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Good morning, ladies and gentlemen. Welcome to the Q1 FY '23 Earnings Conference Call of Glenmark Pharmaceuticals Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Utkarsh Gandhi, General Manager, Investor Relations for Glenmark Pharmaceuticals. Thank you. And over to you, sir.
Thank you, moderator. Good morning, everyone, and a very warm welcome to the Q1 FY '23 Results Conference Call of Glenmark Pharmaceuticals Limited.
Before we start the call, a review of the operations for the first quarter of FY '23. Glenmark's consolidated revenue from operations for Q1 FY '23 was at INR 27,773 million as against INR 29,649 million in the corresponding quarter last year, recording a decrease of 6.3%. Excluding the global sales of COVID-related products in the first quarter of FY '22, the year-on-year growth in the base business in the current financial year was at 10.4%.
Let's review the performance of the formulation business, starting with India. Sales for the formulation business in India for the first quarter of FY '23 was at INR 10,352 million as against INR 12,250 million in the previous corresponding quarter, recording a decrease of 15.5%. This decline is mainly on account of a high base due to the sales of COVID-related products in Q1 of FY '22. The India business growth -- the India business contribution was at 37.3% to the total revenues of Glenmark in Q1 of FY '23.
As per IQVIA MAT June 2022, Glenmark's India formulation business is ranked 14th with a market share of 2.17%. During the quarter, Glenmark's India business further strengthened its position in its key therapy areas such as cardiac and anti-diabetic in terms of market share. As per IQVIA MAT June 2022 data, cardiac market share increased to 5.18%, while the anti-diabetic segment market share increased to 1.81%.
As per IQVIA MAT June 2022, the company is ranked second in the derma segment, fourth in the respiratory segment and the company improved its ranking to fifth in the cardiac segment. The company has 9 brands in the IPM top 300 brands in the country which is up from 6 brands last year on the basis of the June data. The company launched 7 new products during the quarter, including Indamet for the treatment of uncontrolled asthma. Glenmark is the first company in India to market this innovative fixed drug combination of Indacaterol, a long-acting beta-agonist and mometasone, an inhaled corticosteroid. This further increases the accessibility of quality drugs for effective asthma management in the country.
The company has a healthy pipeline of differentiated products, which it plans to launch in the market going forward. The India Consumer Care business recorded revenue of INR 647 million, with primary sales growing at 94% Y-o-Y. This was driven by strong performance in all the core brands such as Candid Powder, La Shield, and Scalpe. La Shield and Scalpe+ registered their highest quarterly primary sales in this quarter, while Candid Powder maintained its dominant market leadership status and showed sharp recovery in sales during the current quarter.
The North America business -- the North America business recorded revenue of INR 6,628 million for the first quarter of FY '23 as against revenue of INR 7,878 million for the previous corresponding quarter, recording a Y-o-Y decline of 15.9%. North America business contributed 23.9% to the consolidated sales in the first quarter. In the first quarter, Glenmark was granted final approval and launched Abiraterone Acetate Tablets. In addition, Glenmark also launched the previously approved product Ezetimibe Tablets.
The company also received tentative approval for Calcipotriene and Betamethasone Dipropionate Foam. Glenmark plans to file 1 application in the forthcoming quarter, as well as a PA Supplement to expand our OTC portfolio, which has been complemented by the acquisition of 5 approved OTC ANDAs from Wockhardt. The company plans to file 12 to 15 ANDAs in FY '23.
Glenmark's marketing portfolio as of June consists of 176 generic products, which are authorized for distribution in the US market. The company has 48 applications pending in various stages of the approval process, of which 20 are Para IV applications.
Europe. Glenmark's Europe operations revenue for the first quarter of FY '23 was at INR 3,300 million as against INR 3,059 million, recording a growth of 7.9%. The Europe business contributed to almost 12% of the total revenues for the first quarter. The company witnessed steady growth in both its key markets of Western Europe, as well as Central, Eastern Europe. Growth in Western Europe remained robust, led by double-digit growth across key markets like the Netherlands, Spain and Nordic countries, while CE region maintained its strong growth through markets like Poland and the Czech Republic.
Overall, the company launched multiple products across various markets in Europe during this quarter and Glenmark's respiratory portfolio continues to do well across all European markets. Glenmark has a comprehensive plan to grow its European business going ahead, including geographical expansion into new markets and portfolio expansion to leverage launches in key therapeutic segments like respiratory and dermatology.
The ROW business, which consists of Asia, Middle East Africa, LatAm and Russia CIS, for the first quarter of FY '23, revenue from the ROW region was at INR 4,226 million as against INR 3,360 million for the previous corresponding quarter, recording a growth of 25.8%. ROW business now contributes more than 15% of the total revenues of Glenmark as of first quarter FY '23.
The challenging conditions in Russia, as a consequence of some of the economic sanctions led to erratic consumer behavior in March, which impacted the sales to an extent in the first quarter of FY '23. Secondary sales actually de-grew minus 11% Y-o-Y in value terms during the quarter. However, the company has received approval for some interesting products like Dimetindene Gel, which strengthens the derma portfolio in the region and Ryaltris also received approval for an additional indication and the overall response to Ryaltris has been very encouraging in the market. The company has various strategic initiatives to further strengthen the respiratory franchise in the Russia CIS region going forward.
Asia has continued its strong performance led by positive momentum in key markets like Philippines and Malaysia. The company has extensive plans to strengthen its respiratory franchise in the Asia markets with the launch of Ryaltris in FY '23. Middle East, Africa region recorded secondary sales growth of 19% during the quarter and positive growth was recorded across major markets like South Africa, Saudi Arabia and the UAE. The company expects this growth momentum to continue for the rest of the year.
And Latin America witnessed a steady growth of more than 30% as a region. Markets like Mexico, Colombia, Ecuador witnessed a strong growth momentum in the respiratory business particularly on the back of prescription-generated demand. Glenmark's Brazil business also delivered growth on the base product portfolio.
On the respiratory side, we'll give some key updates for Glenmark's global respiratory business for the first quarter. For Ryaltris, a few updates. During the first quarter, Glenmark received marketing authorization grants for Ryaltris in Singapore and Bahrain. The company is awaiting regulatory approvals for its filings in key markets like Canada, Brazil, Malaysia and several other emerging markets. Glenmark's partner in the EU, Menarini, initiated the commercial launch in Ireland and intends to launch the product in additional European markets in the coming quarters.
Ryaltris sales continued to grow in all the markets where the product has been launched over the last few quarters. Glenmark has also been working with its partner in South Korea, Yuhan Corporation, to enable commercial launch in the second quarter of FY '23. Glenmark's partner in Mainland China, Grand Pharmaceuticals, initiated enrollment in the Phase III study in China in April 2022 as well. Glenmark's exclusive partner for Ryaltris in the US, Hikma Specialty, is also preparing for the product launch post receiving US FDA approval.
Other key updates. The clinical trial is ongoing for the generic Flovent pMDI. We expect to file for this product in calendar year 2023. We also plan to file at least one more respiratory pMDI in the US in calendar year '23, and subsequently continue our filing momentum beyond FY '24. As mentioned before, we launched Indamet for the treatment of asthma in India and our European respiratory franchise across key products such as Salmex, Tiotropium DPI, are also shaping up well in both Western Europe as well as CE markets.
Some updates on the innovative R&D pipeline, GRC 17536. GRC 17536 is a TRPA1 antagonist and the company's pain pipeline asset being developed as an orally-administered treatment in patients with painful diabetic peripheral neuropathy. GLP toxicology studies were completed last year and a Phase IIb study was initiated in Q2 of FY '22. This is currently ongoing and interim data for futility analysis is expected by the second quarter of FY '23.
GRC 54276, this is a HPK1 inhibitor and the company's oncology pipeline asset, currently being developed as an orally-administered immuno-oncology adjuvant treatment for patients with solid tumors. A Phase I study is currently underway, and Glenmark is targeting to file for a US IND in the second half of FY '23.
GBR 310, Glenmark had earlier announced successful Phase I results for GBR 310 that suggested similarity in pharmacokinetic, pharmacodynamic, safety and immunogenicity profiles between GBR 310 and the reference product, Omalizumab. Glenmark is in discussions with potential partners to out-license the product.
GRC 39815, this is the ROR gamma t inhibitor and the company's respiratory pipeline asset, being developed as an inhaled therapy for the treatment of mild-to-moderate COPD. The product is currently under Phase I clinical development in the US.
Now, a quick update on Glenmark Life Sciences. Consolidated revenue from operations for GLS including captive sales were at INR 4,899 million as against INR 5,249 million, recording a Y-o-Y decline of 6.7%. This was mainly due to the high base of COVID products in the sales last year. During Q1, regulated markets contribution remained stable at more than 72%, while emerging markets witnessed a growth of almost 24% Y-o-Y, excluding COVID products.
GLS has also received environmental clearance for the installation of 1,000 KL capacity, greenfield manufacturing site at Solapur and construction work will begin in the current financial year. Our external sales for GLS in Q1 of FY '23 were at INR 3,251 million as against INR 3,040 million in Q1 of FY '22, recording a growth of 6.9% Y-o-Y.
An update on Ichnos Sciences. Glenmark has invested INR 1,682 million in the first quarter of FY '23 as compared to INR 1,617 million in the corresponding quarter last year. For further updates on the pipeline, especially for the first quarter of FY '23, please visit the Ichnos website. There is an update published on the Ichnos website.
We want to just state out our key objectives for FY '23, and we reiterate what we had said in the Q4 call. Our revenue growth of 6% to 8% during the year, sustaining EBITDA margin performance at similar levels to FY '22, a CapEx of INR 7 billion to INR 8 billion. Our strategic priority remains to enhance free cash flow generation for further debt reduction and closing out 1 to 2 out-licensing agreements in our innovation pipeline.
Some notes to the results before we open the Q&A. We had a COVID-related inventory provision of INR 41 crores in the first quarter of FY '23. Adjusted for that, our EBITDA margin for Q1 was at 17%. ForEx gain for the quarter was at INR 167 crores, which has been recorded in other income. Gross debt for the period ended June 30, 2022 was at INR 3,765 crores as against INR 3,670 crores in March. Net debt for the period ended June 30, 2022 was at INR 2,392 crores as against INR 2,251 crores in March. The increase in net debt was primarily on account of currency movements during the quarter.
In terms of working capital, inventory for the period ended June 30 was at INR 2,739 crores. Receivables were at INR 2,950 crores and payables was at INR 2,456 crores. Of course, there was a net working capital reduction of almost INR 80 crores as of June when compared to the March numbers. Total asset addition in the quarter was at INR 169 crores, of which tangible asset addition was about INR 139 crores. R&D expenditure for the first quarter was around INR 298 crores, which is about 10.7% of the total net sales for the first quarter.
Before we open the floor up for Q&A, I would just like to introduce the management of Glenmark Pharmaceuticals on the call today. We have Mr. Glenn Saldanha, Chairman and Managing Director; Mr. V.S. Mani, Executive Director and Global Chief Financial Officer; and Mr. Brendan O'Grady, Chief Executive Officer of Global Formulations Business.
With that, we'd like to open the floor up for Q&A. Over to you, moderator.
[Operator Instructions] The first question is from the line of Aashita Jain from Edelweiss Securities.
Sir, one question on just debt reduction and guidance on FY '23.
I'm sorry to interrupt. Ms. Jain, we are not able to hear you clearly. Your voice is sounding muffled.
This is better?
Much better. Thank you.
Yes. So any guidance on debt reduction for FY '23 because if I see in the last few quarters, our debt has moved up, maybe this was because of currency. But any guidance on that?
Sure, Aashita. This is Mani here. So obviously, during this quarter also, the rupee moved substantially. So, that's mainly the reason why there is an upward movement in the debt. Also during this quarter, we had a -- the FCCBs were refinanced, okay. So, we had a one-time big premium payout, though the accruals of the premium were done over the year, but the payout happened this time. But going product forward, I see the debt kind of coming off as the year goes by. Definitely, on a constant currency basis, we should see it go down. Yes.
But any number that you would like to call out, sir?
I would not like to throw a number, but definitely it would be decent. We expect -- on a constant currency basis, we certainly see it going down. Yes.
Okay. And second question is on the COVID inventory provisions. So in the last quarter, we did roughly around INR 38 crores, this quarter INR 41 crores. What is the balance inventory left in the COVID, which we would look at in the future quarters?
Yes, Aashita. So during the last quarter also, we had said that in the channel, we have about INR 80 crores to INR 90 crores. So, I think INR 40 crores has come in. So going forward, another INR 40 crores to INR 50 crores is something that we could see. I mean, I don't think COVID, there is much there. So, this could definitely come back. So, that's what we look at the outer limit.
Okay. And just lastly on this Ryaltris. Could you help us understand this opportunity in the US market as well as in the outside US market?
Sorry. Can you just -- can you repeat that?
Sir, my question is on Ryaltris. How big this opportunity can be for you in the US market as well as outside US?
So, we are not breaking it up, but I think Ryaltris for us, we think over a 3-year timeframe, 3 years to 4 years, can be $100 million, $150 million product across all markets.
Just from the US -- oh, across all the markets. And US would be the major chunk, 60%, 70%.
Not necessary. In US, we have a partnership with Hikma. So obviously, there we will be entitled to part of the economics, not the full, but in the other markets where we're commercializing on our own and various other markets, right, the revenues will flow through those markets.
Sir, how is the partnership with Ryaltris. Is it profit share or how is it structured?
We can't give any visibility around that. But clearly, most of these deals are around royalty and a revenue -- royalty share and profit share.
Okay. And it should be likely in the single digit kind of royalty?
I can't give any detail. We cannot share.
The next question is from the line of Gaurang Sakare from Motilal Oswal.
I hope I am audible.
Yes, you are.
Yes. So, I just wanted to know that what is the update on remediation measure, sir, Monroe facility?
So, I mean we've been -- the remediation is currently underway, right, at Monroe. And we are hoping to get back into -- if all goes as per plan, we are hoping to get back into commercial production around Q4 of this year.
Sir -- and secondly, could you guide us on what were the key reasons for such a steep decline in US sales during the current quarter? And any outlook do you have on US segment over FY '23?
Yes. So, I'll take that question. So the US is -- the US business is undergoing challenges. Every organization has the same answers. Volume impact, we had a few volume impact shift due to global supply disruptions. We are recovering from that. We also continue to see price erosion in the US market. All manufacturers do and price erosion is really -- the amount is impacted by products that are newly approved products, products in transition in your base. So then you take into consideration product approvals coming out of the FDA are unpredictable. So all of those things make US a very challenging environment, where we've been impacted in Q1.
So that's basically the reason for the decline. But if you look at our business for the rest of the year, we have 10 to 13 approvals that we should see in the US this year or total opportunity of those, our volumes are recovering. And overall, we see the outlook for the US second quarter should be better, and we see our business strengthening as we go throughout the year in the US. So optimistic that things are moving in the right direction.
Okay. Okay. So broadly, do you think we can maybe remain flat on FY '22 base? Or do you think we can grow, let's say, mid to high single-digits?
Yes. So, we're looking at flat to low single-digit growth in the US for FY '23 compared to FY '22.
Okay. Okay. Sir, one more on the -- I mean the Consumer Care business, it has witnessed a phenomenal 94% Y-o-Y growth in 1Q FY '23. So can you give a brief color on how sustainable is this and what should we expect for, let's say, FY '23 and even next year?
So, I think the Consumer Care business is growing. I mean, obviously 94% is not sustainable, but I think we will have high growth coming out of this business as we go forward because of some of the new launches, some of the new channels that we've opened up, which should drive the Consumer Care business.
Okay. Okay. Sir, regarding -- I mean, continuing on domestic business. So in domestic formulation business, so can you guide us on the number of product launches and how many of these would be first-to-market during FY '23 and '24?
So, I mean, typically on the domestic business, we launch 20, 30 products a year, right? And given that, I think we have some exciting launches in the diabetes space. Respiratory also, we have some good launches. I mean these are typically some of the launches, which will drive the growth this year and drive the growth next year.
Okay. Okay. And so what would be the -- I mean, what would be the growth guidance for domestic formulation this year?
So, typically, our base business is growing at 15%, 16% minimum, right? I mean that's the July numbers also that came out were 16% in AVAC and about 10% in IQVIA, right? So 15%, 16% is our normal growth on the base business. This is ex-COVID drugs, right? And even today, we are growing at that pace and we think we can sustain this, this year and probably part of next year.
So 15% to 16% ex-COVID business you think?
That's our current growth rate.
Okay. Lastly, on the contribution of Baddi facility to US sales. Any update on the feedback on observations raised by the US FDA in recent inspection?
So we have no feedback, right? We went through multiple inspections in Q1, and we've responded adequately and we are still awaiting feedback from the agency.
Okay. And can you give us the....
Sorry to interrupt, Mr. Gaurang Sakare, may we request that you return to the question queue. There are participants waiting for their turn. We'll move on to the next question, that is from the line of Harshita from [ Dellis ].
Sir, my question was on respiratory space. What are the upcoming milestones, which we will be able to see in coming quarters for respiratory?
So, I mean, the respiratory business is a global business for Glenmark, right? And we've done a lot of different things in different parts of our respiratory franchise. So, for example in India, we launched Indacaterol for the first time. Indacaterol Mometasone as the first launch in India. We launched vilanterol, fluticasone higher strength for the first time in India.
So, there are lots of good launches in respiratory in India, and also in the quarter, we got approval for 2 strengths of beclomethasone in Brazil. Europe, we have 4 or 5 big drivers for our respiratory franchise. US, we are running Flovent clinical trials and we are hoping to file 1 more product in addition to Flovent next calendar year. So it's truly a global franchise for us. And of course, Ryaltris, there is enough visibility on the launch of Ryaltris in so many different markets, right? And hopefully, our US launch also is imminent any time. So, I think the whole respiratory franchise globally is a big franchise for us.
Okay. And any specific -- was there any strategic challenges in terms of recruitment, especially in case of COPD because of COVID?
You mean patient recruitment?
Yes.
I think you know it's always been a challenge, right? I mean multiple trials ongoing across the world, patient recruitment is always a challenge. But I think we're doing okay, particularly on the Flovent trial. We are making good progress in patient recruitment.
Okay. And in terms of biosimilars, what are the updates, which we can see for CSU or maybe asthma?
So, we just have one biosimilar in our pipeline, which is Xolair, and we just completed Phase I. We are not moving forward. We are working on getting a partner on board to take the drug forward. Other than that, we commercialized multiple biosimilars through partnerships, but we are not developing our own biosimilars.
[Operator Instructions] The next question is from the line of Saion Mukherjee from Nomura.
Yes. On the Monroe facility, what....
Sorry to interrupt, Mr. Mukherjee, your audio is breaking up.
I'm sorry. Is it better now?
Much better.
Yes. We can hear you, Saion.
Yes, no, I was wondering on your Monroe facility. After the last inspection, do you have a classification as a VAI, OAI? I'm just wondering what is the status and what's the timeline?
So as on today, Saion, we haven't heard back from the agency. So, we have no visibility on any timeline or classification.
Okay. But are you getting approval from the site at this point or those approvals are currently not coming?
No, currently we are not getting any approvals.
Okay. Okay. Fine. The second question I had was on Europe. So the inhalers that we have launched, can you share first like how large is that business, inhalation business in Europe and what kind of market share we have been able to achieve in Europe?
So there are multiple products there, right, Saion? One is, of course, Tiotropium is a big one, right, for us. Then we've got Salmex, which is salmeterol, fluticasone. These both were launched as first generic. Then we've got beclomethasone, right, in Europe. In addition, we have Ryaltris in different markets, right? And we have a couple of more launches coming up, right, over the next 18 months, right, in Europe. So it's a pretty broad portfolio.
In terms of market share across Europe, it's virtually impossible to guide because it's different in different markets and it's super complex, right, to guide. But it's a substantial contributor to our total revenues already and we are expecting Europe to grow overall 15%, 20 % CAGR, right, going forward. Given that, a lot of the growth is going to come out of Ryaltris and out of some of the respiratory products that we launch and we continue launching. So it's a big contributor going forward to the total revenues.
Understood. I was just wondering, Glenn, some of the Salmex and Tiotropium that you've launched, at least in the key markets, right, in the UK, Germany, if you can share some market share in some of the larger markets typically like how much one can expect to get in these markets?
I mean, my guess, Saion, is it will be in the 10% to 20% range, right, somewhere thereabout in terms of market share, that's only a guess, Saion, at this point. It could be higher in some of these markets. It could be lower.
I understood. And just on the respiratory pipeline for the US. So you talked about, Flovent. Can you just share how large is the opportunity? What is the competitive dynamics there? And any other product -- I think you mentioned one more product. So if you can share how should we think about from next year in terms of filings that you would be doing? What kind of expenditure one would incur in developing these products and just a broader thought on the respiratory development programs that you're doing in the US?
So, Flovent alone is approximately a $1.6 billion product as far as I know. I think, to the best of our knowledge, there is one other filer which is Teva. We are not sure about, if there is anybody else running clinical trials, but to the best of our knowledge, we are probably second in that list on Flovent. Our filing goes out next calendar year, which means we would launch 2025, right, approximately, right, early '25. That's our estimated timeline for Flovent. We have 3 products in development for the US, of which, as I said 2 will get filed next year. One of them is Flovent. There is one more product, and then we have a third product in development. So basically, our view on -- we will -- we typically have about 3 odd respiratory programs in development at any time for the US.
Okay. Glenn, I mean -- so from a commercialization perspective, if I look at FY '25 and/or FY '26, there can be 2 commercial products including Flovent in the US, if everything goes right.
That's correct.
[Operator Instructions] The next question is from the line of Shyam Srinivasan, an individual investor [sic] [ Goldman Sachs ].
This is Shyam Srinivasan, from Goldman Sachs. Just 1 question. I joined late, so please apologize if it's been answered. Just on employee costs. Actually, I noticed that we typically have a 2Q bump up, right, but this time we have seen a bump up even in 1Q. So has there something that's changed in the way you recognize the employee costs?
Yes, Shyam. Mani here. So, you're perfectly right. So, we decided to payout the bonuses in 2 quarters, 1 in Q1 and another in Q2, okay. So that kind of measures well over the year. Okay.
Yes. So Mani -- and yes, so should we assume this going forward because we always used to model like 2Q higher, 200 basis higher? Yes.
Yes. Going forward, you can spread it out over the 2 quarters. Yes, that would be better.
First 2 quarters of the fiscal. Got it. And just in terms of just the underlying dynamics of employee cost in terms of either inflation, how are you seeing things for the full year? How should we look at it?
I think, Shyam, it's pretty stable, I think. We are not seeing major spikes in employee cost, right? I think for a full year, I mean, it should be single-digit growth.
Yes. It will be normally like how we have 7% to 8%. It will be around that.
Yes. And when you guide us to the EBITDA levels being same, I am assuming, this is the 18% to 19%, right? What's the level? Sorry, I didn't pick that up. Sorry.
Yes. We had earlier also guided to something closer to what we did last year, 18 to -- or closer to 19%. So, we still believe we can reach there. I mean, obviously, the first quarter, there were some input cost increases, et cetera, et cetera, but in the second quarter onwards, we feel it should be much better. Yes.
Got it.
And also historically, our first quarter sales are much lower compared to the other 3 quarters. So, I mean in some ways as the turnover goes up in the next 3 quarters, we should see better numbers.
Got it. My second question is on the India business and I'm stripping out the INR 350 crores last year of whatever COVID and COVID allied. So, we have grown 18%, if I do the math right? 2-year CAGR is some 10%, 11% -- sorry 3-year CAGR. So just want to understand how should we look at it? Should we be higher than 10, or should we be closer to 18 when we look at the forward path? And if you can help us understand, either from a new product launches or volume growth on our existing business, how things are panning out?
So right now, Shyam, in July, IQVIA -- I mean AVAC showed us a 16%, IMS was lower because the market also -- IMS was lower. So I mean, I think we believe on our base business. It will be like 15%, 16% growth for the full year coming out of India. So, we are expecting strong growth. We have lots of good launches, particularly in respiratory, diabetes. Diabetes, we launched sitagliptin, SITA, DAPA, first generic on SITA, first generic on SITA, DAPA. We have a number of other launches coming up, right? In respiratory, we have Indamet, which is indacaterol/mometasone first generic, vilanterol/fluticasone, first generic in respiratory.
So, there is a ton of good launches, right, in the space, which will drive your India growth, right? In addition, of course, our core brands continue to do very well, right, whether it's your Telma, Candid, Ascoril, Alex. So, we have very strong brand franchises, right, across the space. And then the last thing is our OTC business is doing very well. So, our Consumer Care business, right, and that continues to do well. So, I think there are multiple triggers to the India growth strategy for Glenmark.
The next question is from the line of Saion Mukherjee from Nomura. Mr. Mukherjee, we are not able to hear you.
Just one second.
Yes. Go head, Saion.
Yes. Sorry. So the India business is to continue, is there any headwind in some of the big molecules that you have, Remo, teneligliptin because of all the patent expiries that is happening? Is that something hurting your overall growth, or you think it is -- you are able to manage it overall 15%, 16% that you are guiding?
So, Saion, while Remo, the mono components are not doing great. We have Remo MV, which is doing well for us, the triple, right? We are the only one that has a triple combination there. Likewise, Teneli, so some of the erosion that we've seen in some of our older products, right, will be more than compensated with sitagliptin franchise, okay, and some of the newer launches.
We also have one more big launch coming up yet this quarter in the diabetes space, right, which again will be a first time in the country, kind of a launch, right? So that also could be a substantial contributor. So, I think all-in-all, whatever slight erosion we are seeing in some of the older molecules like Remo or even at Teneli, right, we are more than able to compensate with the new products that we are launching.
Okay. Okay. That's helpful. And Glenn, on -- the second one is on Ichnos Sciences. Any further update you want to share in terms of timeline of the clinical trial outcomes that we should look forward?
So for Ichnos, the next 6 months -- 6 months, 7 months is very important, right? So, we are hoping to get POC on 1342. 1442, we'll start dosing any time now, right, our first-in-man. We have 2001, which will enter the clinics in Q4 of this year. So if all goes well, we should have 2 POCs on 1342, 1442. We should have 2001 in the clinic. So 3 oncology clinical assets by the end of this year.
We are hoping to close 1 licensing deal yet this year. So that's on course. So, I think given all that, right, there could be some significant value creation in Ichnos this year and of course, the capital raise towards the end of this year is something we still target. Once we get these 3 clinical assets in the going and 2 and 1 licensing deal, right, on the back of that, we are hoping to do the capital raise.
Okay. Okay. And Glenn, the final question is can you share like what's the outlook like for your markets like Russia and…
Sorry, Saion, you just broke up. Can you repeat that?
Yes. Sorry. I was asking about the outlook for Russia and Brazil in particular.
So Russia -- look, Russia is doing well, okay, Saion, right? Russia, despite the war and everything, we still -- the market growth is still good. That coupled with the fact that the ruble remained strong, right, and we took some price increases, right, on account of inflation, we see a good year in Russia this year. Brazil, we think has now turned the corner for us, right? And I think the next 2 years, 3 years, 4 years should be strong years for Brazil.
So, we launched the other 2 strengths of beclo, we are expecting Ryaltris approval in Brazil sometime this year, right? And we have a couple of good filings, right, which should get come through, get approved either Q4 of this year in the respiratory area or early next year. So, I think Brazil we think will be a strong market for us going forward.
Okay. Okay. And just one last question, Glenn. I just wanted to check on the profitability front, Europe and Latin America. I understand, historically, these geographies were struggling. Now with, at least Europe scaling up and Latin America turning the corner, how should we think about, let's say, the EBITDA contribution from these 2 regions?
I think it should be -- go ahead, Mani.
Sure. So, Saion, over the years, Europe, but also with the amount of good product launches that we had with Ryaltris, tio and also couple of other good respiratory products. Over the years, the profitability definitely has improved. I think today we can even see some of the EBITDA margins much higher than what it used to be historically. And in some of these Latin American markets like Brazil, et cetera, again, when we say we turned the corner, at least we are now better than breaking even at least during the current year. So I don't see it -- so all this should help us to get close to our overall objective of getting a decent EBITDA margin that we kind of guided to earlier.
[Operator Instructions] The next question is from the line of Umesh Matkar from Sushil Financial Services.
Yes. I would like to know, did we incur any remediation cost this quarter and going forward, are you expecting any? And second, are you confident of launching Ryaltris with observation on certain plants?
So, Ryaltris, as I said, we are expecting launch any time now, right? So, we have a -- our manufacturing is clear right now, right? And we've got approval basis done. So, we are expecting launch anytime, right, for Ryaltris in the US.
And as far as the remediation cost, obviously, last quarter we did see a -- I mean previous quarter, we did see a -- we had given one, about almost 10 million or whatever. But this quarter, we didn't have much, but going forward, there could be some. And as and when we incur some of these, we will put that across, yes. But a good amount has already been done, okay. That's what I can say.
Yes. And last question, sir. I heard you mentioning single-digit growth in US. Is it because of new launches? Or are you saying -- are you expecting lower price erosion on your products going forward?
So, I think the US business is stabilizing, but I think it is -- we have, as I said earlier, we have about 10 to 12 products that we can launch this year. We've had 2 that we've launched so far in the first quarter. We just had another approval. So, we still have a table of 10 products that we can launch this year. And so we expect the second quarter to be better than the first and we expect the third and the fourth quarter to be better than the first and second quarter. So, I think things in the US are trending in the right direction. And it's a matter of execution, just stabilization of our base business and new product launches.
Thank you. [Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Utkarsh Gandhi for his closing comments.
Thank you, moderator.
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With this, we end the call today. A big thank you to all of you for joining us on the call.
Thank you, members, of the management team. Ladies and gentlemen, on behalf of Glenmark Pharmaceuticals Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.