Zydus Lifesciences Limited (ZYDUSLIFE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Zydus Lifesciences Earnings Conference Call for the Fourth Quarter FY '25 ended 31st March 2025. I now hand over the conference to Mr. Ganesh Nayak for opening remarks. Thank you, and over to you, sir.

Good evening, ladies and gentlemen. It's my pleasure to welcome you all to our post results teleconference for the fourth quarter and the financial year ended March 31, 2025. For today's call, we have with us Dr. Sharvil Patel, Managing Director; Mr. Nitin Parekh, Chief Financial Officer; Mr. Tushar Shroff, President, Corporate Finance; Mr. Arvind Bothra, Head of Investor Relations; and Mr. Alok Garg from the Managing Director's office. To begin with, let me give you an overview of the performance for the year. I'm happy to inform you that we have ended the fiscal 2025 on a strong note. Overall, we delivered healthy growth during the year, in line with our expectations. On the profitability front, we exceeded our expectations with the highest ever operating profit as well as margins during the year. Improved product mix along with operating leverage helped us improve our profitability above our expected range for the year. Our U.S. business delivered sound performance with a strong double-digit growth through the year. This was led by both volume expansion and successful new product launches. Our branded formulations business in India outpaced the market growth aided by healthy volume growth and new product introductions. Our Consumer Wellness business delivered industry-leading double-digit growth on the back of robust volume growth. International markets business comprising emerging markets and Europe continued its growth momentum with a strong demand led growth across geographies. In order to remain competitive and serve our customers in a cost-efficient manner, we have implemented a number of digitalization and efficiency enhancement measures in our operations. These measures have improved the profitability in the range of 50 to 70 basis points, and we expect a similar improvement going forward as well. With that, let me take you through the financial numbers for the year gone by. We recorded consolidated revenues of INR 232.4 billion, up 19% on a year-on-year basis. The business delivered strong operating EBITDA margin of 30.4%, which is an improvement of 290 basis points over the previous year. Consequently, the consolidated EBITDA for the year grew by 31% to INR 70.6 billion. Net profit adjusted for exceptional items for the year was INR 47.5 billion, up 22% aided by strong profitability [Technical Difficulty] further INR 8 billion as at 31st March 2025 against the net cash of INR 8.6 billion as at 31st March 2024. Coming to our quarterly performance, we ended the year on a strong trajectory. Our consolidated revenues for the quarter stood at INR 65.3 billion, up 18% on a year-on-year and 24% on a quarter-on-quarter basis. Our operating profitability continued to improve with an EBITDA margin of 32.6%, which is an improvement of 310 basis points on a year-on-year and 630 basis points on a quarter-on-quarter basis. EBITDA for the quarter stood at INR 21.3 billion, up 30% on a year-on-year and 53% on a sequential basis. Net profit adjusted for exceptional items during the quarter was INR 13.9 billion, 18% on a year-on-year basis and 36% on a sequential basis. Now let me take you through the operating highlights for the fourth quarter of FY '25 for our key business segments. The U.S. business registered revenues of INR 31.3 billion during the quarter, up quarter-on-quarter. We filed 3 ANDAs, received 6 approvals and launched 5 new products during the quarter. Our India geography, comprising of formulations and consumer wellness businesses accounted for 39% of the total revenues during the quarter and grew 13% year-on-year. The Branded Formulations business in India grew faster than the market during the quarter with 11% year-on-year growth driven by high uptick in killer brands and innovation brands. The secondary sales during the quarter exceeded the market growth with 10% growth, which was driven by strong performance of chronic segments and overall higher than market growth in our key therapies. Contribution of chronic portfolio has increased consistently over the last several years and stood at 43% as per IQVIA MAT March 2025, an improvement of 400 basis points over the last 3 years. Our Consumer Wellness business recorded revenues of INR 9.1 billion, up 17% year-on-year with a 13% volume growth. The Personal Care segment comprising of Nycil and EverYuth brands witnessed strong consumer traction and achieved robust double-digit growth trajectory over the last several quarters, highlighting the segment's resilience. Food & Nutrition segment also registered strong double-digit growth, driven by category expansion and product innovation and supported by the acquisition of Naturell Private Limited, a leading player in the healthy snacks category with a brand portfolio of Max Protein and RiteBite. International Markets Formulations business delivered robust growth during the quarter with revenues of INR 5.5 billion, up 12% year-on-year. Recently, our Ambernath API manufacturing facility received an EIR with No Action Indicated status from the U.S. FDA against an inspection conducted in February 2025, which was concluded without any observations. I'm also very happy to inform you that we have been ranked #1 in the Future-ready Workplaces survey amongst all Indian companies. This study conducted by -- was conducted by Fortune India!. Now this achievement reflects our organization's culture, the commitment to NextGen, people-centric practices, leadership development and a forward-looking workplace ethos. This concludes the business review. I would now request Dr. Sharvil Patel to take you through the key drivers across businesses as well as initiatives in our innovation program. Thank you.

Thank you, Mr. Nayak, and good evening, ladies and gentlemen. We are happy to have you all on the call today. We are quite pleased with our overall performance during the fiscal year 2025. We ended the year with a strong double-digit growth and the highest ever operating profitability. Our strategy of going beyond-the-pill backed by strong execution helped us to deliver this good performance and build an impetus for future growth. With a differentiated product portfolio and deep innovation pipeline, we remain committed to address diverse health care needs for our patients. In the U.S. generic space, we have increased our presence through the years by building a comprehensive portfolio across dosage forms and therapies through both in-house efforts as well as partnerships. In order to satisfy the unmet health care needs of the patients and ensure access, we have been expanding the specialty footprint in the U.S. by building a portfolio of 505(b)(2) products and enhancing our presence in the pediatric rare disease space. This, coupled with strong customer relationships, a pool of manufacturing facilities with capabilities to produce diverse dosage forms, an agile supply chain and an efficient cost management have ensured sustained growth trajectory for the U.S. business. On the India Formulations front, various strategic interventions done in the past years have helped our branded formulations business to grow faster than the market, and we look forward to building on to this momentum. Our aim is to strengthen the presence across focused therapies through multiple levers and in turn, serve a wider set of customers. Our rich and diverse portfolio of innovative products have enabled us to offer novel solutions to patients to address their unmet health care needs. Besides medicines, we also provide value-added services to patients like the support -- patient support programs and be with them during the entire journey. Both the segments of our Consumer Wellness business and vis-a-vis the Personal Care and the Food Nutrition business registered strong double-digit growth during the year, indicating sustained consumer preference for our brands. Our R&D capabilities continue to be at the forefront, helping us launch new products and extensions to capitalize on the emerging consumer trends. Our portfolio of wellness products built over the years positions us well for both today and future growth by expanding presence in new business channels such as modern trade and e-commerce and exploring new opportunities. On the international market front, which is our third pillar of growth, the focus remains on expanding the presence in the chosen therapy areas across key geographies by leveraging our global R&D portfolio of the differentiated and complex generics as well as specialty products. In line with our vision of addressing the diverse health care needs of patients throughout their journey, we forayed into the medtech space by entering into a share purchase agreement to acquire a majority stake in Amplitude Surgical SA in France. Amplitude Surgical is a European medtech leader in high-quality, lower limb orthopedic technologies, and it provides numerous value-added innovations to best meet the needs of the patients, surgeons and the health care facility. Our innovation pipeline across different areas progressed well, and we have achieved important milestones during the year. Our innovation engine has also delivered multiple treatment options over the years in an affordable manner, making them accessible to a large set of patients. With this, let me share some material developments on the innovation front during the quarter. On the NCE front, we received the U.S. FDA approval to conduct a Phase IIb clinical trial of Usnoflast, a novel oral NLRP3 inflammasome inhibitor in patients with ALS. The U.S. FDA has also granted an orphan drug designation to Usnoflast for the ALS indication. The data monitoring and follow-up is ongoing on the post completion of our patient recruitment for the Phase IIb/III clinical trial of saroglitazar magnesium for PBC indication and the Phase IIb clinical trial of the molecule for MASH indication for the U.S. market. We are now looking forward to the Phase IIb/III trial readout for PBC indication towards the end of the calendar year. In the vaccines R&D space, with the support of the Gates Foundation, we have initiated development of the world's first combination vaccine against shigellosis and typhoid. We shall conduct early-stage development, animal immunogenicity studies and the regulatory preclinical tox studies for this combination vaccine. We have also received approval to initiate the Phase II clinical trial for a Bivalent TCV vaccine during the quarter. We have also -- on the specialty business, we have entered into an exclusive development licensing supply and commercialization agreement with Synthon BV of the Netherlands for a novel 505(b)(2) oncology product. NDA for this product is likely to be filed in 2026. The product will provide additional benefits in form of reduced pill burden, flexibility for dose adjustment and enhanced patient compliance. Thank you. And now we can start with the Q&A. Over to the coordinator.

[Operator Instructions] The first question is from Damayanti Kerai.

My first question is to Dr. Patel. Can you comment on the Mirabegron litigation update, which we recently heard? And what's your view on the supplies from your perspective?

So I think with respect to supplies, we continue to supply the product into the U.S. market. And the next trial is scheduled for February of 2026 and which is related to the 780 patent and other asserted patents. And so we will be preparing for the February jury trial.

Okay. So till February, the supply will go as well, right? There is no change in your plans?

Not yet.

Okay. My second question is on your specialty portfolio in the U.S. So you have the sitagliptin franchise. Can you quantify what kind of contribution you have seen for FY '25? And how we should look at this portfolio in coming years?

So I think -- I mean, while we cannot quantify the exact number, I think we are doing far better than our initial estimates on the franchise, both with the private -- I mean, with the market -- the private market as well as the tender. And we continue to believe that it will be also an important product for FY '26 also. So that is our current best estimate. And we have a national contract for 5 years from the national contract point of view.

Okay. Though you cannot quantify, but say, out of your INR 1.3 billion sales in FY '25, is it a sizable number or it's still building out?

It's a decent number, but obviously, it is not a blockbuster of product, but it is one of the important new product launches that is there.

The next question is from Neha Manpuria.

My first question is on the U.S. business. If I look at the quarter-on-quarter improvement, obviously, we do see an uptick from Revlimid. Is that all that drove the $80 million incremental sales quarter-on-quarter or any other one-offs? I mean, any other improvement in the larger products that we have, particularly since we saw competition in Asacol?

Just to clarify, at least for this quarter over the last quarter, we don't have any major Revlimid sales.

Okay. So the quarter-on-quarter increase has then been driven by base portfolio?

Other products. Base portfolio and, obviously, some of the launches we did last year and Mirabegron and other products.

Okay. In which case, just trying to understand the improvement in the gross margins quarter-on-quarter. I mean we have seen a very sharp improvement in that number. So any color that you can provide as to that uptick and how sustainable that gross margin is as we think about next year?

So it's a mix of business as well as products. So even base business improvement is there. Contribution from U.S. business, India business, wellness business. So wellness, we have been able to take some price increase also. We are able to reduce our cost also on some of the products. So it's a mix of various things.

So in which case, this margin should be sustainable in the next year?

So to the extent, the product-specific margin, obviously, you would find some impact. But otherwise, yes, margins are stable.

Okay. Just on the U.S. business, if this number is not driven by Revlimid, in which case, is it fair to assume that the $1.4 billion, $1.5 billion is the base? Obviously, Revlimid goes away 3 quarter out, but this is the base at least for the next few quarters?

Yes. For FY '26, we believe U.S. will still grow in single digit.

The next question is from Anubhav Agarwal.

One question is on Mirabegron. So just trying to understand our risk limit for this product. So next litigation update is in February. Is there a risk limit that we have in mind, let's say, the litigation continues for another year or so even after February, are we still fine with the risk limit over there?

Yes. I think we have done a proper due diligence with expert opinion and everything, and we still believe that the risk reward profile has not changed.

Okay. So if a litigation were to take another year, you can still continue to sell the product?

Yes, currently, we believe so.

Sure. And just clarity on previous question Neha asked. So quarter-on-quarter, let's say, December quarter to March quarter, so when you say versus previous quarter, sequentially Revlimid contribution is lower or higher? March versus December quarter?

It's not -- there is not nothing -- anything significant. Both quarters, there's no Revlimid meaningful contribution.

Okay. And Sharvil bhai, when you mentioned that there will be single-digit growth there, just trying to understand, can you give us some idea about the base business because tracking your company has become very difficult now, Mirabegron, Revlimid, so fluctuating numbers. We have no idea about the base business here. So how is the base business doing in the U.S. and overall for the company?

So one thing is, today, as of now, we have a very strong and healthy base business growth. This also includes when we have obviously lost share on Asacol. But we are seeing significant opportunities on our existing products in terms of new contracts and new requests. We being a very, I would say, resilient supply chain effort that has been put and availability of our products being very good, we are seeing a lot more opportunities for products in the U.S. And obviously, with the portfolio expanding with other dosage forms also, including transdermals and others, we are seeing an uptick also. So I would say it's a mix of both, but it's good to see that beyond Revlimid, we are seeing good traction on the business.

Sure. Just one more clarity here. So let's say, versus last quarter now, the litigation for Mirabegron looks to be a little more extended now. So let's say, what you guided last time versus what you're guiding now, I'm assuming that we have taken more sales of Mirabegron versus what we have guided, but isn't your guidance still the same as what you're guiding earlier for the U.S.?

I'm sorry, maybe I didn't get your question the way you tried. Maybe you could clarify it a little bit.

Yes. I'm just trying to say that versus the call that we had in January when we had the December results versus now, so the expectation, at least my understanding was that Mirabegron at least will sell till first half of this fiscal '26. And now it looks like because of the litigation date, which is delayed a bit, at least till end of fiscal '26, we'll continue to sell Mirabegron at least till end of this fiscal. So ideally, the U.S. sales guidance should have been more than the single-digit increase in fiscal '26. I'm just trying to think from that perspective.

No, because we have not assumed that we are not going to be able to sell Mirabegron. So our guidance cannot change because it is still -- we're still continuing with the same guidance that we will continue to sell mirabegron. So we are not built in for no sale of mirabegron this year.

Okay. And on sitagliptin, can you just give what kind of market share -- IQVIA, I think, still shows about low single-digit market share for all 3 brands of sitagliptin. Is that a good representation at least on the CVS front?

So I think we will see a further traction on CVS conversion, but we can definitely say that for our earlier estimates of what we thought we would do on ZITUVIO franchise, we have done multifold better. So we're doing well with what we -- it's a good product. We're going to stick around for the next 2 years. And I think with the 5-year contract also -- national contract, we'll continue to do that. And we would see more uptick, I believe, in the coming quarters.

The next question is from Bino.

Just a couple of follow-up questions. Sharvil bhai, earlier, whenever we have spoken on calls, your guidance was that Revlimid would be club -- coming up lumpy in 1Q and 4Q. So how come it changed in this 4Q, there was no Revlimid significantly?

So I think we -- I think -- because generally, we always get the most of the business in the last 10 days of March and all. So this time, with the negotiations that went through and obviously, there has been challenge in negotiations and pricing, we are -- we have pushed it out to the first quarter in terms of sales. I mean, first quarter of the financial year in terms of sales. So anyway, we only have 8 to 10 days in the last month in March generally. And this time, we had to wait and negotiate better for the quantities, so we have postponed it to the first Q.

Understood. And going forward, next year in Jan, the sort of exclusivity is getting over. So would your entire quantity or your allocation for the year, will all that get over in 1Q itself? Or is that what your thought is?

No, I don't think we'll have all sale in 1Q. I think it will be staggered exactly still -- it's very difficult to say how the ordering will happen and how much ordering will happen after the first buy. So we have to wait and see. But our current best estimate is that it will be spread across for the next 2 to 3 quarters. It won't be lumped in Q1.

Got it. And on the U.S. guidance you gave, if I understood correctly, it's a single-digit growth in U.S. sales in FY '26 over FY '25. Is that right?

Yes.

Okay. And looking ahead into FY '27, of course, it is too early, but do you see a sharp falloff from the FY '26 level in FY '27? Or will it be more or less plus/minus those levels?

No, we -- I mean, we see -- we have important launches in FY '27. So assuming we are doing well with our approvals and regulatory front, we don't see any major falloff.

Got it. One last question, if I could push in. Any margin guidance, EBITDA margin guidance for FY '26?

So FY '26, we believe we will exceed 26% or around 26% comfortably in terms of EBITDA margins, and that's our current best estimate.

The next question is from Surya Patra.

My first question is on the U.S. business again. So although you have given some clarity about the change of around $80 million this quarter versus last quarter, what we have seen. See, if there is no Revlimid this quarter, and there is a jump of $80 million, what is that is contributing? Is it driven by Mirabegron? Or there is a kind of any licensing income or anything is there this quarter, that is why we are seeing a kind of a consequent improvement in the gross margin. What is really driving this U.S. business this quarter? Is there any one-off kind of licensing income or any sort of that is there? Can you justify please?

No. So I don't think there's any licensing income or one-off income that is existing there. So there's nothing there. It is to do with the base portfolio, mirabegron sales and overall other launches scaling up. So it's a mix of all of those things other than Revlimid not being a very important part this quarter.

A few of your peers have already indicated that Revlimid already has started seeing some kind of price erosion in the U.S. So given that, do you agree to that fact? And this is likely to be the scenario going ahead till the time of this entire opportunity expiring?

Yes.

And is it fair to believe that FY '26 would be the peak Revlimid sales for us or we have already seen that?

I think maybe FY '25 -- maybe this is an unfolding scenario. So I would say FY '25 would have been mostly the peak.

Sir, in fact, FY '27 generally like could see the impact of Mirabegron and Revlimid put together could be cumulatively, let's say, around $400-odd million kind of impact. So our new product launches can cope up to that level so that it can manage the growth for following period?

So I always said, right, that our base business, we believe without many of the one-offs, we can sustain easily $1 billion. And obviously, we have a lot of new products that we need to launch. And depending on different status of that, obviously, we can see the scale up, but we are comfortable at $1 billion without those exceptional products.

Sure, sir. And last one, sir, from my side, in the domestic business side, while the industry has been moderating in terms of growth consistently and gradually sequentially, we have started delivering even stronger numbers, outpacing the trajectory what we are seeing for the industry. So since we are closing the year, now at least if you can give some sense that, okay, what is the split between the domestic business -- within the domestic business, what is the split of the specialty portfolio, let's say, the biosimilar, NCE all put together? And what is the kind of growth those are seeing compared to the other portfolio?

So the innovation portfolio, which you mentioned has definitely grown significantly better than the overall growth and also led by volume-led growth. I would say many of the changes that we have made strategically in terms of both reducing complexity as well as putting the right resources and focus behind our growth booster brands has led to this better-than-market growth for both annually as well as the quarter, and we see that momentum to continue for the financial year coming through. And I think we still hope to have important launches during the year, again, for our differentiated pipeline of products that will come in the coming year. So we are seeing a good trajectory towards that. And I think because our India business or India geography doing very well also, both consumer as well as the animal health business, many times when we're discussing margins, a lot of the margin is also driven by these businesses, which significantly give you a better value return. So I think it's -- when you look at the overall margins, it's not only driven by U.S., but driven by other businesses. And also businesses that were in the earlier initial stages of the investment cycle, but now are giving better returns every quarter-on-quarter are also leading to better margins.

But double-digit growth is a kind of a possible scenario for the domestic business for FY '26, given the industry is expected to see a low or mid-single-digit kind of growth.

So this year, we grew at 10% and quarter at 11%. We are committing -- we feel comfortable that we will grow better than market. Now that is assuming that market grows at a certain percentage. So -- but we have a lot of products and important products to launch, which will, I believe, continue with this momentum.

The next question is from Amey Chalke. Amey, requesting you to please unmute and ask the question. Okay, we'll move to the next question. The next question is from Bino.

Just a follow-up question. Recently, you got approval for this product, deflazacort, which I believe you are launching with -- under a brand name. Now I believe there are already a couple of generic players in the market for this. So can you explain the strategy behind launching this product with a brand name?

I think earlier, our strategy was it could be a branded launch, but with the genericization, I think, it will not be a pharmaceutical branded launch.

The next question is from Tushar Manudhane.

Sir, just on the margin guidance for 26%, just to sort of understand while probably the competition in generic Revlimid might keep profitability under check, but then we continue to sell Mirabegron, which given that it is also a limited competition product will help get better margins, which will offset sort of Revlimid. So just trying to understand that FY '25, we ended with a healthy margin of almost 30% and then we are guiding for FY '26 for '26. So what is dragging us down by almost 300 bps?

Revlimid is obviously going to be a driver because there is challenges in pricing and competition. And we have lost Asacol also versus last year. Plus R&D expenses on saroglitazar, we would have at least 100 basis points higher than last year at least. So all of that will lead to our guidance right now.

So basically -- so R&D expense, how much should one take for FY '26 on overall basis?

8%.

Okay. Sir, secondly, on Mirabegron, while since you as well as Lupin continues to sell the product, but -- so from a generic competition perspective, do you see any threat coming through?

I'm sorry, I couldn't understand the question.

Sir, given that despite the at-risk launch, I mean, being done by, say, Lupin as well as Zydus Life, so any scope for other guys getting approval, subsequent launches? Any market intelligence, if you could sort of share?

I -- no, that I would -- I don't have that intelligence to share right now.

The next question is from Saion Mukherjee.

Sir, the 505(b)(2) products that you have mentioned, is it possible to share the opportunity size for these 2 products and in terms of commercial time line in the U.S.?

So I think we need -- we still -- as I said, we have to still file those products. So once we file it, I think, and once the IP strategy and everything is clear, we can share a little bit more. But the one thing I can say is that they are part of a very large -- I mean, the portfolio that we're developing it for, the molecule is quite large in the market.

And so you expect it to be after, I mean, probably FY '28 or beyond that? Not in...

Sorry?

The launch is expected not in the next 2 years? Will that be fair to assume given that you have to file and there are potential IP challenges?

Yes.

Okay. And the second one was on vaccine. You had earlier mentioned about potential tenders participation in vaccine. Where are we? And any expectations that you have for next year or FY '27?

So I think -- thank you for that question. I think on the vaccines front, I'm quite upbeat and positive on the overall trajectory for the business and the opportunity. So as I said, it forms 3 important areas. One is our India business, which continues to do well. We are -- we believe that we are a critical contender in the public tenders for the MR vaccine that has come out, and we believe that will be an important MR tender supply for Zydus in the coming year. We are also seeing requirements from UNICEF and PAHO for some of our prequalified vaccines for different markets, and we will be able to participate in some of these tenders. So that could offer additional opportunities in the coming years, both from the UNICEF tenders as well as the PAHO tenders. And also registering these products in some important markets outside like Egypt and others will also offer us some additional opportunities on the vaccines. So both, I think, are non-tender sales, which is doing very well. We are selling, I think, the highest doses of the flu vaccines now. We are selling out all capacities on our rabies vaccine. We have the other 2 vaccines that are coming up. And the new vaccines that are getting added to the portfolio and with potential access now to both India public and the WHO prequalified public markets, we are seeing a good trajectory for the vaccines in terms of scaling it up.

So in terms of time line, will we start seeing that scale up this year in FY '26?

Yes.

Okay. Sir, if I can ask one more question on GLP-1 semaglutide. You had mentioned about your plans for India. Will this be limited to India or there are other emerging markets that you can consider for the first wave launch in fiscal '26 or '27?

So I think our current strategy for semaglutide, both for India and developing markets is that we have a novel formulation for semaglutide that we are going to commercialize both in India and the other markets. And we are on track for day 1 launch in India. And we see it as a very -- and also, we would partner this molecule also to some companies because we have a unique formulation with a very strategic advantage. And we hope to take that same capability into the other emerging markets.

The next question is from Amey Chalke.

Yes, am I audible now?

Yes.

First question I have on the saroglitazar. If -- I understand our data would be out somewhere in December or the year-end. So what is our strategy for the PBC indication post the trial?

So once our data, if we see a data to be equivalent or better than today's -- I mean the treatment guidelines, we will be planning our commercial activities for launch, including, obviously, first filing the NDA. So that's our current status on saroglitazar for PBC.

So are we going to do it on our own considering the PBC indication would be a bit smaller in size, right?

It's quite a sizable indication for what we, as a company, can do. So -- and yes, we will be doing it ourselves.

Sure. And the MASH indication, you think it still remains lucrative considering the GLP-1s are also covering the market now?

Yes, because PBC and GLP-1s have nothing to do with each other. So for...

No, no, the MASH indication?

So the MASH, we are still only in a Phase II, and we have only talked about commercialization for PBC indication for the U.S. market.

Sure. The second question I have on the FY '27, I heard you saying that there won't be a problem in FY '27 post FY '26 once the Revlimid is out. So is it possible to give some color on the product launches there, which would be able to offset the fall in some of the key products?

No. So I had stated when the question was asked to me that in terms of our base business without the exceptional product, we are comfortable to be above $1 billion in revenue. So obviously, today, we are much higher than $1 billion. So that's what I had stated. And I said, but irrespective of that, we have a lot of important launches in FY '27, almost 14 to 15 important critical launches. And if many of them materialize, then we will obviously do better than that.

The next question is from Gaurav Tinani.

Congratulations. So firstly, on Revlimid, after the patent expiry, given the nature of the product, the distribution, can we see Revlimid still being a significant $50 million-odd kind of sustainable opportunity beyond FY '27 -- FY '27 and beyond that?

No.

Okay. And in terms of the composition of U.S. base for FY '27, could you give an idea what percentage of contribution can come from the NDAs or 505(b)(2) opportunity in FY '27? Or what's the long-term goal there? What percentage of U.S. revenues that can scale up to?

So I think it's a little difficult to talk product-wise this contribution. I mean currently, we have given FY '26 guideline, which is that we will grow in high single digits for FY '26. But for FY '27, it's still early to say. But what I can say is that with -- we have launches, which are products that get launched. We have some products where we have sole exclusive launch plans depending on the exclusivity. So that also has tremendous opportunity. And plus, as I said, we continue to launch anywhere upwards of 20, 25 products every year. So that continues to add to our base of products. And as I -- while I stated that our base business has continued to grow, so we are also quite excited that our products that we currently also sell are seeing higher demand request. So I think all put together, we are seeing an important -- I mean, we're seeing in the U.S. FY '27 -- there's a lot of background noise maybe where you are.

The next question is from Saion Mukherjee.

Dr. Sharvil, just wanted to check with you. There's been a lot of talk on the U.S. imposing tariff on pharmaceuticals. Have you made an assessment for Zydus business? What can be the potential impact? And strategically, are you thinking about investing in facilities in the U.S. because that's an uncertainty the industry is dealing with. If you can share your thoughts on impact on Zydus?

So I think it's a lot of moving parts. It's very difficult to know what could be the impact. Any tariff will obviously have an impact. But with the reference pricing, which -- I don't know how that works on generics, I don't know if that will work on generics or not. But I would say on setting up facilities in the U.S., we do always explore opportunities to co-develop, manufacture at a third-party location, both in Europe and in U.S. for the products that we need to do sometimes. And we are looking at opportunities where we feel that the value is there for manufacturing in the U.S. But I think any of the decisions will not be -- will require a lot of time for setting it up. So it's not something that can happen in the short term. But we have committed to making a good amount of investment in the U.S. with our foray into specialty and other areas.

The next question is from [ Devang Saraogi ].

I have 2 questions. Are there any update on specialty acquisition in the orphan drug space in the U.S., especially for the launch of saroglitazar approaching?

So we have acquired Zokinvy last year, which was a rare disease asset for treatment of Hutchinson-Gilford progeria syndrome. And we continue to look for more opportunities in the rare disease side. With respect to synergizing anything with Saro right now? No, that is not something that we have in our pipeline, but we will continue to look for more opportunities to synergize for saroglitazar.

And sir, second question is about guidance -- revenue guidance for emerging market and consolidated business for FY '26?

So for the overall business, we are looking at a double-digit growth in revenue, led by strong growth in India and international markets and also our new growth themes like biologics, vaccines and all scaling up. We believe in India, we believe we continue to outperform the IPM market for the year. U.S., we will see a single-digit growth going forward. On the -- yes, those are the for FY '26.

And sir, any contribution from vaccine for this year?

Yes, we will see some good contribution from vaccines for FY '26.

And any guidance on emerging market scale up?

Emerging market has been consistently growing at a strong double-digit CAGR and also improving profitability, and that trend is also continuing, and we are quite positive for scale up.

The next question is from Surya Patra.

Just one clarification. Post this Asacol HD competitive pressure what we have witnessed in U.S., sir, how important this entire mesalamine franchise is currently in the U.S. business or U.S. revenue...

Sorry, can you repeat the question because I get always some other noise from behind, so...

Sorry. Sorry for that.

It's very difficult to figure the question out.

I was asking about the mesalamine franchise that we have created. But one of the important product having seen the generic competition or kind of other fierce competition. So how important this entire mesalamine franchise that we have created? And in terms of the revenue contribution to the overall U.S. business of Zydus, how significant this is going to be, let's say, for '26 and beyond?

So mesalamine has been a very important franchise for the organization over multiple years, it has delivered strong value and shown the capability of complex dosage forms and how Zydus has sort of created them and also obviously created value out of them. And mesalamine, as an overall franchise, will still remain very relevant because we have at least 3 mesalamines in the market, and we hope to add more mesalamine franchises to launch. So it's a good product. Obviously, it has lost its heydays of the significant value, but it is still a very meaningful product and will continue to remain so.

And in terms of size, let's say, 10% of the U.S. currently or any sense of how big it could be, the franchise as a whole?

As I said, it is an important franchise, and it will remain relevant. Now I won't be able to give individual percentages for that.

The next question is from Shrikant Akolkar.

Just one question. If you can talk about our peptide pipeline development. And in next 2 years, are we expecting any peptide launch? That means non-GLP-1 peptide?

So I think we have, obviously, the couple of peptides that are the GLP-1s, including liraglutide, semaglutide, tirzepatide that are either filed or under development. And then we have some other like teriparatide and others, but those are more on the recombinant side. So I would say that is the overall pipeline right now. Beyond that, we are looking at further pipeline in terms of how to add, but this is our current pipeline.

The next question is from Tushar Manudhane.

So just on this impairment of a product, so if you could just highlight which product on which we have taken this impairment in the quarter?

It was rotigotine. The product that we had...

Go ahead. Go ahead sir, sorry.

Acquired from Teva. It is under litigation. I said it is a product that we had acquired as part of Teva's divestment and we had acquired it, and it is under litigation, and we have impaired it.

Got it, sir. And this goodwill related to this Brazil business also, if you could just elaborate?

It is a goodwill, which was created at the time of acquisition. And the overall scenario in terms of both branded and generic in Brazil has undergone a change, and we were looking at our own products and pipeline and expected sales. As is that, as a matter of prudence, we thought it better to do the impairment of the goodwill.

The next question is from Apurva Rastogi. Apurva, can you please ask your question? Apurva, can you please unmute and ask your question?

Maybe if you move to the next one until maybe they come back.

We will take Gaurav's question next.

So would you be able to share any more color on the 14 to 15 critical launches that you expect to do in FY '27, number of FDF launches there, number of differentiated dosage form launches there, other limited competition? Any color on further breakup that you can shed light on this?

So I think, as I said, the launch -- I mean, it's difficult to answer it that way right now, and it's too early, but there are -- many of them are complex launches with semi-exclusive or exclusive launches also. And the mixture of portfolio is mix of orals as well as injectables. So that's the current portfolio that I'm talking about. This doesn't include other launches that we are still planning for. And it's still a development. It's still a going phase because they are still sitting in April or May of this year to talk about FY '27.

Okay. On the acquisition of Amplitude, I think you're expecting close by H2 of this year. Just one clarification. Do we expect this to be earnings accretive or dilutive for FY '26, '27, please?

Accretive.

The next question is from Tejas Parikh.

Sir, you mentioned about multiple product launches for FY '27 potentially to offset the decreasing of Revlimid. Can you tell me, will this be in the therapy of the existing therapy or in any new therapy areas?

So generic development is sort of agnostic to therapies. So we don't select products by therapy, but it's select by size and opportunity and competition. So as I said, it forms oral dosage forms, which obviously form a large part of the portfolio generally, which includes liquid injectable and then liquids and -- as well as transdermals as well as topicals. And then obviously, the injectable portfolio, which also forms another sizable part of launches. So those are the overall ways in terms of dosage forms when we plan for...

The next question is from Devang Saraogi.

When can we expect meaningful revenue contribution from medical devices business? And what kind of scale up are we targeting for next 2 to 3 years?

So medical device is an important area for the organization. And we have had important both organic as well as inorganic opportunities that we have looked at and have been successful at. So we are organically building on the nephrology side. We are organically building on the cardiovascular side with also a critical partnership that we have done for TAVI. And we have been -- we are also looking at successful closure of the acquisition of Amplitude for orthopedic implants. So these are the areas that we are going to focus on. Some of these are already revenue-generating and profit-making businesses. So we will look to add more geographies, bring down cost and increase our -- and grow this business. So yes, we have an important growth theme for the business over the next 5 years.

Sir, any numbers...

But it is not going to be short term. It is going to be -- no, I don't have a number right now, but we have obviously -- as a business, we have strong aspirations to make it a meaningfully large business.

Thank you. As we do not have any questions, I request Ganesh sir for closing remarks.

So thank you very much, and look forward to interacting with you during our next quarterly analyst conference. Have a good evening.

Thank you very much to management team. Ladies and gentlemen, on behalf of Zydus Lifesciences, that concludes today's conference. Thank you for joining us, and you may now disconnect your line and exit the webinar. Thank you.