Analyst Concall
Zydus Life sees growth uptick till FY29 post 2 new launches
This story was originally published at 21:17 IST on 12 November 2024
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--Zydus Life: See effective tax rate for FY25 at 24-25%
--Zydus Life: Looking at Jul-Sept levels of R&D spend going forward
--CONTEXT: Comments by Zydus Life's mgmt in post-earnings analyst concall
--Zydus Life: US base business healthy, continues to grow despite challenges
--Zydus Life: Have 2 major launches in FY27, see uptick in growth till FY29
--Zydus Life: Seeing competition for Asacol HD in market
--Zydus Life: Don't see revenue drop for Revlimid, to get more share FY26
--Zydus Life: See more fall in Asacol revenue in Oct-Dec than in Jul-Sept
--Zydus Life: Hope to be long-term, committed animal health player in US
--Zydus Life: Looking to participate in UNICEF tenders for vaccines
--Zydus Life: Meaningful scale-up of vaccine business from FY26, FY27
--Zydus Life: Look to maintain US mkt share in FY26, scale up in FY27, FY28
--Zydus Life: Will continue to grow above market, which is our aspiration
By Akash Mandal
MUMBAI – Zydus Lifesciences Ltd. is on track to achieve the growth and profitability it aspires for 2024-25 (Apr-Mar), with the company likely seeing an uptick in growth until FY29, the company's management said in a post-earnings conference call Tuesday. The company said it sees the rise in growth on the back of two major launches in FY27.
The company said it sees competition in the market for its drug Asacol, but is in a good position to handle potential market share loss or price erosion due to the increased competition. Though there was some impact of this increased competition on the product's revenue in the current quarter, the full effect of the increased competition will be seen only in the December quarter, the management said. Asacol drug is used to treat certain bowel diseases such as ulcerative colitis.
The company said there would be no drop in the revenue from Revlimid drug, after the patent for the medication expires in the September quarter of FY26. Revlimid is used to slow growth of cancer cells. The management of Zydus Life believes that it would see an increased market share for the drug going forward. The benefits from the generic version of Revlimid will be seen in the March quarter, the management said. The company also said there was an uptick in on-year growth of its drug Mirabegron, a drug used for overactive bladder. The management said the litigation related to the drug Mirabegron is "unpredictable" but not imminent, with the impact of the litigation "away for at least 2-4 quarters."
The company said it plans to participate in UNICEF tenders for its typhoid conjugate vaccine, subject to the US Food and Drug Administration's approval of the company's vaccine. UNICEF is the biggest procurer of typhoid conjugate vaccine in the world. The company said it will participate in UNICEF's annual tender, which usually has a range of 80 million-150 million doses. "We hope to take a small percentage of that share that could be very meaningful and sizeable for the organisation," the management said. The company said it is looking to qualify its magnetic resonance imaging vaccine soon, which would help it explore other UNICEF tenders. It also said it is hopeful to participate in an upcoming India-based tender.
The company said it will start "meaningfully scaling up" its vaccine operations by FY26-27. The competition for the tenders is just between 2-3 market players, and the revenue from the tenders will be "meaningful," the company said. The company also said it aims to maintain its current market share in the US market in FY26, and will gradually scale up in FY27-28. The company said its US operations showed good growth in the current quarter despite challenges.
The company said it will continue to launch animal health products alongside targetting the US market and scaling up its injectables business. Launching technology-driven products in the animal health space will be another "leg of growth" for the company. The company said it hopes to remain a long-term committed player in the animal health space in the US.
The company's management said it sees the effective tax rate for FY25 at 24-25%, taking into account the one-off tax expenses the company saw in the current quarter. The company said the one-off expenses and the company's different spending on research and development in different parts of the world reduced the effective tax rate for the quarter. However, the company said the tax rate will be equalised to 25% over the year. End
Edited by Vidhi Verma
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