Ladies and gentlemen, good day, and welcome to Strides Pharma Science Limited Q4 FY 2024 earnings conference call. 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Abhishek. Thank you, and over to you, Abhishek.
Thanks. A very good afternoon, and thank you for joining us today for Strides earnings call for the fourth quarter and full year ended financial year 2024. Today, we have with us Arun, Founder and Executive Chairperson, and Badree, Managing Director designate, to share the highlights of the business and financials for the quarter. I hope you've gone through our results release and the quarterly investor presentation, which have been uploaded on our website as well as stock exchange website. The transcript for this call will be available in a week's time on the company's website. Please note that today's discussion may be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the Investor Relations team.
I now hand over the call to Arun to make his opening comments.
Thank you, Abhishek, and good afternoon, good evening to everybody joining us today in our for our earnings call. It's been an honor to talk to all of you, especially on completion of what FY 2024 has been an exceptional year for Strides. We came back strongly from a difficult FY 2022, announced publicly a reset strategy, and I'm very delighted to announce today that not only have we completed all what we aimed to achieve in our reset, we have done most of those much ahead of time, and we are now very delighted the way we are now positioned for future growth. It's been a pleasure leading this company. We have made some announcements today, which we will talk briefly.
I continue to be the executive chairman of the company, and I will be on all the calls going forward. But having said that, we are building the future Strides for the next decade, and I'm delighted to have with me today Badree, who's been a long-standing CFO and executive director, as our MD designate and other colleagues in the room who could address some of the questions. Overall, it's not often that the company gives guidance or an outlook. We did because we were operating under difficult circumstances, and we continue to do that for the next year because we have OneSource announced. So it was important that we guide investors of where the business is going.
So if you look at the FY 2024 performance, this has been our highest, this has been our best year, both for revenues and absolute EBITDA, so also being the best quarter. We have been very, very focused on optimization of our business, on cost containment, operational OpEx leverage, and also and also growth. It's been a very pleasant outcome. Like I said, we've had, we have achieved all our outlook, including debt, far ahead of our scheduled 3x debt to EBITDA ratio to bolstered by the high-end range of the EBITDA that we achieved. And of course, we have also completed our network optimization across the company. We now believe the reset and the cost-effective strategies have been complete.
Growth investment started a few quarters ago, and you will see a very different Strides with product profiles and approvals in the next year or so. We are obviously delighted with a very critical approval this morning that we received for the U.S. sucralfate. We're also happy that it just adds to our basket of over 35 products that we are almost the sole Indian player. This strategy has played out for us for many years, but we have now recently started adding products of larger value and size. We're delighted with our market share with sucralfate.
We have been a very quick two-market player in that product, which is very contrary into our strategy of launching products at a very appropriate time when we get the right price, and we are sure of the right market share. That strategy will continue, and I will now briefly take all of you through some of the highlights. Revenues were a shade under $500 million, but all markets grew. Our key focus market and new growth markets have grown exceptionally well. Most of you know that we have a small business in the institutional segment. That business was impacted in the last financial year by low allocation of tenders. This resulted in a kind of muted performance in FY 2024.
But I'm now pleased to announce that we have received a significantly higher allocation on this program for the next two years, and you'll see more, more upticks in this part of the business in the second half. Importantly, we have especially in the we have secured very significant product approvals, so I'm guiding the investors and analysts and individuals who follow us to note that FY 25 will have will continue to be an important year, but significant growth will come only in H2, because a lot of new product approvals and launches are expected only in that period. What is also important for us in the last two years was consistency, and unlike our first avatar, we had consistent quarters of revenues.
Gross margin was very, very in a tight space between 59 and 60%. This is almost a 12% uptick from where we started. EBITDA margins nicely moving up from 16% to 19.3%. We would like to get to a historical 21% EBITDA in the next year or so, and there's some more work that is happening that will ensure that we get there. And adjusted PAT has been increasing steadily, and we have a PAT of around INR 200 crore after last pickup of Stelis, and that is something we can discuss later. But Stelis reported its first ever quarter where it had a breakeven as we guided.
We expect Stelis to be profitable, the division to be profitable in this financial year with all the business that we've won, and we continue to win in that space. I'll come to that in more details, but quick high levels, the U.S. market, we guided for $250 million in the higher end of the, of the outlook. We are very delighted to be bang on target. We had a very weak flu season. Most of you know that we, Q3 and Q4 are very significant quarterly markets because of flu products, but it was a very poor year for, for flu, for us. But we were, we were fortunate to have Suprep, generic Suprep launched during this period.
And we are now in pole position with market share on this product, with the contracts that we won. So we're very happy that some of that negativity or negative offsets on flu products were made up by new product launches. Although we have a lot of products approved, our calibrated approach to pricing, market share, right time to launch, is what we'll continue. And we have guided that we will get to a $400 million size in the next two to three years. We believe the U.S. market will continue to be an important part of our business strategy, but with a disciplined approach, which is very differentiated with both products and go-to-market.
I'm also pleased to let you know that we are now considered amongst the most, compelling generic providers, for reliability, and we have an on-time service level of 99%, which is considered to be gold standards in the industry. So our focus has been on customer advocacy, right pricing, right, availability of product. We have the lowest, failure to supply. Now, this is now sub $200,000 for a $250 million business, which is the lowest in the industry, and we're very delighted with all the enablers that have gone about driving the US business. We'll continue with this focus, but, let me also announce today that we have started investing very heavily, on newer technologies and portfolio beyond the $400 million generic mark as we focus on more complex generics.
We just announced a partnership for nasal sprays in controlled substances. We will have our first filings in this financial year, and our first 505(b)(2) will also probably be filed somewhere middle of next financial year. And there will be several more activities in building a portfolio, both by in-licensing and partnering and also developed in-house. So we're very I mean, earlier, we did mention that we have 60 products that meet our criteria of margins. We continue to stay invested with that theory, but we take more time to launch those products, and just to be sure that our disciplined approach is not compromised.
So yeah, we will continue to be and we also see a lot of stability in the US market, so I think the timing is also fine. As far as the other regulated markets, we have had three consistent, although the market grew by 19, almost 20%, but we had three consistent quarters of INR 40 million. To most of you who follow us, we build consistency before we focus on levering that. You will see similar numbers for the first one or two quarters in FY 2025, but then you will see significant growth in the second half in the other reg markets as we have already partnered our products. But as you know, in Europe and other markets, it takes time when we partner products for our partner to launch products.
Typically, our partners are global or national champions, and therefore they take a little more time than normally if we were going to market. Our access market, I mentioned that in my brief summary, but our growth markets are growing very nicely. It's grown almost by about 25% and of course, on a low base, and that will continue to deliver very strong growth in the coming years. We committed to a debt to EBITDA under 3. Pleased to announce that we are now 2.72 ahead of the outlook. The scheme with OneSource enables us to push down debt of INR 300 crore into OneSource. And we had a very significant free cash flow of almost INR 700 crore. That is almost 95% of our EBITDA to cash conversion ratio.
We now have one of industry-leading cash-to-cash cycle times, and we'll continue focusing on these elements as we improve our free cash generation. We target to reduce our debt by an additional INR 500 crores after spending almost INR 200 crores in CapEx this year. We do not intend to achieve any of this with new borrowings. Consequently, we are now guiding for FY 2025 for debt to EBITDA under 2. These, of course, with the ratios, our key balance sheet ratios. Our ROCE especially has grown. Our excellent run rate at 15% is pleasing. We have very ambitious targets around that. We have a gross block to asset turnover of almost 5 x. That, again, many of you will appreciate, is industry-leading.
We'll continue to sweat our assets by smart product selection, technology improvement and automation that reduces our OpEx costs. Before I conclude on Strides and open the floor for questions, a quick note on OneSource. We have now received this name, OneSource, as official, so Stelis is now called OneSource. OneSource, on completion of the NCLT process, will be India's first platform CDMO. We have 40 unique logos day one. We have 17 GLP partners, including several first to file and sole exclusive players who are our partners. We believe that we are in a very, very strong position with our capabilities in drug product devices.
Our sterile injectables business, the CDMO business, and the soft gelatin business, the incoming two businesses into OneSource, have met 100% of its EBITDA of FY 2024. FY 2025 will be similar, with very marginal growth, and that is because we expect more product approvals in both these divisions only towards the last quarter of FY 2025. We are pleased to confirm advice that we have now received as of late last night all our approvals, including that from the SEBI, for the scheme to now go on to the NCLT, and we will, we will now commence our NCLT filing in the next couple of weeks, and we will keep all of you updated on progress.
Before I hand over the, I mean, take questions, we have made some changes. We have two very significant directors who have played very important roles in our company, Mr. Bharat Shah and Mr. Sridhar, both independent directors, retiring. Consequently, we are very delighted to announce today the appointment of Subir Chakraborty into our board. Subir, for those of you who may know him, was very, until very recently, the CEO of Exide, and has played a very, very significant role in creating significant value there. With strong operational experience prior to his CEO role, we are all excited to have Subir on board and benefit from his experience. We will also add Aditya Kumar onto the board. Aditya, for full disclosure, is my son.
He's been in the company for the last 10 years, and he will join us as an independent director, an executive director. Both are obviously subject to shareholder approvals. And it's, like I mentioned, while I continue to be the Executive Chairperson and will continue to play a significant role in setting the next level of Strides, I already announced my pleasure of having Badree as my colleague and Managing Director and CEO, Group CEO of the company. I'm also very pleased to announce that Rakesh, who started his career at Strides, rose up the ranks with his brilliance and execution capabilities to be our new Group CFO.
I'm sure with this new changes and additions, not only will we add strength to what we have done in the last two years, but we are building the future for Strides. My apologies for a slightly longish introduction, but given that, we are a little bit exuberant with what we have done, please pardon our indulgence. I did talk about the FY 2025 outlook, but for completeness, we expect to grow 12%-15%. Bulk of the growth will come in H2. We expect EBITDA margins to be about INR 950-1,000 crores.
I did mention that we expect the soft gelatin business to be soft in terms of EBITDA, and that is because we had two very big approvals in FY 2024, mainly icosapent and cyclosporine, where we are taking significant market share... and new product approvals are only expected in FY 2026. But we still will do a small growth over the $25 million EBITDA that we achieved. Consequently, the retained business will deliver approximately INR 750-800 crores of EBITDA, and we have that run rate already now, so we should be comfortable in growing that from the INR 800 crore exit run rate to about about INR 950-1,000 crores.
We expect free cash to be continuing to be a focus, of the company, and, we would end the year, with a net debt of under $2 billion, and, at which time, we think that we would be in a very, very strong position to be debt-free, in 3-4 years from there on. We are guiding the U.S. business to be approximately in the range of $285 million-$300 million. It's a tight range, but, we are confident that, approvals like Suprep and icosapent and, now sucralfate today, these would still allow us to give away market share when we are challenged and yet grow the business, without compromising the margins. So thank you all, and, happy to take questions.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone 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 will wait for a moment while the question queue assembles. The first question comes from the line of Vishal from Systematix. Please go ahead.
Thanks for the opportunity. With respect to the U.S., can you share some color on how Suprep is doing for you in terms of market share, and have you scaled up to the full potential, or there is a further ramp-up possible here?
Typically, Vishal, in products like Suprep, when there are three, four players, we are very happy at a 25%-30% market share. I can tell you as we speak, that we are at that spot already.
Okay. So, we should not see further ramp-up from Suprep going forward. We need new approvals to ramp up from here.
We don't need new approval for Suprep, but we typically, when it's a 3-4 market player, we typically are satisfied with a 25%-30% market share as a philosophy.
Thank you. Second on OneSource, we talked about a GLP-1 that is going to supply to your customers. Is that GLP-1 already commercialized or it's in clinical stages that you will be supplying?
One of the GLPs, one of our partners is expecting approvals, and we expect our first commercial supplies of GLP supplements in this financial year.
Thank you. Next question comes from the line of Aman Vij from Astute Investment. Please go ahead.
Good afternoon, sir. Continuing this OneSource question on OneSource. So this CSA we have gotten for GLP-1, it's for liraglutide, if my understanding is correct. And this, if you can correct me on that, if I'm wrong. And this is expected to come in H2 or in H1?
H2, and the product is correct.
Okay. So we have, like, 15, 16 different projects, and out of this, only one CSA you are expecting in FY 2025, not more than one or just the-
Our work on GLPs are on Wegovy and Ozempic.
Yes, yes, but I believe we have 6 in-
They're all partnered through 'til 2026.
Yes, sir. I believe we have six in liraglutide. Only one of our customers are commercializing this year. The rest may be in FY 2026.
I do not know where you get this information. We do not give, how many customers for each programs in any of our conversations.
Sure, sir. You had shared all this information in one of the PPTs, so just wanted to clarify on that part. Anyways, on, yeah-
We have one customer who is expected approvals. We may get every other customer's approvals, too, but one customer has already started work on the CS, the commercialization of liraglutide.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Hi, thank you for taking my question, and congratulations on a very strong finish to the year. Two questions. One is on the US business. The point that you mentioned about our intent to grow the business beyond $400 million, you know, in terms of some of the newer trying to get in, how should we think about our US business evolution? It gets to $400 in the next three years, and then how do we see it going from there on?
Yeah, thanks, Nitin. So what we are saying is that the current strategy of niche limited competition kind of limits our growth to $400 million. That's our aspirational growth. We are now very confident we can achieve that. Maybe we can add a few tens of millions of dollars additionally, but it's not something that can double from $400 million. For us to continue to benefit from the US market opportunity, we have to be differentiated with either platform technology or leveraging our US manufacturing activities, which has got very specific capabilities around controlled substances, nasal sprays, very complex device manufacturing, liquids manufacturing, which can only be made in the US. And that requires capabilities which are currently beyond what we have in India.
And that is what we are currently investing globally with, with, with partners, and sometimes we do it ourselves, both here in India and more in the US, eventually. And that set of products are typically in the $40 million-$50 million opportunity range. So from the evolution standpoint, you'll notice that our original strategy in the US was when we had a $3 million-$4 million product, as product average, the last few approvals have more taken that ticket up to an average of $20 million. And now we are building portfolios in the $40 million-$60 million range. So it's been, a kind of, it's not tactical, but a more stated strategy that is just playing out, and it takes its time to play out.
And secondly, on the other reg markets, you know, we've been extremely, very positive on, on this space. Is there any, any particular reasons why the traction has not been as much, as we probably expected at the start of the year?
No, it's still grown at 20%, but it's important to note that our other regulated market is almost B2B, right? So when we license our products to global players, it takes time for them to launch the product, because they typically launch in 15-20 countries at the same time. And therefore, the launch period is much longer. And that's about it. Like I said, in H2, you will see these numbers changing quite significantly upwards.
Okay. And lastly, on OneSource, you know, the drug device play out, I mean, will begin to play out, that part of the business. Starting off and then semaglutide, as and when the patent expire. The other pieces of the business, especially around biologics CDMO, I mean, how should we think about that piece, on a, you know, in terms of how that will evolve, in terms, in terms of scalability, scale, and size as we go through?
So we are winning. So as you know, our drug substance capabilities were only established about six months ago. I'm now actually pleased to report that we have won our first major NCE contract there. And we keep winning business, so we are adding new customers every month across the platforms. Of course, everybody is excited about the GLPs, but our focus on non-GLP is as intense as it should be for a CDMO. So we are winning a lot of business in non-GLP programs, too. Overall, we have guided $400 million of revenues three years from the time of listing of OneSource, if I'm not mistaken, in the last updates.
We are very much on track to get there, both the GLPs and non-GLP programs.
Thank you, sir.
Good night.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Praful Bohra from InCred Capital. Please go ahead.
Yeah, hi, team. Congratulations. I will just two questions on the US business. The first, the guidance of $285 million-$300 million, which is around 15%-20% growth here. So here, what kind of price erosion are you building?
Well, you know, the US business is not a function of price erosion for us, is that when we are challenged heavily, we exit the product. So we just get off a product, and if you look at IMS, you'll see us not in products that we were there last year, if we are being challenged on pricing. So we don't have. So because we have the luxury, Praful, of several ANDAs that is at the cusp of being launched, we have a very differentiated way of modeling our US business. And, I've been consistently telling for four years that we do not have a price solution. For this reason, not because we are not challenged, but when we are challenged, we let go. I mean, rational challenge, we keep. Irrational challenge, we let go.
Sure. Secondly, on the Endo portfolio, what proportion of the, you know, the pending ANDAs are still liable to be launched? And, would any of the ANDAs be significant from our perspective?
Yeah, of course. Our number one selling product now is an Endo product. I mean, Endo portfolio product. So we probably have one more product that we will launch this year from the Endo portfolio, which will have an exit run rate almost similar to our number one product. We now, the Endo P&L itself is a profitable P&L after two difficult years, and a significantly profitable P&L on a standalone basis. We have a lot of products, I would say 10-15 products at least on the Endo portfolio that will meet our criteria. But these products in the US, you know, we are constrained by the speed in which we can launch these products, because we only have the capacity to launch three or four new products a year.
We then pick and choose which are the best ones in our lot. But, like I said, our number one product in the U.S. now is an Endo product.
Yeah, sure. Thank you.
Thank you. Next question comes from the line of Aditya Sen from RoboCapital. Please go ahead.
Hi. Thank you for the opportunity. So, we have guided about 12%-15% growth this year. So, that is inclusive of all the product launches that we are planning, right?
Yeah.
This will be the guidance will be same for FY 2026 and FY 2027, if I'm not wrong?
Why would that be the same?
Because, we have around 60 product launches scheduled for the next two, three years, three years. So we go by-
Aditya, product is not equal to revenues, right?
Right.
A product can be $4 million, a product can be $20 million. So that's not a good benchmark for you to do our model.
All right.
We have guided $400 million over the next 3-4 years. We are growing at 15%. If we continue doing that, we'll do that in 3 years. The math is very simple.
All right. Thank you for that. Thank you for correcting me, rather. And also, in OneSource, can you please mention how are we planning to achieve such targets? Like, will it be again, product driven, or do we have other strategies there?
So we already have contracts signed, right? So we only need our partners-
Okay.
to get approvals.
Okay.
Great. Thank you.
Thank you. Next question comes from the line of Rupesh Tatiya from Intelsense Capital. Please go ahead.
Thank you. Thank you for the opportunity, sir. My first question is, can you please tell me what is the capacity for GLP-1, you know, across OneSource network?
Rupesh, can you just speak up? You're on a speaker phone or something. We, we can't hear you well.
Hello. Hi. Hi, can you hear me sir?
Yeah, better.
Okay. So my first question is, what is our capacity for GLP-1 across OneSource network? You know, manual injectors, auto injectors. I mean, if you can give some color on that.
Device combinations are about 40 million unit capacity, and we will complete an expansion in FY 2026 to take it to 200 million units.
This 40 million, what kind of, you know, gross block it is and what kind of revenue it can generate?
No, we can't get into those details. You can send us a note. These are too granular details to give on an investor call, and, we can then respond to you specifically.
Okay. Okay. Sir, and then I also wanted some color. Can you give me some? How does the billing work in this GLP? Because we are gonna create, you know, a final drug device, but the drug comes from our sponsor, and the device will come from somebody else. So how does the, you know, billing work in this?
Our revenue of CDMO is 100%. Everything else is passed through. So our partner pays for everything. We only serve... We only-- When we say our revenue could be $300 million or $200 million in the biologics division, not in the soft gel and injectables division, then, if you do $100 million in biologics, $100 million is our gross margin.
Thank you. A reminder to all the participants that you must press star one to ask a question. The next question comes from the line of Sandeep Dixit from Arjav Partners. Please go ahead.
Thank you, sir. Can you hear me clearly?
Yes.
Thank you. I just wanted a clarification. In your opening comments, one of the sentences after, you mentioned the guidance of EBITDA growth of INR 950-INR 1,000 crores, does it give any guidance for the standalone entity or rather the retained business in Strides?
750-800.
Right. So in which case the numbers are not adding up. That's the reason I asked. You have said $60 million as a guidance for OneSource.
Yeah, you're not reading our deck properly, Sandeep.
Okay.
The $60 million has got three divisions.
Right.
What is going from Strides is $25 million.
Okay.
$20 million. What is going from Strides is $20 million. Okay? That's all.
Okay.
Coming from other parts which are getting merged.
Right. Yeah. Got it. Thank you.
On the 950-1,000, you have to only - $20 million.
Correct.
Thank you.
Thank you very much.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Thanks. Nitin's question again, I'm just clarifying. You mentioned the increased capacity for the drug device combinations would be 100 million or 200 million?
INR 200 million.
... goes almost 5x.
Yeah, we were thinking of 100 million, Nitin, when we spoke three quarters, but we currently, with the contracts that we have signed up and looking at the success of some of our partners in their litigation and pole position status, we are obliged to double our capacity to 200 million. So yeah, we're going 5x. And we'd rather do it at one go, because equipment cost is not the most expense-- I mean, it's the most expensive part, but the lead time for equipments are too long in this.
Arun, where does it place you in terms of, rather with this capacity in the various drug device CDMO players, ex?
We do not have specifics of our competitive landscape, but I would assume top five.
Okay. Okay. And secondly, on our Stelis business, you know, we've done a pretty decent job on controlling our overhead costs, optimizing our cost structure, the whole last several quarters. I mean, do you still see opportunities for optimizing the costs further from here on, leading to further expansion of margins over the next two, three years?
Yeah, like I said, Nitin, we probably have about 200-250 basis points of margin expansion through cost improvements and completion of network optimization. And that is why we said our dream goal is to get to our 21.5% pre-EBITDA percentage-wise, and we think we can do that in the next 12 to 16 to 18 months.
Okay. With the strategy that you're following in the business, so what is your assessment with the X of the profitability in business or, you know, sort of, a peak profitability this business can really get to?
So I think, minus OneSource also, we can comfortably grow at that 15% CAGR. Our target then should be to get to 21% EBITDA and be debt free. This is our goal in the next two years.
Okay, thank you so much.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Rohit M, an individual investor. Please go ahead.
Hi, sir. Thank you for the opportunity. First question is on the other regulated business. So you had a strong year-
Can you repeat?
Yeah. So first question is on the other regulated business. We had a strong year for the other regulated in volume and growth. Could you highlight which were the key markets that contributed to the strong growth? And are we confident of maintaining this growth momentum going forward in the next year?
Yeah, mainly Germany and Australia and, and the Nordic regions.
All right. And any guidance on the next year?
We can't give a percentage guidance, but we said that the company overall grows 12%-15%. ORM will continue to be a big part of that growth, but more growth you will see in H2 rather than H1.
Got it. Second question is on the gross margins, which were around 60.7% in Q4. Can we sustain this 60% plus gross margin going forward? And how are we looking at that?
Yeah, ±2%, it's doable. So we have done that for four quarters or more. So we can. We are now in that zone. We shouldn't have a problem.
All right. Thank you. Thanks for coming in.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Jagdish Sharma, an individual investor. Please go ahead.
Hey, thanks for giving me this opportunity. Congratulations for a good FY 2024. My question is on US business. What sort of investments would we need incrementally to take our US business to $400 million in 2 to 3 years?
Nothing. We have all the products already approved. We have 265+ ANDAs, of which we have commercialized only 65. So we have plenty of approved ANDAs. Our R&D for the $400 million run rate is almost done. We don't spend any money on that part of the business. We put more money on the 400 beyond story.
Okay, sir. Thank you.
Thank you. Next question comes from the line of Rahul Bharadwaj, an individual investor. Please go ahead.
Hey, thanks for the opportunity, and congratulations on the good set of numbers.
Hey, Rahul, can you speak up?
Yes, sure. Could you share a bit more guidance on possible demerger situation for OneSource and the vision that we have over the next couple of years for this particular division, and how we expect to grow in this division on division?
You need to repeat your question on OneSource.
Yes.
You are breaking when you speak.
Any details that you can share and timeline for the demerger, and how we plan to grow in the CDMO division over the next couple of years?
So we got, last night, the demerger approvals from SEBI, which was the last step prior to the court process of the demerger, which is called the NCLT process. We expect to file in court the necessary documentation this quarter. Typically, it can take anywhere from 3-4 quarters for the court process to get completed, and about 60 days for the stock exchanges to list the stock. But we got the last and most important step was the stock exchange approves and SEBI approves, which came in last night.
Thank you so much.
Thank you. Next question comes from the line of Vibha Ravi with Citeline. Please go ahead.
Hi, can you hear me?
Please go ahead.
Could you tell me if OneSource can be expected to benefit in any way from the shift away from certain Chinese companies like WuXi? I know it's still time for the Biosecurity Act to, you know, come through, but is there any planning on that front, and can OneSource be expected to benefit?
So clearly, the Biosecurity Act has been diluted quite significantly, and there is a 7-8-year window for companies dependent on China to find solutions or alternative solutions. But we are seeing a significant amount of new RFPs for biologics. And I think the China Plus One on the biologics is playing through. We haven't seen so many RFPs in the last 1 year that we are seeing in the last 2 quarters. So we believe that there is some momentum around this whole Biosecurity Act and at least new programs coming to India or another nation as a first choice. To answer your question, plain and simple, yes, we are seeing that. We are seeing it benefiting us, OneSource.
Okay, thanks. And one more, a bit broad-based question: So, is the Middle East crisis expected to begin impacting input costs and/or logistics anytime soon, or it's like further out?
So a lot on supply chain of materials, because earlier it was more to do with geopolitical and COVID and other issues. The Red Sea crisis is now, I would like to say, behind. The shipping premiums have dropped quite dramatically. But yeah, this is the nature of the beast, right? So we have to be vigilant. For now, it's business as usual.
Okay, thanks. Can I just get in one more question?
Please.
Okay. Could you talk a little bit about how the alliance with Orbicular for nasal sprays is progressing?
Progressing very well. It's one of our more important partnerships. I did mention that we will have our first filing this year. We expect to complete the entire platform program during the course of the next 12 months, and we should expect approvals thereafter. We have significant interest on these exclusive controlled substance programs. And in partnership with Orbicular, we are finding the right go-to-market strategy. Yeah, but we are very excited with our partnership with Orbicular. We consider them to be best in class, and we're delighted to be partnered.
Okay. Thank you so much.
You're welcome.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Thank you all. Really appreciate your time, and thank you for your patience as we build Strides. Appreciate your time, and feel free to write to us if you have any questions. Thank you and good evening.
Thank you. On behalf of Strides Pharma Science Limited, that concludes this conference. Thank you for joining us. You may now disconnect.