Launch of gZetia positively impacted US business: Glenn Saldanha, Glenmark
Glenn Saldanha: Q4 also should be a strong quarter as far as overall performance goes and probably will be ahead of Q3 on an overall basis including Zetia. So I think overall Q4 should look stronger than Q3.
ET Now: I heard you mentioned that you launched it on December 12th and if Zetia contributed in a smart way with just half a month of sales I am now trying to think what a full quarter of sales because you have a six month period what a full quarter of sales could do to your overall revenues for quarter four?
Glenn Saldanha: Well I think we have guided to $200 to 250 million on in terms of our contribution what we would gain out of generics Zetia so we are well on course to achieving that that is the only guidance I can provide. Obviously,Q3 the December quarter there is some initial pipeline inventory that goes into the channel right which is higher than your normal monthly sales so from that perspective I would not anticipate Q4 being way ahead of Q3 in terms of overall numbers.
ET Now: But can you give me some numbers here I mean what did Zetia do specifically Zetia do I know we are talking a lot of about Zetia we will talk about other things too but what did Zetia do in quarter three for you and what will Zetia do in quarter four for you?
Glenn Saldanha: So look we are not breaking down specific numbers but generics I mean Zetia is a molecule is a $2.6 billion drug and we have the sole 180 day exclusivity which is shared with our partner Endopar Pharmaceuticals so I think we are the only generic currently in the market because of the six months exclusivity. We are not breaking down specifically Zetia sales but I think the US business the 190 odd million that we reported is a big component of that…a significant component would be Zetia in Q3 and in Q4 also we anticipate that component will be there.
ET Now: So let us move away from Zetia now then Glen, x-Zetia what is the growth of the base US business because the market feels that pricing pressure has been playing out certainly?
Glenn Saldanha: Absolutely so again as I said we are not breaking out the base business from Zetia sales but I think the general trend in the US you are seeing significant pricing pressure in the US market,we are seeing pricing almost a 10% decline on account of pricing pressure and we think this trend will continue for some time in terms of generic pricing in the US.
ET Now: So let us not take the clock back let us take the clock forward after six months Zetia launch and windfall gain will be over what happens to the US business then because if Zetia becomes a commodity it would be an ordinary business stream or a business revenue for you?
Glenn Saldanha: Sure you are absolutely right so I think post six months exclusivity there will be a flood of generics and it will commoditise, however, we still believe that in FY18 the US business will grow over FY17 at a overall level. So I think despite having the bulk of Zetia flowing into FY17 and part of it going into FY18 on a full year basis FY18 will we will see some growth coming out of the US the overall US business.
ET Now: Let us talk about the two aspects which may be something that the market may be not worried about at all I do not think the market is worried about but may have a small concern on one is the India and LATAM sales which have been disappointing, two is the plan for the balance sheet and the clean up there would you throw some light on both of these?
Glenn Saldanha: Sure, so India sales, India we continue to be among the fastest growing companies in fact if you see the last month IMS we were the second fastest growing companies among the top companies. We also improve ranks so we are among the top 15 companies in the country as far as India goes, however, I think the demonetisation aspect had an impact on the overall growth of the India business so we still grew India at about 6% but there was an impact seen in November-December. We think India growth numbers will come back, it may take some time but we think India will continue to be a very strong business for the company going forward. As far as LATAM goes we had this quarter we had zero sales coming out of Venezuela so there is no effect whereas last year at this time Venezuela was a significant contributor. If you strip out Venezuela I think the core business is growing at about 15-20% in terms of our sales on a constant currency basis out of the other markets so I think both these continue to be strong. In terms of the balance sheet and the leverage goes we are very clear that at the end of Q4 our debt level, our net debt will be below what we saw in March 2016 so there will be a significant de-levering of the balance sheet and purely on account of the cash flow that is coming out of Zetia.
ET Now: Could be that number because out of the 200-250 million which you will get from Zetia there would be some marketing expenses not everything comes into your balance sheet how much would you be like to de-lever how much would you like to divert towards R&D?
Glenn Saldanha: I think other than the tax payment the bulk of it so if you net out tax the rest clearly goes towards debt repayment of course the 200-250 million will part of it will go into FY18 and part of it will come into FY17. So FY17 year end we are guiding a net debt level below what we had in March 2016 and then the rest will go into FY18 in terms of cash flows so FY18 of course should be below 2017 also in terms of overall leverage.