Key highlights from Glenmark Pharmaceuticals Limited (GLENMARK) Q4 FY22 Earnings Concall
Management Update:
- GLENMARK said the India business continues to significantly outperform industry growth rates, continuing the trend of the past several years.
- The company said it filed a total of 19 ANDA applications with the U.S. FDA in FY22 and plans to file 14 to 15 ANDAs in FY ’23.
Q&A Highlights:
- Damayanti Kerai from HSBC Securities asked about the update on Monroe; remediation and sales pickup expectation. Glenn Saldanha MD said GLENMARK recently had an FDA inspection, and it had 17 observations that came out of Monroe. GLENMARK is confident of addressing some of these observations and post that, it will start commercializing products from Monroe.
- Damayanti Kerai from HSBC Securities asked about the US pricing environment. Glenn Saldanha MD replied that the U.S. pricing environment continues to stay challenging. GLENMARK continues to see around high single-digit price erosion in the U.S. And the company expects this to continue into next year.
- Damayanti Kerai from HSBC Securities asked about the reason for high amount of other income in 4Q. Glenn Saldanha MD said the other income basically had an exchange gain of INR92 crores, which was the reason for the high amount.
- Saion Mukherjee from Nomura asked about the total cost incurred in the P&L from the Monroe side in FY22 and the expected cost in FY23. Glenn Saldanha MD said it spent about $30 million in Monroe last year, out of which about $10 million hits the P&L. In FY23 it is expected to go lower in FY23.
- Shyam Srinivasan from Goldman Sachs asked about the reason for dragging down of revenue growth. Glenn Saldanha MD answered that the 6% to 8% is because of the high base of COVID drugs that GLENMARK has in this year. Stripping that out, it’s double-digit growth.
- Shyam Srinivasan from Goldman Sachs asked about the driver of EBITDA margin and if it can be taken beyond 20%. V. S. Mani CFO said the company wanted to guide to a very realistic number. Since there is some amount of uncertainty everywhere, GLENMARK thought to guide to 19% rather than to say anything more than that.
- Sameer Baisiwala from Morgan Stanley asked about the kind of deleveraging the company is looking at for FY23. V. S. Mani CFO said it would not like to really put a number out. GLENMARK would definitely guide that it wants to reduce it further, but would not want to put a broad number there.
- Sameer Baisiwala from Morgan Stanley enquired about the specific timeline for Ryaltris U.S. launch. Glenn Saldanha MD clarified that it will most likely be second half this year.
- Nitin Agarwal from DAM Capital asked about the broad breakup of capex guidance of INR700-800 crores for FY23. Glenn Saldanha MD said that the company is having a number of brownfield and greenfield projects in its GLS, which should be about INR200 crore plus. The remaining would be some in-licensing spends and some normal capex in GPL and R&D side.
- Nitin Agarwal from DAM Capital enquired about the total capex investment in Monroe so far. Glenn Saldanha MD replied that so far the company has spent almost about $200 million on all the three lines put together over the years.