Glenmark Pharmaceuticals Ltd Q1 FY2026 Concall Summary

Key Takeaways

• India divergence is the headline puzzle: Reported India growth of just 3.7% trailed secondary sales growth of 15.1% by a wide margin, driven by tail-end brand pruning and a diabetes supply gap. Management expects the two to converge from Q3.
• AbbVie deal transforms the innovation story: IGI partnered with AbbVie on ISB 2001, retaining emerging markets rights while securing an upfront payment that will make the consolidated entity cash positive post-close.
• U.S. injectables and respiratory build a multi-year growth arc: 8.9% QoQ North America growth was driven by injectable share gains, with generic Flovent 44 expected in H2 and a 3-to-5-year portfolio build underway.
• Margins guided to stabilize at 23%+ from Q3: Q2 EBITDA is distorted by the IGI deal flow, but the underlying trajectory points to 23%+ from Q3 onward, supported by a sustainable 68-69% gross margin.
• What to watch next quarter: Whether the India reported-to-secondary gap begins to close, the pace of new U.S. injectable launches, and the consummation and accounting of the AbbVie deal.

India Business: The Divergence and the Diabetes Drag

• Reported vs secondary sales gap: India reported growth of 3.7% was held back by discontinuation of low-margin tail-end brands and underperformance in the diabetes segment, while secondary sales grew 15.1% against an IPM growth of 8.5%. Management expects the gap to close from Q3 onwards as brand pruning completes and new launches ramp up.
• Diabetes supply constraint resolved: Underperformance in diabetes was driven by supply constraints on LIRAFIT, the first-to-launch Liraglutide biosimilar in India where Glenmark now holds over 50% market share. Full supply is available from Q2, so diabetes sales are expected to improve significantly from Q2.
• Branded shift is deliberate, not accidental: The company is consciously moving up the value chain, exiting tail-end brands to focus on higher-margin branded products. Management described the portfolio shift as broad-based across segments, not concentrated.
• New oncology launches add a growth layer: TEVIMBRA (Tislelizumab) and BRUKINSA (Zanubrutinib), launched toward the end of Q1 under the BeOne Medicines agreement, are expected to gain momentum and meaningfully contribute to the India business over the next 2-3 years.
• India growth ambition: The company expects a 10-15% CAGR in India over the next 3-5 years.

Glenn Saldanha: "Glenmark now with the ISB 2001 deal and our move towards becoming more of a branded company. I think going forward, our vision is to focus more on high-margin products, right? So a lot of the tail-end brands we are moving out of, right? Like a typical branded company, the idea is to keep moving up the value chain and focus more on the margin profile of the high-value products and the branded products."

AbbVie Deal and the Innovation Pipeline

• ISB 2001 partnered with AbbVie: IGI granted AbbVie exclusive rights to develop, manufacture and commercialize ISB 2001 across North America, Europe, Japan and Greater China. Glenmark retains emerging markets rights and will lead development and commercialization in those territories. Phase 1 data was presented at ASCO 2025.
• Upfront payment transforms the balance sheet: The upfront payment is one-time and non-refundable, covering IGI expenditure for the next 3 years. Post-deal close, the company will be cash positive at the consolidated level. The balance of the upfront will be booked in Q2, with the specific amount to be disclosed after money comes in and auditor discussions conclude.
• Deal closure expected in September: Management is hoping to close the AbbVie transaction in September. Dose expansion for ISB 2001 continues, and next steps will be decided jointly with AbbVie after consummation.
• QIN HAYO advancing on multiple fronts: A global multicenter Phase III study has been initiated in neo-adjuvant and adjuvant NSCLC. Authorization was received in Kenya for early access programs, and the first market launch is expected in FY26.
• RYALTRIS geographic expansion continues: Approved in Colombia and Thailand, with approval expected in Brazil and China this year. Launches are planned in 10-12 additional markets over the next few quarters.

U.S. Business: Injectables Now, Respiratory Next

• North America delivered 8.9% QoQ growth: Growth was driven by gaining share in injectable product launches and other partnered products, despite what management described as a relatively challenging environment.
• Injectable portfolio building out: The company already has 9-10 injectable products in the market and is launching 3 more through partnerships in Q2, supporting a good Q2 expectation. Management sees a clear trajectory to higher growth going forward compared to historically.
• Respiratory pipeline is the next leg: Generic Flovent 44 is expected to be a big launch in H2. The company plans to file approximately 5-6 U.S. NDA applications for the full year, with 1 filing expected in the forthcoming quarter. Respiratory products are filed and getting approved over the next 3-5 years.
• Monroe facility awaiting FDA feedback: The facility continues to take exhibit batches. Five observations from the last FDA inspection have been responded to, and the company is working with the FDA. Management hopes to restart commercial manufacturing this year, which would accelerate some filings.
• Antitrust litigation has no timeline: Glenmark USA agreed to settle with the direct purchaser class for USD 3.78 crore, subject to court approval, with no admission of liability. Litigation continues on other classes, but management offered no visibility on any timeline.

Glenn Saldanha: "I think longer term, we will have a -- if you look at us in the next 3 to 5 years, we should have a strong injectable portfolio, right, which is evolving in the U.S. along with a number of respiratory products, right, which is filed and getting approved in the next 3 to 5 years."

Europe and Emerging Markets: A Mixed Quarter, Recovery Expected

• Europe declined 4% YoY but the exit is improving: The branded respiratory business, including RYALTRIS, continued strong month-on-month growth. Management anticipates a return to double-digit growth from Q2 onwards and expects double-digit growth for the full year FY26.
• WINLEVI launched in the UK, more markets to follow: Partnered with Cosmo and approved by MHRA, WINLEVI is planned for launch in other European markets by the end of FY26. Two additional respiratory products were recently approved in Europe.
• Emerging markets were subdued at 0.2% YoY: Lower seasonal demand in some Latin American markets dragged the headline number, while the rest of EM grew 9%. Management anticipates double-digit growth in FY26 on a constant currency basis.
• Asia Pacific recorded high single-digit secondary sales growth in key markets including the Philippines and Malaysia.

Margins, Cash Flow and the Balance Sheet

• EBITDA margin guided to stabilize at 23%+ from Q3: Q2 is not presentable due to IGI deal flow distortion, but the underlying trajectory points to 23%+ from Q3 onward. Gross margins are already improving with the knocking off of tail-end brands and are seen as sustainable at 68-69%, driven by the branded markets and diversified geographical portfolio.
• Net debt increased on working capital and one-offs: The increase was driven by inventory and debtors buildup, LCDF one-off severance payments, plant closures, and inventory buildup for Europe launches pushed to Q2. Post-AbbVie deal close, the consolidated entity becomes cash positive.
• Other operating income is recurring in nature: It consists of ongoing royalty income, incentive income, and debit note price adjustments across various markets, all in the normal course of business.
• Full-year guidance maintained: Capex is on track, R&D is guided at around 7.5% for the full year, and net working capital days of 110-115 are seen as sustainable long-term.

Anurag Mantri: "Q3 onwards the EBITDA margin trajectory should stabilize close to a 23% plus range. So 23% is what we are guiding."

Guidance & Commitments

Key Metrics