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Good morning, ladies and gentlemen. Welcome to the Q4 FY '22 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. Ravi Agrawal, Head of Investor Relations for Glenmark Pharmaceuticals Limited. Thank you, and over to you, sir.
Yes. Thank you, moderator. Good morning, everyone, and a warm welcome to the Q4 FY '22 Results Conference Call of Glenmark Pharmaceuticals Limited.
Before we start the call, a review of operations of the company for the quarter and year ended March 31, 2022. For the fourth quarter of FY '22, Glenmark's consolidated revenue was at [ INR 30,191 million ], recording an increase of 5.6% year-on-year. For the year [indiscernible] 31, 2022, Glenmark's consolidated revenue was at INR 123,049 million, recording an increase of 12.4% year-on-year.
Before we get into the detailed discussions on the businesses, the following were the key highlights of the year. Number one, Glenmark listed its wholly owned API subsidiary, Glenmark Lifesciences Ltd, on the Indian exchanges. The IPO which consisted of a fresh issue of INR 10.6 billion and offer for sale of up to 6.3 million shares by the company was subscribed by over 44x.
Number two, Glenmark was listed in the prestigious Dow Jones Sustainability Index for the fourth consecutive year. The company is among only 15 companies from India to be listed under DJSI Emerging Markets Index this year. Also, Glenmark was the first domestic pharma company to raise sustainability linked loans by raising $228 million in SLLs during the year. A detailed ESG profile of the company is available under the Investors section on our website.
Number three, in third quarter FY '22, Ichnos entered into an exclusive licensing agreement with Almirall SA for the IL-1RAP antagonist ISB 880. Under the agreement, Almirall is granted global rights to develop and commercialize this monoclonal antibody for autoimmune diseases. Ichnos received an upfront payment of EUR 20.8 million and will receive additional development and commercial milestone payments and tiered royalties based upon future global sales.
As per -- number four, as per IQVIA in April '21, FabiFlu became the highest selling drug in the Indian pharma market amongst all therapies. The success of FabiFlu is a testament to the end-to-end capabilities of Glenmark to offer patient quality medicines with affordable access.
Number five, Glenmark was selected for the production-linked incentive, PLI, scheme aimed at improving India's manufacturing capabilities and enhancing exports. Glenmark is 1 of 11 companies under group A selected for the scheme.
Number six, Europe business achieved significant milestone of USD 200 million annual revenues for the first time.
Number seven, Glenmark had several successes in its core respiratory franchise during the year. The company received U.S. FDA approval for its NDA product Ryaltris in the U.S. and marketing approval in all 17 markets across EU and U.K. during the year.
On to the businesses. First, the India business. Sales from the formulation business in India for the fourth quarter of FY '22 was at INR 8,847 million and -- as against INR 8,238 million in the previous corresponding quarter, recording growth of 7.4% year-on-year. The India business contribution was at 29% of the total revenues in Q4. As per Jan-March '22 IQVIA data, the non-COVID base portfolio grew 15.5% as compared to the non-COVID IPM growth of 10.6% during the quarter.
The India business continues to significantly outperform industry growth rates, continuing the trend of the past several years. As for IQVIA data, Glenmark was one of the fastest-growing companies in the industry among the top 20 players on a MAT March 2022 basis with growth of 23.8% as compared to IPM growth of 17.4%. For the year, Glenmark's India formulation business is ranked 13th, up 1 rank from last year, and its market share has increased to 2.4% as compared to 2.34% last year.
In terms of market share, Glenmark's India business further strengthened its position in its core therapy areas such as cardiac and respiratory. As per IQVIA MAT March 2022, the cardiac segment market share increased to 4.96% as compared to 4.76% last year. The respiratory segment market share increased to 5.43% as compared to 4.96% last year. The company was ranked second in derma, fourth in respiratory and sixth in cardiac segment during the year.
The India formulation business achieved several important milestones during the financial year. As per IQVIA MAT December 2022, FabiFlu was the sixth largest brand across all brands in India during the period. Ascoril D Plus became the 10th brand of Glenmark to enter the IPM 300 brand league. The company now has 10 brands in the top IPM 300 brands in the country, up from 6 brands last year.
The company launched 7 new products during the quarter and 31 products during the year. Amongst key launches during the quarter, the company launched the novel Zita Plus Pio, which contains teneligliptin 20 mg, Pioglitazone 15 mg to be taken once a day. And it's the first of its kind in India offering a world-class and affordable treatment option to adult diabetic patients.
Glenmark's Consumer Care business. GCC business [indiscernible] was INR 619 million in the fourth quarter and INR 1,790 million in FY '22 with secondary sales growth of 23.4% in Q4 and 12.6% year-on-year in FY '22, respectively. This growth was led by new product launches, especially Candid Cream, where secondary sales grew 30% year-on-year annually, while La Shield recorded secondary sales growth of 95% year-on-year. Candid Powder maintained its dominant market leadership status with a market share of 63% in the current financial year. The company also launched Candid Prickly Heat Powder during the quarter.
Coming to North America. North America registered revenue from the sale of finished dosage formulations of INR 7,378 million, which is $98.2 million, in Q4 FY '22 as against revenues of INR 8,012 million, which is USD 109.8 million, for the previous corresponding quarter, recording a de-growth of 7.9% year-on-year. The North America business contributed 24% of the total revenues in Q4 FY '22 as compared to 28% in Q4 FY '21.
In FY '22, Glenmark was granted approval of 9 ANDAs comprised of 7 final approvals and 2 tentative approvals. Additionally, Glenmark was granted a second tentative approval on a prior approval supplement for the 0.25 mg strength of Fingolimod Capsules. Notable approvals included Lacosamide Tablets, Clindamycin Phosphate Foam and Theophylline Extended-Release Tablets. The company filed a total of 19 ANDA applications with the U.S. FDA in FY '22 and plans to file 14 to 15 ANDAs in FY '23.
Glenmark completed the successful launch of 10 new products during FY '22, consisting of a mix of semisolid preparation, delayed- and immediate-release oral solids. Notable launches included Lacosamide Tablets and Rufinamide Tablets, where Glenmark was one of the first generics available for launch. Glenmark Canada [indiscernible] ANDS applications with the Canadian health authorities this quarter.
Glenmark's marketing portfolio through 31st March 2022 consists of 174 generic products authorized for distribution in the U.S. market. The company currently has 46 applications pending in various stages of the approval process with the FDA, of which 20 are Para IV applications.
Europe. Glenmark Europe operations revenue for Q4 FY '22 was at INR 4,968 million as against INR 4,223 million, recording growth of 17.6% year-on-year and 30.5% quarter-on-quarter. Europe business [indiscernible] 16% of the total revenues in Q4 FY '22 as compared to 15% in Q4 FY '21.
The company witnessed healthy growth in both its key markets of Western Europe and Central Eastern Europe during the quarter. With the continued easing of COVID restrictions, growth in Western Europe was strong, led by double-digit growth in key markets like Netherlands, Spain and the Nordic countries. The Central Eastern European region maintained its strong growth trajectory, especially in markets like Poland. Amongst the key launches, the company launched 4 products in Germany, 3 in U.K. and 2 products in Czech Republic, respectively. Slovenia and Germany launch 1 product each during the quarter.
Glenmark has a comprehensive plan to grow its European business going ahead, including geographical expansion in new markets and expansion of its product portfolio to leverage launches in key therapeutic segments like respiratory and dermatology.
Just talking about the ROW, which consists of Asia, MEA, LATAM and RCIS region. For Q4 FY '22, revenues from ROW was at INR 5,479 million as against INR 4,641 million for the previous corresponding quarter, recording a growth of 18.1% year-on-year. ROW business contributed 18% of the total revenues in Q4 FY '22 as compared to 16% in Q4 FY '21. The company witnessed healthy growth in base business in the region across all its key geographical segments.
As per IQVIA Jan-March '22, secondary sales grew 31% year-on-year in value terms in Russia. The company recently received approval for Ambroxol Solution, and the overall response to Ryaltris and Ryaltris Mono has been very encouraging in the market. The company has various strategic initiatives to strengthen its respiratory franchise in the region going ahead.
Secondary sales in Asia grew 53% year-on-year led by positive momentum in key markets like Vietnam, Malaysia and Philippines. The company successfully launched FabiSpray in Singapore and Hong Kong this quarter under the brand name VirX, and the company has plans to launch in multiple markets in the region in the coming financial year.
The Middle East and Africa region recorded primary sales growth of 13% year-on-year during the quarter with positive growth across major MEA markets like Kenya, South Africa and Saudi Arabia. The company expects the momentum to continue in FY '23 as markets are witnessing signs of recoveries due to the easing of lockdown measures.
In LATAM, while the company recorded positive growth momentum in markets like Peru, Ecuador and Colombia during the quarter, the overall business has been impacted by Brazil, where the market remains challenging for the company due to the pandemic. The company is witnessing signs of recovery and expects positive momentum in the market going ahead.
Before we discuss [indiscernible], I would like to share some color on our various initiatives in the respiratory segment, where the company has laid out a clear strategic road map to create global scale. Ryaltris is our innovative branded nasal spray where we are creating our first global brand. We have now received NDA approval from the FDA in FY '22 and expect to launch the product in the U.S. in FY '23. Similarly, we received marketing approval from all EU markets and U.K. in FY '22 and have launched Ryaltris in U.K., Czech Republic, Poland, Italy -- and Italy and plan to launch in several markets in FY '23, including Belgium, Ireland and Nordic countries.
Similarly, in ROW markets, Ryaltris has been launched in Russia, Australia, South Africa, Ukraine, Uzbekistan, Philippines, Peru, Ecuador, Namibia and Botswana. And we are awaiting regulatory approval in several markets, including Brazil, Malaysia, South Korea, Cambodia in FY '23.
Apart from Ryaltris, the company plans to file at least 1 to 2 filings in FY '23 in Europe and leverage its existing branded portfolio of Soprobec, which is Beclamethasone MDI; Salmex, which is salmeterol and fluticasone DPI; Tiogiva, which is tiotropium DPI; and Ryaltris to grow the European respiratory franchise. In addition, in the U.S., the company recently completed a pivotal biostudy on Flovent pMDI and initiated clinical trials with 2,634 patients with expected filing in CY '23. We also plan to file 1 more product in CY '23 in the U.S.
Coming to our innovation R&D pipeline, GBR 310. Glenmark has announced successful Phase I results for GBR 310 that suggest similarity in pharmacokinetic, pharmacodynamic, safety and immunogenicity profiles between GBR 310 and the reference product, omalizumab, marketed in the U.S. under the brand name Xolair. Glenmark is in discussion with potential partners to out-license the product.
GRC 39815 is currently under Phase I clinical development in the U.S. with Phase I multiple assembling dose study planned in H1 FY '23.
In GRC 17536, the Phase IIb study was initiated in Q2 FY '22 and is currently ongoing in India with 238 patients randomized out of total 472 patients till date with interim data for futility analysis expected by Q2 FY '23. GLP toxicology studies for metabolite qualification were completed in Q3 FY '22. The company plans to hold discussions with the FDA to get feedback on the nonclinical package to support the clinical development up to NDA filing this year.
GRC 54276. IND-enabling studies were completed with a Phase I submission to DGCI (sic) [ DCGI ] in Q4 FY '22. The company has recently received approval for initiation of Phase I [indiscernible] first patient visits are planned from Q1 FY '23.
Glenmark Lifesciences. Revenue from operations, including captive sales, were INR 5,140.6 million as against INR 4,671.6 million, recording a growth -- growing at 10% year-on-year for Q4 FY '22 and INR 21,232.1 million for FY '22, a growth of 12.6%. EBITDA was at INR 1,473.1 million for Q4 FY '22 with margins at 28.7% and INR 6,307.6 million for FY '22 with margins at 29.7%. The external sales for Glenmark Lifesciences were at INR 3,283 million as against INR 3,311 million in Q4 FY '22 -- '21. The company is in the process of executing brownfield and greenfield capacity expansion projects to support strategic growth levers. For further updates on the organization, please log on to www.glenmarklifesciences.com.
Ichnos. Glenmark has invested INR 1,640 million, which is USD 21.9 million, in the fourth quarter of financial year as compared to INR 1,880 million, which is $26 million, in Q4 FY '21. Thus, in FY '22, Glenmark invested INR 6,627 million, which was USD 89.4 million, as compared to INR 7,570 million, which is USD 102.3 million, in FY '21. For further updates on the pipeline and the organization, please log on to www.ichnossciences.com. The pipeline update for the fourth quarter is published on this site.
Key objectives for FY '23. We expect revenue growth of 6% to 8% during the year. We expect to sustain EBITDA margin performance at similar levels of FY '22. We expect CapEx of INR 7 billion to INR 8 billion for the year. We expect to close 1 to 2 out-licensing agreements in the innovation pipeline, and the strategic priority to enhance free cash generation for further debt reduction will continue.
Some words on the results. There is a COVID-related inventory provision of INR 38.8 crores in Q4 FY '22. There is an additional INR 80 crores to INR 90 crores of COVID-related products in the trade channels, which we will review in the coming quarters. ForEx gain for the quarter was at INR 92 crores and INR 88 crores in FY '22, which is recorded in other income. Gross debt for the period ending 31st March 2022 was at INR 3,670 crores as compared to INR 4,687 crores as on 31st March 2021, a reduction of INR 1,017 crores. Net debt for the period ending 31st March 2022 was at INR 2,260 crores as compared to INR 3,549 crores as on 31st March 2021. The total net debt reduction was at INR 1,289 crores.
Inventory for the period ended 31st March 2022 was INR 2,500 crores as compared to INR 2,277 crores as on 31st March 2021. Receivables for the period ending 31st March 2022 was at INR 3,101 crores as compared to INR 2,572 crores as on 31st March 2021. Payables for the period ending 31st March 2022 was at INR 2,389 crores as compared to INR 2,238 crores as on 31st March 2021. Thus, net working capital for the company increased by INR 701 crores in FY '22.
The total asset addition was at INR 292 crores in the quarter and INR 790 crores in FY '22. Of this, the tangible asset addition for the quarter was at INR 235 crores and INR 612 crores in FY '22. Total R&D expenditures for the fourth quarter was at INR 323 crores, which was 10.7% to net sales for the quarter and INR 1,239 crores for FY '22, which is 10.1% of net sales.
With this, I would like to introduce the management of Glenmark on the call. We have Mr. Glenn Saldanha, Chairman and Managing Director; and also Mr. V. S. Mani, Executive Director and Global CFO. I would also like to introduce Brendan O'Grady, who will be joining the company as a Chief Executive Officer, Global Formulations business with effect from 10th June 2022. Brendan will lead the commercial business unit for GPL and provide strategic leadership for bringing greater focus and alignment across all regions and therapeutic areas.
Brendan comes with over 3 decades of rich experience in the pharmaceutical industry, spread across both generics and specialty segments, where he has successfully led and transformed businesses for growth across multiple geographies globally. In his last engagement prior to Glenmark, Brendan was a Chief Growth and Commercial Officer for Amwell, wherein he provided strategic leadership to Amwell's global business operations. Prior to that, he was associated with Teva as the President and CEO of Teva U.S.A. and EVP, North America Commercial. Brendan spent over 2 decades at Teva, during which he was instrumental in stabilizing and growing the North American business, revitalizing the global specialty strategy and making significant contributions to market access strategies, brand acquisitions and integrations. He also had significant and successful stints with Sanofi Pharma and SC Johnson & Son at the beginning of his career.
Robert Crockart, Chief Commercial Officer, has decided to pursue opportunities outside Glenmark. We wish to thank you for his valuable contributions to the organization during his tenure and wish him the best for his future endeavors. I would request Brendan to share a few words.
So thank you, and good morning. As you know, my name is Brendan O'Grady. I'm very excited to join Glenmark on June 10 and bring my nearly 3 decades of experience to the Glenmark team. My purpose this morning is to just really introduce myself and say hello and just let you all know that I look forward to speaking with you more on future quarterly calls. So thank you, and really looking forward to joining with you.
Yes. Thank you, Brendan. With this, we would like to open the floor for Q&A. Over to you, moderator.
[Operator Instructions] The first question is from the line of Damayanti Kerai from HSBC Securities and Capital Markets (India) Private Limited.
My first question is in fourth quarter exceptional items of around INR 825 million, you mentioned it's related to some product recalls and remediation cost of Monroe. So can you update us like what is happening at Monroe? Like why do we need to carry out remediation? And what kind of sales pickup we are expecting from that facility? Because I understand it's one of the key driver for our U.S. sales going ahead.
So just to give you a quick update on Glenmark's U.S. business. So we currently have 5 FDA-approved manufacturing facilities, right, that -- formulation facilities that supply the U.S. Monroe is one of them. As regard to Monroe facility, as you remember, we had a recall, a voluntary recall to the middle of -- around August of last year. And since then, we've been remediating the facility, and we haven't supplied product in Q3 and Q4 in the market. So a lot of these costs are related to the recall expenses and the remediation cost.
You're probably also aware that we recently had an FDA inspection, and we had 17 observations that came out of Monroe. And basically, we're confident of addressing some of these observations. And post that, we will start commercializing products from Monroe. It's a new facility.
Okay. So right now, no supplies, and you are working to resolve the issues, which are raised by the U.S. FDA, correct? And once these are resolved, supplies will start to normalize?
That's correct.
Okay. And my second question is, again, on the U.S. business. So how is the pricing U.S. environment there right now? Are we seeing some sign of improvement or same as what we saw in the previous quarter? And how we should look at this part of the business in next few quarters?
So I think the U.S. pricing environment continues to stay challenging, right? I mean, we are still -- we continue to see around high single-digit price erosion in the U.S. And we believe that, that will continue into next year.
Okay. My last question is, during the quarter, we see especially high amount of other income growth. Is there any one-off which is recorded in this number?
Yes. The other income basically has an exchange gain, which we are just told, INR 92 crores. So that's only reason.
[Operator Instructions] The next question is from the line of Saion Mukherjee from Nomura.
Yes. Mani, can you share what is the total cost that we have incurred in the P&L from the Monroe site in fiscal '22? And how much will that be in fiscal '23?
Yes. So Saion, obviously, we spent about $30 million in Monroe last year, out of which about $10 million hits the P&L. And going forward, current year at least, it will be lower because we'll be, in some part of the year, in the remediating mode. So I would expect it to go lower in the current year.
Okay. So $10 million was the P&L impact, is it?
Yes. P&L impact.
Okay. And Glenn, the question on Monroe again. I mean, it sort of had not a great start. I mean, we had to recall product and not producing anything there. I thought -- the whole idea I thought was that to have a facility -- a new facility, which kind of you can ensure compliance and execution. So what went wrong there in your view? And what are your thoughts now given that it may take long to sort of resolve these issues?
So Saion, running a facility in the U.S. has been a struggle, right, for most of the Indian manufacturers, right? In fact, if you see in the last quarter, almost 4 of our peer companies ended up closing down their facilities in the U.S., right? So it's been a struggle. We still believe that -- we are confident that we'll be able to remediate the issues that we faced at Monroe. And hopefully, this year, around the Q4 of this year, we should start supplying product back to the market. I mean, that's where we are going with it. But it's been a challenge.
But Glenn, I mean, why should that be a challenge? What are the issues that a facility in the U.S. faces versus, let's say, in India? And especially this is a very new facility without any legacy.
So I mean, I can't give you a lot of detail, Saion. But I mean, running a facility in the U.S. is not an easy task. I mean, even the likes of Teva, you must have seen recently had a -- to shut down their Irvine facility, if I'm not mistaken. So it's never easy.
Okay. Mani, there's a question on the cash flow statement. There is an unrealized foreign exchange gain that you booked, INR 227 crores. Now this number is higher than what you've disclosed in the P&L for the year, which is around INR 88 crores. And this has been a gain for the last 5 years. So what kind of gain is this that you're booking in the P&L which is not leading to cash flows?
So Saion, obviously, at the end of the year, that is your -- overall, all your receivables or payables or any other kind of loans given, et cetera. All are restated. And obviously, I mean, some part of that finds its way to the P&L. But broadly, I mean, this is just a reconciliation to the cash. So when you do that, you'll obviously have some element of profit in some of these, which are not yet realized. So that is what is shown. But in the coming years, when you realize the money, it could automatically get adjusted in that. This is a very normal entry. In most companies -- every company, you will find this.
The next question is from the line of Shyam Srinivasan from Goldman Sachs.
Yes. Just the first one on the guidance. I'm just looking at your Slide 21, revenue growth of 6% to 8% and similar EBITDA. So just revenue growth, we have done about like 12%, 12.5% this year. So what's dragging us down? Is it the fourth quarter run rate which has been slower? And which geographies do you think will kind of lead where you think there is still pressure?
So I think, Shyam, if you strip out the COVID drug sales that we had in this year, our revenue growth is double digit, right? So it's -- we still believe that. And going -- I mean, even on a consistent basis, right, if you strip out the COVID drug sales that we had this year and last year, we're growing double digit, right, despite the U.S. being slower, right, than the rest of the geographies. So it just tells you the momentum that we have in the business. And we think we will sustain that for the coming year.
We have great product launches. Ryaltris will be a big contributor to the coming year, right, for us. So I think the 6% to 8% is because of the high base of COVID drugs that we have in this year. If you strip that out, it's double-digit growth.
Okay. That's helpful. I mean, if I were to look at your EBITDA margin guidance, so you're seeing similar levels at 19%.
Sorry to interrupt, Mr. Srinivasan. There's a lot of disturbance from your line.
Yes. Go ahead, Shyam, we can hear you.
So I was talking about EBITDA margin guidance remaining similar. So we have now done 2 years of similar kind of an EBITDA. So is there any scope that over time, we can actually take it beyond the 20% level? What could be some of the drivers? R&D, I think you're kind of starting to rationalize a lot more. So I just want to understand the slightly more longer-term outlook for EBITDA.
So Shyam, this is Mani. So we wanted to guide to a very realistic number, okay? So I think as you know, overall, there is some amount of uncertainty. There is some amount of -- there are geopolitical issues. And also, we've been seeing that the input costs are a little higher, and sometimes expenses also vary. So taking all this into it, we thought we should guide to 19% rather than to say anything more than that. So I think we're hopeful to reach that.
Also, Shyam, on the EBITDA, we have 2 drivers, right? One is, Ryaltris will be a significant contributor to the EBITDA. And then secondly, our gross margins are better -- should be better this year because COVID drug gross margins are lower compared to the -- compared to our overall gross margins for the business. So these 2 should further help the EBITDA. But as Mani said, we've been conservative given the external environment.
So at least at this point of time, the thinking is that all the gains you can make out of these, say, Ryaltris launch and all of that could be offset by raw material inflation. Is that...
That's correct. That's correct. That's the view.
Also, just to add to it, Shyam, last year was a good year. The Q4 was a little bit of a challenge because of various issues. I think that Q1 also, you would see it closer to 17%, 18%. It will not touch those levels. So I think after the Q1, things should ramp up better. So these are the reasons why we feel the full year should be closer to where we were last year and the previous year.
[Operator Instructions] The next question is from the line of Sameer Baisiwala from Morgan Stanley.
Sir, what's the kind of deleveraging that we are looking at for fiscal '23? Any back of the envelope calculation cash flows?
So Sameer, this is Mani. So we would not like to really put a number out. Actually -- I mean, obviously, there has been some amount of challenges when you look across the supply chain. We are confident we should have some amount of deleveraging, but we don't want to put a number out certainly. I feel things are okay. But sometimes, the working capital skews also have been a little difficult this year. So I think it's -- we would definitely guide that we want to reduce it further, but would not want to put a broad number there.
Okay. Okay. That's fine, Mani. And the second question is, you talked about Ryaltris U.S. launch sometime in fiscal '23. I mean, can you be a little bit more specific? Is it like second half of this year that we are looking at?
Yes. It will most likely be second half, Sameer.
Okay. Okay. Great. And final question, good show on Flovent. So you talked about filing in calendar '23. So that -- does that mean launch sometime in calendar '25? Or is there anything on the IP side which is blocking it?
Sameer, it's hard to predict the launch date. It could be earlier. But definitely by '25, we think this product should be on the market.
The next question is from the line of Nitin Agarwal from DAM Capital.
Mani, on the working capital, there has been a pretty sharp increase in receivables for the quarter. Typically, financial issues have resulted in relatively high inventory across most companies. But in our case, the pressure seems to be coming through the receivables front actually. Can you help us understand what's happening there?
Yes. Sure. So obviously, one of the -- there would have been some amount of increase in the debtors because of the growth in the activity in the business but also because of certain geopolitical issues across. So we -- there were some delays in receiving some monies, but we are now receiving all those collections also. So there was a little bit of a sharp increase in that. So that's mainly the reason.
Working cap -- I mean, inventory also went up, but the number of days, we are doing quite okay. And as far as the debtor goes, some portion of that is basically due to these issues that I just elaborated here. But we're getting all the collections, no problems.
And so sir, we should realistically expect a reduction in the net working capital cycle this year now again going back to the previous levels?
I hope it happens, Nitin. But as you can see, there have been challenges on the overall supply chain issues. So it's hard to predict right now. But yes, we are hoping that this year, it will kind of -- on an overall basis, if I look at it really, Nitin, our working capital has gone up by about 8, 9 days. But considering all the issues that one has faced with China, with Russia, I think it's something that we need to be mindful of as we go along.
Yes. And sir, secondly, on the CapEx guidance for the year. This INR 700 crores to INR 800 crores that you're looking at, how are you looking at -- can you just give a broad breakup of this CapEx?
So as you know, we are having a number of brownfield and greenfield projects in our API -- I mean, GLS. So that should be about INR 200 crore plus. And we said we guided to between INR 700 crores and INR 800 crores. So the balance, obviously, while we have brought down the order in-licensing, whatever we pay, but it will still be there to some extent. Current year also, our intangibles have been around INR 160 crores or so. Or if you were to remove computers also, it still would INR 120 crores, INR 130 crores. So we'll continue to have some in-licensing expense. Besides that, obviously, we will continue to have some normal CapEx in GPL as well and some amount on the R&D side as well.
So all this will put together, we'll come close to that. I mean, over the years, we have brought down, Nitin, from almost INR 1,000 crores to INR 900 crores to INR 750-odd crores. We're hoping at best we can do something about it. But for a company that wants to grow at double digits, some amount of CapEx does come in, okay? So that's why we are guiding to a number which we feel is realistic.
Fair enough, sir. And then lastly, on Monroe, what has been the total CapEx investment in the business so far?
So, so far, Nitin, investment, almost about $200 million. So on all the 3 lines put together over the years.
And Glenn, when do we see returns on this $200 million investment in terms of meaningful returns on this business -- on this investment in your assessment?
So Nitin, obviously, it's going to take us some time, right? But as I said, look, Monroe is not the only facility, right, that we are supplying to the U.S. We have 4 other facilities which are supplying product to the U.S., and we continue to stay excited about the U.S. business just given the respiratory filings and everything else we are doing.
The next question is from the line of Saion Mukherjee from Nomura.
Yes. Sir, I just wanted to check on the COVID write-off. So you said INR 38 crores of inventory written off this quarter. Anything else that you're spending, sir, which we will see?
So that is why, Saion, we gave a heads-up that in the channel, obviously, we know what's there. There is about almost INR 90 crores still in the channel. So while there is still time to -- for them to expire or whatever, but we will take a call as we go along during the year, okay? As you can see, some of our peers have had large write-offs when they expire. In our case, there is still -- I mean, there is still no date, but we will review as we go along in the coming quarters.
Okay. And on the R&D spend, given the clinical trials on respiratory assets, how should we think about overall R&D spend and split between Ichnos and generics?
So we will continue to spend only about 10%, keep it flat, Saion. And Ichnos will be closer to half of that, about 5% or a little lower than that, and generics would be the balance. As you can see, over the last couple of years, we have been more -- I mean, very careful about the way we spend in Ichnos, and we'll continue to do that.
Okay. And Glenn, any update on Ichnos readouts, any time line that you would like to share now?
So I think this year, there are 4 inflection points for Ichnos, right? 1342, we are hoping we'll get PoC within the next 3 months, right? 1442, we are starting clinicals, and there's a possibility that this year -- because of the starting dose that's been approved by the FDA, we think in this financial year, there's a possibility we may get to PoC. And then 2001, which we recently announced, right, entered the clinics -- or we file our IND in Q4 of this year. So on the development -- and then, of course, 1 partnering deal is the minimum we expect this year from Ichnos. So these are the 4 inflection points, we think, for the year for Ichnos.
Okay. And one last question on the U.S. generics. So I mean, should we expect a growth in U.S. this year given the price erosion or it could be a decline, you think?
We think it will be a low single-digit growth for the year.
[Operator Instructions] The next question is from the line of [ Nimish Maheshwari ] from [ Rspn Ventures ].
I just want to ask [indiscernible].
Sorry, Mr. [ Nimish ], your audio is not clear, sir. Can you use the handset mode while speaking?
Okay. Is it clear enough?
Much better.
So what is your view on the -- management view on the COVID in this financial year '23 and ongoing situation?
So we don't anticipate any COVID sales in FY '23, right? We don't -- I mean, you'll have -- as part of the endemic, you'll have some small pockets of COVID incidences happening. But we don't think you're going to see it as a pandemic in FY '23, particularly in India. You may see some countries which are still -- which still have COVID cases, and we also export product often on to some of these countries. But in India, we don't anticipate any COVID sales in FY '23.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Ravi Agrawal for his closing comments.
Yes. Thank you, moderator. We will read the disclaimer before we end. The information, statements and analysis made in this document describing company's or its affiliates' objectives, projections and estimates are forward-looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties which could cause actual outcomes and results to differ materially from these statements, depending upon economic conditions, government policies and other incidental factors.
No representation or warranty either expressed or implied is provided in relation to this document. This document should not be regarded by recipients as a substitute for the exercise of their own judgment. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
With this, we end the call today. A very big thank you to all of you for joining us on the call.
Thank you. 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.