Shilpa Medicare Ltd (NSE: SHILPAMED) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Monish Shah — Investor Relations Head
Keshav Bhutada — Executive Director
Alpesh Dalal — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
operator
Sat. SA Foreign. Ladies and gentlemen, you are connected to the Shilpa Medicare Limited conference call, please stay connected. This conference will begin shortly. Participants, you are connected to the Shilpa Medicare Limited conference call, please stay connected. This conference will begin shortly. Ladies and gentlemen, good day and welcome to the Shilpa Medicare Limited Q4FY25 earnings conference call. 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. Should you need assistance during this conference, please signal an operator by pressing STAR and then zero on your touch tone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Mohnish Shah from Shilpa Medicare Limited. He is the head of Investor relations. Thank you. And over to you sir.
Monish Shah — Investor Relations Head
Thank you, Darwin. Good evening and warm welcome to everyone. On our fourth quarter results conference call today. On the call we are joined by Mr. Keshav Putara, Executive Director of Shilpa Pharma Life Science Limited and Mr. Desh Dalal, our CF. Before we begin the call, please note that the financial results and the presentations have been uploaded on the exchange. Note that this call is being recorded and the transcript along with the audio of the same will be made available on the website of the company and the exchanges as well. I would like to remind you that today’s discussion might include certain forward looking statements based on the current expectations and assumptions.
These statements are subject to risks and uncertainties that could cause actual results to differ materially. Investors are cautioned not to place undue reliance on these forward looking statements which speak only as of date hereof. The company undertakes no obligation to publicly update or revise any forward looking statements whether as a result of new information, further events or otherwise. I would like to hand over the call to Mr. Keshav for his opening remarks. Thank you. And over to you.
Keshav Bhutada — Executive Director
Thank you, Mohnish. Good evening everyone. FY25 as a year has been very exciting and a year full of opportunities for us. And our focus on monetization of assets has helped us really as a company to bring in a performance. Now I will start briefing you about our fourth quarter performance as well as on the full year results. So first let me start with the briefing on various business divisions. So overall my briefing will be divided into API Formulations, Biologics. These are the three main divisions in which I’ll be giving you a firm update. So when it comes to API, my overall briefing will be in Oncology, Non Oncology and CDMO Peptide and Polymer.
So when we talk about oncology for the current quarter our first molecule which is a NCE molecule which we are doing it for the innovator customer, their phase 3 clinical study is completed and we understand from the customer that the results are very promising and now subsequently after that they will be planning the DMF filing and subsequently their finished product filing for the product the customer has reviewed breakthrough designation for bladder cancer and the filing is expected in FY26. The second molecule which we again Shilpa is supplying the Oncology API to the customer. The phase three clinical studies is ongoing for our customer.
Apart from that the molecules like Methotrexate for which CEP is already filed, the CEP review is going on track and we are expected to have approval in current financial year FY26 nilotinib which was a non infringing API dialog by PHILPA and for which even the formulation was non infringing. The product is successfully launched by our formulation division for which API supplies were successfully done by our API division and in the next financial year the second launch which is AXI Tinib is expected to happen in first quarter of FY26 for which again the API supplies are ongoing.
With this we are confident that in the current financial year the oncology overall revenues is likely to be growing when we compare year on year. The second update is on non oncology division where Transamic acid where the capacity expansion was completed, the commercial production has started and our current production of around 5 tons is something we are planning to achieve in the current financial year. Apart from that our second molecule UDCA for which CEP was already granted the export sample approvals have already started happening and we are expected to start commercial orders minimum 10 to 20 metric tons.
We are expecting to sell in FY26 third molecule nor UDCF for which we have developed API and for which formulation we have done first time in the world formulation in NAFLD in India and our approval of formulation is expected in first half of FY26 and subsequently launch is also planned in first half of FY26. The API manufacturing for Nor UDC is also already started for a formulation division and is expected to complete in first half of FY26. The new molecule which is Mycophenolate morphetail where the PV campaign is already ongoing and we are expecting to complete PV and filing in FY26.
CDMO peptide and polymer are very important divisions in which HILPA has invested a lot in this. The major Updates are Our first update will be on UNISA IC where the dedicated manufacturing block which we are constructing for our customer. The block construction is ongoing as planned and is expected to complete in first half of FY26. Subsequent to that the PV batches and the filing from this new block will be planned in the FY26. The second project which is a phase two molecule where we have developed both API and formulation for our NCE customer where our customer has received clearance from agency for starting the phase 2 clinical studies for which the material is already supplied from our end and phase two clinical studies will be started in first quarter of FY26 by our partner.
Apart from that in the Q4FY25 we have successfully signed two new contracts in which one molecule is a commercial product where we are doing a site transfer to our facility where the project is awarded to us and we will be taking site transfer and manufacturing the batches in the FY26 for our customer. The second project which is again a NCE molecule for development for a different indication for one of our Australian client for which again the program is awarded and initial development work is started in Peptide division Liraglutide phase our PV campaign was completed. Our DMF is expected to file for this product in first quarter of FY26 semaglutide where again Shilpa has invested lot of resources on development of this product.
Our process development in R D is already completed. Our PV campaign is planned in first half of FY26 for the API polymer division where as I updated last time in the call we have received one order from one of the US customer for $4 million for which the commercial supplies have started and the revenue is expected to be realized in FY26. The second polymer project which is again a very complex polymer which we have developed for one of the US company. The material is supplied to our partner and their trials are ongoing. Apart from that I am happy to tell you that in the current quarter our API business unit, both unit one and unit two have successfully finished USFD inspection and for the unit one already we have received EIR with VAI status.
Now let me start briefing about our formulation division. In formulation the three as on date for with the company we have three NDA approvals in place which is Premitexit Botizomib and the third product is a oral liquid product in us. All the three product commercial launches have completed and revenues will be realized in FY26 botizomy which was the last launch which was pending is completed in the fourth quarter of FY26 by our partner. Apart from that for the Europe market where Nilotinib was launched is currently doing well and as on date there is no competition in the market and there is a good market share which our partner has taken in Europe.
Second molecule which is Axitinib which Europe launch is expected to have in Q1 FY26 for which already the supply orders in formulation are in place and we are expecting deliveries in first quarter of FY26 nor UDCA which is again a NCE molecule which Shilpa has done a clinical study in India for NAFLD. The product approval is expected in first half of FY26 and even the launch is planned in FY26 first half of FY26 and already for the said product company has partnered with various companies in India. Apart from that the transdermal patches which is a very specialty division in which the first product Rotigodine transdermal patch the company has already filed and expecting approval in FY26 our procedure DCP procedure review is ongoing.
The second transdermal project which is again a very complex transdermal patch which we are developing against tablet for which the pilot bio is successfully completed and now the PVA batches and clinical studies are expected to start in FY26 SML ING 011 which is a long acting injectable which we have developed again very unique product which where we have our own IP for which the Phase 3 study is expected to complete in Q3 FY26 and subsequently we will be filing this product in India and parallely for the said product European scientific advice is already submitted so for this molecule we will be going ahead with the US and Europe studies.
Also subsequently in FY26 our major focus for the formulations will be on advancing two to three new such specialty pipeline to the advanced stage and also progressing on our ongoing developments and on the regulatory side. I am happy to tell you that for our transdermal patch and ODF facility we have received our UGMP certificate in the current quarter. Apart from that on the USFD issue for our formulation manufacturing facility the US FDA remediation is completed from our end and we are waiting for the response from agency. Now I’ll start briefing you about Biologics division. In Biologics the Adalimumab which is our first commercial molecule launched in India the sales is doing well and for the current year with the approved additional indications approval we are expecting to have a double of sales in the current financial year FY26 Afliberca which is our second biosimilar.
The clinical studies are ongoing and we are expecting to file this product in FY26 in India market Nivolumab and Pembrolizumab which are again two multi blockbusters. The product development in RD scale is already completed and our pre clinical studies are ongoing and we are expecting to start human studies in FY26 coming to CDMO side where already the two new on two ongoing projects which are molecules where we have done lot of work in FY25. The molecules are again expected to generate sizeable revenue in FY26 where the subsequent supplies for our partner for Phase 1 or pre clinical will be ongoing.
For the current quarter we have signed one more large scale microbial long term contract for more than five years for which we will be developing both DS and DP and we will be supplying to our partners which is a binding contract. Apart from that there is a second project which is a mammalian project which we have again signed with one of the US customer for which we will be starting the development work. We are seeing very good traction on the CDMO side especially on the Biologics facility and we are expecting to add more logos in the current financial year FY26.
Apart from that our deal with Maptree Biologics where it’s a NBA asset for which Hilpa will be exclusively developing for our partner. The cell line delivery is expected in first half of FY26 and our customer is expecting to start their investigational trial in FY26. I am happy to tell you again on biologics side that our facility has received EUGMP approval which again gives a very good convincing answer to various customers that the facility is very well capable of supplying to Europe also and the global markets. Next I will start briefing you about the last thing which is on Albumin where on Albumin.
As everyone is aware the manufacturing facility which FILPA is building, the facility is expected to commission in this year and we are planning to start the product batches also in current financial year and apart from that in Europe. We have already submitted our scientific advice and we are expecting the response closure in first quarter of FY26. Subsequent to that in FY26 we will be starting the clinical studies in India market. Already we have received the permission for starting phase three clinical studies and we are planning to start supplies for The India clinical phase 3 studies in FY26 and clinical studies expected to start in FY26 for India market.
I am happy to announce that we have strategic partnership with Orion Corporation for exclusive commercialization in Europe region and Orion will be our exclusive partner for distribution, marketing and sales of Recombinant albumin. And this partnership is purely for the Europe market and this is for only therapeutic use. Apart from that the applications which are in XCP and Grade and other applications that is not it, not in the scope of current agreement and we are allowed to sell our product for these users. Apart from that this deal is mainly for Europe market and we are still open for us and all other rest of the world and India market.
This underscores the commitment we have had to this project over past eight years. We have made significant strides over the years and we are confident of commercially launching this product in years to come. With this I would end my briefing on business and at the end I would want to tell all our investors that as a company we are very focused on monetizing the assets and whatever assets which Philpa has invested over years, we will ensure that we get revenues from each one of them. With that thank you and I hand over to Mr. Alpesh Dallas.
Alpesh Dalal — Chief Financial Officer
Thanks Keshav and good evening everyone. Let me briefly take you through the financial performance for the fourth quarter and the full year ended. FY25 our total revenue for the quarter stood at 338 crores, recording a growth of 15% year on year and growing 13% for the full year. At Rupees 13. 10 crore, the growth for the year was largely driven by higher growth in finished dosage form and biologics verticals. On the gross margin front, our gross margin for the quarter improved by 200 basis points at 69% compared to the same quarter last year and this improvement came despite low contribution from licensing income and CDMO revenues, which also underscores the profitability of our business model.
The EBITDA for the quarter was at rupees 84 crore as compared to 73 crore in fourth quarter last year showcasing a growth of 15% year on year, whereas EBITDA for the whole year was at rupees 340 crore as against 253 crore last year. The EBITDA margin for the quarter were at 25%, whereas for the full year the margins were at 26%. With the improving business mix and higher utilization of assets, we could expect some further improvement in the EBITDA in future quarters. I’m also happy to share that our interest burden has started coming down and with the interest cost declining by 38% year on year for the quarter going forward as well, I believe that there are savings expected out of lower interest costs during the year.
We repaid high cost NCD loans of rupees 300 crore out of the proceeds of QIP and replaced another 75 crore NCD with a significant lower cost loan. We expect to repay the balance NCD of 75 crore by mid of August 25 to enable further reduction in our interest burden. On the tax front, our effective tax rate for the year has reduced to 36% compared to 41% last year on the back of conversion of loans given to subsidiaries into equity resulting in lower tax expense during the year. We also had a one time exceptional item pertaining to settlement of our pending litigation with celltrion amounting to rupees 29 crores pet adjusted for exceptional items for the quarter stood at Rs 33 crores versus 20 crores on year on year basis whereas adjusted PAT for FY25 was rupees 97 crore growing by more than 2 and a half times compared to previous year.
On the segmental performance for the quarter our EPI business clocked a revenue of 188 crores growing 3% year on year. In this business we have done portfolio rationalization and also improved offtake of key products from our newly expanded capacities. Formulation business revenues for the quarter were at 133% growing 38% year on year and the growth in the formulation business was driven by our EU geography where we continue to have limited competition for our nelutinium product as Keshav was explaining and significant ramp up in our row market that witnessed a growth of over three times compared to the same quarter last year our tire similars business recorded a revenue of 10 crore during the quarter that business is continuously reporting.
You know regular revenues are getting reported in that particular vertical as well. Let me now give you an overview of our balance sheet and cash flow items where our net Debt was at rupees 800. Sorry pardon me, our debt was at 558 crores net debt as on 31st March compared to 905 crore for 31st March 24th and the reduction in debt coupled with improved performance has resulted in our net debt to ebitda improving to 1.6×2 from 5.8x last year. So we have done reasonably well on some of the critical parameters. On the CAPEX front our net capex for FY25 was 216 crore.
And it was majorly for our large fermentation facility that we are building in Khadijah. Additionally, I’m also happy to inform all of you that the board at today’s concluded meeting has decided to declare a dividend of 100% of our equity on the back of improved performance of the company. And with that small introduction I would now like to open the floor for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue you may press star and 2. Participants are requested to please use handsets while asking a question and to limit your questions to two per person. You may rejoin the queue for follow up questions. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. We have a first question from the line of Krisha Kansara from molecule ventures.
Please go ahead.
Unidentified Participant
Thank you for giving me this opportunity. Sir, my first question is related to the biology segment. So you mentioned that these sales from Adali muma will double in FY26. Now if we see in FY25 the segment reported close to 75 crore of top line. So if you can give us the breakup of this 75 crore number. How much was from the CDMO segment and how much was contributed by Adali mum. That is my first question.
Keshav Bhutada
Yeah. Thanks Trisha. So if we see on overall biologic segment in Adalimumab we have clogged a revenue of 15 to 20 crore. Okay. In the last financial year. Okay. Which is expected to double in FY26. Is it clear? And rest of the revenue, Whatever we have is a CDMO revenue and licensing revenue. It’s a mix of both. So exact number, how much it is we can send you later.
Unidentified Participant
Okay? Okay. Okay. My second question is on the formulation segment. So first of all congratulations on the official launch of boltego in U. S market and also for the J code approval. Our ramp up in case of P metrics has been slightly slow and gradual and it has been more than a year now. And now we are expecting to you know, see a pickup in P metric sales from let’s say FY26 onwards. So can we expect the same gradual ramp up in case of voltage omnivore? Because it is the same market and the same distribution partner for us the ramp up in sales could be much faster.
Keshav Bhutada
Yeah Grisha, I think to answer that quickly what I can tell you is with Primitaxit first we had the the approval, the sales pickup took time because there was also Eagle product in the market. Right. But when we talk about botismib there is no much competition in the market. We are the only product having the subcutaneous approval. Right. For the rtu I think that will really open up market quickly. But how it will evolve in the financial year we have to observe because for us also this is a new kind of opportunity which we are really exploring.
But we are confident they should do good for this financial year on both premium.
Unidentified Participant
Right. So you are observing a pickup in sales in PMetric for FY26?
Keshav Bhutada
Yes, yes.
Unidentified Participant
Okay, answer the third question on the albumen side. So first of all congratulations on your partnership with Orion with respect to albumin. I have two sub questions related to this. First is what kind of milestone fee can we expect from such kind of an out licensing agreement for a new biological entity? And usually what is the timeline for that? Can we expect some fee to be received once we conclude the phase three trials? Let’s say nine to 12 months down the line. And my second question is we were supposed to start the phase three trials in first quarter of FY26 and we are almost two months into the first quarter.
So I just wanted an update on the thing.
Keshav Bhutada
Yes Krisha, I think coming to financials we will not be able to disclose that because of our confidentiality with our partner. But I can tell you it’s a very good deal what we have done for this product. Mainly because you know Shilpa has invested over a very lot of time on this product. This product. Right. From so many years. So yeah, giving a Europe region as a whole we have had a good deal on that. And yes there will be milestones which will be spread across signing, filing, approval, launch. So that way the various milestones will be divided.
And yes, coming to the second question on the clinical studies we were expecting to start in first quarter you are right, but I think we may have some delay. Maybe we may move to one or two quarters because we are trying to give our phase three clinical study supply from our new facility so that the new facilities in our part of our dosier from day one.
Unidentified Participant
Okay, so what is the delay that we can expect for phase three.
Keshav Bhutada
By. One to two quarter? Yeah, okay.
Unidentified Participant
Okay.
Keshav Bhutada
Yeah.
Unidentified Participant
And so quickly on the import side. So we have completed all the remediation initiatives and all. Now my question is have we received any final inspection date from us fda Then why I’m asking this is because once we are through with this issue we might see some kind of improvement in our margins because the cut that we basically pay to the CMO players as of now for our US formulations will no longer be paid. So any update on the date inspection, the final inspection date. And also is my understanding on the margin improvement correct?
Keshav Bhutada
No Krisha, there are two things. The first thing on the FDA import alert thing. Yes. See we have completed all the remediation activities and lately what we have seen is FDA is more doing surprise inspection. Okay. So I think we will surely have or we are likely to have in the current financial year as a surprise inspection what we feel. So this is something which we know currently. And apart from that the second question on the margin improvement. Margin improvement will not happen because we are currently paying to the CMO that cost is not significant, only improvement.
What will happen Once the U.S. approval of the facility happens is we may see a good increase in the CDMO revenue. And apart from that our existing products are which are not where the final approval is not received. They are all approval will get started.
Unidentified Participant
Right. Okay, I have a few more questions. I’ll join back with you.
Keshav Bhutada
Yeah, thank you.
operator
Our next question comes from the line of Rupesh Tatia from Sri Rama Managers pms. Please go ahead.
Unidentified Participant
Hello sir. Thank you for the opportunity. My first question sir is on this formulation. Slide slide number 17. The licensing revenue it was 34 crore in Q4FY24 it has gone down to 24 crore in Q4FY25. And you know my understanding was with new product launches and we have launched Nilorthomib, demetrixed, Portezomib. So my understanding was this revenue should have gone up. So can you explain why it didn’t go up? And then overall on FY25 we have this 181 crore revenue. So can you give some idea about how much of it is you know one time milestone payments and how much of it is linked with the sales or the production of the formulation.
Keshav Bhutada
Yeah, See Rupesh, first thing is when the product is commercialized, okay. In any of the market the revenue line item where we will be reporting the number that will not be in licensing, that will be in the sales revenue. Okay. So if you see the numbers what we have shared the Europe revenues have increased. Right? So whatever sales revenue which we have generated from Nilo Tinib or any profit share that all will come in the euro business sales, not in licensing. Okay. And apart from that on your question on decrease of revenue from 4 quarter F FY24 to 4th quarter FY25.
Right. Or even from 3rd quarter to 4th quarter licensing revenue is such a way, as I mentioned in previous call also that is a product once we out license there will be various milestones which will be there for the product. So sometimes in some quarter you will see it will be more, some quarter it will be less but it will be not that it will go significantly lower. So the variation will be there. But only the kind of product mix which we have out licensed in that quarter that will define my licensing income. And of the last year how much was a one time? There was no one time income.
As such we will have, as I mentioned we have a strong pipeline of molecules. So once one molecule in first quarter, I have outlier. In second quarter, there will be one more molecule. Third quarter there will be one more molecule. And every year we will add new pipeline. At the same time existing pipeline I will advance and outlier. So that is how the licensing revenue will be a continuous revenue. It is more like if you have a company which is doing purely CDMO business they will have a fixed CDMO revenue. Sometimes it may be more, sometimes it may be less based on the product deliverable.
Right. Accordingly this will be working.
Unidentified Participant
The reason to ask that question sir is it is almost 50% of our EBITDA. I mean give or take and at least as an analyst I have no way of predicting it that this will grow 15% every year. Right. It is quite lumpy. So that is why I was asking you that question. The second question sir is what is the significance of this EU GMP approval that we have received for biosimilar plant? Is that like a major approval where now we can see biosimilar revenue going from let’s say 75 crore to 150, 200 crore. Does that approval enable us to do that? That is one and then another one.
If you can give some update on Levatinit settlement.
Keshav Bhutada
Yeah Rupesh, I think on the first point of EU GMP approval for the facility, yes, it’s a significant update for our biologics facility. Because if you see in India the number of biologic facilities and in that how many are UGMT or USFD approved? I think as an analyst you will understand that there are not many. Right. So if you have a facility with regulatory accreditation specially from Europe, I think that opens lot of door for CDMO services. Okay. And yes, the revenue is expected to increase. How much it will be in this year, how much it will be in next year, it will all be decided mainly on the CDMO revenues which we will have and how many contracts we will get in every quarter.
Right. So we have to observe that with time. But yes, we are confident as a company that this approval will give us good uptake for CDMO revenues. And on the second question, second question was on settlement Landwatini settlement is something we are currently not disclosing anyone. It’s confidential.
Unidentified Participant
Okay. Okay. And then my final question sir is when. When are we expected to recruit all the patients for albumin phase three and. And when can we see some some.
Keshav Bhutada
Results of that See for albumin? Once we start our clinical study. Our clinical study duration is between 12 to 15 months. Where I’m telling, including the study dosing, the analysis and report. So that will. No, no, no. See for the patient recruitment first we have to supply the material and supply of material from the facility which we have commissioned. Right? The large scale microbial facility. From there if we are supplying and with that only if the clinical study will start then once I file my product from the same facility I can commercialize all also. So what is our current plan is from the new facility? Right, the large scale facility there the batches are ongoing.
And once that is completed in this current year, right. Maybe sometime in Q2 or Q3 we are expecting to start our phase 3 clinical studies for India. That is the plan. And in next year we will be completing our phase three study.
Unidentified Participant
Okay. And where are we on the non. Non therapeutic usage?
Keshav Bhutada
Your non therapeutic as I explained in the previous calls also I will be able to give you more clear picture in the next financial year once I see how is the uptake. But yes, we have started seeding our samples in various customers and they are testing our product.
Unidentified Participant
Okay. Okay. Thank you. Thank you for answering my question sir. I’ll come back in the queue.
Keshav Bhutada
Yeah, thank you.
operator
Thank you. Our next question comes from the line of Maith Katrodia from Nivesha. Please go ahead.
Unidentified Participant
Yeah, thank you so much for the opportunity. Sir, my question was on the part of CDMO business behind the commitment of 20 million tablets, is there any visibility for further scale up in FY27 or FY28? Also could you help us to understand the expected annual revenue from this engagement?
Keshav Bhutada
Sorry meet, your voice was not clear.
Unidentified Participant
Yeah, sorry. Beyond the commitment of 20 million tablets, is there any visibility for further scale up in FY27 or FY28? Also could you help us to understand the expected annual revenue from this engagement partnership?
Keshav Bhutada
Yeah Meet, I think I will not be able to Give you how much will be the expected revenue. But for sure I can tell you that at least up to 20 million. We have feasibility and the kind of indication where this molecule is targeted, we are expecting it to do better. But once the product is launched and it is in market, then only we can give you more clear picture on that.
Unidentified Participant
Okay. Okay. So second question is on part of intangible assets. So there is also a good rising intangible asset. So how we plan to impair or amortize this intangible assets? Could you throw some light on it?
Unidentified Speaker
Yeah. So you know, meet, you know the. We follow a very structured policy for you know, amortizing the intangibles at a point in time when we start commercial usage of that particular intangible asset, we end up amortizing it over its useful life. We have generally come to a conclusion that broadly that useful life should be on an average at about 10 years. So we amortize it over a period of 10 years.
Unidentified Participant
Okay. Okay, thank you so much.
Unidentified Speaker
Yeah, thank you.
operator
Thank you. Ladies and gentlemen, to ask a question you may please press star and one. Our next question is from the line of Kumar Saurabh from Scientific Investing. Please go ahead. Hi.
Unidentified Participant
Hope I’m audible.
Unidentified Speaker
You are audible sir. You may proceed.
Unidentified Participant
Yeah, so my question is on the recombinant albumin where I understand is from the overall market this share is only 5% and it is dominated by three global players. So first question is are we targeting more than this 5% market and how we plan to compete against the bigger players and given I think it’s the cost which will kind of bring this in favor if we want to take a bigger share. So how do we plan to fight on the cost side to have a bigger market share?
Keshav Bhutada
Yeah, I think Saurabh first thing currently with recombinant albumin. Okay. Where specifically the application which we are targeting is a therapeutic use. Okay. Where currently recombinant albumin globally there is no approved product for therapeutic use. Okay, that is first part which I want to clarify. So recombinant albumin, whatever, you will see some market where people are selling it as a excipient grade. So that is completely different market which is for non therapeutic applications. Okay, apart from that, how do we see to ramp up see our partnership with Orion, I think that it’s will give you a clear, clear picture that the molecule has very good potential of selling.
And obviously if we are cost competitive then only any partner will come and sign with you for the product. Right. So we are Confident that we are cost competitive and manufacturing wise as well as clinically and getting the product to market. We are confident.
Unidentified Participant
Okay. Okay. So my second question is around some of the new products like Rotigotin or borders of MIB. So these are expected to be launched in FY26. And I heard in your commentary also if you can talk something about the addressable market size of these opportunities and what is the kind of market share we want to take in some of.
Keshav Bhutada
These molecules products mainly in transdermal patches globally there are not many companies who are working on it. Okay. And for product like roti goating where we already know there is details in public domain also where many people have taken this product in grid but they have failed either in clinical or manufacturing wise. Right. So totally the end market for roti goating as on date Europe is I think more than 200 million euros as per IQVR data. And what we are targeting as a product is because we have already part partnered for this product with one of the very good European company who is very strong in selling Parkinson’s disease products.
So this is add on to their already existing sales force where they have experience of selling such products. So yes, there is a good sizable opportunity for us and we just need to see how it will evolve based on numbers.
Unidentified Participant
Sure. And the last question because I have started studying the company only from last 2, 3 months the CDM and the biologics business. I think lot of effort and lot of investment has gone but the numbers doesn’t reflect the actual potential. So one question is what is like if the business performs up to its potential maybe next three, four years. What is the expected asset turnout of this business and what you feel is going to be a sustainable, you know, return on capital on this investment?
Keshav Bhutada
Yeah, I think Sourabh, your question is very long. But what I can tell you in short words is once you will study more about our company and if you come on every quarterly calls I am sure you will get a very clear insight. But as a company, if you see in India, right Very few companies are there who is having good development and manufacturing platform like Shilpa. Because we can do small molecules, we can do peptides, we can do polymers, we can do biologics, we can do ADCs, we can do injectable, we can do oral solid, we can do pfs.
So if when you have a company which has a, which is a one stop solution for any partner when it comes to development and manufacturing, right Where I feel the opportunity, what we are talking is Significant and in years to come. With more focus on cdmo, we are confident that each of these assets will start giving us returns as on date. If I understand correctly, our roc is around 9% sent for the quarter. Maybe Alpesji can correct it, but. Hello?
Unidentified Participant
Yeah.
Keshav Bhutada
I think there is some noise in the back. Yeah, sorry, there is some network issue we are having. Someone disconnected the call. Yeah. Am I audible now?
operator
You are audible sir. You may proceed.
Keshav Bhutada
Yeah, so I think I have answered my question. Your question? I hope so. Yeah, it is connected. Maybe we can continue the call.
operator
Certainly. Ladies and gentlemen, if you wish to ask questions, you may please press star and one. Our next question is from the line of Ajay Surya from Nivesha. Please go ahead.
Unidentified Participant
Thanks for the opportunity. Also my question is on albumin. So with the Orion Partnership in place, can you please provide more clarity on the regulatory filing timeline, the expected launch year and more on the our readiness in terms of our fermentation capacity.
Keshav Bhutada
Yeah Ajay, as I already mentioned, right. Our manufacturing facility for supplying this recombinant albumin is almost ready. And we are already starting our scale up batches in this facility we have already started. So manufacturing wise we are confident and we are ready with the product. Product only thing is once the scale up and the registration batches, all these things will finish in this year and supply to clinical. That’s the only milestone which we are targeting for the current financial year. Once we do that, once the product is in Clinic, it’s a 1 year 12 to 15 months timeline for completion of the clinical study and subsequently filing and approval.
That’s the plan.
Unidentified Participant
So my next question sir. How do we compare the recombinant albumin in terms of cost like where would Shilpa be placed versus other players like the larger players like album index and how much of our capacity, the total capacity which we plan to put. And so how much of that capacity do we plan to target for the therapeutic grade and the exit P and grid? Can you give any breakup on that?
Keshav Bhutada
No Ajay, I think giving breakup on capacity wise which will happen from two years later, right? It will be not at all possible for us currently. But what I can tell you is our major market focus will be on therapeutic use. Because that’s a very large sizable market for which we have built this facility. And we are targeting apart from that non therapeutic is surely something where once we get customers we will supply. But I think major of our capacity will be utilized for our therapeutic applications.
Unidentified Participant
And on the costing side, if you can help me like Costing I can.
Keshav Bhutada
Only tell you we are competitive I think that is the only sentence which I can use for that and sir.
Unidentified Participant
One last question sir if we look at the human grade albumin market which is quite large maybe to the extent of 7,8 billion but wanted to understand how much extent can the recombinant albumin replace this market because it may to our understanding this cannot be replaced completely so just wanted to understand to how much extent can this replace and we also mentioned that as of now there is no other company which is doing apart from the excipient grid they are not targeting so wanted to understand why are other companies not targeting for the therapeutic grid Is it because of the lower addressable market or is there any lack of my understanding if you can help on that.
Keshav Bhutada
No Ajay I think what I can tell you is first thing as a therapeutic grade what we are targeting I can tell why other companies are not doing what is their strategy and even if someone is doing we are not aware as on date currently okay so let me be clear on that so what we have done as a product is because you know if you have read about our company we have invested in albumin almost seven eight years before where we acquired company we built this asset we’ve completely scaled up the development of fermentation process then we even did pre clinical studies we even did phase one clinical studies so this is a long journey which.
So every company has a different strategy right?
Unidentified Participant
What it answer on the how much of the extent can this RHA replace the human grade albumin market that we.
Keshav Bhutada
Cannot tell today Kajay I think we have to observe that with time.
Unidentified Participant
Got.
Unidentified Participant
It and so if I can chip in one more question sir over the last three years if I look at our service income and license fees it has grown nearly 3x from like 94 crore in FY23 to almost 310 crore in FY25 and the previous participant, one of the previous participants also mentioned that there was a noticeable dip in the current quarter so just wanted to know the thoughts on the sustainability of this growth how much of this growth is driven by recurring royalty income versus milestone based or is it like a one time payment? And going forward with the unicisive and this Orion partnership should we expect a more predictable revenue stream or will this line item continue to be lump in nature?
Keshav Bhutada
I think alphaj, you can answer this. Question.
Unidentified Participant
So there’s some challenge in you.
Alpesh Dalal
Know hearing the question here Can I.
Alpesh Dalal
Can you repeat the question please?
Unidentified Participant
Yeah sir so in the last three years the service income and license fees has grown nearly 3x like from 94 to 300. But as the one of the previous participant also mentioned that there was a noticeable death in the current quarter. So just wanted to know on the sustainability of this growth and how much of this growth is driven by recurring royalty income versus maybe milestone based payment or is it like one time payment which the company has received. So going forward with the unicisive order and this Orion partnership. So should we expect a more predictable revenue stream from this segment or will this line item continue to be lumpy in nature?
Alpesh Dalal
Go ahead adequately. You know explained this a little earlier in the call that licensing revenues that we receive are towards, you know, the initial signing as well as certain milestones related to, you know, few project development that happens or the filing that happens or the approval that comes through or the launch that happens. Once the product is launched and commercial supplies start. They do not form part of the licensing income bit. Right. That is part one, part two. Our company has remained a B2B company where we do develop products and out license to various potential partners.
So as with any pharma company.
Alpesh Dalal
We. Do have a developmental pipeline and as and when we keep developing more and more products, we keep out licensing them so that out licensing the molecules or the products is part of our normal strategy and business revenue stream. Having said that, yes, because you know different molecules can have different potential and in different geographies and even the timelines for some of these milestones when they accrue could differ. So there could be lumpiness in few quarters. But by and large because we have a larger or broader portfolio base, we should be in a position to you know, generate this revenue fairly regularly.
Unidentified Participant
Okay sir, got it. All the best for future.
Alpesh Dalal
Thank you very much.
operator
Thank you. Our next question comes from the line of Tushar from MK Ventures. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. So the CDMO revenue that we typically generate, we have multiple heads under which we are booking revenues, right? So we have API cdmo, we have some formulation CMO projects. We also have Biologic cdmo. Can you help aggregate you know the the revenue which is being booked under different heads. What would be the component of revenue generated for us which is basically what, you know, where we are working with innovators or a large pharma or biotechs and which can be sort of, you know, classified in the nature of a CDMA project even if it is right now being bucketed in different heads.
I just trying to understand what is the total component of work that we’re doing, you know, which can be or which is by other firms classified as CDMO which we may be putting under different heads. And also how many projects you know some more qualitative details around the CDMO part of business.
Keshav Bhutada
Yeah, thanks Usha. I think if you see overall details what we have given on the investor presentation also revenue is on rate almost for FY25 around 158 crores which is something we have clearly mentioned. And of programs it is more than 20 plus programs which we have currently in our CDMO segment. And what we are trying to even do is in the years to come or in the next financial year even segregate CDMO revenues. We are even considering that and showing it separately. So but overall yes there is a lot of opportunity of CDMO work which already company has done where you will see already we are clocking a revenue of 158 25.
Unidentified Participant
But let’s say at the beginning of this call there was this commentary on a couple of oncology projects in the API business which what I could figure out from the call is more in the nature of developmental work being done for the innovator. But but if you know your commentary puts it under oncology API business, has that been counted under CDMO or would that be separate from the 158 crores?
Keshav Bhutada
No, it’s already included in 158 crores currently as part of oncology and going forward, see we are trying to segregate and make people understand more clearly all these revenues because initially this was a revenue we were not segregating separately as a CDMO revenue. So our dedicated CDMO reporting numbers we have just started from last few years. Right. So that is the clarity.
Unidentified Participant
Got it. Also in given that you know both biologics as well as you know the the number of projects on the CDMO site and developmental projects, a lot of projects. There is pivotal outcomes expected in FY26 and maybe FY27. Would it be fair to assume that from this year onwards we should see an accelerated improvement in the overall earnings profile and then the return on capital generated? Given that a lot of the projects for which costs have already been incurred, do we see a sharp operating leverage hit the business this year?
Keshav Bhutada
In short, sir, I think only what I can tell you is we are expected to do good in the upcoming financial year also. That is what I can tell you.
Unidentified Participant
Sure. Can you highlight some more about the new CDMO projection biologics that you have picked up?
Keshav Bhutada
Yeah, the major opportunities which I mentioned you in biologics. Right. Where it’s one of the project is a long term collaboration which we have done with one of the partners which is a long term contract where we are developing them for them both drug substance and drug product. And post that we also have commercial supplies for minimum three to five years. That is one such program. And apart from that there are several NBE programs which already we are under development for our partners. Some are under pre clinical, some are in phase one.
Unidentified Participant
Keshav, last question. On Unicycle, I think we are expecting the approval for Unicycle product in this financial year, right? I think it was the first half of the financial year. That remains on track. Would you have an idea of that?
Keshav Bhutada
No, Tushar, that approval doesn’t remain on track. We are expecting approval in this financial year. Currently what we feel. But we have to observe this with time how it will evolve. But overall from a revenue perspective for the company, there is no major change because the revenue numbers which we have considered for unis I say which was post commercial launch and the significant revenues were considered in next to next which is in FY27. So I think still we remain on track for that. Let’s see how the things are evolving. I will be able to give you more clear picture in maybe Q2, FY26.
Unidentified Participant
Okay, sure. Thank you so much for the opportunity.
Keshav Bhutada
Yeah, thank you.
operator
Thank you. The next question is from the line of Gaurav D from Antique. Please go ahead.
Unidentified Participant
Yeah. Thank you for the opportunity. Good evening. So the presentation still talks about of PDUFA date for OLC on, you know, June 20, 2025. So have has the partner got some queries on the filing and that’s why we’re expecting a delay now.
Keshav Bhutada
Yeah, I think Gaurav, what happens is Gadufa date still remains same. But majorly the issue is the facility where the batches were done. The facility had some issues with USFD where the company is working on remediation. Meantime, what we have done is we have also successfully completed manufacturing of registration batches from the new facility also from which our partner is planning to put this new facility also in the application. So GADUFA dates still remain same once we apply this new facility. Right. Then we have to see how the agency how the negotiation happens with agency on the approval and launch.
Unidentified Participant
Which. Which facility was it expected?
operator
Sorry to interrupt, Gaurav, but your line seems to be muffled.
Unidentified Participant
Okay. Is this better?
operator
Yes, please go ahead.
Unidentified Participant
Sorry, sir. Which facility was this expected to be supplied from?
Keshav Bhutada
That’s the confidential Gaurav we cannot disclose.
Unidentified Participant
Okay. Okay. So we’re not launch. Okay. So the major growth driver this year will then come from the formulation division, Right? Is that understanding? Correct?
Keshav Bhutada
No, because the major division will come. Major growth will come not only from formulation division but also from biologic division and also API division. So if you see all of our divisions, right. Each one have their own pipeline, the own products which are growing at their respective pace. So I think the overall growth from each of the division we are focusing and ensuring that there is growth from each of the division.
Unidentified Participant
Okay. Any guidance on what was the R and D spend for FY25 and what we are expecting in FY26?
Keshav Bhutada
Albej, you can take that.
Alpesh Dalal
Yes. So see, basically, you know, typically we have an RD spend, you know and obviously it depends on the programs that you know are being conducted. But for the current year we have had a run rate of about 30 to 35 crore per quarter. Right. And we expect that our this thing would be in similar range.
Unidentified Participant
This is all expensed in the P and l. Right?
Alpesh Dalal
Sorry.
Unidentified Participant
This 30 to 35 crore is what is seen in the P and L. Right?
Alpesh Dalal
Right. That’s what is charged in P and L. This is obviously inclusive of various, you know, work things that we do. Also the, you know, the employees involved in the same and all.
Unidentified Participant
So we’re not expecting. So gross margins, you know, for FY25 is improved EBITDA margin. You expect some improvement. But on the gross margin front, do we continue to see improvement in FY26 or are we expecting them to be, you know, hold stable at these current near 70% levels?
Alpesh Dalal
See, as far as gross margins are concerned, what happens is that as you would know that in pharmaceutical business typically all the generic products are under constant pricing pressure. Having said that, you know, there are obviously incremental benefits that you try and get from your new product launches, also from some of your sourcing that you do. So it balances out more or less. It remains in similar region. But you know, with new launches and good launches coming in, it can improve with improved business mix.
Unidentified Participant
Sorry, last, if I may, with your permission, what would be the capex spend for FY26?
Alpesh Dalal
Would you like to take.
Keshav Bhutada
Yeah, for the FY26. What will be the capex spend for FY26? We have to sell. See, there are some capex which we are trying not to do. So I think we do. We will not be able to give you clear picture on that. But what we can tell you is it is not significant Capex Apex when we compare to last year.
Unidentified Participant
Okay, okay, all the best. I’ll reach out to the team. Thank you.
operator
Thank you. Our next question is from the line of Shubham Sagar from Skill Ventures. Please go ahead.
Unidentified Participant
Hello. I’m audible.
operator
You are audible sir, you may proceed.
Unidentified Participant
Yeah, my question was on the formulation business. So in this quarter Q4 what drove such high growth in EU region? Like was it just nilotinib or did we see other molecules also ramp up? And likewise if you could provide the reasons for higher growth in ROW and lower growth in us.
Keshav Bhutada
Yeah, mainly in the formulation side for the current quarter the major revenues are from Nilo Tinib. You are right. Apart from that there are some small launches also which we have done in Q4. Okay. And on your second question, second question.
Unidentified Participant
Was so like the higher growth in ROW region and lower growth in us. So what was like this driven by.
Keshav Bhutada
Yeah, majorly higher growth in ROW is only because of various standards where we had participated. We have got approval and also there are lot of registrations which help has done from last two to three years where the approvals have started coming in and also the commercial sales have already started. That is majorly bringing us this up increase in the ROW sales. And when it comes to US sales US as you know our facility is under import alert, right? So only we are there is a decrease in US sales only because of uptake of positive difference between other are cited in and other products like NDAs which we are supplying from the CMOs.
Unidentified Participant
Okay, got it. And so I want to ask like we have incurred like higher OPEX costs. So in the previous quarter I think we had mentioned that we had increased our R D spends and there was also FX loss. So the quarterly OPEX spends which are there like will this be a sustainable which will continue and like if is there is there any like one off this time?
Alpesh Dalal
So see OPEX typically you know there are times that some small portion of OPEX could have certain one offs like some write out that happen or at times some fluctuations that happen in Apex and all but more or less, you know our OPEX for a quarter remains in the region of 70 to 75 crore and we should be continuing with that.
Unidentified Participant
Okay, my last question was on our API business. So like if you see over the year like either our API business has been you know flattish or declining. I mean I know that we had an issue with our bigger customer. But going forward now with you know the upcoming launches and the work we are doing in our API division Going forward, do we see API division to grow further or do we think for the next 12 years it will still stay the same?
Keshav Bhutada
Yes, it will grow. Shubha, you will see a growth in FY26.
Unidentified Participant
And like, what would you base that on? Like, what would be the major drivers according to you?
Keshav Bhutada
Majorly, all our captive products for which we are making APIs. Right. Starting from Nilot nib to North Udca, that all will start adding in revenues. Apart from that, even UDCA for which we have brought CEP will add revenue. Transamic acid again, where additional capacity is added, that will add revenue. So we are positive that for the FY26 the revenue will grow against FY25.
Unidentified Participant
Okay, got it. Thank you.
Keshav Bhutada
Thank you.
operator
Thank you. The next question is from the line of Vishal from Systematics. Please go ahead.
Unidentified Participant
Thanks for the opportunity. On the generic API business, would you be able to put a growth number for FY26 emig teens or higher?
Keshav Bhutada
Pardon? Sorry, your voice was not clear.
Unidentified Participant
I said on the generic KPIs, can we put a growth number, can we grow say mid teens in the generic API business this year? FY26?
Keshav Bhutada
Yes, possible.
Unidentified Participant
Okay. And on Nilotineb, do we continue to be the sole player in the European market and what market share we would have achieved and any sense on whether we expect competition to be there?
Keshav Bhutada
Yeah, I think last call also I mentioned Vishal or on the Nilo Tiny. Yes, currently as on date we are the only person in the market market apart from Innovator. But in quarters to come, we can expect some players to come in the market. But as on date there is no player in the market and how much market share they have taken that we have still not got reconciliation for the quarter. So lot of supplies are done and the distribution and then getting those numbers back in iqa, it takes time. So I think as on date, we are not clear how much market share they have taken.
Unidentified Participant
So would the entry of competition be staggered or all of kind? We can expect like all of these, all of the generic players to come together.
Keshav Bhutada
See, I think we will not expect like generic, like other products where there is suddenly the 10% price has come. It will not be like that for sure. How many players will come? That only time can tell.
Unidentified Participant
And sir, do we have follow on products kind of to kind of substitute. Substitute for the dip? I’d seen Nilo Dinib revenues post entry of competition.
Keshav Bhutada
Yes, yes, Vishal, we have lot of such products which are very differentiated also. So yes, there is a continuous pipeline already in Place where?
Unidentified Participant
Which will add on revenues and on the transdermal pads. Any sense on when we can expect a launch in the us in the.
Keshav Bhutada
Europe market in Europe we should have launched sometime in Q4, FY26. Tentatively. That is the Q4 or it can be Q1, FY27. But let’s see. Q4, Q1.
Unidentified Participant
Okay. And just on this, on Biosimilar, actually Versep, should that approval come through this year and would we be the first ones?
Keshav Bhutada
No approval for this should come in Q1 FY27 because this year we will finish clinical and file the product competition wise. We may have one or two players with us, I feel, but not many. It’s a very complex product.
Unidentified Participant
Okay. Okay. And on. On our udca, would this product compete with Saroglitazar or it would compete with udca?
Keshav Bhutada
See, it will compete with both the products, both UDC and Seraglitazar, but nor udc. The way it works, the therapy wise, the molecule efficacy wise, it is very different than both Surroglitazar and udc.
Unidentified Participant
So you mean it would be even better than Thyroglitazar?
Keshav Bhutada
Yes.
Unidentified Participant
So. Okay, got it. Thank you. That’s all for myself.
Keshav Bhutada
Thank you.
operator
Thank you. The next question is from the line of Deepak Sharma, an individual investor. Please go ahead.
Unidentified Participant
Thanks for the opportunity. So my question is what is the average relation figure from the program basis.
Keshav Bhutada
For the albumin Albumin side?
Unidentified Participant
What is the average relation figure and the average cost from therapeutic and extreme?
Keshav Bhutada
Deepak, I think that is confidential so we will not be able to disclose currently. Okay. Okay.
Unidentified Participant
Thank you.
Keshav Bhutada
Thank you.
operator
Thank you. Ladies and gentlemen. Due to paucity of time, we will take that as our last question for today. I would now like to hand the conference over to the management for closing comments.
Monish Shah
Yeah, thanks. You know, thank you everybody. Thanks for your interest in continued, you know, updates from. We hope we have been able to satisfy your questions and we hope to continue to interact with you in future as well. Thanks a lot.
operator
Thank you on behalf of Shilpa Medicare Limited. That concludes this conference. Thank you all for joining us. You may now disconnect your lines. Sam.