Glenmark Pharmaceuticals declared the results for the quarter ended December’08 and held a tele conference call on 27th January 2008 to discuss the same and its future growth strategies. The key takeaways from the meet are as follows:
Financial performance
Specialty Business
ROW Markets: India, Africa, Asia, CIS & Latin America region
India
- Domestic formulation business reported a growth of 36% to Rs 156.84 crore.
- According to ORG-IMS data the company registered value growth of 18%, vis-à-vis that of the industry 6%.
- Company launched 4 products in the quarter and now has four brands in the top 300 with Telma H making its debut in this list.
- Dermatology and Cardiology segment done well in the quarter.
- Flexilor continued to hold its leadership position in the market.
Africa, Asia, CIS Region
In the quarter, revenues from these regions jumped by 60% to Rs 83.34 crore. Glenmark has filed 71 products dossiers during the quarter and has received 31 product approvals.
CIS Region
- Russian subsidiary improved its tanking from 105 in November 2007 to 95 in November 2008 and market share has improved from 0.17% to 0.20%, according to Pharmexpert data on a MAT basis.
- Company has launched Candiderm and Glebo during the quarter.
- Company is focusing on building its business in Ukraine, Kazakhstan and Uzbekistan.
- It received approvals for the drugs Deriva, Dervia C in Ukaraine and Candibiotik, Candiderm, Candid V Gel, Relcer in Kazakhstan.
Africa
- Company received four new registrations during in the quarter in Sudan – Xmat 500mg, Xmat 850mg, Rosicon MF and Saferon drops.
- Two new dossiers were filed in South Africa.
Asia- Pacific
- Company has launched Telmisartan in Vietnam and Peridopril in Philippines.
- Glenmark is working on couple of in-licening and brand acquisition opportunities.
Latin America
- Revenues from Latin American and Caribbean operations were declined by 16% to Rs 43.70 crore.
- For the entire Latin America region, the company has filed 18 product dossiers during the quarter.
Europe
- Glenmark Europe’s operation registered revenue growth of 56% at Rs 19.28 crore.
Generics Business
USA Formulations
- Glenmark Generics Inc., U.S.A. posted revenue of Rs. 210.41 crore for the quarter ended December’08, registering a marginal growth of 3% over the third quarter of the previous year.
- The Company received ANDA approval for Ranitidine Tablets.
- Beside Ranitidine, the company launched Morphine Sulfate Oral solution and Azathioprine Tablets.
- During the quarter, the company filed 5 ANDAs with the US FDA and intends to file at least 7 ANDAs in Q4-FY09.
- In the forthcoming quarter, the company plans to launch at least 6 new products.
- The Company now has a portfolio of 37 generic products for the US market and currently has over 40 ANDAs in various stages of the approval process with the US FDA.
- There are four potential first to file Para 4 applications filed by Glenmark.
- Nycomed US filed a patent infringement lawsuit regarding glenmark’s ANDA for its Gluticasone Propionate 0.05% lotion product.
EU Formulations
- The company posted revenue of Rs 4.12 crore in the quarter under review.
- Company filed 4 MAAS via the DCP/ Centralized Routes taking the total up to 12 MAAs filed till date.
- During the quarter, the company commenced shipments for its first product launch into the Netherlands and followed it up by subsequent shipment to both Netherlands and UK.
Oncology
- Glenmark generics S.A extra company dossiers in the third quarter and launched one product each in Argentina and Ecuador.
- Revenues from Argentina operations were Rs 11.04 crore as against of Rs 9.02 crore in the corresponding pervious period.
Active Pharmaceutical Ingredients [API]
- Company has filed 36 DMFs till date, it intends to file 4-5 DMFs in the forth quarter and 10-11 for the entire financial year.
- Revenue from sale of API to regulated and semi regulated markets globally was at Rs 27.47 crore for the quarter review.
- During the quarter, revenue from domestic API and co-marketing business amounted to Rs 25.19 crore.
Other highlights
- R&D expenditure for FY’10 would be around USD 60 million.
- Debt on the books as on 31st December ’08 is Rs 1100 crore.
- Cash on the books as on 31st December’08 is Rs 85 crore.
- FDA has inspected the 4 plants in 2008.
- Capex for FY’09 is around USD 40-50 million.
- Tax rate for the year is around 23% to 24%.
- Average interest rate is around 15.5% to 16% for rupee debt and 6.5% to 7% in dollar debt.
- Debt of Rs 350 crore raised in the quarter for expansion plans.
- R&D cost for the quarter is Rs 25 crore and for the FY’08 is around USD million dollars.
- Field force of the company is 1800 as on 31st December’08.
- Expects to file 20 to 25 ANDAs for the FY’10.
- Expects 20% to 25% growth in net profit for FY’10.
- Glenmark is looking for a small acquisition of USD 8 million in emerging markets.
- Company estimates lesser growth than expectation both in terms of target sales and profit for FY’09 and FY’10.
- The delay in FDA approval is main reason for the fall in growth US generics business.
- Company has currently 2 molecules in Phase III, 3 molecules in Phase II and 2 molecules in Phase I stage of clinical trails. It generally incurs R&D expenses of USD 40 million per year. As the Phase III clinical trials requires USD 40 million over 2 to 3 years for a molecules, company plans to out – license 4 molecules. But in the current scenario many companies are not willing to take in-license, so the company needs to invest USD 60 million on R & D in FY’10.
- In the previous post result tele conference call held on 28th April 2008 and analyst meet on 7th November 2008, Company said that, it expects PAT of USD 210 million in for FY’09 and USD 282 million for FY’10 on consolidated basis, an increase of 34% yoy basis. But due to slow down in US generics revenues and increase in R & D expenditure in the FY’10. The company cut down its growth rate in PAT to 20-25% for FY’10.