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.