Welcome to the OneSource Specialty Pharma Limited Q4 FY 2025 earnings conference call. As a reminder, all participant lines will be in listen only mode. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Singhal. Thank you. Over to you, sir.
Thank you, Sidu. Good morning, everyone. Thank you for joining us today for the earnings conference call for the fourth quarter and full year ended financial year 2025. We are pleased to have with us Arun, Founder and Non-Executive Chairperson, Neeraj, CEO and MD, and Anurag, CFO, who will walk us through the key business and financial highlights for the quarter. I trust you had the opportunity to review our results release and the quarterly investor presentation, both of which are available on our website as well as the stock exchange website.
The transcript for this call will be posted on the company's website within the next week. Please note that today's discussion may contain forward-looking statements which should be viewed in context of the risk inherent to our business. Should you have any further questions after this call, our investor relations team will be happy to assist you. I now hand over the call to Arun for his opening remarks.
Morning, everybody. Thank you for joining us bright and early today. Appreciate your time. It is a pleasure to have this conversation, especially given OneSource has come back from a very difficult scenario a little over two years to deliver on everything that we said we would pre-listing and post-listing. It has been a pleasing outcome for the quarter.
As you will notice from the numbers, we recorded a phenomenal top-line growth and a very significant EBITDA. Q4 has been an outstanding quarter. I would also like to put some color around the quarter performance, not as granular as it is in the decks, which I am sure most of you have read. I just wanted everybody to understand that we have had the privilege of adding several customers, especially in our GLP-1 and DDC space.
Consequently, we had a great run in Q4, led by increased execution of several contracts. These were new customers that we onboarded in the earlier part of the year and are typically challengers to the earlier filers. Consequently, there has been a rush for capacities which we were able to deliver, and that has resulted in a good outcome for OneSource Specialty Pharma.
We continue to maintain our near-term outlook for FY 2028 for a $400 million revenue top line with a significant EBITDA in the 38%-40% range, as was being previously guided organically. We are very committed to achieve these objectives based on a strong order book that we have now secured. FY 2026 is going to be a transition year.
I just want investors to be fully conscious that there are several events that lead to us to give this kind of a tepid conversation around how FY 2026 would look like. Predominantly, as you know that bulk of our revenue growth will come from the commercial sales of our DDC products. We are currently on track to believe that almost all our partners will be in a position to supply products in key markets on market formation.
As you know that most of the markets open up towards the end—actually the beginning Q4 of this financial year and Q1 of the next calendar year. Consequently, depending upon the freedom to operate and the various regulatory approvals that our partners need to receive, a lot of our commercial supplies of the DDCs will determine how FY 2026 will look like. Consequently, it'll be lumpy.
There would be quarters which would be extraordinarily high performances like our Q4 quarters. It will more or less mirror FY 2025 with H1 being a lot tepid compared to a very strong H2, and that's what we think we will achieve. Our endeavor is to ensure that our exit run rate, while we will not be able to meet that quarter-on-quarter, on an annualized basis, we would be in that ZIP code.
That's our endeavor. Like I said, a lot of that is dependent upon product approvals and customer approvals. Our order book continues to be very strong in all the sub-sectors of our business. While our biologic drug substance business is nascent, we are seeing strong traction, and I'll let both Neeraj to talk on the business side and Anurag on the finances and the balance sheet, where they would give you more granularity.
I just thought it was important to set the context for FY 2026. 2027 would be a very solid, consistent quarter-on-quarter growth. 2028, we will meet our near-term Guidance organically that we have delivered or kind of provided an outlook when we listed and when we did the roadshows for the pre-IPO placements. Then, of course, we believe that from all our enablers and our significant CapEx expansion, we are ready to get to that near-term numbers. Thank you for listening to this overview, and I'll request Neeraj to get into the granularity of the business. Thank you all.
Thank you, Arun, and welcome everyone to our Q4 and full year results as a listed company. In fact, the journey of OneSource from merely an idea two years ago and through all our NCLT approval process, culminating in listing and now our first full year results have all been hugely exciting for all of us at OneSource. What really gives me a feeling of great satisfaction is that our inception philosophy as a one-stop CDMO continues to play out.
We have added 15 new customers across all our service offerings. We have won multiple RFPs in this time. It's equally important that while we have added new customers and got new business from them, there has been significant repeat business coming from our existing customers, which really shows very strong trust in our capabilities which our customers have.
We have increased our total logo count to more than 70 now, with our customer base, including leading innovator companies. We've got biotechs, we've got top of the global generic companies. You name it, and we have as our customers.
The very fact that our customers trust in our capabilities is across our service offering, but especially if you look at Drug-Device Combinations, where we have delivered almost 50 projects, whether it is fully delivered or in terms of various stages of execution including GLP-1s, all GLP-1s, but beyond GLP-1s as well, as well as both small and large molecules. What has really helped all these new RFPs which we have won, the licensing deals which we have gotten into, the very high-level MSA executions which we did, especially in DDC, which Arun mentioned in his opening talk.
All these have together helped us deliver a very strong performance in Q4, but also in the full year FY 2025, with full-year revenue in excess of INR 1,400 crores which is up 30% versus previous year. An EBITDA of INR 466 crores, which is more than twice of FY 2024. Which is really a commendable feat which the team has achieved.
Our Q4 EBITDA margin which is at 43%, reflects really the impact of Drug-Device Combination, even if most of it has come from MSAs. We'll talk more, Anurag, when he talks about the numbers later. What also gives me immense satisfaction is our compliance track record which continues to be stellar. We had more than 60 regulatory and customer audits during the year across our sites. In fact, we had successful FDA re-inspections at our penicillin and injectable sites. We had Health Canada coming in.
In fact, our flagship site received approvals from ANVISA, from Saudi agencies, among others, which is really going to pave the way for us to start supplying semaglutide when it's in these markets as our customers get approvals and patents expire in early 2026 calendar.
Really in anticipation of the launch of semaglutide, we have always mentioned, even in our last call and in all our interactions, that our progress towards expanding our capacity, especially in Drug-Device Combination, is on track with the first phase set to conclude towards the end of the year. Again, Anurag will talk a little bit more on our CapEx program. While our new customers and RFP wins continue across all our segments, we are also going to be having big commercial launches in the next 12- 24 months, which we have said.
Along with our stellar compliance record, we are very happy to reaffirm the outlook which we gave last time, which is of FY 2025 to 2028, a revenue growth CAGR of 30% and a steady EBITDA margin of 40%. Of course, Arun already mentioned, I would just reiterate that how the current FY 2026 is a really pivotal year for us, when this is a year when multiple drug device combination projects move from the MSA to the commercial stage and the sema patent expiry happens in some of the largest markets.
We have seen Canada, Brazil, Saudi Arabia, India, et cetera, in Q4. Obviously, while the launches will depend upon our customers getting approval, but the very fact that many of our customers have paid us reservation fee with take-or-pay arrangements is a mark of confidence.
Obviously, FY 2027, which is the first full year of commercialization for sema in many markets, will see the CSA contribution to our business more in line with steady state. Finally, what we also have done in this last quarter and FY 2025 is to really strengthen our leadership team with number of new additions we have shared with the market, but also at not only at the leadership level, but also at the critical operational levels.
We will continue to do that. Also, as we had mentioned in our last call, we have now in this quarter really brought in a very highly accomplished board, led by our founder, Arun, which obviously is working with the leadership team and myself to help us reach our aspirations, really to make OneSource a really respected global pharma CDMO. Thank you for your time, I'll ask Anurag to take you through our financial ratios and other financial highlights.
Thank you, Neeraj, good morning, everyone. Like Arun and Neeraj already mentioned on the call, we had a very strong financial performance for this quarter and for the full year. I am pleased to take you through our quarterly and full-year financial numbers. Revenues first. In Q4, revenues stood at INR 4,260 million, we grew 22%. On a full-year basis, revenues were INR 14,449 million, we grew 30% year-on-year.
On EBITDA and PAT, with the strong growth on the top line coupled with our stable cost base, we continue to see a strong operating leverage play out, I'm pleased to report that for the quarter, an operating EBITDA of INR 1,825 million, up 79% year-on-year. What's pleasing to see is that the PAT of INR 992 million for the quarter is actually versus a loss, a negative PAT in the prior year.
On a full-year basis, we delivered EBITDA of INR 4,665 million and an adjusted PAT of INR 936 million, excluding one-timers. Adjusted PAT, as you know, PAT excludes one-timers and exceptional items relating to formation of OneSource, primarily regulatory fees, taxes, duties, and prepayment of interest.
Our EPS for the quarter stood on an annualized basis at 48.9 and for the full year at 21.4 on a fully-diluted basis. EPS calculations, however, exclude exceptional items and scheme-related intangibles that are being amortized. ROCEs, quick highlight, our ROCEs for the full year are 22.9% and Q4 annualized is at 40.9%, close to 41%. Beyond the numbers, this quarter continues to be a transformative period as we build OneSource. The critical pieces on the integration program, as you know, we already spoke about it in the last call.
We got listed earlier this year, but now we are working very closely with our commercials and operations team, the supply chain teams to integrate the business, and we have made significant progress towards that journey. It is a comprehensive integration program of systems, processes, but most importantly, the various IT systems. It will tremendously help OneSource in terms of driving customer wallet share and operational synergies.
On the treasury operations, during the quarter, we see very strong operational cash driven by strong collections from our customers across the businesses. This year, we prepaid high-cost debt and complicated debt earlier in the quarter, and we reduced it by almost 50% by the end of last quarter itself, net of cash and cash equivalents. During this quarter, we further reduced our debt to INR 4,707 million net of cash and cash equivalents.
We anticipate maintaining a healthy below 1.5 debt to EBITDA over the medium term. Like we earlier mentioned, we aim to be net debt-free in the next two to three years. With the significant reduction in debt during the year, coupled with our credit rating upgrade, we have now better access and economical access to funds, and therefore our interest costs are down to INR 278 million this quarter, down 20% quarter-over-quarter, and significant reduction versus the prior year.
On our growth programs, as you already know, we are executing our plan to expand our capacity and capability and will continue to invest over about $100 million over the next couple of years. We will consciously balance our ability to leverage and access funds at attractive terms, as well as our internal accruals and customer participation in those programs.
Fixed asset turns, we anticipate that we will remain higher than two fixed asset turns, currently already at 1.9. As a reminder, as part of the scheme of arrangement, we are carrying INR 10,572 million of intangibles and about INR 38,275 million of goodwill as of March 2025. This is as per appropriate accounting guidance owing to lack of common control between the three entities.
Therefore, we will have a slightly inflated balance sheet for the time being, and you will see more coming along the way as we work through this. Thank you once again for our first annual results call, and I will hand it back to Abhishek for opening the line for questions.
Sidu, can we take the questions now, please?
Sure, sir. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 question queue assembles. The first question is from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Hi, thanks for taking my question and congrats to Arun, Neeraj, and the management team for a fantastic FY 2025. Arun, just kicking off from the comments that you made on the FY 2026 guidance. Just to be clear, I think what we should be looking at maybe a FY 2025, FY 2026, which is kind of closer in nature to FY 2025, where bulk of the revenues in DDC will still be coming from milestones and licensing fees, et cetera, from the contracts and the commercial revenues will be a little back-ended, maybe as in because the patents for sema really begin to expire only towards the end of March of FY 2026. FY 2027 is where the commercial revenues will begin to really pick up and deliver leading to FY 2028 guidance as you've put it out already.
Yeah, that's right. FY 2027, you are spot on. On FY 2026, the first market that opens up is in Canada, which is in the early days of January of 2026 and bulk of the countries go off pattern in March of 2026. Commercial supplies, if everything goes to plan, would only start in Q4 from a freedom-to-operate perspective. We are working through that. In the interim, we continue to have MSAs including DDCs as we acquire more customers.
Given that we have a very strong number of customers in DDC, we have now 20+ customers manufacturing with us Drug-Device Combinations. It is prudent for us not to onboard additional customers because then there will be a clash for capacity. Elsewhere in the deck, you will notice that we are increasing capacities from our 40 million rated capacity to a little over 90 million as early as December.
We also want to be conscious about allotting capacity to the customers that have either provided a take-or-pay contract to us and or we have very specific long-term arrangements. Consequently, taking more customers at the cost of upsetting established customer relations is not something any CDMO, for that matter, we would do. We would have a lull year in onboarding new DDCs for GLP-1s. Of course, we look at adding customers around other formats.
Yeah, like you rightly said, 2027 could be more defining and more predictable. 2026, our goal is to set all the right enablers that get us to the FY 2028 guidance of 400. Our aim is to do much better. Obviously, we will do a lot better than FY 2025 absolute numbers that were announced today, yesterday rather. Can we grow significantly greater than our exit rate would be all up in the air because of the situation that I just explained.
Thanks. On our FY 2028 guidance, to your mind, what are the risks, if any, which one can sort of keep in mind while looking at that number? What are the risks one should crystallize which can impact the guidance?
I think in the near term, we do know that there are several GLP-1s in the works, but there's also very significant new uses and new clinical trials delivering outstanding results. We think that this space will expand with multiple treatment options. We believe that the need for self-medicated injectable auto-injectors will continue to be a significant part of the business.
We also believe that a lot of the global markets are unmet, which will expand quite significantly, both from affordability and ability to cover a larger population. You're probably aware that even the WHO has now added obesity as a key area of focus for them and are considering GLP-1s as a solution. All of that should significantly expand the market opportunity in my view. We don't see any near-term risks to the market.
We believe that when orals do come in, there would be an impact, I think a combination of pill burden and pricing and availability of these products in the markets that have gone off pattern or will go off pattern in the next 12 months would be more a function of timing. I strongly believe that we do not see any risk to our FY 2028. Of course, we have several levers, right, Nitin?
There are several levers ever since we opened up our books for CDMO across our platform. We have a flurry of RFPs across our soft gelatin business, our injectables business. You would see in our deck that we would become a very significant player in high-viscous pre-filled syringes. We're adding new capabilities and subsets within our product platform. We are cross-selling a lot as Neeraj already mentioned.
We are able to secure a lot of customers across various subsets of our platforms and domains. Yeah, we're very excited about the sum of parts story, I think we'll get there without difficulties. Compliance is an added risk. We believe that we have a strong group.
We are recognized for being a leader in this space. We continue to heavily invest in digitalization and upgrading our quality standards. We all know that we are only as good as our next inspection. Yeah, we're very confident as we go out with the kind of enablers and the team that Neeraj has been able to assemble in a short period of time to deliver on the FY 2028 outcomes.
Thank you so much, best of luck.
Thank you.
Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Amay from GM Financial. Please go ahead.
Yeah. Thank you for taking my question and congrats to the management on good set of numbers. First question I have, is it possible for us to give a makeup of DDC revenues for either quarter or for full year?
Amay, hi. We are not specifically giving DDC number, but I think we have very clearly mentioned that today, as we speak, we are close to about 50 DDC projects. These are in various stages of execution. Some have already been delivered. Some of these projects are just waiting approvals which will go into the commercial launches, as Arun already mentioned, towards the end of this financial year.
Then there are other projects which are currently still in the pre-approval MSA stage, where we will continue to derive income as a revenue stream, which is the MSA revenue, which we have seen already giving us a very strong year in the last quarter. While DDC will obviously continue to be a significant driver of our revenue in FY 2026 and beyond, also in our FY 2028 outlook, which we have given. Also, it's not just DDC.
I think that's also the point Arun just mentioned, that our business has got multiple legs. Of course, DDC is a significant growth contributor, but also whether it is Steriscience injectables, whether it is soft gelatin capsules, where we have recently added capacity and taken the capacity to 3x, and we've got multiple new customers onboarded. Yeah, while DDCs will continue to lead our growth strategy, but we have got all service offerings contributing.
Sure. The second question I have is on the new line which will get added by quarter four or December of this year. Will we need a re-inspection or validation and that will take some time, and then the actual commercialization happens from that line? Or is it from December onwards, we'll start doing production from that line?
Yeah. Amay, the line which is getting added is getting added in our current site within the current suite itself. As far as our understanding of FDA guidance goes and various regulatory agency, because remember, the first markets which will open are Canada, Brazil, and so on. Based upon our understanding of guidance, we do not need another inspection. We should be able to get into the market as soon as we are ready and qualified the lines.
Sure. Just last question, if I can squeeze in. The first market is Canada, like you said. Here, if at all our partner is not able to get the approval, still are we expect to get revenues or how things will pan out then?
Amay, I think it's very important, as we have always said, that we have got our customer base, which is who's who of the global industry. We are not dependent upon only one customer. We've got multiple customers and all our customers feel they would be in a good position to enter the market at the time of market formation.
Honestly, for us, what is important is at least some of our customers get approval. It's not important that every single customer needs to get approval, even if some of the customers get the approval, we are all set to support whichever customer gets the approval. We are all set from a capacity point of view, to be able to service these customers. Our look is not dependent upon one customer or two. We have a very large and diverse customer base.
Thank you so much. I will join that.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Madhav from Fidelity Investments. Please go ahead.
Hi. Good morning. I just wanted to understand that as the Canadian and the Brazilian markets open up initially next year for semaglutide generics, is there any sort of broad sense in terms of how much the volumes of the patient base in these markets can expand, like as the prices come down as generics enter? Would you have any sort of reading on that? Thank you.
Without going into very specific numbers, I can just tell you the following, that both these markets or almost all markets which are coming off patent in the next year, have been very poorly served. In fact, the key driver in these markets will be increased access.
Just to give you some idea, that in a market like Brazil, which is one of the largest population markets globally, the way it has been, Novo has served the market, there is less than 1% penetration of what it should have been. In Canada, it is about 4% or 5% penetration. We see these markets right now, what the numbers which IQVIA shows are really not reflective of the true demand.
Once there are generic players in the market and there is a much higher access, we see the markets really taking their true potential, which could be anywhere between 10x to 12x in case of Brazil, for example, or maybe about four to 5x in case of Canada. We see access really driving the growth in these markets.
When you say four to five times in Canada, I think you're saying the number of pens sold or the patient pool can potentially be four to five times higher, right? That's the way to read it.
That's right. Based upon what the IQVIA numbers are today.
Got it. Okay. Thank you.
Thank you. The next question is from the line of Abdulkader Puranwala from ICICI Securities. Please go ahead.
Yeah. Hi. Thank you for the opportunity. My first question is with regards to your order book and capacity addition. In your opening remark, you talked about a strong order book and you are talking about increasing your capacity also to close to 90 million. How should we look at the utilization part considering you are talking about a significant capacity to be added across your business segments over the next one and a half year period?
Yeah. Abdul, thank you for your question. We have mentioned in our talk today and also in our deck, you will see that we are already at close to about 50 Drug-Device Combination projects. Some of these are already executed, filed, waiting approval, some are still under execution. Our capacities, which we are currently having and also what we are adding towards the end of the year, will be servicing both our ongoing MSAs as well as CSAs.
Obviously, the rated capacities are really seen when the full commercialization happens and we take the batches as per commercialization. The key for you to understand is that our order book is very strong. We have got these 50 odd projects ongoing or delivered across our customers, we have got forecasts from our customers going up to next three years.
That's the way we are building, ramping up capacity in line with our customers' forecast, in line with the patent expiries, which are happening over the next two to three years. When we see our order book today based upon what our customers are saying, I think we have a fairly strong utilization of especially the first phase which we are putting in.
In fact, that's why we have mentioned that this is just the first phase which is getting over this year. Just behind this, by end of next year, FY 2026, we will be almost doubling the capacity from where we will be at the end of 2025. This is based upon proactive move from our end to ensure that our customers' demands are met and that's what our customers trust us to do.
Got it, sir. Sir, my next question is pertaining to your NCE and NBE projects. I've seen in your investor deck that there's one new project getting added this quarter. Any color on by when would the revenue booking in a meaningful way happen from this particular segment in your DDC business, and specific with your biologics, NBE, NCE part of the business?
Abdul, I'll just talk about the NBE part first because the NBE, as you know, that biologics as their very nature have got long gestation. Obviously it's a first-in-class product which we have. We are right now in the phase of doing clinical production, which is what will happen in this year.
Based upon the approval timelines, as you know, we expect the product to be commercialized somewhere between 2028 and 2029. In fact, we have said earlier that our near-term outlook which we have given does not include any meaningful contribution from the commercial sales of the NBE which we have. It will still be a lot of pre-approval revenue which will be coming in that outlook.
For other NCE-1s, again, as you can appreciate, I will not be able to give you specific details, but I can tell you that there are products in various patent expiries there. Some launches could happen as early as FY 2027 and some could be slightly later. These are very significant opportunities because in some we have the complete exclusivity as NCE-1 filers.
Got it, sir. Thank you. I will get back in queue.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Rupesh Tatiya from IntelSense Capital. Please go ahead.
Hello, sir. Thank you for the opportunity. Congratulations on great set of numbers. My first question for you is you have not talked much about non-GLP DDC projects. I mean, [inaudible] mentioned several of them, seven at least, one recently. These are high-value molecules. It would be great if you can provide some color on this, either therapeutic area, what would be the commercialization timelines, what would be the potential of these non-GLP DDC molecules. Can they sum up to, let's say, INR 10 million, INR 20 million in volume? If you can give some color on that'll be really helpful.
Okay, Rupesh, thanks for your question. Here the question is very valid. We always said that our expertise is around drug device combination and not any specific molecule. Obviously, we are in a very sweet spot as one of the biggest growth opportunities, which is GLP-1. Our capability and our portfolio is much beyond in drug device combination.
As you can appreciate, keeping some customer confidentiality, I will not be able to give you specific molecules. What I can tell you is that in fact our first drug device combination product which got approved in U.S. for our customer is actually a non-GLP. It's a peptide. It's a very unique product. It's first of its type. Even the innovator doesn't have that drug device combination. We expect the commercialization to happen in FY 2026.
Our first product which got approved in Europe as a drug device combination is a biologic peptide, we expect that commercialization to also happen in FY 2026. There are a number of other products which are in the pipeline. In fact, we've got 10 + total products in drug device combination, total molecules.
I can also tell you that these are good products, obviously the volume are not in line with the likes of GLP-1s because the markets are very different. These are attractive products for us because our per unit realizations are very attractive. Also the fact that many products which are in the pipeline are drug device combination.
I've always said that the move towards self-administration is a big driver of global R&D dollars, that also is a big boost to our business, especially because, as I said, our expertise is in doing drug device combination. You will see us adding significant numbers when we talk about our funnel for drug device combinations.
Okay. Good to hear that, sir. My next question, sir, is congratulations on passing on ANVISA audit. One clarification there now is for Brazil approval, there is no pending action on at least OneSource, right? Is that a fair assumption to make? Then similar update, can you give on Health Canada? I mean, is Health Canada inspection done or there would likely be another inspection before the product gets approved?
Yeah. Your first point is correct that as far as Brazil is concerned OneSource is all set, whether from approval of our site or from our capability and capacities. We are just now awaiting customer approvals before starting manufacturing for our customers. As far as Health Canada is concerned, if you are aware, Health Canada will not come and inspect as long as a site has FDA or European approval. As you know, we have both European and FDA approval, we don't expect Health Canada requiring any inspection before giving approvals from our site.
That's very good to hear, sir. Just my final question, sir, is on liraglutide launch. I mean, where are we on that? I think on March 29, you gave one notice to exchanges that one of our sites received four observations. Basically, observations I'm not sure if it was for DDC. Maybe, where are we on liraglutide launch and whether those observations had delayed the liraglutide launch in U.S. markets?
No. First, I'll answer your last question first. There's been no delay on liraglutide launch, whether because of any observation or not. Already, our customers have got liraglutide approvals already, especially for Europe, and in the process of launching.
I think this launch could happen as soon as next quarter, because while we are set for launch, it depends upon our customers also ability to be able to launch and for us to actually enter the market with them. For your question around the observations, yes, our site was inspected as a norm. We did get some 483 observations, which are also norm. We have already responded to FDA on those and we are confident that we will close out that inspection also well in time.
Thank you. The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.
Hi, thank you for the opportunity. Sir, can you talk about the pricing arrangements of your take-or-pay GLP-1 contracts? What I mean is, from a pricing standpoint, are your contractual terms broadly similar across all clients for GLP-1?
I can tell you the following, that we have, as we said, many of our customers need access to capacity. In order to get access to capacity, we have number of arrangements with our customers. Some customers have participated in our CapEx program. Some have done pay-for-pay deals with us. Some have given us reservation fee, long-term forecast. There are multiple ways where customers are securing access to capacity, which as you know, is the single most rare commodity right now, which is capacity. I think that's what I can tell you right now as far as pricing and contractual arrangements.
Sir, these contracts basically have a annual price revision built in?
I think, yeah. I think it's as you can imagine as a CDMO, there's only so much I can tell you on that. I can tell you these are commercial contracts. These are long-term contracts, and that's what our customers are looking from us, that we support them right from market formation to their securing market share. That's what they will be paying us for.
Okay, sir. Maybe a final question related to this. When you talk about $400 million sales by FY 2028, are you assuming pricing per pen to be stable in a given market like, say, Canada till FY 2028?
I can tell you the following. If your concern is around in-market pricing, I cannot comment on that, simply because that is a function of how our customers will be pricing and how that dynamic plays out. I just want to say that as a CDMO, we take only a small fraction of the in-market price. The impact of anything going around in the market, we do not see impacting our pricing in any way.
Our pricing is anyway based on volume. We do staggered pricing based upon volume, and that is how our customers want, and that is how we are protected. Having said that, we also feel that there may not be as many players in the market, especially at the time of market formation, as you may be thinking.
Understood. Sir, just that clarification on your assumptions which are going into that guidance.
Alankar, sorry, I think we have limited time and a long queue. Maybe you can come back in the queue and let others have a chance, please.
Fair enough, sir. Thank you, and all the best.
Thank you. The next question is from the line of Ritwik Sheth from One Up Financial. Please go ahead.
Yeah. Hi. Good morning, sir. Sir, just one question. Sir, any of our customers are ready for a launch in India or China? These are all predominantly Brazil and Canada?
As I mentioned, we have a global customer base, a very diverse customer base. Most of our customers are global players. As a global player, they have multiple markets which they are targeting. For sure, India could be one of the markets where customers are wanting to enter. As a CDMO partner of choice, for us, we are completely agnostic where our customer really wants to sell the product. It will definitely be Canada, Brazil, and some of the other markets. Yes, India could very well be one of the markets.
Okay. Just a follow-up on this.
Sorry to interrupt, sir. I would request you to please use your handset
Yeah. Is this better?
Yes, sir.
Yeah. Just to follow up on this, would there be any difference in realization for our services offered to a customer in Canada and India for the same product?
No.
The end price would be significantly different. Would our service charge or our charges be significantly different?
No. My simple answer to that question is no. For us, geography is not really important. Where our customers are launching the product is not important for us. Our pricing is purely volume-based pricing, and it is completely agnostic of the geography.
Okay, great. Thank you and all the best, sir.
Thank you.
Thank you. The next question is from the line of Aman Vij from Astute Investment. Please go ahead.
Good morning, sir. My first question is on our liraglutide and semaglutide launches in H1 and H2. If you can just give the number of launches we are expecting of these three individual products in H1 as well as H2.
Yeah. Again, we have said that we have 10 molecules in DDCs, and these include some of the ones which you mentioned. I obviously will not be able to give you very specifics around these products. It would be sufficient to say that depending upon the patent expiries and the approval our customers would receive, we would most certainly be bringing or launching these products into the market in FY 2026.
If you can talk about the commercial launches, sir. Commercially, we were expecting eight to 10.
Commercial launch. All these products would be launched commercially. As for liraglutide, Anurag already said our customers have approvals in Europe. We do have approval also for teriparatide. That also approval we have. The plan is to be launching these products within FY 2026.
You are not commenting anything on the number of launches. Earlier you were saying eight, we were expecting eight to 10. Does that number stay or some has been delayed to FY 2027? That was the question.
I don't think we have ever said any particular number of launches, but as we have said that our liraglutide approval is already in place. We have got the teriparatide approval already in place. They would be coming into the market. What we have said, that there are many products which would be moving from MSA to CSA as the approvals come in. There is absolutely no change to what we mentioned.
Sure, sir. Next question is on the competition from, sir, vials. Oral competition you have talked about. For example, Eli Lilly has launched the products in India in form of vials. Do you expect a similar thing to happen in other geographies? Then that is a risk to our DDC model. If you can talk about that.
In the entire Western world, it's very clear. As I said, the whole idea of these products is self-administration. I think that's where the market is, that's where that move is, and that we see no change into that because vials require intervention of a healthcare professional, and that is exactly against the whole concept of self-administration.
We don't while markets like India, it could well be possible, the vials, but the very fact that it is a self-administration route is what is important. Having said that, I also have to tell you that our capacities are fungible. In fact, on the new lines which we are putting up at our flagship sites are combi lines, which can do both vials as well as cartridges. It is depending upon how our requirement is, how our customer's requirement is. In these lines, we could do 100% cartridges or 100% vials.
Thank you. The last question is from the line of Aman Gada from Avono Capital. Please go ahead.
Hi, sir. Thank you for taking my question and congratulations on great set of numbers. My question was again, slight on the demand side, which the last participant asked, where a lot of new therapies are coming for weight loss and a lot of oral drugs are also gaining traction in GLP-1 for weight loss and diabetes as well. Do you see or anticipate or your customers in turn anticipate some softness in demand, not in near term, but in the farther term, two, three years down the line?
I think we have always maintained that orals will have a place in the anti-obesity market. That's how we see as Eli Lilly has come out with this product. There are a couple of things to look at here. The pill burden, which is there for an oral product, which requires a daily tablet, and the fact that, compared to that, a once-a-week injectable, I think is a very different ballgame.
In fact, if you see, even Eli Lilly has very clearly mentioned that they expect the peak. Their oral product will be no more than 25% of the total anti-obesity market. Keeping that in mind, we are very confident that the mere access of the injectable drugs is going to be significantly higher.
Right now, the penetration levels are so low in some of the largest markets in the world, that will continue to drive, as oral will have their place. Their role will be limited to that 20%-25%, which even the innovators are talking about. Remember, while there are oral therapies in play, there are also injectable therapies in play, which are once-a-month injectable, for example. If that were to come, once-a-month injectable, obviously, is again, way more attractive than a daily tablet in any form.
Understood. We don't see any demand challenges as such in terms of our visibility. A very small update I would require that the capacity that you are adding, the INR 220 million, which you're planning to go, all of this is planned to be added in India or some capacities to be planned outside of India as well, in terms of location?
Right now the number which we have given are primarily for expansion in India. As a CDMO with global footprint, global aspiration, we will certainly continue to explore opportunities to expand outside of India. These expansion could be through either organic route or even inorganic route. That we continue to evaluate.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Yeah. Thank you everyone for joining us early in the morning and asking some very, very insightful questions. This was our first full year call, and we really look forward to your continued interest, and we look forward to speaking to you again in the next quarter. Thank you very much.
Thank you.
Thank you. On behalf of OneSource Specialty Pharma Limited, that concludes this conference. Thank you for joining us and you may now disconnect your line.