Orchid Pharma reported continued stress in the global antibiotics market during the Q3 FY’26 earnings call, with sales at INR207 crores (a 5% YoY decline). Management highlighted pricing erosion in the oral segment and confirmed the successful absorption of inventory devaluation impact. Significant progress was noted on the differentiated product Exblifep, with binding term sheets signed in key geographies, positioning FY’27 as a potential commercial ramp-up year.
Q3 FY’26 Financial Performance Overview
For the third quarter ending December 31, 2025, Orchid Pharma recorded sales of INR207 crores, reflecting a 5% year-on-year decline from INR217 crores in the previous year’s corresponding quarter. Over the 9-month period, sales stood at INR574 crores, down 16% YoY. EBITDA for the quarter was 6%, compared to 17% last year, illustrating ongoing pressures in the global antibiotics market.
Management emphasized that the revenue decline was driven by the sustained weak market, noting that the 9-month oral segment experienced approximately 12% price erosion and 10% quantity erosion. Despite this, sequential volumes improved compared to the previous quarter. The company has focused on cost structure review, reducing non-employee costs by approximately 10% on a 9-month basis while increasing R&D investments to about 1.5% of sales.
Exblifep and Differentiated Products Momentum
Progress on differentiated products is building momentum, particularly for Exblifep. A binding term sheet has been signed in one key geography, and a nonbinding term sheet was executed in a major regulated market. Sales have commenced in Spain and Italy, showing over 200% growth on a small base as these markets opened. FY ’26 is viewed as a transition year, with FY ’27 expected to be the first meaningful commercial year for Exblifep.
For other key molecules, advanced stages of partner agreement signings for Teflaro and Avycaz in the U.S. market are anticipated before the next quarter call. For Ceftazidime, Avibactam, the company is seeking clarification from the FDA following initial observations on the filed submission.
7ACA Project and Regulatory Outlook
The 7ACA project continues to advance, with a major milestone of erecting all fermenters achieved. Mechanical completion is targeted for September. The planned debt for this project is INR450 crores, of which INR170 crores has been drawn down as of the reporting date.
Regarding the Cefiderocol API, production is on stream, with API manufactured and placed on stability. Finished formulation sales are expected to commence in December 2026, pending regulatory registration, for which the company is hopeful of securing a clinical trial waiver due to national AMR concerns.
Geographic and Segment Mix
The oral to sterile mix remained stable at approximately 2:1. Geographically, the mix shifted slightly, with regulated markets now accounting for approximately one-fourth of the business, down from the historical one-third, signaling that regulated markets have yet to revive.
In the AMS division, the EBITDA drag has significantly reduced, reflecting improving operating leverage as the platform scales up. The company is expanding its product mix, having launched the first generic of Teflaro in India in November.
Cash Position and Future Guidance
The company reported having approximately INR75 crores of cash on hand, composed of about INR60 crores from QIP funds and INR15 crores in FD, with working capital limits remaining unused. Management expressed a positive overall outlook, anticipating stabilization and improvement, particularly given green shoots seen in January pricing trends.
Source: BSE
