Q1 21/22

Aug 11, 2021

Quarterly report

Good evening, ladies and gentlemen. Welcome to our post results teleconference for the quarter ended June 2021. I do wish that you and your families are keeping safe and well. For today's call, we have with us Doctor. Sheryl Patel, Managing Director Mr. Nitin Parekh, Chief Financial Officer Mr. Vishal Gaur, Senior Vice President, Corporate Finance and Mr. Alok Gaur, Senior Vice President from the Managing Director's office. This quarter on, we have started the practice of sharing quarterly results in investor presentation, which we have posted on our website and filed with the stock exchanges. I am sure you would have received the same. Among our 2 key markets India and the U. S, the contribution from the India geography has increased. This has offset some of the challenges in the U. S. During the quarter resulting in a healthy double digit growth in revenues and in EBITDA with an improvement in operating margins. Coming to the quarter, despite the onset of the 2nd wave of COVID-nineteen in India and the consequent challenges posed by it, our business grew in double digits aided by strong performance in the India geography. With that, let me take you through the financial numbers for the quarter gone by. As you are aware, the transaction of sale of our animal healthcare established markets undertaking of Zydus Animal Health and Investments Limited was completed recently on the 14th July 2021. The consolidated financials for the period ended June 2021 up to the PBT level do not include the financials of the Animal Health Business and financials of the previous quarter and previous financial year have also been restated to correspond with the figures of the current reporting period. Net profits from Health for all the periods have been shown separately as profits from discontinued operations in the profit and loss account. During the quarter, we posted consolidated revenues of INR40.3 billion, up 15% year on year. Consolidated EBITDA improved during the quarter and stood at INR9.33 billion, up 18% year on year. EBITDA margins for the quarter stood at 23.2%, which is an improvement of 140 basis points on a quarter on quarter basis. Various process simplification and efficiency enhancement initiatives aimed at optimizing the costs resulted into the improvement in EBITDA margins despite the inflationary pressures. Consolidated PAT for the quarter was INR5.87 billion, up 29% year on year. Our India geography comprising of human health and consumer wellness business, which contributed to 50% of the consolidated revenues during the quarter, witnessed a very strong growth of 43% on a year on year basis and registered sales of INR 19,400,000,000. The U. S. Geography comprising of generics and specialty portfolio posted sales of INR 14,500,000,000 during the quarter, down 4% quarter on quarter. Our emerging markets business grew by 70% on a year on year basis and posted sales of INR2.77 billion. On a sequential basis, the business grew by 11% during the quarter. Now let me take you through the operating highlights for the Q1 of FY 'twenty two for each of our business lines. Starting with our human health business in the India geography, the pharmaceutical business market in India registered a healthy growth of 37.2% during the quarter gone by, aided by the lower base of the previous year and contribution from the COVID portfolio. In line with the market, our business also registered a strong growth during the quarter. Overall, our Human Health Formulations business posted sales of INR13.57 billion during the Q1 FY 2022, up 64% on a year on year basis. The growth was supported by both the COVID portfolio as well as good performance of the base business. Branded generics business grew by 67% on a year on year basis during the quarter. We gained market share in the anti diabetic, anti infective and the nutraceuticals therapeutic areas during the quarter vis a vis the corresponding quarter of the previous year. Going forward, with the reduction in the COVID-nineteen cases across the country and relaxations of restrictions, we expect the demand for medicines to normalize due to increased footfalls in the doctor clinics. During the quarter, our consumer business witnessed a strong growth in 5 out of 7 brands that resulted in an overall 10% growth on a year on year basis and revenues of INR5.9 billion. The summer seasons brands, Niacin and Glucon D could not capitalize on their full potential due to a short summer and lockdown in many states. With markets opening up, we see strong in demand across channels. Now let me take you through the performance of our U. S. Formulations business. As mentioned earlier, the business saw a sequential decline in revenues during the quarter gone by. Reduction in cases of supply disruption in the market resulting in limited one time opportunities and pricing pressure in some of our products led to this decline. However, despite the increased competition and pricing pressure, our U. S. Generics business could grow the overall volumes during the quarter. Recently in the month of July, we received the final approval for fulvestrant injection, which is the first approval of a complex product from the biologics manufacturing facility. This product got the approval in the first review cycle by the U. S. FDA and was approved in less than 10 months of filing. Recognizing the importance of digitalization and advanced analytics in improving healthcare delivery offering better customer experience and building responsive back end, we have taken multiple digitalization initiatives in our human health formulations and consumer business in India and also our manufacturing operations. In the Human Health Formulations business in India, we are working on a platform technology that will connect the entire value chain to drive quality, productivity, operational efficiency, resulting in enhanced patient centricity, better prescription engagement, comprehensive disease management and an improved healthcare delivery experience to all the stakeholders. On the consumer business front, the digitalization initiative will help get real time demand visibility across channels, market trend analysis through predictive modeling, efficient management of inventory, better ROI on trade spends and also enable close monitoring and governance of other functional KPIs. On the manufacturing operations side, we are working on the use of advanced digital and analytical tools that will enhance overall compliance and efficiency through simplification, resulting in increased throughput by unlocking equipment effectiveness, productivity by avoiding redundancies and adopting lean work practices to optimize costs. During the pandemic, we saw the opportunity to completely relook at our entire operational spend and initiated the process of 0 based budgeting in our major business, mainly human health formulations business in India. This initiative will help optimize both direct and indirect spend and build internal capability to attain sustained savings over time. The manufacturing operations and 0 based budgeting initiatives put together are expected to improve our operating margins by 80 to 100 basis points. Now this concludes the business review. I will now request Doctor. Sherbil Patel to take you through the progress and initiatives in our innovation program. Over to you, Doctor. Sheryl Patel. Thank you, Mr. Naik, and good evening, ladies and gentlemen. As you all know, continuing with our efforts to combat the COVID-nineteen, we have applied for an EUA to the office of DCGI for the ZYCOB D vaccine with an interim Phase III clinical trial efficacy data for the 2 milligram dose study. The trials were conducted in over 28,000 volunteers at more than 50 clinical sites spread across the country and during the peak of the second wave of COVID-nineteen, reaffirming the vaccine's efficacy against the new mutant strains, especially the delta variant. This was also the first time that any COVID vaccine has been tested in the adolescent populations in the age group of 12 to 18 in India. Around 1,000 subjects were enrolled in this age group, and the vaccine was found to be safe and very well tolerated. We have also submitted the dossier of ZyCoV D vaccine for an EUA to DCGI with a trial data for the 3 milligram dose study also, which is a 2 visit vaccine. On the NCE front, recently in the month of July, we are very happy to say that the EMA, the European Medical Agency, granted orphan drug designation to saroglitazamagnesium for primary biliary cholangitis indication. ODT status provides us with an exclusivity for 10 years if the treatment gets approved. PBC is a disease with a global prevalence of approximately 40 cases per 100,000. Women are much more likely to be affected by PBC than men, and the incidence increases after the age of 50. Across the world, PBC primarily affects an estimated 1 in 1000 women over the age group of 40. Global market for PBC treatment is expected to grow at a CAGR of 36% from 2018 to 2026 and is expected to reach approximately $11,000,000,000 by 2026. Approximately 40% of the patients are either non or partial responders to the current modes of treatment, resulting in a highly underserved patient population. We are hoping that siroglutizar will solve for one of these critical outcomes and become a successful product as we move forward. In India, we received an approval from CDCO to initiate Phase I clinical trial for a novel multi dose anti malaria molecule, ZY19,489. This molecule has already been trialed in Australia. Coming to the biosimilars. During the quarter, we launched trastuzumab emantacin, the first ADC biosimilar and a highly effective drug for the treatment of both early and advanced HER2 positive breast cancer under the brand name Ujvera. The drug has significantly reduced the cost of treatment by almost 80 percent for all patients. Talking on our 505B2 and specialty initiatives. During the quarter, we received a response in the U. S. FDA against our pre NDA meeting for a pain management product. NDA for this product is expected to be filed during the current financial year. During the quarter, we completed 6 in licensing deals. 5 out of these 6 products are expected to start contributing to the revenues from FY 'twenty 3. Cumulative number of such in licensed products now stands at 24. Out of all the in licensed products, for 2 products, we are likely to hold an exclusive first to file status and are likely to have a 180 day exclusivity upon launch. Thank you. And we'll now move over to the Q and A session over to the coordinator. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Also participants connected on webcast, please click on the below link First question is from the line of Tushar Manglani from Motulal Oswal. Please go ahead. Yes. Thanks for the opportunity. So just on this in licensing deal you alluded for revenue contribution from FY 'twenty three onwards. Any further color on this in terms of further quantifying of how much this revenue contribution can be? So I think most of the in licensing deals we have done are where we have gaps in our portfolio or where we may have lost some opportunity on opportunity on first to file. So the in licensing opportunity are generally products which are very niche or very products which have low competition. So they all have a significantly high good commercial potential than any of the normal molecules. So they are obviously the high value products. Exact value is not possible to give in terms of the next 2 to 3 years forecast for that. But some of them do fall in the complex injectable space and some in the oral space. As I said in my call also that 2 of these products is also where we have got 180 day exclusivity potentially. So they are all meaningfully large value products. And will you be manufactured at poultry or So largely, many of them are manufactured by the company whom we license from because they are complex in nature, either the API or the formulation. Few of them we do we will do manufacturing ourselves, but by and large, many of them are sourced through the 3rd the licensing. And just lastly, how much would be the share of COVID related revenue for the quarter, I couldn't understand the question. For the share of COVID related revenue in the human health business for the quarter 1, why? So large part of the revenue majority of the revenue was obviously COVID related was remdesivir. Minus remdesivir, our growth was 35 plus percent for the branded formulation. Got it. Thank you. That's it from my side. Thank you. Our next question is from the line of Kunal Damesh from MK Global. Please go ahead. Thank you for taking my question. So first on the U. S. Business, we said the weakness is attributed, one of the factor is one time buy. So that was that I think that should be positive impact, right? So was that in this quarter? Or the last quarter, we had some onetime buy which did not recur in the Q1? So onetime buys, we have been seeing it for many years last in the last couple of years because of disruption in supply chain. In the last 6 months, we have seen this onetime buys have dried up because there is very little issue with supply chain in the U. S. So we haven't seen any meaningful onetime buys in the last 6 months. Sure. And secondly, I think we have launched like 4 products in U. S. Vis a vis our target was somewhere around launching 30 to 35 products. So are we still on track to achieve that? So in the U. S, we still do expect to get close to 50 plus approvals, some being tentative, and we will still achieve 30 plus launches. Sure. And secondly, on the vaccine opportunity, now that around 55% of the adult population has been vaccinated with at least one dose and every last month is kind of reduces the remaining market by at least 20%, 25%. So how do you see this opportunity now and in the adult market as well as in the adolescent? And on the adolescent front, have we also submitted for emergency use authorization for our vaccine? So on the second question, yes, we have submitted for EUA for the adolescent population, and we are also hoping we will see approval for that. And we'll as soon as we know anything more, we'll apprise everyone about it. With respect to the opportunity for COVID, our current capacities that we are fully if we fully manufacture ourselves is at the max between 10,000,000 to 15,000,000 doses monthly, which is not very large in terms of the overall need of the vaccination. So even at the adult population, I think for us, I don't think the difficulty will be in being able to secure the business for the manufacturing capacities that we have. So we still feel we should be able to supply whatever we can make because we are not I mean, you're talking about 1 crore doses or 1.5 crore doses, which are not very large in the overall requirement point of view. Sure. And if I may squeeze in the last one, in terms of vaccine manufacturing, have we started stockpiling? Because I believe our plant was supposed to be commercialized somewhere in July. So have we started stockpiling in the anticipation of approval? Or we'll start manufacturing at commercial scale after approval? So in our smaller facility, we have started manufacturing commercially for stockpiling. In our new facility, it's the activity starting as of this week. Sure. Thank you. Thank you. Our next question is from the line of Surya Padsa from Philip Capital. Please go ahead. Thanks for this opportunity. My first question is on the U. S. Any specific reason why we are seeing a significant difference in the U. S. Hello? Is it audible? Yes. A slight disturbance, but yes, that's audible now. Okay. So I was just asking about the U. S. Business. Any specific reasons for that we have seen a kind of sequential correction in the U. S. Business? Because we know that the previous quarter was not a great quarter in any manner about the flu sales contribution. So since there was no reason for a kind of sequential correction, although there was a kind of issue of pricing pressure. And given that, what is the kind of outlook that you are having for the full year in U. S? So in the U. S, two things which we spoke about in our conference call. One is there is a lot more competition that we get to see on established products and new products with more approvals that have come through both from existing and new players. So that is something that has definitely happened to the market where you're seeing far more competition and bids. 2nd is that there have been least supply disruptions during the last one year. And that also means that what we need to get to see opportunities of onetime sales by being able to supply products which are in shortage. That issue has come down for the overall drugs. So that's the second part by which we see some gap. And thirdly, we have said that for the because of the lower activities at the prescription level, some of the products, the prescription volume have come down, which correspondingly means that the buying also reduces. So those are some of the things that have happened which has led to this. For us, for annual point of view, we are still looking at a low single digit growth for this year. And if some of the critical new products succeed, we can see some better traction on that. So that is our current estimate. In terms of the next 2 to 3 years, we believe that both transdermals and our specialty injectables and some of the complex oral steroid products will allow us to then scale up from the current levels of what we are at. Okay. Second question is on the COVID portfolio and the anticipation from the vaccine or any status. So you have obviously indicated about it already, but I am saying, let's say, given the recent developments about the approval for the combination of a Covicell plus Covaxin, the approval of J and J is single dose. And here you are seeing just the commentary to the earlier question that your expectation of 1 crore to 1.5 crore kind of per month target that is anyway can be achievable anyway. So that means are you kind of modeling your expectations, Sergio? Hello? Hello? Hello? Are you done with your question? Hello? Yes, sir. Sorry, your voice was not very clear. Yes, yes. So my second question was on the vaccine opportunity, sir. So I was saying that given the recent development about the allowing or approval of the COVID-nineteen kind of mix in India and the single dose of J and J and sure right now you have mentioned about your expectation of a 1 crore to 1.5 crore per month kind of volume. So whether that is a kind of moderation from your earlier expectation that you were thinking about achieving INR 3 to INR 5 crores kind of level by December or so. So anything on that front? So I think your question, I understand, but I think you're mixing 2 things. When I say INR 1,000,000,000 to INR 1.5 crores, that is monthly. And what we had said, 3.5 crore was till December. So we haven't moderated our stance yet. We believe that currently, whatever we will be able to make, we can find an opportunity of market for it in India. And obviously, there is market outside. But currently, let's focus only on India. So we don't see any concern on that. If you look at the manufacturers today in India, COVISHIELD has a very large manufacturing capacity. But other than that, there's nobody who's achieving more than 1 crore to 2 crore. And any of the approved vaccines have not reached commercially availability at all in India. So I think in India, we still require a lot of vaccines. And for us, we believe that with whatever understanding we have, we have a very currently a very strong demand for our vaccine, both for the use in the current form but also for the adolescent use where there is currently none approved. So as I said, for the till the end of the year, we believe anywhere around 3 plus crores we hope to manufacture and supply. And that is at full capacity. So we are going to be making full capacity. Okay. So my next question is about the even the expectations about, let's say, verasen, what we have been so excited about. So obviously, the number of COVID cases has come down. So is it better to think that okay, the opportunity is really drying out here and that is one. And a clarification about this minority interest since higher since last couple of quarters or last two quarters. Is it because that there is a kind of COVID related benefit that is seen in the consumer business and hence the minority interest is looking a bit elevated? P. Vijay Kumar:] So on the first question, I mean, if we all understand what's happening to with COVID-nineteen and the impact it has everywhere and the way it's moving, you know that the infections and the peaks come in waves and in cycles. So we have obviously gone through a very strong second cycle or second wave of COVID. But we know that with what we are seeing in Europe, in the rest of the world, we know that there is an imminent way of the 3rd wave that will be there. So the opportunistic products or products that are related to COVID will obviously make more sense when you see those kind of problems around. For verafin specifically, we are also looking to export it in other countries, and we are also looking to build an outside India business beyond what is India. But currently, what you say is right. In India, there are much lower cases and prevalence. So currently, the need for COVID drugs is lower. But both for verafin, remdesivir, we are seeing we will see a potentially a good export market that we want to build for. For remdesivir, we have significantly good export business and India business still, and we will do the same for virofin also. Related to your second question, maybe Vishal or Nitin Bai can take it up. Yes. So Surya, actually, the non controlling interest is mainly for Zydus Wellness. And as you know, Zydus Wellness is a seasonal business. So it's not equally spread across all the 4 quarters. So quarter 4 of the financial year and quarter 1 of the financial year are the main seasons where you will see higher top line as well as profits in that business. And quarter 2 and quarter 3 are relatively lean because the season for 2 or 3 of their brands is not there. So as a result, you will see this kind of trend every year. So quarter 1 of any year and quarter 4 of any year will have higher profits in that as well as resulting into higher non controlling interest also. One exception was last financial year where because of 1st wave of COVID, Zydus Wellness did not have good profits. And as a result, their non controlling interest was lower. This quarter onwards, it has now normalized. Next question is from the line of Anubhav Agarwal from Credit Suisse. Just trying to understand that we see efficacy data difference between the 3 dose and the 2 dose. I think you have declared 3 dose, but you haven't mentioned about 2 dose. Can you just talk about, Sheryl, by that? How are the 2 different from the efficacy side? So the difference between the 3 dose I mean, the 3 visit and 2 dose, the amount of dose given is the same. It's just that instead of giving between 0, 28, 56 days, we do only 2 times dosing between 0 28 days. So we believe that will bring obviously far more patient compliance and ease of administration. So that's the so I think that from the amount of vaccine given is the same between the two arms. And what we have once we obviously get through the registration, all that, we'll explain more. But we have seen equal and better immunogenicity and antibody response in the 2 visit versus the 3 visit. And that is where we believe that, that could be the potential mode of use for this vaccine as we move forward. So would you say that the so effectively you're saying the efficacy data is you're seeing better in the 2 dose, 3 mg versus 2 mg 1. So what about the safety data? Has that been comparable as well? Yes. So the safety wise also, there have been no safety events or any serious safety events with this arm also. And across all the from Phase I till now, we have not had any safety concerns, and that obviously has been published and shown to the regulators. So on that, we are fine. And I just said it has better immunogenicity. So it could potentially have a higher efficacy. But currently, I would say conservatively to assume similar efficacy would be right. And what kind of population base like you ran the trial on 28,000 patient on 2 MG1. On 3 MG1, what was the population based on which you ran the trial? So the phase, the 3 MG trial has been done on the immunogenicity point of view. So it has been done in close to, I don't have the exact number right now, but around close to, I think, 800 to 1000. Okay. And for the Adulacent, are you going for the 2 dose version even for Adulicient? Or for them, it's a 2 mg1 only? So again, these are all the for the regulators to discuss. We believe with that body of evidence and data we have shown, it potentially will also be a 2 dose regimen, 2 visit regimen. Sure. And for the export markets, have you already started applying? Or once you get the emergency use operations here in India, then you will start applying to the export market? So it's still work in progress. For us, the current capacities that we have, we feel we'll not have enough capacity to serve India. So to look at export is not something practical right now because obviously, we don't want to be able to make any supplies. But we are looking at partnerships and to see whether we can partner for future supplies and maybe give technology transfer to other countries for manufacturing of these vaccines. Few of them have approached us. So we are in those discussion phases. But in the near term, this we are largely only focused for India right now. Thank you. Our next question is from the line of Foram Parekh from Choice Institutional Equities. Please go ahead. Hello. Am I audible? Yes. Yes, you are. Yes. So my question is on wellness. It's a follow-up question. The source had just said that Q1 and Q4 is like the seasonally strong quarter. So would it be right to assume that in next two quarters, the growth rate will taper down to what it is reported in Q1? So growth is obviously corresponding to the last quarter of the previous financial year. So it is not an impact of growth. It's the absolute sale. The quarter 4 and quarter 1 are larger versus quarter 2 and quarter 3. But we are not talking about growth tapering down. We are talking about the size of the business being different between the quarters. Okay. And so if you can just throw some color on the U. S. Business, like we have we are seeing delta variant over there and price erosion. So what would the probable impact be on the U. S. Sales out of these situations? So currently, the impact mostly is because of the price of more competition and less disruption in supply, which and so I think the growth possibilities only when you are with the possibilities of new launches that we get to do. And U. S. Is a cyclical business, so it goes through these cycles of consolidation and again then disruption. So we believe that if you have the breadth of portfolio, which is large enough and if you have good operational efficiencies and good inventory positions, one will see an opportunity that one will get to build on from the existing portfolio. And the rest is obviously to file a new portfolio, which we have been doing and launching new products and slowly building 2 franchises, the transdermal side and the injectable side, which can be very large and sizable for the organization. Okay. And if I may just ask one more question. I just wanted to know, like, how much percentage of COVID drugs do we export? Currently, it's only remdesivir in a way because the government had blocked exports for a very long time. So currently, it's only remdesivir and no other drugs, which are more COVID related. Okay. So that would be like less than 5% of the COVID portfolio that we would be exporting? The export of remdesivir, I don't have the exact number, but it's not very large for the last quarter. Thank you. The next question is from the line of Prakash Aggarwal from Axis Capital. Please go ahead. Yes. Hi. Thanks for the opportunity and good evening. First one is on the U. S. Growth trajectory. So much has been talked about kind of approvals, expected launches, JVs and injectables and all. But qualitatively, I mean on this base that we are talking around $200,000,000 do we see growth going forward in this year and next year? Or do we see that these opportunities that we spoke about this would be able to cover the base business price erosion? How do we see this for the next 6, 12 months or over the next 12, 18 months? We are aspiring for in the next quarter and beyond. Going forward, in the next financial year, we with some new products, some settlements that we have and more of some of the injectable launches that we hope to see very soon and some of the more complex oral new product approvals that we are getting to see in the next quarter. We hope we can build upon that base to minimize the erosion that we may see on one of our methylamine franchise. So that should offset that. And then more new product launches can build upon the traction on the U. S. Business. So I still believe for the next 3 to 4 quarters, we would see a low single digit growth. And maybe protecting the base would be the right way to look at it other than some opportunistic things that we get to see which we don't know of and which can't plan for. But going forward, I think the other portfolios coming in, which is the injectables and transdermals with the clearance. Once we get for Morayya, we'll get to see some better traction on New Product successes. Yes. I mean that pulls me to the second question on Morayya. So if there is any update on desktop inspection, are you hearing that couple of inspections have started in Hyderabad? So any update there? Or what are you hearing? Or what are you getting prepared for? So one, we have now at least got the clearance from the FDA point of view, understanding that we have finished our process of corrective actions, and they have been submitted and they have been accepted by the FDA. And the FDA will schedule for an audit. Now the audit with in terms of physical audit or any other form of audit is still unknown, but we will now we, FDA, we are expecting an audit is what we can say. So what I understand the kapa plan, you already executed the kapa plan as required? Yes. It's already been executed and discussed and closed. We are now, we need a some sort of inspection to get triggered for getting out of the warning letter. Perfect. And lastly, on the margin side, there was a mention by Naksar on this. We are expecting efficiencies to kick in and margins to improve by 80, 100 bps. That is on the current base of 22%, 23% or that was more like a generic statement. How do we think about margin expansion for this year and next year? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So it's on a current base. Okay. So it is about 22%, 23%. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes, yes. And this is over 12 to 18 months? Yes, 12 months, yes. Okay, perfect. Great. Thank you. I'll run back the queue. Thank you. Our next question is from the line of Kunal Damesha from MK Global. Please go ahead. Thank you for giving the opportunity again. So on the generic injectable business, specifically in U. S, what is our aspiration? I don't know, what is our current size in terms of number of products? And maybe if you can share value? And from which plant our future pipeline is kind of high? So our aspiration for the U. S. Injectable business is that we want to build at least a $250,000,000 plus business in the next 3 to 4 years, and that's our current estimate. And this includes a lot of important complex products as well as large number of products that we hope to still continue to file. Our critical sites for U. S. Injectables business is our site in Varodara, which is Leiva, which has 4 lines, and it is approved by the U. S. FDA. At least 2 of the lines are already approved. We have one new site, which is a biologics site where we got prefilled syringe approval. And so that site stands approved. And then we have our Alidax site, which manufactures cytotoxic injectables where we sell liposomal toxorubicin from and hope to file for other injectables also there. And then we have one of our joint venture sites, which does CMO work for us also, where we would also see some oncology filing and launch from. So these are largely the different plants, which are used. They all have currently a very good track record of multiple inspections and have done well with their inspections. So they are all good. In terms of complex injectables, one strategy that we do also have is that we also have partnered in products where these products are partnered in from European and some of the Asian countries. And they also have a good track record on the FDA. And we will be also launching many of the injectables through our in license portfolio. Sure. And if you can provide the size of the current U. S. Injectable portfolio? I'm not it's $35,000,000 or $35,000,000 I think. Yes, it's about $35,000,000 per annum. Sure. Thank you. And second question again coming back to vaccine. So I believe we had one data request from BCGI and I think we have complied to that. So at this moment, what is pending? Is there another data request from them? Or we are just waiting for the response? So we have one data point that we had to provide last week, but and it is being done at the government instituted lab, but that has got delayed. So that's getting submitted tomorrow, day after. After that, for at least, we believe currently for the approval phase, we would have completed most of our data sequence. Sure. And one last on the vaccine facility that we have kind of created. So what other maybe dosage form or other kind of vaccine or other formulations we can produce in that facility? So there are vaccines as 2 plants. 1 is a drug substance plant and 1 is a drug product plant. The drug product plants are existing facilities which make other vaccines and other products also. So that is fungible. With respect to the drug substance plant for the DNA vaccine, it's a recombinant vaccine plant. So it can take up some other recombinant products. But currently, for the foreseeable near future, obviously, we don't have any other capacities to do anything with this plant. So this will be currently dedicated only for the DNA vaccine. Potentially, we are also looking at developing more products, more vaccine platform using this technology. So that is the that will be the ongoing work that will continue for this. So it is a recombinant plant. So in a way, after some modification, it can be repurposed for some recombinant biologics. But currently, this capacity is going to be fully resourced and dedicated for only vaccine production. Sure. Thank you. Thank you. Our next question is from the line of nimesh Mehta from Research Delta Advisors. Please go ahead. Yes. Thanks for the opportunity. A lot of my questions have been answered. Just one thing on the U. S. Side, I'd like to know. Are we likely to launch other nivlumabine franchise, especially in products like glycol in the near future, some outlook on their CRP? Could you repeat the product name? I couldn't hear it well. Belprecala or any other biglamine product that's in your file? So I see. Yes. So we do have a portfolio of at least 3 more mesylamines that we want to launch, and we would be launching some of them very soon. Meaning in this year itself? Yes. Just financial year. Okay, wonderful. And second, just a quick update on the domestic business. How many products are we likely to launch this year in the domestic market? And how many of them will be fresh to market launch? So currently, we have a portfolio of about 35 molecules that we are working, which we want to launch, which will either have limited competition of the first two markets. In the recent times, we have launched a good amount of franchise in the diabetes space, including VILDA Griptan, Denelig Griptan in future. We will be launching some of the other Griptan. So that's one. Then we have launched nitrogestrone, which is again one of the very few limited competition products. So large part of our now future portfolio is driven towards launching low competition or sort of first generic. When we launched our biosimilar cat style against the only generic in India and in the world. So we'll see a healthy pipeline of products that would be first in India, either first generic or potentially first like lipaglin. We also have decidustat that we hope to file by end of this year. So we would see a large part of portfolio being complex and first kind of launches in India. Beyond that, obviously, life cycle management and product life cycle extension happens through doing formulation research that we also continue to do for our products. And we COVID is a different year. We have launched quite a few COVID products. But on average, we are looking to launch anywhere between 30 to 45 new launches in India. Yes. And a lot of them would be first time in the market, right? So 30 to 45 in a year will not all be first time. But if you take a 3 to 4 year view, then at least 30 to 35 like important critical launches which have limited competition or are day 1 launches. Our next question is from the line of Sameer Vaishiwala from Morgan Stanley. Thank you and good evening everyone. Sure. Shailesh, this is about the ZykopfD vaccine. So question number 1, what are your thoughts on the efficacy study for edolacin? So efficacy is never done in cohorts like that. When you do a large Phase III, you do, I mean, general efficacy, and then you do immunogenicity, which is divided in different cohorts, older age group, comorbidities and then the younger age group. So we don't do separate efficacy right now. That will get created once you have a larger set of data. We can talk about overall efficacy, which is a good representation of the overall efficacy. What we do is immunogenicity for all these cohorts to make sure that the antibody response and IgG as well as the neutralizing antibody response as well as the T cell response or the interferon gamma challenge are all similar or they're giving different trends? And we have seen a much good very good trend for, obviously, older age group. In children, we have seen a higher trend on higher antibody formation. So potentially, it could mean that they have a far better, higher protection. So that's how the host, all the studies are planned. Okay, great. So when you get the approval, you get it for both adolescents and adults? That is what we will be hoping for. But I mean once we get the regulators nod, we can talk more about it. But we do have filed for all of this data. Okay. And any time lines when you expect approval and then get into the market? So again, it's very difficult to predict that. I said a last set of information, we believe we will submit in the next 1 to 2 days. And by and large, it's a rolling review that happens. So all the other information has already been reviewed. So if everything is okay and if they don't see any and if we also don't see an issue in the last data and if the data is fine, we can potentially see an approval in the next 1 to 2 weeks maximum. Okay. So this is pretty close. And so what's the market access work being done? If you can just share with us, would you be routing it through all private channels, some tie ups that you have done? Would you be because their volumes are not that large, would you be doing all India or just a Western market? There are 3 opportunities. One is government sourcing, which potentially will be could be the largest sourcing that happens, right? The government did commit that they may potentially buying from any of the vaccines 75% and leaving 25% for the retail. The second is we have also done a lot of activity and created a lot of capability on the digital side to build for the whole supply chain and those administration and the other things that are required in terms of patient support and other required things. So that whole activity is in place, linking it with the app to make sure that the right dosing and everything happens. And we have gone beyond it in terms of providing far more critical information. So all of that is done. We do have requests from institutions and large institutions and mid sized institutions for direct buying, which we have, in principle, agreed to do so. So as soon as we get an approval, as soon as our pricing gets cleared and as soon as the government commits to their quantities, accordingly, we will obviously then supply to the rest of the market as well. Currently, it is a question it is current demand, obviously, we have what we produce, we can we have we have expectations from customers for more than that. So we will see how we'll be able to commit to the different supplies. Okay. And one final one on this, Shelba, if you I don't know how comfortable you're talking. Can you talk a bit about the pricing for this government versus private and your margins expectation on this? So it's very difficult because we haven't had that So So currently, we have a reference price of approval for the government purchases. So obviously, every vaccine is different and the technology is different as well as the investments are different. So that is a place where we still need to discuss with the authorities. But obviously, it will be I mean, we already know the float price which exists, which is upwards of INR 200 and plus, which we know of. And then there is a private market. We believe in the private market, we will we haven't decided yet on the pricing because, again, it's a question of volume. So how much volume we can give to private market versus what we give to the government will define the pricing also. So I think there are a lot of moving parts. I believe it's not too far away. Maybe in the next 1 to 2 weeks, we should be able to achieve that also post our approval. And as soon as we do that, we can give you an update on it. Okay. Excellent. Thank you so much. And just a final before I go is on Moriah. Your guess, is it going to be fiscal 2022 when the inspection happen or you think it can go beyond it? And keeping in mind the vaccination in the current COVID situation doesn't get any worse. I am still hopeful for fiscal 'twenty two, I mean, inspection and clearance. Okay. Thank you so much. Because we just have to wait for an inspection now. Our next question is from the line of Harit Ahmad from Aspark Capital. Hi, good evening. Thanks for the opportunity. My first question is on Assupol HD. So you had commented about slower uptake in the last quarter and in the 4th quarter. So have things normalized on this front? And anything that you're hearing on potential competition in this product because there's a patent expiry that is quite imminent? So two things versus last year, we have seen obviously the volumes for the brand prescriptions come down. But if you say quarter on quarter, then they have stabilized. So they are stable quarter on quarter. Over the last year, their prescriptions have come down as it has done for many products post COVID. On respect to competition, we currently believe and we only know of 1 we know of 1 company which has filed for the product. And I don't think there are any products that have approved yet. And post the patent expiry is only when we'll probably get to know or a few weeks before that, that we'll get to know. But we made an assumption that we'll get to see 1 to 2 competitors the market. That's our best estimate as of now. Got it. And on the transdermal front, how many filings have been made till date? And how many of those are from Mariah? And then how many from the other facilities? So we have, I think, 3 2 products from non Moraya facilities, and all the remaining rest are from MORAYA and one from our U. S. Facility. And MORAYA is largely driving the oral the contraceptive side of the transdermals that we have filed for. Okay. And then last one on COVID vaccine. On the 2 dose vaccine, will the immunogenicity and safety data that we have already generated, will that suffice for approval? Or will there be a requirement for a socialized take for your efficacy trial? So it's the same amount of dose that we're giving. So we strongly believe that this will suffice for the approval. The next question is from the line of Ranbir Singh from Sunil Securities. Please go ahead. Yes. Thanks for taking my question. Sir, on JYCOVID side, just to understand, are we working on any other delivery system from non investing like nasal or something? Needle free dose delivery. Sorry, Mr. Patel, for request you to please repeat. Yes. So I said for the current vaccine, it's already intrathermal application, and it's a needle free application of the dosing. So it is already one of the future ended technologies, which are almost noninvasive and which leads to very little side effects. Okay. And just for my understanding, visits and doses are a different nomenclature or this is same? Sorry? Like we talk about 2 visits and sometimes we talk about 2 doses. So these 2 are different thing or this is same? We used to give the vaccine over a period of 3 visits, so 3 doses in the way, so 0, 28 and 56. Now it will be over 2 visits, 0 and 28 days. Okay. So it is the same like having a 2 doses at 2 visits? So this is the same. It is not like one visit may have more doses? No, the doses earlier was 2 milligram over 3 times. Now it is 3 milligrams over 2 times. Okay. And on U. S. Generic side, the most of competition is Mejalerman products or we see across products that competition has impacted badly? No, it's cross products. So like at our starting also we saw competition, I think that should that would have also impacted Q1 results, right? As of the last 4, 5 months, the competition has been across portfolio for all of the generic companies. So it is more wider. It is not specific to a few products. Okay. Okay. And last one, the related one, like 35 products launches we are talking about and single digit growth. So are you still so competition or the price erosion is likely to be deeper even going forward also? Or do you see that now things are getting stabilized there? So we are seeing at least now a high single digit erosion. For obviously products which were exclusive with, there will be much more erosion. But generally, you're seeing a high single digit erosion to the U. S. Business. And that's what we are predicting at least for the next couple of quarters. Okay. Okay. And you spoke about 30 to 35 product launches in India also in this year? Overall, yes. Okay. That's clear. Thanks a lot. All the rest. Thank you. Our next question is from the line of Kedar from Nirmalbank Institutional Equities. Please go ahead. Kedar, please bear with your question. Hello. Am I audible? Yes. Please go ahead. Yes. Can you share biosimilar revenues for the quarter and how much of that was from India? Also, if you could share some color on the biosimilar revenue that should shape up in the emerging markets over the next 3 years? So on the biosimilars front, currently larger most of our revenue is driven out of India only. In the next calendar year, we will see more launches in the emerging markets and which will add to the overall revenue on the biosimilars side. Our on the biosimilar in the India, we believe we will be I can I'm sure Vishal can give you the exact number, but I think we are about INR 350 crores right now on an annualized basis. And we get to see an I mean, we get to see INR 500 crores soon. So that's where we are on the India biosimilars business. And globally, as I have maybe said earlier also that we have now nominated 2 biosimilar programs for global development, which will see commercialization post 2025. So that's the current plan for biosimilars. Okay. And just to follow-up on that, which are the key countries that we'll be focusing on in the emerging markets? And do you have any plans to outlicense or market them on your own? So currently, a biosimilar EM strategy emerging market strategy is mostly licensing. If you look at which will be the focus markets, which will be also add good revenue to us, it will be the Latin American countries driven by Mexico and then Colombia, Venezuela and others. In Asia, we are looking at Philippines, Thailand and Indonesia being the critical markets and then obviously, Sri Lanka and other smaller markets, Myanmar. In Middle East, we to build towards the Saudi Arabia side of the market. And we have also now approvals in Russia. So Russia will become a critical market to sell for Russia and the CIS countries nearby. So this will be the current plan for the EM markets. What is good for us is that we already have approvals in Russia. We have approvals coming now in Asia and potentially soon approvals in Latin America also. So this would help us build at least 3 to 4 biosimilars in all of these markets. Thank you for answering the question. Just a last question that in case you see a delay in Moriah resolution, would we potentially see a U. S. Revenues? P. Vijay Kumar:] So Moriah has important products, which are transdermals, which we need approvals for. So they are important in terms of our future revenue. Most of the oral drugs are filed out of other parts. Injectables are also filed out of other sites. So they will definitely have an impact. But over a period of time, it will not be meaningful. The next question is from the line of Anubhav Agarwal from Credit Suisse. Yes. Thank you. Shailesh, one just out of curiosity, this 2 NG and 3 NG doses, so when these are so close, I'm a little surprised that you started with such a large trial of 28,000 patients with 2 NG dose, which because you very well knew that your vaccine is going to be 3 dose vaccine. So what was the hindrance of starting the trial with 3 MG dose at that time? So again, this is science, right? We have been doing we are doing DNA vaccine for the first time. So obviously, that obviously, we would have not always known how everything moves. And as we move forward, things get to we get to know because the immunogenicity and other data comes out much later and same does the animal data and other things. So in this development cycle, things kept on happening parallelly and not in sequence, right? So that is one part of the issue. And the second is we were also looking at it saying that if we have a longer time in terms of gap, do we see a higher antibody response? And that could potentially also have been. So the 3 dose made sense from doing that. What we are now getting to see is that 2 doses also behaving similar or better. So maybe that hypothesis was not fully there. And it's an intradermal delivery. So we have to be always we had to make sure that we have an application possible that can be done in 2 doses I mean, 2 times versus 3 visits. And that also means because we have to only inject 100 microliters in a way. So it's a noninvasive injection insertion, but we had to do it. So we had to all of those were questions that still needed to be answered. So that is what happened, and that's how the whole development journey went through. And now we believe that because the safety is similar and obviously the emergency is similar, it will end up being only 2 visits, but it will still be taken on both arms as it was done in the 2,000,000. Right. Okay. And the second question was on the U. S. Market. Just trying to understand the erosion better in this quarter. So was it that because of the COVID, the buyers were having a larger amount of inventory to stock with for the last year. And now they've started reverting back to the normal inventory. And that's why there was a pressure among suppliers because the volume went down from the buyers in terms of purchase. Was it like that the reason that the price erosion increased for everybody in this quarter? Anupam, I think no, the buying came down and you can attribute some part to higher inventory. But that was mostly to do with last quarter, not this quarter, as of gone quarter by. And but it is more now all around higher competition. We are seeing far more new players with new approvals who seem to be very aggressive in pricing, which we believe in as for us, it is not practically possible and responsible to be going at such low pricing. So that's what's happening to the current market. So we are seeing far more bids and far more challenges to pricing, which we believe will some of it seems irrational, but I think over a period of time, maybe some of this will stabilize. But that's the current scenario. Okay. That's helpful. Just one more clarity on this U. S. One. There have been any guide to low single digit growth in the U. S. Business. So are you expecting a completion in the, as I call, this year itself? And despite that completion, you're guiding for 2% to 3% growth? So we are seeing so we don't know I mean so we are assuming at least one generic will be on the market. That's what our current assumption is on the immediate basis, post patent expiry. Okay, sure. Thanks, gentlemen. Thank you. Ladies and gentlemen, due to time constraints, that would be our last question for today. I now hand the conference over to Mr. Ganesh Nayef for closing comments. Thank you and over to you, sir. Thank you very much and look forward to interacting with you again in the month of October when we declare our quarter 2 results for FY 2022. Thank you and have a nice evening. Thank you very much. Ladies and gentlemen, on behalf of CADERA Healthcare Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.