Launches in FY13 to boost growth in Indian market: Glenmark

Aided by malarone and cutivate sales, the US business of Glenmark Pharmaceuticals saw recovery in the fourth quarter of FY12. In an interview with CNBC-TV18, Glenn Saldanha, MD & CEO of Glenmark said, the company expects its domestic market to outperform industry in FY13.

Saldanha is positive about licensing income in FY13. Without the impact of forex, Glenmark recorded EBITDA margins of 17.5% for Q4FY12.
At the moment, Glenmark is eyeing a topline growth of 20%-25% in FY13.
Riding on the back of robust sales in the US and domestic market, Glenmark’s consolidated net profit rose by 32.54% to Rs 150.35 crore in the fourth quarter of FY12. The company had registered a net profit of Rs 113.43 crore for Q4FY11. 
Net sales of the company increased by 34% to Rs 1,065.85 crore for Q4FY12 compared to Rs 795.07 crore for the corresponding period last fiscal.
Below is the edited transcript of his interview with CNBC-TV18. Also watch the accompanying video. Q: The US markets did pretty well for you this quarter. What led to that with specific reference to some of your new launches?
A: The US business has seen a recovery in Q4 which was expected on the back of Malarone continuing to show very strong growth and the launch of Cutivate. We just had one week sales of Cutivate in Q4, so it’s just the start.
We have just been able to do some initial invoicing. Overall, we finished the quarter at about USD 66 million in terms of topline revenues for the US business. Q: Your domestic business has also turned in a growth of 24%. What would you attribute this kind of growth to?
A: I think inventory rationalization was completed in Q3. In Q4, we continue to see very strong growth coming out of the Indian business. In fact, IMS in the month of March set about 37-38% growth.
We are seeing very strong growth out of the India business. We think the growth trend will continue into next year for the India business where we will outperform the Indian industry, given all the products we are launching and the penetration we have been able to achieve in the India business. Q: Can you take us through the margins picture in the current quarter on a forex basis and whether you see margins stabilizing here?
A: The margins in the quarter were at about 17.5% if you net out the forex gain impact. On a full year basis, our EBIDTA margins stood at about 19.5%. We don’t guide towards margins but, we feel comfortable with where our full year margins stand at as of now. Q: The question though for everyone is what’s happening on the licensing side? Can you throw any light on what licensing income you expect in FY13?
A: I think licensing income is extremely unpredictable. We have got a USD 50 million payment in FY11-12 and we continue to strive to make sure that we continue to out-license some of our pipelines.
The two Sanofi molecules that are licensed are currently in Phase 2. Assuming they are successful, we would continue to get further milestones. It looks positive.
We don’t guide to any specific licensing income or time frame for licensing income. But, we continue to remain positive in terms of out-licensing our molecules as well as the molecules that Sanofi is pursuing. Q: What is the status right now with Revamilast and GRC 17536?
A: Both Revamilast and GRC 17536 continue to progress well. We are running two phase 2B trials for Revamilast - one in asthma, the other is in rheumatoid arthritis. These are being run in five countries. We expect at least one of the two phase 2B to report this year, in FY12-13. If all goes well then it could enter Phase 3.
We are also running two different programs for GRC 17536. We are running a phase 2A in pain and we are running one more in an inhale program for asthma. Clearly, both these look very promising and partnering is a big part of our strategy. We don’t guide to any specific time frames as to when these will get partnered out but at some point, we will partner both these molecules out. Q: So what can you share with us about how the business will do in FY13?
A: I can only give you a top line guidance number and we expect top line revenues to grow anywhere from 22-25%. We don’t guide to margin of profit guidance.