The first one on the Ilumya successful trial on PSA. Could you provide some timeline? I know it's at a filing stage, but how should we look at when the filing could happen and then when can we expect, you know, what is the potential timeline here for the developed markets like US, Europe? And also if you could provide some data points in terms of the proportion of patients reaching ACR 20, 50 or 70 at week 24?
Yes, the plan is to present the data or publish the trial result in a reputed journal before we start publicly talking about the data. And I think the regulatory team is working with the CRO to ensure that as soon as we have all the requisite information b ecause we have currently only the topline data, but once we have the requisite information for filing, the plan is to file. Hopefully, we should be able to file the product before the end of this calendar year. But that's not something that I am 100% sure about, but that's the plan.
And Rick, in your view, when do you think this starts converting into revenue contributions, once you see that formulary coverage, would it take usually nine months? Would it be a year out? Or, you could start seeing contribution much faster than that, from a revenue ramp up perspective?
If we plan, we will see some impact this year, this fiscal year.
My second question is on the ROW market. That seems to have seen a very strong growth in the quarter. Is there anything, any milestone income, anything in that number or the growth that's strong in the ROW market?
No, I think she's asking about the rest of the world market. So I think the overall, there's no specific event that I can point to. But there may be some one time sales, which m ay also be responsible. But the overall guidance that we have given includes the performance of the emerging markets and the rest of the world markets.
And my second question is on the Revlimid opportunity. So does 1Q number reflect meaningful contribution from that product? And if you can also comment on the pricing for that product?
I would say our generics busine ss faces up and downs quarterly due to lenalidomide. If we remove that impact, the U.S. generic business is down quarter -over-quarter and year -over-year. We do see continued pricing pressure for lenalidomide.
Taking the GLP point further, could you give some sense about your participation in the first wave of commercialization of GLP product in Canada and Brazil?
I think Canada, Brazil, we have not shared the information, but what I can share is about in India, we will be in the first wave of launch. So we are all working in that direction so that we come first to the market.
Sir, I was just looking at the China development also. We know that we have Ilumya, Ilumetri there through partner, but we have now created our own subsidiary also. If you can add some color to that, those kind of development and interest?
No, I think it's an option that we are creating without any specific plan at this point.
With respect to generic Revlimid, we are almost halfway through into CY'25. And there are two quarters to go before the exclusivity expires. So is it fair to assume that you would have sold 50% of your allocated volume quota for the year?
No, we don't provide product specific guidance.
Can you give some color on the Halol observations and any timeline on the final resolution there?
So, we are engaging with the FDA on finding a resolution for Halol. We have responded to the 483. And we are waiting to hear back from the agency.
Subsequently further building on, it is adding the promotional marketing expenses of 100 million. So, if I have to think about the EBITDA margin. So, directionally would this have sort of an impact on the EBITDA margin which we have done on 1Q FY'26?
No, I think the key difference between how you look at and how we look at is that we look at what is in the best interest of the business long term. Now, how that affects short term EBITDA, I think we actually do not even calculate. So, I am not able to re spond. But our view is that both UNLOXCYT as well as LEQSELVI have significant opportunity to strengthen our presence in the innovative product business and also strengthen our relationship with the customers. So, we will do whatever is required t o become successful.
Just one clarific ation about after settling this antitrust litigation, is it fair to believe that there is no more litigation relating to the antitrust that is there?
So it is there and we have given details in the annual report.
Second is about the Ilumya, for the new indication of psoriatic arthritis. Sir, you mentioned that the filing is likely sometime this year. But what are the likely, means how far the drug is from the commercialization i n the US? And what could be the targeted market that can be addressed by this product?
I mean, typically there is an approval timeline for a new indication. Hopefully, we should achieve whenever that timeline is met post the filing. I think I do not know specific target for psoriatic arthritis, but broadly, what I understand is that around 30% of the psoriasis patients also suffer from psoriatic arthritis. So, that market then becomes available to us.
One bookkeeping question. I wanted to understand the amount for which we have settled Incyte litigation, one time amount that we have given. And whether that would be from part of exceptional items in second quarter?
We don't give indications on this.
Previously, you commented that clearance of Halol facility is going to be very important for pickup in the US generic business. So, now Halol clearance doesn't look like in the site at least this particular year. So, how we should look at the generic business this particular year or the year after that?
I don't think we provide that forward-looking guidance. But as Alok mentioned, we obviously have other sites in which we are able to supply the US market. And we have an existing portfolio that we can look to grow to offset any headwinds we face for our new products.
This quarter, we have done EBITDA of 31.1%. What is our guidance for the full year?
We normally do not give a margin guidance.
We had suggested that there would be incremental costs related to launch of LEQSELVI and UNLOXCYT in FY'26, which we had pegged at around $100 million. So, have we seen that impact in this quarter and will it be more spread across the quarters or will it be high at the time of launch and then comes down from there on?
So, in addition to the actual cost outgo, there will also b e amortization of the cost of the acquisition and that will start only when the product is in market. So, we will see Leqselvi from this quarter. But I think our estimation is that the overall cost of 100 million, we will be sustaining during the year. You don't see that much in the first quarter, but it will start coming.
My first question is on Leqselvi. Now that we have launched the product, how should we look at, I mean, what would be the key milestones in terms of traction of the product? Because if you look at the other two competing products, we have seen very different trends from IQVIA in terms of the prescription trends. If you can just help us in terms of when you think we get to a point where we are comfortable with formulary coverage, how much time would that take roughly?
Yes. So, we just launched Leqselvi a couple weeks ago. We are very encouraged by the early results. We have seen good receptivity with healthcare professionals and patients with our messaging. We already have patients that are going through our hub, which is our support program. And we already have our initial commercial prescriptions. We are in ongoing discussions with payors, which have been very positive. And as I said, we are encouraged by what we have seen with the first two weeks in the market.
On the MFN, based on your discussion, what is the sense of the likelihood of Ilumya getting included in the demonstration project and therefore negotiations on that? Any color on that?
Yes, I would say we have no further information on the MFN executive order. We have not had any dialogue with the government. We have not been contacted with respect to any products in our portfolio.
My question is in the U.S. market. So while we are still waiting for the details, official details to come on the tariff part, but from your side, do you have any thought about improving your manufacturing footprint in the U.S.?
Maybe I can start. We actually have a significant footprint in the United States already. And at this time, we have no plans to move further manufacturing to the U.S.
Dilip bhai, were you happy about the topline results from the Ilumya Psoriatic Arthritis study or could it have been better? I am asking this because we have seen the ACR20 numbers which have come fine. But in ACR50 and 70 maybe didn't show much improvement.
So I think when you look at the numbers, you also need to look at dosing. What we have in no induction dosing as well as only two injections. So I think it's a very good result considering the dose and the overall safety profile. The doctors with whom we have discussed understand the product because it's a class that they are familiar with. So we are comfortable with these numbers.
Just a question on the one-off settlement that you have done. There was this $200 million settlement of Taro. From your footnotes, I understand that you have recognized trading about $62 million in this quarter in Q1. So should I assume that the balance would be recognized in Q2, Q3, etc. as an exceptional item?
Let me take this question. Out of the $200 million, we were carrying a provision for part of it in our books from prior years. So netting of that, the balance has been fully accounted in this quarter and therefore we would not see any further exceptional item on this account in the forthcoming quarter.
My first question was on the domestic business. I think this quarter we have seen a 14% growth on a relatively higher 1Q base. And last few quarters, also if I look at our growth rates, it's not a significant divergence but a marginal divergence versus what secondary s ales growth trends would indicate. So I just wanted to understand if the OTC portfolio is now becoming a major part of our domestic piece and probably there are a few sales channels which are not getting captured. Is it what is driving this marginal growth divergence versus what we see in secondary sales trends?
The majority of the growth is coming from prescription business. It's not from consumer business.
Last quarter we had indicated that we are looking to launch a few new products in the diabetes and weight loss management space in the domestic market going forward. Just wanted to understand how this will sort of reshape the income and treatment regimen, particularly for diabetes. Because while the incremental opportunity size probably is being talked about, just wanted to understand how the current standard of care treatment could get disrupted when some of these new launches come in starting next year?
GLP-1 effect on existing products. So, I think if you look at that way globally, there's a lot of experience about the impact of GLP-1 on sale of existing product, both DPP-4 as well as SGLT-2. So we haven't seen any significant degrowth in those. As a matter of fact, post -generics, I think there is an increase only. So I think if that is repeated in India, there should be no problem.
Dilip sir, My second question was about the cash deployment that you are having in the annual report that you have mentioned. So in the recent past, much of the investment, what we have done, it is towards the specialty portfolio. And th is time that you are also indicating about your interest beyond that. So could you give some clarity about that? Which are the areas that you would be interested in spending and all that?
No, I think we have indicated that we will continue to look for opportunities to strengthen our product portfolio in three therapy areas that we are interested in; Ophthalmology, Dermatology and Onc/Derm.
So, like, I could see in your annual report that there is a sharp jump in the with respect to India. There's a sharp jump in the neuropsychiatry therapy revenues on a YOY basis. A very sharp jump. So is this almost a Rs. 1,000 crores, in fact, on a YOY basis?
No, that's not correct. I think CNS growth is also in line with India growth. If I remember correctly, it is 11% to 12% range.
Just one more on the tax rate, if you could give a number, what should be the tax rate this year?
For the full year, we can consider around 25%.
My question, first question is related to Odomzo. So, although it's a relatively smaller product in your Global Innovative Medicines pipeline, and the product was there in the market for quite some time, and in the last couple of years, there is a sharp pickup, right? And the product has got a decent market share against the competition right? So what has changed?
Yes, at least in the U.S., I can comment. We continue to see nice growth of Odomzo. It's really a recognition from clinicians of what the product can bring, and also a strong execution from our sales and marketing teams.
Just one more question on Leqselvi, right. If you look at the competing molecules, let's say Olumiant, right, they have a restrictive coverage like prior authorization, limited quantity, etc. So even for Leqselvi, are you expecting similar kind of coverage, or will that be enough for the pickup in this product?
I think with all three prod ucts, we will continue to see prior authorizations. Based on our ongoing negotiations, we do expect to have good coverage for Leqselvi versus the competition.
Just a logistic question. So the small one-time kind of revenue that we are suggesting in ROW, is it part of innovative medicine business, or is it part of the non - innovative medicine business?
It's a mix of both, Kunal.
One question for Rick. Since now we have seen some bit of Stelara biosimilar launches in the US market, and Europe also Stelara biosimilars have been there, so are you seeing any on-the-ground impact? Maybe new to Rx patients, given obviously biosi milar would be at a much lower cost, compared to the medicines like Ilumya or Tremfya?
Not really. We have not seen any major biosimilar first policies amongst payers. We also see more growth in the IL-23 class. So, there already has been movement away from Stelara in multiple therapy areas.
And the last one on the UNLOXCYT launch, I think we have suggested obviously it will be launched. But now, is it imminent? We should expect their launch to be in this quarter? What are we kind of waiting? Is it preparations that we are doing?
Checkpoint had submitted long-term data for UNLOXCYT. We are currently waiting on that data to be approved and added to the label in the U.S. And once that occurs, we will launch. And of course, we are also planning for that launch, and we are dealing with that currently.
My second question was actually more of a clarification on the tariff announcement. Firstly, are pharma companies being exempted or you would be paying tariffs starting August 1st? Or any tariff would be pending the outcome of 232 investigation?
I mean, that is the understanding. It is post 232 investigation report, the government will decide on the next step. Till that time, I think pharma continue to be exempted from basic tariff.
You replied to an earlier question that the India growth is run by the prescription business. It is very healthy now, much higher than the market growth rate. Is ther e anything that is driving this? So, like new products, etc. which is in there or is it something which is sustainable?
Yes, I think what I can say is I cannot pinpoint to only one thing which is driving the growth. But what I can say it is a concentrated effort on brand building through scientific promotion. Then building deeper connect with the prescriber using science-led promotion. Then improving the prescriber coverage. Then you also know we have done a field force expansion in the past. And declutter our portfolio and building selective presence in tier 2, tier 3 towns. So, all of that if we put together, I think this is helping us to grow better than the market.
A question on tax rate. Again, to an earlier question you answered 25%. Is that, you know, earlier you had said that your tax rate will gradually mov e up. Last year we had about 16% - 17%. Are you saying that this year it is going to sharply jump to 25%?
So, the tax rates have been moving up quarter on quarter during last year. And currently it is around 23.4%. And we expect for the full year to be around 25%.
Just if there is a revisit on the R&D cost as a percentage of sales for FY'26?
No, I think we are staying with the guidance.
Just one more on the, as far as the facilities being compliant for US market, like if you could just share in terms of which all facilities have now, let us say under issue while the business continues, but incremental generic approvals might be stalled and which facilities are sort of compliant to get the approval?
Yes, sure. So, we currently have three facilities that are under warning letter from the US FDA. Mohali, Dadra, and Halol. We have other facilities in Baska, Ohm, Hungary, Haifa, Brampton which continue to supply to the U.S. and do not have, and we have one more facility in Billerica in the US, which is in near Boston. So, all of these facilities continue to supply and are in a compliant status with US FDA.
Another question that I have is I wanted to understand the Unloxcyt launch timeline. Whether it would be towards the start of second half or later part of the year?
We expect to launch in the second half of the fiscal year.
Just one clarification. For the U.S. generic business, you indicated that it is down YOY as well as quarter-on-quarter in this quarter. Is that right?
That is correct.
Just one clarity on the tax rate. So, this 25% number, does it include the deferred tax component? How much is this deferred tax component? Just trying to understand, is the cash tax rate for the company also 25%?
So, we have to look at it all inclusive on a yearly basis, which will be at 25%. The cash outgo may be lower because of some MAT credits that are still available with us.
So, on the question related to the formulary access f or Ilumya for PsA indication, did you mean that from day one of launch, we will have similar access to what we have currently for Ilumya or whatever that date may be, whatever Ilumya would have coverage?
That is the correct understanding.
Just wanted to check the plan to file for the PsA indication by end of this calendar year. Typically, what's the approval timeline? Is it about 12 months? Is that the right way to think about it?
10 months-12 months.
So, if I can ask, what led to a margin of 31.1%? Is it the low cost of raw materials or there has been some other cost saving measures which you have taken that has led to a margin of 31.1%?
Yes, there has been a mix of factors. As I was mentioning earlier, there is an improvement in the raw material cost. It is also the product mix which has been quite helpful. We have seen a higher specialty sales and also the branded formulation business.