Good morning, ladies and gentlemen. Welcome to Biocon Limited Q1 FY 'twenty two Earnings Conference Call. I am Chirag from the Biocon Investor Relations team, and I welcome you to the Biocon earnings call for Q1 FY 'twenty two. All the attendees to this call shall be in listen only mode, and there will be an opportunity to ask questions after the opening remark concludes. Should you need to raise questions, please select the raise hand option under the reaction tab of your Zoom application.
We will call out your name and then request you to unmute yourself and to ask the question. While asking, Our request would be to please begin with your name and your organization. Kindly note, we will not be monitoring questions on the chat box, but you can raise any technical concerns that you may be facing for our support team to help. This call is being recorded. To discuss the company's business performance and outlook, we have today with us the Biocon leadership team, comprising Doctor.
Kiran Majumdar Shaw, our Executive Chairperson and the other senior management colleagues. I want to take this opportunity to remind everyone about Safe Harbor. Today's discussion may be forward looking in nature based on the management's current beliefs and expectations. It must be viewed in concurrence with the risk that our business faces that could cause our future results, Performance or achievements to differ significantly from what is expressed or implied by such forward looking statements. After the end of the call, If you need any further information or clarifications, please get in touch with me or Nikunj.
Now, I would like to turn the call over to Doctor. Firan Majundar Shaw. Over to you, ma'am.
Thank you, Nikunj, and Let me welcome everyone to this earnings call, which is being held on this very new format. And I would like to basically start by this earnings call by saying that the impact of the second wave of the pandemic Has turned out to be far more devastating than we thought. And we have all, As in the pharmaceutical industry faced mounting on-site infections coupled with lockdowns, which all have posed significant challenges to our operations across our facilities in Bangalore and Hyderabad, particularly at our API plants. As you know, we are a fermentation based industry And many of these supply chain challenges included things like oxygen shortage, etcetera. So we have been impacted this quarter, but we have taken several measures to mitigate the impact Of the spread within our organization, a massive vaccination drive was also undertaken for our employees, The families and our neighboring communities, wherein more than 20,000 doses of vaccines were administered, We simultaneously ramped up the manufacturing of etolizumab, which has been at the forefront of our fight against COVID-nineteen and I would like to share with you that more than 27,000 patients have benefited from etralizumab thus far.
We have received several testimonials of appreciation from patients, family members and healthcare professionals for the number of lives that itelizumab saved throughout this pandemic. With the vaccination drive picking up pace And newer vaccines on course to get to government approval in India, we are hopeful that the situation will turn for the better sooner than later. While there are signs of recovery, we cannot drop our guard. We must stay vigilant, ensure that we get vaccinated and stay safe.
Next.
I would like to also share with you an important management update. John Shaw, the Vice Chairman and Director of Biocon will retire from the Board of Directors due to health reasons on 23rd July, that is today, at the conclusion of the Annual General Meeting. As a key member of the company's Board and the management team since 1999, John Shaw has contributed majorly to the transformation of Biocon from a small enzymes company to a globally recognized biopharmaceutical company. Over the past 22 years, John Shaw has played an important role In building Biocon, ensuring the highest levels of corporate governance in the company as well as contributing to the financial and Strategic Development of the Group. On behalf of the Biocon's Board of Directors and Management, We express our deep appreciation and gratitude to John Shaw for his stewardship and guidance.
I would also like to share with you another organizational update. I'm pleased to welcome Doctor. S. Vijay Kumar as Head of Operations at Biocon to lead the manufacturing projects and EHS functions for the generics business and will be part of the executive leadership team. Vijay Kumar is an industry veteran with more than 30 years of extensive Let me now turn to some business highlights.
Starting with our generics business, we launched Labetrolol tablets and esomiprazole capsules in the U. S, further expanding our generics portfolio. Within Biocon Biologics, we expanded our biosimilars global footprint with product launches in 7 countries in Q1 this fiscal. We also received marketing authorization approval for biosimilar bevacizumab from TGA Australia and MHRA UK. The U.
S. FDA has scheduled a pre approval inspection of our Malaysia facility In Q3 of calendar year 2021, in support of the BLA for our biosimilar aspart, Syngene has signed a 5 year agreement with IAVI, a U. S.-based non profit scientific research organization for manufacturing 3 anti HIV monoclonal antibodies for use in Phase 1 and 2 clinical trials. I will now turn to financial highlights for the quarter. Let me I'll start by saying that we delivered a revenue of INR1808 crores in Q1 this fiscal versus INR1712 crores last fiscal, a modest year on year growth of 6%.
Our revenues were mainly driven by research services, which were up 41% and biosimilars, which were up 10%. We reported a subdued performance in generics, which saw a degrowth of 22%. However, we largely sustained All our operational financial aspects of our business, as we recorded a gross R and D spend of INR136 crores for this quarter versus INR 142 crores last fiscal, and this corresponds to 12% of revenue ex Syngene. Of this, INR 120 crores is reported in the P and L, while the balance has been capitalized. We also recorded a ForEx gain of INR 17 crores versus a loss of INR 4 crores last fiscal.
Core margins, that is EBITDA margins net of licensing, ForEx and R and D stood at 30% in this quarter, and this is on account of subdued performance by generics that offset the gains of an improved performance in biosimilars and Strong growth in Research Services. EBITDA for the quarter was INR437 crores, largely flat year on year, And the EBITDA margin stood at 24% against 25% reported in the same quarter last year. PBT for the quarter was at INR166 crores, down 9%, which is down and this is at 9% compared to 15% of INR249 crores in Q1 FY21, which is largely on account of higher depreciation and amortization and share of loss from our Boston based associate startup, Baikara. However, if you exclude the share of loss From Baikara, PBT stood at INR 224 crores. Novel Biologics is a capital intensive business And while it impacts our P and L, it is an integral part of our business and future growth.
We will explore external venture funding to support clinical development for long term value creation. This is a high risk, high reward business, and we believe that these novel programs are important to pursue. Our net profit for the quarter stood at INR 84 crores versus INR 149 crores last fiscal. But if you exclude the share of loss of Baikara, our net profit was INR 1.42 crores for this quarter. And this largely basically points to a very sustained financial performance despite all the challenges we have faced because of the pandemic.
I will now take you through the performance of our business segments during the quarter. Let me start with our Generics business. Our Generics revenues witnessed a degrowth this quarter, as I mentioned earlier, today. With the number of COVID-nineteen cases starting to decline, we expect these to normalize in the coming quarter. Additionally, the comparable period in the previous fiscal benefited from customers stockpiling APIs on account of COVID related uncertainties.
The segment delivered quarterly revenues of INR 4.86 crores. The quarter's PBT stood at INR 29 crores versus INR 96 crores in the same period last year. PBT margins also were at 6% compared to 15% in Q1 last fiscal. Tacrolimus capsules were launched in the U. S.
In Q3 FY 2020 and is witnessing a gradual ramp up in demand. Our statin formulations portfolio in the U. S. Comprising rosuvastatin, simvastatin and atorvastatin held on to its market share despite continued pricing pressure. During the quarter, we launched labetalol tablets and Esformip Resolve capsules in the U.
S, in line with our aim to expand our formulations portfolio and establish a strong global presence. Labartolol is used to treat high blood pressure and helps to prevent cardiovascular complications such as heart attack and stroke. While esomiprazole, a protein pump inhibitor, is indicated for treatment of gastroesophageal reflux disease. Equivia pegs the market value for Levothyrol hydrochloride and Azomiprazole magnesium in the U. S.
At 63,000,000 and 230,000,000 respectively. Travel restrictions in the wake of the pandemic continued to delay inspection of our facilities And consequently launches as well as expansion into some key markets were affected. However, we are in discussion with the U. S. FDA to We have responded to the mutual recognition agreement announced in May 2021 between the US FDA, EMA and MHRA.
We have responded to the complete response letter issued by the U. S. FDA on COPAXONE. We remain on track to commission our greenfield API facility in BS Visakhapatnam in FY 2022. This will significantly expand our immunosuppressant manufacturing
capacities, which will
come on stream in FY2023, post We are confident that our Strong foundation in fermentation technology coupled with several initiatives undertaken during the past year, Including digitalization, cost improvement and measures to boost operational efficiencies will help us to Significantly improve our business performance in the coming quarters. A note on Novels. Equillium, our U. S. Partner, had an end of Phase 1 meeting with the U.
S. FDA, which confirmed the path to advance etolizumab into a single Phase 3 pivotal study for acute GvHD To support their Biologics License Application or BLA, the study is expected to commence later this year. Biocon, who owns the European rights for etolizumab, would like to report an important milestone this quarter, wherein the Committee for Orphan Medicinal Products approved an orphan designation to etolizumab for the treatment of both and chronic GBHT. Meanwhile, itelizumab continues to be at the forefront of our fight against COVID-nineteen in India. We have ramped up our production capacity to meet the growing demand of the product.
A second brand of etolizumab has been licensed to Sun Pharma for distribution. We have also completed patient dosing in the Phase 4 study of etolizumab to treat cytokine release syndrome in moderate to severe ARDS patients due to COVID-nineteen. The study report is expected to be converted into a publication in the near future. Let me move on to biosimilars. Biocon Biologics has recorded revenues of INR758 crores in Q1 FY22, A year on year growth of 10% and also a sequential growth of 14%.
Core EBITDA stood at INR271 crores in Q1 FY 2022 versus INR249 crores last fiscal, a year on year growth of 9% and 26% growth sequentially from 216 in Q4 FY21. Core EBITDA margins were at 36%, in line with last fiscal and profit before tax to that INR 101 crores. We have seen a significant contribution from our COVID portfolio in India, Predominantly, itolizumab and remdesivir in the strong growth delivered by our branded formulations India business. Thus far, more than 50,000 patients have benefited from these products. Our non COVID products also have performed very well.
Our biosimilars continues to maintain and garner market share in the U. S. Whilst Fulphila, our biosimilar pegfilgrastim maintained a steady market share of around 8.5%. Ogivri, our biosimilar tuzumab increased to over 9% volume share in June 2021. And our biosimilar insulin glargine is estimated to be around 2.6%, about 20 basis points higher month on month.
We anticipate continued pricing pressure in the U. S. And are taking steps to mitigate this through increased volumes and market share. In addition to this, we expect our growth to be fueled by regulatory approvals for our biosimilar bevacizumab and biosimilar as part in the near term once on-site inspections happen. In Europe, our sales continue to improve on the back of new market The EU launch of biosimilar bevacizumab by Viatis Target is expected in Germany, Austria and Poland in Q2 FY22.
Moving on to regulatory topics, the U. S. FDA has scheduled a pre approval inspection of our insulins manufacturing facility in Malaysia In Q3 calendar year 2021, in support of our biosimilar aspart BLA. We believe the BLA is adequate in all scientific aspects and it is only the pre approval inspection of the Malaysia facility that is pending. However, with respect to our biosimilar bevacizumab BLA, We are yet to have visibility on the timing of the site inspection in India by the U.
S. FDA. We have received approval for our biosimilar Bevacizumab from TGA Australia and MHRA UK. We expect the U. S.
FDA's decision on interchangeability of our Biosimilar Glargine by the end of this month. If approved, it will be the 1st interchangeable insulin approved in the U. S. We continue to make good progress on our robust R and D pipeline. To summarize on our Biologics business, we We remain confident on the long term opportunity for biosimilars through improved market penetration, geographical Expansion and further growth from upcoming approvals.
Coming to Research Services, During the quarter, Syngene reported revenues of INR595 crores, up 41% Over INR 4.22 crores in the comparable period last fiscal. PBT for the quarter was INR 95 crores with PBT margins at 16% in line with Q1 FY 2021. Syngene's performance was driven by growth across all divisions, Discovery, Development and Manufacturing Services and Dedicated Centres. Remdes, we Services and Dedicated Centers. Remdesiv was also a significant contributor to revenues this quarter.
The company's Mangalore API facility was also has also successfully completed ISO 90,001 2015 Certification Audit. As mentioned earlier, Syngene has signed a 5 year agreement with IRV for manufacturing 3 anti HIV monoclonal antibodies for use in Phase 1 and 2 clinical trials. Synji will provide an integrated solution encompassing clone selection, analytical methods development, manufacturing process development scale up and cGMP manufacturing of drug substance, viral clearance studies, cGMP manufacturing of drug product and stability studies. So you can see that Syngene now has end to end capabilities from cloned to market in every possible way. To conclude, I would like to say That this has been a challenging quarter for all of us.
However, we are confident we can overcome these challenges with all the encouraging developments and Business sentiment is favorable for biosimilars, generics and research services. Globally, we see a strong demand for biosimilar and generic drugs given the growing emphasis on affordable drug pricing. These are challenging times, and I would like to end by saying let's be responsible. We all need to Stay away from crowds, let's double mask ourselves, maintain the proper COVID appropriate behavior And most of all, I hope every one of you has vaccinated yourself like we have at Biocon Group. Thank you.
I would now like to open the floor to question and answers.
Thank you, ma'am. As we wait for the questions to queue, I would like to remind everyone that you can ask your question by selecting raise hand option Our first question is from Prakash Agarwal from Axis Capital.
Yes. Hi. Am I audible? Yes. Hi, thanks and good morning to all.
My first question on trying to understand this July end, that date better. So as per our understanding, what are the things pending, if at all? And what is our expectation of getting interchangeability? And how does it impact our assumptions For the market share ramp up, which we in the past have talked about that from calendar 'twenty two only, we will see some since the buying has already P. Vijay Kumar:] So, if you could give more color there, that would be very helpful.
I will turn this to Shreyas to respond.
Thanks, Prakash. We are as Kiran said, we are looking For that interchangeability status, our whole date is towards the end of this month and we've reason to remain optimistic that Our insulin glargine would be the 1st interchangeable biosimilar insulin analog that the FDA would approve. Having said that, we've talked about this in the past as well that after the interchangeability status, we would still We just would have to go through the full contracting cycle and secure the contracts. That piece will have to be completed In terms of securing the contracting piece, but it certainly does provide us the opportunity to then validate the decisions that peers have made in The cost for biosimilars, we're building it into the formularies. And more importantly, also provide assurance to the patients, the drivers and more importantly when it can be made available at pharmacy counters in a substitutable manner.
So clearly, there is a support to that overall strategy that we have just outlined where it has stated in the Investor Day That it is an opportunity now to be launched Sendly as an interchangeable insulin Glargine for CIFX Bank. So we will certainly be looking at that
So the contracting cycle that you spoke about, So what is the contracting cycle? Currently, is it ongoing? And would it help if we get the interchangeability, say, on the goal date? Or it would actually help in the next contracting cycle.
So the VLTS commercial team is right We are now in discussions with various payer channels at this point as we talk and the interchangeability The status towards the end of this month is in a way timing because it will aid In these decisions, has players made them over the course of the next month or 2?
Okay, got it. And secondly, on the inspections that you have talked about both in Malaysia plant for Aswad, So everything done is what I understand, but it would require a physical inspection or it would be an online inspection? And I don't know what's the status in Malaysia, but have they started has the FDA started visiting other countries and Malaysia? I am not sure. So if you could Throw some light there.
And in vevacuzumab, is there a chance of online inspection? That's all from my side.
Yes. Thanks, Prakash. I think we've Two, three questions on that. So let me respond. I think on the Aspart inspection for our facility in Malaysia, as Kiran said, The agency FDA has confirmed that they will visit us end of this quarter for a physical inspection on location.
So That's something here we were working with the agency closely for, and that's something the agency has consented to. So we will be Looking to post the APC towards the end of this quarter and the Aspart inspection should be then The only step to move us forward into the approval process. On the betasizumab part, our goal date, as you know, was end of last calendar year and we've been working with the agency to enable that inspection. The FDA did publish a resiliency roadmap where they are looking at international Inspections in an expedited manner. We have been an engagement with them.
We haven't received so far A firm date on when they can visit us in Bangalore. But at this stage, the understanding we have is there is no technical Outstanding questions for the davacizumab application. We've submitted a complete package and we look forward to the pre approval in section, which is a mandatory requirement for a biosimilar approval in the U. S. So that's the update, Prakash, on betacizumab and instructions.
Okay, sir. Thank you very much. I have couple, but I'll turn back. Thank you. Thank you so much.
Thank you, Prakash. The next question is from Damyantikarai from HSBC.
Yes. Hi. Good morning. I hope I'm audible. Yes.
Okay. My first question is, can you explain what kind of P and L impact we should continue to see from Paikara, maybe some more clarity like what is spent from our side and then What kind of impact we'll be seeing on the P and L, say, in next few quarters?
Maybe, Sidharth, you would like to answer this question?
Sure. So Damayanti, I think last quarter we had said that Baikara, which was earlier a subsidiary, would move To an associate, because Biocara is looking at raising funds directly in the U. S. To fund its clinical programs and the pipeline That is under preclinical stage. The investment value that we have for Biocon at end of June It's roughly $15,000,000 And we expect till this $15,000,000 of expenses Are there in Biocara, it will continue to go through the P and L, but through the share of loss of associate, which we Expect within the next 1 to 2 quarters.
Okay. Thank you for that. And my second question is, can you provide Current state of biosimilar sales between regulated market and rest of the world market and if you can talk a little bit more on What will be the key expectations for the rest of the market biosimilars sales? And what will be key drivers or key market which you are looking at
So let me request my colleague, Sushil Umesh, to talk about the Biosimilars Business in the Rest of the World Markets. Mute. Sushil, you are on mute.
All right. Thank you, Damayanti, for your question. In the rest of the world, we are looking at the biosimilar space Very positively, we have a plan to quickly launch our new products and also increase Our products in many more countries than where we are today. We do this with our partners and distributors, and we plan to have a very robust growth call in excess of 25% over the years.
Okay. That's helpful. What is your current Great. Between this regulated and rest of the world market sales for biosimilars?
J. S, you want to take it?
Hi. It's For the quarter, emerging markets is actually above 60%. But if you look on a full year basis, you'd see developed markets 40% to 45% and emerging markets around the 55%
market. Okay.
So just to clarify, 55% around rest of the world market and 45% for the regulated market, but as you On a
full year basis, but for the current quarter,
Thank you, Numeeti. The next question is from Neha Mankuria from JPMorgan.
Thank you for taking my question. First on the biosimilar business, in Ma'am's opening comments, she mentioned there's a COVID portfolio contribution in the quarter. If there is a way to quantify that just to understand how that base business will Look at look going forward to just understand what's the COVID contribution in this quarter, please?
Well, this was Specifically linked to the 2nd wave, so actually it is just sort of a blip in our BFI sales. So we don't expect it to continue at these levels. So it has contributed significantly to our branded formulation business in India, But we don't expect it to contribute to continue and contribute at these levels going forward. So that's as far as what I think. So the branded formulations has certainly jumped over 50% because of this contribution, but I don't think we can rely on this particular business beyond a few quarters.
Understood. And ma'am, in terms of again for the biosimilars business, if I were to look at quarter on quarter, we have an FX gain, R and D does not seem to have moved too much from what I can see for the biosimilars business, But the costs seem to have increased. So is it a reflection of our gross margins being different or lower because of this COVID portfolio contribution? Just to add because ROW sales are higher, so I know what's driving the the margin improvement should have been higher given the FX
So two things. One is you must understand that always quarter 1 obviously reflects The increments that we give our employees and that's the big impact on costs in the Q1, which gets normalized for the rest of the year. Secondly, I think you must also understand that even though we have a contribution On the COVID products, the margins are at a lower level and compared to our other biosimilars business. And thirdly, I think I don't think you should read into the fact that ROW margins are low. So I think ROW is a very good business in many markets, very rich margins.
It, of Average is over the entire business. So I think overall, I think the margin impact has really happened because of The quarterly impact of salary increments as well as some of the low margin sales that we have Basically, Q3 because of COVID COVID.
Understood. Just
clarify, Anir, the FX gain, there's no FX gain in biosimilars.
And we will talk
about the core EBITDA margin at 36%, which is a 26% sequential growth. I mean, in growth terms, it's 26% sequential growth. And in margin terms, it's a 36% margin, And in margin terms, it's a 36% margin consistent with last year.
Yes. No, but I was looking at the absolute sales increase Year on year is pretty significant, right? So to that extent, the margin is flat despite R and D pretty much being in the 60 crore number. That's why I was asking. But yes, my answer sort of gives color on that.
Yes, but it's So revenue grew 10%, EBITDA grew 10%, Core EBITDA growth just about 10%, 9%. So they are all consistent, yes.
Understood. So that, just on the generics business, given the supply chain and operational challenges, If that were not there, how much would you have expected? What was the impact because of that? I'm just trying to understand the normalized performance of the generics business.
So the impact on supplies because of the second wave was roughly INR 75 crores. Okay. We have been very close to our Q4. Kiran alluded to, we have also We've seen continued pricing pressure in the U. S.
For our generics drug and also for our API customers. And unfortunately, we do not have any new approval because the product works, which are under review with FDA. Until the inspections are complete, we are not expecting any new launches.
The 2
Products, so these products were approved by our partners, which we in licensed and launched recently. So we do expect some growth to come in, but the main point is that when we get additional approvals, the Continued pricing pressure will continue to impact our generic formulations. But the EBITDA business, which was impacted in quarter 1, We said that we have seen normalcy now, number of cases in Bangalore have gone down, all our employees are vaccinated, and the operations are now running
Understood. Thank you so much.
Thank you, Neha. The next question is from Suryapatra from Phillip Capital. Suryap, you may unmute your line, please.
Yes. Good morning, everybody, and thanks for this opportunity. So my first question will be on Thanks, Shankar's team. A couple of days back, we have seen a notification from USA PAY TO ANZIL About the claims, what they used to make about the product on pro. And FDA has indicated that all the claims offer superior clinical benefit Over the prefilled series, that is the base list.
So, I think with those claim, Onpro was having Initially, about 60% market share of the total paid field gross premium opportunity and now they're still having over 50%. So with this notification, how should we look at as a kind of potential opportunity for Biocon?
Shreyas, would you like to take
your questions?
Yes. Thanks, Sotheby. So thanks, Silje, for the question. I think if you look at our previous commentary on the topic, we've always said that The Onpro device does offer an element of convenience, but to be focused on making meaningful clinical difference through the prefilled syringes. That's been our focus.
And this kind of way validates some of the positions we've taken in the past. And Over the last one year where we saw the effects of the pandemic resulting in the On4 device holding on to a market share of around 58%. Over the last year, now we're starting to see that come off and we've seen that decrease to about 52% this year. Matter of this quarter, we just closed So in a way, it does create an opportunity for Finsida and we do see that In terms of how market shares in the last quarter have started to slowly ramp up with a 50 basis point increase The monthly market share that we've seen in our product and we view this as an opportunity to really make a difference in the market space.
Okay. So just I want to extend this question a bit more. The 340AB program, what you had I'd also like to thank Phil Grier Steel and the kind of significant ramp up in the capacity for Peg Phil Grier Steel, what you have already achieved prior to The COVID and possibly the benefit of which all this would not have flown into you. So given that The recovery in the business that end with a favorable notification from the FDA, all that considering, Should one consider this as a kind of meaningful opportunity in the near term? Or what time can that you You can see that, okay, there will be some meaningful progress in terms of penetration as well as contribution to the earnings.
Just to elaborate on that, Sudhir, I think the way it goes is these are certainly developments which For an increase in market share going forward. But if you really look at it, the factors that will influence these things would be The competitor contracting strategies, the regulatory or the reimbursement strategies that exist in the marketplace, We certainly see this as a positive development and an opportunity for us. We have the capacity, the product, the approvals And with increased customer focus or commercial attention to this, which VFTS has actually said in their Previous calls as well, with the stronger value proposition that we can bring to stakeholders, We really see this as an opportunity in the coming fiscal year to realize a lot of this market share.
Thank you, sir. And about the interchangeability approval, so aren't we Expecting the interchangeability approval for both the insulins, both Aspart as well as Iblargine?
Yes. So as far as you know, we talked about incident lag in a little while ago, where we are expecting it towards the end of July, we'll expect a decision on our application for interchangeability. The insulin aspart It has been filed as an interchangeable incident analog under the 351 pathway. So when approved, we will be looking at that approved as well as an
Okay. Just last one question from my side. So on the Viagra, If you can just help me understand, I mean, what could be the early earning trigger for Biagra? Because we know that the first The lead molecule is at the very early stage, Phase 1, Phase 2 like that. And there is an affronting of the spend also that we know that.
So hence, if you can just give some sense on that side.
So Baikara has both the first program in the clinic at early stage of Phase 1 development, And it also has a portfolio of molecules, which are preclinical. So I think from that point of view, it is a growing start Yes. And as Siddharth mentioned, we have basically funded it and they are on The active stage of looking for extra venture funding. So I think that is where we need to support them because the Program is very exciting and some of the early signals are also very encouraging. So I think we would like to support them Until they raise external finance.
And I think let me just add, we expect Some critical readouts on the first program, which is in clinic by end of this calendar year.
Okay. The losses from the share of losses, whether that is getting that is restricted to, let's say, Yes, in current year and early part of next year, it is a kind of a continued this thing till the time that we see some progression in terms of earnings.
So, Sumeet, I think what I mentioned to an earlier question that we have roughly 15,000,000 dollars left in our balance sheet out of the $40,000,000 which we had funded. And that $15,000,000 till it gets utilized will flow through the P and L. Call. Unless we fund anything incremental over the next few quarters till Biocon gets this readout And that's the external funding. So it is expected to be temporary.
Definitely, we do not expect it to go beyond this fiscal
Thank you, sir. Wish you all the best.
Thank you, sir. The next question is from Shyam Srivneewasin from Goldman Sachs.
Hi, good morning and thank you for taking my question. Just the first one on
the COVID impact going back to
the earlier participant as well. Remember branded formulations in India were some INR 100 crores like the way we used to report earlier, maybe I'm wrong. And if that has grown 50%, So 758 minuteus 150 is 600, of course. I'm making these numbers up, but looks like then the base biologics Sir, the biosimilar business has declined Q o Q. Would that be a fair way to think of things?
Kenny, you want to take this question?
Yes. Deep, Base biosimilar business is kind of flat versus last year, if we strip out the COVID portfolio. But keep in mind that last year, There was a spillover from Q4 into Q1, which boosted the Q1 FY 2021 numbers. So if you strip that out, then you will still see a growth in the biosimilars business, excluding the core portfolio.
Yes, Chilling, just so from a market share perspective, Q o Q things have improved. So I'm just trying to understand where the struggle is for the Business line. And you talked about, I think, EM being higher and higher contribution and DM being lower versus how you envisage it to be for the full year. So What are some of the translations? I remember in fiscal 'twenty one call, we had actually said that the profit shares from Vielpress has not flown through.
So how should we what can ease now which will kind of help us accelerate this biosimilar business?
We're double counting there when we it's a core portfolio that's got emerging markets shared above 60%, Just to clarify. And then the second point, of course, yes, the as Glargine as you start to increase the market shares in Glargine, You'll see the profit share from Glargine play out, and you're aware that we have 2 more approvals lined up for this year, Plus the potential increase in market shares on our existing portfolio that's big and tasinezumab Should also play out and improve profit share in the coming quarters.
Got it. Very helpful. Second question is on the generics business. Sudhak, I think we have seen kind of subdued performance. You talked about the INR 75 crores.
And this now spans
across multiple lines, right? So the INR 100 crores,
I remember 4Q FY 'twenty, we couldn't So the INR 100 crores, I remember 4Q FY 'twenty, we couldn't shift things in the biosimilar line INR 75 crores now on the generic line. So From an operational and an ability to supply perspective, is the group looking at what are some of these issues? Could these have been avoided? Can we do something in the path forward where these issues don't recur? Because just looking at peers, we have not seen this kind of like a QoQ large volatility in numbers, most of them have had it trended upwards.
So I'm just curious from Our own group perspective, where are the potential misses and how can we correct it in the path forward?
Very good question, Shyam. I think We do have a BCP and disaster recovery plans. But if you look at the 2nd wave In Bangalore, we all know there were significantly higher number of cases compared to 1st wave. Out of 3,500 employees in generics, In the second wave, we had almost 500 employees who were positive within a span of 2 months and that impacted Lot of the work schedule, the quality releases got impacted. Now that has been addressed by vaccinating all our employees.
100% of our employees in Hyderabad, Viasat, Bangalore are vaccinated. That's number 1. Number 2, again, Kieran had alluded in her opening comments That if you look at Biocon, API business is primarily a fermentation based business and for fermentation, these are large Scale fermenters and one of the most important ingredient for fermentation to run is oxygen. And When there was overall high number of cases in the country, the allocation of oxygen was being done by central government Well, lot of the oxygen even for the industrial use was diverted for medical use and we were out of oxygen and hence not able to Charge any new batches. Unfortunately, we treat this more as a force majeure where there is no Mitigation plan, we were working with various state and central governments to see how soon we can get The required quantities that we needed, which did happen, as I mentioned, after 15 years, there was Also certain other disruptions, but I think we do have overall a good plan in place.
But an Extreme situation like this wave 2, we'd I'm not sure if at a very short notice we are able to address All the issues that come up. In fact, Q1, we didn't have any of these issues in the generics business. We had a very, very Strong quarter 1 last year and including H1 because number of cases in the company were still low. We were continuing to manufacture. We had supply chain issues which we addressed very efficiently.
And so hope that these issues, At least on the employee front does do not happen if there is a wave 3 in the future.
Got it. Last question to the team is on R and D Sven, so how should we look at it for fiscal 'twenty two and 'twenty three? Is the current run rate now or you see a step up
I think maybe I'll just give a view on the group We continue to maintain our earlier guidance of between 12% to 14% of gross R and D ex Syngene revenues.
Thank you, Shyam. The next question is from Harit Ahmed from SPOT Capital.
Hi, good morning. I hope I'm audible?
Yes.
So on the generics business, my apologies if this question was addressed previously. On the generics business, after the disruptions we saw in the Q1, how is the business shaping up now? And How should we think of the Q2 and the upcoming quarters?
So, Harit, I'll split this answer into 3 parts. The operational impact that we had in quarter 1 is normalizing. So we do expect, again, our API production To ramp up to what it was in the previous quarters, we do not have any new Plant on new capacities which get qualified this quarter, so there is no growth in our API business. The generic formulations business in the U. S.
It is undergoing pressure. While we are launching new products, we are ramping up our tacrolimus drug, which we had launched Last year, we won some new contracts and we have started supplies against those contracts. At the same time, we have lost Certain business on a status. And on an overall basis in Q2, I do not expect significant growth because the biggest growth is going to come from The 2 or 3 products which we have filed and are under review with the FDA, we have a target action date, Which was in calendar quarter 1 of 2021, which FDM moved to calendar quarter 3 And 4 of 2021. Now that if assuming FDA accepts our request For conducting a virtual audit or the UK MHRA audit, which was successfully conducted In quarter 1, even if we received approval, we expect the launch to happen in the Q3 this year.
So I expect overall business to remain flattish and flattish compared to, let's say, quarter 4 Of last year, but definitely, we should be much better compared to this quarter's performance in the next quarter.
Okay. Got it. And on Baikara, how far are we in terms of our Fundraising plans at that entity. And who owns the 13% minority stake there?
So the funding should be complete or funding is actually dependent on the readouts. So I mentioned that the readouts from the Phase 1 clinical trial, readouts Are expected by end of this calendar year, basis which the funding timing would be decided. And the remaining 13% of the company is with the employees in ESOP pool.
The next question is from Netia Nithya, please unmute your line. Yes.
Hi. I had just a one question on biosimilars in the U. S. So we know that CMS offers a pass through status For the reimbursement rate that's given to 340B Hospitals. And that's valid only for 3 years.
So if you look at your full filler, you're possibly reaching that deadline in June, and that's likely to happen for some of your other biosimilars at a Data point of time. So given that the delta between reimbursement is ASP +6% to ASP minus 22%, do you expect this to impact your margin profile meaningfully?
Yes, let me take that question. So, Neta, yes, we are seeing that CMS pipeline come up Shorkey, we have developed or Viptless has developed strategies to counter that pricing change, which will Yes, Tamar, we believe the recent discussion that we just had on the call also in terms of what Frot does Provide us the opportunity to expand the market, there is going to be an increased competition In that space also with more players than we started off with when these debates were fixed And we will certainly have to have the right mix of whether it's just the pricing part or whether it's the The reimbursable strategy that we talked about or the overall mix that we will be coming up with. But certainly Beatrice He is aware of this and we are looking at providing a stronger value proposition overall to the various stakeholders.
If I may just follow-up, can you throw some color on whether if you look at your revenue split between hospitals, clinics and 340B, Is it possible to provide some color on what's your exposure to 340,000,000,000?
I think we'll have
I don't have the exact split, We have a lower share of the 340P segment. So we have our exposure is slightly lower there Competitors are the competitors, but we can't give you specifics on the numbers.
Got it. Thank you so much.
Thank you, Nithya. The next question is from Sameer Baisiwala from Morgan Stanley.
Hi, good morning, Aviva. The first question is on the pricing pressure that you're seeing in the U. S. For BioSEM's Trastu and Bekfil, can you please help us what's driving this? You've been talking about this for last 6 months at least.
So I mean pricing pressure in terms of The U. S, I can see the important piece is the biggest question around U. S. Was whether the U. S.
The market will be accepting of biosimilars. I think that was the biggest question that we were faced with as we began the fiscal And maybe towards the end of last fiscal, I think that's the reasonably answer that we've seen good adoption of biosimilars. And As competition increases, there is the natural fallout is that there is going to be Some pressure on pricing. We've not seen pricing go down the generic route. So this is in line with the expectation when you see different major players enter this space.
So We basically expect this to kind of stabilize. We've also seen more gradual decrease in prices Overall and the ASPs have been more in line with what you would expect in a market where you have 4 to 5 media players across the portfolio. So we are not really seeing anything Out of line that we were we had set out in the beginning.
Sure, that's fine. But I'm just trying to understand what's the dynamics Behind it in the sense that if there is a no new entrant over last whatever 6 month period, then What forces the price correction? Is one of the incumbent getting more aggressive or is the payer demanding it? What's
So pricing is Sorry, So pricing is certainly one factor which I think as I've seen before, beyond pricing, there are other factors that play a role as well in terms of How entrenched players are focused on therapy areas in terms of what the competitor contracting strategies have been, In terms of what the overall payer dynamics are, so in addition to just the pricing, Even the reimbursement strategies that have been put together play a role in terms of how market shares get allocated. And we are not fully weighted between the various It is determinants on how these decisions are being taken. So pricing is certainly one factor, but not the sole determinant of market share allocations between the various players. And you will see that change over time across the various players. Certainly, those who have within the space in that particular therapy area could see a carriers given their Long standing relations with the payers.
And I think that's an area that VHS has also said in the past that it has There is an area for improvement that they have identified and that's what they will be investing in with greater focus
Okay. My next question is on the market share for these two products, PEGFIL and TRAS2 in the U. S. Steve, we have been at whatever, say, 6% to 8% for some time. We do get some 50 basis points up here and there.
What's really going to drive this to 15%, 20% your rightful market share? What's holding back? And just to add to that, over time, you will see more players coming in and this opportunity would then go away As the biasing utilization moves up to 65%, 70%, 75%, so we need to add urgently, it's been long time. So your thoughts on this?
To begin with, I think the effect in customs space, we've got a steady market share of around 8.5%, 9% that's where It has been trending and as we discussed earlier on the call, we did see Onpro which kind of moved up in its market share over the last 1 year, given the pandemic situation and the convenience factor that we saw patients looking at. So Certainly, it held on to market more than what was expected. So it has taken a longer time for all incumbents to We've seen that come off as we get into this year and you've seen over the last one year that on pro market share dropped from 58% to 52%, Certainly creates an opportunity for Fulfila to move into that space. In terms of Trastuzumab, I think there again the COVID pandemic has played a role where there's been a reduction in terms of The overall diagnosis where the streaming success came down over the course of the last year. And we fell down through that Market share, it's steadily low.
The course of the last 18 months, we've ramped up towards the double digit figure. We're just under 10 At this point, we're looking to increase that market share. There was, of course, a disruption that was caused with the market moving from the 100 4 20 milligrams and certainly there is some attribution that given the higher dose formulation there is lower losses, Hence, lower requirement. So the franchise itself, there is some, let's say, rationalization in terms of volumes. But we believe that that remains strong.
And as we get into the coming year with the pandemic, probably behind us, particularly in the U. S, We are starting to see those more footfalls in the hospitals and more screenings, and we will see that we continue to hold that one
In terms
of talking through about What is it that has driven this overall franchise in addition to bexildasum And trastuzumab, we're looking forward to getting bevastuzumab join this overall oncology franchise, Which we believe will be also another sizable opportunity because vebicizumab itself has grown year on year 5% in terms of market share solely in the U. S. So apart from 26% globally. So we believe that there is a longer term play for us In the oncology space, with a more complete offering in terms of pegfiltrastuzumab and then There is a zoom app to join me shortly.
With your permission, I'll just have one or two more. And that is when did FDA confirm that it would come for the Malaysian inspection in 3Q? I asked this question because I think Malaysia is right now going through a very bad 3rd wave. I think just 2, 3 days back, it's hitting almost its Highest ever COVID positive cases. So is there any reason to think that FDA can actually delay this?
And second question is any thoughts on the new biosimilars entering Phase 3 trials?
So let me answer the first one straight up. We've been in constant dialogue with the inspectors who are visiting us On-site and we have Dhrukshar, you're absolutely right. The 3rd wave of Malaysia despite the lockdown has been more aggressive Or not the 3rd day, but essentially the current day. And they are seeing an all time high in terms of cases reported. But there are clear relaxations that the government has provided in terms of visitors from different parts of the world And those who are coming for visits for 15 days and less.
And I think the way we work with the agency is they are confident of making The trip to inspect us and be with us on-site. At this point, what we have to share with you is those plans are Still on track and they expect to visit us towards the end of this quarter. So that's on the Malaysia Sorry, pre approval inspection at our location. In terms of products getting into the clinic, we've said in the past that our Products are progressing very well in terms of the CMC aspects of it. We are currently in the state where we are We are progressing them towards the clinic and we will be updating them shortly once they get past that stage and are
Thank you, Sameet. The next question is from Charulata Gayathini from Dalaland Charultha, please unmute your line to ask your question.
Yes. My question pertains to the interchangeability for Glargine. After receiving interchangeability, what type of market share would you expect over the 1st year, Full year of operations.
So, Chandra, I wouldn't be able to comment on Specific market shares, but as we've discussed also in the call, we certainly believe this to be a development in the right direction for us To have more constructive discussions with the payers, but we wouldn't be able to give you specific guidance on what those market shares would
But while you are talking to the payers with limited number of Competition in Glargine, would it be reasonable to expect a 10% market share in FY 2023 Or it could be higher.
As I said, we would not want to comment on specific Market share, the percentages, but suffice to say that we are looking at building on what we've done so far in the past.
Okay. Yes. Thank you.
Thank you, Charita. The next question is from Hiyush Jain from Apex Capital.
Yes, hi. Thanks for the opportunity. I wanted to understand the cost competitiveness and cost advantages Of Biocon in the biosimilars arena, like do we have certain cost advantages in Biosimilars which other players won't have because we are manufacturing in India and Malaysia. And do these cost advantages will help us And in this pricing war that is happening currently in U. S?
Krish, I think if you just look at how our focus is conventionally given in the biosimilars space, Price is certainly an important or I would say cost is an important element or important lever to be successful in the market. Okay. The first piece is the scientific aspect and to be able to develop a molecule as complex as a biosimilar. Then the ability to get the facilities approved in terms of which markets you want to bring these products to. And then the third aspect then will be the ability to price it competitively and to win market share.
So I think what Biocon has been able to success We demonstrated we have the scientific credibility to bring these highly complex biologicals to the market And not just to emerging markets with certain players maybe operating in, but to all parts of the world. And our products today are approved by all ICH companies. So that's the scientific hurdle. The next piece is the manufacturing scale and the compliance with regulatory standards and That's the other hurdle that we've been able to move on and surpass. We've always been, even in our small molecule space, We're very focused on emerging markets.
We've always been extremely competitive in that space. That's been our DNA. And we continue to be focused On cost at all times. So we come from that focus and legacy. So we don't see cost So being a barrier to us within market share, but I want to leave you with the thought that that's not the only factor Determining success as I just kind of outlined.
Okay. That helps. My other question is What is the core growth strategy that the senior management is looking like? Where is the bottom line growth going to come from In the next 2 or 3 years, what arenas are you most hopeful about?
I mean on the biosimilars case, let me respond. I think one of the things that we've got is we played the platform very effectively for For an insulin franchise, which is all set to grow in terms of us towards the end of the month, looking forward to an interchangeably First intracenterable insulin ever to have been approved by the FDA. We're clearly looking forward to that decision. We are hopeful And we're looking forward to that. So we're looking at the insulin franchise making a difference.
Certainly, we're also looking at a more complete oncology portfolio With davacizumab joining the Rupiksel, Grastuzumab franchise, we're also looking at making the difference with To patients and patient lives for our COVID portfolio, we will be repurposed products from our pipeline like etilizumab, which has really made a difference in saving patient lives in this time of crisis. We are looking at growing our footprint in emerging markets Where we really had great success in different parts of the world as Sushil talked about With the portfolio that we've got and most importantly, we are looking to bring the next wave of biosimilars To the fore, as we continue to maintain our need in terms of building several first biosimilars So I will say there are several things that we have to look forward to And we are really looking forward to that with a lot of optimism.
So I
would just like to add to that by saying that across the group, we see some very strong growth drivers. I think you've just heard from Sidharth We have a large number of ANDAs in our pipeline. We are having a lot of Capacity expansions that will go on stream, API business, as you know, is also a very profitable business for Biocon. And if you saw the recent rankings of API Producers in India, Biocon is right up there in the top 10. In fact, it's in the top 5.
So I think from that point of view, we are very committed to This business as well and of course Research Services has a lot of growth opportunities, which you also heard. So I think overall, I think the Biocon Group is in a very strong position to deliver on all its on all fronts, Whether it's biosimilars, which is now going to focus on market expansion across developed and emerging markets with its existing portfolio. It's looking at portfolio expansion. It's looking at a strong focus on insulins. And I think in terms of our generics business, both in terms of APIs and formulations, we see a huge opportunity for growth In the coming years and so also in the Research Services.
So I think overall, we are in a good place And we are going to be really focusing on operational excellence as well as market share In terms of all our products.
Yes. One last question from my side. Sidharth, what kind of CapEx do we foresee for Fiscal 2022?
I think we had said that overall CapEx Spends were $100,000,000 a year for next 3 years. We have had some delays in the beginning in the Q1, but Overall, from a cash spend perspective, I expect around INR 500 crores to be the outlay in FY22, but it will pick up in FY2023. So this
is ex Syngene, right?
Because I'm only talking about generics business. Maybe Chaney can give numbers for the biosimilars business.
Another 100,000,000 account Biologics, 100,000,000 per year.
Okay. Okay. Thank you.
Thank you, Ashish. The next question is from Vasira Vasundhala from
Hi, am I audible?
Yes. Perfect.
Thanks for taking my question. I think first just wanted to understand with Mr. Shaw leaving the Board,
Yes, we will look at adding someone to the Board, and we will look at someone Who comes from a digital technology background is what our view is.
And then just the second question was, I think, 6 months to a year ago, the target for the biosimilars Business was about $1,000,000,000 in revenue. Understandably, some of that has been delayed with the FDA investment in the year. Does that target still stand
for you guys?
Well, the target is there, obviously, but it won't happen by FY 'twenty two. So I think we are looking at recalibrating that target date. But obviously, the $1,000,000,000 target is very much on the annual for biosimilars. And we hope that we will deliver it sooner than later.
Got it. All right. That's all from me. Thank you.
Thanks, Mr. The next question is from Mitesh Shah from ICICI Securities. Mitesh, please unmute your line.
Sure.
Call. Can you hear me?
Yes, we can.
Yes. Thanks for taking my question. I just have one hypothetical question. Post interchangeability, if a product is Q2 table, can we see the similar kind of generic acceptance like for the BioSuspart and the insulin portfolio?
I think Shreyas had mentioned that we have submitted our BLA for Insulin as part as an interchangeable insulin. So I think going forward, all our insulin submissions will be made as interchangeable insulins. And basically, Glargine was filed under a very different regulatory route and that's why we had to now A request for an interchangeable label under a very different set of circumstances. But going forward, I think we will look at All insulins being submitted under the interchangeability.
Yes, Got it. My question is mainly because post the interchangeability of the Klargine, can we expect the Similar response like generic is having the interchangeability currently in the market or pure generic is accepted as a
Branded portfolio?
Well, you mean for biosimilars in general, Youssir? Right, right, right.
Post intergenerational.
I thought you were talking about insulins. But Right now, the guidance given is for insulins because it's a simpler molecule From an identical comparability point of view, but when it comes to monoclonal antibodies, I think It will take some time before the agency will take such decisions is our belief.
Okay. And the loss of our sales this quarter because of the phone related disruption, Can we see some of the recovery on the coming quarters?
Well, we certainly expect that to happen because we Expect normalcy to return this quarter unless we see a very unexpected 3rd wave. But other than that, I think since we have vaccinated all our employees, we believe that we are in a safe place to Continue with our operations, and we hope that things will resume over the coming quarters. So certainly, we expect things to be
Thank you, Mitesh. The next question is from Tarang Agarwal from Old Bridge Capital.
Hello, team. Good morning. Couple of questions from my side. Just general questions. 1, in a manufacturing marketing partnerships that you have entered with your partners, Such as yours and Beatrice for your oncology platform or the diabetes platform in North America.
If you could give us some sense on what proportion of value of the product is captured by the manufacturer and what Is captured by the marketer. Without getting into specifics, just wanted to get a broad brush of incentives between the 2 collaborators. That's number 1. And the second question is, given the size of the biosimilars, opportunity wave 1, wave 2, wave 3 and maybe the wave 4, And the portfolio that you have, whether it's approved under development, would it therefore not make sense for you to maybe In the medium to long term, actually be marketing these products on your own, So as to be able to capture the entire value chain, would that be the right way to look at it? Or would Partnerships be the right way to look at this in the long term, obviously, not in the short term?
Well, if you look at the way we have developed the biosimilars business, it is exactly along these lines. I think you will know that our Partnership with Beatrice was extremely valuable as we initiated our biosimilars development because I think it was important to share the risk, The cost and the opportunity, which I think both partners have benefited from and realized the value of Entering into such a partnership where Biocon brought in a lot of R and D and manufacturing capabilities and And Viatrix is obviously focusing on the commercial aspects of our partnership. Going forward, as you know, in terms of wave 2 and wave 3 programs, we have a partnership With Sandoz, we have also plans to have our own programs. So we will have a combination of partnerships and programs Going forward, depending on what the commercial models are going to look like. So I don't think we want to completely focus on 1 or the other.
I think it's important to have a very balanced view Of what works in a partnership that could work better on your own. So I think that's the way Biocon has gone about it. And going forward, we certainly want to have our own programs being marketed by us.
Sure. And on my first question on broad brush in terms of value capture at the manufacturing level and at the marketing level?
So let me put it this way. On the collaboration as a whole, we have a very equitable collaboration. So I think that's as much as I can say. I cannot really break it down I would just say that it's a very equitable partnership.
Okay. Thank you. Thanks, Varun. We have another question from Sameer Baisavala from Morgan Stanley. Sameer, please go ahead.
Thank you for a follow-up. Just a couple of questions. One is on the Mutual recognition group with MHRA UK for Beva. What's the likelihood that And I guess, are there any case precedents where FDA has done so?
So Sameer, I just want to correct you. The MHRA Mutual Recognition route has been actually pursued by the generics Division. As far as the biosimilars or Biocon Biologics is concerned, We have looked at all avenues of trying to get our facility in Bangalore inspected, whether it's virtual, whether it's through mutual recognition, But we are yet to get a proper a positive feedback from the agency. We were we at least appreciated that they gave us a positive feedback from Malaysia, but India is still Not something that we have visibility on.
Okay, got it. Very clear.
If I may also add, in general, there has been not a precedence on this. I think this guideline came out in May. After that, I know that companies have reached out to FDA to get the advantage of this new guideline. The FDA has reached out to us and requested for information, which we have submitted, and we await that decision. So At least I have not heard again in the Indian generic context if any other Indian company has received an approval Using this mutual recognition with MHRA, Iman.
Okay, great. And just on the inter Tangibility, I'm not so sure, maybe not a very right question, but would this be against the innovative brand, which is Lantus or also against The other guy which is Vasu Clara.
So this is Sameer against the innovative brand, So the significant increase to Landis.
All right. Yes. Got it. Thank you so much.
Thank you, Sameet. The next question is from the Deepush
Hi, ma'am. Any update on oral insulin program? And what is the progress on our biosimilar joint venture with Sandoz? Any update, ma'am?
So in terms of oral insulin, we are still in the process of completing the Type 1 diabetes trial and once that is known, we will take a view on The next path ahead for this program, as far as Sandoz is concerned, yes, the programs are under development, They are still at early stage.
And lastly, ma'am, what type of annual Last guidance we can expect for Baikara?
Baikara is a start up. So I would say that you will only get some readouts by the end of this year in terms of their first program that is in the clinic. And based on that, then we will go and the company plans to then raise funds, venture funding. And it also has some very exciting follow on programs, which are preclinical. So I think as you must I'm sure you're aware, These kind of very innovative startups do need to basically focus on 1 or few programs That will then establish their capability and their platform technologies.
Thank you. That was the last question. We thank you all again for joining us today. If you have any additional questions, please feel free to reach out to our Investor Relations team. We look forward to see you again next quarter.
Have a good day, and stay safe.
Thank you. Thank you.
Thank you.