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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.
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