LUPINNSEQ2 FY2024November 17, 2023

Lupin Limited

6,700words
101turns
7analyst exchanges
4executives
Management on call
Vinita Gupta
CEO, LUPIN LIMITED
Nilesh Gupta
MANAGING DIRECTOR, LUPIN LIMITED
Ramesh Swaminathan
EXECUTIVE DIRECTOR, GLOBAL CFO AND HEAD CORPORATE AFFAIRS, LUPIN LIMITED
Ravi Agrawal
M&A AND INVESTOR RELATIONS
Key numbers — 40 extracted
45%
erall strong performance on respiratory products. In the quarter, respiratory products contributed 45%+ of our revenues. We expect to sustain our business at $200mn plus level now going forward with th
rs,
c gTolvaptan and generic gXywav in October that will drive big part of growth in next couple of years, in particular gTolvaptan. Our pipeline is now positioned well to evolve our business into complex
18%
rnings call. On the last occasion that we met, we mentioned that we would strive to achieve around 18% EBITDA margin by Q4 of the current year. I am happy that we have delivered on our promise, in thi
INR 4,939 crore
romise, in this quarter itself. Now, diving deeper into the numbers. Sales for Q2 FY24 came in at INR 4,939 crores as compared to INR 4,091 crores in Q2 last year, a growth of 20.7% YoY. On a QoQ basis, the compa
INR 4,091 crore
Now, diving deeper into the numbers. Sales for Q2 FY24 came in at INR 4,939 crores as compared to INR 4,091 crores in Q2 last year, a growth of 20.7% YoY. On a QoQ basis, the company reported growth of 4.2% and 8
20.7%
r Q2 FY24 came in at INR 4,939 crores as compared to INR 4,091 crores in Q2 last year, a growth of 20.7% YoY. On a QoQ basis, the company reported growth of 4.2% and 8.9% after excluding NCE income, ove
4.2%
,091 crores in Q2 last year, a growth of 20.7% YoY. On a QoQ basis, the company reported growth of 4.2% and 8.9% after excluding NCE income, over Q1 FY24. We have registered robust growth across most
8.9%
es in Q2 last year, a growth of 20.7% YoY. On a QoQ basis, the company reported growth of 4.2% and 8.9% after excluding NCE income, over Q1 FY24. We have registered robust growth across most of our ke
40%
e registered robust growth across most of our key geographies. North America has grown at a strong 40% YoY and 17.4% QoQ. India business has grown at 6.8% YoY whilst EMEA grew at 24% YoY. Our API busin
17.4%
robust growth across most of our key geographies. North America has grown at a strong 40% YoY and 17.4% QoQ. India business has grown at 6.8% YoY whilst EMEA grew at 24% YoY. Our API business registered
6.8%
ographies. North America has grown at a strong 40% YoY and 17.4% QoQ. India business has grown at 6.8% YoY whilst EMEA grew at 24% YoY. Our API business registered growth of 7% YOY.
24%
grown at a strong 40% YoY and 17.4% QoQ. India business has grown at 6.8% YoY whilst EMEA grew at 24% YoY. Our API business registered growth of 7% YOY. November 9, 2023 Movi
Advertisement
Guidance — 20 items
Vinita Gupta
opening
“We expect to sustain our business at $200mn plus level now going forward with the continued ramp up of Tiotropium and other NPLs in H2 and beyond.”
Vinita Gupta
opening
“As we look at the second half, we expect that the investments we made in expanding on sales force to get to a level of productivity that will help us build on our growth rate from the first half.”
Vinita Gupta
opening
“We already started seeing gains in the start of Q3, October has been strong and we expect to continue that in the rest of Q3 and Q4 for our India business.”
Vinita Gupta
opening
“For the full year, we expect R&D to be around INR 1,500 to INR 1,600 crs.”
Vinita D. Gupta
qa
“Vinita, if we do think Spiriva ramps-up to 35%- 40% market share in the next year.”
Vinita D. Gupta
qa
“And second, if that is the case, should we then expect the current base that we've reported to see a step-up over the next few quarters?”
Vinita D. Gupta
qa
“So, Neha we would expect pricing to be stable as we ramp-up the product.”
Vinita D. Gupta
qa
“And, therefore, we think that, certainly Tiotropium will continue to ramp-up, especially into the next year.”
Neha Manpuria
qa
“So, in the next 6 to 12-months, we expect to launch in Australia, Canada, Europe, multiple regions that we built capacity for.”
Neha Manpuria
qa
“So, our focus on driving down costs is still very much there, and we expect to kind of keep it on a leash around the levels that we just spoke about for in the quarters to come.”
Risks & concerns — 7 flagged
So, we don't see a reason for price not to be stable unless we see, a challenge in substitution.
— Vinita D. Gupta
But when we look quarter-after-quarter, we might see some impact of inventory correction over the next couple of quarters.
— Vinita D. Gupta
Ramesh Swaminathan: Firstly, I would like to stress that you should see this, vis-a-vis the previous quarter where there's, of course, been an increase of, operating leverage of just about 1.2%.
— Neha Manpuria
Diabetes is the one category that has been a challenge for us, but that also has come around to growth now for us.
— Nilesh Gupta
Actually, the encouraging sign for us was, in the last couple of years, we have seen the HandiHaler decline versus Respimat, that the brand has been working hard to convert.
— Vinita D. Gupta
We actually saw in the last couple of months a flattening of, so no decline in the HandiHaler, which is a promising sign.
— Vinita D. Gupta
And we hope that as we continue to ramp-up the product as it gets utilized, that it will definitely flatten the decline or, hopefully take some share from the overall molecule.
— Vinita D. Gupta
Advertisement
Q&A — 7 exchanges
Q
So, the first question is from Bansi Desai. Please go ahead, ma'am. Thank you for taking my questions. So, my first question is on the U.S. business, so while Spiriva looks like has contributed meaningfully in Q2 and so has Darunavir, if one were to exclude these two products, have you seen sequential growth in the U.S. base? Yes, actually we have seen our inline products pretty stable, growing a bit and the new product launches contributing as well. I'd say Darunavir was launched in Q1, so there was pipeline build in Q1, so the Darunavir level in Q2 is obviously lower than Q1.
Bansi Desai
Okay, that helps. And what is your sense on the price erosion levels in the market, any different from what we saw in Q1? Yes, we've seen a level of stabilization at that mid-single-digit level on our baseline products, in line products. So hopefully that continues. Got it. And secondly, on Spiriva itself, our initial expectation was that this product probably will see ramp-up similar to what we saw in Albuterol, but November 9, 2023 clearly it looks like, it has done better than that. So, how should we look at market share ramp-up here and any visibility on the AG launch? Yes, so the ramp-up h
Q
Thanks for taking my question. Vinita, if we do think Spiriva ramps-up to 35%- 40% market share in the next year. A, would this require, in your view, more pricing action from us, to go after this market share? And second, if that is the case, should we then expect the current base that we've reported to see a step-up over the next few quarters? Because in your opening comments, I think you mentioned that we'll keep the base at 200 plus, but shouldn't we see a step-up from the current base if we get to the 35%-40%? Yes. So, Neha we would expect pricing to be stable as we ramp-up the product. W
Neha Manpuria
products that help us grow the business, which gives us confidence that both in fiscal year '25 and in particular in fiscal year '26, given the Tiotropium ramp- up plus injectables plus ophthalmic products that we have on the new product launch calendar, we should grow the business pretty well. Got it. And, I remember you once mentioning that, you think you have enough capacity to get to your fair share. Should I assume the 35% to 40% is the fair share that you were talking about and, capacity is not an issue, therefore you've given that number? Yes, we have built capacity not only for the U.S.,
Q
Yes. Thank you for the opportunity. After a remarkable improvement in first half in terms of operating performance, how should we look at margin trends ahead? So, as you said earlier expected 18% margin by end of this fiscal but it came a bit earlier and now things seems to be on improving path. So how should we see margin trajectory from here on? Ramesh Swaminathan: So, we think, in so far as America is concerned, the overall, the sales there should hover around, the $200 million mark and they would of course be ramp- up in other parts including India. So I would actually expect, the growth tra
Damayanti Kerai
So, second half broadly around 18% margin. Ramesh Swaminathan: Yes. So maybe for the full year we could be in higher teens. November 9, 2023 It's obviously because the first three quarters are in the 18% and 14.5% in the first quarter, you can average it out. Okay, and just want to understand, ma'am mentioned in her opening comment that now $200 million plus level is sustainable for the U.S. business and that includes Spiriva and all other new launches, right? Or how should we look at that? That's right. Okay, and just another question on U.S. side, how much is branded portfolio contribution rig
Q
Thank you for the opportunity. First one on the biosimilar, is there any update on the Pune facility and Pegfilgrastim filing for us?
Nilesh Gupta
Yes, I can take that. So we had the EIR, which was issued by the FDA. We identified areas of improvement in the EIR, which were actually underway. And we hope to send an update to the agency by March, post which we would follow up for an approval. Sure. And what would be our strategy here for commercializing? Let's say if we get approval in FY25, will there be any field force required, front-end commercial infrastructure. November 9, 2023 Yes, so we're tracking the market very closely right now, and of course, waiting for the site and product approval before making concrete plans. But, as the ma
Q
Hi. Thanks for taking my question. See Vinita when we talk about 25% market share on Spiriva, we take into account the entire portfolio of Spiriva, Respimat inhaler and HandiHaler both are we just talking in terms of the single strength?
Vinita D. Gupta
I'm talking about the HandiHaler. As a percentage of that market. But how do you see the substitution happening from Respimat inhaler? I mean, how do you see that playing out? Actually, the encouraging sign for us was, in the last couple of years, we have seen the HandiHaler decline versus Respimat, that the brand has been working hard to convert. They had also moved their couponing strategy to the Respimat to drive hard conversion. We actually saw in the last couple of months a flattening of, so no decline in the HandiHaler, which is a promising sign. And we hope that as we continue to ramp-up
Q
Good morning and good evening. Hi, Vinita just a follow-up on Spiriva, you had mentioned earlier that you're seeing a substitution rate of 25%. How is this defined? What does that mean?
Vinita D. Gupta
That's a prescription ramp-up rate that we are seeing of the generic versus the brand HandiHaler. Okay. And how, one bottle or one canister, however you call it, how long does it typically last for a patient? One month, two months? I think it's a 60-day supply if I'm not mistaken. It's a 30 day. 30 days. 30 days. Okay. So if substitution rate is 25%, then 30 days we should be hitting 25% market share, right? I mean, am I, is there something wrong in that assumption? I think so, that’s just right. Okay. And second? That's the kind of unit share, we are seeing the unit and prescription share, co
Q
Okay. First of all, I would like to compliment Vinita for delivering excellent results. I have a couple of questions. Madam, where do you see our company in over next two, three years, as you mentioned that we are on a steady growth plan. So next target is $5 billion, maybe three to five years down the line. Second question is, when do we surpass the record profits achieved during Shri DBG’s times, we achieved record profits. So when do you see we achieve this in next two, three years? November 9, 2023
Vinita D. Gupta
Very good questions. Both the long-term prospects on the revenue front and profitability, and our goal is really to get our company back to consistent growth on revenues as well as improve our profitability, so profitable growth more than just growth. So, on the revenue front, we see, I mean, fiscal year '26 is going to be a material year for us, as I mentioned in the last couple of minutes, given the material launches, as well as ramp up of current products, continuing to solidify the gains that we have made. And then I'd say in a five- year time frame, we expect the overall company business to gr
Speaking time
Vinita D. Gupta
38
Moderator
10
Bino Pathiparampil
9
Damayanti Kerai
7
Nitin Agarwal
6
Neha Manpuria
5
Kunal Dhamesha
5
Sanjay Khullar
5
Karan Vora
4
Bansi Desai
3
Advertisement
Opening remarks
Vinita Gupta
Thank you. Good afternoon, folks. I am very pleased to welcome you to our Q2 FY24 earnings call. I have with me our MD Nilesh, our CFO Ramesh and our head of Investor Relations Ravi. We look forward to sharing our Q2 highlights and outlook for the Fiscal year. We are very pleased to build on the momentum over the last couple of quarters and deliver significant improvement in operating margins driven by growth across majority of our regions, US launch of Tiotropium and continued focus on efficiencies. Our US business delivered continued growth in revenues and margins for a 5th quarter in a row on the strength of a stable base business, launch of Tiotropium and overall strong performance on respiratory products. In the quarter, respiratory products contributed 45%+ of our revenues. We expect to sustain our business at $200mn plus level now going forward with the continued ramp up of Tiotropium and other NPLs in H2 and beyond. Our India business recorded growth inline with the market, wit
Advertisement
← All transcriptsLUPIN stock page →