India and US business continue to grow over 20%: Glenn Saldanha

Interview with chairperson, Glenmark

Glenmark Pharmaceuticals had a Rs 143 crore net profit in the March quarter, with strong revenue growth from all markets. Glenn Saldanha, chairman and managing director, talks to Aneesh Phadnis on the details. Edited excerpts:

Your earlier forecast for sales growth was 18-20 per cent for FY16 and a similar one for the US market. For the full year, it was finally 15 per cent. Why did the company miss the target?

The 15 per cent overall growth was despite the high currency devaluation across emerging markets. The overall growth was supported by the US and India (sales), which increased by 19 per cent and 20 per cent, respectively. In  Russia and Brazil,  the performance of subsidiaries was impacted significantly, despite strong business growth in constant currencies. Due to a poor political and economic environment, we’d also stopped shipments to Venezuela from last November, which further impacted the overall growth.

You received 24 product approvals in the US in FY16, including six tentative ones. What is the growth outlook for this year and the sales outlook?

We remain optimistic.  The India and US business continue to grow in excess of  20 per cent. The 24 approvals from the US regulator this financial year was a record for us. The businesses across markets have rebounded and we are gearing up for launch of  anti-cholesterol drug Ezetimibe (generic Zetia), where we have a 180-day exclusivity in the US market, adding to our growth.

Rest of the World (ROW) markets, including Russia and Latin America, contribute about 20 per cent of revenue and the business has been hit due to currency fluctuations. How is Glenmark addressing the issue?

We continue to sustain focus in the ROW segment, especially Russia and Latin America. Put together, Glenmark’s business across ROW markets is still Ebitda (operating earnings)-positive, though this has reduced substantially due to the currency devaluations. We won't make any new investment in these markets because of the persistently volatile situation across some of these.  However, we have a strong pipeline of products for these regions, expected to help maintain constant currency growth of 15-20 per cent.

The domestic business has been fairly strong, especially in the dermatology and diabetes segments. What is the growth outlook for FY17? How many products is the company planning to launch this year?

Glenmark is one of the fastest growing companies in the India pharma market, particularly in the past few years. We have had strong growth across the dermatology, respiratory and cardio metabolic segments. The company will continue to focus on these and has plans to launch a number of products in these three segments in this financial year. We expect the India business to grow by 15-20 per cent.

A few of your peer companies are focusing on consumer-over the counter (OTC) business. Does Glenmark have plans for this segment?

Glenmark has introduced a number of OTC products and we will continue to invest in the business.  The company has recorded very good growth in OTC, albeit on a lower base, and will continue to grow stronger in these areas.