Good evening, everyone. I'm Saurabh Paliwal from Biocon's Investor Relations team, and I would like to welcome you today to today's Earnings Call for the fourth quarter and full year fiscal 2024. I would like to indicate that all participants are in the listen-only mode, and there'll be an opportunity for you to ask questions after the opening remarks conclude. Should you need to re-ask questions, please select the Raise Hand option under the Reactions tab of your Zoom application. We will call out your name and unmute your line to enable you to ask the question. While asking, please begin with your name and your organization. Please note that the chat box is disabled, but you can raise any technical concerns by sending us an email to investorrelations@biocon.com. I would like to bring to your attention that this conference is being recorded.
The recording will be made available on our website within a day, and the transcript will be made available subsequently. As part of today's representation, we have Group CEO, Mr. Peter Bains, Mr. Siddharth Mittal, CEO and MD of Biocon Limited, Mr. Shreehas Tambe, CEO and MD of Biocon Biologics Limited, along with other senior management colleagues from across our business segments, to discuss this quarter's business performance and future outlook for the company. Before we begin, I would like to remind everyone regarding the Safe Harbor link to this Conference Call. Comments made during the call may be forward-looking in nature based on management's current beliefs and expectations. They must be viewed in relation to the risks that our business faces that could cause our future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements.
After the end of this call, if you need any further information or clarifications, do get in touch with us. With this, I would like to turn the call over to Mr. Peter Bains, our Group CEO, for his opening remarks. Over to you, Peter.
Thank you, Saurabh, and good evening, everyone, and thank you for participating in this review of Biocon Group's fiscal 2024 quarterly and full-year financial results. Before presenting the results in detail, I'd like to start with some opening remarks. Overall, 2024 has been a year of balanced progress in which each of Biocon's three core business verticals, Biocon Generics, Biocon Biologics, and Syngene, have delivered significant operational successes and made clear advances in preparation for future growth, while at the same time facing and addressing a range of operational challenges. Overall, the balance and momentum has been positive. Let me now expand a little on each of the verticals and start with our generics business.
On the generics front, we have seen encouraging growth in our formulations business expansion, driven by new product launches, strengthening of our U.S. business footprint, and further traction in our wider geographic expansion initiatives through both our direct-to-market and strategic partnerships model. Momentum in our formulations business balanced the challenges we faced in pricing pressures on our API business, which witnessed a contraction over the year, resulting in generics delivering a modest 1% year-on-year growth. We were very pleased with our recent landmark success in our peptide portfolio through securing approval for liraglutide, a GLP-1 receptor agonist prescribed for diabetes as well as obesity in the U.K. This was the first generic approval of a GLP in a major regulated market, represented another first for Biocon, and also represented a clear signal of our capability in development and manufacturing of complex GLP drug device products.
Turning now to our biosimilars business, where during this fiscal and in what has been a transformational year, we completed the full transition of the acquired biosimilar business globally. We maintained strong revenue growth momentum, delivering robust volume growth, evidenced by improvement in market shares of our products in all regions, especially in the United States, and we expanded our geographical reach, accessing new markets and patients, and crossed the $1 billion revenue threshold. All in all, this was a hugely eventful start to the new post-acquisition Biocon Biologics era. Along with our peers, we faced inertia in the formulation of the biosimilar adalimumab market in the United States, which we do not see materially opening until calendar year 2025.
During the year, we prepaid $250 million of acquisition-related balance sheet debt, and as stated in earlier calls, reducing debt will remain a management priority. Moving on to Syngene. Syngene delivered a 9% year-on-year revenue growth while absorbing a research services sector-wide funding slowdown in the fourth quarter. Syngene's rapidly evolving contract research, development, and manufacturing platform provided revenue diversification to offset what is already expected to be a transitory slowdown in research funding, with its development and manufacturing divisions, especially biomanufacturing, delivering a strong performance. All three of Biocon Group's major business segments are at exciting inflection points and are developing improved positions for growth opportunity in the near- term and beyond. I'll now move on to present the key financials. Turning now to the financial highlights, I'll start with quarter four.
Here, at group level, total revenue for the quarter was INR 3,966 crore, up 1% year-on-year. Revenue from operations at INR 3,917 crore came in slightly more strongly, up 4%. At the verticals level, biosimilars revenue from operations grew a robust 12% year-on-year, while research services and generics saw sequential growths of 2% and 7% respectively. I'll elaborate more on this, later in my remarks. Group core EBITDA for the quarter stood at INR 1,176 crore, representing a core operating margin of 30%. Quarterly R&D spend stood at INR 246 crore, corresponding to 8% of revenues, excluding Syngene.
EBITDA for the quarter stood at INR 964 crore with a margin of 24%, with profit before tax and exceptional items stood at INR 328 crore versus INR 500 crore last year. Net profit for the quarter, excluding exceptional items, stood at INR 144 crore versus INR 335 crore last quarter. Reported net profit for the quarter was INR 136 crore. Now, if I move on to the full year and start with those numbers, in fiscal 2024, total revenues at the group level came in at INR 15,621 crore, a growth of 35% year-on-year.
Total revenues included INR 530 crore of state dilution and fair valuation gain in Bicara, pursuant to their December fundraise, and an operating income of INR 350 crore from the divestment of the two non-core business units in India to Eris Lifesciences by Biocon Biologics in Q3. The biologics segment contributed the bulk of the full year growth, with operating revenues growing 58% to INR 8,824 crore. The research services segment grew by 9% to INR 3,489 crore, while generics came in with 1% growth at INR 2,799 crore. Group core EBITDA was up 10% to INR 4,195 crore, representing a core operating margin of 29%.
R&D investment for the full year were INR 1,154 crore, up 3% year-on-year, and representing 10% of revenues, excluding Syngene. EBITDA for the year was up 44% at INR 4,164 crore versus INR 2,888 crore in the same period last year, with an EBITDA margin of 27%. Adjusting for the step-up gain in Bicara and the Eris transaction, EBITDA would stand at INR 3,284 crore with an EBITDA margin of 22%. Profit before tax and exceptional items stood at INR 1,537 crore, up 29% year-on-year, with net profit for the year before exceptional items coming in at INR 1,030 crore versus 787 in fiscal 2023, up 31% year-on-year.
For the full year, exceptional items amounted to INR 8 crore net of tax and minority interests compared to INR 324 crore last fiscal. Consequently, reported net profit after exceptional items for fiscal 2024 is INR 1,022 crore versus INR 463 last fiscal. Let me now turn to the segmental business performance during the quarter, and let me start with the performance for generics. In Q4, the generics segment reported an operating revenue of INR 719 crore, a 3% decline year-over-year, but a sequential quarterly growth of 2%. Core EBITDA for the quarter was INR 155 crore, representing a margin of 21%. Profit before tax stood at INR 50 crore, and on a full year basis, generics recorded an operating revenue of INR 2,799 crore, up 1% year-on-year.
Core EBITDA was INR 627 crore, flat versus last year, with a margin of 22%. Profit before tax stood at INR 234 crore, with a profit before tax margin of 8%. Overall, the full-year generics performance came in below expectations due to pricing and demand challenges in the API business, as well as the impact of some regulatory delays. Notwithstanding this, we are very pleased with the tractions that we've seen in the formulations business, which grew 36% year-on-year, reflecting the investments we've made in building our formulations capabilities, capacities, and product range over the past few years. Statin and immunosuppressant formulations led the growth momentum, which was also seen across all major geographies.
During the fiscal formulation share of product sales increased to approximately 35% from 25% last year, and it is, it is expected to increase and overtake APIs as a share of our business mix in the coming years. It's also important to note that despite the challenges faced in our API business, we were able to maintain Core EBITDA margins at the same levels as last year due to cost control and saving initiatives. On the regulatory front, the approval for our generic liraglutide in the U.K. was a notable highlight, with Biocon becoming the first company globally to receive a generic GLP approval in a major regulated market. This approval is not only important as a step towards entry into the U.K. market itself, but also reinforces our technical and development capabilities in bringing complex GLP drug device products to the market.
This augurs well for Biocon's ability to access and capture future GLP opportunities that will be a major driver of growth momentum in the coming years, as we develop and look to bring to market our extensive pipeline of GLP products, products across global markets. Over the full year, we made filings for 38 drug products and 37 APIs, and received approvals for 24 products and 20 APIs across global markets. I'm also pleased to report that during the year, we had multiple facility inspections from international regulatory agencies across various sites, all with positive outcomes. On the manufacturing front in fiscal 2024, we continued our focus on enhancing our capacities and capabilities to support ongoing and future growth, particularly in formulations and peptides. To strengthen our foothold in the North American market, Biocon acquired an oral solid dosage U.S. manufacturing facility located in New Jersey.
The acquisition of this FDA-approved facility, our first in the United States, will strategically enhance and complement Biocon's existing manufacturing capabilities and is expected to begin commercial operations in fiscal 25, subject to regulatory clearance. In India, our immunosuppressant facility in Vizag received a certificate of suitability, or CEP, from the European regulator, EDQM. We expect the facility to be inspected and subsequently qualified for commercial supplies by other major regulators, during this fiscal. Our peptide facility in Bengaluru also successfully completed process validation activities, a very important step in preparation for future product launches. Enhancements to our synthetic capacities in Hyderabad, non-immuno fermentation capacities, as well as new sterile injectables, in our facility in Bengaluru, remain on track.
We are continuing to expand our product pipeline with a clear focus on formulations and peptides to cater for our mid and longer term business, opportunities and requirements. Coming to leadership updates in the generic business, I'm very pleased to announce the appointment of Vishal Nair as Head of Supply Chain Management, and Amit Kaptain as Head of Commercial for our global API business, as well as for generic formulations in select emerging markets. Overall, and despite the revenues coming in slightly below expectations due to the pricing pressures in the API business, fiscal 2024 has been a year of important progress for the generic segment, with strong momentum in the formulations business, strengthened footprint and capabilities in the United States, enhanced reach and partnerships across global markets, and a key first registration in our GLP market ambitions.
As we look ahead, formulations are expected to be the key growth driver for fiscal 25, and we would expect performance to build throughout the year with a stronger second half pull-through. Our GLP portfolio, including liraglutide, semaglutide, and tirzepatide, is expected to play a major role in the mid to longer term. We see GLPs as the major growth driver of the business from fiscal 26 onwards. Market data here indicate the market opportunity of GLPs to reach nearly $100 million by the end of this decade, and we have a comprehensive pipeline to address and compete in this major strategic market opportunity. Turning now to the biosimilars segment, let me start by providing an update on quarter 4's business performance.
With the full transition of the acquired Viatris business successfully completed in December 2023, fully one year ahead of schedule, this was the first quarter where Biocon Biologics directly managed the fully integrated business across all geographies globally. We have been able to achieve this while ensuring a seamless experience for our patients, our customers, and our partners, and at the same time, maintaining significant in-market growth momentum. A clear highlight for the quarter has been the performance in the United States, where only two quarters post-transition, we can report strong demand and enhanced market share performance across all our commercial products. Fulphila, our biosimilar pegfilgrastim, increased its market share to 21% from 14% in March 2023, and was the only product in the category increasing market share.
Ogivri, our biosimilar trastuzumab, increased share to 18% from 10% last March and is seeing increased pull-through at the physician level. We have also secured four new commercial formulary agreements, including UnitedHealthcare's Commercial Medical Benefit drug policy, effective first of May this year as a UnitedHealthcare preferred oncology product. Our Semglee and insulin glargine franchise has increased its share to 15% and is the fastest growing brand in the segment. As you are aware, IQVIA reported share does not include closed-door networks, which would add an estimated 3% additional market share. Overall, the continued momentum of market share performance of our biologics products in the United States since transition has been very encouraging and positions us well as the market dynamics continue to evolve in the U.S. private and government sectors. I'd now like to comment briefly on our biosimilar adalimumab franchise.
Adalimumab has been a significant success for our biologics business in our portfolio, and our franchise in Europe has been very successful and continues to be a key value and growth driver for us. We've earned market shares of 20% in Belgium, 18% in Germany, and 11% in France, which reflects the strong confidence patients and prescribers have in our products since we launched in 2018. In the U.S., as you will all know, the biosimilar adalimumab market formation has emerged significantly slower than anyone had anticipated. As previously advised, we think that while the market will begin to open in calendar 2024, it will not really develop fully until calendar 2025's formulary start, excluding the originator and biosimilars secure exclusive or preferred coverage.
Biocon Biologics intends to leverage its relationships with U.S. customers and PBMs to pursue opportunities across all channels, but expects that this will take some time to fully fructify and translate into sales. Turning now to Europe, we're pleased to report that our market shares have remained robust and stable across all major markets in the first quarter after completing full transition in December. Fulphila held 8% share, Ogivri 10% share, and Abevmy, our biosimilar bevacizumab, remained at 6% at the end of December 2023. We are also seeing significant success in capturing new market opportunities and expanding reach into the top five European countries. On the emerging markets front, Biocon Biologics posted its highest ever quarter revenue, led by strong growth across its major regions in LATAM, Latin America, Africa, the Middle East and Turkey, and the Asia Pacific regions.
Revenues were driven by the consolidation of the self-led and the partner-led business models and supported by seven product launches during the quarter. We have seen strong demand for our recently launched biosimilar bevacizumab in Brazil, and we've expanded patient reach in Mexico with additional insulin supplies to our partner there to address the unmet needs of insulin-dependent patients grappling with market shortages of insulins. Turning now to the Eris transaction. As we've previously announced, Biocon Biologics entered a long-term commercial collaboration with Eris Lifesciences to expand access to our portfolio of metabolics, oncology, and critical care products in India. This was for a total transaction value of INR 1,242 crore, representing a value accretive multiple of 3.4x revenues and 18x EBITDA.
This strategic collaboration with Eris aligns with Biocon Biologics' commercial strategy to maximize patient reach and market potential while unlocking value from its branded formulations business in India, built up over the past two decades. We've also signed a ten-year supply agreement with Eris for these products as part of the collaboration. Turning now to the full year financial update for biosimilars. Revenue from operations was INR 2,358 crore, up 12% year-on-year. Excluding the one-time INR 354 crore income from the divestment of the two non-core business units in India to Eris Eris in Q3, this would have translated into sequential growth of 10%. Core EBITDA was INR 698 crore with a margin of 30%. EBITDA margins for the quarter were 24%, with R&D investments at 7% of revenues.
On a full year basis, Biocon Biologics crossed the U.S. dollar $1 billion revenue mark, with revenue from operations at INR 8,824 crore, representing a 58% year-on-year growth... driven by the step-up from the acquisition, along with robust underlying growth in the core businesses. The business delivered INR 2,190 crore in EBITDA, representing a healthy margin of 25%. We also continued to invest in our pipeline to support future growth with an R&D spend at 10% of revenues. You would also have noticed a reduction in operating expenses versus Q3 in fiscal 2024, reflecting the decrease in costs linked to the integration and one-time related costs. Reducing our acquisition debt remains a key priority, and as I mentioned, we were able to allocate $250 million to this end over the full year.
Turning now to regulatory updates on the biosimilars front. We're very pleased to share that the U.S. FDA has accepted our biologics license application for biosimilar ustekinumab for review under the 351(k) pathway. We've signed a settlement and license agreement with Janssen Biotech and Johnson & Johnson, that clears the way to commercialize the product, in the U.S., subject to regulatory approval, no later than February 22, 2025. This now positions us to be amongst the first wave of entrants into the U.S. market. Biocon Biologics has also signed a settlement agreement with Bayer and Regeneron, that paves the way for the introduction of Yesafili, our biosimilar aflibercept, into the Canadian market, no later than July 2025. The product has already been approved by Health Canada.
Also, on the regulatory front, the FDA was unable to undertake an inspection of our Bengaluru facility that manufactures our biosimilar bevacizumab within the initially proposed go date timeline, and therefore issued a supplementary CRL. The CRL did not identify any outstanding scientific issues, and we have submitted all required documentation to the agency. Turning to our Malaysia site, here we have completed the implementation of all the corrective and preventative actions, the CAPAs, as per the committed timelines and have provided the U.S. FDA with a comprehensive update. As a next step, we are now anticipating the agency to visit and to inspect both the Bengaluru and Malaysia sites, which, subject to outcome, would pave the way for approval of our biosimilar aspart from our Malaysia site and our biosimilar bevacizumab from our Indian site.
It is important to note that the same facilities are already cGMP certified by leading global regulators, including the EMA and Health Canada. With regard to biosimilars leadership updates, delighted to announce the appointment of Dwight Hanshew as its new Chief Quality Officer this quarter. Dwight brings with him over 30 years of global leadership experience and expertise across operations, quality, and R&D. And most recently, he was the Head of Quality for Cipla in the United States. In summary, fiscal 2024 has been a truly transformative year for Biocon Biologics, with the company emerging as a unique, fully integrated, and leading global biosimilars player.
The business delivered strong in-market performance, crossing the $1 billion revenue threshold, grew share in all its products in the key U.S. markets, had its highest ever quarterly sales in emerging markets, while simultaneously maintaining business continuity and integrating a highly complex, geographically diverse business across 120 countries, 1 year ahead of schedule. Looking ahead, we will consolidate and strengthen our focus on leveraging the advantages of our fully integrated model to accelerate growth for existing products and continue to expand our geographical footprint. Preparing for new product launches will also be a major focus. A flow of new product launches is now on the horizon, and these new launches will be key catalysts in the near to medium term to drive both sustainable growth and margins.
Behind this, we will continue to invest in advancing and building a highly competitive, global pipeline, and expect R&D investments to be in the 8%-9% of revenues range. Let me now give a brief update on our novel molecules. These are novel assets targeting autoimmune disease and cancer. Let me start with itolizumab, a first-in-class novel anti-CD6 monoclonal antibody licensed to Equillium for certain markets. Itolizumab is being developed by Equillium for acute graft versus host disease and for systemic lupus erythematosus and lupus nephritis. During the fiscal, Equillium presented positive data from phase Ib EQUALIZE study of itolizumab in patients with lupus nephritis at the annual meetings of the American Society of Nephrology and the American College of Rheumatology.
In April, it also announced positive top-line data from a phase I EQUALIZE study in patients with lupus nephritis, where the study demonstrated clinically meaningful response in highly proteinuria patients, with more than 80% of subjects achieving over a 50% reduction in urine protein, creatinine ratio. Itolizumab also demonstrated a favorable safety and tolerability profile. Equillium has entered into an option and asset purchase agreement with Japan's Ono Pharmaceutical, granting them an exclusive option to acquire Equillium's rights for Japan. Their option is expected in the second half of calendar 2024. Boston-based Bicara Therapeutics is developing BCA-101, a first-in-class EGFR TGF-beta trap bifunctional antibody. During the fiscal, Bicara presented positive interim data from its ongoing open label phase I and Ib dose expansion study of BCA-101 at the European Society for Medical Oncology, evoking strong investor and investigator interest.
In 2023, Bicara closed a Series C funding of $165 million, and post this fundraise, Biocon's shareholding in Bicara has now diluted to 14%, and the company is no longer considered an associate company of the Biocon Group. Let me now turn to Syngene, our research services segment. Syngene's fourth quarter revenue from operations was INR 917 crore, a growth of 7% on a sequential basis, degrowing 8% year-over-year. For the full year, revenue was up 9% over fiscal 2023 to INR 3,489 crore. Revenue performance during Q4 and the full year was impacted by lower demand for research services, stemming from a reduced capital funding environment in the United States.
On a full year basis, Syngene delivered 9% year-on-year growth, with reported EBITDA growing 10% to INR 1,105 crores, with stable EBITDA margins at 31%. Profit before tax was INR 632 crores and up 6% year-on-year. This performance was underpinned by Syngene's diverse business platform, with its development and manufacturing services, especially in biomanufacturing, delivering strong growth throughout the year and more than compensating for the slowdown in research revenues. During the year, Syngene successfully concluded the acquisition of the strategic biologics manufacturing facility from Stelis Biopharma, which will add 20,000 liters of manufacturing capacity, trebling Syngene's biomanufacturing capacity and providing the basis for future growth opportunity. The completion of the facility, its modifications and qualification remain on track and are expected in the second half of fiscal 2025.
Syngene also acquired 17 acres of land in Genome Valley in Hyderabad to support long-term growth in the research services division. The recent step-up now seen in new funding in the U.S. biotech is encouraging and is expected to drive a recovery in demand for research services and development services in the coming quarters. Syngene's guidance for fiscal 2025 includes revenue growth at single digit to low double digits on a constant currency basis, operating EBITDA margin to be similar to fiscal 2024 levels, and net profit growth in single digits.
So in my concluding remarks, and as I said, for Biocon as a group, fiscal 2024 has been a year characterized by both significant operational successes and clear progress in preparation for future growth opportunities across our businesses, while at the same time, facing and addressing a range of operational and market challenges, which I've described in my commentary. On balance, we've made good progress. Two very important elements of fiscal 2024 have been the traction seen in our base businesses and the progress made on investments to underpin near-term growth. For generics, these include the manufacturing capacity investments, primarily for formulations and peptides in Vizag, in Bengaluru, and in our Hyderabad sites, as well as the acquisition of the oral solid dose facility in the United States.
In biosimilars, we've made investments towards capacity enhancements of our Malaysia insulin facility to ensure we can meet the increasing demand we are seeing right across the global markets. We are also realizing the benefit of past investments to meet increased demand for our monoclonal antibody portfolio. And in Syngene, we've had the acquisition of the Stelis biologics facilities, which adds the substantial biologics drug substance capacity and a commercial scale, high-speed fill finish unit. Syngene also acquired the Genome Valley land in Hyderabad, as I mentioned, to support the longer-term growth in our discovery research services. These investments on top of the existing base businesses, and opportunities and our new product flow, put the businesses in a good position to capitalize and deliver on the market opportunities ahead...
So looking to fiscal 2025, we expect it to be a year of both consolidation and of transitional and accelerating growth. Consolidation will build off the recent business model expansions and capacity and capability evolutions we've invested in behind our businesses. Transitional accelerating growth will come from revenue, building off these enhanced models that will start modestly and pick up in the second half of the year, driven by growth from existing products and existing markets, supported by accelerating growth from existing products in new markets and, of course, from new growth from new product introductions into new markets. In generics, while we expect continued pressure on the API business, given the current business environment, we also expect growth driven by formulations, especially new formulation launches in the second half of the fiscal.
Transition and acceleration in the generics business will come from the new flow of GLP opportunities, with the impact becoming visible in fiscal 2026. In biosimilars, our base business is expected to deliver robust volume growth through its strengthened vertical model and expanded global footprint. Favorable FDA inspections of our biologics facilities in Malaysia and Bengaluru would be key transition events, subject, of course, to agency review and decision. With any favorable outcomes would likely have limited impact in fiscal 2025, with more material impact in 2026.
For Syngene, the long-term demand drivers for the sector are positive, and with the expected recovery in U.S. biotech funding, Syngene is very well positioned to capitalize on demand recovery across research, but also from the tailwinds in the biomanufacturing, division and the fallout from the U.S. Biosecurity Act, which will gradually accelerate the China Plus One, opportunity. Overall, Biocon Group companies have strengthened business models with greater global reach and scale and are increasingly well positioned to take advantage of significant and emerging market growth opportunities. With this, I would now like to open the floor, to questions.
Thank you, Peter. I'll request people to use the Zoom application icon to raise their hands. We will wait a while for the queue to assemble. We will take the first question from Damayanti Kerai from HSBC. Please go ahead.
Hi, thank you for the opportunity. My first question is on your commercial biosimilars in the U.S. Good pickup seen in all the three products, Ogivri, Fulphila, and Semglee. It appears that upcoming launches will most likely make a meaningful impact a year later from now, whether it's bevacizumab or aspart or other biosimilars. Just want to understand, in the commercial biosimilars, what kind of further headroom you see for growth and how should we see this biosimilar growth trajectory from $1 billion mark?
Thank you, Damayanti, for the question. I'll start with my response, but perhaps Shreehas and Matt can add into this. I think, first of all, you know, we're very pleased with the momentum we're seeing. Only two quarters out from taking the business over in the United States, we're seeing some very robust market share increases. These are, of course, driven, you know, by volume demand for our products, and they are coming along, you know, with some pressures on pricing. But, you know, we see sustained demand in volume for our products, I think both in the private and the government sectors, and I think we see that coming across our full range of products in market today.
I would also comment that I think you're right, Damayanti, that I think the new product launches, while they could have some impact in this fiscal, you know, the major impact would be seen in fiscal 2026. Shreehas, maybe you want to build upon that, and Matt, probably with some details on the end market demand profile in the United States in particular. Shreehas, are you on mute?
I'm happy, Peter, if you can hear me, I'm happy to chime in.
Matt, Matt, Matt, Matt, perhaps you can pick up on that.
Yeah, sure. Absolutely. Thank you for that, and thank you for the question. Look, what we're seeing is really the ability to understand in the U.S., the Part D side and Part B in our portfolio, and we're building upon this through this relentless focus we have, not only with our sales team, but building those relationships with market access. So we're building on the foundation and setting ourselves up for a nice portfolio in oncology, diabetes, and even immunology as we prepare to launch new products as we go into latter half of FY 25, and then continue to set us for success in FY 26. Maybe we have Shreehas now, but those are my thoughts there, Peter. Thank you.
Thank you, Matt. Shreehas, did you want to add anything? I think Shreehas may be struggling with the technology. So-
Okay.
Damayanti, does that answer your question?
Yeah, yeah, it does. Thanks for it. My second question is on your progress in efforts to gain market access and payer coverage for adalimumab. So you basically commented, the market will notably start opening up in calendar year 2025, or maybe a bit later. So meanwhile, maybe you can just update us on your effort on the payer coverage side.
Sure. And let me start again. I mean, I'll repeat that, you know, adalimumab for Biocon Biologics has been, you know, a real success story, as you can see from our positions in Europe. You know, we're going to look to build on that experience in the United States. And as I said in my commentary, we don't really see the market opening up in calendar 2024, but, you know, we'll see it begin to open up more materially in 2025 as formularies take the originator off their lists. And we will be working, you know, to establish our foothold as that opens up and then build from there toward a stronger position through calendar 2025.
Matt, again, maybe you can comment a little bit more on the channel details and the model on that and our strengths that we're putting to work.
Yeah. Thank you, Peter. We're seeing still the foothold of Humira that's still on most of the formularies. As Peter stated in the opening remarks and just stated, too, this will start opening up in 2025. What we've been able to do is secure some positions within our market access team in regards to having not only Humira, but having the biosimilars on there. So as the payers start to transition Humira off, we will start using our sales force to start pulling our products through to increase that market share. The other thing I will say is that we have tremendous relationships. As you know, we've been working market access since we launched our products in 2018. So the payers are very familiar with Biocon.
We are aggressively pursuing these opportunities, and we do see some opportunities lifting, and we'll be in position in Q1 2025 to be able to take those advantages in which the payers decide.
Thank you. I'll get back in the queue.
Thank you.
Thank you, Damayanti. We'll take the next question from Jainil Shah from JM Financial.
Hello. Yeah, hi. Am I audible?
Yes, you are, Jainil.
Yeah. Hi, thank you for the opportunity. My first question is on denosumab. So, you know, you know, Sandoz has settled with the innovator, and, you know, do you believe that we will be in the first wave of launches? Because we'll be filing by the end of this year. So what are your thoughts on that?
Yes, as I said in my opening remarks, you know, we think we will. You know, and we're delighted to have secured that opportunity and, you know, are working, as you'd imagine, toward that very aggressively. And again, this is an opportunity where we can put some of our existing, you know, capabilities and strengths to work in that market. And again, perhaps, Matt, you'd like to pick up on that and maybe on the regulatory status as well.
I think we have Shreehas available. I see him. Shreehas, are you able to?
I think Shreehas has a technical problem getting sound off.
Yeah, we can't hear you, Shreehas.
Um-
Matt, this is Sandeep. If I can-
Yes, Sandeep, that would be helpful. Thank you, Sandeep. Yes.
Yes. So certainly, I mean, I can confirm that, we are in a good position to make the filings in the next few months, and we'll be the first cohort that can launch in the U.S. and Europe as well.
Sure, sure. Any timelines for approval for both denosumab, Stelara, and any risks that you see to those timelines?
I think our package looks good. The data is looking fine. I think I'm very optimistic in terms of going through the approval. It takes regular, regular cycle is about 12 months for the FDA and about 15 months with the clock stop for EMA. So that will be standard as expected for all the molecules.
Sure. Just one on the CapEx that we are planning for the next 2-3 years.
Let me, let me take that. I think that what you will see is that CapEx will taper down, calibrate down from recent levels, but we will be maintaining the necessary investments to support the capacities that we're building to you know, underpin both the existing near-term growth opportunities and the midterm opportunities that we are moving toward. You'll see us, you know, some calibration down, but we are not going to, going to stop investing behind the very substantial near-term, mid, and longer term opportunities that we've been building towards over the last few years.
Sure. Just one more, if I may. You know, in the generics business, you know, what's our growth guidance, and how many launches do we expect next year? You know, we have alluded to H2 being stronger, but if you can give us some
... you know, guidance on how many launches are there? How do we expect Vizag to start contributing? So your thoughts.
Sure. I'll ask Sid to provide more detail, but, you know, again, I'll comment that, you know, what we are looking at is, you know, transitional acceleration, and we see that picking up in the second half of this fiscal, built on the new product launches, especially in formulations, you know, that we've invested in over the last years. And we've—as I said in my commentary, we've made a large number of regulatory submissions. We've had good success and approvals, and we expect to see that momentum continue, and that will underpin the growth that we'll be looking for in the generic business over fiscal 25. Sid, do you want to add anything more to that?
I think the only optics, which I would like to give is, of course, this is a combination of products that we have filed in the U.S., which includes a few injectables and few OSDs, which are either approved by the FDA and waiting for launch, or they are under final review with the FDA, and we will launch during the course of the year. Plus, as we mentioned earlier, that liraglutide in U.K. will be launched by our partner, Zentiva, and by us, by end of this calendar year. And our file is also in advanced stages of review with European authorities, and once we receive those approvals, that product will be launched as well in the second half of this fiscal year.
So combination of the launch of liraglutide in U.K. and Europe, plus a few products in the U.S., will drive that growth. I cannot give you exact number of products, but needless to say, our portfolio continues to be limited in terms of total number. But of course, these are differentiated, high-value products that we are working on.
Sure.
Thanks, just checking, Peter, if you can hear me, Sid?
Yes, we can.
Yes, we can hear.
Thank you.
Again, thank you. Apologies for this glitch.
Sure.
Janil?
Yeah. Thank you. Thank you. That's it.
Okay. Thank you.
Thank you, Janil. We'll take the next question from Surya Patra from Phillip Capital.
Yeah, thank you. Thanks for this opportunity, sir. My first question is on the biosimilars business. So having seen strong volume growth in the recent quarters for the already marketed products, the revenue growth in the biosimilars looks either muted or declining for FY 2024 versus last year. So given that and the kind of price competition, although there is kind of volume ramp-up that is visible, so... And also likely a ramp-up in the key products in FY 2026, so what growth one should really think for the biosimilars portfolio in FY 2025?
So, Surya, I'll again begin, but Shreehas, maybe now you're online, which is good. We can, we can get your view.
Yeah.
Surya, I think that, you know, that there's strong momentum in the end market products in the biosimilars business. I mean, as I've said in my opening remarks, you know, this includes market share gains, and not insubstantial market share gains, across all our products in the United States. You know, robust market share performance in the quarter that we transitioned the business in the United States, leading market shares in many instances in Europe, and the highest ever quarter that we've seen in the emerging markets business. So I think there's very positive growth momentum in the biosimilars business, you know, and I, you know, we would expect that growth momentum to continue during fiscal 2024.
You know, Matt's given some comments on some elements of that, but, you know, we've seen extremely robust demand for our products, and that's reflected in very high volume pickup in the last two quarters of the prior fiscal, and we expect that momentum to push through into this fiscal. So I don't quite see the market starting point as you describe, but I think we're building off a very encouraging momentum and look to see that push on through. Shreehas, perhaps you can put a little bit more color on that.
Pretty comprehensive, Peter. I'd just say, Surya, that if you look at the products that we've got in the market in the United States, which is a very large market, each of those products now command a fifth of the market share, a fourth to a fifth. And I think that is something which will clearly demonstrate that we've got a sizable piece of the opportunity there. In Europe, you're seeing us move from the two-country approach that we had in the past to the other countries, the other large countries in Europe and emerging markets. Peter just talked about the strong response we are seeing from key emerging markets.
The current immediate focus is with the products that are commercial, but if you want to look at how things are shaping up in the near-term future, that will be on the back of new product launches. We talked about two in the opening remarks, and we also have the risk-free launches that we're looking at from new products into major geographies. So I would think it's a very strong, you know, expectation in terms of how we are moving things forward. We have good momentum, and we expect to drive this in the years to come.
Sure, sir. Second question is on the, let's say, about Humira, to be specific, and the pipeline products, including the ustekinumab. So, see, in fact, we have seen Humira has seen some kind of a revenue decline in the recent quarters, but that has not translated to any kind of improvement in, for biosimilars. So is that mean Humira is losing out business to some competing products? And if that is the case, whether biosimilar opportunity is likely to be, believed to be shrinking for adalimumab?
Shreehas, do you want to pick up on that? I think we've covered some of it, but,
Yeah. No, thanks, Peter. I think, Surya, that's a very fair question. Just to, just to index this properly, adalimumab in the U.S. was the first product that, that in that sense, saw biosimilars coming up in the, in what the U.S. market calls as the pharmacy benefit space or the Part D space. And, that operates very differently than the previously launched products that we've seen in the oncology space. So to understand that space a little bit different than, than how the oncology products, which are more buy-and-bill, operate. So this was, I think, in many ways, for all the players, including the payers and the PBMs, to, to understand how this opportunity unravels itself. And I think what we've seen is that everyone's tried to understand how a $20 billion asset eventually plays out.
Like Peter mentioned in his opening comments, we'd always said that 2023 is when it may open up, but it will only begin in 2024, and some meaningful progress on the biosimilars will only happen in 2025. I think we've probably seen that starting to happen in 2024, where you're seeing one or two biosimilars players starting to get some market share through some innovative models that the PBMs have come up with.
Mm-hmm.
And, 2023 essentially was where the innovator continued to hold more than 98% of the market. Now, this was something that was a first experience for everyone in the pharmacy benefit space for such a large asset. Stelara will, of course, play out following this. There will be some learnings of this, including things like product attributes, including interchangeability, including ability to negotiate. All of this will help the industry, the biosimilars players, as well as the PBMs, to help shape this as we go forward, Surya.
Okay, sir. Just last clarification from my side, sir, in fact, about the marketing arrangement, what we had with the Viatris at the time of acquisition of the biosimilar business in U.S. Whether when we are saying that we have now integrated ourselves, so whether that marketing arrangement is effective for FY 25, that is there or not? And secondly, about R&D spend, fourth quarter have seen some kind of moderation to the around 8% of the revenues, excluding, of course, Syngene. So whether it is the kind of fair run rate that one should build for next year?
Let me start with that. So, maybe I'll start with the second question first on R&D. As I said in my remarks, Surya, I think you'll see a calibration down from previous levels, as you've identified, you know, in Q4, a calibration down from previous levels. But this is in part due to the cyclical nature of where assets sit in our R&D, and particularly the development pipeline. You know, it is not a constant spend. It does modulate as you move assets from early stage and into later stage development, which is more expensive. So there's a natural curve there. But the other comment I want to make is we are going to continue to invest behind building a very globally competitive pipeline of assets.
That has been something that Biocon Biologics committed to many years ago, and it's a theme that we're going to persist with. We're very confident about, you know, our ability to build a very competitive global pipeline that will serve, you know, our growth aspirations in the mid and the longer- term. As I said also, we know, we now have, you know, a very exciting and visible flow of new products on the near-term horizon. I'm sorry, Surya, your first question was?
Marketing arrangement, what we have-
Oh, marketing arrangement. Yes. No, I think there, but I'm going to ask Shreehas to comment as well. The marketing arrangements with Viatris have now all successfully completed, and the handover is complete. We have no lasting marketing arrangements left. In terms of marketing and commercial capability, obviously, within that transaction with Viatris, we've got some great people that have come over and joined Biocon Biologics. And their expertise, their capabilities are helping underpin, you know, the very exciting growth momentum that we're seeing in these early quarters as we complete the full transaction. But just to be clear, Surya, on this one, there are no marketing arrangements left here.
There may be some very small peripheral support activities related more to administration, but there are no marketing, legacy contractual remains here. This is now fully the Biocon Biologics team driving this momentum.
Okay, sure. So will this lead to a kind of some absolute increase in the either employee cost or, or, any other cost element for us?
I mean, the short answer to that is, is yes, because in the previous collaboration model with Viatris, they had those costs, but of course, they took a lot of the profit as well. So now we have those costs, and, you know, you will have seen that reflected in some of last year's numbers. So we're now carrying the cost of that commercial marketing team and activity, but we're capturing now the full value of those efforts, and it's, as I said, very encouraging to see, you know, the market share gains and the momentum building, and we're capturing all of the value now in this fully vertically integrated model.
Sure.
Shreehas, do you want to add anything to that?
No, no, Peter, I think you covered it well. Perfect.
Yeah, sure.
Okay.
Yeah, sure.
Thank you, Surya.
Thank you. Thanks a lot. Wish you all the best, sir.
Thank you, Surya. We'll take the next question from Neha Manpuria from Bank of America.
Yeah, thanks for taking my question. You know, just to follow up on the Humira, you know, the biosimilar Humira that we talked about. You know, the two private label launches that we've seen by the biosimilar companies seem to be gaining, you know, good traction. At least that's what the initial data seems to show. You know, so as we talk about the market opening up in 2025, does that put our ability to then get in and get meaningful share at risk, you know, with these existing players probably scaling up over the next few, you know, months?
Neha, I think it's a very interesting question. It is one that the team, you know, have been looking at for some time, and I think they're advancing our own thinking on that, you know, not simply for Humira, but beyond. I'm gonna ask Matt here to comment a little bit more on that and, perhaps develop a little bit our thinking there.
Sure. I'll let Shreehas please chime in as well. So you're correct. We're seeing the private label starting to migrate, and the reason is that recently CVS announced that they were transitioning from Humira.
Mm.
And remember, as we look at this, we look at a commercial piece, we look at Medicare, Medicaid, there's multiple channels, and also there's 2 other large commercial entities that's available to play in which we are bidding now for 1-1 start dates. So just as we're seeing these private labels migrate, that does not leave all the market out for Biocon. The market is open in the commercial, in the Medicare, in the Medicaid business. So we are actively and set up in pursuing those opportunities, and we're also keeping a close eye and understanding how the private label and how that's switching, and the progress there. But we still believe we have an opportunity in which we're currently bidding on for more growth in FY 25, starting in 1-1, 1-1 2025. But anything, Shreehas, you would like to add?
That was perfect, Matt. I think this is good. Thank you.
Thank you.
Thanks. That's very helpful. My second question is, Peter, you mentioned in your opening remarks that, you know, debt reduction remains a priority for the company. You know, given that a lot of the launches are going to be back-ended, with bulk of the benefit in FY 26, how should we think about net debt reduction for, you know, BBL and Biocon, in the next year? I mean, what avenues are we looking at to reduce debt?
Right.
or if you could give any number, that would be great.
Right. So, Neha, let me start by saying that, you know, we are while debt reduction, as I said in my opening remarks, is a priority, we're comfortable with our ability to service all our obligations. We will be looking to reduce debt, and as you've seen in the last fiscal, we allocated $250 million to acquisition-related debt reduction. You know, we have a pretty extensive range of options, and we are going to explore all of them, and we'll look to make the right decision at the right time on that. But, you know, we have bank opportunities, we have equity opportunities, we have hybrid opportunities.
There are, you know, a pretty extensive range of levers that we can look at, and we are exploring, and we will make debt reductions during the course of this year. But we'll do them, you know, I think, at the right time, and I can't give any specific quantitative guidance on that. But, you know, for sure, you'll be updated as and when, you know, we become active there.
Got it. Thank you so much.
... Thank you, Neha. We'll take the next question from Ankush Mahajan from Axis Securities.
Thank you, sir. So my question is, what's outlook for the debt on, sir?
Was that question the outlook on debt?
Yes, sir. Outlook on debt.
Okay, Ankush, as I've said, I think the starting point here is to understand that we're comfortable in servicing the debt that we have. But we're also, as a priority, going to be looking to reduce the debt levels. And, and we have, you know, a wide range of options to explore. As I've said, we can look at bank options on debt, we can look at equity options, we can look at hybrid options. There are other levers. We are exploring that. We will be looking to reduce debt this year, but I can't give details of when and how much. You know, we'll be looking to make the those decisions as appropriate during the year, and of course, we'll be updating you as and when we do.
Thank you, sir.
Thank you. We take next question from Nitin Agarwal from DAM Capital.
Hi. Two questions, on the investment. Now, what are you thinking about the approvals for the U.S market, which GLP-1?
I'm sorry, I didn't hear that question.
Where are we on the approval for GLP-1 in the U.S. market, is Nitin’s question, sir?
Okay. Sid, why don't you take that?
Yeah. So the file is under review with the FDA, and we are quite positive that we should hear back from the FDA. Of course, this requires a facility inspection as well, because this product was filed from Biocon Biologics' injectable facility. And as Peter alluded to in his opening comment, that we are expecting FDA to inspect the facility in the coming months. And hopefully, you know, when they come to review the facility, inspect the facilities, you know, they will look at it for liraglutide as well. So, you know, it's we expect. I think Peter also alluded to the fact that we expect liraglutide to meaningfully start contributing to the growth from FY 2026.
You know, even if the approval comes through later part of this year, we will see a meaningful difference coming in from both in Europe and U.S. in FY 2026.
Thanks. Secondly, if you can provide some clarity or some color on how is the immunosuppressant new facility scaling up? What kind of capacity utilization do we have, and how do we see that part progressing?
So the capacities, you know, the existing capacities, of course, we have done a lot of process optimization to enhance the capacity while we qualify Vizag. And again, as you know, that we have got the CEP from the European authorities, so we can already start commercializing part of those quantity capacities in Europe. But of course, for us, the bigger market is U.S. and Latin America, and we are expecting FDA to come and inspect the facility, after which we will be able to address the demand. Of course, when you look at our current facility and Vizag, we'll have a huge opportunity to capture a much larger market share for immunosuppressants at a global level.
And so with your capacity of the increased scale coming through, do you foresee a situation of increased pricing competition in this space? I mean, is the demand there to absorb such a large capacity that you're going to bring on board?
Well, the demand is growing because the volume share is going up. Now, of course, there is competitive pressure. There are, whether it's, from rest of the world or India, and in some cases, other companies who has their own immunosuppressant fermentation capacities. So, we are also working with a lot of 505(b)(2)s. As you know, that, we have a very large customer, which is based out of U.S. They have their own 505(b)(2). So and overall, when we look at the world, the immunosuppressants market, it's expected to grow. So we of course have to, participate in the market, going up and, compete with others on the market share, and winning additional business. I think last quarter, we also got a very important approval in China for mycophenolate sodium.
We also have other immunosuppressants, which are under review with the Chinese authorities. China, as you know, is also a large volume market. So we would look at geographical expansion, we would look at increasing our wallet share in our core markets like U.S. and Latin America. Overall, the market is growing as number of transplants grow.
Thank you so much. Best of luck.
Thank you.
Thank you very much for your questions. That was the last question of the day, given the timelines we are at. For the questions that remain unanswered, I'll request the partners to please send us an email, and we'll be happy to, you know, take them offline. With this, we'll conclude today's presentation. I thank everyone for joining us today, and have a great rest of the evening. Good night.