Shilpa Medicare Limited has informed the Exchange about Transcript of Q4FY25 Conference call.
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Date: 30 May 2025
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Dear Sir/Ma’am,
Sub: Transcript of the Q4 FY '25 Conference call
In furtherance to our intimation dated 19 May 2025 with regard to the Q4 FY '25 Conference Call held on Monday, 26 May, 2025 at 17:00 hrs., please find the enclosed transcript of the call.
Thanking you,
Yours faithfully
For SHILPA MEDICARE LIMITED
Ritu Tiwary Company Secretary and Compliance Officer
“Shilpa Medicare Limited
Q4 FY '25 Earnings Conference Call”
May 26, 2025
MANAGEMENT: MR. KESHAV BHUTADA – EXECUTIVE DIRECTOR AND
CEO – SHILPA PHARMA LIFE SCIENCES LIMITED MR. ALPESH DALAL – CHIEF FINANCIAL OFFICER – SHILPA MEDICARE LIMITED MR. MONISH SHAH – HEAD, STRATEGY AND INVESTOR RELATIONS – SHILPA MEDICARE LIMITED
Page 1 of 18
Moderator:
Ladies and gentlemen, good day, and welcome to the Shilpa Medicare Limited Q4 FY '25
Shilpa Medicare Limited May 26, 2025
Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode
and there will be an opportunity for you to ask questions after the presentation concludes. Should
you need assistance during this conference, please signal an operator by pressing star and then
zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Monish Shah from Shilpa Medicare Limited. He is the
Head of Strategy and Investor Relations. Thank you, and over to you, sir.
Monish Shah:
Thank you, Dorwin. Good evening, and warm welcome to everyone to our fourth quarter results
conference call. Today on the call, we are joined by Mr. Keshav Bhutada, Executive Director
and CEO of Shilpa Pharma Life Sciences Limited; and Mr. Alpesh Dalal, our CFO.
Before we begin the call, please note that the financial results and the presentation have been
uploaded on the Exchange. Note that this call is being recorded and the transcript along with the
audio of the same will be made available on the website of the company and the Exchange as
well.
I would like to remind you that today's discussion might include certain forward-looking
statements based on the current expectations and assumptions. These statements are subject to
risks and uncertainties that could cause actual results to differ materially. Investors are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date
hereof. The company undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, further events or otherwise.
I would like to hand the call over to Mr. Keshav for his opening remarks. Thank you, and over
to you.
Keshav Bhutada:
Thank you, Monish. Good evening, everyone. FY '25 as a year has been very exciting year, and
a year full of opportunities for us. And our focus on monetization of assets has helped us to bring
in a good performance.
Now I will start briefing you about our fourth quarter performance as well as on the full year
results. So first, let me start with the briefing on various business divisions. So overall, my
briefing will be divided into API, Formulations, Biologics. These are the 3 main divisions in
which I'll be giving you a firm update.
So, when it comes to API, my overall briefing will be in oncology, non-oncology, CDMO
peptide and polymers. Starting with oncology, for the current quarter, our first molecule, which
is the NCE molecule for the Innovator customer, we have completed Phase III clinical study.
And we understand from the customer that the results are very promising. And now
subsequently, after that, they will be planning the DMF and finished product filing. The
customer has also received the breakthrough designation for bladder cancer and the filing is
expected in FY '26.
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Shilpa Medicare Limited May 26, 2025
The second molecule, for which we are supplying, is an oncology API, the Phase III clinical
studies are ongoing.
Apart from that, the molecules like Methotrexate for which CEP is already filed. The CEP
review is going on track, and we are expected to have approval in current financial year FY '26.
Nilotinib, which was a non-infringing API developed by Shilpa and for which even the
formulation was non-infringing, the product is successfully launched by our Formulation
division for which API supplies were successfully done by our API division. And in the next
financial year, we expect to launch Axitinib in Q1FY26 for which, the API supplies are ongoing.
With this, we are confident that in the current financial year, the oncology overall revenues are
likely to grow on year-on-year basis.
The second update is on non-oncology division, for Tranexamic acid we have completed
capacity expansion and commercial production has started. Apart from that, our second
molecule, UDCA for which CEP was already granted, we have started to ship export samples
and we expect to start commercial orders.
Third molecule is Nor-UDCA, for which we have developed the Novel API and for the first time
the formulation for NAFLD in India and our approval of formulation is expected in the first half
of FY '26. And subsequently, launch is also planned in first half of FY '26. The API
manufacturing for Nor-UDCA has also started for Formulation division and is expected to
complete in first half of FY '26.
The new molecule, which is Mycophenolate Mofetil where the PV campaign is ongoing, and we
expect to complete PV and file the product in FY '26.
CDMO peptide and polymers are very important divisions in which Shilpa has invested a lot. In
this, the major updates will be on Unicycive where we are constructing a dedicated block for the
customer and the construction is happening as planned, this is expected to be completed in first
half of FY '26. Subsequent to that, the PV batches and the filing from this new block will be
planned into FY '26.
The second project in CDMO is a Phase II molecule where we have developed both API and
Formulation for our NCE customer, and the customer has received clearance from agency for
starting the Phase II clinical studies, for which the material is supplied from our end and Phase
II clinical studies will be started in first quarter of FY '26 by our partner.
Apart from that, in the Q4 FY '25, we have successfully signed two new CDMO contracts in
which one molecule is a commercial product where we are doing a site transfer to our facility,
where the project is awarded to us. The second project, which is an NCE molecule for
development for a different indication for one of our Australian clients, for which, again, the
program is awarded, and initial development work has started.
In peptide division, for Liraglutide our PV campaign was completed and our DMF is expected
to be filed for this product in first quarter of FY '26. Semaglutide where, Shilpa has invested a
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Shilpa Medicare Limited May 26, 2025
lot of resources on development of this product, and out process development in R&D is
completed. Our PV campaign is planned in first half of FY '26 for the API.
Polymer division, as earlier updated in the previous call, we have received one order from one
of the U.S. customers for $4 million, for which the commercial supplies have started, and the
revenue is expected to be realized in FY '26. The second polymer project, which is a very
complex polymer, we have developed for one of the U.S. companies. The material is supplied
to our partner and their trials are ongoing.
Apart from that, I'm happy to tell you that in the current quarter, our API business, both Unit 1
and Unit 2 have successfully finished USFDA inspection. And for the Unit 1 we have received
EIR with VAI status.
Now let me start briefing about our Formulation division. In Formulation, as on date with the
company, we have 3 NDA approvals in place, which is Pemetrexed, Bortezomib, and the third
product is an oral liquid product in U.S. All the 3 product commercial launches have completed,
and revenues will be realized in FY '26.
Apart from that, for the Europe market, our Nilotinib launch is doing well. And as on date, there
is no competition in the market, and we have a good market share via our partner. Second
molecule, which is Axitinib, having launch planned in Q1 FY '26. We have the supply orders in
hand and we are expecting the deliveries to start from 1QFY '26.
Nor-UDCA, which is again an NCE molecule, which Shilpa has done a clinical study in India
for NAFLD. The product approval is expected in first half of FY '26 and even the launch is
planned in first half of FY '26. And company has already partnered with various companies in
India for this product.
Apart from that, the transdermal patches, our specialty division, we expect to get approval for
Rotigotine transdermal patch, in FY26. This will be our first TD product for which the review
is ongoing with the agency.
The second transdermal project, which is again a very complex transdermal patch, here we are
developing against a tablet for which the pilot bio is successfully completed, and now the PV
batches and clinical studies are expected to start in FY '26.
SMLINJ011, which is a long-acting injectable, a very unique product, where we have our own
IP, for which the Phase III study is expected to completed in Q3 FY '26. And subsequently, we'll
be filing this product in India. And parallelly, for the said product, European scientific advice is
already submitted, so for this molecule, we will be going ahead with the U.S. and Europe studies
also in FY '26. Our major focus for the formulations will be on advancing 2 to 3 new such
specialty pipeline products to the advanced stages.
And on the regulatory side, I'm happy to tell you that for our transdermal patch and ODF facility,
we have received our EUGMP certificate in the current quarter. Apart from that, on the USFDA
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issue for our formulation manufacturing facility, the USFDA remediation is completed from our
end, and we are waiting for the response from agency.
Now I'll start briefing you about Biologics division. Biosimilar Adalimumab, which is our first
commercial molecule launched in India, the sales are doing well. And for the current year with
the approved additional indications, we are expecting to double the sales in the current financial
year FY '26.
Aflibercept, which is our second biosimilar, the clinical studies are ongoing, and we are
expecting to file this product in FY '26 in India market. Nivolumab and pembrolizumab, which
are 2 blockbuster molecules by revenue, the product development in R&D scale is completed,
and our preclinical studies are ongoing, and we expect to start human studies in FY '26.
Coming to CDMO Biologics we have 2 projects, for which a sizeable amount of work was done
in FY25. These molecules are expected to generate decent revenue in FY '26, where the Phase
1 supplies are expected to start, or preclinical, will be ongoing.
For the current quarter, we have signed one more large-scale microbial long-term contract for
more than 5 years, for which we will be developing both DS and DP, for which we have a
binding contract. Apart from that, there is a second project which is a mammalian project, which
we have signed with one of the U.S. based customer and for which we will be starting the
development work. We are seeing very good traction on the CDMO Biologics side, and we
expect to add more products in FY '26.
On our deal with MAbTree Biologics, where it's an NDA asset for which Shilpa will be
exclusively developing for our partners. The cell line delivery is expected in first half of FY '26.
And our customer is expecting to start their investigational trial in FY '26.
I'm happy to tell you that on Biologics side that our facility has received EUGMP approval,
which gives additional regulatory certification to our customers that the facility is very well
capable of supplying to Europe and the global market.
Next, I will start briefing about Albumin. As most of you are aware, the manufacturing facility,
which Shilpa is building, the facility is expected to commission in this year, and we are planning
to start the product batches in current financial year. And apart from that, in Europe, we have
already submitted our scientific advice, and we are expecting the response closure in first quarter
of FY '26. Subsequent to that, in FY '26, we will be starting the clinical studies. In India market,
we have received the permission for starting Phase III clinical studies, and we are planning to
start supplies for the India clinical Phase III studies in FY '26.
I'm happy to announce that we have strategic partnership with Orion Corporation for exclusive
commercialization in Europe region. And Orion will be our exclusive partner for distribution,
marketing and sales of recombinant Albumin, and this partnership is purely for the Europe
market, and this is for only therapeutic use.
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Apart from that, the applications, which are in excipient grade and other applications that is not
in the scope of current agreement, and we are allowed to sell our product for these users. Also
note that this deal is mainly for Europe market, and we are still open for U.S., RoW and India
markets. This underscores the commitment we have had to this project over the past eight years.
We have made significant strides over the years, and we are confident of commercially launching
this product in years to come.
With this, I would end my briefing on business. And at the end, I would want to tell all our
investors that as a company, we are very focused on monetizing the assets and whatever assets
which Shilpa has invested over years, we will ensure that we get revenues from each one of
them.
With that, thank you, and I hand over to Mr. Alpesh Dalal.
Alpesh Dalal:
Thanks, Keshav, and good evening, everyone. Let me briefly take you through the financial
performance for the fourth quarter and the full year ended FY '25. Our total revenue for the
quarter stood at INR338 crores, recording a growth of 15% year-on-year and growing 13% for
the full year to INR1,310 crores. The growth for the year was largely driven by finished dosage
form and biologics verticals. On the gross margin front, our gross margin for the quarter
improved by 200 basis points at 69% compared to the same quarter last year. And this
improvement came despite lower contribution from licensing income and CDMO revenues,
which also underscores the profitability of our business model. The EBITDA for the quarter was
at INR84 crore as compared to INR73 crore in the fourth quarter last year, showcasing a growth
of 15% year-on-year. Whereas EBITDA for the whole year was at INR340 crore as against
INR253 crore last year. The EBITDA margin for the quarter were at 25%, whereas for the full
year, the margins were at 26%. With the improving business mix and higher utilization of assets,
we could expect some further improvement in the EBITDA in the future quarters.
I'm also happy to share that our interest burden has started coming down with the interest cost
declining by 38% year-on-year for the quarter. Going forward as well, I believe that there are
savings expected out of lower interest costs. During the year, we repaid high-cost NCD loans of
INR300 crore out of the proceeds of QIP and replaced another INR75 crore NCD with a
significant lower cost. We expect to repay the balance NCD of INR75 crore by mid of August
'25 to enable further reduction in our interest burden.
On the tax front, our effective tax rate for the year has reduced to 36% compared to 41% last
year on the back of conversion of loans given to subsidiaries into equity, resulting in lower tax
expense. During the year, we also had a onetime exceptional item pertaining to settlement of our
pending litigation with Celltrion amounting to INR29 crores but adjusted for exceptional items
for the quarter stood at INR33 crores versus INR20 crores on year-on-year basis, whereas
adjusted PAT for FY '25 was INR97 crore, growing by more than 2.5x compared to previous
year.
On the segmental performance for the quarter, our API business clocked a revenue of INR188
crores, growing 3% year-on-year. In this business, we have done portfolio rationalization and
also improved offtake of key products from our newly expanded capacities.
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Shilpa Medicare Limited May 26, 2025
Formulation business revenues for the quarter were at INR 133 crores, growing 38% year-on-
year. And the growth in the Formulation business was driven by our new geography where we
continue to have limited competition for Nilotinib. And significant ramp-up in our RoW market
that witnessed a growth of over 3x compared to the same quarter last year.
Our Biosimilar business recorded a revenue of INR10 crore during the quarter.
Let me now give you an overview of our balance sheet and cash flow items, where our net debt
was at INR558 crores as on 31st March’25 compared to INR905 crores for 31st March '24. And
the reduction in debt, coupled with improved performance has resulted in our net debt-to-
EBITDA improving to 1.6x from 5.8x last year.
On the capex front, our net capex for FY '25 was INR216 crore, and it was majorly for our large
fermentation facility that we are building. Additionally, I'm also happy to inform all of you that
the Board at today's concluded meeting has decided to declare a 100% dividend on the back of
improved performance of the company.
I would now like to open the floor for Q&A.
Moderator:
We have our first question from the line of Krisha Kansara from Molecule Ventures.
Krisha Kansara:
My first question is related to the Biologics segment. So you mentioned that the sales from
Adalimumab will double in FY '26? Now if we see in FY '25, segment reported close to INR75
crore of top line. So if you can give us the breakup of this INR75 crore number, how much was
from the CDMO segment and how much was contributed by Adalimumab?
Keshav Bhutada:
So if we see on overall Biologics segment in Adalimumab, we have clocked a revenue of INR15
crores to INR20 crores, in the last financial year, which is expected to double in FY '26. And
rest of the revenue, is split between CDMO and licensing revenue.
Krisha Kansara:
My second question is on the Formulation segment. So first of all, congratulations on the official
launch of Bortezomib in U.S. market and also for the J-code approval. Our ramp-up in case of
Pemetrexed has been slightly slow and gradual, and it has been more than a year now.
And now we are expecting to see a pickup in Pemetrexed sales from, let's say, FY '26 onwards.
So can we expect the same gradual ramp-up in case of Bortezomib because this is the same
market and the same distribution partner for us, the ramp-up in sales could be much faster?
Keshav Bhutada:
What I can tell you is with Pemetrexed, first, we had the approval, the sales pickup took time
because there was also eagle pharma another competitor in the market. But when we talk about
Bortezomib, there is not much competition in the market. We are the only company having the
subcutaneous approval right for the RTU. I think that will really open up market quickly. But
how it will evolve in the financial year, we have to observe because for us also, this is a new
kind of opportunity which we are exploring. However, we are confident that the partner should
do good numbers in FY26 on both Pemetrexed and Bortezomib.
Krisha Kansara:
So you are observing a pickup in sales in Pemetrexed for FY '26?
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Keshav Bhutada:
Yes.
Krisha Kansara:
My third question is on the Albumin side. So first of all, congratulations on your partnership
Shilpa Medicare Limited May 26, 2025
with Orion with respect to Albumin. I have 2 sub-questions related to this. First is, what kind of
milestone fee can we expect from such kind of an out-licensing agreement for a new biological
entity?
And usually, what is the timeline for that? Can we expect some fee to be received once we
conclude the Phase III trials, let's say, 9 to 12 months down the line? And my second question
is, we were supposed to start the Phase III trials in first quarter of FY '26, and we are almost 2
months into the first quarter. So I just wanted an update on the fee.
Keshav Bhutada:
Coming to financials, we will not be able to disclose that because of our confidentiality with our
partner. But I can tell you it's a very good deal, mainly because Shilpa has invested a lot of time
on this product, from so many years. And yes, there will be milestones, which will be spread
across signing, filing, approval, launch. So that way, the various milestones will be divided.
And yes, coming to the second question on the clinical studies. We were expecting to start in
first quarter, you are right. But I think we may have some delay, maybe it may move to 1 or 2
quarters because we are trying to give our Phase III clinical study supply from our new facility,
so that the new facilities are in our part of our dossier from day 1.
Krisha Kansara:
So what is the delay that we can expect for Phase III?
Keshav Bhutada:
It may move by 1 to 2 quarter.
Krisha Kansara:
On the import alert side. So we have completed all the remediation initiatives and all. Now my
question is, have we received any final inspection date from USFDA then? Why I'm asking this
is because once we are through with this issue, we might see some kind of improvement in our
margins because the cut that we basically pay to the CMO players as of now for our U.S.
Formulations will no longer be paid. So any update on the final inspection date? And also, is my
understanding on the margin improvement, correct?
Keshav Bhutada:
No, there are 2 things. See, first thing on the FDA import alert, we have completed all the
remediation activities. And lately, what we have seen is FDA is more doing surprise inspection.
So I think we will surely have, or we are likely to have in the current financial year a surprise
inspection. So this is something which we know currently. And apart from that, the second
question on the margin improvement. Margin improvement will not happen because we are
currently paying to the CMO. However, that cost is not significant. Only improvement, what
will happen once the U.S. approval of the facility happens is we may see a good increase in the
CDMO revenue. And apart from that, our existing products, where the final approval is not
received, there all approval will get started.
Moderator:
Our next question comes from the line of Rupesh Tatiya from Shree Rama Managers PMS.
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Rupesh Tatiya:
My first question, is on this Formulation slide, slide number 17. The licensing revenue, it was
INR34 crore in Q4 FY '24. It's gone down to INR24 crore in Q4 FY '25. And my understanding
was with new product launches, I mean, we have launched Nilotinib, Pemetrexed, Bortezomib.
Shilpa Medicare Limited May 26, 2025
So my understanding was this revenue should have gone up. So can you explain why it didn't go
up? And then overall on FY '25, we have this INR181 crore revenue. So can you give some idea
about how much of it is onetime milestone payments? And how much of it is linked with the
sales or the production of the Formulation?
Keshav Bhutada:
First thing is when the product is commercialized in any of the market, the revenue line item
where we will be reporting the numbers, that will not be in licensing, those numbers will be in
the sales revenue. So if you see the numbers, what we have shared, the Europe revenues have
increased. So whatever sales revenue, which we have generated from Nilotinib or any profit
share, that all will come in the Europe business sales, not in licensing.
And apart from that, on your question on decrease of revenue from fourth quarters FY '24 to
fourth quarter FY '25, right, or even from third quarter to fourth quarter, licensing revenue is
such a way, as I mentioned in previous call also, that is a product once we out-license, there will
be various milestones, which will be there for the product. So sometimes in some quarter, you
will see it will be more. Some quarter; it will be less. So the variation will be there, but only the
kind of product mix, which we have out licensed in that quarter, that will define my licensing
income.
And of the last year, there was no onetime income as such, as I have mentioned before, we have
a strong pipeline of molecules. So once one molecule in first quarter have out licensed, second
quarter, there will be one more molecule. Third quarter, there will be one more molecule. And
every year, we will add new pipeline. At the same time, existing pipeline I will advance and out-
license. So that is how the licensing revenue will be a continuous revenue. It is more like if
you have a company which is doing purely CDMO business, they will have a fixed CDMO
revenue. Sometimes it may be more, sometimes it may be less, based on the product deliverables.
Rupesh Tatiya:
The reason to ask that question, it is almost 50% of our EBITDA. And at least as an analyst, I
have no way of predicting it that this will grow 15% every year, right? It is quite lumpy. So that
is why I was asking you that question.
The second question, is, what is the significance of this EUGMP approval that we have received
for Biosimilar plant? Is that like a major approval where now we can see Biosimilar revenue
going from, let's say, INR75 crore to INR150 crore, INR200 crore? Does that approval enable
us to do that? That is one. And then another one, if you can give some update on Lenvatinib
settlement?
Keshav Bhutada:
I think on the first point of EUGMP approval for the facility, yes, it's a significant update for our
Biologics facility because if you see in India, the number of Biologics facilities and in that, how
many are EUGMP or USFDA approved? I think as analysts, you will understand that there are
not many. So if you have a facility with regulatory accreditation, especially from Europe, I think
that opens a lot of doors for CDMO services.
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Shilpa Medicare Limited May 26, 2025
And yes, the revenue is expected to increase. How much it will be in this year, how much it will
be in next year, it will all be decided mainly on the CDMO revenues. So we have to observe that
with time. But yes, we are confident as a company that this approval will give us good uptake
for CDMO revenues.
Keshav Bhutada:
And on Lenvatinib settlement we are currently not disclosing anything right now as its
confidential.
Rupesh Tatiya:
My final question, is when are we expected to recruit all the patients for Albumin Phase III? And
when can we see some results of that?
Keshav Bhutada:
For Albumin, once we start our clinical study, our clinical study duration is between 12 to 15
months, including the study, dosing, the analysis and report.
Rupesh Tatiya:
The first patient has been recruited?
Keshav Bhutada:
No. See, for patient recruitment, first, we have to supply the material. And supply of material
from the facility which we have commissioned, the large-scale microbial facility. From there, if
we are supplying and with that only if the clinical study will start, then once I file my product
from the same facility, I can commercialize also.
So our current plan from the new facility is, the large-scale batches are ongoing. And once that
is completed in this current year, maybe sometime in Q2 or Q3, we are expecting to start our
Phase III clinical studies for India. That is the plan. And in next year, we will be completing our
Phase III study.
Rupesh Tatiya:
And where are we on the nontherapeutic usage?
Keshav Bhutada:
See, on nontherapeutic, as I explained in the previous calls also, I will be able to give you more
clear picture in the next financial year once I see how the uptick is. But yes, we have started
feeding our samples to various customers and they are testing our product.
Moderator:
Our next question comes from the line of from Meet Katrodiya from Niveshaay.
Meet Katrodiya:
Sir, my question was on the part of CDMO business. Beyond the commitment of 20 million
tablets, is there any visibility for further scale up in FY '27 or FY '28? Also could you help us to
understand the expected annual revenue from this engagement?
Keshav Bhutada:
I think I will not be able to give you how much will be the expected revenue. But for sure, I can
tell you that we have a good visibility. And the kind of indication where this molecule is targeted,
we are expecting it to do better. But once the product is launched and it is in market, then only
we can give you more clear picture.
Meet Katrodiya:
So second question is on part of intangible assets. So there is also a good rise in intangible assets.
So how we plan to impair or amortize the intangible assets? Could you throw some light on it?
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Shilpa Medicare Limited May 26, 2025
Alpesh Dalal:
Yes. We follow a very structured policy for amortizing the intangibles. At a point in time when
we start commercial usage of that particular intangible asset, we end up amortizing it over its
useful life. We have generally come to a conclusion that broadly that useful life should be on an
average at about 10 years. So we amortize it over a period of 10 years.
Moderator:
Our next question is from the line of Kumar Saurabh from Scientific Investing.
Kumar Saurabh:
So my question is on the recombinant Albumin, from the overall market, this share is only 5%,
and it is dominated by 3 global players. So first question is, are we targeting more than this 5%
market? And how we plan to compete against the bigger players? And given I think it's the cost
which will kind of bring this in favour, if you want to take a bigger share. So how do you plan
to fight on the cost side to have a bigger market share?
Keshav Bhutada:
Yes. I think, first thing, currently with recombinant Albumin, where specifically, the application,
which we are targeting is a therapeutic use, where currently recombinant Albumin globally, there
is no approved product for therapeutic use. That is first part which I want to clarify. So
recombinant Albumin, whatever you will see some market where people are selling it as an
excipient grade. So that is a completely different market, which is for nontherapeutic
applications.
Apart from that, how do we see to ramp-up? See, our partnership with Orion, I think that itself
will give you a clear picture that the molecule has very good potential of selling. And obviously,
if we are cost competitive, then only any partner will come and sign with you for the product.
So we are confident that we are cost competitive and manufacturing-wise as well as clinically
and getting the product to market.
Kumar Saurabh:
My second question is around some of the new products like Rotigotine or Bortezomib. So these
are expected to be launched in FY '26 and I heard in your commentary also. If you can talk
something about the addressable market size of these opportunities and what is the kind of
market share, we want to take in some of these molecules/ products?
Keshav Bhutada:
See, mainly in transdermal patches globally, there are not many companies who are working on
it. And especially for products like Rotigotine where we already know that many companies
have taken this product in R&D, but have failed either in clinical or at manufacturing level. So
totally, the end market for Rotigotine as on date is, I think, more than EUR 200 million as per
IQVIA data.
And we have already partnered for this product with one of the very good European companies,
who is very strong in selling Parkinson's disease products. So this is an add-on to their already
existing sales force where they have experience of selling such products. So yes, there is a good
sizable opportunity for us, and we just need to see how it will evolve based on numbers.
Kumar Saurabh:
Last question because I have started studying the company only for the last 2, 3 months. The
CDMO and the Biologics business, I think a lot of effort and a lot of investment has gone, but
the numbers doesn't reflect the actual potential. So one question is, what is like if the business
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performs up to its potential, maybe in next 3, 4 years, what is the expected asset turn out of this
business? And what do you feel is going to be a sustainable return on capital on this investment?
Shilpa Medicare Limited May 26, 2025
Keshav Bhutada:
Yes. I think, your question is very long. But what I can tell you in short words is once you will
study more about our company and if you come on every quarterly call, I'm sure you will get a
very clear insight. But as a company, if you see in India, there are very few companies who are
having both development and manufacturing platform like Shilpa because we can do small
molecules, we can do peptides, we can do polymers, we can do biologics, we can do ADCs, we
can do injectables, we can do oral solid, we can do PFS.
When you have a company which is a one-stop solution for any partner when it comes to
development and manufacturing, where I feel the opportunity what we are talking is significant.
And in years to come with more focus on CDMO, we are confident that each of these assets will
start giving us returns. As on date, if I understand correctly, our ROCE is around 9%.
Moderator:
Our next question is from the line of Ajay Surya from Niveshaay.
Ajay Surya:
Sir, my question is on Albumin. So with the Orion partnership in place, can you please provide
more clarity on the regulatory filing timeline, the expected launch here? And more on our
readiness in terms of our fermentation capacity?
Keshav Bhutada:
As I already mentioned, our manufacturing facility for supplying this recombinant Albumin is
almost ready, and we are starting our scale-up batches in this facility. So manufacturing-wise,
we are confident, and we are ready with the product. The scale-up and the registration batches
will be completed in this year and including supplies to clinical trials, that's the only milestone
which we are targeting for the current financial year. Once we do that, it's a 12 to 15 months'
timeline for completion of the clinical study and subsequently filing and approval.
Ajay Surya:
My next question is, how do we compare the recombinant Albumin in terms of cost? Like where
would Shilpa be placed versus other players like the larger players like Albumedix? And how
much of the total capacity, which we plan to put there? And so how much of that capacity do we
plan to target for the therapeutic grade and the excipient grade? Can you give any breakup on
that?
Keshav Bhutada:
No, I think giving breakup on capacity-wise, will be not at all possible for us currently. But what
I can tell you is our major market focus will be on therapeutic use because that's a very large and
sizable market, for which we have built this facility. Apart from that, nontherapeutic is surely
something where once we get customers, we will supply. But I think majority of our capacity
will be utilized for our therapeutic applications.
Ajay Surya:
And on the costing side, if you can help?
Keshav Bhutada:
The costing, I can only tell you, we are competitive.
Ajay Surya:
One last question. If we look at the human grade Albumin market, which is quite large, maybe
to the extent of $7 billion, $8 billion, but wanted to understand how much extent can the
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Shilpa Medicare Limited May 26, 2025
recombinant Albumin replace this market? Because to our understanding, this cannot be
replaced completely. So I just wanted to understand to how much extent can this replace?
And we also mentioned that as of now, there is no other company which is doing apart from the
excipient grade, they are not targeting. So I wanted to understand why are other companies not
targeting for the therapeutic grade? Is it because of the lower addressable market? Or is there
any lack of my understanding? If you can help on that.
Keshav Bhutada:
No, I cannot tell why other companies are not doing, what is their strategy. And even if someone
is doing, we are not aware as on date currently. So let me be clear on that. So what we have done
as a product we have invested in Albumin almost 7, 8 years before, where we acquired a
company, we built this asset. We've completely scaled up the development of fermentation
process, and we even did preclinical studies, even did Phase I clinical studies. So this is a long
journey, so every company has a different strategy.
Ajay Surya:
How much of the extent can this RHA replace the human grade Albumin market?
Keshav Bhutada:
That we cannot tell it today. I think we have to observe that with time.
Ajay Surya:
Over the last 3 years, if I look at our service income and license fees, it has grown nearly 3x
from like INR94 crore in FY '23 to almost INR310 crore in FY '25. And one of the previous
participants also mentioned that there was a noticeable dip in the current quarter.
So just wanted to know the thoughts on the sustainability of this growth. How much of this
growth is driven by recurring royalty income versus milestone based? Or is it a onetime
payment? And going forward with the Unicycive and this Orion partnership, should we expect
a more predictable revenue stream? Or will this line item continue to be lump in nature?
Alpesh Dalal:
As explained a little earlier in the call, the licensing revenues that we receive are towards the
initial signing as well as certain milestones related to a few project developments that happens
or the filing that happens or the approval that comes through or the launch that happens. Once
the product is launched and commercial supplies start, they do not form part of the licensing
income bit. That is part one. Part two, our company has remained a B2B company, where we do
develop products and out-license to various potential partners. So as with any pharma company,
we do have a developmental pipeline. And as and when we keep developing more and more
products, we keep out-licensing them. So that out-licensing the molecules or the products is part
of our normal strategy and business revenue stream.
Having said that, yes, because different molecules can have different potential in different
geographies and even the timelines for some of these milestones when they accrue could differ.
So there could be lumpiness in a few quarters. But by and large, because we have a larger or
broader portfolio of this, we should be in a position to generate this revenue fairly regularly.
Moderator:
Our next question comes from the line of Tushar from MK Ventures.
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Tushar:
So the CDMO revenue that we typically generate, we have multiple heads under which we are
booking revenues. So we have API CDMO, we have some Formulation CDMO projects. We
also have Biologics CDMO.
Shilpa Medicare Limited May 26, 2025
Can you help aggregate the revenue which is being booked under different heads? What would
be the component of revenue generated for us, which is basically where we are working with
innovators or large pharma or biotech? And which can be sort of classified in the nature of a
CDMO project, even if it is right now being bucketed in different heads?
I'm just trying to understand what is the total component of work that we're doing, or which is
by other firms classified as CDMO, which we may be putting under different heads? And also,
how many projects, some more qualitative details around the CDMO part of business?
Keshav Bhutada:
I think if you see overall details what we have given on the investor presentation also, our CDMO
revenue for FY '25 is around INR158 crores. And number of programs is 20-plus, which we
have currently in our CDMO segment. And what we are trying to do, is that in the years to come
or in the next financial year, segregate CDMO revenues. We are even considering that and
showing it separately. Overall, yes, there is a lot of opportunity of CDMO work, which already
company has done, we are clocking a revenue of INR158 crores for FY '25.
Tushar:
But let's say, at the beginning of this call, there was this commentary on a couple of oncology
projects in the API business, what I could figure out on the call is more in the nature of
developmental work being done for the Innovator. But if your commentary puts it under the
oncology API business, has that been counted in the CDMO or would that be separate from the
INR158 crores?
Keshav Bhutada:
No, it's already included in INR158 crore currently as part of oncology. And going forward, we
are trying to segregate and make investors understand more clearly all these revenues because
initially, we were not segregating separately as the CDMO revenue. So our dedicated CDMO
reporting numbers, we have just started from last few years. So that is the clarity.
Tushar:
Also, given that both Biologics as well as the number of projects on the CDMO side and
developmental projects, a lot of projects, there is a pivotal outcome expected in FY '26 and
maybe FY '27. Would it be fair to assume that from this year onwards, we should see an
accelerated improvement in the overall earnings profile and the return on capital generated,
given that a lot of the projects for which costs have already been incurred, or do we see a sharp
operating leverage at the business this year in short?
Keshav Bhutada:
I think only what I can tell you is we are expected to do good during the upcoming financial year
also.
Tushar:
Can you highlight some more about the new CDMO projects in Biologics that you have picked
up?
Keshav Bhutada:
Yes. The major opportunities, which I mentioned to you in Biologics, where one of the projects
is a long-term collaboration, which we have done with one of the partners, is a long-term contract
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Shilpa Medicare Limited May 26, 2025
where we are developing both drug substance and drug product. And post that, we also have
commercial supplies for minimum 3 to 5 years. And apart from that, there are several NBE
programs, which already we are under development for our partners. Some are under preclinical,
some are in Phase I.
Tushar:
Last question on Unicycive. I think we are expecting the approval for Unicycive product in this
financial year, right? I think it was the first half of the financial year. Does that remains on track?
Would you have an idea of that?
Keshav Bhutada:
No, that approval doesn't remain on track. However, we are expecting approval in this financial
year. But we have to observe this with time how it will evolve. But overall, from a revenue
perspective for the company, there is no major change because the revenue numbers, which we
have considered for Unicycive, post commercial launch and the scale up in revenues were
considered in FY '27. So I think still we remain on track for that. I will be able to give you more
clear picture in maybe Q2 FY '26.
Moderator:
The next question is from the line of Gaurav T. from Antique.
Gaurav T.:
Sir, the presentation still talks about a PDUFA date for OLC on June 28, 2025. So has the partner
got some queries from the filing, and that's why we're expecting a delay now?
Keshav Bhutada:
Yes. I think, what happens is PDUFA date still remains same. But majorly, the issue is the
facility where the batches were done, the facility had some issues with the USFDA, where the
company is working on remediation.
In the meantime, what we have done is, we have also successfully completed manufacturing of
registration batches from the new facility, with a new partner and planning to put this new facility
in the application. So PDUFA date still remains same. Once we apply with the new facility, then
we have to see how the negotiation happens with agency on the approval and launch.
Gaurav T.
Which facility was this expected to be supplied from?
Keshav Bhutada:
That's confidential. We cannot disclose.
Gaurav T.
So we are not expecting launches. So the major growth driver this year will then come from the
Formulation division, right? Is that understanding, correct?
Keshav Bhutada:
No, because the major growth will come not only from Formulation division, but also from
Biologics and API division. So if you see all of our divisions, each one has their own pipeline,
their own products, which are growing at their respective pace.
Gaurav T.
Any guidance on what was the R&D spend for FY '25 and what we're expecting in FY '26?
Alpesh Dalal:
Yes. See, basically, we have an R&D spend that depends on the programs that are being
conducted. But for the current year, we have had a run rate of about INR30 crore to INR35 crore
per quarter. And we expect that this thing would be in a similar range.
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Shilpa Medicare Limited May 26, 2025
Gaurav T.
This INR30 crore, INR35 crore is what is seen in the P&L, right?
Alpesh Dalal:
Right. That's what is charged in P&L.
Gaurav T.
So gross margins for FY '25 is improved. EBITDA margin, you expect some improvement. But
on the gross margin front, do we continue to see improvement in FY '26? Or are we expecting
them to be more stable at the current 70% level?
Alpesh Dalal:
See, as far as gross margins are concerned, as you would know that in pharmaceutical business,
typically, all the generic products are under constant pricing pressure. Having said that, there are
incremental benefits that you try and get from your new product launches. So it balances out
more or less, it remains in similar region. But with new launches and good launches coming in,
it can improve with improved business mix.
Gaurav T.
What would be the capex spend for FY '26?
Keshav Bhutada:
Yes. For the FY '26, we have to still see, there are some capex which we are trying not to do.
But what we can tell you is it is not significant capex, when we compare to last year.
Moderator:
Our next question is from the line of Shubham Sehgal from Skill Ventures.
Shubham Sehgal:
My question was on the Formulation business. So in this quarter, Q4, what drove such high
growth in EU region? Like was it just Nilotinib? Or did we see other molecules also ramp up?
And likewise, if you could provide the reasons for higher growth in RoW and lower growth in
U.S.?
Keshav Bhutada:
Yes, mainly in the Formulation side, for the current quarter, the major revenues are from
Nilotinib, you're right. Apart from that, there are some small launches also, which we have done
in Q4.
Shubham Sehgal:
So with the higher growth in RoW region and lower growth in U.S. So what was this driven by?
Keshav Bhutada:
Yes, majorly higher growth in RoW is only because of various tenders where we had
participated, we have got approval. And also, there are a lot of registrations which Shilpa has
done from last 2 to 3 years, where the approvals have started coming in and also the commercial
sales have already started. That is majorly bringing us this increase in the RoW sales.
And when it comes to U.S. sales, U.S., as you know, our facility is under import alert. There is
a decrease in U.S. sales only because of uptake of difference between azacitidine and other
products like NDAs, which we are supplying from the CMOs.
Shubham Sehgal:
And so I wanted to ask like we have incurred higher OpEx costs. So in the previous quarter, I
think we had mentioned that, that we increased our R&D spend and there was also FX loss. So
the quarterly OpEx spend, which are there, like will this be sustainable, which will continue?
And like is there any one-offs this time?
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Shilpa Medicare Limited May 26, 2025
Alpesh Dalal:
So see, there are times that some small portion of OpEx could have certain one-offs like some
write-offs that happen or at times some fluctuations that happen in OpEx. But more or less, our
OpEx for the quarter remains in the region of INR70 crore to INR75 crore, and we should be
continuing with that.
Shubham Sehgal:
My last question was on our API business. If you see over the years, either our API business has
been flattish or declining. I mean I know that we had an issue with our bigger customer. But
going forward now, with the upcoming launches and the work we are doing in our API division,
do we see API division to grow further? Or do we think for the next 1, 2 years, it will still stay
the same?
Keshav Bhutada:
Yes, it will grow You will see growth in FY '26.
Shubham Sehgal:
And like what would you base that on? Like what would be the major drivers according to you?
Keshav Bhutada:
See, majorly, all our captive products for which we are making APIs, starting from Nilotinib to
Nor-UDCA, that all will start adding in revenues. Apart from that, even UDCA for which we
have CEP will add revenue. Tranexamic acid, where the additional capacity is added, that will
add revenue. So we are positive that for FY '26, the revenue will grow against FY '25.
Moderator:
The next question is from the line of Vishal from Systematix.
Vishal:
On the generic API business, would you be able to put the growth number for FY '26, say, mid-
teens or higher?
Keshav Bhutada:
Yes, possible.
Vishal:
And on Nilotinib, do we continue to be the sole player in the European market? And what market
share we would have achieved? And any sense on whether we expect competition to be there?
Keshav Bhutada:
Yes. I think last call also I mentioned. On the Nilotinib, yes, currently, as on date, we are the
only generic in the market. But in quarters to come, we can expect some players to come in the
market. A lot of supplies are done and then distribution and then getting those numbers back in
IQVIA, it takes time. So I think as on date, we are not clear how much market share they have
taken.
Vishal:
So would the entry of competition be staggered or we can expect all of the generic players to
come together?
Keshav Bhutada:
See, I think we will not expect like generic where there are suddenly more than10 players
entering the market. How many players will come that only time can tell.
Vishal:
And sir, do we have follow-on products to kind of substitute for the dip in Nilotinib revenues
post entry of competition?
Keshav Bhutada:
Yes. We have a lot of such products, which are very differentiated also. So yes, there is a
continuous pipeline in place which will add on revenues.
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Shilpa Medicare Limited May 26, 2025
Vishal:
And on the transdermal patch, any sense on when we can expect the launch in the Europe
markets?
Keshav Bhutada:
In Europe, we should have launch sometime in Q4 FY '26, tentatively or it can be Q1 FY '27.
Vishal:
And just on Biosimilar Aflibercept, should that approval come through this year? And would we
be the first one?
Keshav Bhutada:
No, approval for this should come in Q1 FY '27 because this year, we will finish clinical trials
and file the product. Competition-wise, we may have 1 or 2 players with us, but not many. It's a
very complex product.
Vishal:
And on Nor-UDCA, would this product compete with Saroglitazar, or it would compete with
UDCA?
Keshav Bhutada:
Nor-UDCA, the way it works, the therapy-wise, the molecule efficacy-wise, it is very different
than both Saroglitazar and UDCA.
Vishal:
So you mean it would be even better than Saroglitazar?
Keshav Bhutada:
Yes.
Moderator:
The next question is from the line of Deepak Sharma, an Individual Investor.
Deepak Sharma:
My question is for the Albumin side. What is the average realization figure per gram basis and
the average cost from therapeutic and excipient side?
Keshav Bhutada:
I think that is confidential, so we will not be able to disclose currently.
Moderator:
Ladies and gentlemen, due to paucity of time, we will take that as our last question for today. I
would now like to hand the conference over to the management for closing comments.
Alpesh Dalal:
Thank you, everybody. Thanks for your continued interest in Shilpa. We hope we have been
able to satisfy your questions. And we hope to continue to interact with you in the future as well.
Thanks a lot.
Moderator:
Thank you. On behalf of Shilpa Medicare Limited, that concludes this conference. Thank you
all for joining us. You may now disconnect your lines.
(This document was edited for readability purpose)
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