Please note that this conference is being recorded. I now hand the conference over to Mr. Utkarsh Gandhi, Senior General Manager, Investor Relations for Glenmark Pharmaceuticals Limited. Thank you, and over to you, sir.
Thank you, Lizanne. Good morning, everyone, and welcome to the Q3 FY 2026 earnings conference call of Glenmark Pharmaceuticals Limited. Before we start the Q&A, let's review the performance for the quarter. For the third quarter of FY 2026, Glenmark's consolidated revenue from operations was at INR 39,600 million, as against INR 33,876 million in the corresponding quarter last year, recording overall YoY growth of 15.1%. For the nine months of FY 2026, Glenmark's consolidated revenue is at INR 132,119 million, as against INR 106,655 million, recording a YoY growth of 31.3%.
In terms of our regional performance, starting with India, sales for the formulation business in India for the third quarter of FY 2026 was INR 1,298.6 million, as against INR 1,063.7 million in the corresponding quarter last year, recording a YoY growth of 22.1%. In terms of secondary sales, Glenmark continues to significantly outperform the IPM in terms of YoY growth. As per IQVIA, Glenmark's India formulation business recorded a growth of 15.8% in the third quarter and 13% as per MAT December 2025, compared to the overall market growth of 10.9% in the third quarter and 8.3% as per MAT December. Glenmark continues to outperform the overall market in its key therapeutic areas like dermatology, respiratory, and cardiac.
Glenmark's India business is ranked 13th with a market share of 2.32%. The company has 11 brands in the IPM top 300 brands, as per MAT, December data. In terms of its key therapeutic areas, Glenmark is ranked 2nd in dermatology, 2nd in respiratory, and 4th in the cardiac segment, as per IQVIA third quarter data. In terms of new product launches, so in Q3, Glenmark announced the launch of Nebzmart GFB Smartules and Airz FB Smartules, the world's first nebulized fixed-dose treatment therapy for the treatment of chronic obstructive pulmonary disease or COPD. Both products combine three proven medicines, glycopyrronium, formoterol, and budesonide, to reduce airway obstruction, inflammation, and improve lung function.
In a clinical study conducted in India, this triple, nebulized triple therapy demonstrated rapid improvement in lung function and better control of breathlessness, among patients. The treatment was well-tolerated and demonstrated a good safety profile, offering patients a simpler and more effective way to manage COPD. In terms of some of our other key products, particularly on the innovation/specialty front, TEVIMBRA, BRUKINSA, which we partnered with BeiGene and launched in the first quarter, in a short period of time, these two brands have seen a very strong uptake in the market as a differentiated treatment option for patients across multiple solid tumors as well as hematological tumors. The company expects these two brands to meaningfully contribute to the India business growth over the next two to three years.
Liraglutide, the company was the first to launch the biosimilar of Liraglutide. It continues to hold a clear market leadership position in the Liraglutide market and gives a good segue for the company to launch other GLP-1 agonists also. Jabryus, which Glenmark partnered with Pfizer and launched in January 2024, this continues to be well-received by dermatologists as a novel treatment for moderate to severe atopic dermatitis with improved efficacy as well as oral convenience to patients. In terms of the consumer care business in India, the GCC business delivered sales growth of 21.5% YOY. The flagship brand, Candid Powder, delivered a strong revenue growth of around 17% in the third quarter, and has now holds more than 56% market share as per IQVIA data.
Scalpe+ portfolio also delivered strong revenue growth of 50%+ in the third quarter, and some of the other brands like Bontress, Elovera, Aquasoft, also delivered high double-digit growth during the third quarter. Moving on to North America. The North America business recorded revenues of INR 9,706 million for the third quarter of FY 2026, as against revenue of INR 7,813 million for the third quarter. This includes the out licensing income for ISB 2001. Net of that, the core business year-over-year growth for the North America region was 4.1% in the third quarter. Glenmark launched 4 products in Q3, all injectable products, which included sodium bicarbonate injection, ropivacaine injection, epinephrine injection, and leucovorin calcium injection. Two ANDAs were filed during the quarter.
Glenmark plans to file three ANDAs in the upcoming quarter. In terms of our respiratory portfolio for the US, Glenmark has filed two ANDAs for generic nasal spray and is awaiting approval for the same. The company has already filed the ANDA for generic FLOVENT 44 MCG in May 2024, and in Q3, we also filed the ANDA for generic FLOVENT 110. The company is also working on other respiratory products, which are in the pipeline and will be filed over the upcoming quarters. Glenmark's marketing portfolio consists of 214 generic products and the company currently has 53 applications pending at various stages of the approval process.
In November 2025, Glenmark announced that it had received the EIR from the U.S. FDA for its formulation manufacturing facility in Monroe, North Carolina, with a voluntary action indicated or VAI status. With this positive development, the company will restart manufacturing at the Monroe site. Moving on to Europe. Glenmark's Europe operations for the third quarter of FY 2026 were at INR 7,963 million, as against INR 7,297 million, recording a growth of 9.1%. There was a recovery in the European business during the third quarter, particularly due to the onset of the winter season, which aided the growth of the respiratory portfolio. As per the secondary sales data, Glenmark continues to outperform its covered market in CE countries such as Czech Republic, Poland and Slovakia.
There were 5 new product launches in that region, which also aided the growth. In the generic markets of Western Europe, Glenmark's performance remained stable, with strong achievement in Germany and the Netherlands. The branded respiratory portfolio in Western Europe also sustained its momentum. Glenmark continues to focus on increasing contribution from branded markets and portfolio in Europe. Glenmark announced the launch of WINLEVI in the UK market earlier this year, and the brand has seen a strong uptake throughout the year in the UK. In October 2025, Glenmark's partner, Cosmo, received marketing authorization approval for WINLEVI in the European Union as well, and Glenmark is now planning to initiate the commercial launch in its licensed European territories by Q1 FY 2027. Moving on to emerging markets.
For the third quarter of FY 2026, revenue from the emerging markets region was INR 8,119 million, as against INR 7,491 million for the corresponding quarter last year, recording a growth of 8.4%. Our Russia business continues to perform well. As per the IQVIA secondary sales data, Glenmark's Russia business recorded growth of 15.1% in Q3 and MAT December. In its core therapeutic areas of dermatology, Glenmark recorded far faster secondary sales growth than the overall market, and Glenmark continues to rank ninth in dermatology and second in the expectorant markets. So RYALTRIS, as one of the key brands in Russia, continues to gain share. The Latin America region delivered high double-digit growth in the third quarter.
Key markets such as Brazil, Mexico, witnessed a strong recovery on the back of multiple differentiated product launches in the respiratory segment. RYALTRIS, again, is a key brand here, particularly in Mexico, and is awaiting approval in Brazil and is expected to help sustain the high growth in the region. In the Middle East Africa region, our secondary sales growth remains subdued in key markets, mainly on account of some new product launch delays. RYALTRIS, however, continues to see strong pickup post its launch in key markets in the region, such as Saudi Arabia, and it's still the leading allergy product in South Africa. The region is expected to show gradual recovery towards growth starting in the fourth quarter.
Key markets in the APAC region, such as Malaysia, Australia, recorded double-digit secondary sales growth during the third quarter. The overall region is expected to maintain strong performance in the forthcoming quarters. Glenmark continues to remain one of the leading dermatology and respiratory companies in the APAC region. A quick update on our global innovative portfolio. RYALTRIS, starting with RYALTRIS. So as of December 2025, marketing applications for RYALTRIS have been submitted to more than 90 countries across the world. The product has been commercialized in 52 markets and is expected to be launched in additional 10-12 markets over the next few quarters. In Q3, we launched RYALTRIS in 3 additional markets, including Colombia.
As per the IQVIA data, RYALTRIS continues to see a robust performance, both in terms of value and unit market share, and has recorded global secondary sales growth of 50%+ YOY. Glenmark's partner companies across Europe and emerging markets continue to witness a steady increase in its market share in all licensed markets. Glenmark and its partner in mainland China, Grand Pharmaceuticals, secured approval for RYALTRIS in October 2025. The product is expected to be launched by Q1 of FY 2027, and Glenmark's partner in Thailand, Organon, is also planning to launch RYALTRIS in Q4 of this year. WINLEVI, as mentioned earlier, company launched WINLEVI in the UK market in Q1 and saw strong uptake throughout the year.
Glenmark's partner received marketing approval for WINLEVI in Europe, and Glenmark is planning to initiate commercial launch in its licensed European territories by Q1 of FY 2027. WINLEVI is currently under regulatory review in South Africa as well, where Glenmark has the rights, commercial rights. QiNHAYO, or Envafolimab, Glenmark has filed QiNHAYO marketing applications in 18 markets to date. The first commercial launch is expected in FY 2027. The company has received authorization from the regulatory authority in Kenya, Mauritius, and Rwanda for supply of QiNHAYO via early access programs or named patient programs. As announced earlier, Glenmark has also initiated a global multicenter phase III study in resectable phase III neoadjuvant or adjuvant non-small cell lung cancer.
Trastuzumab deruxtecan, partnered with Hengrui in Q3, Glenmark advanced its preparations for the initiation of marketing applications for trastuzumab deruxtecan, a next-generation HER2-targeting antibody drug conjugate, which was in-licensed in the second quarter from Jiangsu Hengrui Pharmaceuticals for several emerging markets. The company expects the first wave of MA applications to begin in Q1 of FY 2027. Lastly, Aumolertinib, partnered with Hansoh. In the third quarter of FY 2026, Glenmark entered into an exclusive license and collaboration and distribution agreement with Hansoh Pharmaceutical Group, for Aumolertinib, a third-generation EGFR tyrosine kinase inhibitor for the treatment of non-small cell lung cancer. Glenmark gained rights to develop, register, and commercialize Aumolertinib across Middle East, Africa, Southeast Asia, Australia, New Zealand, Russia, CIS, and a few selected Caribbean countries.
Aumolertinib was approved in the U.K. in June 2025 for the first-line treatment of adult patients with locally advanced or metastatic non-small cell lung cancer, with activated EGFR mutations and the treatment of adult patients of locally advanced or metastatic EGFR T790 mutation-positive NSCLC. Hansoh has also received positive CHMP opinion in the third quarter, with an MA approval expected in the fourth quarter. Aumolertinib is approved for four indications in China and already marketed in China. Glenmark is preparing to initiate marketing authorization applications for Aumolertinib in the first half of FY 2026, and commercial launch anticipated during the second half of FY 2027. Lastly, on IGI. Glenmark's IGI features a robust pipeline of innovative oncology molecules targeting multiple myeloma and solid tumors.
And IGI also has two autoimmune assets, which have been out-licensed to leading companies and are in clinical development. For ISB 2001, IGI is currently executing the phase I study in Australia, United States, and several European countries. The study continued to dose expansion in April and is continuing to rapidly enroll patients. Our next clinical molecule in oncology, which is ISB 2301, part of the Immunite platform. This is a first-in-class multispecific NK cell engager developed for solid tumors and the first program from IGI's Immunite platform. As mentioned earlier, a clinical candidate was selected in October 2025. The program has now entered IND enabling stage, and we are expecting to file the IND before the end of calendar year 2026.
In terms of our immunology portfolio, ISB 880, which is partnered with Almirall. So Almirall's phase II clinical study in hidradenitis suppurativa continues to advance with ongoing patient recruitment and dosing. Reinforcing the program's strong operational progress, Almirall also plans to initiate POC for other additional inflammatory skin diseases for ISB 880. ISB 830, phase I trial was initiated in the first quarter of calendar year 2025. Astria presented initial data at the EADV conference in September 2025. And now we are working to actively evaluate the most promising paths forward for this molecule to accelerate the development. From the Glenmark management team, we have Glenn Saldanha, Chairman and Managing Director, and Anurag Mantri, Executive Director and Global CFO.
I'll now hand it over to Glen for his opening comments.
Thank you, Utkarsh, and good morning, everyone, and welcome to the Q3 earnings call. If I look at the third quarter, Glenmark, we delivered strong growth in the third quarter with a broad-based growth across most of our markets. While the overall geopolitical uncertainty remains prevalent, depreciating global currencies helped our overall performance during the third quarter. In the third quarter, we continue to launch some very exciting, innovative products in our core therapeutic areas, such as GFB nebulizer in India in the chronic respiratory segment. Also, some of the products that we launched earlier, TEVIMBRA and BRUKINSA, continue to drive our India performance. The positive outcome at Monroe has long-term strategic value for our U.S. business.
In this quarter, we also partnered with Hansoh for Aumolertinib, which is a third generation novel EGFR. We are pretty excited about this asset because it will, you know, come to market in the second half of FY 2027 and can significantly enhance our overall innovative franchise. If you look at innovative franchise, we have about seven, eight products, innovative-led global assets, which will drive our sales growth over the next five years, primarily in the areas of oncology, dermatology, and respiratory medicine. IGI, you know, on the back of ISB 2001, we continue to do exceedingly well with our IGI platform. ISB 2001 is progressing well in terms of the dose expansion study, and we're expecting ISB 2301 filing by the end of this calendar year, which we're pretty excited about.
Going forward, we expect a strong finish to FY 2026 with a good growth, particularly in the U.S., where some of our respiratory launches that we are anticipating in the fourth quarter of this year. Our India business continues to outperform the market, and we see good long-term growth levers, especially in chronic respiratory and our oncology franchise. We think TEVIMBRA BRUKINSA is the first launches. We will also launch eventually Aumolertinib and the Hengrui asset and various other assets in India, which will drive the sales of our India franchise. So we see very strong growth coming out of India over the next five years. We will also launch Aumolertinib in the second half of FY 2027, and we'll keep scaling up RYALTRIS and WINLEVI going forward.
RYALTRIS will be a $100 million product for us this year and continues to scale as we go forward. So in summary, the next five years continue to remain pretty exciting for Glenmark in terms of growth, performance across all the parameters. And we continue to move up the value chain, especially with our innovative franchise over the next five years through these seven, eight launches, which will clearly define the company and the future as we go forward. We clearly remain on track to achieve our overall objectives that we laid out as part of Glenmark 3.0. With this, I'll hand it over to Anurag to give his opening comments, and then we can take Q&A.
Thank you, Glen. Good morning, everybody. We delivered on our near-term guidance with a strong revenue performance and a margin profile of 23% in this quarter. The business growth was helped in part by the currency depreciation across our key geographies. However, our base business performance continues to remain strong, especially in key branded markets. With our gross margin in current quarter was impacted by the product mix, however, we saw a good operating leverage, which helped overall our overall margins. We continue to remain net cash positive and are on track to target the gross debt zero by March 2026. Multiple initiatives are ongoing to help normalize working capital movement to remain around 115 days of net working capital days, in line with our guidance by March 2026.
We remain confident of closing FY 26 on a strong note and foresee a good start off to our next growth journey of Glenmark 3.0 from 2027 onwards. Thank you.
Thanks, Anurag. So with that, we, I think we can open the floor up for Q&A. Lizanne, over to you.
Thank you. We will now begin with the question and answer session. Anyone wishing to ask a question, may please press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions be assembled. The first question is from the line of Damayanti Kerai from HSBC. Please go ahead.
Hi, good morning, and thank you for the opportunity. My first question is on your comment around gain from currency depreciation during the quarter. So if you can just quantify how much was that, and excluding that, what kind of growth we would have recorded?
So, Damayanti, currency depreciation sits in the, goes into the multiple part of the P&L. So in a normal business case, whatever the revenue and in terms of the, changing, converting that revenue from that geography into the, rupee term, that goes and sits in the normal EBITDA, right? And, if you see on our exceptional item, there is a currency, difference of INR 7.3 crore, which is only on exceptional item. So out of the exceptional item, INR 177.8 crore is due to the labor court, and balance 77, sorry, 7 crore is because of the exceptional item. And so it sits into the multiple part of the, thing, businesses, and it's difficult to actually, quantify that way.
Okay. My second question is on the FLOVENT status from the FDA. So, since your last communication, have you heard anything incremental? And when do you expect the agency to come back with its decision?
All I can say is, you know, we've had multiple discussions with the agency, and we are very close to, you know, we're hoping we'll get an approval very quickly on FLOVENT 44.
Glen, you mentioned respiratory will be significant in the fourth quarter, so FLOVENT will be part of that?
We are hoping that FLOVENT is part of it, but we also have the nasal spray and various other products in the respiratory franchise, which could get approved in Q4.
Okay. My last question is on your working capital management. You mentioned 115 days is something which you are targeting by March 2026. So in terms of key changes and progress, if you can walk, like, what are the key initiatives and how things are shaping since last quarter when we had some hiccup, et cetera. So if you can just talk a bit about your working capital management part.
Yes. So, Damayanti, we have initiated multiple options, basically. So one was on the sales side, basically to get the debtors reduced, and that is through the factoring and some of the other instruments. So including the other market like Europe and LATAM, which we were not doing yet, and which obviously we will be very cost conscious on this part. So that's one on the sales side. And similarly, on the MSME and vendor side also, we are trying to elongate the payment cycle through the RBI related legitimate channels, which include vendor financing and some of the vendor bill discounting sort of thing.
So which will help us to move more both on the sales side as well as on the purchase side, to allow reduce the working capital cycle.
Okay. So as of December, where do you stand against this target of 115 days?
Right now, we are actually again lower than 115 days. But as the business activities increase, that's why we are keeping... But right now we are at close to 110 days.
Okay. Thanks. Thanks. I'll get back.
Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Yeah, thanks for the opportunity. Sir, on Monroe, now that USFDA issues are behind, so, you know, how do we, you know, what would be the sort of trajectory in terms of business? I guess product approvals has still not come, so how do we start the commercial production, you know?
So I think, we will start commercial production in, in this quarter, and, we have one or two approved products, so we will start commercializing that. Next year, you can anticipate we will sell about three products with, a number of filings, right, next year. And, I, I think the way to think about Monroe is, you know, it's, it'll take some time, right, for, for the site to be fully, in full flow, right, in terms of commercial production. And at the operating level, about, I would say about four years, right? From today, you know, we will, you know, we will break even at the operating level.
Also, how do you intend to, you know, increase the number of filings from this site, maybe over the next 12-15 months?
I think every year we will have at least three, three odd filings, right, from the site. And we are working specifically on very complex injectables, right? So we're not doing any run-of-the-mill products. So, that will further enhance the filings.
Got it, sir. And sir, secondly, RYALTRIS, you highlighted it's $100 million product now. Major geographies and their contribution, let's say any geography which is contributing, say, more than 10, 15%, if you could just refresh that.
It's pretty broad-based. So Europe obviously is a big driver, along with some leading emerging markets like Russia, Australia, and multiple other countries, right? Which, where the bulk of the sales are coming from. But I think it's pretty broad-based overall. So there's no country, no geography, which is more than 20-25% of sales, somewhere thereabouts.
Got it, sir. And lastly, on gross margin, like if I exclude the out-licensing income, the gross margin, while it's highlighted there, it's a product mix, but is there anything further? Because without the out-licensing income, the gross margin is much lower at 65%.
Yeah. So, it's largely because of the product mix and geographical mix because of that. I think, but hope- I think we are on track. I think we should be on. I think you will see a recovery on this. And what we see our guidance is overall at EBITDA level, we are on track to deliver our guidance of 23% in a sustainable basis.
Also, just one point on gross margin. If we get these new product approvals, right, in Q4, you'll see a definite uptick in the gross margins.
Got it, sir. And sir, just a request and a suggestion that if you could put the R&D expense in the presentation or the press release itself, given that it's a core sort of for Glenmark Pharma, it would be good instead-
Sure.
Of putting commentary in the presentation.
Sure. So, Tushar, just to reiterate, so R&D for this quarter was INR 290 crores, total R&D.
Yeah. Thank you.
Thank you, Tushar.
Thank you. The next question is from the line of Kunal Randeria from Axis Capital. Please go ahead.
Good morning. Glen, in Europe, you have shown a revenue growth of around 9%, but I think the currency appreciation, I mean, sorry, revenue appreciation would be around 15%. So do you decline in constant currency in Europe?
See, I think Europe, the way to think about Europe is, you know, we've had a phenomenal last three years or four years, right? I mean, the business has done, has done exceedingly well, if you look at our European business, right? In, in the first half, we've had some challenges in terms of growth, right? In, in the first half. Going forward, I think Europe, you know, you should expect like a, a, a single digit to low double-digit growth from here, right? Given that we've grown over 25% CAGR over the last three, four years.
Sure. But I think you had earlier mentioned that, you know, maybe in the medium term, it can grow in double digits. So is it because-
Yeah
... launches are a bit slow? See, 26, I can understand from a base of 25, but maybe, about 27, 28, can we still grow in double digits?
I think we can grow double-digit in Europe. I mean, the key is, you know, we are waiting for some new product approvals, right? I mean, for example, in FY 2027, we should have at least a couple of respiratory product launches, right? Which should drive Europe. Also, RYALTRIS, you know, we should see some incremental growth coming in Europe in FY 2027 and beyond. So overall, the business and WINLEVI also will contribute, right? I mean, we're just launching WINLEVI in UK and in Europe. So overall, the business should continue to do well, right? But, I mean, just to be conservative, we are saying high single-digit to low double-digit, right, growth for Europe going forward.
Increasing contribution of branded market will lead to this actually.
Fair enough. Fair enough. Sir, secondly, on the ISB 830 and 880, and I see both products are progressing well now. So can you share what can lead to milestone payments for you?
We don't give any visibility to specific milestones, right, as a company. I mean, we've stayed away from that. So I think. Look, I think the takeaway message is, you know, we have three innovative assets all progressing well in the clinics, right? So 2001 continues to do well for us. Additionally, 880, you know, with Almirall starting the phase II, that's an exciting asset. And then of course, 830, right? So I mean, we have these three assets in the clinics and, you know, hopefully this year, by the end of this calendar year, we'll have 2301 also going into the clinics, right? And we have a good pipeline of innovative assets from here on, right.
But I think from a commercial perspective, the way to think about it is the next five years, right, will be contributed by these seven, eight innovative assets, right? The Hansoh, Hengrui, Envafolimab, RYALTRIS, WINLEVI, TEVIMBRA, BRUKINSA, I mean, these are the next five years. And then post that, the following five years will be all about two thousand and one and some of these immunology assets and some of the rest of our portfolio. So I think that's the next 10-year journey, right, for the company, right, in, on the innovation side.
Sure. So just one more, if I can. You have increased your filing fees in the U.S., so can I ask for which plants are you doing the filing? Because Indore, but Goa are still active in the remediation scanner.
So, I think the way to think about our US business is, there are two plants, Aurangabad and Monroe, right? Where the bulk of our filings are coming out of. Goa and Indore are under warning letter, so we tech transferred some of the products to some US CMOs and we got a sucralfate suspension approved, which was from one of the warning letter sites. And likewise, we have some other products which are tech transferred to US CMOs. But we have completely discontinued our US commercialization and filings.
Sure. Sure. That's very interesting. Thank you, Namrata.
Thank you. The next question is from the line of Saion Mukherjee from Nomura. Please go ahead.
Yeah, good morning, and thanks for taking my question. Just some numbers, this INR 290 crores of R&D, if you can split between Ichnos and the rest of the business?
Around 50% was, of this was IGI related.
Okay. Okay. The second one was regarding your other expenses, which seem to have come off a year-on-year basis, despite, you know, currency depreciating, impacting costs in many of your international markets. So if you can give some color on why the other expense is coming down and how should we think about that going forward?
So other expenses, broadly, it remains in line, but as you see on a quarter-on-quarter basis, sometimes because of approval and the phasing of the expenses, sometimes it goes lower. But I think, overall, we should see an inflationary related impact on the other expenses. So, this quarter it looks lower, but I think it's more a phasing and booking issues.
Okay. And the final one, if I can ask on, you know, if you can share the net cash number and also the, CapEx that you have done for this year, both tangible addition and intangible addition please.
So, CapEx in this quarter was around INR 215 crore, and YTD CapEx was INR 715 crore. And on this quarter, CapEx, around 55% was on intangible and 45% was tangible. So that's what the broadly CapEx number was. On net cash, if you see, we remain net cash positive. And in fact, gross debt was close to around INR 100 crore, and net cash was also close to INR 600 crore. In fact, we had a large payment in this quarter of around INR 1,250 crore, which includes ITI tax, dividend we have paid, we had a CapEx amount. So that's—despite that, actually, we remain on cash overall net cash positive.
So, sir, what is the number, sir? Sorry, sir. Net cash number, is it?
Around INR 600 crore.
Net cash, INR 600.
Sorry, Saion, gross debt is about INR 600 crore, and the net cash is, net cash is around, n et cash is around INR 1,200 crore of cash.
Okay. Okay. And just in terms of your future liabilities, if you can, you know, what should we sort of pencil in? Because some of the licensing deals that you've done, you know, from various companies in the recent past, and also some liabilities related to litigation. If you can have some visibility for this year, next year, how should we think about payouts that, you know, if we have to factor in?
So I think just a couple of things, right? On the legal settlements, obviously, Shane, we can't give too much of visibility, right? However, if you look at the MDL, right, we have done a settlement with the DPPs, that's public information, right? And we still have some of the other classes to go, right, which is mainly the AGs and the EPPs, right, on the MDL, which is probably the largest right now in terms of legal cases. So that's on that side. On the innovation side, you know, with us doing, you know, these three transactions, right? The Hengrui transaction, obviously some of it is built into the intangible numbers that Anurag mentioned. And, Aumolertinib, we are still, we are still in the process of paying that.
I think that is.
So timing-wise, it could be in this quarter or it could be early next quarter. I think, because it, it's difficult to actually give you the specific, because it depends on the commercial progression of the deal. But I think it could be somewhere at the end of this quarter or early next quarter, accordingly.
And then going forward, beyond that, Shane, you know, the next big milestones are all linked to the launch, launches of these products, but we don't anticipate any big amounts being paid on any three of these assets, right? So I think that's kind of where we stand. It's more back-ended, royalty-based, and sales link milestones and which are the drivers to the numbers.
I see. Okay. Okay, thanks a lot. I'll join back.
Thank you. The next question is from the line of Krish Mehta from Enam Holdings. Please go ahead.
Thank you for taking my questions. I have two questions. The first is on your specialty business, the 7, 8 innovative assets, which Glen mentioned earlier. So if you could just broadly, directionally tell us in terms of how the gross margin level would differentiate from the rest of our portfolio in the 7, 8 innovative assets, including the ramp-up we've seen in RYALTRIS, and where you can see the gross margin eventually settle, you know, as we scale up these 7, 8 assets?
I think that's a very good question. Look, see, oncology assets, the gross margins are significantly higher than, than, where we are today, right? The core business, right? So I think more than the gross margins is also the EBITDA margins will be significantly higher. So there will be a, a definite margin uplift, right? I would anticipate a lot of this will start playing up from FY 2028, not 2027. By 2028, you'll have, amlotinib fully, you know, commercialized in many, many markets, as well as, you know, the, the Hengrui assets starting to commercialize in some of the markets by FY 2028. So I think the real uplift in the margin profile of the company will happen from, from the current 23 odd levels, right, will happen from FY 2028 onwards.
Okay. No, that's helpful, Glen. And if you could throw some light on how the Ichnos, you know, quarterly revenue and cost will be accounted for going forward in terms of, you know, how we're recognizing the AbbVie payments. If you could just explain on the accounting for the next few quarters, you know, revenue and cost both?
On the revenue side, whatever, as you recall, what the upfront payment, which we got, we booked $525 million last quarter. And now there will be a equalized run rate of $17.5 million every quarter. On expenses side, we get a reimbursement, but which reimbursement we net it off and go into the other expenses. So that does not go impact the top line and bottom line simultaneously. So that actually gets netted off as per the reimbursement part and the other expenses.
That's very helpful. My last question was, you know, what will be the number for this Ichnos quarterly revenue, and, I mean, the Ichnos quarterly cost that we spend going forward say for the next 3-5 years?
So, we've guided to a $70 million run rate, right, in terms of burn for IGI, right?
Annualized, INR 70 million.
Annualized INR 70 million, so we'll stay within that.
We are booking exactly INR 17.5 million per quarter, which is again INR 70 million every year. So that's how we are booking the revenue also. On next business,
Thank you.
Thank you. The next question is from the line of Sukrit Patil from Eyesight Fintrade Private Limited. Please go ahead.
Good morning to the team. I have two questions. The first question to Mr. Glenn is, across Glenmark's core business, you have spoken extensively about the portfolio focus and therapeutic priority. Just want to understand the key trade-offs you are currently making between investing behind scale in established market versus nurturing your therapies in newer areas? And what key internal signals would you need to rebalance the capital or management attention between these two sectors? Thank you. That's my first question. I'll ask you the second question after this. Thank you.
So, I mean, in them, we've always been therapy focused, right? Unlike many of our peer companies, we are focused on these three areas, right? Derm, respiratory, oncology. And, I don't think it's that easy to switch areas, at least for us, because we have built deep expertise starting from R&D right up to commercialization in these three areas, right? Which actually is a competitive advantage for us. That's the way we view it.
So I think, you know, given that, given this expertise that we've built in these three areas, we are now expanding our EM franchise, right, India and emerging markets in terms of commercialization, with a clear view that longer term, as we get more innovative assets, we could continue to move up the value chain into much some of the developed markets as we go forward. So, I mean, the capital allocation between the therapy areas versus getting into newer areas doesn't exist for Glenmark, because we built our business basis that, at least for now, right? And that's the next five to 10 years, we'll continue to focus on the areas that we have defined for ourselves.
Thank you. My second question to Mr. Mantri is, beyond high level margins and cost commentary, what are the key early indicators you track internally across pricing, product mix, and working capital that give you confidence on profitability and cash flow sustainability before these trends reflect in the reported results?
So, good question. Basically, what we track, and this is very critical for us because especially when we are operating in emerging markets and across the markets. So we track closely the working capital. One is that on a debtors and inventory side, because these markets consume a large working capital requirement, and also on a purchase side. So actually, how to bring this entire working capital cycle more efficient and reduce this cycle. So if you see, industry has been, well, maintaining almost operating at 125-130 days. But we are targeting 115 days this year, and then we will continue to improve work on the improvement further.
So this is what we closely track, debtors, inventory, creditors, this, and how to actually improve with the various instruments, but at a more efficient cost manner.
Thank you, and best of luck for the next quarter.
Thank you. Okay, thank you.
The next question is from the line of Zaher Kherani from Khandwala Securities. Please go ahead.
Hello. Thank you for the opportunity. I would like to ask that what is the planned CapEx for the next fiscal year, and what are the strategies motive, motive behind it?
I think the CapEx typically is around, running at around INR 700-INR 800 crores a year. So you should see the same-
INR 800 crore is the CapEx for next year.
Yeah.
Actually, next year, we should see.
So that's the way to think about it, and I think the investment is all going into... One is, ongoing CapEx, right, in terms of plants, you know, expanding our current lines, you know, and various facilities, right? That, that's the bulk of it,
And Hanglee and-
Some of the in-licensing that we've done.
Okay. Okay, thank you.
Thank you. The next question is from the line of Tarang from Old bridge Capital. Please go ahead.
Hi, good morning.
Sorry to interrupt, Tarang, we are not able to hear you. Can you speak a bit louder?
Hi, am I audible?
Yes.
Yeah.
Hello? Yes.
Yes. Go ahead, Tarang.
Good morning. Just a bookkeeping clarification, the net-net cash as on 31st December 2025 is over and above what you've, you know, reserved at Ichnos, or this is on a consolidated basis?
So cash is at a consolidated basis.
Okay.
Basically, Ichnos money we actually keep utilizing as on as per their phasing requirement. So it's not that we keep that cash separately. So it's a consolidated number, which I told you, on the INR 600 crore of net cash.
Got it. Okay, thank you.
Thank you. The next question is from the line of Tushar Manudhani from Motilal Oswal Financial Services. Please go ahead.
Yeah, thanks for the follow-up. Just one question. Sir, any of the assets now where, you know, there is a further scope of, the deal, at least in the current assets or probably any new asset that can come up, let's say, over the next, 6 to 9 months?
So Tushar, I can't give you any visibility to our further partnering right now. But all I can say is the-
No, I-
Yeah, go ahead.
No, I meant to ask that the, at least the products which are already, you know, sort of, out licensed to the partners. So is there a scope for getting more partners for such products, firstly?
Look, there is always scope, Tushar, right? I mean, on each of these assets, right? We can always look for some regional partnerships, some smaller partnerships. I mean, it can go on and on, right? But I think it's not right to give any visibility around partnering, right, on each of the assets. One is that we already have, and even subsequent assets, right, that we are developing, like 1 Jan 2023 and, and beyond, right? All of them can be partnered at any point in time. Our bigger challenge for us is that, what is the optimal time to do any of these partnerships, and do we really need to do it? Because otherwise we end up giving up too much if we do it too early.
Got it, sir. Be well.
Thank you.
Thank you. The next question is from the line of Damayanti Kerai from HSBC. Please go ahead.
... Hi, thank you for the opportunity again. Glenn, I have a question on this ISB 2001 asset. So you're still conducting and enrolling patients for phase I studies, right? So just want to understand, when this R&D and clinical trial responsibility will be, you know, going to the partner, or you will complete the phase I and, like, how things work there?
So unfortunately, I can't give you too much visibility on our relationship with AbbVie, right? But all we're saying is the dose expansion will end, and we will, you know, we've made significant progress with the dose expansion. And I think any further information you will see in some public communications as and when we are ready to put it out.
Sure. My second question is, again, yesterday, during the budget speech, I guess there was emphasis on bio manufacturing, bio manufacturing, production in India, by the finance minister.
Right.
So any initial thoughts? Because I guess he was emphasizing on oncology and other acidity treatments, et cetera. So since you are, I think, focused in these segments, so any thoughts here?
So currently, we don't, you know, we don't do any manufacturing of biologics within Glenmark, right, in-house. We continue to outsource a lot of our biologic manufacturing, right?
Mm-hmm.
However, I mean, you know, we never know how things play out in the future, right? So it's definitely a positive for the industry.
Okay. Okay. Thank you. Thank you.
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Thank you for taking the question. Glen, on two, two- business, one is in the U.S. In the U.S., obviously, with the couple of receipt approvals you talked about likely coming through this year, just in the next few quarters, and you talked about some of the first-to-file, which will probably come towards the end of the year. So that probably, you know, gives us decent visibility on 27, 28 growth in the U.S. Now, how should we think about U.S. subsequently? I mean, are these sort of one-off drivers which come in and business gets to a base, a relatively high base? And then how should we think about U.S. subsequently from here on, I mean, after these are sort of drivers in the business?
So I think the way to think about it is 27 is all about, FLOVENT, FLOVENT 44, and maybe one more strength of FLOVENT, and, the three, out of the three, at least two, two sole FTFs, right, coming onto the market in the second half of FY 2027. 28 and beyond, you know, we will see some of the Monroe approvals, you know, injectable approvals starting coming through, as well as the additional respiratory, filings that we're doing over the next 12 to 18 months, right? Which again, are, are super complex and, and difficult, right? So I think these are the two main drivers to the U.S. business from 28 and beyond, right, as we go forward.
Glen, on the generic filings, you know, but when you say these are complex filings, so when, by when do you think you'll be probably able to do the first of these filings beyond FLOVENT?
It's probably happening in the next 3-6 months.
Okay. Okay. And secondly, on the emerging market business, you know, there has been some slowdown this year, but how would... You talked about Europe being a slightly slower, sustainable growth from year on. How should we think about the emerging market piece?
So emerging markets, you know, next year should be a strong year for EM, okay? And, you know, the core business, we see some significant growth, plus, of course, with the launch of this amlodipine, right, in the second half of next year, right? Starting from then, EM should be a significant driver, right, over the next five years for the company.
So this is what, like a 15%-20% growth business on a compounding basis, or like a 10%-15% compounding business? How do you...
If you see on a five-year basis, it's north of 20%, very clearly .
Going forward. Okay. Okay. Okay. And, and lastly, Glen, on the specialty business, so RYALTRIS obviously has scaled up to close to $100 million, as you talked about. Next of RYALTRIS, when do you, I mean, how meaningful. When do you see the other launches start to become meaningful for us? Say, $50 million-$200 million dollar bracket, when, as collectively, when do they get there?
See, RYALTRIS is currently growing at 25%-30%, right, top line. So it's still... The growth numbers are still very strong in the existing markets. Over and above that, you know, we are still waiting for the Chinese launch to happen, you know, coming up. We're expecting a Brazilian approval coming through. So there are still a number of markets where we're still not commercialized, right? So I think getting up to $200-$250 is, is not gonna be a huge challenge for us, right, over the next three to five years.
On the RYALTRIS portfolio, when do you think it starts to become meaningful?
Sorry, say that again.
RYALTRIS portfolio.
RYALTRIS innovative portfolio, is that what you're talking about? Does it become meaningful?
Yeah. I mean, when does it start to become meaningful? So $50 million plus, thereabout, in the range overall.
I think FY 2028, you'll see a big, big, upswing, right? Because FY 2028, as I said, you'll have this, amlodipine, plus you'll have some of the Hengrui, some markets of Hengrui. Plus, of course, India will be really meaningful. I mean, starting FY 2027 itself in the second half, with Amlodipine being launched, right? And in India, right? Then TEVIMBRA BRUKINSA doing well. You know, the run rate already is maxed out for TEVIMBRA BRUKINSA. And, and then again, FY 2028, we'll have these other, the Hengrui asset also launching. So I think the build-out is very solid, right? And, you know, you'll see some good growth numbers. The FY 2028, for sure, will be ahead of $50 million, right, collectively, ex trials.
Oh, that's nice. And if I get one last one, Anurag, on the—when you think about, again, EBITDA margins for the, for the business, you know, over the last couple of next, next 2-3 years, I mean, do you see operating leverage? So what will drive business from here on? It is gross margin improvement, or this is, you see also operating leverage inherent in the business, which can drive both, you know, which can probably add to the, margin improvement as we go forward?
So, basically, if you see, as Glenn pointed out, is that all these new innovative assets coming in, more branded share mix share increasing in our overall mix, emerging market playing very strong for us. I think all this puts together, you will see a margin expansion northward of what our guidance is there. But our guidance is right now mostly for this year, next, say, three to four quarters. But as Glenn mentioned, FY 2028, we see all these newer in-licensing assets coming up and all these things playing out. We should see a good positive consolidation in our gross mar our EBITDA margins.
Because it will be operating leverage after this, actually, because our base expenses have been built out, so it will be a cost remains fixed, and then you can build it on this, the platform which we have built across geographies.
Okay. Thank you so much. That's all.
Thank you. The next question is from the line of Harsh Dhoot from Dymon Asia Capital. Please go ahead.
Oh, hi. Good morning, sir. Thanks a lot for the opportunity. So one question from my side on domestic sales. We have clocked a very good performance in the quarter at clocking around INR 20 million-INR 30 million growth order sales. So, is it fair to assume that I think is normalized and this trend is sustainable in the domestic business?
As I said, see, India is a very strong market for us, right? We are among the fastest growing companies in India. I mean, if you look at December also, we grew at 19%, when the market grew at 10%-11%, right? So very strong numbers, right, coming out of India. And I think, you know, for the next three to 5 years, India will be a strong growth market for us, and, especially when we launch these oncology products, right? That will further give a good flip, to the India growth, right? So both chronic respiratory and oncology will drive India. So, you should see this run rate remain more or less at this level or, or keep growing from here, right, as we go forward in the quarters ahead.
Okay. Thank you, also. Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was our last question. I now hand the conference over to Mr. Utkarsh Gandhi for his closing comments.
Yeah, thank you. Quick reminder to everyone that the information, statements, and analysis discussed during this call describing the company or its affiliates, objectives, projections, and estimates are forward-looking statements. These are based on current expectations, forecasts, and assumptions, and are subject to risks and uncertainties, which could cause actual outcomes to materially differ. No representation or warranty, either expressed or implied, is provided in relation to the conversation and the documents provided, and the company undertakes no obligation to update or revise any forward-looking statements, whether because of new information, future events, or otherwise. With that, we can close the Q3 earnings call. Thank you everyone for joining us today. Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Glenmark Pharmaceuticals Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.