Positive phase 3 data on GSP 301; USD 100m opportunity for co: Glenmark

A: We have got positive phase 3 data on GSP 301. This is a big event for the company because this is our first branded product to clear phase 3. We are hoping to launch this product; file it in FY18 and launch it in FY19. However, from sales potential perspective it is at least a USD 100 million opportunity for us.

Latha: When can we hear about the out licensing deal?

A: In all likelihood we will be commercialising this product on our own or with a partner. We are still debating the best way to get to market. So over the next year we will have further information on our commercial strategy.

Sonia: You did say that there is a USD 100 million opportunity that you are seeing with this deal?

A: Sales potential is about USD 100 million for this particular product.

Sonia: What would that translate to in terms of your own revenue growth that you are expecting to see over the next one year or so?

A: We will file this product in FY18 in the US and we will start commercialising in FY19 and post commercialisation you can expect USD 100 million of sales coming through on this product. However, the key takeaway is this is only the first product and we have a host of other branded products which we would start filing.

Sonia: What would the pipeline look like in terms of filing over the next one year or so?

A: We have close to three or four branded products in development and every year from hereon we should have one product entering phase 3 and completing phase 3. It is a pretty exciting pipeline that we have developed internally.

Anuj: This product in particular, in FY18 you don't have any revenue potential because the next step as you said you will be filing in FY18 and the revenue potential is only for FY19?

A: That is correct.

Latha: Donald Trump's latest pick Scott Gottlieb, former FDA Deputy Commissioner is going to head that drug authority, believed to be committed to lower drug prices. How should that impact you and other companies that export to the US?

A: Scott Gottlieb is a veteran and has been with the agency for a while and understands the industry pretty well. So, generic prices in the US are currently at its lowest point with the kind of competitive pressure that most companies are facing in the environment because of the channel consolidation and the price pressure. Therefore, the generic side of things is extremely competitive from US perspective. So, the main focus would be on branded side and not the generic side.

Sonia: Earlier you had indicated to us, when we spoke last, that the US base business pricing pressure could be about 8-10 percent. Do you think it could get worse in the quarters to come?

A: The reality is north of 10 percent; if you look at Q4 and the pricing pressure in Q4 is north of 10 percent. So there is a significant amount of pricing pressure that companies are witnessing on the generic business.

Anuj: We have also seen a spat of US FDA Form 483, warning letters. What is your stand on that from industry point of view?

A: That is part of regular business. India is such a large supplier of medicines to the US now and the agency will continue auditing Indian facilities and you will continue to see 483s and warning letters as we go forward.

Sonia: You said that the pricing pressure could be northwards of 10 percent Q4 onwards. What would this do to your margins because you had indicated a margin performance in the range of about 22-23 percent odd? Could that be under threat as well?

A: The margin expansion is all coming out of new products and right now we have Zetia which is being sold right now in the US market. So this quarter and a part of next quarter should also look very exciting on account of Zetia and the kind of cash flows and revenues that we are getting out of the product. However, longer term, margins will be under pressure unless you keep getting new product approvals and you are able to expand margins by way of new products.