Glenmark Pharmaceuticals (Not Rated)

CMP: Rs.2,203 Market Cap: Rs.622 bn

Investor day meet KTA’s

Summary
India business continues to be the largest and fastest growing segment for the company. It will continue to focus on cardiology and anti-diabetes therapies in this market. Current revenue mix is – India 34%, Emerging market 21%, Europe 21% and North America 23%. IGI is now a self-sustaining business for the next three years due to the upfront payment by Abbvie. The company will consider the IPO for IGI after three years. The company used to invest USD 70mn annually in this business. Glenmark expects consolidated EBITDA margin of 23% for FY26 and expects 23%+ EBITDA margin post that as there will not be any investment in IGI through Glenmark. The company will continue to invest in R&D and expenses will be between 7-7.5% of revenue. Oncology, respiratory, and dermatology are the primary therapy areas Glenmark is focusing on for emerging markets. The company has few new geographies that it will be expanding into but will be more focused on penetrating further into existing geographies.

Medium term guidance
▪ Revenue is expected to grow at a 12–14% CAGR over the medium term.
▪ India business will grow at 10-12% consistently over the next 3-5 years.
▪ R&D investment will remain between 7.0–7.5% of consolidated revenue, focused primarily on oncology, immunology, and respiratory innovation.
▪ Capex guidance for FY26 is Rs 8 bn, aimed at manufacturing, R&D, and technology scale-up.
▪ Glenmark aims to reach and sustain a 23% EBITDA margin from FY26 onwards.
▪ Company is targeting 20%+ Return on Capital Employed (RoCE) and Return on Equity (RoE).
▪ The company expects to generate sustainable free cash flows, helped by monetization of innovation assets and margin expansion.

India
▪ India remains Glenmark’s largest and fastest-growing market, consistently outperforming the industry in recent years.
▪ The company has built a strong brand franchise, particularly in cardiology and diabetes segments.
▪ While India is not part of the company’s global innovation-focused strategy, it continues to see strong double-digit growth here.
▪ India will also play a critical role in Glenmark’s emerging market strategy, with expected contribution from brands like QiNHAYO in coming years.

Emerging Markets
▪ Emerging markets are considered a critical growth engine for Glenmark, with a “think global, act local” strategy.
▪ The company believes it is among the strongest partners for innovation-led brands in emerging countries.
▪ Oncology, respiratory, and dermatology are the primary therapy areas Glenmark is focusing on for emerging markets.
▪ Glenmark’s respiratory portfolio is seeing strong traction in Russia, where it ranks #2 Indian company in the market, with around USD 80mn in sales achieved within just two to three years post-launch.

▪ Going forward, higher revenue contribution is expected from QiNHAYO and Ryaltris in emerging markets.
▪ QiNHAYO, an oncology brand, is expected to be launched in India and emerging markets and projected to reach USD 100–150mn in sales.
▪ Brand-building efforts are underway to create a strong franchise across Latin America, CIS, Africa, and Southeast Asia.
▪ In Kenya, Glenmark ranked #2 in 2024, while Brazil, Mexico, and Colombia account for more than 50% of LATAM sales.
▪ Countries like Malaysia, Philippines, and Vietnam are also important contributors from APAC region.

United States
▪ The U.S. business has hit a bottom due to lack of meaningful launches in recent years but is now at an inflection point.
▪ Glenmark is focusing its U.S. growth strategy around respiratory, injectables, and complex generics.
▪ Two respiratory launches are guided in H2FY26, including fluticasone 44 (nasal spray) and an MDI (metered dose inhaler).
▪ The Monroe facility is currently under remediation but is expected to restart commercial manufacturing in FY26, which will be a key milestone.
▪ The injectable pipeline is being strengthened with a 15-product portfolio under development.
▪ The top 5 products contribute only 25% of U.S. revenue, showing portfolio diversification.
▪ The company is also investing in complex generics and FTF (first-to-file) opportunities as future pillars of growth.
▪ Over the next 5–6 years, Glenmark expects to achieve USD 300–400mn in sales from the U.S., through in-house products and partnerships.
▪ Overall, U.S. revenue contribution will remain below consolidated guidance range, but is expected to rebound through respiratory and injectable product ramps.
IGI (Switzerland, Navi Mumbai, and U.S. presence)
▪ IGI (Ichnos Glenmark Innovation) is Glenmark’s biotech arm focused on multispecific antibodies, including trispecific platforms.

▪ Key pipeline assets include:
o ISB 2001: Partnered with AbbVie, currently in Phase 1. AbbVie will fund all future development costs for this asset.
o ISB 2301: Commercialization expected to begin in FY27.
o GRC 65327: Internal oncology program.

▪ IPO of IGI is not a priority now. Funding for the next 3 years is already secured from the AbbVie deal; IPO may be considered post that.
▪ Glenmark’s belief is that trispecific platforms can deliver better efficacy than bispecifics in oncology, especially in multiple myeloma, which will have a market size of USD 50bn by 2030. Glenmark is expected to capture 10% of the market.

Europe
▪ Glenmark has doubled its European business in the last three years, with a strong push in branded and specialty generics.
▪ Branded portfolio share has risen from 20% to 30% in the last 5 years.
▪ Winlevi, a dermatology product, launched in Apr’25, is the cornerstone of Glenmark’s derma franchise in Europe.
▪ A dedicated team in Europe is in place to identify and execute new product opportunities, particularly in dermatology and respiratory.
▪ The company plans to launch four key respiratory brands over the next three years, targeting 25–30% market share in strategic countries.
▪ Glenmark has a strong presence in the UK, Germany, Austria, and Spain, but no presence in France, and has no plans to enter due to market challenges.
▪ The growth strategy in Europe includes geographical expansion, pipeline build-up, and deeper respiratory and dermatology product offerings.
▪ Glenmark aims to continue gaining market share and does not plan to expand to new geographies, as its current footprint is considered sufficiently wide.

Rashmi S / Candice P / Zain A G,
Dolat Capital