Ladies and gentlemen, good day and welcome to Q2 FY 2027 earnings conference call of Glenmark Pharmaceuticals Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Utkarsh Gandhi, Senior General Manager, Investor Relations of Glenmark Pharmaceuticals. Thank you, and over to you, Mr. Gandhi.
Thank you, Renju. Good morning, everyone, and welcome to the Q2 FY 2027 earnings conference call of Glenmark Pharmaceuticals Limited. Before we begin, I would like to wish everyone a very happy Diwali. Let's review the overall business performance before we get on to the Q&A. For Q2 FY 2027, Glenmark's consolidated revenue from operations was at INR 473 million as against INR 469 million in the corresponding quarter last year. On a like-for-like basis, Glenmark's consolidated revenue in Q2 FY 2027 recorded YoY growth of close to 20%. For the first half of FY 2027, Glenmark's consolidated revenue from operations was INR 82,658 million as against INR 93,113 million in the corresponding quarter last year. On a like-for-like basis, Glenmark's consolidated revenue in the first half of FY 2027 recorded a YoY growth of around 18%. Covering our market-wise performance, starting with India.
Sales in the formulation business in India for Q2 FY 2027 was at INR 13,274 million as against INR 1,651 million in the corresponding quarter last year. On a like-for-like basis, the India formulation business recorded YoY growth of close to 14% in the second quarter and close to 15% in the first half of FY 2027. Glenmark continues to significantly outperform the IPM in terms of secondary sales as per IQVIA. Glenmark's India formulation business recorded a growth of 16.7% in the second quarter and 15.7% as per MAT September 2026 data, compared to the IPM growth of 13.8% in Q2 and 12.1% in MAT September. Glenmark continues to sustain strong growth in its core therapeutic areas like dermatology, respiratory, cardiac, and oncology.
Glenmark India business is ranked 13th with a market share of 2.4% as per IQVIA MAT September 2026. The company has 11 brands in the IPM top 300. In terms of core therapeutic areas, Glenmark is ranked second in dermatology, third in respiratory, and fourth in the cardiac segment as per IQVIA MAT September data. Reflecting on the growing trend of its oncology franchise, Glenmark has also advanced into the top 10 of the oncology market according to the Ipsos MAT June 2026 data.
In terms of our key innovative brands across therapy areas, we continue to see strong sales for both TEVIMBRA and BRUKINSA, which are our partner products in oncology, which were launched in Q1 FY 2026. In the respiratory segment, we launched Nebzmart GFB and Glenmark Airz FB Smartules in Q3 FY 2026. This is the world's first nebulized fixed-dose triple therapy for the treatment of COPD, and it demonstrated very strong market attraction since launch, further enhancing Glenmark's leadership position in respiratory.
In terms of our GCC business, primary sales for the Glenmark Consumer Care business in Q2 FY 2027 were INR 1,252 million with a YoY growth of 46.5%. GCCL brands delivered a strong performance in Q2, driven by sustained momentum across all our key franchises, including Candid, La Shield, Scalpe, and some of the newer brands like Bontress and Episoft. Moving on to North America. North America business recorded revenue of INR 10,089 million for Q2 FY 2027 as against INR 44,656 million last year. Net of the deferred out-licensing income recognition for ISB 2001, the core business YoY growth for the North America region was around 31% in Q2 and around 25% in the first half of FY 2027. During the quarter, Glenmark launched four products across multiple channels. Multiple launches included sugammadex injection, fluticasone nasal spray RX, and nintedanib capsule.
In addition to these product launches, Glenmark also launched other pack sizes for existing products, and Glenmark is also looking to begin distribution of several other in-licensed products in the third quarter. Glenmark has strengthened its respiratory franchise with the launch of fluticasone propionate inhalation aerosol, the 44 mcg, which is a generic to Flovent. Glenmark was granted a CGT designation and received 180 days exclusivity upon commercialization. As mentioned before, Glenmark has also received approval for fluticasone nasal spray, both RX and OTC formulations. We have also filed additional ANDAs for differentiated respiratory products, including Fluticasone Flovent 110, a generic to Flovent 110, as well as for generic to ipratropium inhalation MDI. Glenmark has also initiated the end-to-end commercialization of RYALTRIS and is now leading brand strategy and market access across the U.S. Glenmark has also built a large portfolio of commercial injectable products to various partners.
Our injectable facility received EIR from the U.S. FDA with an EIR classification, and subsequently, we relaunched fulvestrant injection out of the Monroe facility in Q1 FY 2027. We are working on launching additional products from the Monroe site in the upcoming quarters. During the second quarter, our Goa plant also received EIR from the US FDA with an EIR classification. A quick litigation update. As previously disclosed, there were multiple antitrust and consumer protection lawsuits, including class action that is consolidated in the Eastern District of Pennsylvania against the company's subsidiary, Glenmark Pharmaceuticals Inc., in connection with allegations of price fixing, market allocation, and related anti-competitive conduct. The plaintiffs included classes of direct purchasers, EPPs, and indirect purchasers of generic drugs. Three complaints filed by Humana were included in the consolidated litigation.
With a view to resolve this dispute and avoid uncertainty, Glenmark USA has agreed to enter into a settlement with Humana for a total amount of $15.3 million, including interest payable in two installments. The settlement makes clear that Glenmark USA denies each and every one of the allegations made against it, and the settlement does not constitute any concession or admission of liability, wrongdoing, or illegality on the part of Glenmark USA. The full amount of the payments of the settlement agreements have been provided in the company financials. Moving on to Europe. Glenmark Europe operations revenue for Q2 FY 2027 was INR 7,920 million as against INR 7,460 million, recording a growth of 6.2%. Europe delivered a mixed performance during the quarter. We saw strong momentum across several Western European markets, being partly offset by softer demand in parts of the CEE.
The region continues to strengthen its strategic portfolio through successful launches and commercialization of key brands, particularly RYALTRIS and WINLEVI, which gained further market acceptance across multiple markets. Strong execution in respiratory and dermatology specialty portfolios, market access initiatives have helped sustain the business momentum. We are continuing to remain focused on accelerating growth in the European region through our differentiated strategy around respiratory, dermatology portfolios. We expect branded respiratory and branded dermatology to keep contributing higher in Europe as we move forward. Moving on to emerging markets. For Q2 FY 2027, revenue from the emerging markets region was INR 8,769 million as against INR 6,585 million for the corresponding quarter last year, recording a year-on-year growth of 73.2%. EM delivered impressive performance in the second quarter, driven by robust secondary sales growth, continued market outperformance, portfolio expansion, and strong execution across regions.
Our Russia region recorded a healthy growth led by dermatology portfolio, new product launches, and continued market share gains. Amongst the dermatology companies in Russia, Glenmark ranked sixth as per the IQVIA data MAT September 2026. LATAM delivered a strong Q2 as well, with growth driven mainly through the larger markets like Brazil, Mexico, and Colombia, supported by continued portfolio expansion in the respiratory segment. RYALTRIS was launched in Brazil during the second quarter of FY 2027 and has received encouraging initial feedback from physicians as well as the market. The MEA business also remained resilient amidst the geopolitical and supply chain uncertainty, with key countries outperforming several covered markets. RYALTRIS again continues to be a successful product in the region. The APAC region was one of our fastest-growing regions in the quarter, delivering strong secondary sales growth driven by respiratory and dermatology brands.
Moving on to our global innovative portfolio, starting with RYALTRIS. As of September 2026, marketing applications for RYALTRIS have been submitted to more than 90 countries across the world. The product is now commercialized in 58 markets, and further, we are expecting RYALTRIS to be launched in additional 10 markets over the next few quarters. RYALTRIS was launched in Brazil during the second quarter, as mentioned before. We also have initiated the end-to-end commercialization of RYALTRIS in the U.S., and we've seen some initial success there as well. Our partners in Europe and emerging markets continue to drive a steady increase in market share across all the licensed markets. WINLEVI, which is partnered with Cosmo. As mentioned earlier, the company has launched WINLEVI in the U.K. in the first quarter of FY 2026.
Since launch, the product has achieved formulary status covering 40% of the U.K. market, and we've seen some initial strong feedback on the product. Glenmark's partner, Cosmo, also received the MA last year. In the first quarter, we have launched WINLEVI in several other European markets, including the Nordics, CEE, and Spain. WINLEVI is also under regulatory review in South Africa, where Glenmark has submitted the application earlier. Moving on to our oncology portfolio, starting with QiNHAYO, which is envafolimab partnered with Jiangsu Alphamab. Glenmark has filed QiNHAYO marketing authorization applications in 24 countries as of September 2026. We received our first regulatory approval in the Dominican Republic in September, and we have also initiated early access for new patient programs in nine other markets. Glenmark has also initiated a multi-center phase III study in neoadjuvant and/or adjuvant patients in NSCLC.
Trastuzumab rezetecan, which is partnered with Hengrui Pharma. Glenmark advanced regulatory submissions for trastuzumab rezetecan, next-generation HER2-targeting ADC. As of September 2026, MA applications for trastuzumab rezetecan have been submitted in two markets, with additional filings to follow in subsequent quarters. As mentioned before, in June 2026, we have initiated a phase III clinical trial in platinum-resistant ovarian cancer in India. We also received approval for initiating enrollment in other markets. Aumolertinib, which is partnered with Hansoh. In Q3, Glenmark had entered into an exclusive license collaboration and distribution agreement with Hansoh for aumolertinib, which is a third-generation EGFR tyrosine kinase inhibitor for the treatment of NSCLC. Glenmark had submitted MA applications for aumolertinib in 13 markets as of September 2026, with the first commercial launch anticipated during the second half of FY 2027. Moving on to IGI.
IGI's multispecific antibody pipeline in oncology consists of four assets, ISB 2001 or ABBV-2001. To date, more than 170 subjects have been dosed in the TRIgnite phase I study, 42 in dose escalation and more than 130 in dose expansion. Safety efficacy data from all subjects continues to be promising and consistent with the data previously presented at ASCO 2025. Updated phase I clinical data from the TRIgnite study of ISB 2001, ABBV-2001, were accepted for oral presentation at the upcoming ASH 2026 conference in the session Multiple Myeloma: Pharmacologic Therapies: The March of Immunotherapy. ISB 2301 is a first-in-class multispecific immune cell activator which is targeting solid tumors, and IGI intends to submit an IND by the end of this year. ISB 2302 and 2501 are the other differentiated assets, both in early preclinical development.
In terms of our immunology portfolio, ISB 880 or LAD191, this is the anti-IL-1RAP. Almirall reported We partnered this asset with Almirall, and they reported in their H1 2026 financial results presentation that the ongoing phase II study in HS is expected to read out in 2027. In addition, phase I data for LAD191 were also presented at the European Society for Dermatological Research 2026 meeting under the title Anti-IL-1RAP Treatment Shifts HS Towards Non-Lesional State, providing further scientific support for the program's mechanism of action in HS. ISB 830, X8 STAR-0310, subsequent to BioCryst's acquisition of Astria and BioCryst's confirmation that STAR-0310 falls out of the company's strategic focus, BioCryst will return full licensing rights to IGI effective November 4th. IGI is currently evaluating strategic pathways for STAR-0310 going forward, including potential partnerships. Some additional notes on the results.
R&D expenses for the quarter were INR 344.9 crore, of which IGI R&D was around INR 187 crore. Total CapEx during the second quarter was about INR 262.1 crore, of which tangible CapEx addition was around INR 170 crore and intangible was around INR 92 crore. From the Glenmark team, we have Glenn Saldanha, Chairman and Managing Director, Anurag Mantri, Executive Director and Global CFO, and Purvi Shah, General Manager, Investor Relations. I will now hand it over to Glenn for his opening comments.
Thank you, Utkarsh. Good morning, everyone, and thank you for joining us today. Before we begin, on behalf of the Glenmark team, I would like to extend our warmest wishes to all of you on the occasion of Diwali. Q2 was another strong quarter for Glenmark, reflecting the continued momentum across our business and the disciplined execution of our strategy. We delivered strong growth across key markets while continuing to strengthen our portfolio and advance our innovative programs. Our India business continued its strong performance across our core therapies. We continue to strengthen our presence across our four therapeutic segments through a differentiated branded portfolio and superior execution-led approach. In North America, we continue to build on the momentum through our respiratory launches. We remain excited about the continued opportunities both in respiratory and injectables, as well as the initial pickup of RYALTRIS.
Emerging markets delivered another healthy quarter, supported by the strength of our branded franchise and strong market execution. We witnessed very strong secondary sales growth across our key emerging markets. In Europe, we remain focused on expanding our branded and respiratory and dermatology business while steadily improving the overall quality and profitability of the overall business. Innovation remains a clear pillar for Glenmark's long-term strategy. During the quarter, we continued to make progress across our innovation and specialty portfolio.
We believe our innovative platform at IGI is truly world-class, and we are excited about the progression of our partnership with AbbVie, as well as the next assets in the IGI pipeline, starting with ISB 2301. We believe Glenmark is well-positioned for the next phase of growth, and we are excited about the opportunity ahead. Our priorities remain clear: accelerating growth in our core business, scaling up our specialty and branded portfolios, and advancing our innovative pipeline. With this, I will hand the floor over to Anurag for his opening comments.
Thank you, Glenn, and good morning, everyone. Wish you all a very happy Diwali and a prosperous new year ahead. As Glenn mentioned, we delivered a strong performance in Q2, supported by our execution across all our businesses and continued focus on operational discipline. This is despite the cost pressure across the value chain due to the various geopolitical volatility. Excluding the various one-offs from the last year, as well as looking at our core business P&L, excluding IGI, we delivered a 20% YoY growth in revenue, along with 21% EBITDA margin in Q2. The company recognized an exceptional item during the period, for which the related amount has been fully provided for in the financial statement. Adjusting for the exceptional item, our adjusted PAT stood at INR 485 crore, with PAT margin of 11.4% for the quarter.
As of September, our net working capital days were in the range of 110-115 days, in line with our guidance for FY 2027. The company continues to maintain a net cash position of INR 424 crore as on September 2026. The increase in gross debt reflects the funding of certain strategic field force expansion in various markets and the multiple legal settlement payments which were front-loaded in the H1. Accordingly, to meet this strategic expansion, we kept the cash in the various geographies to meet our strategic growth targets.
As the operating leverage kicks in in H2 FY 2027, we expect gross debt to be zero by end of FY 2027. The company remains focused on the prudent capital allocation, and accordingly, we are focusing on our strategic growth targets and maintaining our healthy balance sheet ratios. Overall, we are pleased with the progress we have made in the first half of the year, and confident of strong second half based on the operating leverage. With that, we would be happy to take our questions.
Renju, we can open the floor up for Q&A.
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on a 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 for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Damayanti Kerai with HSBC. Please go ahead.
Hi. Good morning, everyone. My first question is on your provisions for litigation charges in the U.S. So, after what you booked in first half of this fiscal, what kind of visibility you have? Like, how much more we can incur in coming quarters? If you have any thoughts around that?
I think most of our big cases have been settled, right? Now, going forward, we anticipate there will be some possible small amounts which will go out as we go forward. So, the bulk of it is behind us in terms of settlements, legal settlements.
Okay. Major ones are done, but some smaller matters might continue in coming quarters as well?
Quarters and years, maybe.
Quarters and years. My second question is on your U.S. build-up. Two points I want to understand. First, what kind of headroom you see for Flovent franchise in terms of market share gain, et cetera? Then second, if you can update us on filing and launches from the Monroe facility.
Sure. If you look at our respiratory franchise, Flovent 44 was the first product, first major product that we rolled out, and the product's doing as what we anticipated. It's doing quite well. We are the sole generic on the market, and to the best of our knowledge, we'll continue that way for a while. The second product we got was, substantial product was fluticasone nasal spray, which we are currently in the process of commercializing. Some of that impact you should see in Q3 and beyond, in terms of the sales of fluticasone nasal spray. We also have two other product launches probably toward the end of this year. One is Flovent 110 and ipratropium. These are the two launches towards the end of this fiscal year.
Next year, we are hoping we should have, we are anticipating one or two more filings this year, which should come up for launch next year. I think the respiratory franchise is very solid. Also, in this quarter, we also have acetonide getting launched, which we think is an exclusive product. I think that will also be a key driver to the performance in Q3 and beyond. This is broadly the U.S. trajectory. Then of course, in injectables in Monroe, we've now launched fulvestrant already, that's commercial, and we are waiting for some of the iron complexes to start getting approved as we go forward. Next year, you should see, our hope is at least three, four products commercial from Monroe. One or two of them could be quite substantial.
Sure. When you are doing manufacturing of some licensed product as well from Monroe, right?
No, not from Monroe. Monroe, we only do our own products, but what we do is we do a lot of in-licensing of various injectable products. We have multiple partnerships, right, between various Indian companies and some Chinese companies, which has helped us get some excellent, a good portfolio. For example, sugammadex, which we recently launched, or in the past, we have Titan and OIN. We have a number of products from that franchise, which has helped us build a sizable institution business. That coupled with the Monroe launches in injectables, our thinking is in the next two, three years, we should have a substantial injectable portfolio, right? Between Monroe and the in-licensed products, as well as some of the in-house respiratory launches that we are doing, should be the key drivers to our overall business in the U.S.
Sure. That's helpful. My last question is, now India and U.S., two of your largest businesses, strongly back in your growth trajectory. How should we look at the EBITDA margin trajectory from current levels?
I think, just one point. India and U.S. are big, but I also think emerging markets will be very, very substantial for us, in the next five years. I just want you to keep track of that too, because of all the because RYALTRIS as a product continues to do exceedingly well, and of course, with the launch next year should be a substantial year for our oncology franchise, with the launch of aumolertinib, trastuzumab, starting next year onwards, you should see substantial uptake in some of these products.
The oncology, some of these should start contributing next year. So, FY 2028 onwards. I think the build-out should be pretty substantial, from here on every year. With the oncology products, with RYALTRIS continuing to grow at 30%, 40%, across the world. That should be a key driver for us over the next three, four years. I think emerging markets should also be a substantial player. But in terms of margins, I'll ask Anurag to comment.
So, as the shift happens towards more branded innovative portfolio in India and emerging market, along with the higher-margin launches in North America, the margin trajectory, and you will see in H2 itself, it's continued to grow because we have invested in field force expansion and strategic expansion in emerging market in oncology area in H1. Therefore, the expenses were front-loaded, and these will start yielding results from H2 onwards. So we'll continue to see upward margin trajectory, and what we guided earlier is that in terms of a percentage improvement on a year-on-year basis, that's what we are targeting on the margin front.
Sure. Thank you, Glenn. Thank you, Anurag. I'll pass it on.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Kunal Randeria with Axis Capital. Please go ahead.
Yeah. Hi, and good morning, and thank you for the opportunity. Glenn, first question on ISB 2001. In the press release day before yesterday, you mentioned that you'll be presenting at ASH this year. In your presentation, there's a mention of two trials. There's one phase I/II combination also. So TRIgnite, I understand, y ou probably have updated data on that. But can you just highlight what this phase I/II combination is?
Sure. As you know, the ISB 2001 is being run by AbbVie now, right? Our partners, AbbVie. They are running. They have full control of the development, and while we play an active, we collaborate very closely with them, they are running the trials. What the phase I/II trial, if you look at ClinicalTrials.gov, right, AbbVie has started a phase I/II trial where they have combined ISB 2001 along with, I think, CELMoDs, right? Mezigdomide and iberdomide. They are running that trial as we speak.
It is on ClinicalTrials.gov, so you can actually access it from there. The TRIgnite, of course, you are very familiar with, the 170 patients that we have dosed is coming out of the TRIgnite study. I think a lot of We are pretty excited about the presentation that will go out at ASH. You should wait till ASH to see what we are going to present there.
Sure. Got that. Second question, you have emerging market, like a great quarter this time around. I think in the years ahead, you do have portfolio rollout of envafolimab, trastuzumab rezetecan, and others. I am just wondering what kind of growth one could expect, and what would be the contribution of some of these new innovative products that we can maybe see in the next two to three years?
I think in terms of growth trajectory, right, EMs, you should see a minimum 15%-20% growth consistently for the next few years, right, coming out of EMs. Oncology alone, right, should start contributing next year, right? With some of these oncology products, my guess is, you should see next year $30 million-$40 million coming out of the oncology franchise, and that will continue to grow significantly. Of course, the margin profile also on these oncology drugs are much higher than the regular margin profile. That should help from FY 2028 in terms of the overall margin profile. With the oncology launches, alongside with RYALTRIS continuing to do well, right? Consistently, my guess is you should see a 15%-20% growth consistently from here on.
Sure. Can you share how much has RYALTRIS done maybe in this quarter, and what do you think it could be again two, three years down the line? Which markets will drive the growth from here on?
If you look at RYALTRIS as a product, right? If you look at the overall market, Kunal, right? It is about $3.5 billion, right? In terms of entire steroidal nasal spray market. We are addressing a pretty substantial market, right? If you put the monosteroidals like fluticasone nasal spray, FLONASE, and NASONEX, and all these products, right? And the combination products. RYALTRIS, we think, is a best-in-class product, right? In terms of efficacy and safety profile, and it is demonstrated consistently.
Many of our markets, we are already at above 20% market share, right? In almost 10 or 15 markets, we have more than 20% market share. I mean, if we are able to broad-base that, right, this can be a substantial product for the company as we go forward. Today, as of this year, we will be at about $130 million-$140 million of sales, our sales, right? That is growing at about 30%, 40% right now, closer to 40% growth. I think it is a substantial rollout for us, right? You can see multi-year growth coming out of RYALTRIS as we go forward.
In H1 itself, Kunal, the RYALTRIS growth on a year-on-year basis was more than 40%.
Okay. Got it. Which markets are driving these?
I think it's very broad-based, Kunal. Virtually every market, we are seeing that kind of uptake, right? I also think, some of the newer markets we're just in the process of launching. For example, Brazil, which is a large market. China, our partners are just rolling it out in China. U.S., I think this is the first year, and I think U.S., our goal is to continue to drive RYALTRIS sales as we go forward. I think the next four, five years, we should see substantial uptake from the U.S. market with regards to RYALTRIS. So, this year is about $15 million, $20 million of sales, but that will grow pretty rapidly as we go forward. I think these are some of the markets which are contributing, but I think the growth is broad-based. Till today, almost all our markets, we are growing at 30%, 40% consistently.
Got it. Thanks. Thanks a lot, Glenn, and all the best.
Sure.
Thank you. Next question comes from the line of Nitin Agarwal with DAM Capital. Please go ahead.
Thanks, sir, Glenn, and congratulations, team, for a good set of numbers. Glenn, on the respiratory launches that we have done so far in H1, what is the market share sort of performance in both the products that you launched so far?
Flovent 44, as per IQVIA, it is around 22%, and growing, as we go forward. I think we will continue to gain share on Flovent 44. That is our view. Fluticasone nasal spray, we have just launched, Nitin, so it is too early to talk about market share. I mean, we had just started. We got the approval, I think, in September, and we are just now rolling it out as we speak.
Glenn, when you look through the U.S. now, I guess, obviously, you have got things lined up for this second half of the year, as you mentioned, as well as a couple of launches for next year. But, I mean, what is the 3-to-5-year picture of the U.S.? I mean, have we made enough investments? Are we making investments in the U.S.? What kind of specific therapies or categories will drive the U.S. for us? I mean, is there enough fuel to really take us meaningfully from where we are today?
I think so. I think the drivers will come out of both. Every year, we can launch a couple of respiratory products. These are very large products, so that is a big driver for us. The other thing is the injectables. I think, Monroe, you should see the next three, four, five years to give you substantial growth coming out of the Monroe injectable products that we are commercializing. On the generic side, it is both these platforms, and of course, RYALTRIS, as I said, should give us a substantial growth over the next four to five years in the U.S. market itself. We will be putting resources to drive that as we go forward.
You mentioned iron sucrose complexes for next year in the U.S. And from a respiratory perspective, beyond the fluticasone franchise, how many filings are we looking to do over the next couple of years?
We have fluticasone's franchise, then we have ipratropium, which we are expecting to get approved. And then after that, we have at least a couple of filings, Nitin, every year. And these are all mostly MDI, DPIs, and those kind of products.
Okay. And secondly, you mentioned about the oncology, I think the specialty products we need to scale up from next year onwards. If I got it right, you mentioned a $30 million-$40 million number for next year. I mean, how are you seeing these numbers playing out in the next couple of years?
So, look, peak sales for this franchise, right? My guess is if you just take certain timelines, right? FY 2030 should be in the $100 million-$150 million range, and peak sales going up to almost $400 million-$500 million in 2035, 2036 kind of timeframe for the oncology franchise. This doesn't include ISB 2001, right? We are just talking about these three assets.
For these three assets, have we already made the requisite investments from a marketing perspective, say promotion perspective, or the incremental costs or meaningful costs which can come on these going forward?
We have made significant investments, right? As Anurag guided, H1, we did a lot of investments on the oncology side, putting the people, putting the teams, all the filings. I think a bulk of it is done, but there will obviously be ongoing investments, right, as we go forward in the subsequent years.
Okay. Lastly, on Europe, given the size the business has got to now, how should we think about Europe's growth going forward?
Europe, on the generic side, there is a lot of struggle, right? I would just anticipate it will continue to grow low single digit for the next few years, right, on the generic side. I think in Europe, if you see what we are doing, the two assets, right, RYALTRIS, again, part of it is through Menarini and part of it is through our own sales force, right, is very strong. For example, markets like the U.K. now, we are adding field force and expanding our presence in the U.K. on our own. In addition to RYALTRIS, of course, WINLEVI is doing exceedingly well. We have just launched it, and we had a great conference at EADV, which is the European Dermatology Conference. I think WINLEVI, these two are key drivers. Besides that, we have a couple of other derm assets, right, which are branded assets.
On the respiratory side, we have some of these MDI/DPIs, Sobrec and Salmex and various products that we have launched on the branded respiratory side. I think our goal is to continue to drive our branded performance in Europe and to move beyond generics. I mean, that is the roadmap for us.
Okay. Then last one. In the past, we used to be pretty strong in the women's hormonal business, right? That piece, at least in some parts, is coming back quite strongly in the U.S. Do we have any play there, any products which can become meaningful for us, which are seeing traction?
We have a very large OC portfolio, right, in the U.S., even today, right? We probably have about 20-plus products in the oral contraceptive space, right? The big one we have is estradiol vaginal, which is also seeing a lot of uptake, right, in the U.S., right? That is a unique product for us. I think the whole oral contraceptive space is pretty substantial for us. There are no major new launches there, but we are seeing a lot of traction on the existing franchise.
On the estradiol cream, or do you I mean, what kind of pickup in this?
Estradiol vaginal pessaries.
But have you seen traction on that product?
Yes, we are. We are seeing a lot of uptake there.
Okay. Thank you so much.
Thank you. A reminder to all the participants that you have pressed star and one to ask a question. Next question comes from the line of Rahul Jeewani with IIFL. Please go ahead.
Yeah. Hi. Thanks for taking my question. If I see in first half, we have generated around INR 1,650 crore of EBITDA, but our operating cash generation is negative in first half. Can you comment in terms of what's happening with respect to cash generation, and how do you see this trajectory playing out, let's say, in second half of the fiscal?
Yeah. Rahul, as I mentioned that first half, we were expanding our people and we had front-loaded the investment on the growth in the first half. That was the one growth OpEx which we were doing. Second is that the legal settlement which we took in the P&L earlier, those payments were there, and those were largely loaded in the H1. So almost INR 520 crore of those payments were there. Besides that, the CapEx of around INR 337 crore, and then others are normal routine payment of the interest and the dividend and working capital. With that, I think if you see that we were actually negative on our cash generation in the first half. But as we go into the second half, because all these investments which we did in H1 is start yielding as results in the H2.
We are expecting a strong H2, and that's what we are expecting to go back to a almost INR 1,200 crore of cash without any debt. Right now, INR 400 crore to almost INR 700 crore-INR 800 crore cash generation we are expecting in H2. That will be the trajectory because in our business, a growing growth business, we will continue to have a right capital allocation between the growth OpEx and growth CapEx, and maintaining the sufficient cash balance in the various geographies to keep funding our growth aspirations.
Sure, Anurag. If I see in first half, we have booked this INR 220 crore-odd of litigation settlement expense, and you are talking about in the cash flow statement, there is INR 500 crore of these litigation settlements which have been paid out.
Yeah. See, what happens is that we book entire as soon as the settlement happens, the entire amount gets booked in P&L on an accrual basis. Whenever the cash happens, actually what we booked in this quarter, actually the payment of only half of the payment have happened in this time, but the balance will go in the future. Similarly, what we booked in last year, actually some of these payments have come up in this year.
Sure. Okay. Some of these sales force investments which you are talking about, which has led to an increase, let's say, gross debt going up and net cash coming down, these look very material from the impact which it has had on cash flows. What are really these investments about in terms of building up these rep teams?
Basically, we have almost added almost 1,100 people across the India and emerging market at oncology franchise. All these recruitments were done in the first half, and therefore, if you see that first half, the operating margin was also lower. With this actually, with growth OpEx and the lower operating margin compared to that, also some of these IGI expenses were also in ISB 2301 were also uploaded in this. If you remove that IGI and innovation part of our business, this still did a 21% margin. I think because the cash wise, because we continue to fund this innovation journey as well as the growth OpEx in emerging market and oncology, therefore that's why you see that cash generation was lower in the first half.
Sure, Anurag. From a next two to three-year perspective, can you guide us in terms of what is a fair number to be building in with respect to our EBITDA-to-operating-cash conversion? Because as I said, the numbers have been all over the place over past two, three years.
As I said that even in H2, we are expecting around INR 700 crore-INR 800 crore cash generation, which will repay this entire debt, and we will be carrying a cash position of INR 1,200 crore in the bank account. We are expecting to end up in this year at least. This will be the strategy. See, because expansion-wise, we will obviously, it depends on what kind of, like as Glenn mentioned, next year probably we will invest some amount in U.S.
That is to build up. But that actually, if you see our, all the OpEx are very high payback. In H1, we invested, and within H2, we start seeing the results. If you see that way, we are expecting a strong cash flow generation. But obviously, having said that, we will continue to maintain our growth aspiration of the emerging market and oncology franchise across the India and emerging markets.
Sure. That is it from my side. Thank you.
Thank you. A reminder to all the participants that you must press star and one to ask a question. Next question comes from the line of Krish Mehta with Enam Holdings. Please go ahead.
Hi, thank you for taking my questions. I just had one question on the balance sheet to confirm. If you could just confirm that the gross debt was close to what number this quarter, and what is the net debt of It's close to 430 crore of net cash, if I'm not wrong. Is it fair to assume it's just 867 crore of gross debt?
Yeah, 867, 866.5 was the gross debt in this September, and 1,290 was the cash in the quarter. That's how it gives the 424 crore of net cash.
Thank you. My last question was on the oncology front. Glenn, you mentioned that we can expect $30 million-$40 million of incremental sales next year, and the margin profile will be much better. If you could just provide some color on the gross and operating margin deltas between the oncology products that we'll see coming in next year.
I mean, again, I do not want to put a number out there, but at the EBITDA level, it will be well ahead of the company EBITDA, right? Well ahead of the company average. So you are looking at like 30%-40% at the net level, right, for all these oncology products.
Okay, that is very helpful. Thanks so much.
Thank you. A reminder to all the participants that you must press star and one to ask a question. Once again, a reminder to all the participants that you must press star and one to ask a question. Once again, a reminder to all the participants that you must press star and one to ask a question. The next question comes from the line of Vibha Ravi with Norstella. Please go ahead.
Hi, can you hear me?
Yes, ma'am.
Hi, good morning. I just wanted to know regarding ISB 2001, outside AbbVie's territories, do you have licensing plans outside the territories which are already covered with AbbVie?
All I can say at this point is, Glenmark, we have all the rights to India and emerging markets, right? We- Right now, the entire focus is to make sure that collectively as partners, we're moving the asset forward and working as hard as possible to bring it to market. That's where all our energies are right now on ISB 2001.
Okay. You had mentioned that there's going to be a presentation, right, at ASH?
At ASH, correct.
Yeah. So is there anything you can share with us before that, or it's going to be totally at the presentation then?
Nothing at all. I can't share any because it's all under embargo, right? So we cannot share anything at this point.
Okay. And regarding ISB 2301, is there any update? I think you have mentioned regarding that. Okay. So could you tell us of this funding that has come in, how much is going to go back to IGI and towards innovation?
I mean, all this happened a year or two ago, right? All that is done, right? We continue. IGI clearly is well-funded, right? First of all, they have capital sitting till FY 2028 and beyond, right? That is what we had provided, right, in terms of funding to IGI from the proceeds, right? Over and above that also, they are well-funded as a company.
Okay. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question-and-answer session. I now hand the conference over to Mr. Utkarsh Gandhi for closing comments.
Thanks, Renju. Quick reminder to everyone that the information, statements, and analysis discussed during this call describing the company or its affiliates' objectives, projections, estimates are forward-looking statements, and these are based on current expectations, forecasts, and assumptions, and subject to risks and uncertainties which could cause actual outcomes to materially differ. No representation or warranty, either expressed or implied, 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 Q2 FY 2027 earnings call. Thank you, everyone, for joining us today.
Thank you. On behalf of Glenmark Pharmaceuticals Limited, this concludes this conference. Thank you for joining us. You may now disconnect your line.