biologic front. So on a console basis, how should one think about the margin kind of expansion or kind of moderation if you can give some clarity for the full year?
Kiran Mazumdar Shaw
Okay, I’ll quickly give my comments on generics and maybe Deepak can add his comments for Sanjin margins. But see, the first quarter and first half will be under pressure. We have multiple launches coming up. We are launching Lira Glutide in the Europe this quarter along with our partners ntiva. We are expecting few other launches. In fact we also launched Sacubitril Vulsartan or interesto in the US on day one recently which will be reflected in our Q2 numbers. And the margins are going to ramp up by H2 is when you will see the impact of all these launches coming in and on a full year basis.
Again I do expect generics to get back to the profitable and growth trajectory on the margins front. And I think Kiran already alluded in our concluding remarks that with all these upcoming launches, generics will have a strong double digit growth on a revenue front.
Kiran Mazumdar Shaw
I think Surya, I also want to add, I think what you’re seeing right now is the impact of operating cost expenses on some of these capitalized, you know, facilities. But I think as I mentioned starting Q2, you’re going to start seeing these capacities being utilized and once you ramp up these capacities, you will start seeing a very good, you know, delivery of, of profitability.
Surya Patra
Sure man. Okay, one clarification further about this fundraise and the repayment to Goldman Sach and others. What is the minority interest then Biocon would be having enhanced on in Biocon Biologic.
Kiran Mazumdar Shaw
Now see we’ve raised 4,500 crores of which we have used roughly $200 million to repay Goldman SAC. The repayment has been done as of end of June. We have a commercial paper which we had borrowed money to repay ADQ in January earlier this year and that commercial paper is due in September. Now apart from that the remaining funds will be used to repay Kotak and Eedle as their payments become due but on a fully diluted basis. Assuming all these, I mean Goldman and Eagle is paid out, we’ll be up to 78% stake in back on biologics.
Surya Patra
Okay with this sir, is it fair to believe that there is no compulsion on biocon Biologic to go for a listing?
Kiran Mazumdar Shaw
No, there’s no compulsion. I think we’ve, we’ve said that IPO there’s a, I mean the commitment to VRAs that we had was the best effort and we have time to give exit to investors which is in few years. So there’s no compulsion as such.
Surya Patra
Sure sir. Just last one point so from my side about the biosimilar business. So two point basically one is the USTech in map whether we have seen any kind of a ramp up or any revenue contribution from that from the US market from that and second point was about the, the launch of as part when we would be having dual brands from Civica as well as from our own. So whether the pricing would be similar or whether we will have the advantage of the limited competition as well as the interchangeability benefit or not because Civica pricing is likely to be relatively lower.
Shreehas P Tambe
Let me respond to both your questions Surya. I think very relevant questions. Let me first talk about the ustekinumab ESNTech launch that we’ve had in the US and it’s been a very successful launch led by our US team there. I think one of the key things to bring to your attention is that we’ve had very strong formulary coverage for this product. We’ve you know got most of the big, all of the big commercial payers whether it is ces, United Health Express Scripts, all of them have listed yes and Tech on their main formularies. So that’s a very strong positive sign.
Two is we are also starting to see initial trends in terms of how prescriptions have moved and we are seeing that a very large share of the prescriptions have moved towards Jason Tech which is a good thing apart from the fact that it’s actually an interchangeable product which helps that is showing that the product is starting to gain Initial early leads as biosimilars start taking more market share once the originator product gets knocked off from the formularies starting July and then progressively towards the end of the year. So we feel good about how Esntech has performed, Surya, and we are looking forward to sustained performance in the coming quarters as well.
On the second question that you asked about insulin Aspart, we are very proud of being the first and the only interchangeable rapid acting insulin analog in the US market at this point. So it’s not just the ASPART market, but we also believe there’s a larger rapid acting opportunity that insulin Aspart can target. With regards to your question on Civica, I think that’s a very, very smart strategy. I would think the US Commercial team has come up with where we are bringing product closer to patients in the United States. So the product will be manufactured locally in the US Giving us an opportunity to have two products and two product brands to be in a position to supply the, the patients in the US in a more comprehensive way.
You’ve seen some articles where originators have, have made statements that they may be looking to withdraw some of these products, particularly the rapid acting insulins in the, in the near term or towards the end of this calendar year. And we want to be in a position, and we believe we will be in a position to, to meet that demand as, as it comes up in calendar 26 and beyond.
Surya Patra
Sure, sir. Yeah, thank you. All the best.
Saurabh Paliwal
Thank you, Surya. We will take the next question from Neha Manpuria from Bank of America. Please go ahead.
Surya Patra
Yeah, thanks for taking my question. Shares. Just another question on Stellara. If I look at the IQV number, we’ve seen, you know, very strong market share trends, but this does not necessarily reflect all of the contracts as yet. Right. So we could continue to see this momentum build as we see, you know, new contracts coming in in July and I think you mentioned some in Jan. So is there a fair bit of Runway to improve market share still in Stellera?
Shreehas P Tambe
Yeah, and I think that’s a, that’s a fair observation. As I said, these are still early days. We are, we’ve got a good start. I think Matt Eric, who is our head of commercial in advanced market, has been leading this effort from the front and maybe I would want him to jump in here to add some more color to give you a sense of how we see this ramping up. Matt, if you could jump in, that would be helpful.
Matthew Erick
Thanks Shreyas. Sorry, my video here. Yeah, thanks. So as the products continue to. The. Stelara from the payer starting July 1st. You’re starting to see what trio said early uptake of Usetec. So these products will continue to see we see one full basis point that has contributed to that in increase in June. Remember, most of these products where Stelara will come off at the bear starts in July and then will continue to accelerate as we go through the end of the year. So we’ve got a great start. We have massive amount of coverage from the payer side and our sales force are in tune out there already talking to healthcare providers and you’re seeing this opportunity take place.
So you’ll see more growth as we go through the remainder of the quarter and into next calendar year. Thank you, Shreyas.
Surya Patra
Matt, just an extension to that question. Given that this is a fairly competitive product, you know, how should I think about the stickiness of the market share, you know, for Stera? You know, I mean I’m just trying to understand is there a risk that you could see the, the competition probably chip away on share come the next contract cycle? I mean from a physician perspective, how sticky is it? You know, is the biocon BBL biosimilar?
Matthew Erick
Great question. Look, we’re early leaders like we are with biocon. Doctors are getting used to writing yes intech. Remember, interchangeability is not to each biosimilar, it’s only to the brand. As the patients and doctors get used to utilizing the biocon yes Intech it becomes very sticky and I can tell you we’re in a great position. As we’ve spoken about before, being vertically integrated, we are well positioned to continue to compete and compete profitably in this market as the dynamics change and shift. But early on we have the next 12 months of a great run rate because of what Shriyas has indicated in our coverage and we have all expectations of continue to brand ourselves with yes intact and getting patients from familiar and doctors from here to keep that stickiness as we go into that next payer cycle.
Surya Patra
Oh, that’s very helpful. My second question is the oncology, you know, biosimilars. You know, given that we’re seeing competition now come back into the market. So some of the gains that we’ve seen earlier this year seems to be coming off. Given there is more competition expected in oncology biosimilars, should we expect that, you know, margins for BBL will probably be at these levels, you know, with whatever we gain in stellar being offset by the oncobio similar seeing pressure.
Shreehas P Tambe
Let me, let me respond to this and if you needed, Matt can give you additional color. I think first up, Nia, we can look at the data points that you’re referring to. But we believe that the oncology franchise for us in the US has been very, very strong. In fact, we still have over a fourth of the market with the two biosimilars that we’ve launched and it continues to be very, very profitable. It’s seven years since we’ve launched these products and they continue to hold value. Which, which is another way of looking at it is to see how do you really operate in a medical benefits space, the part B archetype of the market.
And I think that’s credit to the North America team in managing how to gain market share and retain value. And I think the team’s really been able to demonstrate that we continue to retain market share, grow that to a fourth of the market and continue to hold value. So that continues to be an area of strength as we bring Abev me, which is our biosimilar Bavastizumab into the market. It only further strengthens our oncology franchise. We’ve talked to you about our approvals that are coming in in other parts of the world and us shortly with Denosumab, which will be branded Webzuo and Fragzi, which will also then bring in.
Kiran Mazumdar Shaw
I think you can continue, Matt.
Matthew Erick
Yes. What he was building upon is that we’re continuing to have our franchise of oncology and we’ll continue to build on these launches that he was speaking about in regards to Dosumab. In regards, just to recap that we still see strong performance in our oncology portfolio with the addition of bevsivimab. And then we’re going to start layering on new product launches within our full portfolio, not just in the United States, but across the rest of the globe in advanced markets and also emerging markets.
Surya Patra
Thank you Matt. Just one last question. When do we launch aspart and you know, what’s the timeline for the BEVA launch?
Matthew Erick
Sure, sure. On the ASPAR piece we’ll be launching immediately. We have approval, we’ll start seeing more pull through. As you remember, the US is set on a July basis, in a January basis. So as part will be strategically launching between now and the end of the year and leveraging our relationships and our great franchise that we’ve set up with Simglee. But that will be a ramp up because of timing in regards to the payer cycles and in regards to bevsivimab. You’ll see this launching towards the End of the the summer, around the October timeframe in which we’ll continue to start leveraging our oncology portfolio and ramping up our payer strategies as we go into the first of the year.
Surya Patra
Thank you so much, Matt. Appreciate it.
Matthew Erick
Sure. You’re welcome.
Saurabh Paliwal
Thanks, Neha. We’ll take the next question from Harid Ahmed from Evander Spark, please go ahead.
Kiran Mazumdar Shaw
Good morning.
Shreehas P Tambe
Thanks for the opportunity. So my first question is regarding the opportunity in recombinant human insulin, which you talked about in the past, and how Novo’s plans to exit during this year can translate to a meaningful opportunity for us. So if you can talk a little bit about how we positioned to capture this opportunity from a capacity standpoint and especially on the drug substance side, and if you could also in this context, touch on the phase two expansions that’s ongoing in Malaysia and where exactly are we in that?
Kiran Mazumdar Shaw
So, you know, since Shreyas has not yet been able to rejoin, let me start by saying that the Malaysia facility, as you know, we have expanded, we have doubled the expansion of the drug product line and that is going to be operational very imminently. However, it obviously will only cater to certain markets till all the regulatory inspections are through. Having said that, I think from a, from a positioning point of view, the insulin opportunity is very, very large and we are addressing this as much as we, we do have a growing capacity in Malaysia in terms of, I think, drug substance.
We have adequate supplies, but it’s really the drug product that we need to ramp up. We have a large global network of drug product manufacturing. But I think from the Malaysia facility, we’re really focusing on advanced market supplies, largely with some of it going to, you know, certain emerging markets. So to, to answer your question, yes, we are ramping up. We are trying to address the, you know, large opportunity that is emerging in, in the best way possible. I think by the end of the year we’ll be in a much better place to address most of this demand that we are seeing.
Shreehas P Tambe
Thanks, Kiran. That’s helpful. My second question is on the generics business. You touched on liraglutide launch in Europe. Can you give an update on the status for filing in the US for this product and on semaglutide? As we are approaching market formation across various emerging markets, can you give us some color on our preparedness to launch the product?
Kiran Mazumdar Shaw
So the lira US Review file is under review with the FDA and we should hear back shortly. We do definitely do expect the approval to come in sometime this fiscal. I cannot comment on the timing exactly. But we do expect a launch in the US during this fiscal and as far as Samaglutide is concerned, I think even in the last quarter we had said the development is done, we are gonna file in quarter two which is quarter in many emerging markets in Canada and we are expecting early approvals in some of the markets where we’ll file this quarter by end of this, by end of calendar 26, early calendar 27.
So while the market, as you rightly said, is going to open up in calendar 26, we do not expect many companies to have received the approvals but we will not be too far from those companies.
Shreehas P Tambe
Thanks AJ I’ll get back in a few.
Saurabh Paliwal
Thanks Sarit. We take the next question from Sham Srinivasan from Goldman Sachs. Please go ahead.
Sham Srinivasan
Yeah, good morning. Thank you Saurabh, thank you for taking my question just the first one on what’s happening to Dalimumab in the US So it’s been two years since we have launched. I know there’s been a lot of issues from a market share not only for you, for everyone but how does this pan out in the next 12 months. And could also comment on like the pricing trends have been because of private label influence has also been you know, not as per original thought process. So how should we look at ADALI progress for us in the in the U.S.
Matthew Erick
Aaron, do you want me to take that one real quick?
Kiran Mazumdar Shaw
Yes please just take. Okay.
Shreehas P Tambe
Yeah.
Matthew Erick
So thank first of all thanks for the question. The Adaly for biocon continues to be work in progress. We we are going through a payer cycle in which we’re bidding aggressively but the attributes in the US are still high concentration. But don’t forget we have a huge franchise in Europe in which adalitamab has been very successful as Kiran stated in her open remarks. So we are definitely leveraging our global platform. As we see the trends as you asked with adalitamab, we see the pricing starting to soften meaning that we believe the market price is settling on Adalidumab and we won’t see these huge swings that we saw in the beginning.
So more to come after the January 1st. But we’re in the mix. We continue to fight but the attributes that are currently being driven in the US preferred by most of the payers are still the high concentration. And then as we see you talked about the private labelers as you know Sandoz and CVS have the majority of that share. They just recently decided to not report that. So it’s going to be hard for all of us to see it in iqvia, but we do see a trend of Humira starting to fall off of the payer contract starting 11 of 26.
So the market will continue to be open. Biocon will continue to compete and will continue to press forward on Adalimab. But we do have a lot of products coming not only in the US but around the globe in which we’re very successful and will continue to leverage.
Sham Srinivasan
Got it. Thank you. Thank you Matt. Just a second one again on Yeser Philly in Canada. I think the press release talks about it. So how should we look at that particular launch?
Matthew Erick
In what way? Looking at it from what perspective? I mean we’re ready, we’re launching. We’ve already started working with key customers in which we’re putting in bids now in Canada primarily the business is in primarily two spots, Quebec and Ontario which we have our sales force which we’re very familiar with. We, we remain very optimistic in our opportunity because of our position in that launch and being the first one of the first in the market in Canada.
Sham Srinivasan
Helpful. Thank you. Matt. This last question is for Siddharth. Just on the generics. Siddharth you talked about, you know, the linoleum I did not appearing again in quarter one and you also alluded to the double digit growth. So what are the, you know, product launches we are looking forward to and I think lira in India, is it going to be a significant opportunity or the SEMA next year is the one that’s going to be the one to watch out for.
Kiran Mazumdar Shaw
I think the biggest growth driver is going to be lira in Europe where we have already supplied partially in quarter one. We will continue to supply to Zentiva and to other markets where we are direct in quarter two onwards we have in fact won some tenders also in Europe for lira glutide directly and that would be the main growth driver. Apart from that we do have couple of other launches. I think we’ve spoken about Mika Fungin injection being launched in quarter two. We also have norepinephrine injection coming up for launch in quarter two. We had received an approval for Everolimus Zoetrus which is being launched in quarter two.
We I mentioned about Entresto or Sarcobitrilsartan being launched in quarter two. Like that there are a few other small molecule OSDs and injectables on top of lira in Europe. And again lira US is of course a big opportunity. It’s still a very lucrative 700, 800 million market with limited number of players. And I mentioned earlier that we do expect an approval in the US and we will launch it in the US after the approval is received.
Sham Srinivasan
Yeah. And Siddharth, sorry, just continuing on this SEMA in Canada or other markets? Sema, sorry, your update for from BCON for you know, Canada, Brazil, rest of the markets.
Kiran Mazumdar Shaw
So as I addressed the previous question that we will be filing in Canada, Brazil and many other markets this quarter and with an expected best case approval by end of calendar 26th but more likely launch in 27.
Sham Srinivasan
Helpful. Thank you. Thank you Siddharth. All the best.
Kiran Mazumdar Shaw
And India, just to close your question on India, we will be launching Liraglutide also in India this quarter through our partners. And of course there’s a limited opportunity before semaglutide is commercialized sometime in calendar 26. But still we believe that given the, the, the whole availability of drug from innovators, whether if it’s for Ozempic or from Manjaro in India, there is a huge market that can be created by our partners in India before semaglutide comes in.
Sham Srinivasan
Got it. Thank you. All the best.
Kiran Mazumdar Shaw
Thank you.
Saurabh Paliwal
Thank you. Sham. We take the next question from Tushar Manudane from Motila Losol securities. Please go ahead.
Tushar Manudhane
Yeah, thanks for the opportunity. Am I audible?
Saurabh Paliwal
Yes.
Tushar Manudhane
So firstly on, on Canada semaglutide like tentatively, what would be the timeline to get the approval?
Kiran Mazumdar Shaw
I just mentioned that best case would be by end of calendar 26th we’ll be filing this quarter. And so far let me remind you Canada has not approved a single GLP1 whether it is generic Lira glutide as well. So, so Canadian health regulator is taking its own time to approve the GLP1. So even with Lira glutide filing done by many other companies at least five, six years back, there’s not a single approval and there’s not a single approval yet for semaglutide. So we have been interacting with Health Canada on a liraglutide file. We of course understand a little bit better in terms of what they are expecting and our teams are addressing proactively now for semaglutide as we file that drug this quarter and the review cycle while is short in Canada it’s post filing it’s eight to nine months if it’s a first cycle approval.
But as I mentioned that given Health Canada has not approved a single generic GLP1, we do best case expect an approval by end of calendar 20166 but more likely in calendar 27 followed by the launch.
Tushar Manudhane
So what’s the so just curious to understand the thought process in terms of you know what concern they have as far as GLP1 approvals for let’s say generics or biosimilars is concerned.
Kiran Mazumdar Shaw
That’s difficult for me Tushar to comment. Each regulator has their own way of reviewing the files of course I mean our own Lira glutide which was approved by MHRN EU regulator of course US has asked different set of questions Canadian regulation regulators have asked for different set of questions and I think it’s also sometimes if it’s the first or second drug in a particular class they just want to make sure that their guidelines and their review process is aligned with what they’re expecting. So we can take it offline in terms of some of the questions that they ask which probably the other regulators have not asked.
But again it’s something that’s a part of standard review procedure for a new class of drug that gets approved in these major countries.
Tushar Manudhane
And so just on the generic side the approximately how how to think about the operational cost while you have highlighted on the new launches pipeline but let’s say how much in terms of quantum one should think about the operation cost is that more or less settled as far as new capacity new facilities concerned or we will see still some increase in the operational cost See the cost.
Kiran Mazumdar Shaw
Which is there in quarter one P L relating to the three new facilities roughly 60 crores so on a full year basis it’s roughly 240 crores. Now we have few more facilities which will get capitalized during the later part of this year. Of course the injectable facility which we’ve just commissioned and where we’re going to do the qualification and the filings that facility will get qualified next fiscal but we will see some increase during the remaining quarters for the new facilities that will get capitalized but not a significant change but as I said that the impact of all these new launches and increase in gross margin would offset the these additional costs that have hit the P and L and more from H2 onwards.
Tushar Manudhane
Okay so thirdly on the Lira US FDA any queries which is pending to be addressed and hence some time for the approval.
Kiran Mazumdar Shaw
We have addressed all the queries. We had two open points with the FDA and the last CRL one was related to the facility clearance which of course the facility has been subsequently cleared received vi and there was some specific data that the FDA does which we had responded to and we have a target action date been assigned by FD and we will wait to hear back from them on the outcome. So as far as biocon is concerned, there’s no outstanding query that we are working on.
Tushar Manudhane
And so just lastly like you know, Biocon as such has been sort of experts interestingly on the biologic side as well as on the synthetic side as far as GLP set of product is concerned. We still sort of trying through the generic route whereby the cost of operation seems to be much, much lower when it goes to the biologic route. So you know, if you could, you know, throw some light here in terms of we could have done in terms of at least cost of manufacturing much lower if you would have gone biologic route.
Kiran Mazumdar Shaw
So one is cost of manufacturing but you also have to look at the regulatory path. If you look at GLPs today come the in the generics, whether it’s in Europe or US comes under the synthetic part of course the recombinant route of making drug substances there. Biocon does have recombinant API as well. And we of course look at the time to develop a drug and time the regulatory part to get it approved versus the cost of manufacturing the drug substance. And we are very competitive in terms of manufacturing our drug substance. We have vertically integrated.
We know what the Chinese companies who are supplying to few other generic companies, what cost they’re or what selling price they’re supplying the drug substance. And we know our own cost so we think we are very well placed compared to our competitors as far as the costing is concerned. The recombinant API is definitely going to be required for the oral semaglutide because there the cost of goods sold is primarily influenced by drug substance cost. Unlike injectable where drug substance does have an important influence, but not that it’s not going to make a big difference whether it’s synthetic or recombinant as far as injectable is concerned.
Tushar Manudhane
Got it. So this is helpful. Thanks. Thanks a lot.
Saurabh Paliwal
Thank you. Thank you sir. We’ll take the next question from Dr. Neha Karodia from Abacus. Please go ahead.
Neha Kharodia
Hi, good morning. Thanks for the opportunity. So my question is on the biosimilar business more from a longer term perspective. So in our previous corporate presentation it refers to Frost and Sullivan report which mentions that global biosimilar market itself can become 3x over FY 2024-2029. So just wanted to understand the our biosimilar business growth versus the industry growth. Can we grow better and how are we looking at this growth considering the part of the patent expiry that we are catering to.
Shreehas P Tambe
Thanks for that question. Let me respond to that. I think the, the report that’s been put out by Frost Sullivan is, is very fair because it does cite two things. One is that the biologics opportunity itself is very large, which is before it gets to biosimilars, given that biologics are increasingly becoming the standard of care. So I think that is clearly set out. But the report also establishes the fact that biosimilars are here to stay. And that’s the next large opportunity where Biocon Biologics is very well placed in, in the current set of, of circumstances where we’ve one of the largest portfolios, one of the deepest, in certain key therapy areas, which is in oncology, in diabetes and in autoimmune diseases.
So these are the three large areas that the report talks about, where investments are happening. And if you look at our portfolio, we’ve got a very, very rich portfolio in, in these therapy areas. So from an outlook perspective, we’ve always said that we’ll invest in debilitating diseases. We are getting products to market. We’ve got five products, you know, ready for launch in the next 12 to 18 months is what we had guided. Four of those five are already now getting to launch. Four of them we’ve launched. Fifth is on the way. From an approval standpoint.
We have approval in the US and in, in the EU and in Canada. US approval should follow, which is for dirosumab. That tells you that we are well on our way to realizing the, the opportunity that lies ahead of us. And I’ve said probably several times that the opportunity ahead is far more exciting than what we’ve seen at Biocon Biologics so far.
Neha Kharodia
Yeah, thanks for that explanation. But to understand it more quantitatively, as in even ballpark numbers are fine. So can we grow better based on your commentary, somehow I sense is that our growth can be better. But is that understanding correct?
Shreehas P Tambe
I, I 100% share your sentiment and, and I appreciate that your confidence in, in our trajectory should be so Neha, I, I think we, we are aligned in terms of how we see the future.
Neha Kharodia
Understood. Thank you.
Saurabh Paliwal
Thank you, Neha. We’ll take the next question from Vipul Kumar Shah from SMGAR Investments.
Vipul Kumar Shah
Hi. Am I audible?
Saurabh Paliwal
Yes.
Shreehas P Tambe
Yeah.
Vipul Kumar Shah
Can you give the market share moments.
Kiran Mazumdar Shaw
For various biosimilars in various geographies and what were the same last year in the same quarter?
Shreehas P Tambe
So I think the, Let me give at a, at a headline level, let me give you a sense of how our market shares have grown. Let me start with the United States which is a large part of our business. It’s about 35 to 40%. Oncology portfolio, as I’ve said earlier on the call, has been leading the way. I think we’ve got two products which is Fulfiller, I know Giveri Fulfiller is our Pegfil Graster which has a market share of close to 27% or a little more than that. It was, if you look back a year it was trending in that 15 odd percent range.
So it’s grow, grown significantly. If you look at Ogibri which is our biosimilar trastuzumab, that’s at 25% a year or a little more than a year ago it would have been at that 10, 11% range. So again you are seeing a very strong growth in terms of how the market shares have grown again they continue to grow profitably. So you can take that confidence in terms of how we are growing that business. We continue to maintain steady market share in our insulins portfolio both in the US and in the rest of the world because it’s really up to us.
We do not see a major competition. We actually see no competition from any biosimilar insulin makers. We are the only biosimilar insulin that’s approved in the US So we continue to see a good demand in as much as we can make. In terms of Europe, which is the other large geography, I would point you out to some of the other previous guidances that we had shared. I talked about it in Q3 of last fiscal where we had said we have very good performance with our Fujio Adalimumab in Germany where we have a leading market share of 18% and we’ve held that steady.
But we will grow into other geographies and in other therapy areas. And if you look at the recent reported market shares, our oncology portfolio led by Abev Me, which is our Bevacizumab and Ogiveri, which is our Trastuzumab, have shown significant growth, 15% and 20% which, which gives you again a sense that while we’ve said that we will grow, you know, beyond our therapy areas, it is actually starting to play out which is as per the guidance we had provided before. We continue to see Europe as a, as an opportunity for growth. We have more than 10 products approved in Europe and in the U.S.
now in Canada and we’re looking to see how we can build this given that there is headroom for growth.
Vipul Kumar Shah
So then why it is not reflected in the profitability this market share.
Shreehas P Tambe
We will discuss this offline if you would need to. We will be happy to spend time with you and see how the operators leverage is beginning to show. Kedar can can of course come in and talk to you more in this. Kedar, feel free to jump in but you’re already starting to see the EBITDA margin starting to improve and we expect this to strengthen VIPUL over a period of time.
Vipul Kumar Shah
And my last question is for Kiran ma’. Am.
Kiran Mazumdar Shaw
So when we, when we conceived the acquisition of this VRTV business so do we feel that it has met all the goals which we had set at that time? Because when you look at the stock price, when you look at the market cap it is below that date. Although we have spent close to $2 billion on that. We had to dilute Xinjian stakes twice. We had to dilute stake in biocon. So as an investor who is with the company since ipo I don’t find that it has worked that way. So I would request Kiran ma’ am to have his her views.
Thank you very much. So let me respond to it by saying that I think the acquisition has been a very important acquisition for us. I think without the Viatris acquisition we could never be a global biopharmaceutical company. You are right that you know the debt burden is what is dragging down, you know the, the perspective or the perception of what investors feel about this acquisition. But let me assure you that we are now in a very healthy financial state. I think the fact that we’ve done the QIP and the bond issue has made us far more financially robust.
And I can tell you that you will see a huge improvement in the way we are approaching this business in the coming quarters and coming years. And this is going to be a game changing, transformative acquisition that we have made that will actually make us two global leaders. As you already know, we’re in the top five biosimilars companies in the world. And I think we are very well positioned to really surge into a leadership position in the next five years. That is what our aim is. I don’t think you should as an investor keep focusing on near term perceptions about servicing the debt.
We have done everything we can to lower the this particular apprehension. And I think what we’ve done thus far is extremely encouraging as far as I’m concerned. As a promoter, I think you will see that this is also a time when you’re seeing profitable growth in the biosimilars business. And as the Provisioning of interest comes off, it goes straight to the bottom line. So I think you should really look at this business and understand what we are trying to do. I think the problem is that we are just looking at broad numbers and panicking. But I think if you look at the real business health, if you look at the way the numbers are improving, the leverage is improving, I think you will get far more confidence.
Right now you can see that in this quarter alone the biosimilars business has turned positive which up until now was only sort of either flat or negative. So this actually tells you about the kind of business prospects that are emerging before us. So I would not really comment on this business like you are commenting. I would like you to basically understand the business and maybe I think you should take this offline to understand how the business is growing, how we are becoming far more profitable. And in the coming years you will see that everything that we are doing is going to go straight to the bottom line.
Thank you very much madam for your detailed answer. I’ll definitely take it offline. Thank you so much.
Saurabh Paliwal
Thank you Vic. Sorry, the next question from Nitin Agarwal from Dam Capital.
Nitin Agarwal
Hi, thanks for taking my question on the. In the long acting incident he talked about certain product, certain competitors withdrawing from the market and we also have seen certainly there’s been a sharp improvement in Novo sales on Novorapid in the first half of the year. So if you can just throw some light on what are the dynamics which is driving this uptick in the value of the market itself over the last few quarters. See.
Shreehas P Tambe
Nathan, thanks for the question. Usually we have refrained from commenting on any innovator specifically or any company other than us specifically. But there are public domain reports where, you know, the ones that you cited have, have actually made communications, public communications that certain SKUs and certain products will be withdrawn to certain markets, particularly in the US by the end of this calendar year and until stocks last they will continue to make supplies. So that was the reference that I’m making and we’ve also seen that in the past. It’s not one, we’ve seen both the large insulin manufacturers make such comments and there are probably they are driven by their priorities and focus.
So we wouldn’t want to comment on that, that but it does present us with two situations. One is we, you know, are, you know in a position to provide that requirement for patients who are looking for this life saving drug. And, and we have always been willing to step in when such an opportunity arises. So we are very, you know, conscious of the, of the humanitarian aspect as well and the business opportunity as well. And we have made the investments, you know, that we are making investments to double our capacity in, in our drug product line in Malaysia.
We have increased our drug substance manufacturing, which should come online shortly in the coming years. And we have tied up with Civica, who’s a, you know, a local United States manufacturer, so that we can, you know, even localize manufacturing closer to patients. So we really see this, you know, we, you know, I wouldn’t want to comment on short term blips in realization, but I certainly see this as a long term sustainable growth opportunity where there’s very limited to none in terms of competition.
Kiran Mazumdar Shaw
I would also like to add to that, Nitinji, that we are seeing this rising demand just not in North America, but also across the world. I think even if you look at our partner, commercialization partner in India, I think that demand has also increased significantly. So I think the insulin story worldwide, I think all of you just focus on one market, but the insulin story worldwide is really, really a very interesting one for us emerging markets. I can tell you that demand is only rising and there are very, very few insulin players in the world to really cater to this rising demand.
So we are very excited with what the insulin story has to offer us.
Nitin Agarwal
I’m just taking on that. So hypothetically, you know, while given some of the ways, some of these positive trends are playing out in the insulin market while we are doubling our capacity in Malaysia at this point of time, I mean, do we actually at some point in time foresee a situation that we need to go in for some more capacity additions on this part? So this is, this capacity enhancement will be enough for us to fill whatever that you in mind for the, for the next possible future.
Kiran Mazumdar Shaw
We are doing, sorry, we are taking all the necessary steps for, you know, addressing this market, this large market opportunity in various ways, not just, you know, through our own, you know, capacities, but also through partnerships and other networks that we are developing.
Nitin Agarwal
Thanks. And secondly on the Denison, you know, a why when do we see our approval sort of coming through in the US and secondly, how do you see this, the dynamics in this market? You know, given the fact that probably be a little bit of a late entry.
Shreehas P Tambe
So two things, Nitin, again here. We’ve, we’ve indicated in the past that, that we will have the approval before the end, we should have enough approval before the end of this calendar year and we are tracking well to that date in the US So we see that approval imminent and Once we see that we’ll have both these products coming in again. The opportunity continues to be still very strong in terms of how we will get into the market. There are a couple of players like you seem to have indicated that whether there will be an opportunity for us.
Let me give you a sense that there are are two products here. One is a part D product and the other one is a part B product. Given that there are two brands, Brolia and Xdiva and they are operated very differently. So one is, you know, impacted a little bit by, by time and also in how the archetype operates, which is a part D product. But the other one is really playing to our oncology franchise strength and we feel very good about it. Timing may not necessarily pay a big difference in how we eventually realize success out of this asset.
Nitin Agarwal
Thanks. And last one, Kedar, on the you know in the presentation we’ve talked about the like to like margins for the biosimilars. 24%, you know, what’s the 26% that you’ve reported? What would this adjustment be of 2 odd percent.
Shreehas P Tambe
Yeah Nitin, these are the all the items below Opex R and D and gross margin. So that includes forex, that includes the derivative accounting that we do and that includes other income and expenses. So you should take 24 on a normalized basis for the quarter.
Nitin Agarwal
And Khidar, as we have mentioned a few times in the past, as the operating leverage begins to kick in in this business, what are the you know, typical sustainable margins that we can hit in this business going forward?
Shreehas P Tambe
Yeah, so typically we have avoided giving guidance. Nitin, on the margins going forward, but as the new launches kick in and operating leverage plays out, that improvement will reflect in the numbers going forward. But we don’t want to guide specifically at this stage.
Nitin Agarwal
So what I meant is from a range or it’s does it become like a 20, 25% margin business? Is a 25, 30% margin business on a more sustainable basis? Is there a, is there a way to characterize the. Prof. The inherent profitability of this business?
Shreehas P Tambe
Yeah, directionally I think improvement is what will kick in. But you know we don’t specifically guide for any range. Nitin but you are right. Directionally I think you should see improvement in gross margins because of new launches and the OPEX as a percentage of revenue.
Nitin Agarwal
Thank you so much.
Saurabh Paliwal
Thank you Nathan. That was the last question, ladies and gentlemen for this call. We thank you very much for joining today and hope to see you in next quarter. Have a good day.
Kiran Mazumdar Shaw
Thank you.