Glenmark Pharmaceuticals Limited (NSE: GLENMARK) Q2 2025 Earnings Call dated Nov. 18, 2024
Corporate Participants:
Utkarsh Gandhi — General Manager, Investor Relations
Glenn Saldanha — Chairman & Managing Director
V. S. Mani — Executive Director and Global Chief Financial Officer
Analysts:
Damayanti Kerai — Analyst
Nitin Agarwal — Analyst
Ankit Minocha — Analyst
Tushar Manudhane — Analyst
Neha Kharodia — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen. Welcome to the Q2 FY ’25 Earnings Conference Call of Glenmark Pharmaceuticals Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Utkarsh Gandhi, General Manager, Investor Relations for Glenmark Pharmaceuticals. Thank you, and over to you, sir.
Utkarsh Gandhi — General Manager, Investor Relations
Thank you, Lizanne. Good morning, everyone. Welcome to the Q2 FY ’25 results conference call of Glenmark Pharmaceuticals Limited. Before we start the Q&A, we’ll review the overall performance of the company for the second quarter of FY ’25.
In Q2 FY ’25, Glenmark’s consolidated revenue from operations was at INR34,338 million as against INR32,074 million in the corresponding quarter last year, recording an overall year-on-year growth of 7.1%. For the six months ended September 30, 2024, Glenmark’s consolidated revenue was at INR66,780 million, which was recording a Y-o-Y growth of 7%. Let’s review our overall regional performance starting with India. Our sales from the Formulation business in India for the second quarter of FY ’25 were at INR12,817 million as against INR11,252 million in the corresponding quarter last year, recording a growth of 13.9% Y-o-Y. The India business contribution was at 37.3% in the second quarter.
The Indian Pharma Market continued to witness a slowdown in the overall market. However, Glenmark continues to outperform the IPM in terms of Y-o-Y growth. Accordingly, as per IQVIA, Glenmark’s India Formulation business recorded a growth of 12.7% in Q2 of FY ’25 and 13.1% as per MAT September ’24 compared to the overall market growth of about 7.6% in both these time frames. In the second quarter, the acute respiratory market continued to witness a slowdown due to the seasonality factor. As a result, both the overall respiratory market and Glenmark’s respiratory business recorded single-digit growth. However, Glenmark continues to outperform the overall market in dermatology and cardiac therapeutic areas.
Glenmark’s India business now ranked 13th. So, we’ve gained one rank in terms of our overall ranking with a market share of 2.22% as per IQVIA MAT September data. We continue to have nine brands in the IPM top 300 on MAT basis. And in terms of key therapeutic areas, Glenmark is ranked second in dermatology, third in respiratory and fifth in the cardiac segment. In terms of our some key products, LIRAFIT, the company was actually the first to launch the biosimilar of Liraglutide under the brand name LIRAFIT in India. It continues to be the only biosimilar in the market. LIRAFIT has seen strong traction in the overall GLP-1 market in India post-launch. The company also plans to launch other GLP-1 agonists in the near future.
JABRYUS, which is partnered with Pfizer, in Jan 2024, Glenmark launched JABRYUS Abrocitinib, a first-of-its-kind oral advanced systemic treatment for the treatment of moderate-to-severe atopic dermatitis in India in partnership with Pfizer. The company has initiated promotional activities and JABRYUS has been well-received by dermatologists as a novel treatment for moderate-to-severe AD with improved efficacy and convenience to patients. TISLELIZUMAB and ZANUBRUTINIB partnered with BeiGene. So, Glenmark and BeiGene entered into an agreement for the marketing and distribution of two oncology products, TISLELIZUMAB AND ZANUBRUTINIB in India. Under this strategic collaboration, Glenmark will be responsible for locally required development, registration and distribution providing access to BeiGene’s innovative oncology medicines for cancer patients across India. These two products will be launched in the next six to nine months post the receipt of the required regulatory approvals.
Glenmark Consumer Care business in India recorded primary sales of about INR733 million with a Y-o-Y growth of 15%. The flagship brand Candid Powder continued to deliver double-digit revenue growth in the second quarter. The brand continues to gain share and recorded 57.4% market share for the month of September. In Q2, the Scalpe portfolio also delivered a robust revenue growth of 40% and Scalpe, the key variant there recorded double-digit growth.
Moving on to North America, the North America business recorded revenues of INR7,405 million for the second quarter of FY ’25 as against INR7,498 million for the second quarter of FY ’24. So, this translates into a Y-o-Y decline of 1.2%. For the second quarter of FY ’25, the North America business contributed 21.6% to the overall sales. In the second quarter, Glenmark received approval for and launched Topiramate capsules USP, 15 mg and 25 mg. In addition, Glenmark launched three new over-the-counter products; Adapalene Gel, Cetirizine Hydrochloride Tablets and Olopatadine Hydrochloride Ophthalmic Solution. Glenmark also acquired a previously approved ANDA for Acetylcysteine Injection in Q2. This will be Glenmark’s eight commercial product in the injectable portfolio for the U.S. market.
Glenmark has also leveraged its strong development capabilities in the respiratory area to build a portfolio for the U.S. market. The company has filed two ANDAs for generic nasal sprays and is awaiting approval for the same. In addition, the company has filed the ANDA for generic Flovent 44mcg pMDI in May 2024. During the second quarter, we filed one ANDA and we plan to file two more ANDAs in the upcoming quarter and the company also plans to launch three to four products in the upcoming quarter. Our Glenmark’s marketing portfolio through September 2024 consists of 198 generic products authorized for distribution in the U.S. market. The company currently has 50 applications pending at various stages of the approval process of which 21 are Para IV filings.
Moving on to Europe, Glenmark’s Europe operations for the second quarter of FY ’25 recorded revenue of INR6,874 million, recording a year-on-year growth of 14.6%. Europe business contributed 20% to the total revenues in the second quarter. Glenmark’s European operations continued the strong growth trajectory, driven by a robust uptick of the branded business and sustained growth across key markets. Glenmark continues to outperform the overall pharma market in key Central Eastern countries like Czech Republic, Poland and Slovakia. Our growth in the CE region was also aided by three new product launches. The Western European business also clogged double-digit growth for Q2. Branded respiratory portfolio continues to have a strong trajectory in these markets.
Glenmark is now ranked 14th in the generic market of Germany as per the IQVIA MAT August data. Some of the key respiratory products, RYALTRIS and SALMEX, continue to sustain their market share across the region. Glenmark continues to focus on sustaining the increased contribution from the branded markets and the branded portfolio in Europe. It is awaiting approval for four additional respiratory products which were filed in the fourth quarter of FY ’23 and the company is also planning to launch WINLEVI in select markets of Europe starting FY ’26.
Moving on to the ROW region. For the second quarter of FY ’25, revenue from the ROW region was INR7,041 million as against INR7,339 million for the corresponding quarter last year, recording a decline of 4.1%. For the second quarter, the ROW business contribution was 20.5%. In spite of the lack of growth in the first two quarters of FY ’25, Glenmark anticipates to finish the year — the full-year FY ’25 with a high single-digit Y-o-Y growth in ROW on a constant-currency basis.
As per IQVIA, second quarter and MAT September data, Glenmark’s Russia business recorded secondary sales growth of 16% and 19% in value. RYALTRIS continues to do well in the Russian market and gain further share during the quarter. Glenmark ranks 9th amongst the dermatology companies in Russia and second amongst the companies present in the Expectorants markets of Russia. In Latin America, the respiratory portfolio continues to be the key growth driver. Glenmark launched the first generic Salmeterol + Fluticasone MDI in the Brazilian market in the first quarter and the product has done well post-launch. RYALTRIS was also launched in the Mexican market in the second quarter and is expected to be launched in one, two other markets in the region over the next six months, along with other device-based respiratory products.
In Middle East and Africa, the company continued to achieve secondary sales growth in key markets. Glenmark is now ranked second in the overall pharma market in Kenya. RYALTRIS continues to do well, particularly in South Africa, where it’s the leading nasal spray for allergic rhinitis and has seen strong pickup in other markets also post-launch. In the Asia region, there were some markets witnessing slowdown due to the ongoing geopolitical challenges. However, new product launches in dermatology and respiratory are expected to contribute to growth in the upcoming quarters. RYALTRIS continued to do well and significantly outperformed the overall market in the region, particularly in markets like Australia and South Korea.
Moving on to our Global Brands, starting with RYALTRIS. So as of September, marketing applications have been submitted in more than 90 countries across the world and the product has been commercialized in 41 markets. Further, it has received approval and will be launched in another 10 to 11 markets over the next few quarters. As per IQVIA June — MAT June data, RYALTRIS has seen robust performance in terms of both value and unit market shares. So, the product has achieved high double-digit market-share in Australia, Czech Republic, South Africa, Italy, etc.
Glenmark’s commercial partners in the U.S. Hikma recorded consistently better performance on a Y-o-Y basis in the second quarter, backed by strong demand and a stable supply. Menarini, Glenmark’s partner in the EU has witnessed steady increase in market share across its licensed markets and Grand Pharmaceuticals, Glenmark’s partner in Mainland China has received acceptance of the ANDA and the company expects approval to be received sometime in FY ’26.
Moving on to ENVAFOLIMAB. So in Jan ’24, Glenmark had announced the the signing of a license agreement with Jiangsu Alphamab and 3D Med for ENVAFOLIMAB for India and most of the ROW markets. ENVAFOLIMAB under the brand name ENWEIDA has already been approved in China by the Chinese NMPA in November ’21 as a global-first subcutaneous injection PD-L1 inhibitor for the treatment of adult patients with severe MSI-high advanced solid tumors. In China, it’s already included as a breakthrough therapy by the Chinese regulatory authority and it has been dosed to multiple patients in the Chinese market. Glenmark plans to file ENVAFOLIMAB in more than 20 markets in FY ’25 and the first market launch is expected in FY ’26. WINLEVI, as mentioned earlier, in Q2 FY ’24, Glenmark and Cosmo announced the signing of a distribution and licensing agreement for WINLEVI in 15 European markets as well as U.K. and South Africa. The company is awaiting approval in its licensed markets and plans to launch WINLEVI in FY ’26.
Moving on to IGI. So, IGI today features a robust pipeline of innovative oncology molecules targeting multiple myeloma, AML and solid tumors. Two of the molecules have received orphan drug designation. Multiple myeloma remains a devastating and fatal disease with no current cure available. And the market for multiple myeloma is projected to grow from $23.5 billion to approximately $33 billion by the year 2030, driven by the aging population and the increasing incidents. ISB 2001, our lead asset represents a groundbreaking approach in the fight against multiple myeloma. It is a tri-specific T-cell engager that targets BCMA, CD38 on the multiple myeloma cells, while engaging CD3 on the T-cells to harness the body’s immune system. This targeting mechanism enhances the tumor cell destruction and offers a new pathway to address the challenges faced in treating relapsed-refractory multiple myeloma.
ISB 2001 is amongst the first tri-specific antibodies developed for the use of multiple myeloma. In July ’23, ISB 2001 received orphan drug designation from the FDA for the treatment of multiple myeloma. The Phase 1 first-in-human study of ISB 2001 was divided into two parts; a dose-escalation and a dose expansion part. The first patient was dosed in November ’23, just about a year back and the trial is now active in the U.S., Australia and India. Dose-escalation is currently underway and expansion is scheduled to initiate sometime in calendar year 2025.
ISB 2001 data, we recently announced that IGI will be presenting the first-time data from this Phase 1 study of ISB 2001 in an oral presentation at the 66th American Society of Hematology or ASH Conference in San Diego. The oral presentation will detail results from the dose-escalation portion of the study. The abstract features data as of July 2024, including an overall response rate of 75% in efficacy valuable patients, including one stringent complete response, a very favorable safety and tolerability profile that shows no dose-limiting toxicities and only one adverse event above Grade 2 and no treatment discontinuation so-far. The more updated data presentation will be available at ASH2024 and IGI aims to initiate partnering discussions post ASH2024. For any further updates, you can log on to the IGI website and go through the most recent quarterly update on the pipeline.
Some notes to the results before we open the Q&A. The forex gain in the quarter was about INR7 crores, which was recorded in other income. R&D expenditure in Q2 FY ’25 was around INR227.9 crores, which was 6.6% of sales of the second quarter. Total asset addition to the block in the quarter was INR79 crores, of which tangible addition was about INR59 crores and intangible addition was about INR20 crores. Net cash for the period ended September was INR259 crores. And in terms of working capital at the end of September, inventory was at INR2,840 crores. Receivables was at INR2,860 [Phonetic] crores and payables were at INR2,360 crores.
We have the management of Glenmark Pharmaceuticals on the call today, Mr. Glenn Saldanha, Chairman and Managing Director; Mr. V. S. Mani, Executive Director and Global Chief Financial Officer; and Mr. Ashish Mukkirwar, Group Vice President and Head of Strategy.
With that, we can open the call for Q&A. Over to you, Lizanne.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. [Operator Instructions] The first question is from the line of Damayanti Kerai from HSBC. Please go ahead.
Damayanti Kerai
Hi, good morning and thank you for the opportunity. My first question is on India business. So, you mentioned respiratory has seen some slow seasonal pickup, etc. So, can you update how things have moved so far? And in terms of Q3, whether you expect respiratory to see come back?
Glenn Saldanha
So as you know, Glenmark, our India business has always been very strong business for us, right? We continue to outperform the industry. Our growth is almost 1.5 times, 2 times of the IPM growth consistently. We’ve seen some slowdown in the external environment in the last couple of months, right? And we believe that there is a possibility that this could continue for some time. So, I think Q3, while at the secondary level, we will continue to outperform the IPM, right, I think the overall pharma market will continue to witness maybe low double-digit or low single-digit growth basically, right, or mid-single-digit growth, right? So that’s kind of where I see the overall pharma market, 5% to 7%, 8% growth, of which we will continue to outperform.
Damayanti Kerai
Sure. My second question is, can you update us on status of Monroe plant in terms of any feedback or anything you have heard back from the FDA and what is the timeline now you are looking for this particular plant in terms of GMP clearance?
Glenn Saldanha
So, on the — on our facilities per se, right, as you know, we had a very successful FDA inspection at our Aurangabad facility. We had zero observations coming out of that inspection. And we’ve done a lot of work in the remediation of Monroe and some of our facilities overall. We had a meeting with the agency and on the Monroe facility specifically and we are pretty positive about the agency visiting us and re-inspecting and we think by the — before the end of this year, there’s a strong possibility we may reinitiate commercial production.
Damayanti Kerai
So, you already have a meeting date with the FDA and you are…
Glenn Saldanha
We did the meeting. We’ve already completed the meeting and we are now waiting for the agency’s next steps. We believe before the end-of-the year, there’s a strong possibility that we will initiate commercial sales and production.
Damayanti Kerai
Sure. And can you also remind us like what kind of operating spend is currently there for this Monroe plant?
V. S. Mani
Yes, Damayanti, Mani, here, So, I think we do about $25 million to $26 million a year as operating expenses in Monroe plant, yeah.
Damayanti Kerai
Okay. And my last question is on the Ichnos spend, you have already I guess, done a lot of improvement and maybe it’s down to say $60 million annual run-rate at this point of time. But with, I guess, progress in some of the assets, how do you see R&D moving up for Ichnos?
Glenn Saldanha
So we’ve — on the innovation side, right, Ichnos, IGI is our innovation engine, right? So, as you know, we spun it out with — to bring in a strong focus in oncology and immunology. And now we’ve — we’ve — over the years, we bought down our spend quite dramatically, right? And now we’re about at about $60 million, $70 million this year. With the great data that we are seeing for ISB 2001, we believe ISB 2001 can be transformational, right, for both Glenmark and IGI and globally can be one of the most sought-after assets, right, in the multiple myeloma space with the kind of safety and efficacy data that we are seeing, which we will present at ASH. So, what we’ve done is a lot of our focus now is on ISB 2001 as a single-asset. We’ve actually curtailed some of our spends on the other assets. So, I think going-forward, you should anticipate that we continue to remain in the $60 million, 70 million spend base, right, for IGI going forward.
Damayanti Kerai
Sure. That’s very helpful. Thank you and all the best.
Glenn Saldanha
Thank you.
Operator
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Nitin Agarwal
Hi, thanks for taking my question. Glenn, on just a couple of housekeeping questions. First, reminding [Phonetic] on the working capital, there has been a pretty sharp increase in the net-net current assets. We’ve been trending higher than what we guided for the year. So, what is your outlook for the balance part of the year on this?
V. S. Mani
So, thanks for the question, Nitin. Mani here. So, I’ll try and put a few things together. So first of all, our debtors are at about 78 days and this is in line with the industry benchmark. And if you recall that we had guided that this will go up during our earlier calls as well, okay. During the last year, we have taken certain corrections due to which our debtors were lower 57 days. This is now steady-state. So, we see it remaining at current levels, okay? And obviously, this quarter even our payables were a little lower. So all-in all, it looks like that. But I think broadly working capital should be around these levels, okay.
Nitin Agarwal
So, for the year, where do we see Mr. Mani, working capital ending up, typically on a sustained basis now?
V. S. Mani
Sorry, can you repeat the question again?
Nitin Agarwal
I mean, earlier we said 75 days to 80 days on the net working capital. We see sticking around there around those levels or it’s going to be a little higher than on a sustained basis?
V. S. Mani
It should be slightly around that level. And see, another thing, if you look at it, the payables also came down sharply. So to that extent, the debtors is more or less what I had kind of guided to. Payables came down a little more. So it depends on the timing, everything put together. So, I think broadly it should be around 80 plus days. Yeah. That’s where it is.
Nitin Agarwal
Okay. And secondly, on the other expenses, there’s been a pretty sharp move on a Q-o-Q basis. Y-o-Y, I’m not sure if you can correctly compare them. But irrespectively, which are way you look at it, anything specifically which drove other expenses?
V. S. Mani
There’s no one-off as such, but let me explain again there. Broadly, it’s basically higher spend in sales and marketing. As you can see, our R&D is more or less where it was. Basically sales and marketing promotion, particularly in our branded markets, okay. So, as you can see, we have stepped-up our sales of branded. There is more of a one-time spend on the business. A little bit of freight costs also have gone up marginally because of basically Middle East, etc. During the course of the year, it will stabilize and will normalize at about 26%, which has been a historical trend over the last couple of quarters or years.
Nitin Agarwal
Okay, thanks. And Glenn on the ISB 2001, at what stage do you think we are from a discussion perspective on the licensing on it? And how much time do you think these kind of things normally take?
Glenn Saldanha
So I mean, Nitin, we’ve been doing this for almost 25 years now, right, innovation. And I think this is the first time we have a real world-class asset, right, which can be transformational in the multiple myeloma space. So, I think if we look at the journey, we will initiate discussions post ASH, but clearly this — we won’t be in any hurry to close something quickly. So, we are giving ourselves most likely FY ’26 is when you can anticipate something happening, right, on the partnership side.
Nitin Agarwal
Okay. And ex of the partnership, I think we should assume that IGI will keep spending about $60 million to $70 million per annum on innovation?
Glenn Saldanha
That’s correct. I think — I mean, the way to think about this is we believe that post partnership, we will not need to fund IGI beyond that, okay, right? They will go on their own independent journey after that, right, through the proceeds of the partnership as well as a possible IPO that we’ve always guided to.
Nitin Agarwal
On that Glenn, because as you mentioned, IGI right now is — your focus is largely on a single — I mean largely on ISB 2001. I mean, does IGI with a single molecule focus become hypothetically, assuming all goes well, IPO will candidate wouldn’t be a single molecule?
Glenn Saldanha
Yeah. I mean, Nitin, there are, all it takes is one asset, right? I mean, look at Keytruda and some of the large assets, right? That’s all that it takes. Remember that in the innovation space, it’s not a matter of numbers, it’s just having one world-class asset. And I think after 25 years, this is possibly the one which we think can be transformational.
Nitin Agarwal
Thanks. And if I take the last one, Glenn, on the U.S., from an increment when you’re working on the pipeline for the future years, what are the focus areas for the pipeline incrementally for you? I mean, respiratory, obviously is one. Beyond that, what are the areas that you’re focusing on apart from respiratory?
Glenn Saldanha
I think most of our efforts are on respiratory and injectables. Those are the two areas, which we are pushing aggressively on, right, for the U.S. portfolio. And I think, I mean, we are expecting the first respiratory launch in the next six to nine months, right? And from there on, you should see continuous launches of respiratory products. And these are both in the MDI and nasal spray area, right, initially. So that’s a big area for us. And then injectables, as you know, we’ve got eight injectables on the market. We are hoping to launch a few more in the next three to six months. And then post that the Monroe products will start coming to market from, you know, later this year or early next year, right? So, we have a full slew of rollout in the injectable and the respiratory space.
Nitin Agarwal
Okay. Thank you so much.
Operator
Thank you. The next question is from the line of Ankit Minocha from Adezi Ventures Family Office. Please go ahead.
Ankit Minocha
Yeah, hi, good morning. Looking at your operating margins and EBITDA margins, I think you’ve already kind of touching the 18%, 19% level this year. So, kind of looking at other things in the market, pricing trends, etc., what do you think this number could be for next year?
V. S. Mani
So if you recollect, we had guided during our Investor Day also that current year we should be closer to 19%. And going forward, we would see a percentage or a percentage and half improvement over the years. I think that’s what we’ll continue to guide to.
Ankit Minocha
Okay. Understood. Thank you. And in general, there was some degrowth that was seen in North America and the Rest of the World market. What were primarily the reasons for this and how do you see these trends moving forward?
Glenn Saldanha
So, the U.S. market has been a huge struggle, right, for us over the last few years. I think Q3 is looking like a much better quarter just given the fact that we’ll be launching three, four new products. And then Q4 onwards, you should see the numbers go up even further. And I think the runway is once we get these respiratory products approved, right, which should happen in the next six, nine months, the U.S. should come back towards a strong growth trajectory. As regards ROW, we think it’s — we’re coming off a high base last year. So, I think on a full-year basis, we will grow high single-digit and then going forward from next year, we’ll be back to the 15%, 20% growth levels.
Ankit Minocha
Okay. Yeah. Thanks a lot.
Operator
Thank you. [Operator Instructions] The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the opportunity. Sir, just a clarification. This first respiratory launch timeline, what did you highlight, sir, if you could repeat?
Glenn Saldanha
We’ve given ourselves six to nine months to get the first launch. It could be earlier, but that’s the outer timeline that we give ourselves.
Tushar Manudhane
And this product, does this product also have any litigation aspect as well or it’s just the approval and then we are good to launch?
Glenn Saldanha
It’s just approval and good to launch.
Tushar Manudhane
Right. And just on other expenses, again, like this 26% of sales is something which is sort of a — is it like 3Q onwards or it’s going to be more like over a period of time, this other expenses to come down to 26% of sales?
V. S. Mani
So, I couldn’t get your question fully correct. Can you please repeat again?
Tushar Manudhane
Sir, other expenses for this quarter has been higher, including, let’s say, R&D. But as you highlighted in the earlier comment that this should stabilize at 26% of sales, yeah, which is more like 3Q onwards or this is more like a medium to long-term target?
V. S. Mani
No, I guided for the full-year being closer to 26% and R&D, by the way, is lower, okay, it’s about 7% for the first six months. So, as I already explained, this is broadly in terms of sales and marketing and promotional expenses and some amount of freight costs that have gone up. So, I think during the course of the year, this should stabilize, yeah.
Tushar Manudhane
Got it. Because the first half, the sales has been more or less more as such spread out and it’s literally half of what we are talking for full year, but first half EBITDA margin is broadly 18%. So, just trying to understand what will drive the EBITDA margin so that we end full year at 19%?
V. S. Mani
Sure. So, as you can gather that we are close to 18% and I think in the second half with a couple of good launches as well as RYALTRIS getting approved in some more geographies. Overall, we see the trajectory growing closer to the 19%.
Tushar Manudhane
Understood, sir. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Neha Kharodia from Abakkus. Please go ahead.
Neha Kharodia
Yeah. Hi, good morning and thanks for the opportunity. Sir, two questions from my side to understand the industry point of view for U.S. market. One is on the U.S. price erosion scenario currently and how do we look at it going forward? And secondly, if Robert F. Kennedy Jr. becomes the next U.S. Health Secretary, how do we look at it as in terms of do we expect more ANDA approvals or do we expect price erosion to increase going forward?
Glenn Saldanha
I think, this is a very tough question, right. Nobody knows how it’s going to play out, right, from here on. But all I can say is just given our experience during the last Trump administration, right, I think price erosion was pretty high. But I think now over the last 10 years, the industry has also changed significantly, right? And given there are lots of new approvals, so every product is super competitive. So, there’s margins are always under pressure. Return on capital employed is not the greatest in the U.S. business. So, given all these pressures, right, I honestly don’t see room for further a price or price deflation, right, in that market, right? And so that’s the current scenario for the U.S. business.
Neha Kharodia
And currently, what is the level of price erosion that we are seeing for us and also for industry in general in the U.S. market?
Glenn Saldanha
I think it’s low single-digit now.
Neha Kharodia
Okay. Thank you.
Operator
Thank you. The next question is from the line of Ankit Minocha from Adezi Ventures Family Office. Please go ahead.
Ankit Minocha
Yeah, hi. Thanks for the follow-up. You were speaking to an earlier participant about progress happening on Monroe. So, just from a top level picture, how does in case Monroe does read some sort of positive impact moving forward, what sort of impact does it have on the P&L and what are the kind of triggers that drive the business?
Glenn Saldanha
So look, so Monroe are clearly as and when we — as Mani mentioned, right, we are already burning $25 million, $26 million every year, which is baked into our numbers, right? So, I think going forward, as we start launching products from there, right, we will see those flowing into the margins, right, and it will give us a margin expansion an improvement, right, over the next few years. I mean that’s the way to think about Monroe.
Ankit Minocha
Okay. And my second question is about RYALTRIS. I mean, do you see any price erosion kind of coming in there as well? And how does it work with that particular product in terms of margins and growth moving forward?
Glenn Saldanha
So, RYALTRIS is a branded product, right? So, there is no a price erosion per se. I mean, if anything, there is price increases that you get basis inflation, right, for most of the branded products. And we believe that this will have a long runway, right? So, this is our second or third year of launch and we are tracking at about $80 million annual sales and this will keep growing rapidly to becoming a $200 plus million product over the next three to five years.
Ankit Minocha
Right. Thank you so much. Thanks a lot.
Operator
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Nitin Agarwal
Glenn, on the — just taking a specialty point forward, when do you see the launches of ENVA and WINLEVI coming through? And are you looking to sort of get into more licensing deals for the specialty portfolio for ROW markets?
Glenn Saldanha
So, WINLEVI, we’ll launch Nitin over the next maybe nine months from here in the European market, right? We’re hoping to get approval before the end of this year and then commercialization will happen early part of next year. As regards, ENVAFOLIMAB we filed in 20 markets. We think we can start launching as early as Q4 in one or two markets. And then thereafter next year, we will see a number of launches. And from there on, it will take us at least two or three years to get to a certain scale for ENVAFOLIMAB, if not longer, right?
Regarding your question, Nitin, on additional in-licensing opportunities, I mean, we keep doing deals on in-licensing. I mean, for example, we did Abrocitinib with Pfizer, we did BeiGene, we got two of BeiGene’s assets for the India market. So, this is a constant you know constant build-out for us. Clearly, we’ve defined that over time we want to keep moving up the value chain, right, and that’s the journey we are on, right? And hopefully, if it all goes well, this will finally end up with a ISB 2001 launch, right?
Nitin Agarwal
Okay. Thank you so much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the opportunity again. Sir, just on this LIRAFIT, if you could share your experience now it’s since launch in January ’24, how has been the acceptance both in terms of the medical community as well as the patient community.
Glenn Saldanha
So as you know, LIRAFIT is the first GLP-1 product to be launched in India, right? And the acceptances is fairly good from the market. We’ve struggled a little bit in terms of supplies, but I think now from December onwards, we are hoping that the supply situation should improve and thereby we will continue to scale the brand in the diabetes space. So, being the first GLP-1, we are seeing the feedback pretty positive from the medical community.
Tushar Manudhane
And the supply issue was — if you could elaborate further on this on the supply hiccups.
Glenn Saldanha
Well, it’s a complex product, right? It’s a biological origin, right, peptide, right? So, I think given that it’s — you know, there have been challenges in scaling it up but now I think we are in a much better place.
Tushar Manudhane
Really, from a CMO organization….
Glenn Saldanha
Sorry, I can’t hear you very clearly.
Tushar Manudhane
Sorry, this is more from a CMO organization which you’d be procuring this drug, right?
Glenn Saldanha
Yeah, that’s right. I mean, we have some partnerships which — for supply.
Tushar Manudhane
Understood, sir. Thank you. That’s it from my side.
Operator
Thank you. [Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Utkarish Gandhi for his closing comments.
Utkarsh Gandhi
Thanks, Lizanne. Before we end the call, we would just like to state that the discussion materials provided during this today’s call, including information, statement and analysis made describing companies or its affiliates, objectives, projections or estimates are forward-looking statements. These are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially. No representation or warranty either expressed or implied is provided in relation to this discussion and should not be regarded by recipients as a substitute for exercise of their own judgment. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
With that, we can close today’s call. Thanks a lot for your participation.
Operator
[Operator Closing Remarks]