We have two questions on the specialty business. On Leqselvi, when should we start seeing revenue contribution from improving payer coverage and payer access that you talked about? Would more meaningful revenue contribution from this be evident, let's say, in the later part of this fiscal or more so would you say in fiscal '27? What would be your assumption there?
We're already starting to see paid prescriptions through commercial channels, and we would expect that to continue to grow throughout the year.
And second one on cosibelimab. I wanted to understand whether it has been filed for European markets. And w hether our competitors, Keytruda and Libtayo, do they have a European approval already?
Yes, we are in the process of compiling the dossier for Europe. Once it's filed, we will share the update with investors.
And just one final one on ODOMZO. If you could share what would be ODOMZO share in the basal cell carcinoma market among the BRAF inhibitors?
It's not a BRAF inhibitor. It's a Hedgehog inhibitor. So I think it all depends on different geographies. Rick can update on the U.S. market share. But in Europe, I think, is in excess of 60% market share.
On semaglutide, where we have a filing in Canada as per Health Canada disclosures. Based on your previous experience with filings in that market, what are the time lines that we can look at for approval of this product? And on semaglutide again, in India, where the market formation is expected in March '26. So we plan to have a product ready with an approval by the market formation time?
Yes, India, I think what we have told you in our last call also, India will be ready for the launch in the first wave when the LOE happens on the patent expires.
A couple of months back, there was an announcement by the U.S. President on 100% tariffs on patent drug imports into the U.S. Well, there's no final policy that's been released yet, but is this a risk for our IM products given that we are manufacturing these products outside the U.S. And at the same time, we are manufacturing these in geographies where U.S. already has a trade deal and these trade deals cover pharma as well. So how should we look at this particular risk?
Look as you say, there's a lot of uncertainty at this point. I mean, we don't have any additional tariffs that we're paying today. The original announcement has been put on pause, and we're still awaiting the outcome of the Section 232 investigation.
And just on the opening comments now, I think called out that the U.S. business formulation, we have now innovative higher than Generics. So obviously, you don't call it out, but of the $500 million U.S. formulation, so I assume $250 million, $260 million is now innovative. That's a 70%, 80% of global innovative business, right? So just maybe the question is the other way around. What is the prognosis now for the Generic business? Do you foresee that this kind of decline continues? Does it still be -- make sense for us to be -- it's still significant, but just your thoughts on how we should look at the U.S. generic business going forward?
Our strategy is to grow both our Innovative Medicines business as well a s our Generics business.
Last question, just again, just in light of the tariffs and U.S. based on localized manufacturing in the U.S., what are your thoughts? Is there any move for us to move supply chains back into the U.S.? I know policy is still uncertain. But just your thoughts, you have enough cash. What about looking at U.S. manufacturing assets?
Yes. We already have a manufacturing footprint in the U.S. We are kind of constantly assessing that manufacturing footprint. And we are open to considering moves to the U.S. in due time.
Yes. And the second question I have is on the India semaglutide market, once it is Generics, Sun Pharma being with t he dosage form? And slightly, longer horizon question is Sun Pharma's expectation of how the GLP-1 market is expected to grow in the medium term? Any color would be helpful?
No, I can tell you broadly, the GLP market is very exciting, and it will continue to grow, but very difficult to give any specific numbers and what it will grow in the future. What we can say, we want to participate in the market whenever the first opportunity is available.
So just a clarification on Fibromun, is the Phase III and Phase II data on soft tissue sarcoma and glioblastoma. Is yet to come out? Or it's already there?
Yes. I think both the data are yet to come out. But this is also something which will be disclosed by Philogen, who is managing the studies.
And second question, I know there's a lot of uncertainty on the tariff situation, but I think there was another new investigation under the Section 301 that was mentioned recently. Does that in any way impact ILUMYA, even though we don't sell I LUMYA, in Europe, its through the partner. Do you think that could be under consideration as a part of this investigation? Any views you have around that?
I don't think we have any views at this time. I think as we shared before, the tariff situation, as you know, is very fluid and uncertain. So it's hard for us to predict what the impact will be on our -- on either our Generics or Innovative Medicines portfolio at this time.
And second question is about the Semaglutide entry in Canada, although we have filed for that. Whether we will be there in the first round of commercialization? Or how later that we would be even if our filing is relatively recent. So any time line about the commercialization of the product in the Canada?
Yes, we really don't have any further comments on that at this time.
Just one question that I had on biosims. I know that we have been always steadfastly focused on scaling up our specialty portfolio in the U.S. But given the FDA's recent guidance, any rethink in terms of U.S./Europe biosimilar strategy. Given that a lot of our peers have been incrementally allocating more capital and R&D investments to biosims, so any rethink there in terms of our strategy for the U.S.?
So I think we are studying and possibly waiting for the clear guidance to come before we take a decision. Because clearly, this would reduce potential investment, but there will also be impact in terms of future competition. So also, there is no complete clarity on substitution. So all of that will help us finally take a decision.
My first question is on the sema opportunity. Basically I want to understand how calendar year '26 will look at as for this opportunity is concerned? Are we basically targeting Canada and India as the 2 geographies for the generic launch? And at the same time, I mean, just trying to understand what capacity we are looking at for ourselves for the GLP-1 drugs? I mean -- and how much we plan to do it in-house?
I think Canada, there are two questions already been asked. We are not giving any clarification on Canada. Coming to India, as I said earlier, we will launch once there is an LOE. Regarding capacity and where we manufacture, we are not disclosed as of yet.
And for our Innovative molecule, let's say utreglutide, I mean could you mention which key indication we are looking at? I mean I understand obesity, anti -diabetes, one of them, but there are other indications also which we are looking at?
Yes. I think the Phase II that we have disclosed is a type 2 diabetes study.
The first one on the intangible assets, which seem to have moved sharply from the March '25 level, almost around USD 950 million plus. So I can see the $300 million intangibles which have moved from under development to other intangible head, but if you could provide a broader moving pieces here?
Thank you, Kunal, for your question. The increase in the intangible assets is also due to the Checkpoint intangible that has got added during the quarter. And we al so had a milestone payment for ODOMZO. Yes, it is about $471 million. So we had Leqselvi related apart from Checkpoint, which is another larger piece, as you would know.
Secondly, on the incremental specialty spend that we had suggested that we would be spending around $100 million in this year related to the launches of Leqselvi and Unloxcyt. So is it fair to assume that some of that has started in Q2? And should we see the run rate to be more simil ar in the quarter 3, quarter 4 or should we expect some acceleration deceleration? Any color would be helpful?
Yes. I'm happy to address that. So we did see a slight increase in Q2, and we would expect to see further increases in Q3, Q4 particularly as we launch Unloxcyt.
And lastly, on the Generics piec e. The generic Revlimid seems to have kind of gone down even on a sequential basis? Is it a fair assumption? And would it be now a meaningful contributor in this quarter?
Yes. Okay. So on lenalidomide, we have said that Y-o-Y, there is a drop. Q-o-Q, the number is flat.
And on ILUMYA, is it fair to assume that the prescription growth that we are seeing, I know as a category biologics in psoriasis is growing. But even as we wait for psoriatic arthritis approval to come through, we can continue to see the momentum in prescription growth over the next few years?
We do expect to see continued growth. As you shared, the IL-23 market continues to grow as does the overall psoriasis market. We continue to release new data on I LUMYA and sharpen our sales and marketing tactics, so we would expect to see continued growth.
And the last one I have is on R&D spend. If you look at R&D, we are obviously tracking below the guidance that we had revised down last quarter. How should we think about R&D spend for the full year? Do we expect to pick up going into second half or would it remain at the current 5.5% level that you see?
So Neha, I think we should come in the lower end of the guidance overall, that's what is our assessment today.
I have a question on the balance sheet. If I look at the other current assets, it's almost doubled since , March '25 from INR2,500 crores to almost INR5,000 crores. Could you clarify on this? What led to this?
Yes. This is mainly on account of the GxMDL settlement, which has gone into an escrow account. Last quarter, we had a settlement on the GxMDL case, and that amount has been deposited in an escrow account.
And in the ROW segment, we've seen a very strong growth this quarter, constant currency terms around 17% to 18%. And in the last quarter, we had alluded to some onetime sales. So has that continued into the second quarter?
So before we answer the drivers for this one, there is no one -off in this quarter sales. For ROW, basically, the growth has been led by both Generics as well as Innovative Medicines. But there is no one-off.
Just wanted to understand, there is some investment into subsidiaries, which is showing up in the cash flows amounting to almost like INR3,400 crores. Can you explain what is it all about? Because this amounts to almost like INR390 million, whereas we have paid almost INR500 million for Checkpoint. So just was trying to understand that there was a big difference?
No, the Checkpoint considerati on is not USD500 million, Bharat, it's less. It's what we disclosed was USD355 plus.
Just the first one again on the consolidated cash flow statement. Just the net cash generated Y-o-Y has declined despite similar profits. So just -- I can see it is working capital. But if you could explain why our lower cash generated, please?
Yes. There is some amount of increase in the working capital, which we believe will get normalized in this quarter. As I was also mentioning in the initial commentary, there has been a settlement that has happened towards GxMDL plus our brand acquisitions that have happened, which is the reason why the cash flow overall has come down compared to the 1st April '25.
Just on ROW, is there any particular new launch that we have seen or particular geography, which has done good? And what would be the constant currency growth?
Yes. So there is very little forex impact and the growth was led by both the Generics and the Innovative Medicines, particularly by ILUMYA and ODOMZO.
My first question is on your USD 100 million spend for supporting the 2 launches in this fiscal. So if you can explain how costs will build up, say, majority of hiring for salespeople, etcetera, will be done in this year itself. So going forward in '27, what kind of cost you assume to continue? Some color on that will be helpful?
Yes. We have already launched Leqselvi, so that sales force is in place, and we do now have the sales force in place for Unloxcyt. So we will start to obviously see those expenses. Some of these expenses will continue to occur in '27 and beyond as we continue to support and grow these 2 very important products.
My second question is a clarification on Revlimid opportunity. So should we assume September was the last quarter when you had some meaningful sales coming from that product? And going ahead, there will be virtually no sales? Or how should we look at that?
We'll have a small amount of sales for the rest of the fiscal year.
On the GLP -1 compound, GL0034. We have been kind of pushing this like a bit -- considering the competitive landscape, we are probably pushing it later, I think. We're not hurrying to develop this. Is there a reason to this or how should...
No, I think we are quite excited with the early data that we're getting with patients, both for MASH as well as for diabetes. And we would be presenting this data shortly. But the Phase II study also, I think we disclosed that should be in the press release we've given that should start shortly global Phase II.
Quickly on Cequa, I know that Restasis already has enough generic players, b ut there is anticipation that you should see some more competition there. Does that impact our ability to grow Cequa at all? If we do see additional competition in Restasis, what do you think could be the impact on Cequa given how well you've been doing in that product?
We continue to see good growth for Cequa, even as new competitors have come to the market. We believe it has a good value proposition for patients, and we put in the right programs to support patients as well. So even as new competitors have entered, we have continued to grow and would expect to continue to do so.
Sir, my first question is on the specialty business in the non -U.S. In fact, what we are observing that the ROW and Emerging Market growth looks really strong in the recent quarters. So is it mainly driven by the fundamental growth triggers that we are witnessing in those markets o r it is also a role played by the specialty business in the non-U.S.?
Yes. I mean I would say both of them are factors in how the growth played out.
So can you elaborate a bit on your specialty in the non-U.S. market business, although it has already been indicated that brands of U.S. is likely to see newer markets and hence, growth. So any incremental initiative thought process about expansion, extension of these brands, if you can?
No, what I said is like ILUMYA, we are launched in 35 countries. And some of the countries, the launch has happened over a period of last 1 year. So this launch will also get picked up, and we see there will be good commercial traction. So ex-U.S., I believe that ILUMYA will be a strong franchise for us to continue to grow.
My next point is about the tariff one. So whether we have any negotiated price, the way innovators are offering to Trump for their Medicaid program. So for our innovative brands, whether we have any negotiated price with the TrumpRx?
We do not. As you probably are aware, we were not one of the 17 companies that received letters from the Trump administration. We don't know is the honest answer. I think it's unclear what will happen with the tariffs after the investigation. What we know now is that there's a pause. We believe that Generics are already excluded. We believe that will continue to be the case. And it's unclear at this point what the impact will be on brands. Certainly, we'll be prepared to have discussions when the time comes.
Sir, first question on Leqselvi. Even though the penetration of targeted treatments for alopecia areata is quite low in the U.S., you've seen some stagnation in prescriptions for 1 of the other 2 molecules for this indication in particular. So from a market standpoint, is there any aspect that could hinder growth for targeted treatments like Leqselvi?
We expect the market to continue to grow. You're probably commenting one of the competitors has stopped promotion. So as well as we've launched, there's been another competitor that have launched that are having an impact on that product's growth. We believe the market will continue to grow. We see that. We see new physicians that are starting to provide JAKs, are starting to prescribe JAK inhibitors. And over time, we would expect that confidence to grow, the number of prescribers to grow and more patients to be treated.
And the second one is more of a clarification. I missed your response on the U.S. manufacturing presence. You spoke about already having a presence, but you also spoke about open to considering a further manufacturing presence in the U.S. Did I hear it correctly?
That is correct.
Just one question. We have seen a spike in interest cost this quarter. And if I see the balance sheet short-term borrowings have also gone up. So is it because of the acquisition or it would be reduced in the future or anything if you can comment on it?
Yes, you're right. This is a short -term borrowing that we have taken for the acqu isition. And since it is also short term in nature, it will get evened out in the coming quarters.
So one clarification about the tax rate. So this quarter, it looks obviously higher with 27% plus kind of tax rate. And also, there is a kind of onetime adjustment relating to the merger. So if that is to be factored, then the tax rate will look even higher, more than 30%. So first of all, what is that INR140 crores adjustment whether it is into the crate already, and that is to be separated, considering it is one-off. If you can give some clarity about that ma'am. And what is the ETR that you are expecting for the full year?
Yes. Our ETR has gone up to 24.5% and we expect it to be hovering around 25%. This is what we've been guiding. We used to get some benefits on account of carry forward tax losses as well as the benefits of having our facilities in Assam and Sikkim. Those are getting over and therefore, the tax rate will get normalized.
And just one more point about the GLP-1 opportunity. So how do we position ourselves whether our focus would be vial oriented to enter into the domestic market or it would be pen-oriented approach that we follow?
Those are -- I mean we have to remain competitive, and we need to have a product which can compete with the best product. Even the Semaglutide, which Kirti is talking about will be a pen product. So that's not an issue.