Good morning, everyone. Thank you for joining us on this call to discuss Biocon's First Quarter Results for FY 2026. I am Saurabh Paliwal from Biocon's investor relations team. Before we get started, let me introduce the management on this call. We have today Biocon's Chairperson, Dr. Kiran Mazumdar-Shaw, Mr. Siddharth Mittal, CEO and Managing Director, Biocon Limited, and Mr. Shreehas Tambe, CEO and Managing Director, Biocon Biologics, along with other senior management colleagues across our business segments. A few housekeeping points. We will start the call with the opening remarks by Kiran, which will be followed by an interactive Q&A session. All external participant lines are muted and are in the listen-only mode. There will be an opportunity for you to ask questions after the opening remarks conclude. If you need to ask a question, 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. Please note that this webinar is being recorded. The recording will be made available on our website within a day, and the call transcript will be made available subsequently. Before we begin, I want to remind everyone about the safe harbor related to today's call. Comments made during the call may be forward-looking in nature and 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. With this, I would like to turn the call over to Kiran for her opening remarks. Over to you, Kiran.
Thank you, Saurabh. Good morning, everyone. I'm pleased to present an overview of the Biocon Group's performance for the first quarter of FY 2026. Before we get into the segmental and financial details, let me highlight some of the key developments during the quarter. Let me start with equity fundraising. As a part of our strategy to strengthen the group's financial position and reduce our exposure to structured equity investments, we successfully completed a Qualified Institutions Placement, or QIP, of INR 4,500 crore, which is our first equity raise since Biocon's IPO in 2004. The offering was oversubscribed and received strong interest from a diverse and a mix of global and domestic institutional investors, reflecting confidence in our long-term strategy and value creation potential.
The funds raised will enable us to increase our stake in Biocon Biologics by facilitating the exit of structured equity investors, which reinforces our strategic focus on the huge biosimilars opportunity event. Product launches and approvals, we achieved several significant milestones this quarter that strengthen our global biosimilars portfolio. The U.S. FDA approved Kirsty, our biosimilar insulin aspart, making it the first and only interchangeable rapid-acting insulin in the U.S. This marks a major regulatory milestone and builds on the strong foundation established by Semglee, our long-acting insulin, further reinforcing our leadership in the U.S. insulins market. We launched the first biosimilar aflibercept Yesafili in Canada, and this marks our 10th biosimilar to reach commercial markets globally, underscoring our expanding global footprint.
We also secured approvals for biosimilar denosumab from both the European Commission and U.K.'s MHRA, and these approvals mark Biocon Biologics' anticipated entry into the bone health therapy area, opening up a new therapeutic segment for our biosimilars business. I would like to touch upon, of course, facility expansions and strategic capability building. Our injectables facility, primarily focused on GLP-1s, has been commissioned, with commercial supply expected to begin in FY 2027. This facility strengthens our position in the fast-evolving metabolic and diabetes care space and is part of our broader commitment to building advanced manufacturing capacity aligned with future portfolio needs. At Syngene, we inaugurated a state-of-the-art peptide laboratory, adding to our integrated discovery and development platforms, which already include monoclonal antibodies, antibody-drug conjugates, oligonucleotides, and proteases, thus reinforcing our position as a technology-driven research partner. On sustainability, we continue to make meaningful strides in our sustainability journey.
Biocon received a gold rating in the 2024 EcoVadis corporate sustainability assessment, with an improvement score of 77, up from 70 last year. This places us in the top 5% of companies globally and represents our highest sustainability rating to date. Syngene was recognized by TIME and Statista as one of the world's most sustainable companies in 2025, and it ranks number one among Indian pharma and biotech firms, placing it in the top 20 globally within its sector. This recognition underscores our collective commitment to responsible growth, environmental stewardship, and sustainable business practices. I will now move into performance summary. We commenced FY 2026 on a strong note.
Adjusting for the one-time gain from the divestment of our branded formulations India business in Q1 FY 2025 on a like-for-like basis, the group delivered 15% year-on-year growth in operating revenue, led by accelerated growth in biosimilars, continued growth in CRDMO, and a steady performance in generics. I'm sorry the slides have not coincided with my talk, my speech, but please move to the next slide. Let me walk you through the financial highlights. Operating revenue stood at INR 3,942 crore, up 15% year-on-year. Biosimilars grew 18% on a year-on-year basis. CRDMO, which is really our research services business which pertains to Syngene, grew 11% year-on-year, and generics grew 6% year-on-year. Core EBITDA was INR 1,003 crore, up 11% year-on-year, with a margin of 25%. R&D investments were at INR 205 crore, or 7% of revenues excluding Syngene, reflecting continued pipeline investment.
Reported EBITDA grew 19% year-on-year to INR 829 crore on a like-for-like basis. Profit before tax, excluding exceptionals, rose 71% to INR 97 crore on a like-for-like basis. I would now like to discuss our business performance in a segmental manner. Let me begin with the generics segment. The generics business delivered in line with expectations. The exceptional revenue spike that we saw in Q4 of FY 2025 was driven by the launch of lenalidomide, or generic Revlimid, which should be viewed as a one-time upside. Growth in Q1 was supported by new product launches, including liraglutide in the U.S., lenalidomide, and dasatinib in the U.S., liraglutide in the E.U., and lenalidomide and dasatinib in the US. Stronger volumes in key APIs were seen this quarter, and continued traction in our peptide portfolio, with liraglutide approved for diabetes in India, is expected to be launched shortly through our commercial partners.
When it comes to revenue from operations, it was at INR 697 crore, up 6% year-on-year. Product sales grew 13% year-on-year. EBITDA reflects ramp-up costs linked to operationalizing new facilities, including our peptide API plant, our expanded fermentation capacity in Vizag, and our Cranbury, New Jersey facility in the U.S. While these costs impact margins in the near term, these new capacities are expected to deliver strong ROCE as utilization ramps up, especially in GLP-1s. R&D spend was at INR 70 crore, or 10% of segment revenue, primarily directed towards advancing our GLP-1 portfolio. Higher interest and depreciation costs from recent CapEx also impacted PBT performance. I will now move to biosimilars. Q1 FY 2026 marks our sixth quarter as a fully integrated global biosimilars company.
Following on last year's consolidation, we have now entered the accelerate phase, where we are focusing on scaling existing commercial products, deepening our presence in key markets, and preparing for future launches to drive sustainable and profitable growth. Before we dive into Biocon Biologics' business performance, I'm very pleased to share that we have had a successful outcome with NHS, securing four out of seven regional awards for Yesafili. This marks a 100% success rate across our national tender submissions in the U.K. and highlights the team's consistent strategic execution. Now coming to key highlights. North America received U.S. FDA approval for Kirsty , our interchangeable biosimilar insulin aspart, the first and only rapid-acting insulin with this designation in the U.S. I would like to also talk about partnering with Civica, Inc to locally manufacture insulin aspart in the U.S., enhancing supply security and affordability.
Our oncology portfolio delivered strong performance with Ogivri, our biosimilar trastuzumab, and Fulphila biosimilar pegfilgrastim, both maintaining 27% market share. Yesintek, our biosimilar ustekinumab, emerged as a leader in early immunology uptake with strong formulary coverage across major payers, including Cigna, UnitedHealth, Express Scripts, and Blue Cross Blue Shield plans. Coming to Europe, Hulio, which is our biosimilar adalimumab, continues to be one of the market leaders in Germany with a market share of 18%. Our oncology portfolio, led by Arvemi, our biosimilar bevacizumab, and Ogivri, biosimilar trastuzumab, demonstrated strong momentum on the back of successful tender wins in major markets. Yesintek, our biosimilar ustekinumab, received a very strong reception in key E.U. markets, including Germany, Spain, Italy, and Portugal. When it comes to emerging markets, growth was led by our strategic focus on eight high-impact self-led markets, significantly increasing revenue share.
We secured large tenders, including a multi-year contract with Malaysia's Ministry of Health for rh-Insulin and Insulin Glargine. When it comes to segmental financials, revenue was up 18% year-on-year at INR 2,458 crore. EBITDA was up 36% year-on-year on a like-for-like basis at INR 645 crore. EBITDA margin, including and excluding forex and other items, was at 24%, with an approximately 300 basis points year-on-year expansion, reflecting improved operating leverage and the benefits of economies of scale. Now coming to our CRDMO business, our research services business segment has been renamed as CRDMO, representing the new profile of Syngene's business. Syngene had a positive start to FY 2026 with revenue of INR 874 crore, which is an 11% year-on-year increase, EBITDA of INR 224 crore, which is a 19% year-on-year increase with a 25% margin.
Growth was driven by pilot programs transitioning into long-term contracts, as well as continued client trust in Syngene's scientific and operational excellence. Biologics manufacturing has made good progress in terms of capacity expansion. Unit 3, which is our biologics facility in Bengaluru, is now operational. The Bayview facility in the U.S. remains on track for commissioning later this year. Despite macroeconomic uncertainties, Syngene sees robust demand from large and mid-sized pharma clients and remains on track to deliver FY 2026 guidance. To wrap up, I would like to basically end with some concluding remarks where I would like to summarize a few key points. All three businesses, namely our biosimilars, CRDMO, and generics, are seeing accelerated growth. Each has clear growth drivers and focused leadership working to strengthen fundamentals and improve return ratios.
The progress we've made on product launches, market share, and customer traction demonstrates that we are winning in the market. Our balance sheet is stronger. Through our QIP, we've enhanced financial flexibility to increase our stake in Biocon Biologics, provide an exit to structured equity investors, reduce interest burden, and improve leverage ratios. We are aligning our business with shifting global policy and supply chain dynamics. Biocon and Syngene have now two manufacturing setups in the U.S. The Oral Solid Dosage facility in Cranbury, New Jersey, whose capacity has been significantly expanded to support our U.S. sales, is going to be shortly inaugurated. Through our Civica alliance in the U.S., local manufacturing of insulin will assure access and affordability. Syngene's Bayview Biologics facility will enhance capacity and give direct access to the U.S. biologics CRDMO market.
Additionally, the facility will also be utilized by Biocon Biologics for select biosimilars for the U.S. market. Our growing global manufacturing and commercial footprint reflects our agility and readiness to serve patients and partners worldwide in an increasingly localized world. In terms of an outlook, I'd like to say that we've made a strong start to FY 2026. Biosimilars is well positioned to build on its momentum with recent launches and approvals expected to fuel accelerated growth. CRDMO continues to benefit from favorable demand trends, and Syngene is actively investing to future-proof its capabilities. In generics, our early investments in GLP-1s and peptide APIs are indeed gaining traction. Multiple product launches are planned in the coming quarters, which will support strong double-digit growth for the full year. With this, I'd like to now open it up for a Q&A.
Thank you, Kiran. We'll wait a moment for the question queue to assemble. Ladies and gentlemen, please use the raise hand tab in your Zoom application if you wish to ask a question. We'll take the first question from Damayanti Kerai from HSBC. Please go ahead.
Hello. Am I audible?
Yes.
OK. Thank you for the opportunity. My first question is, when you look at your performance year-on-year for a biosimilar segment, you have recorded growth of 18%. At the same time, generics and Syngene also grew year-on-year. When we look at the gross margin part, there is a decline of, say, 150 basis points or so. I just want to understand, specifically from biosimilars sale, whatever incremental sales you are recording, is that coming from more discounted tender channels, etc., and how should we look at the trend ahead? If you can explain this, please.
Over to you, Shreehas and Kedar.
Damayanti, thank you for the question. I think if you noted Kiran's commentary, the biosimilars biologics business has performed very strongly in the quarter. Not only has the revenue grown 18% year-on-year, there's also been an improvement in the EBITDA margin. There's a 36% increase in the EBITDA on a quarter-on-quarter basis. There's a 300 basis point improvement that we are demonstrating, which is actually coming on the back of operating leverage that you see starting to play out. I would say the biosimilars business, Damayanti, has really been in a very good shape. We are starting to see margin improvement as we go forward. As this business scales up further with the new launches that we are expecting to start to show towards the later part of the year and in the subsequent financial year, we see this only getting better from where it is today.
Shreehas, thank you for that. I understand at the EBITDA level, but I was trying to understand more at the gross level performance. Thank you.
Kedar, do you want to comment on this? I think my sense is the gross margins are also quite strong. I think.
Just to add to what Shreehas said, the gross margins, Damayanti, in the biologics business have held quite steady. Operating leverage has played out. That's why EBITDA growth is stronger. We can take this offline, Damayanti, but the biologics gross margins have held steady. OpEx, as a percentage of revenue, has started seeing an improving trend.
Sure. I just have another question on interest expense. Before that, if you can say, like, what is the debt level at the parent as well as the Biocon Biologics Limited level? We have been talking about debt reduction for a couple of quarters. When we look at the interest expense for the quarter, I think it has gone up. Can you explain that as well?
Yeah, maybe Siddharth, you want to take the group level interest questions?
Sure. I think, Damayanti, the debt, I think we have said that mainly it's at Biocon Biologics level. We have a net debt of roughly $1.1 billion in June at biosimilars level, approximately $100 million at generics level, and $120 million cash positive in research. The funds that we have raised through QIP, as you're aware, have been used partially to retire the OCD of Goldman Sachs. The interest that we were accruing on that OCD would start showing a reduction from quarter two onwards. The bank interest will continue for the foreseeable future because these are primarily on the bonds, which are five-year bonds, which will be due for repayment in 2029. As we also retire some of the NCDs with Kotak and Edel during the course of this fiscal, we will gradually start seeing interest costs come down.
There's been no increase, per se, in the interest costs compared to Q1 of last year. It's remained stable because the amount of instruments, whether OCD, NCD, the bank debt, has remained at similar levels in Q1, at least.
OK, with some of these repayments on the way, should we assume interest burden to go down from Q2 itself, or will it happen in a more gradual manner?
Q2 will definitely go down for Goldman Sachs, which had the 5% coupon on $180 million. That would go down, as I mentioned. Kotak and Edel will be more later part of this fiscal.
OK, so that does, like, this $1.1 billion net debt, that is at the parent level? Sorry, I missed the.
That's at Biocon Biologics level. Biocon Biologics has $1.15 billion of net debt.
At the parents?
Parent, as I mentioned, Biocon has $100 million of debt.
OK, $100 million. OK, got it, got it. My last question is for biosimilars?
Damayanti, I would like you to take this offline because your understanding of increased interest is not correct. I think you should take this offline with the.
Sure, sure, ma'am. I'll do that. My last question is, for biosimilars, can you give us the regional split, say, like U.S. and other market?
Yeah, see, this quarter, emerging market is about 23%. Advanced markets is about 77%. On a full-year basis, you should factor 75%-25%, Damayanti. Within 75% of the advanced markets, U.S., the North Am will be 40% +, and the balance will be rough.
OK, Kedar. Thank you. I'll get back in the queue.
Thank you, Damayanti. We'll take the next question from Surya Patra from PhillipCapital . Please go ahead.
Thank you for this opportunity. First, again, clarification on the gross debt. I'm sorry I missed that. What is the gross debt level that we are having here right now on the consolidated level basis?
It's that $1.1 billion. I'll repeat, Biocon Biologics has a net debt of $1.15 billion, $100 million debt in generics, $100 million cash in Syngene. When you add the three, it's $1.15 billion, which is primarily the debt in Biocon Biologics.
OK. Continuing with the generics, we have seen that in this current quarter, there is a kind of impact from the EBITDA level, both YoY as well as sequence level. Here are two things. Whether there is no Revlimid sale in this quarter, that is one. Is there any one-time kind of spend because of the facility commercialization and all that, which may not be there in the subsequent quarter? Is that the right understanding? If that is yes, can you quantify the one-time impact?
The Revlimid launch impact, as we mentioned, was in quarter four of last year, which had boosted the profits and revenue in the fourth quarter of FY 2025. We did have a very small component of sale in quarter one, which, of course, did not have a significant impact. Till the product is launched in an unlimited quantity, which is going to happen at the beginning of next calendar year, we are not going to have any more continuing sales of lenalidomide for at least the first three quarters of this fiscal. As far as the cost is concerned, we did have three facilities, as Kiran mentioned in her opening remark, which were capitalized in last fiscal. These are very large investments: the immunosuppressants facility in Vizag, the drug substance facility for peptides in Bangalore, as well as the new Cranbury facility that we had acquired in the U.S.
The impact of all these facilities' operating costs are in the P&L, which is going to be on an ongoing basis. The impact is roughly INR 60 crore a quarter. When you look at the EBITDA or the margins or gross margins from the sales that generics businesses recorded, it is in line with the quarter one of last year's EBITDA. That has been impacted by these facility payroll and other operating costs for these three facilities, which will continue for now going forward.
OK. If I just extrapolate it about the margin for the consolidated business level, because we are anticipating a kind of a moderated margin scenario for the Syngene business due to the capacity implementation unit, the Stelis unit, and here generics, we will have some pressure, while we would be seeing a kind of a ramp-up on the biologic front. On a console basis, how should one think about the margin kind of expansion or kind of moderation, if you can give some clarity for the full year?
OK, I'll quickly give my comments on generics, and maybe Deepak can add his comments for Syngene margins. The first quarter and first half will be under pressure. We have multiple launches coming up. We are launching liraglutide in Europe this quarter, along with our partners. We are expecting a few other launches. In fact, we also launched sacubitril, valsartan, or Entresto in the U.S. on day one recently, which will be reflected in our Q2 numbers. The margins are going to ramp up. H2 is when you will see the impact of all these launches coming in. On a full-year basis, again, I do expect generics to get back to the profitable and growth trajectory on the margins front. I think Kiran already alluded in our concluding remarks that with all these upcoming launches, generics will have a strong double-digit growth on a revenue front.
I think, Surya, I also want to add, I think what you're seeing right now is the impact of operating costs, expenses on some of these capitalized facilities. I think, as I mentioned, starting Q2, you're going to start seeing these capacities being utilized. Once you ramp up these capacities, you will start seeing a very good delivery of profitability.
Sure, ma'am. OK, one clarification further about this fundraise and the repayment to Goldman Sachs and others. What is the minority interest then Biocon would be having enhanced in Biocon Biologics now?
See, we've raised INR 4,500 crores, of which we have used roughly $200 million to repay Goldman Sachs. The repayment has been done as of end of June. We have a commercial paper, which we had borrowed money to repay ADQ in January earlier this year. That commercial paper is due in September now. Apart from that, the remaining funds will be used to repay Kotak and Edel as their payments become due. On a fully diluted basis, assuming all these, I mean, Goldman and Edel is paid out, we'll be up to 78% stake in Biocon Biologics.
OK, with this, sir, is it fair to believe that there is no compulsion on Biocon Biologics to go for a listing?
No, there's no compulsion. I think we have said that IPO is a, I mean, the commitment to Viatris that we had was the best effort. We have time to give exit to investors, which is in a few years. There's no compulsion as such.
Sure, sir. Just last one point, sir, from my side about the biosimilar business. Two points, basically. One is the ustekinumab, whether we have seen any kind of a ramp-up or any revenue contribution from that from the U.S. market from that. The second point was about the launch of aspart, when we would be having a dual brand from Civica as well as from our own. Whether the pricing would be similar or whether we will have the advantage of the limited competition as well as the interchangeability benefit or not, because Civica pricing is likely to be relatively lower.
Let me respond to both your questions, Surya. I think very relevant questions. Let me first talk about the ustekinumab Yesintek launch that we've had in the U.S. It's been a very successful launch led by our U.S. team there. I think one of the key things to bring to your attention is that we've had very strong formulary coverage for this product. We've got all of the big commercial payers, whether it is CVS, UnitedHealth, Express Scripts, all of them have listed Yesintek on their main formularies. That's a very strong positive sign. We are also starting to see initial trends in terms of how prescriptions have moved. We are seeing that a very large share of the prescriptions have moved towards Yesintek, which is a good thing.
Apart from the fact that it's actually an interchangeable product, which helps, that is showing that the product is starting to gain initial early leads as biosimilars start taking more market share once the originator product gets knocked off from the formularies starting July and then progressively towards the end of the year. We feel good about how Yesintek has performed, Surya, and we are looking forward to sustained performance in the coming quarters as well. On the second question that you asked about insulin aspart, we are very proud of being the first and the only interchangeable rapid-acting insulin analog in the U.S. market at this point. It's not just the aspart market, but we also believe there's a larger rapid-acting opportunity that insulin aspart can target. With regards to your question on Civica, I think that's a very, very smart strategy.
I would think the U.S. commercial team has come up with, where we are bringing product closer to patients in the United States. The product will be manufactured locally in the U.S., giving us an opportunity to have two products and two product brands to be in a position to supply the patients in the U.S. in a more comprehensive way. You've seen some articles where originators have made statements that they may be looking to withdraw some of these products, particularly the rapid-acting insulins in the near term or towards the end of this calendar year. We want to be in a position, and we believe we will be in a position to meet that demand as it comes up in calendar 2026 and beyond.
Sure, sure. Yeah, thank you, Shreehas.
Thank you, Surya. We'll take the next question from Neha Manpuria from Bank of America. Please go ahead.
Yeah, thanks for taking my question. Shreehas, just another question on Stelara. If I look at the IQVIA number, we've seen a very strong market share trend. This does not necessarily reflect all of the contracts as yet, right? We could continue to see this momentum build as we see new contracts coming in in July. I think you mentioned some in Jan. Is there a fair bit of runway to improve market share still in Stelara?
Yeah, Neha, I think that's a fair observation. As I said, these are still early days. We have got a good start. I think Matt Erick, who is our Head of Commercial in advanced markets, has been leading this effort from the front. I would want him to jump in here to add some more color to give you a sense of how we see this ramping up. Matt, if you could jump in, that would be helpful.
Thanks, Shreehas. Sorry, my video here. Yeah, thanks. As the products continue to transition the Stelara from the payers starting July 1, you're starting to see what Shreehas said, early uptake of ustek. These products will continue to see, we see one full basis point that has contributed to that increase in June. Remember, most of these products where Stelara will come off at the payer starts in July and will continue to accelerate as we go through the end of the year. We've got a great start. We have a massive amount of coverage from the payer side. Our sales forces are in tune out there already talking to health care providers. You're seeing this opportunity take place. You'll see more growth as we go through the remainder of the quarter and into next calendar year. Thank you, Shreehas.
Matt, just an extension to that question. Given that this is a fairly competitive product, how should I think about the stickiness of the market share for Stelara? I'm just trying to understand, is there a risk that you could see the competition probably chip away on share come the next contract cycle? From a physician perspective, how sticky is it? Is the Biocon Biologics biosimilar?
Great question. Look, we're early leaders like we are with Biocon. Doctors are getting used to writing Yesintek. Remember, interchangeability is not to each biosimilar. It's only to the brand. As the patients and doctors get used to utilizing the Biocon Yesintek, it becomes very sticky. I can tell you we're in a great position, as we've spoken about before, being vertically integrated. We are well positioned to continue to compete and compete profitably in this market as the dynamics change and shift. Early on, we have the next 12 months of a great run rate because of what Shreehas has indicated in our coverage. We have all expectations of continuing to brand ourselves with Yesintek and getting patients from here and doctors from here to keep that stickiness as we go into that next payer cycle.
Oh, that's very helpful. My second question is the oncology biosimilars. Given that we're seeing competition now come back into the market, some of the gains that we've seen earlier this year seem to be coming off. Given there is more competition expected in oncology biosimilars, should we expect that margins for BBL will probably be at these levels with whatever we gain in Stellara being offset by the onco biosimilars seeing pressure?
Let me respond to this. If needed, Matt can give you additional color. I think first up, Neha, we can look at the data points that you're referring to. We believe that the oncology franchise for us in the U.S. has been very, very strong. In fact, we still have over a fourth of the market with the two biosimilars that we've launched, and it continues to be very, very profitable. It's seven years since we've launched these products, and they continue to hold value. Another way of looking at it is to see how you really operate in a medical benefits space, the part B archetype of the market. I think that's credit to the North America team in managing how to gain market share and retain value. I think the team's really been able to demonstrate that.
We continue to retain market share, grow that to a fourth of the market, and continue to hold value. That continues to be an area of strength. As we bring Abevmy, which is our biosimilar bevacizumab, into the market, it only further strengthens our oncology franchise. We've talked to you about our approvals that are coming in in other parts of the world and U.S. shortly with denosumab, which will be branded Vevzuo and Evfraxy, which will also then bring in.
Did Shreehas freeze there, Kiran? Can you still?
Continue, Matt?
Yeah, what he was building upon is that we'll continue to have our franchise of oncology. We'll continue to build on these launches that he was speaking about in regards to denosumab. Just to recap that, we still see strong performance in our oncology portfolio with the addition of bevacizumab. We're going to start layering on new product launches within our full portfolio, not just in the United States, but across the rest of the globe in advanced markets and also emerging markets.
Thank you, Matt. Just one last question. When do we launch aspart? What's the timeline for the beva launch, beva formula launch?
Sure, sure. On the aspart piece, we'll be launching immediately if we have approval. We'll start seeing more pull-through. As you remember, the U.S. is set on a July basis and a January basis. So aspart will be strategically launching between now and the end of the year and leveraging our relationships and our great franchise that we've set up with Semglee. That will be a ramp-up because of timing in regards to the payer cycles. In regards to bevacizumab, you'll see this launching towards the end of the summer, around the October time frame, in which we'll continue to start leveraging our oncology portfolio and ramping up our payer strategies as we go into the first of the year.
Thank you so much, Matt. Appreciate it.
Sure, you're welcome.
Thanks, Neha. We'll take the next question from Harith Ahamed from Avendus Spark . Please go ahead.
Good morning. Thanks for the opportunity. My first question is regarding the opportunity in recombinant human insulin, which you've talked about in the past, and how Novo 's plans to exit during this year can translate to a meaningful opportunity for us. If you can talk a little bit about how we're positioned to capture this opportunity from a capacity standpoint, especially on the drug substance side. If you could also, in this context, touch on the phase two expansions that's ongoing in Malaysia and where exactly are we in that.
Since Shreehas has not yet been able to rejoin, let me start by saying that the Malaysia facility, as you know, we have doubled the expansion of the drug product line, and that is going to be operational very imminently. However, it obviously will only cater to certain markets till all the regulatory inspections are through. Having said that, I think from a positioning point of view, the insulin opportunity is very, very large, and we are addressing this as much as we can. We do have a growing capacity in Malaysia in terms of, I think, drug substance. We have adequate supplies, but it's really the drug product that we need to ramp up. We have a large global network of drug product manufacturing. I think from the Malaysia facility, we're really focusing on advanced market supplies largely, with some of it going to certain emerging markets.
To answer your question, yes, we are ramping up. We are trying to address the large opportunity that is emerging in the best way possible. I think by the end of the year, we'll be in a much better place to address most of this demand that we are seeing.
Thanks, Kiran. That's helpful. My second question is on the generics business. Suresh, you touched on liraglutide launch in Europe. Can you give an update on the status of our filing in the U.S. for this product? On semaglutide, as we are approaching market formation across various emerging markets, can you give us some color on our preparedness to launch the product?
The liraglutide U.S. file is under review with the FDA, and we should hear back shortly. We definitely do expect the approval to come in sometime this fiscal. I cannot comment on the timing exactly, but we do expect a launch in the U.S. during this fiscal. As far as semaglutide is concerned, I think even in the last quarter, we had said the development is done. We are going to file in quarter two, which is this quarter, in many emerging markets and Canada. We are expecting early approvals in some of the markets where we'll file this quarter by end of calendar 2026 or early calendar 2027. While the market, as you rightly said, is going to open up in calendar 2026, we do not expect many companies to have received the approvals. We will not be too far from those companies.
Thanks, Siddharth. I'll get back in a few.
Thanks, Harith. We'll take the next question from Shyam Srinivasan from Goldman Sachs. Please go ahead.
Yeah, good morning. Thank you, Saurabh. Thank you for taking my question. Just the first one on what's happening to adalimumab in the U.S. It's been two years since we have launched. I know there's been a lot of issues from a market share, not only for you, for everyone. How does this pan out in the next 12 months? Could you also comment on the pricing trends, because private level influences have also been not as per original thought process. How should we look at adalimumab progress for us in the U.S.?
Kiran, do you want me to take that one real quick?
Yes, please. Just take it.
OK, yeah. First of all, thanks for the question. The adali for Biocon continues to be work in progress. We are going through a payer cycle in which we're bidding aggressively. The attributes in the U.S. are still high concentration. Don't forget, we have a huge franchise in Europe in which adalimumab has been very successful, as Kiran stated in her open remarks. We are definitely leveraging our global platform. As we see the trends, as you asked with adalimumab, we see the pricing starting to soften, meaning that we believe the market price is settling on adalimumab. We won't see these huge swings that we saw in the beginning. More to come after January 1st. We're in the mix. We continue to fight. The attributes that are currently being driven in the U.S. preferred by most of the payers are still the high concentration.
As we see the, you talked about the private labelers. As you know, Sandoz and CVS have the majority of that share. They just recently decided to not report that. It's going to be hard for all of us to see it in IQVIA. We do see a trend of Humira starting to fall off of the payer contract starting 01/01/2 026. The market will continue to be open. Biocon will continue to compete. We'll continue to press forward on adalimumab. We do have a lot of products coming, not only in the U.S., but around the globe, in which we're very successful and will continue to leverage.
Got it. Thank you. Thank you, Matt. Just a second one again on Yesafili in Canada. I think the press release talks about it. How should we look at that particular launch?
In what way, looking at it from what perspective? I mean, we're ready. We're launching. We've already started working with key customers in which we're putting in bids now in Canada. Primarily, the business is in two spots, Quebec and Ontario, which we have our sales force, which we're very familiar with. We remain very optimistic in our opportunity because of our position in that launch and being the first, one of the first in the market in Canada.
Helpful. Thank you, Matt. The last question is for Siddharth, just on the generics. Siddharth, you talked about the lenalidomide not appearing again in quarter one. You also alluded to the double-digit growth. What are the product launches we are looking forward to? I think lira in India, is it going to be a significant opportunity? The sema, next year, is the one that's going to be the one to watch out for?
I think the biggest growth driver is going to be liraglutide in Europe, where we have already supplied partially in quarter one. We will continue to supply to Zentiva and to other markets where we are direct in quarter two onwards. We have, in fact, won some tenders also in Europe for liraglutide directly. That would be the main growth driver. Apart from that, we do have a couple of other launches. I think we've spoken about micafungin injection being launched in quarter two. We also have norepinephrine injection coming up for launch in quarter two. We had received an approval for everolimus Zortress, which is being launched in quarter two. I mentioned about Entresto or sacubitril/ valsartan, being launched in quarter two. There are a few other small molecule OSDs and injectables on top of liraglutide in Europe. Liraglutide U.S. is, of course, a big opportunity.
It's still a very lucrative $700 million, $800 million market with a limited number of players. As I mentioned earlier, we do expect an approval in the U.S., and we will launch it in the U.S. after the approval is received.
Yeah, Siddharth, sorry, just continuing on this, sema in Canada or other markets? Sema, sorry, your update from Biocon for Canada, Brazil, the rest of the markets?
As I addressed the previous question, we will be filing in Canada, Brazil, and many other markets this quarter, with an expected best-case approval by end of calendar 2026, but more likely launch in 2027.
Helpful. Thank you. Thank you, Siddharth. All the best.
In India, just to close your question on India, we will be launching liraglutide also in India this quarter through our partners. Of course, there's a limited opportunity before semaglutide is commercialized sometime in calendar 2026. Still, we believe that given the whole availability of drug from innovators, whether it's for Ozempic or for Mounjaro in India, there is a huge market that can be created by our partners in India before semaglutide comes in.
Got it. Thank you. All the best.
Thank you.
Thank you, Shyam. We'll take the next question from Tushar Manudhane from Motilal Oswal Securities . Please go ahead.
Yeah, thanks for the opportunity. Am I audible?
Yes.
Firstly, on Canada's semaglutide, like tentatively, what would be the timeline to get the approval?
I just mentioned that best case would be by end of calendar 2026. We'll be filing this quarter. Let me remind you, Canada has not approved a single GLP-1, whether it is generic liraglutide as well. The Canadian health regulator is taking its own time to approve the GLP-1s. Even with liraglutide filing done by many other companies, at least five, six years back, there's not a single approval. There's not a single approval yet for semaglutide. We have been interacting with Health Canada on our liraglutide file. We, of course, understand a little bit better in terms of what they are expecting. Our teams are addressing proactively now for semaglutide as we file that drug this quarter. The review cycle, while it's short in Canada, post-filing it's eight to nine months if it's a first cycle approval.
As I mentioned, given Health Canada has not approved a single generic GLP-1, we do best case expect an approval by end of calendar 2026, but more likely in calendar 2027, followed by the launch.
I'm just curious to understand the thought process in terms of what concern they have as far as GLP-1 approvals for, let's say, generics or biosimilar systems.
That's difficult for me, Tushar, to comment. Each regulator has their own way of reviewing the files. Of course, I mean, our own liraglutide, which was approved by MHRA and E.U. regulator, of course, the U.S. has asked a different set of questions. Canadian regulators have asked a different set of questions. I think it's also sometimes if it's a first or second drug in a particular class, they just want to make sure that their guidelines and their review process is aligned with what they're expecting. We can take it offline in terms of some of the questions that they ask, which probably the other regulators have not asked. Again, it's something that's a part of standard review procedure for a new class of drug that gets approved in these major countries.
Got it. Just on the generics side, approximately how to think about the operational cost while you have highlighted on the new launches pipeline. Let's say how much in terms of quantum one should think about the operational cost? Is that more or less settled as far as new capacity, new facilities concerned? Will we see still some increase in the operational cost?
See, the cost which is there in quarter one P&L relating to the three new facilities is roughly INR 60 crore. On a full-year basis, it's roughly INR 240 crore. We have a few more facilities which will get capitalized during the later part of this year. Of course, the injectable facility, which we have just commissioned and where we're going to do the qualification and the filings, that facility will get qualified next fiscal. We will see some increase during the remaining quarters for the new facilities that will get capitalized, but not a significant change. As I said, the impact of all these new launches and increase in gross margin would offset these additional costs that have hit the P&L and more from H2 onwards.
OK. Thirdly, on the liraglutide U.S. FDA, any queries which are pending to be addressed and hence some time for the approval?
We have addressed all the queries. We had two open points with the FDA in the last CRL. One was related to the facility clearance, which, of course, the facility has been subsequently cleared, received VAI. There was some specific data that the FDA does, which we had responded to. We have a target action date been assigned by FDA, and we will wait to hear back from them on the outcome. As far as Biocon is concerned, there's no outstanding query that we are working on.
Biocon as such has been sort of experts, interestingly, on the biologic side as well as on the synthetic side as far as GLP set of product is concerned. We still sort of are trying through the generic route, whereby the cost of operation seems to be much, much lower when it goes to the biologic route. If you could throw some light here in terms of we could have done in terms of at least cost of manufacturing much lower if you would have gone biologic route.
See, one is the cost of manufacturing. You also have to look at the regulatory path. If you look at GLPs today, in the generics, whether it's in Europe or the U.S., it comes under the synthetic part. Of course, the recombinant route of making drug substances there, Biocon does have recombinant API as well. We, of course, look at the time to develop a drug and the regulatory path to get it approved versus the cost of manufacturing the drug substance. We are very competitive in terms of manufacturing our drug substance. We are vertically integrated. We know what the Chinese companies who are supplying to a few other generic companies, what cost or what selling price they are supplying the drug substance. We know our own costs. We think we are very well placed compared to our competitors as far as the costing is concerned.
The recombinant API is definitely going to be required for the oral semaglutide because there the cost of goods sold is primarily influenced by a drug substance cost, unlike injectable, where drug substance does have an important influence, but it's not going to make a big difference whether it's synthetic or recombinant as far as the injectable is concerned.
Got it. This is helpful. Thanks, thanks, thanks.
Thank you, Tushar. We'll take the next question from Dr. Neha Kharodia from Abakkus. Please go ahead.
Hi, good morning. Thanks for the opportunity. My question is on the biosimilar business, more from a longer-term perspective. In our previous corporate presentation, it refers to the Frost & Sullivan report, which mentions that the global biosimilar market itself can become 3x over 2024 - 2029. I just wanted to understand our biosimilar business growth versus the industry growth. Can we grow better? How are we looking at this growth, considering the part of the patent expiry that we are catering to?
I think, Neha, thanks for that question. Let me respond to that. I think the report that's been put out by Frost & Sullivan is very fair because it does cite two things. One is that the biologics opportunity itself is very large, which is before it gets to biosimilars, given that biologics are increasingly becoming the standard of care. I think that is clearly set out. The report also establishes the fact that biosimilars are here to stay. That's the next large opportunity where Biocon Biologics is very well placed in the current set of circumstances, where we have one of the largest portfolios, one of the deepest in certain key therapy areas, which is in oncology, in diabetes, and in autoimmune diseases. These are the three large areas that the report talks about where investments are happening.
If you look at our portfolio, we've got a very, very rich portfolio in these therapy areas. From an outlook perspective, we've always said that we invest in debilitating diseases. We are getting products to market. We've got five products ready for launch in the next 12 - 18 months, is what we had guided. Four of those five are already now getting to launch. Four of them we've launched. Fifth is on the way from an approval standpoint. We have approval in the U.S. and in the E.U. and in Canada. U.S. approval should follow, which is for denosumab. That tells you that we are well on our way to realizing the opportunity that lies ahead of us. I've said probably several times that the opportunity ahead is far more exciting than what we've seen at Biocon Biologics so far.
Yeah, thanks for that explanation. To understand it more quantitatively, even ballpark numbers are fine. Can we grow better based on your community? Somehow I sense that our growth can be better. Is that understanding correct?
I 100% share your sentiment. I appreciate your confidence in how our trajectory should be. Neha, I think we are aligned in terms of how we see the future.
Understood. Thank you.
Thank you, Neha. We'll take the next question from Vipulkumar Shah from Sumangal Investments . Please go ahead.
Hi, am I audible?
Yes.
Yeah, can you give the market share movement for various biosimilars in various geographies? What were they saying last year in the same quarter?
Vipul, I think let me give at a headline level. Let me give you a sense of how our market shares have grown. Let me start with the United States, which is a large part of our business. It's about 35%- 40%. Oncology portfolio, as I've said earlier on the call, has been leading the way. I think we've got two products, which are Fulphila and Ogivri. Fulphila is our pegfilgrastim, which has a market share of close to 20.7% or a little more than that.
It was, if you look back a year, it was trending in that 15% odd range. It's grown significantly. If you look at Ogivri, which is our biosimilar trastuzumab, that's at 25% a year or a little more than a year ago. It would have been at that 10%- 11% range. You are seeing a very strong growth in terms of how the market shares have grown. They continue to grow profitably. You can take that confidence in terms of how we are growing that business. We continue to maintain steady market share in our insulin portfolio, both in the U.S. and in the rest of the world, because it's really up to us. We do not see a major competition. We actually see no competition from any biosimilar insulin makers. We are the only biosimilar insulin that's approved in the U.S.
We continue to see a good demand as much as we can make. In terms of Europe, which is the other large geography, I would point you out to some of the other previous guidances that we had shared. I had talked about it in Q3 of last fiscal, where we had said we have very good performance with our Hulio adalimumab in Germany, where we have a leading market share of 18%. We've held that steady. We will grow into other geographies and in other therapy areas.
If you look at the recent reported market shares, our oncology portfolio, led by Abevmy, which is our bevacizumab, and Ogivri, which is our trastuzumab, have shown significant growth, 15% and 20%, which gives you again a sense that while we've said that we will grow beyond our therapy areas, it is actually starting to play out, which is as per the guidance we had provided before. We continue to see Europe as an opportunity for growth. We have more than 10 products approved in Europe and in the U.S., now in Canada. We are looking to see how we can build this, given that there is headroom for growth.
Why is it not reflected in the profitability?
We will discuss this offline. If you would need to, we will be happy to spend time with you and see how the operating leverage is beginning to show. Kedar can, of course, come in and talk to you more in this. Kedar, feel free to jump in. You're already starting to see the EBITDA margin starting to improve, and we expect this to strengthen over a period of time.
My last question is for Kiran ma'am . When we conceived the acquisition of this Viatris business, do we feel that it has met all the goals which we had set at that time? When you look at the stock price, when you look at the market cap, it is below that date. Although we have spent close to $2 billion on that, we had to dilute Syngene stakes twice. We had to dilute stake in Biocon. As an investor who is with the company since IPO, I don't find that it has worked that way. I would request Kiran ma'am to have his or her views. Thank you very much.
Let me respond to it by saying that I think the acquisition has been a very important acquisition for us. I think without the Viatris acquisition, we could never be a global biopharmaceutical company. You are right that the debt burden is what is dragging down the perspective or the perception of what investors feel about this acquisition. Let me assure you that we are now in a very healthy financial state. I think the fact that we have done the QIP and the bond issue has made us far more financially robust. I can tell you that you will see a huge improvement in the way we are approaching this business in the coming quarters and coming years. This is going to be a game-changing, transformative acquisition that we have made that will actually make us two global leaders.
As you already know, we're in the top five biosimilars companies in the world. I think we are very well positioned to really surge into a leadership position in the next five years. That is what our aim is. I don't think you should, as an investor, keep focusing on near-term perceptions about servicing the debt. We have done everything we can to lower this particular apprehension. I think what we've done thus far is extremely encouraging as far as I'm concerned as a promoter. I think you will see that this is also a time where you're seeing profitable growth in the biosimilars business. As the provisioning of interest comes off, it goes straight to the bottom line. I think you should really look at this business and understand what we're trying to do. The problem is that we're just looking at broad numbers and panicking.
I think if you look at the real business health, if you look at the way the numbers are improving, the leverage is improving, I think you will get far more confidence. Right now, you can see that in this quarter alone, the biosimilars business has turned positive, which up until now was only sort of either flat or negative. This actually tells you about the kind of business prospects that are emerging before us. I would not really comment on this business like you are commenting. I would like you to basically understand the business. Maybe I think you should take this offline to understand how the business is growing, how we are becoming far more profitable. In the coming years, you will see that everything that we are doing is going to go straight to the bottom line.
Thank you very much, Madam, for your detailed answer. I'll definitely take it offline. Thank you so much.
Thank you, Erick. Sorry. We'll take the next question from Nitin Agarwal from DAM Capital.
Hi. Thanks for taking my question. Shreehas, in the long-acting insulin, you talked about certain products, certain competitors withdrawing from the market. We also have seen suddenly there's been a sharp improvement in Novo sales on Novorapid in the first half of the year. If you can just throw some light on what are the dynamics which are driving this uptick in the value of the market itself over the last few quarters?
Nitin, thanks for the question. Usually, we have refrained from commenting on any innovator specifically or any company other than us specifically. There are public domain reports where the ones that you cited have actually made communications, public communications that certain SKUs and certain products will be withdrawn from certain markets, particularly in the U.S., by the end of this calendar year. Until stocks last, they will continue to make supplies. That was the reference that I'm making. We've also seen that in the past. It's not one. We've seen both the large insulin manufacturers make such comments. They are probably driven by their priorities and focus. We wouldn't want to comment on that. It does present us with two situations. One is we are in a position to provide that requirement for patients who are looking for this lifesaving drug.
We have always been willing to step in when such an opportunity arises. We are very conscious of the humanitarian aspect as well and the business opportunity as well. We have made the investments. You know that we are making investments to double our capacity in our drug product line in Malaysia. We have increased our drug substance manufacturing, which should come online shortly in the coming years. We've tied up with Civica, who's a local United States manufacturer, so that we can even localize manufacturing closer to patients. We really see this. I wouldn't want to comment on short-term blips in realizations, but I certainly see this as a long-term sustainable growth opportunity where there's very limited to none in terms of competition.
I would also like to add to that, Nitinjeet, that we are seeing this rising demand not just in North America, but also across the world. I think even if you look at our commercialization partner in India, I think that demand has also increased significantly. I think the insulin story worldwide, I think all of you just focus on one market, but the insulin story worldwide is really, really a very interesting one for us. Emerging markets are, you know, I can tell you that demand is only rising. There are very, very few insulin players in the world to really cater to this rising demand. We are very excited with what the insulin story has to offer us.
Just taking on that, hypothetically, you know, given some of the ways some of these positive trends are playing out in the insulin market, while we are doubling our capacity in Malaysia at this point of time, do we actually, at some point in time, foresee a situation that we need to go in for some more capacity additions in this part? Or is this capacity enhancement enough for us to fill whatever we have in mind for the next foreseeable future?
We are taking all the necessary steps for addressing this market, this large market opportunity in various ways, not just through our own capacities, but also through partnerships and other networks that we are developing.
Thanks. Shreehas, secondly, on the denosumab, A, when do we see our approval sort of coming through in the U.S.? Secondly, how do you see the dynamics in this market, given the fact that it probably is a little bit of a late entry tier?
Two things, Nitin. Here, we've indicated in the past that we will have the approval before the end. We should have an approval before the end of this calendar year, and we are tracking well to that date in the U.S. We see that approval imminent. Once we see that, we'll have both these products coming in. The opportunity continues to be still very strong in terms of how we will get into the market. There are a couple of players, like you seem to have indicated, that whether there will be an opportunity for us. Let me give you a sense that there are two products here. One is a Part D product, and the other one is a Part B product, given that there are two brands, Prolia and Xgeva. They are operated very differently.
One is impacted a little bit by time and also in how the archetype operates, which is a Part D product. The other one is really playing to our oncology franchise strength, and we feel very good about it. Timing may not necessarily be a big difference in how we eventually realize success out of this asset.
Thanks. Last one, Kedar, in the presentation, we've talked about the like-to-like margins for the biosimilars is 24%. You know, what's the 26% that we've reported? What would this adjustment be of 2%?
Yeah, Nitin, these are all the items below OpEx, R&D, and gross margins. That includes forex, the derivative accounting that we do, and other income and expenses. You should take 24% on a normalized basis for the quarter.
Kedar, as we have mentioned a few times in the past, as the operating leverage begins to kick in in this business, what are the typical sustainable margins that we can hit in this business going forward?
Yeah, typically, we have avoided giving guidance, Nitin, on the margins going forward. As the new launches kick in and the operating leverage plays out, that improvement will reflect in the numbers going forward. We don't want to guide specifically at this stage.
What I meant is from a range, does it become like a 20%-25% margin business? Is it a 25%-30% margin business on a more sustainable basis? Is there a way to characterize the inherent profitability of this business?
Yeah, yeah, directionally, I think improvement is what will kick in. You know, we don't specifically guide for any range, Nitin. You are right. Directionally, I think you should see improvement in gross margins because of new launches and OpEx as a percentage of revenue.
Thank you so much.
Thank you, Nitin. That was our last question, ladies and gentlemen, for this call. We thank you very much for joining today and hope to see you in the next quarter. Have a good day.
Thank you.