Ladies and gentlemen, good day, and welcome to Jubilant Pharma Wallet Limited Earnings Conference Call for the Quarter and Half Year Ended September 30, 2021. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the opening remarks. Please note that this conference is being recorded. I now hand the conference over to Mr. Vineet Mayer, Head of Investor Relations at Jubilant Pharma Limited.
Thank you, and over to you.
Thank you, Stanford. Good evening, everyone. Thank you for being with us on our Q2 FY 'twenty two earnings conference call. I would like to remind you that some of the statements made on the call today could be forward looking in nature, and a detailed disclaimer in this regard has been included in the press release that has been shared on our website. On the call today, we have Mr.
Shyam Bhatia, Chairman Mr. Harib Bhatia, Co Chairman and Managing Director Mr. Arvind Jukhani, Group CFO Mr. Pramod Yadav, CEO, Jubilant Pharma Mr. Giuliano Pafatti, CEO, Jubilant Biases Mr.
Syed Karsi, CEO, Jubilant Therapeutics and Mr. Arvind Sharma, CFO, Jubilant Pharma. I now invite Mr. Shyam Bhatia to share his comments.
Thank you. Good evening, everyone. I hope you and your family are safe and healthy. The company reported 4% top line growth during the quarter, driven by steady revenues in the Pharmaceuticals segment and robust growth in the Contract Research and Development Services segment. In the Pharmaceuticals segment, while radiopharma, allergy and CMO businesses reported growth on year on year basis, the API business performance was lower on a higher base last year, and generic business witnessed headwinds due to temporary pricing pressure in the U.
S. Market. Generic business was also affected during the quarter by import alert at Woorkee plant and by the impact of the industry wide impurity issue in certain Saati products that led to the lower sales and some product withdrawal. In our Contract Research and Development Services business, we witnessed strong growth both year over year and sequentially driven by continued strong demand from our customers for our drug discovery services. In proprietary novel drug business, our clients are on track to take 1 program to the clinic stage by the end of this financial year.
Our strategic initiatives of API demerger is progressing well, and we have received consent from the bondholders and term loanholders and have filed the first motion in NCLT in September 2021. We expect to complete this reorganization by the end of this financial year. During H1 FY 'twenty two, we grew our revenues by 20% year on year and improved our EBITDA margins by 2.44% versus H1 FY 'twenty one due to recovery of radiopharma business and strong performance in Energy, Immunotherapy, CFO, API and contract research businesses. I would like to mention that over the medium term, we have very strong growth levers in all our businesses. To drive growth in these businesses, the company will continue to invest accordingly.
I would like to welcome Giuliano Parcetti, who has joined as the CEO of Jubilant Biophos Limited and brings with him over 2 decades of experience across businesses and global markets. I wish Giuliano all the best and confident that he would play a strong role in further strengthening and scaling up our contract research and development services business under Jubilant Biossys. With this, I hand over to Pramod to discuss the pharma business.
Thank you, Mr. Narsia. A very good evening to all of you. Pharmaceutical revenue was at INR 15.43
crores versus INR 15.16 crores in
INR 1516 crores in Q2 FY 2021. Our radiopharma business witnessed improvement in sales year on year. However, sales of recovery during the quarter was affected by increase in COVID-nineteen cases in the U. S. I would like to mention that we continue to maintain majority market share in key products in this business.
The Rubafil installations during the quarter were affected by the higher COVID-nineteen cases in the U. S. We remain, however, bullish on Rubafil given its unique benefit to the patients and have completed the doubling of root tissue manufacturing capacity, which will enable continued growth in this product over the near medium term. Our NDA I-one hundred and thirty one MLD clinical trials, both for Phase II and Phase III, are progressing satisfactorily. Radiopharmacy business witnessed steady performance year on year.
However, volumes were somewhat impacted during the quarter due to its slow flow of COVID-nineteen. Our aggressive turnaround plant is on track to grow top line strongly with new customer base, expand network to service newer geographies and enhance cost and procurement efficiencies. And we have witnessed positive outcome over the last two quarters. The Energy Immunotherapy reported robust performance, both year on year and sequentially, with strong recovery from COVID-nineteen thereby healthy growth in revenue resulting from volumes higher than pre COVID levels. In our CMO business, we recognized year on year growth in revenue, driven by continued strong demand from customers as well as due to COVID related deals.
In addition to Rupesh 200 crores COVID related revenue that we realized in Q1 FY22, we booked around INR150 crores of COVID related revenue in Q2 FY22. This is against INR93 crores in Q2 FY 2021. With pandemic cases showing downward trend, the CMO performance is expected to return to normal levels in coming quarters. The capacity expansion projects at Spokion is underway and is expected to complete by end of calendar year 2024. Once completed, this will open further growth avenues for the CMO business.
Performance of our API business was lower year on year due to higher base last year, but sequentially, it witnessed strong growth with stable margins. We expect this trend to continue, Though off yet, we are seeing price increase for some of key starting materials being imported from China as well as increasing solvents and utility cost in India. We expect this cost to be passed through finished goods prices. We are also reducing our dependency on imports from China for KSMs by developing them indigenously. Our API business demerger, as mentioned by Chairman, is underway.
And once completed, it will create a robust platform that provides end to end services. I am sorry, there were some people in the background that will provide end to end services from drug discovery services to the clinical research to contact manufacturing of innovative and the generic APIs and would unlock massive potential for growth over the medium term. Our generic business reported lower revenue and profit during the quarter due to several factors such as pricing pressure in the U. S. Market, lower volumes due to import alerts at the Rookey plant and industry wide import issue in Sartans that led to voluntary withdrawals.
This was partly mitigated by higher end facility sales. The EBITDA for quarter was at INR324 crores as compared to INR343 crores in Q2 FY 2021. In H1 FY 2022, Pharmaceutical business revenue was up by 18% year on year, driven by recovery in radiopharma and strong growth in allergy and immunotherapy, CMO and API businesses. The generic business also grew by 8% year on year in H1 FY 2021. The EBITDA during H1 FY22 grew by 32% versus FY 2021 with 2.28 percent improvement in margins to 22.2%.
With regard to Roorkee import alert, our remediation activities are ongoing as per the plan and we expect to complete the same early next calendar year. The London Group revised status remains as it is. We have completed remediation activities and await U. S. FDA inspection.
With this, I hand over to Giuliano to provide insight into contract research and development services business.
Thank you, Pramod. I'm excited to become part of the Jubilant Ambarsa Group, and I'm glad to interact with you all through this earnings call for the first time.
At Jibilant Biases, we have a robust platform that both delivers to significantly scale up this business,
both in terms of capabilities and capacities. In our contract research and development service business under the Cuban and Biases brand, we delivered another quarter of strong performance during Q3 FY 'twenty two, driven by continued strong demand from biotech companies for our integrated discovery as well functional services such as chemistry, LN2K and discovery biology. The business has healthy pipeline of new contracts and customer acquisition for FY 'twenty two. Qq FY 'twenty two revenue grew 44% year on year and EBITDA grew 73% year on year with a margin of 32.9% versus 27.4% in Q2 F1 'twenty one. Our H1 FY 'twenty two revenue was up by 49% year on year, EBITDA by 81% year on year and margins stood at 35.6%.
I'm also glad to mention that our new state of art chemistry research innovation center at Noida is now fully operational. The new facility has been designed with highest global compliance standards to support both biotech and Big Pharma by delivering speed, quality and innovation. In view of the strong demand from our customers, we have approved further expansion of the Greater Nolda facility, which will deliver both chemistry and the NPK services. With this, I now hand over to Seid to discuss the precursor in all the drugs pipeline. Thanks, Giuliano.
Good evening, everyone. In our proprietary novel drug business, we are developing a pipeline of 1st in class and best in class agents to deliver physician medicines focused on addressing unmet medical needs in the area of oncology and autoimmune disorders. We are also leveraging our industry validated drug discovery platform to identify novel promising assets and move them from discovery to development on an accelerated timeline. Our 1st in class LHC1Hdac6 dual inhibitor addresses multi $1,000,000,000 market segments in both hematological malignancies and solid tumors and has successfully completed pre IND mutation with FDA with a goal to file the IND by end of calendar year 2021 and initiate 1st in human clinical studies in early 2022. 3 more programs are following this week: a 1st in class PAD4 inhibitor targeting autoimmune disorders such as limited arthritis, subsets as well as metastatic cancer, a differentiated PRNT5 inhibitor with potential best in class profile, which uniquely shows both blood and brain exposure and therefore can address brain tumors like GBM and brain metastasis.
And finally, an oral brain penetrant PD L1 inhibitor, first ever potential checkpoint therapy for brain tumors. We anticipate the submission of additional INDs by the end of 2022. In our proprietary novel drug business, we are developing very high potential assets that have attracted significant interest from institutional investors and strategic partners. The company is working towards creating shareholder value in this business through an external capital raise on or potential partnering with major global pharmaceutical companies. With this, I now hand over to Arun to discuss the financials.
Thank you, Syed. A very good evening, and I thank everyone for taking our time and joining us on our quarterly earnings conference call. I would like to highlight the company's financial performance for the quarter and 6 months ended September 30, 2021. For quarter financials, revenue from operations during the quarter was at INR 1657 crores as compared to INR 1591 crores in Q2 last year. Pharma revenue stood at INR 1540 crores versus INR 1516 crores in Q2 FY 2021, while contract research business reported revenue at INR 108 crores as compared to INR 75 crores during Q2 FY 2021.
Reported EBITDA during the quarter was at INR 3.44 crores as compared to INR 3.53 crores in Q2 FY 2021 with a margin of 20.8% versus 22.2 percent in Q2 FY 2021. Depreciation and amortization expenses during the quarter was INR 100 crores versus INR 85 crores in Q2 FY 2021. Finance cost during the quarter was INR 35 crores versus INR 46 crores in Q2 FY 2021, a reduction of 25 percent year on year. Reported PAT during the quarter was at INR 1.43 crores as compared to INR 1.47 crores in Q2 last year. EPS for the quarter was at INR 8.97 per share versus INR 9.21 per share in Q2 FY 2021.
Now moving on to H1 FY 2022 financials. For H1 2022, revenue stood at INR 3,292 crores versus INR 2,747 crores in H1 FY 2021. Pharmaceutical revenue was at INR 3,085 crores versus INR 2612 crores in H1 corresponding year. The contract research and development service revenue was recorded at INR 1.96 crores against INR 1.32 crores last year. The reported EBITDA for the period was at INR 7.23 crores versus INR 5.36 crores in F1 FY 2021.
Depreciation and amortization expense was at INR188 crores versus INR 167 crores in H1 last year. Finance cost stood at INR 69 crores versus INR 94 crores in H1 FY 2021. Average blended interest rate at H1 FY 2022 stood at 4.62 percent versus 5.17 percent in H1 FY 2022. Debt for the 4th star was at INR303 crores versus INR 182crore in H1 FY 2021 with EPS of INR 19.06 per share versus INR 11.44 per share in H1 FY 2021. Net debt on a constant currency basis on September 30, 2021 was at INR 1823 crores versus INR 1928 crores as on March 31, 2021.
Net debt to EBITDA improved to INR 1.14 as on September 30, 2021 from 1.42 as on March 31, 2021. During the quarter, we saw our net debt increase by INR 173 crores, which was mainly attributable to temporary increase in working capital, which is expected to normalize during this financial year. On YTB basis, net debt on a constant currency basis was lower by INR 105 crores. Capital expenditure, excluding R and D capitalization was at INR 131 crores for the quarter and INR238 crores for H1 FY 2022. For full year, we maintained the same spend around INR 700 crores to INR 800 crores
for the financial year.
With this, I would like to conclude our opening remarks. We will now be happy to answer any question that you may have. Thank you.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. The first question is from the line of Rahul Veera from Abaqis. Please go ahead.
Hi, sir. Congratulations on decent set of numbers. Sir, just a couple of questions from my end. Even though we executed couple of CDMO contracts in this quarter, in terms of margins, sir, we are on the much lower side. Usually, with CDMO contracts, you've seen the margins being on the upper end.
I understand our radiopharma business is not yet fully back to the 2019 levels. But even after that, after considering that, the margin is still at 20%, so much lower. So can you throw some light there?
Thank you for your compliment. This is Ramod here. So the margins in CDMO are little lower because of 2 reasons. One is that the CDMO deal value in comparison to previous quarter in this quarter was slightly lower. And in our CDMO business, we also include the API where we mentioned that for some of the Sartans, there were the product withdrawal.
So that impacted the margin for the quarter.
Okay. So the 1st part specialty pharma that is radio pharma comes back to normalization, do we see our margins moving close to 25% plus?
So the margins ultimately will move up to the very healthy levels and that will be driven by our increasing installs of the ruby field, by our increasing launches of more of the generic products and our NDA I1K1MI business. And as the COVID continues to get normalized, overall those dispensings will increase because the elective diagnosis will come back to the normal level. So yes, the margins in the near term, like in the next 2 to 3 years, we'll bounce back to very healthy levels.
Thank you. We've lost the line for the current participant. We take the next question from the line of Vishal Manchanda from Nirmal Bang. Please go ahead. Sorry to interrupt.
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even that is yet to normalize?
This business in the month of April May had almost normalized because during that time the number of COVID cases in U. S. Had gone down substantially. However, from the June onwards, the COVID again started increasing. And June, July, August, September were the months where we were impacted by COVID.
So the Doge dispensing in that business had gone back to between 90% to 95%.
But
from the last one week, we are again seeing the overall better trend in the U. S. So let's keep the fingers crossed.
Okay. And I just want to understand the margin impact of the decline in radio pharmacy business. So at a gross margin level, it would be a healthy business. So all that you lose
would kind of come out of
the
EBITDA. Is that right, Swazhi?
Yes. So we have been mentioning from the last two calls that we have put the very robust strategic initiative in place in that business to grow the top line. You are right that if the top line grows, the fixed cost at the pharmacy level is more or less remaining same or it doesn't go up in the proportion of the top line. So you get a very healthy bottom line in the process. And along with that, we are also looking at improvement in operational efficiencies and the procurement efficiencies.
And we mentioned that in 2 years' time frame, the business will be at the breakeven. And we are tracking it and we are on track earlier now.
Okay. Any improvements that we can see this year in terms of so 100 basis point margin improvement on account of the efficiency steps, the efficiency measures that you are taking? So since we
are already taking efficiency measures and we are already seeing the improvement, if the COVID situation doesn't deteriorate further, we expect this year our margins to be better than last year.
Okay. And where would be TTPA in terms of the normal volumes? Will it be down 50% or even lower?
Sorry, I couldn't get the question. If you can please repeat.
Where would the DTPA in terms of the volume, normal volumes? Is it still 50% lower or it has started to come back?
So it's actually difficult to track the exact number on quarter on quarter because this all will depend upon how many doses have been discharged from the various pharmacies from ours as well as from others. But we have seen an uptick in DTPA as well as MA in this quarter. But however, this is not yet close to the normal level. It's still much lower.
It is not close to the normal level, you said?
Yes. Got it. So we have seen slight improvement, but we have yet lot of parts to cover.
Okay. Thank you. That's all from me. Thank you.
Thank you. The next question is from the line of Tushar Manutane from Motilal Oswal. Please go ahead.
So just would like to understand how much would have been the impact of this voluntary withdrawals and some under the raw material cost, right, and affecting the overall gross margin?
It will be difficult to mention the exact amount that how much had will be impact. But if you can see our overall EBITDA margin in comparison to the previous quarter has gone down by about 2% to 2.5%, though the revenue is more or less same. So that much of the impact majorly has come due to these withdrawals as well as the import alert into the generic business and overall U. S. Pricing pressure into generic business.
So at least Okay. So just taking this further now, is this withdrawal exercise more or less done and so we will not have this impact in the coming quarters or that will still continue?
So the withdrawal is done, but we will take about we will be back in the market in the next quarter.
So broadly, basically trying to understand how the gross margin will have the trajectory going forward?
Yes. So even in this quarter, though we will start putting the product back into the market, which will be free of the impurities. But it will get to the normal level in the last quarter of this financial year. So we will also see some impact of that in Q3.
Got it. Thank you.
Thank you. The next question is from the line of Tarang from Old Bridge Capital. Please go ahead.
Hello, team. Good evening. Thank you for your time. Two questions from my side. One, what is the gross block associated with the Roodke facility?
And how much of remediation cost do you anticipate over the next 12 to 15 months?
So your first part of question I missed, if you could please repeat again.
What is the gross block associated with the route key capacity?
So
then when you're asking the gross block of the Ruchi capacity, is there exactly what is that you're asking?
The value of the gross block associated with the Ruchi plant?
I think, Pramod, it's about the fixed assets. So I think Chris will be able to answer. He can answer the second question.
Yes. Chris, Arun, would you like to answer? Yes. Let me look at that and I have to be back free. Okay.
So till we look at that, I can answer the second question, which you are asking about how much could be the remediation cost. We had already incurred quite a lot of remediation cost while we were taking actions on the warning letter observations. The observations which have come again in the last audit because of which we have got the import alert, they require more of the some of the changes in our SOPs and the training to the operators and that kind of the remediation efforts, which really doesn't incur much cost, but much of the remediation cost. It's nowhere material.
Okay. So it's only a matter of time and getting those processes in place that this should help with the remediation, correct?
Yes. And that we indicated that we expect that we will be completing all that in early next calendar year. Got it. My second question
Yes. Sorry, please go ahead.
No, I was saying that then we will let the FDA know and then we will have to wait for the FDA to come and audit us.
Okay. My second question is relating to the CRDS business. I just read that you have recently just completed the expansion of the Noida Research Center. And correct me if I'm wrong, you suggested that maybe perhaps you're going in for a larger expansion given the demand environment, the burgeoning demand environment for this business. Would that be
accurate? So
as we go to the Yes,
I'm here. So that's accurate. The capacity expansion I was referring to has been completed and commercial operations commensurate from September 2021. Then I mentioned further expansion we plan to do for the NPK and chemistry, And this will start generating additional revenue from Q1 2023 onwards.
Sure. So Julien, just wanted to check, I mean, are these new campaigns that you're getting from your existing customers or new customers that are approaching you?
Yes. Our current customer base is strong. And so we are leveraging existing customer as well further developing the customer base.
I'm sorry, please come again. You're saying that you're getting new projects from your current customers or is it really a mix of both?
We are leveraging our existing customer base, which is strong. And at the same time, we are continuing to further expand this customer base.
Okay. Thank you. That's it for me. I just wanted the gross block number. That will be helpful.
Thanks.
Thank you.
Yes. So certainly the net assets at Luki are
$35,000,000 net book value. You are not audible to us? The net book value of our assets at LUKIER, dollars 35,000,000
Thank you. We'll take the next question from the line of Rahul from Abaqis. Please go ahead.
Hi, sir. So a quick question from my end. Any other CDMO contracts from the COVID that we are forcing?
So we'll continue to explore the possibilities and the opportunities. And as and when we will be concluding any of the contracts, we will be informing about that.
Sure. So as of now, CDMO will largely be running on these previous old contracts, which are relatively low margin business. Is that correct to say?
No. It's let's not say low margin. Even our the normal business in the CMO also had a very healthy margin. They started looking at the profitability less in comparison to much better margin into COVID related deals. So yes, the COVID related deals in Q3 and Q4 are not because we had mentioned that the business will be coming back to the normal level.
Sure. Sure. Sir, quick question on the Jugel and Bioss' side. Since we are entering in the clinical stage, are we looking to raise any funds there for that?
Sorry, could you kindly repeat, please?
Yes. In the Jubilant Therapeutics and the Jubilant Biosciences, are you planning to raise any funds in either of them?
Let me answer this.
Yes. Sure,
sir. As we have explained in the past that in the therapeutics, we are looking today the crossover round for our projects, which are going into clinic. In BIOSYS, we have no plans of raising funds right now.
Sure. Fair point, sir. Thank you so much. This was helpful.
Thank you. Thank you. The next question is from the line of Arunjan Jain from Nirmal Bang. Please go ahead.
Thank you for the opportunity. Sir, just one clarification. So when this sorry to ponder on this again and again, but when we got this import settlement of July, in the press release, we have mentioned that there is not much impact on non exempted portfolio. So we have stated that it would be less than 3% of the revenue. So what has changed?
And or if you can quantify the impact in this quarter? And it is likely to continue for next at least 2, 3 quarters going forward also?
So for the non exemptive product, we had mentioned that there are the three conditions which FDA has put on us, which we have to comply with. And those three conditions included testing of the product at independent laboratory and also taking the entire GMP verification by an independent consultant. You may appreciate in the D and P process to get the product tested at a different lab needs the method transfer, the analytical method validations and then the product testing, etcetera. So it takes some time. And same way for a GMP consultant also to virtually remotely have access of all the production records and verify them and then give the GMP certificate, also took some time.
So that impacted the performance during the quarter. However, now we have geared upon both those things and the advent of product shipments has started going to the U. S. Now.
So you mean to say that during this quarter, Q2, we there was kind of more sales from Rokhli, which would start of the exempted product from this Q3. Is that right to say?
Yes. Yes. So after the import alert, the sales of the sales of exempted product from the Ruki has started about 2 to 3 weeks ago, and it's ramping up.
Sure. Thank you. And sir, I would just touch on London, sir. So you said that we are doing and the remediation is almost over from our side. So when we are expecting the next development on this, probably reinspection or online reinspection, so what is the next logical step there would be?
Yes. FDA, to our best of understanding, FDA had not been doing online inspections for the normal GMP audit. They were doing online inspection for the selected the product approval, etcetera. But now in the recent past, FDA has restarted doing the audits in India. We don't know that our Nanjan Gut plant comes where into their priority list, but we expect FDA to come and audit us soon.
Thank
you. The next question is from the line of Alankar Garrudy from Macquarie. Please go ahead.
Hi, good evening, everyone. So my first question is, amidst lower satin prices, what were the drivers for the strong sequential growth in the API business?
Could you please repeat the question?
So amidst lower satin prices, just wanted to understand what were the drivers for the strong sequential growth in the API business?
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So other than statins, we also have many other products. And even in the statins also, there was a demand. It's only the pricing pressure was mainly on the Valsartan, where in the Valsartan, the prices during the nitrocellin, integrity in the supply was very limited, had gone up substantially. This now has come back to the normal level. But other than the Valsartan, we have a huge product range for the direct synthetic applications.
And as you know, there is a higher demand from the API from China because there had been lot of discussion about the reduced dependency on the Chinese supply chain. So we saw the additional demand coming up because of that and we had done high volumes sequentially. Though in comparison to a year ago, it still looked a bit lower because the last year was the exceptional quarter. In Q1, our plant was low. So in Q2, the dispatches were very high.
Understood, sir. And sir, is it also a factor of the debottlenecking exercise which is currently happening? So have you realized any benefit of that in this quarter?
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] That exercise is not like it's a one time exercise. We have 6 plants and various streams over there at that site. And plant by plant, stream by stream, we are doing the debottleneckings. And those action plants are on track. So depending upon the product, in some of the product where the debottlenecking has happened, we may have realized the benefit of that.
But it has not been completed for all the products for all these changes.
Understood. So my second question is, you spoke about higher KF cement solvent prices and your ability to pass it on to consumers, the customers. Can there be some lag in passing on this higher input costs?
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes. There could be some lag because one is that we do not know how much inventory our competitors are holding at the old price. So the customer may take time to negotiate and give us a revised price. So it could be lagged, but in the API business, we have seen that whatever the cost increase, generally, it gets passed on into the finished bid process.
Understood, sir. And so just maybe a small follow-up there is so these issues specifically pertaining to the China power outage problem, that could continue in this Q3 as well. So would it be fair to assume that the higher prices which we are seeing right now, those could continue in the Q3 as well?
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We will start seeing the impact of hard prices. Some impact we will start seeing in Q1, and we will see more impact in Q4 because we also are holding some inventory of the raw materials. But yes, in some part of Q3 and Q4, we will see impact of those prices. And we have to make the assessment how much we will be able to pass on. As of now, we expect we will be able to pass on complete increase with some lag.
Sure. That's it from my side. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Roshan Nair from Equinis Wealth. Please go ahead.
Yes, thanks for the opportunity. So I just my question pertains to more of general business. So with that the pricing pressure, lower volumes due to import alert and all these problems pertaining to generic business. So when can we see the revival in this segment of business? [SPEAKER
UNIDENTIFIED COMPANY REPRESENTATIVE:]
Let me try and address that in two parts. In terms of revival in the U. S. Generic market, it's a cyclic pattern. Every 1 or 2 years the price pressure comes.
And when the price pressure comes, some of the weaker players who are not making margin, then they wetted the market, the market again becomes short and then prices again start going up. So this cyclic pattern continued and currently we are at the bottom of the cycle. The other impact on us is because of the import alert. So the products which currently are restricted for import into U. S, we are making arrangements to get them contact manufacturer at 3rd party.
And then from those locations, we start bringing them into the U. S. But this process takes time. Generally, the process takes about 8 months to 12 months. For the products which are exempted, that as I mentioned earlier, that we are streamlining the issue and we have started supplying the products to the U.
S. Market. And the 4th and last is that we don't expect that import alert should last long. We are hopeful that in the next audit, we will be able to get this import alert lifted. Once that happens, then anyway the situation becomes longer.
Until then, whatever capacity we are having, we are also trying to maximize that capacity for the non U. S. Markets. So we are taking the various initiatives
Okay. And my other question is relating to the capacity expansion at Rupu fil manufacturing capacity. So when can we expect the ramp up? Or in the 1st year, what would be the percentage in terms of ramp up of the facility? [SPEAKER UNIDENTIFIED COMPANY
REPRESENTATIVE:] This you are asking for Rupi or for U. S?
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] The one which saw the doubling of manufacturing capacity.
[SPEAKER UNIDENTIFIED COMPANY
REPRESENTATIVE:] So we had almost doubled the capacity in the Caddy staff in our U. S. Storage facility. And in my speech I mentioned doubling capacity of the ruby field in at our Montreal facility? Your question is for which business?
The U. S. 1.
U. S. 1. Yes. So the capacity, whatever the investments we have made in that is now available.
And as I mentioned that we expect to put the Spartan price in the market towards the later part of this quarter and ramp up into the next quarter. This increased capacity will help us punch a lot to that much better market share in FY 'twenty three in the U. S. Market.
Okay. All my other questions are answered.
Thanks a lot for the question. Thank you.
Thank you. The next question is from the line of Vivek Gupta, an individual investor. Please go ahead.
Hi, thanks for the opportunity. So probably some of the questions are answered earlier, but a couple of questions still are left in my queue to ask. So first one is I see that the trade receivables are towards the higher end during this quarter along with inventory. So what would be the reasons for it?
The inventory is higher because of the few of the disturbances we talked about, about the market withdrawal or the import alert where we had continued the production of the exempted products, but we were in the process of fulfilling the conditions of the FDA. And so that as soon as those conditions are fulfilled, supplies can go. So that was the reason on the inventory side. On the credit receivable side, I'll say that it may be only the timing and the product mix impact.
Okay. So one more request I would like is like I find there are no exchange filings coming from Jubilant Palm over side about the updates. And it is only at the time of results that you mentioned all the details in your presentation. So it would be great if we have some intermediate press releases to better understand what is going on from the company's business perspective. So the other question is yes, go ahead, please sir.
Yes, I said whenever there is any material event, which as per the requirement we have to inform, we ensure that that information goes to stock exchange.
Just to quote with an example is, like recently you have mentioned in the press edition citing that you have submitted to NCIT about the reorganization scheme for this Jubilant generics with the Jubilant pharma. There was no exchange filing corresponding to the same. It was done in September, I suppose, correct?
I think there was an exchange filing. We have Arjun on the call. Yes. That's right. We have Arjun on the call.
Can you
yes, yes, we did the filing on the relevant date also.
It was done, Vivek, at the time of the last quarter results announcement, and it was very well covered with the proper exchange filing, Vivek. You might have a look at that.
No, no,
that is fine. About the I'm talking more from the Ncell 3 submission perspective.
So these are the
last intermediary steps. These are the intermediary steps. There are intermediary steps. Yes. So these are intermediary steps.
There are 5 or 6 steps in the path, as you know, Vivek. So when we informed in the last Q1 results, along with the exchange filing and we announced public announcement and that it was clearly mentioned and we can share that with you that announcement and you can get that from the Shopify Street website with details on
the steps and procedures. This is
just an intermediate update we are giving the journey And it said that it will be effective on April 1st next year and there
will be all kind of processes
that will run-in the meantime.
Thank you. The next question is from the line of Jay, an individual investor. Please go ahead.
Hello, sir.
Congratulations for decent set of number. And I believe with the kind of product and management bandwidth we have got, we would be able to pull up. So a couple of questions, sir. One is on Europe foray for Rubifil. And second one is on, if you can show some lights on SoFi Biotech partnership, how is it going?
And do we look at increasing stake in SoFi Biotech? And third one, and probably there are many management interviews being done by the various business channels. So I could hardly see our management coming on the business channels and discussing the business updates. So if you could do it more frequently would be helpful for individual investors. Thank you, sir.
So, Jeth, thank you for the compliments. And your third point which you made is duly noted, and we will take the necessary action on that. On the two of the questions on the Rubicel Europe, so we got the approval in the Rubicel Europe in the Europe and we have started doing the installations in the Europe as well other than the U. S. And Canada where we had been doing earlier.
So that's an additional geography, which we have started developing and we are getting a good traction on that. And your second question was, if I if you can just let me recall again?
It's on Soffe Biotech Partnership and what plans we have got for that partnership?
Yes, yes. So it's Soffe Biotech. They have 3 business verticals. They have the network of pet radio pharmacies, where we have many of the complementing things with them in terms of overall distribution and acquisition of the customers. So there the cooperation is continuing.
The other piece is they had the very the novel assets called FAPI for the diagnostic and the therapeutic applications. For the therapeutic, they have out licensed this to Novartis. And for the diagnostic, they have kept it to themselves. They are, as of now, in the process of taking the approvals of that from the U. S.
FDA. So they are making the filings. And their 3rd business vertical is doing contract manufacturing for these radioactive isotopes along with the ligand and then helping the other the biotech companies, pharma companies and universities to develop the product. We see a lot of synergies into our business with their business. About the pharmacy, I have already talked about.
They have good products for them to does it for the distribution and I can speak about them because that's in the public knowledge. You know that Biogen's product is approved for the Alzheimer. They also have agreements with a company called NMI who has a neuropsych, the product which is required for the diagnosis for the Alzheimer. Earlier, the neuro set was not getting too much of the traction because therapeutic application was not available. Now with therapeutic application being available, they will have a substantial to the business for the dispensing of the neuro set.
And same way, they also have the other context for the PSMA product of the PS MSI, which is also expected to bring healthy revenue and the margins for that. So we are very happy and satisfied with our investment and we are very confident that this investment will give healthy returns.
Thank you, sir, and all the best.
Thank you.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.
Thank you so much for the conference call and wishing all of you a very happy Diwali in advance. Thank you.
Thank you. Ladies and gentlemen, on behalf of Jubilant Pharma Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.