Glenmark Pharmaceuticals Limited Q2 FY24 Earnings Conference Call Insights

Key highlights from Glenmark Pharmaceuticals Limited (GLENMARK) Q2 FY24 Earnings Concall

• Financial Results
  • Revenue increased 6.3% YoY to INR35,879 million.
  • India formulation sales grew 2.8% YoY despite market slowdown.
  • North America sales declined 1.9% YoY.
  • Europe sales increased 58.4% YoY on branded business growth.
  • ROW sales grew 19% YoY across sub-regions.
  • R&D expenditure was 9.5% of revenue at INR324 crores.
  • Net debt increased to INR3,355 crores due to settlement payments.
• India Business Performance
  • Ranked 14th in India with 2.11% market share.
  • Impacted by respiratory and dermatology market slowdown.
  • Growth remained strong in cardiac segment.
  • 9 brands in IPM top 300, ranked 2nd in dermatology/respiratory.
• European Operations
  • Revenue growth driven by robust branded business.
  • Strong growth in key markets like UK, Czech, Poland.
  • Respiratory portfolio continues performing well.
  • Launch of Ryaltris in Slovakia in Q2.
  • Distribution agreement for Winlevi in 15 EU markets.
• Respiratory Portfolio Performance
  • Ryaltris launched in multiple markets, seeing strong uptake.
  • Remains key contributor in Latin America and other regions.
  • Marketing applications submitted for Ryaltris in over 70 markets.
  • Clinical trials progressing for generic Flovent and other products.
• Dermatology Segment Growth
  • Recorded 21% value growth in India versus 9.6% market growth.
  • Continues strong performance in Asia markets like Malaysia.
  • Dermatology a key area along with respiratory in ROW regions.
• Life Sciences Business Update
  • External sales grew 5% YoY in Q2 FY24.
  • Entered agreement to divest 75% stake to Milieus Life Sciences.
• US Business Outlook
  • Q2 sales declined due to some supply disruptions.
  • Resolved supply issues and have strong pipeline of launches.
  • Expect US sales to return to normal levels in Q3.
  • Pricing environment seems to be stabilizing.
• Monroe Facility Remediation Update
  • Most remediation work is complete, taking engineering batches.
  • Will have meeting with FDA before resuming sales.
  • Hard to predict timing but expect FDA inspection at some point.
  • Remediation costs declining, most expenses already incurred.
• R&D Spending and Licensing Income
  • H1 R&D spending lower than last year at $36.8 million.
  • Still guiding to about $60 million plus for full year.
  • Received $15 million licensing income in Q3.
  • R&D reductions driving 2% of projected margin expansion.
• India Business Outlook
  • Expect 12-15% sustained growth next 3 years.
  • Rx business strong in respiratory, cardiac, derm, diabetes.
  • OTC and institutions other growth levers.
  • India remains a steady high-growth market.
• Margin Expansion Drivers
  • Lower R&D spending is a key driver of margin growth.
  • Operating leverage from Europe and Latin America expansion.
  • Monroe facility resuming production also a contributor.
  • Aiming for around 19% EBITDA margins in FY25.