Glenmark Pharmaceuticals Q1 FY27 earnings call

Glenmark Pharmaceuticals reported a robust Q1 FY27, with consolidated revenue growing 23.1% year-on-year to INR 40,185 million. This growth was broad-based, with India formulation sales increasing by 15.5% to INR 14,321 million, North America revenue surging 41.1% to INR 10,974 million, and Emerging Markets revenue up 27.7% to INR 7,304 million. The core North America business, excluding deferred income, also showed strong growth of 19.8%.

The company is actively transforming its portfolio, particularly in Europe, where branded products currently contribute around 30% of revenues, with a target to reach 60-odd percent over the next five years. Key launches like RYALTRIS continue to gain market share globally, with 40%+ Y-o-Y secondary sales growth, and WINLEVI is expanding its presence in European dermatology markets. These initiatives are central to sustaining double-digit growth in Europe from next year.

Glenmark is making significant investments in its oncology and respiratory franchises. In India, TEVIMBRA and BRUKINSA achieved over INR 100 crores in sales within their first 12 months. Upcoming launches like Aumolertinib (H2 FY27) and Trastuzumab Rezetecan (MA applications in Q2 FY27) are expected to position Glenmark among the leaders in India's oncology space within five years. The U.S. business is also being driven by respiratory launches, with 2-3 more expected in H2 FY27.

The company's innovative pipeline, particularly the IGI assets, continues to advance. ISB 2001 (ABBV 2001) shows promising safety and efficacy data from Phase I studies, and an IND submission for ISB 2301, a first-in-class multi-specific immune cell activator, is planned for later this year. Glenmark's R&D spend for Q1 FY27 was INR 289 crores, with a commitment to maintain 7-8% of overall revenue for R&D, including INR 70 million for IGI's clinical trials over the next 2-3 years.

Despite geopolitical situations leading to increased API and logistics costs, Glenmark managed to maintain its gross margin through an improved product and geographical mix. The company reiterated its full-year margin guidance of 21-22% and remains committed to a gross debt zero position. Working capital initiatives, including supply chain financing and factoring, are being utilized to optimize efficiency and free up cash for future growth, with a target of around 115 days net working capital.

While not a primary focus, the semaglutide product is helping to turn around the diabetes franchise in India, currently tracking at INR 20-25 crores in annualized sales and growing rapidly. In the U.S., the injectables portfolio, including the relaunched fulvestrant injection from the Monroe facility, is expected to start contributing more meaningfully from next year, complementing the current growth drivers from respiratory products.