Good evening, ladies and gentlemen. It's my pleasure to welcome you all to the post-results teleconference for the first quarter ended June 30, 2025. For today's call, we have with us Dr. Sharvil Patel, Managing Director; Mr. Nitin Parekh, CFO; Mr. Trushar Shroff, President, Corporate Finance; Mr. Arvind Bothra, Head of Investor Relations; and Mr. Alok Garg from the Managing Director's Office. To begin with, let me now give you a broad overview of the developments during the quarter. We commenced FY 2026 on a strong note, following a formidable base of FY 2025. We delivered a stable revenue growth during the quarter, with most key businesses performing well. Our U.S. Formulations business sustained execution excellence, delivering both sequential and year-on-year growth on a high base. On the India geography front, our branded Formulations business in India sustained the growth momentum, outpacing the market growth for yet another quarter
The business has consistently outperformed the market growth in the last couple of years. Consumer wellness business navigated through the challenges of early monsoon conditions, which impacted the seasonal brands. However, the non-seasonal portfolio remained resilient, cushioning the overall performance. International markets Formulations business delivered yet another strong growth performance seen over the last several quarters, driven by all-round growth across key geographies, reflecting a good diversity of performance. With that, let me take you to the financial numbers for the quarter gone by. We registered consolidated revenues of INR 65.7 billion, up 6% on a year-on-year basis. Our operating profitability continued to remain strong, with an EBITDA margin of 31.8% during the quarter. Consequently, EBITDA for the quarter stood at INR 20.9 billion. Net profit for the quarter was INR 14.7 billion, up 3% year-on-year.
Aided by strong profitability, our balance sheet strengthened further, with a net cash position of INR 56.3 billion as at June 30, 2025, against the net cash of INR 48.8 billion as at March 31, 2025. Now, let me take you through the operating highlights for the first quarter of FY 2026 for our key business segments. The U.S. business registered revenues of INR 31.8 billion during the quarter, up 3% year-on-year and 2% quarter-on-quarter. We filed three NDAs, received six approvals, including two tentative, and launched three new products during the quarter. Our India geography, comprising of Formulations and Consumer Wellness business, accounted for 37% of the total revenues during the quarter and grew 6% year-on-year. As mentioned earlier, the branded Formulations business in India grew faster than the market during the quarter, with 9% year-on-year growth, driven by strong uptick in pillar brands and innovation products.
Chronics segment continued to grow at a faster pace, driving the overall growth of the business. In terms of therapeutic performance, the business grew faster than the market in key therapies of cardiology, respiratory, anti-infectives, pain management, and in the super specialty area of oncology. On the super specialty front, we continued to retain leadership position in the oncology therapy. Contribution of the Chronic portfolio has increased consistently over the last several years and stood at 43.7% as per IQIA-MAT June 2025, an improvement of 420 basis points over the last three years. Our Consumer Wellness business recorded revenues of INR 8.5 billion, up 2% year-on-year. Excluding the seasonal brands, the business posted strong double-digit growth, reflecting the underlying strength of the portfolio and balanced business model. International markets Formulations business posted revenues of INR 7.3 billion, with a strong year-on-year growth of 37%.
The growth was well-spread across different regions, as both the emerging markets and Europe delivered strong demand-led growth during the quarter, benefiting from focused execution. On the medtech front, we recently completed acquisition of 85.6% stake in Amplitude Surgical. During the quarter, we entered into a strategic partnership with Braile Biomedica, an innovative cardiovascular device manufacturer in Brazil, to exclusively commercialize its transcatheter aortic valve implantation, which is TAVI technology, across Europe, India, and other select markets. With this partnership, we look forward to expanding into the fast-growing interventional cardiology segment. On the operations side, our API manufacturing facilities at Ankleshwar and Dabhasa received EIR from the U.S. FDA against inspections conducted in March 2025 and April 2025, respectively. This concludes the business review. I would now request Dr. Sharvil Patel to take you through the key drivers across businesses as well as initiatives in our innovation program.
Thank you, Mr. Nayak, and good evening, ladies and gentlemen. It is a pleasure to have you all here today on the call. We had a steady start to FY 2026. All our businesses maintained the growth momentum with robust operating profitability and performed in line with expectations, except for a couple of summer-oriented brands in the consumer wellness business, which faced seasonal challenges. We stay committed to achieve our targeted top-line growth and profitability for the current financial year. This will be driven by our strategic intent of going beyond the pill to address diverse healthcare needs of the patients and also superior execution. In the U.S. generics market, we have steadily expanded our footprint by building a robust and diversified portfolio across various doses. This growth has been driven by a combination of strategic in-house development efforts and prudent licensing initiatives.
To broaden access and provide diverse treatment options, we have been expanding our presence in the specialty space by enriching our portfolio of the 505(b)(2) products and enhancing our focus on the pediatric rare disease platform. Powered by robust customer relationships, a versatile network of manufacturing facilities capable of delivering a wide range of dosage forms, an agile and responsive supply chain, and disciplined cost management, our U.S. business is firmly positioned to have a sustainable growth trajectory. On the India formulations front, our branded formulations business continues to outpace the market growth. Our strategic initiatives are focused on expanding our presence across targeted therapeutic areas, thereby enabling us to serve a broader patient population. We have effectively leveraged a rich and diverse portfolio of innovative products to deliver novel solutions that address critical unmet medical needs.
In the consumer wellness space, we are driven by our mission to meet evolving consumer preferences and choices in the wellness domain and inspire healthier lives. Our portfolio of wellness products built over the years positions us well for the future customer needs. We look forward to driving growth through innovation, scale, sustainability, and serving consumers with differentiated, evidence-backed wellness products. In the international markets formulations business, which comprises different countries of emerging markets and Europe, it has emerged as a reliable third pillar of growth and continues to deliver strong double-digit growth over the last several quarters. In the emerging markets, we remain committed to satisfying diverse patient needs across chosen therapies through multiple levers. In Europe, our focus remains on expanding our offerings and enhancing the market coverage.
In line with our vision of going beyond the pill to make a deeper impact in patients' lives, we forayed into a global biologics CDMO business through our plan to acquire Agenus Inc.'s U.S.-based biological manufacturing facilities. Agenus Inc. is a clinical-stage immuno-oncology company committed to developing immune therapies to combat cancer. The acquisition marks our strategic investment in the U.S.-based manufacturing for biologics, thereby adding a sustainable growth driver for the future. I'm also happy to note that we successfully completed our stake acquisition in Amplitude Surgical in France, a European medtech leader in high-quality lower limb orthopedic technologies. Amplitude's portfolio comprises technologically advanced products and solutions backed by cutting-edge research and innovation, and complemented by robotic surgery platforms. With this acquisition, we look forward to offering numerous value-added innovations to meet the patients, surgeons, and healthcare facilities.
With this, let me share some material developments on the innovation efforts during the quarter. On our NCE research front, we initiated a phase II-B clinical trial of Usnoflast, a novel oral NLRP3 inflammasome inhibitor in the U.S., in patients with amyotrophic lateral sclerosis, commonly known as ALS. The U.S. FDA granted fast-track designation to the molecule for ALS indication during the quarter. The molecule also holds an orphan drug designation from the U.S. FDA for this indication. In the biotech R&D space, we received market authorization approvals from the drug regulator for Rituximab and Aflibercept biosimilars. We also received regulatory approval to initiate a phase III clinical trial for a second antibody drug conjugate. On the vaccines R&D front, we completed a phase II clinical trial of hepatitis E vaccine.
We also initiated a phase IV trial of rabies vaccine to evaluate the long-term immunogenicity and safety vis-à-vis the WHO pre-qualified vaccine in animal bite cases. Thank you, and now we start with the Q&A. Over to the coordinator for the Q&A session.
Thank you, sir. Now we will open the forum for a question-and-answer session. Anyone who wishes to ask a question, please raise your hand from the participant tab on the screen. Please note this conference is being recorded. The first question is from Kunal Dhamesha.
Can you hear me?
Yes.
Thank you for the opportunity and congratulations on a good set of numbers. The first question on the U.S. run rate, which is obviously good this quarter. When we look at, let's say, beyond FY 2026, we had initially commented last quarter that we don't expect a sharp fall. Can you provide some more color there? How are we seeing the FY 2027 U.S. revenue shaping up and some of the key products that we are expecting to launch?
In FY 2026, with the price challenges on Revlimid, we still believe we will have a single-digit growth in this year. We are maintaining our current guidance of growth in the U.S. for FY 2026, and we expect to launch 30+ products, with clearance potentially of our injectable facilities also, some more launches.
For FY 2027 or for FY 2026?
FY 2026.
Okay. My question was more on FY 2027, sir, beyond, let's say, Revlimid. How are we basically planning to offset the Revlimid cliff with the kind of products that we have?
There will be, obviously, we continue to have important launches in FY 2027 also. Ibrance as well as the other two molecules where we believe we will have decent launches. Also, our 505(b)(2) scale-up is going to be seen in FY 2026 end, but more so in FY 2027. That will substantially add to the business. We're quite excited with that prospect, especially with our 505(b)(2). We have almost a 25-product pipeline with 15 products that have already been filed and future products that are to be filed. That is also going to create a long-term differentiated portfolio for the organization.
Sure, shall we expect like FY 2027 to be more flattish growth or?
I think it's still early to tell because we have to see many things play out. As I said, pipeline-wise, we have exclusive launches. We have a 505(b)(2) program that will scale up. We are quite, and obviously, regular products of 20 - 30 launches every year. We believe all of that will aid to the growth. I think better clarity we can give only probably end of the fourth quarter once we are clear about what will be the current status.
Sure. Thank you for that. My second question is on Saroglitazar. If you could provide an update there, how the trials are progressing, whether there was any interim clinical trial data readout, you know, which was, you know, you have seen interim data, etc. How does it, and then on the timeline of launches, I think we have suggested late FY 2027 or early FY 2028. How are we looking on those timelines?
I think it's the same as we, nothing has changed. I think we are looking, we have completed a trial. The last patient readout is also done. We will wait for the data to be seen in the next quarter. If the data looks promising, which we hope, then we will be going for NDA filing. If all that goes well, then in FY 2027, we'll see a launch for Saroglitazar.
Sure. Just a last quick question. Data is already there and it's being analyzed? Is this what you are suggesting?
No, no, it's under lock right now. Once everything is done, we'll be able to unlock data and do a readout. We're saying it'll be in the second end or third quarter beginning.
Okay. Sure, sure. Thank you and all the best.
Thank you. The next question is from Bino.
Hi.
Hello.
Hi. Can you hear me?
Yes, I can hear you.
Okay, great. Dr. Sharvil Patel, could you also comment on the Mirabegron? First of all, in this quarter, has it been pretty much similar levels as last two, three quarters? Is it likely to continue for the time being?
Sir, Revlimid and Mirabegron, two special products, you know, in totality, more or less the same kind of sales.
Okay. Has it changed significantly for Q2, Q1 or more or less similar continuing?
More or less similar.
Okay. Got it. What is the outlook for Mirabegron? You know, of course, litigation is pending, but when you look forward into FY 2027, do you see this continuing in FY 2027, or is it highly unlikely that it stays in FY 2027?
We will have to wait for the trial before we can comment on that. I think, as I said, the trial date is in February 2026. Only post that, we can give any more comments on that. Until then, we do continue to commercialize the product.
What is the best outcome of the trial? That the product continues to be under patent, you will be unencroaching, and only the current two players will stay for three, four years. Is that such an outcome?
I think it would be very difficult to speculate what outcomes can be. I would not do that right now. We'll have to wait till then. I said, until then, we know we are commercializing the product.
Got it. The question about these two facilities which you have acquired, one is the Agenus Inc. one in California and the earlier acquisition in India of the Sterling Bio facility. When can we look at some sort of meaningful scale-up in these facilities? You have paid a decent quantum of money. Even if you want to apply one and a half, two times, you know, as a turnover, still it could be INR 100 million, INR 200 million revenue coming from these kinds of facilities. When can we see this kind of revenue?
On the second facility, with the Agenus Inc. facility that we have acquired in the U.S., it is under qualification. It's a brand new facility which is under qualification. Once it's qualified, it is going to produce bot bulk for Agenus Inc. There is a contract for them for the next three years to produce bot bulk. Beyond that, we will be looking to bring more Agenus Inc. manufacturing into this facility and also potentially bring some biosimilar manufacturing. That's the current plan. I would say it's probably at least a two and a half year, three-year plan before we'll see a large, I mean, see capacity realization and revenue uptake.
With respect to our other joint venture, which we have with the Sterling Biotech facility, we are under a large CapEx program going on to build, I would say, world's first recombinant whey protein manufacturing at scales that have never been made in the world. We are making large-scale manufacturing for the whey protein and whey isolate through fermentation. That program will see, probably in the next two years, we would see commercialization kick in. It's nothing in the short term for both of these facilities.
Just one point on that, when you talk of Sterling Biotech, it is an existing company with, you know, sales and EBITDA. What we have paid is for, you know, that existing business. What Dr. Sharvil Patel just now mentioned is the future project that we intend to put up in the same company.
Understood. Great. I'll join back with you. Thank you.
Thank you. The next question is from Neha Manpuria.
Thanks for taking my question. My first question is on the 505(b)(2) portfolio that you indicated would ramp up by the end of this year. Currently, we have Sitagliptin. I think there was one more, Docetaxel, that we had unlicensed last year. Are there any other launches in the 505(b)(2) portfolio that are expected as we think about the next year? How big can the 505(b)(2) portfolio be for Zydus next year?
We have, as obviously you mentioned already, the one product that we commercialize and Docetaxel, which we'll commercialize in the next quarter. We also have two more 505(b)(2) products that one is about to get commercialized, one we are waiting for approval to commercialize. Over a period of time, I think the 505(b)(2) will definitely be a significant value as well as profitability driver for the specialty space, which will be more sticky. We already have a decent revenue on 505(b)(2) with good profitability, but we are seeing a major scale-up, you know, which is in FY 2027 and beyond.
Besides Sitagliptin, can the other portfolios also, I think Ceta, you mentioned that can be, you know, INR 50 million. Can the other products be as large as Ceta or Ceta would still end up being the largest product in that portfolio?
Others will be larger.
Okay. The usual ramp-up for these would be similar to what we've seen in Sitagliptin for the Docetaxel and the two other products that we commercialized?
No, I would say the peak for the others would be in the second or third year.
Okay. Okay.
They will have longer patent life, and they will not be facing generic competition that way.
Okay. Understood. My second question is, I think in the opening remarks, you mentioned about emerging market being the third pillar of growth. We've seen a significant step up in emerging market revenues this quarter. Is there any one-off that we are seeing in the EM? Could you provide some color on what sort of growth we should expect and what's driving this acceleration in growth in the emerging market business?
For us, the emerging market, including in the U.S., both have driven very strong growth, and it's been broad-based across geographies. We are very confident of strong double-digit high teens to mid-20s growth going forward for the overall international markets, and we are seeing that to be sustainable.
The high teens to mid-20s isn't anything, I mean, there's no tender component, which is probably one-off to this year, which we don't see. There's the sticky run rate that we should assume for the emerging market business?
Yeah, we are talking about high teens to mid-20s growth for the international markets.
Okay, thank you so much.
Thank you. The next question is from Harit Ahmad.
Thanks for the opportunity. Hope I'm audible.
Yes.
First question is on Usnoflast, given it's a very promising molecule, and you talked about commencement of phase II-B trials. Can you give some more color on the timelines for phase II-B trials and, you know, the best-case scenario for the launch for this product?
I think we're just about to initiate the trial. We have a global CRO whom we have contracted, and everything is in place. The trial will begin in the next one to two months. It will be a two-year kind of trial and then post that readout. We are talking about a two to three-year window for seeing our clinical data for ALS. It's mostly an efficacy trial, so we believe that depending on the results, we could see an approval on phase II-B, or we may have to then further do a phase III. High chances that if we see good data, we could go for an approval post this trial.
Thank you for that. The next one is on biosimilars. So far, we have refrained from any investments targeting regulated markets for our biosimilar portfolio. Given that we have a fairly broad portfolio of around 14-15 biosimilars, is there any rethink on our regulated market strategy, or is there any plan to partner with someone who will undertake all the R&D spends and the commercialization part of it?
We are working on both ideas. One is the regulatory scenario has changed for certain class of biosimilars. There is no longer a requirement for an efficacy trial, so the pathway has become obviously much better for both you for U.S. The second is we have a manufacturing footprint now in the U.S. to make biologicals. We are looking at both opportunities in in-house portfolio as well as licensing in with manufacturing in the U.S. as an opportunity to add maybe one to two products in the biosimilar space to launch, I mean, to develop and launch.
Okay, got it. One clarification on the Saroglitazar comment in PBC, as we await the data, you mentioned that we'll be looking at the data before deciding on the next steps. What exactly are we awaiting? I mean, are we going to compare the data for Saroglitazar with some of the existing products in the market, and only if we meet the expectations versus those products, we'll be taking a call to go forward with Saroglitazar? Is that the correct understanding?
No, it's a blinded trial, so we're waiting for the efficacy as well as safety data to come out. If both those are good and if it is comparable with the treatments available today, we will obviously take the next step of filing for an NDA.
Got it, sir. I'll get back with you. Thanks.
Thank you. The next question is from Surya Patra. Hi, Surya. Are you able to hear us?
Hello, can you hear me?
Yes.
Yeah. First question is on the Amplitude acquisition. If you can just give some more color after the acquisition, what is your thought process about it? Is there any kind of acquisition-related cost that we could see in this quarter? Having done the licensing arrangement for the devices also, what is the kind of a metric thought process or the goal that we would be having going ahead, if you can?
With the acquisition of Amplitude Surgical, obviously, we become, at least from an Indian context perspective, a decently important player in the med devices space. The acquisition gives us the opportunity to enter into the orthopedic implant space for knee and hip. It gives us a navigation and robotic capability as well, which is the future for all surgeries, as you see. It gives us both those capabilities. It has a strong footprint in Europe with a strong presence in France. What we hope to do is obviously continue to build an increased share in these markets, but also enter and scale up markets like Australia, Brazil, Mexico, and enter more markets through both their network as well as Zydus's capabilities. India offers a great opportunity to launch high-technology, high-end implants in India, and we will be also launching these products in India.
Beyond that, we do see opportunities to improve on our profitability with looking at cost reduction through helping us improve margins. Also, on the intervention cardiology, our licensing capabilities with TAVI technology allow us to enter more markets, including India. We will be doing clinical trials for CE approvals for Europe as well as in India, and we hope to build an intervention cardiology business both through stents, balloons, TAVI technology, and future more products in this category.
And acquisition-related costs, Surya, largely booked in March quarter only.
Sure.
Thank you, sir. The second question is on the GLP opportunity. In the emerging market that is now likely to be activated, starting with Canada, Brazil, like that, as well as in India, if you can give some clarity about your preparedness for these markets and your ultimate plan of integrated operation for the advanced market in the subsequent period, your plan, please.
Sure. First, we have in semaglutide a different formulation, a formulation that gives convenience and ease of administration and also reduces the overall burden in terms of economics. We hope to, we will be launching this new formulation in India, and we are on track to do so. We should be present when market formation happens. We are quite excited with that. This formulation does offer significant benefit versus the existing formulations in the market. Similarly, we hope we are also taking this new novel formulation to other markets like Brazil, Canada, and future other markets which will open up. Our strategy is not to go with the same but differentiated formulation in all other markets.
We will get to see that the filings will start to happen by the end of the year, and we will see maybe from a year to two years from then launches in different markets depending on our approval, how long it takes for the approvals to come. Right now, I think from the commercialization point of view, India will offer the most benefit to us in terms of revenue.
Okay. Sir, regards to the CDMO acquisition or entry into the biologics CDMO business, these two acquisitions, these two facility acquisitions obviously facilitate your foray, but is there any investment plan beyond that?
No, I think our current investment plan is to get these facilities up and running and qualified and start doing business through them. We don't have any more biologics CDMO expansion plans in the U.S..
Okay. Just last one on the Sitagliptin. Considering the kind of a bulk supply arrangement as well as the government supply put together, is it fair to believe that this is kind of compensating for the losses, what means the revenue losses we have been facing in the Asacol HD in this current year? What will happen to that revenue stream once the generic competition in Sitagliptin starts?
I think I would say the franchise is a good product which will have business over the next couple of years. It is definitely not replacing the loss of revenue for the lenalidomide. From a new product 505(b)(2) point of view, it's a good product which has a good NPV with at least two to three years of good earnings. We are quite excited, happy with that. It doesn't replace, on its own, doesn't replace any earnings.
No, I was asking about the Asacol HD revenue loss. Is it getting compensated by this product right now this year, sir?
HD has gone quiet, I mean, there has been a steep decline. The revenue gap has been obviously some of this, but also so many other products that we have launched. I would not attribute all of it to this product.
Okay. Okay. Yeah. One just clarification, sir, about the finance cost. See, we have been talking about reducing our debt and hence the finance cost, but that has still been kind of stagnated or it is remaining there only. Your some clarity on that front would be useful.
There are two kinds of finance cost. One is because of the accounting treatment that we do for liquid acquisition where we have to do unwinding of interest amount on the contingent payments that we need to make to the sellers. That is one important component. I'll give you separate amounts. Also, we'll provide that specific amount for that. The second is that we are having, you know, arbitrage income in terms of government securities. We have made investment, we buy government securities, we place those government securities, again the securities we again, you know, borrow.
That actually helps us in terms of maximizing return on our own capital. You would also find an increase in other income in our results. The increase in other income is largely attributed to interest income. On a net-net basis, there is still a gain in what we are doing. You will have a large cash balance and there will be some borrowings also against the government securities. On a net-net basis, we have net surplus only. There is no borrowing.
Okay. Okay. Sure, sir. Yeah. Thank you.
Thank you. The next question is from Kunal Dhamesha.
Thank you for the opportunity again. One on the medical devices business beyond, let's say, Amplitude and the licensing. Are we planning to do any organic CapEx here? If yes, what would be the amount and how will it be spread over the next couple of years?
Yeah, we are building a dialyzer facility which is under construction and in the next one year, we hope to get it up and running. That is the CapEx that is going on. Also, some small CapEx on our intervention cardiology side. Between the two, we are spending around INR 300 crore of CapEx on med devices.
Will that be completed this year mainly?
No, probably in 12 - 18 months.
Sure. The second one on the HNS facility that we have in the U.S., would you share the current bioreactor capacity that we have, and is it a single-use reactor or a stainless steel reactor facility?
These are single-use bag reactors. I think the capacity is around eight to 2KL into 4 KL, 2 KL into 4.
Okay.
2,000 KL for 4 reactors, and also we have small-scale reactors also.
Yeah, this would be mainly mammalian cell culture reactors that we'll be using?
Yes.
Okay. Sure. Are we looking at any cost efficiency program as we enter into post-Revlimid era? If yes, what are the cost lines that we are looking at and potentially how much savings we can kind of accrue over the next couple of years?
We do, I mean, not because of Revlimid, but over, I would say, since the mid-early 2000s, we have institutionalized cost reduction programs in the organization with SLIM, PRISM, and other critical initiatives. Every year we have a very strong savings target, which the team is quite good and have been surpassing those targets every year. That continues as our cost base goes up, both from procurement savings, same vendor negotiations, alternate vendors, improvement in efficiency in manufacturing, both from productivity as well as batch size yield. I think all of those put together, we do have savings that we achieve every year, which are meaningful. That will continue. By and large, on many metrics, we are sort of very good and best in class, so to say. We hope to stay and stay in that kind of metrics.
Sure, sir. Last one from my side. At this point in time, shall we pencil in Ibrance Zendic launch in FY 2027? Do we have that clarity from the settlement?
We have clarity, but we have to wait for if there is any pediatric exclusivity. If not, yes, it will be a FY 2027 launch, late FY 2027 launch. If there is pediatric exclusivity, then early FY 2028 launch.
Sure. Sir, just the Ibrance, you know, the molecule itself for the innovator has seen a significant decline this year. Do we expect once standardization happens and the low-cost alternative is available that some share can be gained back?
Generally, when genericization does happen, unless the therapy is shifted, obviously you see volumes grow. Today, also, irrespective of that, it's still a very, very large opportunity. After genericization, generally volumes do pick up for most therapies unless there is a shift of therapy. I would say the molecule still offers a very significant opportunity in the medium term.
Sure, sir. Thank you and all the best.
Thank you.
Thank you. The next question is from Bino.
Hi. Good evening again. Just one follow-up question on semaglutide. Are we fully integrated backwards in semaglutide, both API as well as formulation?
Yes.
Okay. Do we have sufficient capacities for India launch and the other emerging market, Canada, etc., launch over the next two years?
Yeah, we do have, we have planned for enough capacity. We also have alternate source on API. We are dual sourced, and we have obviously PFF and cartridge facility sufficient of that, and obviously the devices also we have been planned for. Hopefully, we are in control.
Got it. Thank you.
Thank you. The next question is from Neha Manpuria.
I just wanted to get a sense of what the CapEx would be given the CDMO capacity that we are setting up for the U.S., and you said INR 300 crore for the intervention. Is there anything else that we have planned? What would be the CapEx roughly for the year?
Total CapEx for the current financial year is estimated around INR 200 crore. That includes INR 300 crore of medtech.
The U.S. CapEx also, right?
Sorry?
The U.S. facility?
No, the acquisition is separate.
No, there is no CapEx in that because that facility is already, I mean, they're fully CapExed and it's only under qualification now.
There is no additional CapEx that is required for.
There could be incremental small CapEx, but the facility is only under, now is under qualification.
Okay. Got it. That is helpful. Thank you so much.
Thank you. The next question is from Devang Saravgi.
Evening, sir.
Good evening.
I have two questions. When can Desidustat be expected to receive approval from Chinese regulator, and what could be the potential revenue opportunity for this drug in the Chinese market?
I think, as I said, we have completed the clinical trials in China with our partner. The data was already published. We have mostly answered all our queries with the Chinese authorities. We are hoping that in the next 12 months, we would see approval for Desidustat in China. From our point of view, Desidustat offers a tremendously large opportunity potentially for the company. China is probably one of the largest markets for HIP inhibitors with an existing product also which are in multi-million dollars. We do hope for it to be a very meaningful launch and commercial opportunity for Zydus.
Is there any change in approval timeline for CUTX-101?
No, we still are looking forward to approval in this financial year.
Sir, lastly, on the ND robot arm from Amplitude Surgical, it appeared to be promising. Do you have any information on the expected launch timeline and market size potential?
Yes, it has been already applied for CE approval, and the launch will be in this financial year.
Are there any revenue expectations?
Yeah, there are revenue expectations built with this robot, which will improve our revenue in Europe also, and we also potentially will look to bring the robot to other markets as well after CE approval.
Any differentiation between competitors in this product?
The good part of this is that there has been a navigation system that has been in use for many years and with strong data. We are very excited with the capability that it has. Now, with the robotic arm, also it builds additional capabilities. We believe we will see good traction for the robot going forward. Beyond that, obviously, the knee and hip joints are high-tech, high-quality products, and we hope to see good success of them in different markets.
Sir, if you allow, last question on tariffs. Any comment? How can it affect, any insight?
I don't have any comment because we don't know the extent of the tariff on pharmaceuticals or generics. As and when we are clearer on that, we can give a better understanding. As I said, the U.S. is an important market for us. In the U.S., a lot of medicines are made available and affordable because of generics. Generics are almost 90% of the volume in the U.S., and that helps bring the healthcare cost down. I think we are committed to making sure that we continue to create this access in the U.S.. Once we see the tariffs, we will see the impact and work accordingly as to what we can best achieve after that.
Thank you, sir. Thank you.
Thank you. The next question is from Nitin Aggarwal.
I have a question, Dr. Sharvil Patel, on the lenalidomide for the remaining quarters. Do we still have quantities that we'll intend to book or we're largely done with the quota?
We're largely done. No, the quota we still have some left, but I think by and large, we're largely done in terms of the majority of our revenue, we have booked it in the last quarter.
Sharvil Patel, when we look through the remaining three quarters for the year, you know, when we're talking about growing on, you know, the business that we did last year in the U.S., given the fact that we did have a large Mirabegron, we did have a largish Q4 contribution from lenalidomide, plus the Asacol HD erosion which has come through this year, how do we, what sort of drivers do you see will make up for some of these things going forward?
As I said, we still continue with the guidance of single-digit growth in the U.S. this FY 2026. It will be driven obviously by the launches that we have done in the last year, the products like the 505(b)(2), which we have launched and which we are hoping to launch in the coming quarters. Also, we have a base business that has done well. While Asacol HD may have gone down, overall we are gaining on our base business as well. Mirabegron also continues to be favorable. Putting all of this together, we believe that we will still see growth in spite of the last Q4 that happened where we won't see any majority business on Revlimid.
Thanks. Dr. Sharvil Patel, on the growth, on the EBITDA margins, how do you see the EBITDA margins versus last year?
We believe we will be better than 26% EBITDA margins, and that's what we have maintained as a guidance.
Okay, thank you so much.
Thank you. The next question is from Tushar Manudhane.
Am I audible?
Yes.
Thanks for the opportunity, sir. Just with respect to Desidustat, while you know, maybe probably approval taking the next 12 months and then subsequently, the commercial channel probably, you know, how long will that take to see that probably the stable or the scale-up in the sales?
We have partnered with the commercial partner in China who is a large player in the market, and they are already preparing for commercial launch. They are well prepared to do so. The market size of this kind of CKD molecule in China is already about INR 1 billion and more. We see a great opportunity for this to take share in the Chinese market. I think our partner is well prepared and excited to prepare for the launch. I think most of the work with the authorities is completed, and we hope that we will see approvals in the next one year.
For us, it will be this like royalty kind of income, of course, including the profit share because it's a manufacturing and the commercial.
Yeah, it's a profit share. I mean, it's a markup plus royalty income.
Are there any broad range you would like to highlight, like how much this would be as a percentage?
We can't talk about it yet because we have to get pricing approvals also and other aspects. Once we commercialize it, we can give better color. Obviously, the nature of licensing is where we don't have any other fixed costs, so the profitability will be high.
Okay. Just a second, you're on this Agenus Biofeed facility with this botanical and the capacity would be largely utilized or there would be still a sufficient amount, and then what kind of products we intend to sort of get the, let's say, exhibit batches or validation done from this facility.
For current requirements for BOT/BAL for their clinical trials, the facility is obviously far more, I mean, has far more capacity than the production that we'll do. We do have an opportunity to add more products beyond BOT/BAL. If BOT/BAL goes fully commercial and the uptake is very strong, we have a potential to further add capacity also. We do believe that we can have more than one product in this facility. As I said, we have four 2KL reactors and we also have another facility, though smaller, but also can be retrofitted. Depending on the requirement, we will look to how do we scale up if needed. Currently, we look at clinical supplies on BOT/BAL as well as potentially adding some biosimilars and third-party business to the CDMO.
Sorry for my ignorance, but just wanted to understand this. Given that it is a biologics facility, this entity does have scaled up earlier in terms of manufacturing from, let's say, lab to the commercial level, and which is where the confidence for this bottleneck product?
Yeah, so BOT/BAL has already been given to more than 1,000 patients through their different clinical trials. There is already a, the team already has the capability from both, as you said, from lab scale to 2 L to 20 L to now 2KL. They already have proven capabilities to manufacture this.
Okay, sir. Got it. Got it. Thanks, sir. That's it for me, sir.
Thank you.
Thank you. We will wait for a few minutes for the question queue to assemble. You can click on the raise hand tab on the screen. I request management for the closing remarks, please.
Thank you for today's conference call and your active participation. We look forward to interacting with you in the next quarter. Thank you.
Thank you very much to Zydus Management Team. Ladies and gentlemen, on behalf of Zydus Lifesciences Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines and exit the webinar. Thank you.