Q1 21/22

Aug 16, 2021

Ladies and gentlemen, good day and welcome to the Q1 FY 'twenty two Earnings Conference Call of Glenmark Pharmaceuticals Limited. 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 presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Ravi Agarwal. Thank you, and over to you, sir. Yes. Thank you, moderator. Good morning, everyone, and a warm welcome to the Q1 FY 'twenty two results conference call of Glenmark Pharmaceuticals Limited. Before we start the call, a review of operations of the company. For the Q1 of FY 'twenty one, 'twenty two, Glenmark's consolidated revenues from operations was at INR 29,649,000,000 as against INR23,448,000,000 recording an increase of 26.4% year on year. On to the businesses, first the India business. Sales from the formulation business in India for the Q1 FY 'twenty one, 'twenty two was at INR 12,250,000,000 recording a growth of 57.1% year on year. Q1 FY 'twenty two was a landmark quarter for the India business with both the COVID and non COVID portfolios of the company performing well. The India business outperformed industry growth, continuing the trend of the past several years. As per IQVI MAX June 21, Glenmark's India business recorded growth of 35.4% as compared to the IPAM growth of 14.7%. Glenmark's India Formulations is ranked 13th, an increase of 1 rank with market share of 2.6% as compared to 2.24% in Q1 last year. Glenmark is the fastest growing company amongst the top 20 companies on a March June 2021 basis. Glenmark is ranked number 1 in antivirals, number 2 in Burma, 4 in respiratory and 6 in the cardio market in India. The company launched 7 new products during the quarter. Denmark's novel patent protected and globally researched sodium glucose co transpoker 2 inhibitor, remoglucosin, continues to do well in India. Total remoglucosin sales, including brand extensions, grew strong double digits during the quarter. Denmark has recently signed an exclusive long term agreement with Canadian Biotech Sanitiz to commercialize nitric oxide maple spray for COVID-nineteen treatment in Indian and other Asian markets. Studies have shown that the nitric oxide nasal spray is safe and highly effective in reducing viral load in COVID-nineteen patients and reduces onward transmission. Phase 3 clinical trial is expected to be completed followed by commercial launch under the brand name Savi Spray in India later during the calendar year. During the quarter, Denmark became one of the first companies in the world to launch Ryalsys AZ Mysis Spray, a novel fixed dose combination of momaltestone, curate and AzalexTime for the treatment of moderate to severe allergic rhinitis in India for patients above 12 years of age. Launched at an affordable cost, the product provides a far more convenient cost effective treatment option in the country and reinforces the company's strength in its respiratory franchise. Consumer Care business. Secondary sales of Glenmark's Consumer Care business grew by 24% year on year during the quarter. Candid Powder recorded its highest ever secondary sales in June 2021. Similarly, Larcie and Style Plus both recorded their highest secondary sales in the quarter. The company also successfully launched Candid Cream during the quarter, which is available in more than 30,000 outlets currently. Coming to North America. North America registered revenues from the sale of finished postage formulations of INR78,78,000,000 in Q1 FY 'twenty two, recording a growth of 6.1% year on year. On a constant currency basis, the revenues have grown 8.5% year on year during the quarter. In Q1 FY 2022, Denmark was granted final approval and launch cheopyrin extended release tablets, 300 MG and 450 MG. Glenmark has been granted a competitive generic therapy CGT designation for theophylline extended release tablets, 450 mg. With this approval, Glenmark is the 1st approved applicant for 1st competitive generic therapy and is eligible for 180 days of CGT exclusivity upon commercial marketing of the 450 strength. Renmark also received approval and launched Arformatol tartrate insulation solution. Arformatol is manufactured at the company's North America's manufacturing facility based in Maungol and marks the company's 1st nebulizer approval. In addition, Glenmark launched the previously approved product rupinamide tablet as one of the first available generics on the market. The company filed 8 ANDA applications with the U. S. FDA, including 3 filings from Mondro and is on track to file 18 to 20 NDAs in FY 2022, including 4 to 5 filings from Mondro. Venmo's marketing portfolio through June 30, 2021 consists of 172 generic products of sites for distribution in the U. S. Market. The company currently has 44 application spending in various stages of the approval process with the FDA, of which 21 are Thylophore applications. Talking about the ROW region, for the Q1 of FY 'twenty two, revenues from ROW region were at INR2686 million, recording growth of 26.7 percent year on year. In Russia and CIS markets, the company is witnessing recovery, with secondary sales having grown 42% year on year in the region. In Russia, as per Q1 IQ VI, Denmark revenues grew 29% in value terms vis a vis 13.2% growth in the overall retail market. Also during the quarter, the company successfully commercialized VialSYS in Russia with indications of seasonal and perennial allergic to NYFS in patients over 12 years of age, strengthening our regulatory franchise in the market. Secondary sales of the company grew 20% year on year during the quarter in Asia with strong growth in key markets like Philippines and Sri Lanka. The company also witnessed recovery in the Middle East Africa region with secondary sales growth of 52% year on year with growth witnessed in markets like Kenya, South Africa and Saudi Arabia. Europe. TMX Europe operation European operations was at INR 3059 million recording a growth of 11.7% year on year. The company witnessed a mixed performance in the Western European region. While growth was affected by continued COVID restrictions in some countries, key markets like UK and Netherlands witnessed positive growth. The Central Eastern European region witnessed healthy growth across most key markets. In line with our global focus on the respiratory segment, Glenmark became one of the first generic companies to successfully launch diatropion dry powder in Malaysia, the bio equivalent version of Tioga Handyhala under the brand name of Tioga in the UK during the quarter. The company has a strategic exclusive licensing agreement to market Tioga DPI in Western Europe and its planned subsequent launches of the product across markets in Western Europe. In this quarter, Glenmark concluded the DCB procedure for Hyattress in Europe, enabling approval in 17 countries across EU and UK with launch plans in the current year. Latin America. Wehrmacht's revenue from its Latin American Caribbean operations was RUB 625,000,000 in the quarter, recording growth of 2.5% year on year. Revenue growth was impacted by Brazil, where the market remained challenging due to the pandemic. However, we have begun to witness recovery in this region with most of the other markets recording positive growth momentum during the quarter, including Mexico, which grew 63% year on year during the quarter. Glenmark's Specialty and Innovation Innovative R and D pipeline, we start with Rytris. Rytris is currently under review with the FDA as a treatment for seasonal allergic rhinitis in the USA. Glenmark's responsible agency CRM was submitted to the FDA in July 21 with the PDUFA goal date in Q4 FY 2022. In April 2021, GenMark included the GCP procedure in Europe, enabling approval in 17 countries across EU and UK with potential launch in key markets in H2 FY 2022. During this quarter, GenMark also received regulatory approval for Vyaches in Zambia, Ecuador and Peru. Vyaches sales continue to progress well in Australia, South Africa, Ukraine and Uzbekistan. In Q1, FY 2022, GearMask Partner in China, Grand Pharmaceuticals Company Limited finalized the Phase 3 protocol for China and submitted the IND application in July 21. In South Korea, Glenmark is working with its partner, Yuan Corporation, to potentially launch the product by H2 FY 2022. GBR C10. Glenmark has announced successful Phase 1 results for GBR C10 that suggests similarities in pharmacokinetic, pharmacodynamic, safety and immunogenicity profiles between GBR C10 and the reference product, omalizumab, marketed in the U. S. Under the brand name Xolair. The company is in discussion with potential partners and is targeting to conclude a deal before initiating Phase 3 studies. GRC39815. GRC39815 is the company's respiratory pipeline asset being developed as an inhaled therapy for treatment of mild to moderate COPD. It's currently under Phase 1 clinical development with a single ascending dose study in the U. S. The Phase 1 study is expected to be completed in the next few quarters. GRC17536. GRC17536 is the company's 10 pipeline asset being developed as an orally administered treatment of pain in patients with painful diabetic peripheral neuropathy. A regulatory submission to DCGI for conducting the Phase 2b DRF study in India was done in Q1 FY 2022 and the study is scheduled to be initiated in the next quarter. The company is evaluating further options including out licensing for the molecule. GRC-fifty four thousand two hundred and seventy six. GRC-fifty four thousand two hundred and seventy six has been developed as an orally administered IO adjuvant treatment for patients with solid tumors in oncology. Preclinical in vitro and in vivo profiling was completed in Q1 FY 2022 and preclinical DNPK and non GLP toxicology studies are currently underway. Further evaluation of the molecule is ongoing to advance towards clinical studies. Glenmark Life Sciences, GLS. The equity shares of GLS were listed on GST and MHC on 6th August 2021 following a successful IPO. So pursuant to the IPO, GLS published its unaudited financial results for the Q1 of the financial year on 13th August 2021. For the Q1 of the financial year, GLS registered revenue from operations including captive sales of INR 5,249,000 as against INR 3969,700,000 during the same quarter of the last financial year, recording growth of 32.2 percent year on year. The EBITDA margin for Glenmark licenses including captive sales was 31.3% for the Q1 of this financial year. For Q1 FY 'twenty two, external sales for GLS was INR 3040 million as against INR 2348 million, recording growth of 29.5 percent over the corresponding period last year. For further updates on GLS, please log on to www.glenmarklivescience.com. Iconos. Glenmark has invested INR 1617 million, which is around $21,900,000 in the Q1 of the financial year as compared to INR 1735 million, which is INR 23,000,000 in Q1 last year. For further updates on the pipeline and the organization, please log on to www.iclostsciences.com. The pipeline update for the Q3 is published on the site. Key objectives for FY 2022. We expect revenue growth of 10% to 15% during the year. We expect to sustain EBITDA margin performance at similar levels of FY 2021. We expect to reduce debt by at least RMB15 1,000,000,000 during in FY 2022 through a combination of free cash generation and IPO proceeds. Post FY 2022, the strategic priority is to enhance the free cash generation for further debt reduction. We've prioritized this over R and D investments and capital expenditure. We also expect to close 1 to 2 out licensing agreements in IKMLOS during the financial year. Some notes before we open for Q and A. The India formulation revenues include INR350 crores of private new sales with EBITDA of INR 70 crores during the quarter. ForEx gain for the quarter was at INR 38.9 crores as against INR 40 crores last year, which is recorded in other income. Gross net for the period ending 30 June 2021 rose at INR 4636 crores as compared to INR 4,687 crores as on 31st March 2021. The net debt for the period ending 30th June 2021 was INR 3,444 crores as compared to INR 3,549 crores as on 31st March 2021. The total net debt reduction was at INR 105 crores, and this is after adjusting for one time expenditure of around INR 40 crores in ABCD Technologies and around $7,500,000 at premium on prepayment of FCCBs during the quarter. Inventory for the period ending 30th June, 2021 was at INR 2,426 crores as compared to INR 2,277 crores on 31st March 2021. Receivables for the period ending 30th June 2021 was at INR 2,601 crores as compared to INR 2,572 crores on 31st March 2021. Payables for the period ending 30th June 2021 was at INR 2,354 crores as compared to INR 2,238 crores as on 31st March 2021. The total asset addition in the quarter was INR 265 crores of which the tangible asset addition was INR105 crores. The R and D expenditure for the 4th quarter is around INR284 crores, which is around INR9.57 percent to the total net sales for the Q1. Before we open the floor for Q and A, I would like to introduce the management of Venma Pharmaceuticals on the call. We have Mr. Vem Saldana, Chairman and Managing Director Mr. V. S. Mani, Executive Director and Global Chief Financial Officer and Mr. Robert Crockhardt, Chief Commercial Officer. With that, we'd like to open the floor for Q and A. Over to you, moderator. 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 Krishna from Annam Holdings. Please go ahead. Hi. Thank you for taking my question. So I have two questions. The first one is on the debt repayment from operating cash flow. So is it fair to assume that around INR 400 crores to INR 500 crores of debt repayment will be made through operating cash flow? Yes. Krish, about INR400 crores will be paid from the operating cash flows. So we have set a target of about INR1600 crores of that. The IPO will give us at least INR400 plus because whatever we receive in the IPO, there is some amount of issue expenses as well as on the OFS side there will be some tax on that. So net around R1200 will come from the IPO, whatever we are using and balance R400 plus will at least come from the internal generation of cash flow. Okay. And my second question was on the ICONOS licensing deals that you mentioned. So is there any time line we can expect when it's likely to happen whether Q3 or Q4 of this year? So Krish, our target is to close this fiscal year at least one deal, right? So between 1 to 2 deals is when we'll close this fiscal year. I mean, we've made a lot of progress, but and we are pretty confident that should happen. Okay. Thank you so much. Thank you. The next question is from the line of Nitin Agarwal from Dhan Capital. Please go ahead. Hi, thanks for taking my question. Again, just picking up your thoughts on the last question around in your commentary that you've sort of stated in the presentation in terms of a strategic priority being prioritizing debt reduction going forward over CapEx and R and D. Can you just help us talk a little bit more through in terms of how you're looking at subsequent to FFO 'twenty two on this whole on how you're looking at the utilization of cash flows? So what kind of debt reduction does it imply? And what does it really mean for the balance sheet post FY 2022? So I think Nitin, strategically, what we are saying is, as Mani mentioned, right, we generate INR 4,500 crores from the business this year. That should keep escalating every year, right, in FY 'twenty three and 'twenty four. So I mean, if you run the math, right, I think we will have very, very low debt net cash net debt numbers, right, by the end of FY 'twenty four, right. So every year you can expect the numbers the free cash to keep escalating from the business. That's what we are targeting. And is there a number that we're working with in terms of what we're looking to reduce the debt by, net debt by over the next 2 years, barring pure quotes that are going to? I mean Nitin, again, if you read what I'm saying, right, I'm saying that from this year onwards, every year, the free cash generation of the business will keep escalating and all that free cash will go towards reducing the net debt. So if you do the math by FY 'twenty four, it will be a very low number. Right. And secondly, on just to associate a point, so how should we look at the CapEx now for further business over the next 2 to 3 years? We obviously got the GLS listing. They have their own growth plans. Taking that into account, what kind of annualized CapEx number we should look at now including tangible intangibles? So, Nitin, I'll take that question. So what we are saying is that going forward, we are looking at about INR 650 crores to INR 700 crores and maybe next year onwards a little bit lower, INR 650 or so. So as you can see here in the Q1 that probably will be the trajectory at which we will do. We are about 160 or so in the Q1. So I think 650 to 700 is what we look for the current year and going forward it will be more towards 650 or so and that will include the GLS CapEx as well. Because many of our important CapEx decisions are already implemented in terms of 1 row and etcetera and also some of the other things in terms of licensing etcetera. So on a broad basis, we are looking at this as a number. And Vinodhi, this number will continue for at least what time are you comfortable with this kind of CapEx before we sort of step up CapEx again? About 3 years, Nitin, beyond that we will be disciplined, but 3 years, I think. Okay. Thanks. Sir, one more, sir, again on the business, we talked about the India business, the whole nitric oxide licensing deal that you talked about. I mean the product I mean can you just talk us through your own thoughts on this product and the possible potential of this product and when does it begin to sort of impact in the numbers potentially? Sure. So Nitin, obviously, this is a very exciting product, primarily because we think it will not only work in treatment of COVID, but mainly prevention of COVID. And being a nasal spray, there's the convenience aspect, you can use it pretty frequently for prevention of COVID. So it's a very exciting product. We think we will we are hoping we started the Phase 3 clinical trial in India and we are hoping if we do get an emergency use authorization, we could launch sometime as early as October, November otherwise close to the December time frame. Okay. And this is going to be a device product. So this is going to be what, our internal manufacturing or this is something that you're going to be sourcing, Glenn? So initially it's sourced, but then we will make it ourselves. Okay. And lastly, Shirek, I mean aside of these COVID opportunities, related opportunities which are there, I mean how is the base business looking like for India? So India, Nitin, we've clearly been among the fastest growing companies in India and we continue to sustain those growth that growth momentum. And we are very excited about the prospects of India. I mean we have 2 or 3 big launches in this month and next month. So I think that will drive India growth. So I think all in all next 2, 3 years should be good years for the India business for us. Okay. And if you squeeze in the last one on the U. S, I mean how is the there has been too much a lot of talk around generic pricing pressure and most of our peers companies have faced pressure in the current quarter. What has been our experience given the fact that our portfolio has been significantly eroded over the this has significant pricing pressure on the dermatology side over the last several quarters? And what does the Brawana launch really apply for us in terms of we haven't seen much I mean, how meaningful a product what kind of market share are you looking on that product going forward? Robert, do you want to take that? And I'll take that through its logic here. So first of all, I think on the pricing erosion side, we have seen a bit of an increase and probably looking at it a little bit more around the high single digit levels. And of course, this has an impact as we go along. When you're looking to your question on the BRAVANA, just to remind you that we really launched product right at the end of June. So it's still very early days and didn't really have a big impact in quarter 1. However, as it stands today, we already have a 28% share. So we're still pretty optimistic in terms of what this product can bring us. Sorry, I missed the last part, but could you say about where we are currently in the product? I'd say currently, our market share on Nirvana is around 28%. So we're making good progress. What I did say was that we only launched at the end of June, right? So the impact in quarter 1 was low, but we got the product in the second half of our quarter moving forward. Hope you got that. Got it now. And secondly, just to conclude that, how do you see the approvals for the rest of the year? Nitin, about you can assume every year we will have about 10, 12 approvals, right? So we expect at least another 7, 8 approvals yet this year. Okay. Thanks, Glenn. Best of luck. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Hi, good morning and thank you for taking my question. Just the first one, I've missed the data points on India growth excluding Sagicool. So we think about INR350 crores of INR in the quarter. So excluding that, the growth is around 30%, 13%. Yes. Okay. So I note that down. So just then, a bit surprised, right, that if we remove that, then we're talking about the domestic growth as well. Was it that the COVID portfolio kind of impact the non core part of the portfolio? Or how should we and you talked about growth in the Indian domestic business. So just trying to understand why the weakness in the rest of the portfolio. So I think, Shyam, overall, 12%, 13% is a decent number for non without COVID, right, in terms of growth. I mean, I don't know too many companies who are delivering above that, right, in India, if you take out the COVID products. So I think it's a decent growth overall, right, on the core business even without the COVID products. And if we can sustain 13%, 14% right for the rest of this year, I think that will be a great performance for the India business without the COVID portfolio, basically. Okay. So maybe then we didn't have a base impact like last year for IATA, right, like we otherwise. Would that be another way to reset it? Yes. But even then, Shyam, I mean, look, the Indian IPM, right, if you strip out COVID products is like in the double digit range, okay, right, at best. Okay. It's not like we are underperforming the IPM. We've always done better than the IPM, and we will continue growing from strength to strength in the India portfolio with all the new launches that we have. And then just one on the pricing environment in how you would look at it to the domestic India, we have seen so far at least industry changing growing on the back of price growth as well. So how is it for us? I think overall, the pricing environment is stable in India and most of our growth is coming out of new product launches and volume growth, right, more than just price growth. Got it. Got it, sir. It's Haifel. Just moving over to the U. S, the 28% market share for Bovana, what is the denominator we are talking about because we have an AG, we have other players as well. So just trying to understand like for like, are we comparing to the whole market improving brand? Or if you can help us, please. This is on the overall market, Shyam, right, on the overall prowana market. Okay. And how do yes, yes, I'm here. I can hear you. Hello? Yes. Sorry, Glenn, you're saying that it's of the overall market, right? Yes. And it will take time. Look, it's not going to get captured immediately, okay, right? So please don't take this as next month you'll see the IMS sales or IQOS sales and expect the reflection. It's not going to happen. It will take time to build out, okay? But I think Robert's statement was more in terms of what we've already captured so far in terms of market share. Yes. Okay. Some of this could be contracted as well and not get sold. Maybe that's the way to look at it. Absolutely. Got it, Piyush. Last question is on the R and D expense. So I think this call out at about 9.6%, 9.7%. So it seems to have come out of that double digit number. How should we look at this now on a go forward basis? So, Shahram, let me hear. So last year, we did about 11.5% or so. So this year, we have been tracked somewhere while the Q1 was a little more muted, we'll track somewhere between 10% and 11%, more towards the 10.5% or so. That's where we'll be. So in terms of over the last 2, 3 years, we have progressively kind of come up substantially. Got it. And you called out I think RMB20 1,000,000 for item up, right? RMB22 1,000,000. What we called out was RMB21.9 million. Okay, got it. So and the reminder is for generic RNG for this company. Yes, the reminder is generic RNG. Got it. Thank you and all the best. Thank you. Thank you. Next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yes, hi. Thanks. Good morning to all. My first question is on the India business. So, FABI did phenomenally well. And just trying to understand how is the run rate being in July, August? And what is your expectation? How do you see this product? Are we seeing the loss of it given cases are down or the limbs are still going on? So Prakash, we've had virtually no sales of Fali, right, in the last in July August. And even June has came off pretty significantly. Okay. And looking at Q2 of last year, you had a heavy down there. How do you expect the remaining 9 months going forward for your India business? So I think Q2 in India obviously will be negative growth for us on the India business. But I think overall Q2, we are seeing we are expecting a very good Q2 on the back of a lot of traction that we are seeing in the ROW markets in Europe. The U. S, we are expecting close to double digit. So I think we are expecting a strong Q2 on a consolidated basis. However, on India, we will be negative in Q2 because of the high tariff sales we had last year. Okay. Fair enough. And if I mean the correlation of lower gross margin is a function of tariff sales. Is that right? Yes, Prakash. The lower gross margin is clearly a function of tariff sales. So as and when we don't have COVID sales, we'll automatically go back to where we used to be at 66.60 percent or 70%. We do expect the gross margin to normalize from Q2, actually. Guess. Yes, broadly. As and when the COVID sales are off, it will definitely be there. That's the main number. In India sales, you are saying that ex heavy anyway we are guiding for 10%, 12% growth. Yes, yes, absolutely. Yes. Okay. And second one is on the investment. So clearly, we have moderated our CapEx, R and D, etcetera, and cost as well. So the free cash flow is very good. I'm just trying to understand what are you thinking about next level of investment, if at all, where would that be over this year, next year? What are you thinking about investments now and in which guidance space? So, Prakash, our primary objective right now, as we've said in our guidance, right, is to accelerate the free cash of the business and to pay down debt, right? And the next 2 years or 3 years, we'll go clearly in that as the primary objective. Outside of that, we may see some in licensing deals to in certain geographies to accelerate the business. But money also guided towards the total CapEx, right, for the next few years. So it's all within that, right, in terms of in licensing cost. And Mundo investment is largely done, right? Mundo is done. Okay. So CapEx for this year and next year is looking how big? So as I guided earlier, Prakash, around RMB650 to RMB700, next year will be closer to RMB650, this is what we're looking at. Okay. And these are I mean, just closing the loop here, these are maintenance CapEx? Or is there anything that intangible is half way here? Yes. So largely in GPL, most of them will be maintenance CapEx. But in GLS, as we had I mean, I could tell you that they are obviously spending some money on putting up some CapExes in their plants and something on the oncology side. So those are not maintenance that are like greenfield investments. Okay, okay. Thank you so much and all the best. Thank you. The next question is from the line of Kunal Rundaria from Edelweiss. Please go ahead. Good morning. Thanks for giving me the opportunity. Glenn, you have had some new launches such as Xeroa map, COVID-nineteen, CDXC. Just wondering how do you see launches in the second half? Do we expect such launch quality? Or do you think some period of consolidation before it starts to improve? And secondly, how many of the pipeline products are full FPS or some which moves the P3 designation? So I think it's hard to guide towards launches, right? At JEMMA, we never guide towards any specific launches because there's still a lot of uncertainty in terms of filing the approvals. So we prefer not to put out any color on the quality of launches at least in this. But I think strategically as a company, we make sure that the only 5 products which are have got certain value built in them whether it is CGT status, whether it's for generic, whether it's in the 1st wave of generics. So we're very focused in terms of what filings we do. So obviously, a lot of that will translate into the quality of launches, right, as and when they do come up. So I think all in all, the U. S. Business, our perspective is if we are able to grow this business around 10%, 10%, 12% every year, I think we've done well. And this year, we are clearly positioned to grow at about 10%, the U. S. Business. Sure. Can you sort of number of maybe some range you'd like to give for PTT or FTX product? Not for this year, but maybe it's not in your pipeline, if any. No, we don't guide to any FTS or CGT or any of our pipeline. Sure. The second question is actually on a wild drift. So firstly, what are the CRM about the effect of this estimate, Julia, for few months? And secondly, I understand earlier that you have been the feedback so far from the doctors as well as payer? There? Regarding the CRL, it was sorry, regarding the U. S. CRL, it was primarily on account of our Badri manufacturing facility, which is under a warning letter. What we've done is we've now transitioned on to a U. S. Manufacturing location and we have refiled basis that. So we are hoping it will go through a it should get approved basis at this time. Regarding the response of doctors has been very positive. I think the product has beaten all our expectations in the markets where we've launched it. So be it South Africa, Australia, Ukraine, we are launching in Russia. So the feedback is really very positive and we are hoping to launch in Europe starting in Q3 of this year. So all in all, it should be a big product for the company at a global level. And then just one more second, Sreedhar, you have mentioned that Spiro Marketing was $7,300,000 or so in Guaravala. So what is the kind of competition that we can expect, So we have missed the question. Can you just repeat that? So, Sohrab, speaking to our market you had mentioned, I think in Rockwell, directly, there is around $750,000,000 in Europe. Wondering what kind of competition do you expect here? So we are expecting at least one more generic in the next 6 months, right. And that's the only visibility we have, right. And this is from not an Indian player. So one more generic is what we anticipate in the next 6 months. And have you launched a call from us? No, we just started the launch process. It will take us at least 6 to 9 months to even commercialize in all markets. Sorry, we couldn't understand your question. No, your voice is not coming very clear. So this comes closer to the phone. Will your competitor take just as long to commercialize? I mean will they remain 6 to 9 months behind you in other markets still? Absolutely. I mean that's the typical process in Europe. So you'll start country by country, and it typically takes that long to commercialize in most of the markets. The next question is from the line of Prashant Manudhane from Motilal Oswani. Please go ahead. So just on this marketing promotional expenses, how do you see has it been back to pre COVID levels at least for the branded in this market? So on a yes, definitely on a broad basis, there are two parts to it. Okay, obviously the marketing expenses will be back to pre COVID levels. And if you are referring to the other expenses line, obviously in the first half normally it's a little lower than the second half. So on a full year basis we will be back to about 36% or so. We were close to that last year. We will be slightly above that. Okay. So is it still improving in gross margin and steady flow to some extent? Yes, yes, I mean that will also happen. I mean it's not like everything is planned that way. But historically, if you look at it, our H1 normally the overall other expenses are a little lower compared to H2. And normally, the sales are also a little higher in H2. Year. The next question is from the line of Harit Ahmad from Spark Capital. Please go ahead. Good morning. Thanks for the opportunity. On the Thai European DPI launch that we have done, this product has been licensed from home and what are the returns with this partner in terms of revenue share or profit share? B. Balaji:] So this is licensed from a European manufacturer. And I mean we can't disclose the precise deal terms, but it's in license from a European manufacturer. Okay. And my second question is on Ichnos. Are there any data readouts that we should expect from the BEAT assets in the next 6 or 12 months? So just trying to understand some of the milestones that we should look forward to from Iclouds from a pipeline progress perspective. So Iclouds, near term, as we discussed, right, you should see some deal action on ISB 880 and ISB 830. Those are near term events. In addition, I think 1342, you should see a readout in the next 6 months is what we believe. If all goes well, we should have POC in the next 6 months. So I think these are the 3 and 1442, the start of Phase the IND filing and start of Phase 1. So these are the 4 inflection points for Aikonos in this year. Okay. Last one from my side. The seasonality that we see in some of our segments, especially ROW, EU and LatAm, this is on account of what exactly? I mean, is it because of our respiratory products and the seasonality that those products typically have? Or is there any other reason for Q1? I think there are 2 things which are impacting the volatility in sales are purely because one is COVID is still around, okay, in many geographies, right. So there are still some lockdowns, there are still some geographies which are getting impacted across the world. So that is one impact. 2nd is, of course, respiratory is a big franchise for us. Latin America particularly, we lost out heavily because of our respiratory sales coming off during the COVID period. But I think, I mean, starting Q2 should be a good quarter for many, many geographies around the world, right. And that's what we are seeing on the ROW side. So strong traction coming out of ROW. Likewise, Europe also should come back to seeing good growth numbers from 2nd quarter onwards. Got it. Thank you very much. Thank you. The next question is from the line of Alankar Garude from Macquarie. Please go ahead. Hi, good morning, everyone. Glen, you mentioned about the next few years being good for the India business. So from a capital allocation perspective, are there any plans to increase our focus on India going forward? B. Balaji:] Well, I think, Anantar, we are anyway growing this business above the market. The bulk of our focus today is on products, right, making sure we get new products to the market and making sure we continue to gain market share in the segments, which we operate, which is mainly dermatology, respiratory, cardiovascular and diabetes, like the 4 segments in oncology. So I mean these are the segments we are driving. And I think the bulk of our focus is on bringing new products to market and trying to gain share through the product group as opposed to large field post expansions and further capital investments in the India business. Understood, Glenn. And my second question is to Robert. So I would assume our U. S. Portfolio concentration would have come down quite a bit over the past few years. Any color you can throw in on what would be the sales contribution from our top 10 products in the U. S. Now versus what it was, say, 3, 4 years back? Well, to be honest, we'll see that if you just look at our portfolio as a whole today, the biggest portion of our portfolio, we are a number 1, 2, a 3 player and the top 3 players. So proportionately still, our top 10 products will still bring in a very hard proportion of our business in a relative perspective. But has that number come down over the last few years? Or it's pretty much intact? No, it's come down a number. Pretty much intact. I mean the shares are high, okay, just to ask you what Robert is saying a little bit. Market shares are high. But in terms of value to the overall business, we don't have a single product, which is more than, let's say, 15,000,000 in sales. So it's a very diversified business today. Understood. Thanks for all the best. Thank you. The next question is from the line of Charulata Gazzini from Dalal and Brocha. Please go ahead. Yes. My question for this, the agreement with Sanofi, By when do you expect I mean, if you could give some details of the trial and the timelines of launch? So the trial is underway. I think it's 250, 300 patient trial that we are running in India. And we are hoping it all depends on the regulators as to when they would approve us and whether we would get emergency use authorization or we would have to complete the trial and then launch it. So it could be anywhere from October right up to December time frame is what we anticipate. For the EUA filing? No. This is for either EUA or final approval. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Okay. And in terms of my second question on the ROW market, whatever supplies are going into ROW, are they mainly COVID related Or they are mainly the other products? So I can take that. I mean, what we have seen in the last quarter is, obviously, across the board through all the ROW countries, Africa, Asia, CIS, and also Middle East, even our Russian business, on our base business, we've seen exceptional growth. So we are very optimistic about our business today. And just to answer you, in short, in quarter 1, there was very little of the COVID product that went out into ROWF. Again, so what would be the percentage for COVID? COVID is negligible. The COVID products are negligible in our order. Okay. Fine. Understood. Thank you. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Prakash Agarwal from Axis Capital, your line is unmuted. Please proceed with your question. Yes, hi. Sorry, I was in mute. Just wanted to understand the margin guidance better. So this quarter, particularly, gross margin and EBITDA margin marginally lower because of higher COVID related sales. Next quarter, you talked about Europe and LatAm bouncing back plus U. S. High margin product. Roana is there. So I mean, I'm just trying to think that 19%, 20% is definitely in the back. So would you be also I mean, do we have upside risk on this like you expect better margins going forward? Prakash, we would like to guide to a 19% to 20% margin, 19% plus. And if we get anything better that's a bonus. I mean we would because as you know there are COVID and there are uncertainties, but we would like to buy to a 19%. The GC obviously as I guided earlier, we always have a 66% to 67% GC. I mean if there is no COVID sales automatically it goes back there, yes. That's how it trends. But are you baking in higher costs going forward for the rest 9 months or how should we The other expenses as I explained for a full year basis, if you look at it, it is almost about 26% plus. In this quarter, it was a little lower. As I also informed earlier that the first half normally is a little bit lower and it builds up in the second half as we get to looking at launches etcetera. So on an overall basis, what I can try to say that we will do EBITDA margin of 19 plus I think. That's a good guide. Okay. Perfect. And secondly, I missed one point on the 1 or 2 launches, which I think Glenn said, and India business large launches, what would those be? Prakash, we can't mention, but I think you'll see it in the next 2, 3 months, right? We have some ongoing launch activities on multiple products. I think in the next 2, 3 months, it will be evident. So are these the core diabetes franchise or these are This is all within our therapeutic areas. Non COVID? Correct. Okay. Fair enough. Okay. Thanks a lot. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Ravi Agarwal for closing comments. Yes. Thank you, Margretha. We will read the disclaimer before we end. The information, statements and analysis made in this presentation describing the company or its affiliates objectives, projections and estimates of all looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from those statements depending upon economic conditions, government policies and other incidental factors. No representation of warranty either expressed or implied is provided in relation to this presentation. This presentation should not be regarded by recipients as a substitute for the exercise of their own judgment. The company undertakes no obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise. With this, we end the call today. A very big thank you to all of you for joining us on the call. Thank you very much.