Ladies and gentlemen, good day and welcome to Orchid Pharma Limited Q4 FY24 Earnings Conference Call, hosted by Systematix Institutional Equities. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Institutional Equities. Thank you, and over to you, sir.
Thank you, Manav. Good evening, everyone. On behalf of Systematix Institutional Equities, I welcome you to Q4 and full year FY 2024 earnings call of Orchid Pharma. We thank the Orchid Pharma management for giving us an opportunity to host the call. Today, we have with us the senior management of Orchid Pharma, represented by Mr. Manish Dhanuka, Managing Director, Mr. Mridul Dhanuka, Director, and Mr. Sunil Kumar Gupta, Chief Financial Officer. I'll now hand over the call to the company management for opening remarks. Over to you, sir.
Thank you, Vishal. Good evening, ladies and gentlemen. This is Manish Dhanuka, the Managing Director. I welcome you all to this discussion of Orchid Pharma's results for the fourth quarter and the full financial year 2024. So I'm pleased to share some of the key financial achievements for Q4, financial year 2024, and then the entire year. In the fourth quarter, our sales reached INR 217 crore, up from INR 210 crore in the same period of the last year. Our EBITDA for Q4 was INR 42 crore, compared to INR 31 crore in the previous year. For the full year, full financial year of 2024, we achieved the sales of INR 819 crore, a significant jump from INR 666 crore last year.
Our full year EBITDA stood at INR 142 crore. However, this includes INR 15 crore of interest income, therefore the EBITDA for, from the normal business standard, INR 127 crore, up from INR 103 crore in financial year 2023. This growth is reflected in our strong compounded annual growth rate of 22% in sales and 26% in EBITDA over the past three years. These figures highlight our continuous progress and ability to adapt to the market demands. Efficiency and productivity remain at the core of our operations. Employee expenses have decreased from 9.8% of sales last year to 8.5% this year. Similarly, our other expenses as a percentage of sales have dropped from 19.9%- 18.9%.
Our gross margins have remained stable, with a slight shift from 42% last year to 41% this year. These improvements underscore our commitment to better financial management and operational excellence. Moving on to the operational updates, I'm thrilled to announce the regulatory milestones on enmetazobactam. This critical drug has received approval from both the US FDA and the European Medicines Agency. This approval marks a significant step forward for Orchid Pharma. It will open the doors to royalties from these lucrative markets. In India, we have also been granted approval for phase three clinical trials, and we will be conducting phase four trials post-launching the product. Our initial expectations for launching, which were mid-2025, have now been advanced, and we anticipate starting sales by the next quarter. This accelerated timeline will enhance our revenue streams in the current financial year.
For the Indian market, Orchid will partner with a third party with comprehensive hospital coverage, while also utilizing our own newly formed AMS, AMS division for product distribution. In addition to enmetazobactam, I'm pleased to report that we have filed an Abbreviated New Drug Application, ANDA, of ceftazidime-avibactam in the USA. This strategic filing is expected to significantly contribute to our own growth in the near future, rebuilding our position in the U.S. market. Regarding our ongoing projects, the 7-ACA project in Jammu is advancing steadily. We have almost completed the land acquisition, which was a hurdle in the past. The technology transfer is completed and trial batches have been successfully produced at our pilot plant in Chennai. The three government permissions required to start the construction have been obtained.
However, the delays in land acquisition have shifted our commissioning timelines for Jammu facility to March 26 from the original planned September 25. We have utilized the time during this delay to complete the design work of the facility, which should help in better execution and commissioning. Other noteworthy projects include small capacity rejig in-house, which is progressing as per schedule and is expected to be commissioned in the second quarter of this financial year. This expansion will provide us with necessary capacity to support our growth over the coming years. Additionally, we are making significant progress on the project of downstream products of 7-ACA and the Cefiderocol project, which is in collaboration with GARDP and Shionogi. These projects. While these projects are still in their early stages, we anticipate their commissioning sometime in 2026.
Looking ahead, our primary challenge will be ensuring the timely and budget delivery of these projects. However, with the steadfast support of all our stakeholders and the dedication of our employees, I'm confident in our ability to meet these goals... Our robust project management practices will help us navigate any potential risks and ensure successful outcomes. In conclusion, I'm optimistic about the future of Orchid Pharma Limited. Our strong financial performance, coupled with significant regulatory approvals and progress on key projects, positions us well for the sustained success. I would like to extend my heartfelt gratitude to all our stakeholders, employees, investors, and partners for their unwavering support. Together, we will overcome the challenges and seize opportunities, ensuring the continued growth of Orchid Pharma Limited. Thank you for your attention. I now open the floor for questions and look forward to a fruitful discussion. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Reminder to all participants, you may press star and one to ask questions. You may press star and one to ask questions. We have our first question from the line of Nikhil from SIMPL. Please go ahead.
Hello. Yeah, good evening. Am I audible?
Yeah, Nikhil, we can hear you.
Yeah. Congratulations on a very good year, and congratulations on the fast-track launch of enmetazobactam in India . One or two data point questions. Can you give a breakup of our revenue between regulated markets and non-regulated markets, and specifically between India, Europe, US, and ROW?
Yeah, Nikhil, we don't give contribution. I can share with you the regulated and non-regulated breakup. The numbers are 40% regulated and 60% for unregulated markets. And I can also give you the other number that you said, that is the split between sterile and oral business. So oral business for Orchid is 25% now, and 80% is the sterile business.
Okay. One more question, please. Last quarter, we said the sterile facility was commercialized in November, and we were looking at utilizations of close to 40%-50%, and probably 100% in FY 2025. But on the revenue, if you look at between the quarters, there is no significant change. So can you talk about what is the utilization level we are operating on the sterile? And an additional question was, on the oral also, we were talking about a facility should come up. So what are the timelines for that facility, and how these two, what is the overall capacity addition we have done both on sterile and oral?
Yeah. Thanks.
Yeah.
Yeah. Yes, a particular expression.
Yeah. So this, the facility was supposed to be commissioned in November. We commissioned it, I think, in December. And you see, in sterile operations, generally, you have a lot of validations and other things to be carried out. However, the last quarter we have operated at 80% capacity, and I think it is evident partly from the sales also, and the products have started moving to the non-regulated markets. As you understand, it will take some time to register the product in the regulated markets, so the products are already selling in the non-regulated markets. And I, we are very hopeful that this year we should be able to do complete production, total production in this newly commissioned facility of the sterile products.
With respect to the non-sterile product, like we mentioned, the capacity increases in one of the products is already in production. And the second one, like I said in the speech, is going to be commissioned, probably in this quarter or early of the next quarter, early part of the next quarter. That is, that is going to bring further growth into the company.
Okay.
Uh-
One last... Hello?
Yeah, Nikhil.
Yeah, one last question. See, on the new initiatives you talked about on Cefiderocol and 7-ACA and enmetazobactam. But just if we have to understand the base business, what we've been operating, how should we look at the growth in the base business? Like, based on the opportunity size and the filings, what kind of a growth do you think the base business can sustain over the next three, four years?
Yeah. Our guidance has been within around 20% CAGR. So we are maintaining that at least in the next two years.
Okay, fine. I'll come back in this one.
Thank you. A reminder to all participants, you may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Vidit Shah from Spark Private Wealth Management. Please go ahead.
Thanks so much for taking my question. My first question was, on the matter of the Allecra approval that you've got in the royalties, the economics from this, when this kicks in, does this, you know, fully translate to EBITDA, or do we, do we have any expenses that we incur to realize this royalty?
No expenses. Whenever we start the sales, and we earn the royalty on those sales, those flow directly to the bottom.
Okay. Understood. On the 7-ACA, you know, project, I may have missed your commentary, but did you mention that the timelines have been shifted to March 2026?
Yes, because of the land acquisition delay, so it was shifted by six months. Earlier, we were targeting October 25.
So once this is commissioned in March 2026, we start seeing the ramp up of production in FY 2027. How easy is it to ramp up the 7-ACA facility there? And, you know, does it take time, or can we start seeing about 75%-80% utilization from the first year, given that our trials have already been successfully completed?
Yeah. So, definitely it's not very easy, but, our intention is at least to have two-thirds utilization within the first year.
Sorry, how much utilization?
Two-thirds.
Two-thirds. Okay, okay.
Yeah.
Got it. Also, in terms of the benefits that are likely to accrue, the IRR is expected to be 3-4 years, that still holds true?
Yeah, that still holds true.
Okay. Understood. Sorry, I'll, I'll get back in queue for further questions. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. We have our next question from the line of... Jainil Shah from JM Financial. Please go ahead.
Yeah, hi, thank you for the opportunity. My first question is on the royalties that you're gonna receive. So how is it gonna accrue? Is it gonna be spread out evenly or will it be lumpy?
Yeah, generally, the royalty, our understanding is, any NCE sales will take 3-4 years to reach peak. So once it reaches the peak, I think the numbers should be stable, but it will take 3 years. So it's going to be exponentially increasing from a very low base in the first year to increasing significantly every year after.
No, that may be anyway variable. But, just saying, we're gonna record it every quarter or probably first quarter, just have a, you know?
Yeah. So the methodology for recording would be every quarter. Once we get the sales report from Allecra, they will share the royalty calculations with us, and that's when we will record it. There might be one quarter lag from their reporting versus, you know, our reporting, but it's going to be reported every quarter.
Sure. And, about the hospital division, if you can share some of your thoughts, how much investment have we, you know, and how many employees are we appointing? What's the investment there?
Yeah. Manish will answer this question.
So, we are starting with a small team of about 40-50 sales professionals. And we are expecting to launch this division in the second quarter. The major products will be all antibiotics, which will of course, the flagship product will be our innovative product of Cefepime and enmetazobactam. And we shall be targeting the Tier One and Tier Two cities with the hospital, multi-specialty, as well as the nursing homes. This is our plan for this.
Okay, very helpful. What is the incremental cost that we should be looking?
I do not... Incremental cost means, sir?
For the sales team, it is affecting in our employee costs, right, so.
Yeah. So that, that would, we are expecting the division to be independently, working independently as a, as a business unit. But yeah, we do expect some, you know, investment, related to manpower costs, which was partly built into this quarter also, because all the design works and, you know, preparations were going on. So, that would be there during the, during the year. At this point of time, it's difficult to say how much would be the negative impact in this whole financial year.
Okay. Okay, that's helpful. Thanks a lot.
Thank you. We have our next question from the line of Nikhil from SIMPL . Please go ahead.
Yeah, hi, just two questions I made. One is, the product launch, so what are the timelines of the launch in Europe and US? Any which you can share or Allecra has shared with you?
... You know, sorry, Nikhil, we don't have visibility on that, but I think it should be launched very shortly. I think within a couple of months, we should see the product on the market, but that's only my guess. I don't have any information.
Okay. And, secondly, see, earlier in our past discussions, we had talked about that once the commercial launch or disclosure, we may look at going in as a second source. So any updates over there or any discussions?
With respect, we were saying to bind to Allecra?
Yeah, yeah, yeah.
Yeah. So only after the launch those discussions will start.
Okay. As of now, no change.
As of now, nothing.
So Allecra, so Allecra is out-licensed this product to different parties. I believe we'll have... It will take some time to start those discussions.
Okay. One last question. See, on our private entity, we had looked at products other than antibiotics, and there was this non-penicillin product range which we were working. And not on the near term or next 2-3 years, but beyond 3-4 years when you are thinking, in Orchid, would you look at going beyond cephalosporin range? Because, if you look at our presentations 2 years back, the first project was to complete the basket of products. And probably I would believe now we are close to closing the basket around cephalosporin. So beyond cephalosporins, are we looking at any new segments or how are you thinking about this?
Yeah, so-
So-
Sir, please.
Yeah. While we believe that, cephalosporins, actually have a vast potential considering the new molecules that are in our radar, and we wish to really consolidate our position in being a leader in cephalosporins. But I, I think your point is very valid, and we've already started to pick up an R&D for, peptide-related synthesis. And hopefully, we should be able to enter into the new technologies two or three years down the line.
Okay. Then, just last question. See, this 7-ACA production would be a largely fermentation-based production, if I'm not wrong. And what we've seen is that there is a lot of fermentation capacities which are coming in India and probably many supplies are shifting from China also. You talked about peptides, but other than peptides, in the fermentation, would you say that probably on Orchid we can create an edge on the fermentation production or any thought process on that?
Yeah. Sure, Nikhil. So that's at intent level right now. So, actually the idea of setting up the pilot plant in our Chennai facility site is to ensure once we, you know, commercialize 7-ACA, we get, good experience on fermentation and other related products. Our lab is equipped to handle other products as well. That's going to be, you know, 3-5 years after launching. But yeah, that thought is there, that fermentation is an area that Orchid will be correct.
Sure. Thanks a lot. I will come back in the queue.
Thank you. We have our next question from the line of Viraj Parekh from Carnelian Asset Management. Please go ahead.
Hi, Mridul, hi, Manish. Congratulations on your results. A few questions from my side. So the first is on our new sterile facility, which we commissioned last quarter. So we, we've achieved 50% potential utilization with, you know, concentrated sales in emerging markets. Just wanted to understand that once we're achieving full potential utilization, which would obviously target the regulated market, or do we see more share coming from regulated markets with sterile facility?
See, we don't generally target, as such, in terms of file manufacturing, we don't target any market. It depends on the order availability that we decide on the production plan. And, like you understand, getting this new block registered and approved from the U.S. and Europe authorities will also take about a year or two. So we start by manufacturing the products and, doing the stability and other validation activities, and then only we file the documents in regulated markets. Until then, we utilize the facility for non-regulated markets. So I would say at least for this financial year, we continue to supply in the non-regulated markets. And we hope from next year onwards, we will have some registrations coming in in the regulated markets.
Sure. This second question is, you know, what is our line of communication with Allecra? I mean, you know, we are getting this information from, you know, filings are happening in the public domain. But in terms of actually when the sales happen and, you know, when we are liable to, you know, collect our royalty. So what is the line of communication we have with them, as what sales will happen and when we receive our royalty, and how frequent is it?
So until now, we have been in communication directly with their CEO and the MD. But we will develop the lines of communication now at all the levels as the sales become, you know, evident. But we are in communication with the top management there.... Okay, sure. I'll get back to you.
Thank you. The next question is from the line of Rakesh Tatia from Intelligence Capital. Please go ahead.
Hello, sir. Can you hear me?
Yeah, Rakesh, we can.
Yeah. So I have several questions. First one, sir, is Dhanuka. Can you give us clear, you know, revenue impact, some indication there, and then when will Dhanuka merger be consumed? What is the progress on that?
So I can share the revenue numbers, Rakesh, because Dhanuka is a private company, the numbers of that and other things will be finalized only by September. Revenue is upwards of INR 500 crore this year. In terms of the merger timeline, we are still waiting to hear from the stock exchange. Once we get the NOC, we have to apply to NCLT, and that will take up to 12 months.
Okay, okay. I see. So it was 225, I think, in half year, so it is above 550, is what you're saying.
Mm-hmm. It's INR 550 crore, exactly.
INR 550 crore.
Five eighty.
Okay.
It's INR 580 crore.
Okay, okay. I see. Okay. And, second question, sir, is can you maybe update on India launch? I joined the call a few minutes late, so if it is repeated, please pardon me. But where are we on India launch for enmetazobactam ?
So for India, we have been granted the phase III trial waiver by DCGI, and we expect to launch it within the next quarter. So earlier, our expectation was early next year. Due to the clinical trial waiver of phase III, we'll be able to launch it before that.
Oh, that is very good news, sir. Another, another question, sir, is we, we launched, I think, about a year back. So can you maybe, you know, give some color on it? How, how sales are panning out, what is, you know, our share. Some, some color on Avibactam.
I can tell you that, we've done well in Avibactam. Last year also, we sold about INR 12 crore. This year we sold more than INR 61.56 crore of this product. Some of the top brands, they use our API. So I think we, we are probably the market leader in this product in India.
Has there been, you know, some price compression in this case, or we are holding on the price?
That, that's, you know, very common in all APIs. The prices do fall, but so do the costs with time, so it's following the same progression. But I... We are very hopeful that now our export markets will open up, and that will further increase the sales of this product.
Okay. Okay, I see, sir. Another, next question, sir, is Cefiderocol. Can you maybe give some updates on, you know, how much we are spending currently on CapEx plan, and what are, you know, commercialization timelines?
Yeah. So right now, we are involved basically in R&D, in development of the API. We are going ahead and designing the plant, which will be the basically injection manufacturing facility for the Cefiderocol injection. The design work is going on. The investment is not yet significant. As of now, it's just some consulting fees and all. The investment should start from next quarter onwards, when we start the construction, manufacturing facility.
What would be the estimated outlay, sir, for that project?
$15 million is what we have, you know, announced.
3... Did you say $3 million, sir?
15, 15.
15. Okay. I see. Okay. And, if we come to older presentation, you had talked about, you know, there are three products that were ready to be launched. One of them was, I think, Cefepime, and another one was Ceftaroline. Can you, maybe talk about this? Where, where are we on, you know, launch of these products?
Yeah. So Cefepime is a product that we are going to launch in India now. We have, we have manufactured the API, and we are going to be, getting the API manufactured in India, and we will launch it in, the AMS division, and that will probably be the first generic in India. For the Cefepime, we are ready with the process and technology, and we are tying up, with the partners to develop the finished goods formulation for the U.S. market. The technology is ready with us.
I see. Okay. Just one clarification on Cefiderocol. Can we expect some commercial revenue in FY 26?
FY twenty-six?
Yeah, financial year 26.
Yeah, maybe just a little, but maybe not. So it's usually a little tricky. So it's going to be commercialized sometime in 2026, so mostly FY 2027 only.
Okay. Okay, sir. And maybe final, final question, sir, is, you know, we, we were working with some U.S. client, and some issue happened at the client end. In general, can you talk about, you know, U.S. market business development? Where, where are we on that?
So the US market is doing well. It's growing quite well. In fact, I think we probably mentioned one of our customers had a problem with their U.S. FDA. That's still going on. So although we expect a new customer to start soon, they have started the sterile facility of Pfizer, and once they get their approval, we should be again able to supply for the US market.
So what, what would be, you know, your contribution, U.S. revenue contribution, you know, this year? And how, how would you see it evolving over the next two years? Can you give some, you know, directional view on that?
Right, that's negligible, so any growth which comes over negligible would be significant only.
10, 10% in the next two years, or 15%, is that a reasonable estimate?
Unless we have the US FDA approval of the possible customer, I think it would be too premature to guide in from the numbers and, let me share. But, yeah, once that facility is up and running, then we will know more, so couple of quarters, we can come here.
Okay. Okay, sir. Thank you. Thank you for answering all my questions.
Thank you. A reminder to all participants, you may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Aman Vij from Astute Investment Management. Please go ahead.
Good evening, sir. My first question is on the margins this quarter. So, because lower than the last quarter, any specific reason for this thing?
Among product mix, always keeps changing with respect to quarter and quarter. With Orchid, I have always maintained that please look at us as a company with cumulative quarter and quarter wise. Our guidance has been 50% ±2%. Last quarter was an aberration, and this quarter is more in line with what we expect going forward. So 50% ±2% is our guidance. And whenever you look at Orchid, like Q1, Q is not the right way. So if you're looking at Q2 results, you should look Q1 plus similarly, look at Q1 plus like that.
Sure, sir. Could you comment on the other income instead of talking about this quarter?
Yeah. So the other income, the large part is the interest that we have earned right now from the QIP money we raised last year for the investment in ACA and other projects. So deployment is not meaningfully started, so that's a large part of the interest income on that.
Sure. Next is on the Dhanuka part of the business. So what kind of growth are you expecting in that part of the business for FY 25? And you had talked about an exploration of margin improvement. Where are we on that front?
We are expecting about 15% growth this year, again, in Dhanuka Laboratories. The margins should, I think, the EBITDA should also grow in the same proportion.
Sorry, sir, but we had talked about say high single digit/low double digit kind of aspirational margin in that. So, there are-
No, I think, Aman, there's some confusion. I, we were given, we were given a guidance of double digit, around 6%-8%, it should be in the similar range only.
Okay, okay. So no further improvement you are seeing at least for next year?
Yeah, yeah.
Sure. On the CapEx plan for FY 25 and 26, what are your expectations are the same?
You mean actual deployment or... Because we already talked about the project CapEx. You mean how much will be actually spent?
Yes, yes, yes.
We talk about different projects, like that, but, on 7-ACA, you can expect about, only 5% less than last year, 35-33, something like that. And, on second call also a lesser number or similar number, because a lot of it could be as advances. So I don't think, you know, just cash would be a right way to measure it.
Sure. No, other major CapEx apart from these two?
No. The third one is the R&D that we are doing of the oral, so that's about, we have budgeted about INR 25-30 crores. That will be this year. Nothing yet.
Sure. And, in the start of the call, you were guiding for 20% CAGR over the next couple of years. So, given, does this include numbers from enmetazobactam as well, or this is the previous business you have talked about?
So it basically it's about the AMS business, but when that has a system, the numbers would be over a number.
Can you talk about it will take at least one more quarter, right? Maybe from Q2 only we, we can see some royalty payments on that front.
Yeah, we hope to see that.
Sure, sir. Any other in terms of geographical breakup, you only give the regulated and the other districts. So any reason we are not ready to share more on that front?
Yeah, that's, you know, proprietary information and a lot of the, you know, our customers and don't want us to share, and even our competitors will get some information. So that are coming to not to share geographically.
... Sure, sir. One question on Shionogi. Any other trial which is possible in FY 2025 critical and-
We don't foresee anything as of now.
Okay, that's my question. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Tanmay Gandhi from Investec. Please go ahead.
Hi, sir, Tanmay from Investec, Investec here. So my first question is on enmetazobactam. So can you give some clarity on how will the India launch play out? And will you be looking for multiple partners, or you will give some exclusive license to a single company?
In terms of country, there's a revenue guidance we've given, you know, in three years after launch, it should be about, you know, INR 25 crore-INR 100 crore kind of a number. On the partner front, I don't think we will go with too many people. Yeah, it would definitely be Orchid plus somebody else as well.
Basically, a two-player margin?
Yeah. Yeah.
Okay. Secondly, on your, you know, on the launch in Europe, right, I think the partner has already started supplying the product. So have you heard anything from Allecra , or do you have any expectation for the royalties, which you are planning to receive in coming quarters?
Right now, no, we don't have any forecast from them. We'll be engaging with them shortly about the launches. Maybe in the next quarter, we'll be able to report something.
Okay. But we do expect some royalties to start coming in from quarter, right?
Yeah, that's the expectation. Unfortunately, it's only expectation. We don't have any formal communication at this time.
Yeah, I, I understand. Sir, lastly, about the India business, so how is the manufacturing, you know, will be taken care of? So we have already tied up with someone, and do you already have the API with us?
You are talking about enmetazobactam?
Yeah, enmetazobactam.
Yeah, yeah. So we are tied up with the CMO, and we've taken the validation. API will be made in Orchid. So all those things are set up. As soon as we receive the final approval from the government, we will be good.
Okay. And then, sir, again, on the, you know, Allecra as a second source, right, for a global launch. So have you started off the discussion? Sorry, I missed your rest of the discussion earlier part, sir.
I mean, yet to hear from them about start of sales. So once we do, we'll be setting up a, you know, call with them on how we'll see the mechanism for accounting and auditing set up.
My question is on the API supplies to Allecra.
No, no, there is no discussion on that. They are right now outsourcing it, and only after the sales start, maybe after a couple of quarters after start, there would be an opportunity to start discussing. And typically, whoever would be the supplier would have some exclusivity already.
I understand. Thank you. Thanks a lot for this.
Thank you. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Anant Jain, an individual investor. Please go ahead.
Thank you, and congratulations on a good year. Most of my questions have been answered. Just one question. So this is very heartening to hear that, you know, we are looking to launch enmetazobactam very soon in India. What kind of marketing preparations and other preparations have we done to do that? And is there anything, any way for us to understand potentially the price that exists, when can we see India sales of enmetazobactam starting to reflect? And also on the pricing side of enmetazobactam in India, how do you see that?
Some of those details are proprietary. For example, the pricing and things like that, I won't be able to share that, right now. With respect to the launch, we are just waiting for the government, and hopefully, we should see some sales coming in in the next quarter. That's what we are hoping for. Your third question was with respect to the preparation. No, no, no. I mean, next quarter will be Q2, because the product is still not approved for launch. We received the clinical trial label, the license clinical trial is going on.
Okay.
Your last question was with respect to the preparation. So our AMS team has been working diligently to create a strategy, but unfortunately, you know, we are ready to share it before we launch the division formally. So again, I'll have to hold that.
What about, you know, just like figure of call for the rest of the world market, which is most of the developing nations, are we planning to have an enmetazobactam also for the ROW market in terms of our understanding with the with Allecra ?
Allecra. Yeah, so, Orchid only has the rights to sell it in the rest of the world. Markets are going to be selected.
One question on enmetazobactam, can this product be right, you know, INR 100 crore in 2-3 years? And where are we on the penetration of Avibactam?
You know, what we feel is that this product has great potential because it is going to address the problem of antimicrobial resistance against the two of the most common molecules, which is the tetracycline and ciprofloxacin.
Yeah.
And it should be able to save Meropenem for future generations. So we feel that the potential is huge.
Mm.
But it all depends, you know, how doctors accept the product and, how the customers, the patients, respond. So a bit too early to give you the exact idea, but I think the molecule has great potential.
So what you're saying is that it has the potential to be that kind of a product, but how it gets it, how it gets acceptance, the medical fraternity is like something in our mind?
That's right. That's right.
So, one last question again, going back to enmetazobactam, ROW markets, do we, do we have any idea what Allecra is planning to do? Slash, is like any talks with, going on where we can step in? Because we are into the API also. So are there, like, any plans for us pitching into, that role or any discussions happening with Allecra around that?
Yeah, it's very interesting. We also think like that, but to the best of our knowledge, they are not interested in non-regulated markets. At this point of time, I don't have...
We have not had any discussion.
I don't think we have an answer to this question. But they seem to be only interested in US, Europe and China. That's where the big bucks are.
The participant got disconnected. We'll move on to the next question. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Vishal Manchanda from Systematic. Please go ahead.
Thanks for the opportunity. So with respect to the Paragraph IV filings, we were on Zavicefta, Cefepime and Teflaro. Can you share an update on where are we there?
Zavicefta, already filed Ceftazidime Avibactam . Teflaro is basically ceftaroline. We are still working on the partner selection on ceftaroline. That's why we decided to launch it in India. Hopefully we should be able to do it once we're able to find the right partner with the right kind of arrangement.
On Zavicefta filing, have we done it on our own or we have partnered?
We developed the ANDA completely on our own, and we filed in our next meetings.
Okay, sir. And the second one on sterile specialty, as you said, 80% utilization. So if you look at your quarter-over-quarter numbers, they are flat. So, having ramped up from 0%- 80%, should not have the quarter numbers grown faster this quarter?
No, I said in the last quarter, the utilization, like I said, we commissioned in December. Then we had some validation work to do, and then last two months, we were able to run it full capacity. So as you know, it's a long cycle. So probably the sales impact would not have come in the quarter.
Yeah.
So, Vishal, what sir is trying to say is that, you know, that, 80% utilization happens towards the end of the quarter. And once you produce, the product has to be kept for sterility for two weeks. So, you know, whatever was produced in March was probably not sold in March. So what you would see is the second within this, in the, in this quarter, you should see some difference.
Okay. Got it. And, sir, just one final one on 7-ACA clarity. So when you manufacture 7-ACA, can you also manufacture desacetyl-7-ACA from the same plant? Is it a downstream plant or is it a very different process to manufacture desacetyl-7-ACA?
It's a downstream process. Already a plan of our implementation, which will be finished.
Okay. And just one more. What with Dhanuka and Orchid both together, how much of the 7-ACA we produce can be used in-house?
Including our plan to setting up the downstream unit, 80%, more than 80%.
Okay. So if you just exclude, if you exclude ceftriaxone capacity that we are planning, just for the base business that we do currently from Dhanuka and Orchid.
Just about 25%.
Okay. Thank you, sir. That's it from my side.
Thank you, sir.
Thank you. A reminder to all participants, you may press star and one to ask questions. You may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. As there are no further questions, I would now like to hand the conference over to management for closing comments.
Thank you. I thank you all for participating in this call. It was a very fruitful discussion. Sometimes some of your questions kind of ignite us to ask the right questions with ourselves actually, and we find a lot of good answers also. So thanks for raising those questions and keeping us on our toes, and we look forward to your continued support. Hopefully, we can continue this, our journey towards making a successful Orchid Pharma once again. Thank you.
Thank you.
Thank you. On behalf of Systematix Institutional Equities, I conclude this conference. Thank you for joining us, and you may now disconnect your line.