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Edited Transcript of CADILAHC.NSE earnings conference call or presentation 9-Aug-19 11:00am GMT

Q1 2020 Cadila Healthcare Ltd Earnings Call

Ahmedabad Aug 16, 2019 (Thomson StreetEvents) -- Edited Transcript of Cadila Healthcare Ltd earnings conference call or presentation Friday, August 9, 2019 at 11:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Ganesh Narayan Nayak

Cadila Healthcare Limited - COO & Executive Director

* Sharvil Pankajbhai Patel

Cadila Healthcare Limited - MD & Director

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Conference Call Participants

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* Anubhav Aggarwal

Crédit Suisse AG, Research Division - Associate

* Damayanti Kerai

HSBC, Research Division - Analyst, Healthcare and Hospitals

* Kunal Dhamesha

SBICAP Securities Ltd., Research Division - Analyst of Pharmaceuticals

* Neha Manpuria

JP Morgan Chase & Co, Research Division - Analyst

* Nimish Nagindas Mehta

Research Delta Advisors, Research Division - Research Analyst

* Nitin Agarwal

IDFC Securities Limited, Research Division - Analyst

* Prakash Agarwal

Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals

* Purvi Shah

Sharekhan Limited, Research Division - Pharma Equity Analyst

* Saion Mukherjee

Nomura Securities Co. Ltd., Research Division - Head of India Equity Research

* Sameer Baisiwala

Morgan Stanley, Research Division - Executive Director

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to the Q1 FY '20 Post-Results Conference Call of Cadila Healthcare Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Ganesh Nayak, COO and Executive Director of Cadila Healthcare Limited. Thank you. And over to you, sir.

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [2]

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Welcome, ladies and gentlemen. It's my pleasure to take you through the performance and the results of the first quarter of FY '20. We have with us Dr. Sharvil Patel, Managing Director; Mr. Nitin Parekh, CFO; Mr. Harish Sadana, Chief Strategy Officer; and Mr. Vishal Gor, Senior Vice President, Corporate Finance.

During the first quarter, on a consolidated basis, our revenues grew by 21% year-on-year to INR 34.9 billion. We posted an EBITDA of INR 6.3 billion, excluding the impact of certain one-off expenses aggregating to INR 700 million, our EBITDA for the quarter stood at INR 7 billion or 20.1% of our revenues. Profit after tax, excluding the impact of such one-off expenses, was INR 3.58 billion for the quarter.

Our India geography, comprising of human health, consumer wellness and Animal Health, has grown by 46% on a year-on-year basis, registering a revenue of INR 16.7 billion. On a comparable basis, our business in the India geography grew by 8% during the quarter. Contribution of the India geography and the overall business was 49%.

The U.S. geography, comprising of generics and speciality portfolio registered a revenue of INR 13.7 billion. At 40% of the total business, the U.S. geography posted a growth of 11% year-on-year.

Our rest of the world business, comprising of multiple emerging markets, grew at 12% during the quarter.

Now let me take you through the journal of initiatives and the outcomes for each of our business lines. Coming to the human health business in the India geography, I shared with you during our earlier interactions, we have been working on multiple strategic interventions to bring back growth in the human health business. So far, we have worked on the following initiatives. We have revamped 70% of our territories to the new sales operating system, where the focus is on demand generation by improving the sales planning cycle and also improve the quality of interactions between the field business officers and the business managers. There is an extensive use of data at the back of the newly-created digital tools to help improve quality of decision-making and customer engagement strategies.

We have also undertaken a portfolio rationalization exercise and have decided to discontinue 233 SKUs where we were not able to build scale. These SKUs represent 17% of the total SKUs that we sell.

We have also been working on improving our customer engagement model, depending on the nature of the traffic, to get maximum value for our efforts. On the back of these initiatives, our overall India human business posted a growth of 6% during the quarter compared to the 2% year-on-year growth registered in the last quarter.

Growth in the branded portfolio, excluding the generic products, was 7% during the quarter.

As for the generics data, our human health business grew by 9.5% during the quarter, outperforming the overall Indian pharmaceutical market growth of 7.9%.

Our gynecological and hormones portfolio grew faster at 14.5% versus the market growth of 7.7%. Our derm portfolio also grew 1.5x the market at 9.91% versus the market growth of 6.3%. In the cardiac portfolio, we are on the recovery path quarter-over-quarter and our market share has improved from 4.5% to 4.53% during the quarter.

I'm happy to share that our pillar brands had an annual sales in excess of INR 500 million each, which contributed over 30% of the India human health business, have grown by 11% during the quarter. In fact, some of these brands have registered market-leading growth in excess of 15%.

Also, brands having annual sales between INR 250 million and INR 500 million, which contribute to 1/4 of the India human health business, have registered a growth of 9% during the quarter, which is in line with the market growth.

In this market, too, some of the brands have posted growth in excess of 16%. Our emphasis will now be to sustain the momentum in the go-to buckets and to revise growth of the remaining portfolio. To achieve this objective, we are in the process of transformative restructuring of this business around mass and specialty.

In the case of mass cluster, the focus will be to improve penetration by expanding reach. And in the specialty cluster, the focus will be on intensified engagement efforts with the key opinion leaders. As expected, such a transformative change will require a couple of quarters to stabilize, and we expect the current growth momentum to continue.

EBITDA margin for our India human health business has significantly higher-than-average margins at a consolidated level, which has further improved in this quarter.

On the India consumer wellness front, we are happy to report that the integration of the acquired business is growing as forecast. On the back of a good season and focused sales and marketing efforts, Zydus Wellness Limited registered sales of INR 6 billion during the first quarter. And on a comparable basis, the sales of Zydus Wellness Limited grew by 13% year-on-year.

Now having acquired this business in February and knowing that this quarter contributes to 1/3 of the annual sales, we are happy that the performance of this quarter has been above our expectations.

On the brand front, our key brands namely: Sugar Free, EverYuth Scrub, EverYuth Peel-Off, Glucon D and Nycil have not only maintained their leadership in their respective categories but have also grown better than the market.

So far, we see a good opportunity to regain lost share by investing in the brand by increasing media messages in the key markets through multiple media efforts.

The quarter gone by has been challenging for the animal health business due to a delayed monsoon and drought-like situation in some parts of the country, and we expect it to catch up in the coming quarters.

This summarizes the components of our businesses in the India geography.

Now let me talk about the next big geography, which is the U.S. As mentioned earlier, the overall business grew by 11% year-on-year on the back of new launches and the consolidation of market shares in lead places.

On a quarter-on-quarter basis, as anticipated, the decline in the business is largely attributable to over 90% reduction in the sales of seasonal products like oseltamivir and the authorized generic of testosterone gel. We also saw over 25% decline in the sales of levorphanol. This business, excluding these products, was able to maintain the same level of sales as registered in the previous quarter.

We received approval for 10 new products, including 2 in-catalog (inaudible) for the U.S. market during the quarter. We've launched 8 new products in the U.S. during the quarter, including the rivastigmine transdermal patch, the first transdermal patch launched from our own pipeline. During the quarter, we filed 4 additional ANDAs with the U.S. FDA.

Overall, for FY '20, we expect our U.S. generic business, excluding the onetime AG business, to grow in single digits on the back of 25 additional launches planned during the next 3 quarters, including 5 to 6 high-value products. This is in spite of the significant reduction in the sales of mesalamine 1.2 grams delayed-release tablets, and the loss of business to the tune of over $15 million due to the suspension of production of injectable products and highly-potent oral solid products at Moraiya as part of our remedial actions.

Our emerging markets, including the core geographies of Brazil, South Africa, Mexico and Sri Lanka grew at 12%. We retained our #1 position in the Sri Lankan product market for 7 quarters in a row with a market share of 6.5%, with a leadership position in the cardiovascular, gastrointestinal, orthopedics and gynecology therapy areas. During the quarter, we commenced business in the French West African region.

Our biologics portfolio, which presently gets drafted in India and other geographies, recorded a sale of INR 2.06 billion in the last 2 months -- 12 months. Sales for the first quarter of FY '20 were INR 648 million, up 26% year-on-year.

Our vaccine business has launched a [tetra vaccine] in the India private market. We shall give regular updates as we get ready for the WHO pre-qualification for some of our products.

On the operations and compliance front. Recently, the U.S. FDA has classified the inspection conducted at the Moraiya facility from the 22nd to the [10th] of April-May as officially -- Official Action Indicated, which is the OAI. We believe that this classification will not have any impact on the current supplies or revenues from this facility, and the process of remediation is on as per the commitments made to the U.S. FDA.

We are continuously updating the U.S. FDA on the progress of remediation. There are 32 ANDAs filed from Moraiya pending approval, which are 1/3 of the total ANDAs pending approval.

We have initiated site transfer of all our injectable products from Moraiya to Diva and expect to complete the site transfer of these injectables by the end of FY '20. While we are working on bringing back Moraiya on the compliance track, our other facilities have maintained their successful track record of sustained compliance.

During the quarter gone by, our oral solids dosage formulations manufacturing facility located in our Ahmedabad SEZ successfully completed the U.S. FDA inspection. Production in this facility has been significantly ramped up from an average of 130 million pills per month last year to 270 million pills per month.

Our transdermals manufacturing facility of Hercon in the U.S. and both the oral solid dosage formulation manufacturing facilities of Nesher Pharma in the U.S. have also successfully completed the U.S. FDA inspections.

In addition, recently, in the month of July 2019, last month, our oral solids dosage formulations manufacturing facility at Baddi, and our API manufacturing facility at Ankleshwar successfully completed the U.S. FDA inspections without any observations.

With this, I conclude the business review. And I would now request Dr. Sharvil Patel, Managing Director, to take you through the progress and initiatives in our innovation program. Over to Dr. Sharvil Patel.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [3]

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Thank you, Dr. Nayak. As a company, we have been -- we believe that innovation is the only way to have a sustainable pharmaceuticals business. This has been evident from our continued investments on different technological platforms as well as capabilities that we have built across these platforms. Behind all of these investments, one thing that has always guided us is do more with less. As a result of this philosophy, in spite of running multiple programs in diverse areas, we've been able to manage the research spending within the 7% to 8% of our revenues. I believe we will maintain the same level of investment and achieve targeted milestones across multiple programs.

Let me give you an update on the key innovation programs that are underway at the organization. On the NCE front, on Lipaglyn molecules, we completed enrollment of patients with non-alcoholic fatty liver disease, which is NAFLD, including NASH, in EVIDENCE IV Phase II clinical trial across 20 clinical sites in the U.S. We also completed enrollment of patients in nonalcoholic steatohepatitis in EVIDENCE II and EVIDENCE III and EVIDENCE IV/V Phase III clinical trial across different clinical sites in India and Mexico.

Recently, in the month of August, we successfully completed Phase III clinical trials in India of Lipaglyn in patients with type 2 diabetes. The trial was a multicentric randomized double-blinded study to evaluate the safety and efficacy of saroglitazar compared to pioglitazone in patients with type 2 diabetes.

The Phase III trial enrolled 1,140 subjects, and the study on the patient was over a period of 56 weeks. The trial has demonstrated efficacy and achieved statistical significance on its primary endpoint which is the change in mean HbA1c as compared to the baseline. No severe hypoglycemic events were reported. There was also no weight gain or edema observed during the trial of saroglitazar.

For Desidustat, our investigational new drug targeted at treating anemia in non-dialysis-dependent chronic kidney liver disease patients, we announced the commencement of Phase III clinical trial in India after completion of a successful Phase II trial.

On the biologics front, we initiated Phase III clinical trial for our -- in India for [ADM 1] during the quarter. We received regulatory approvals to initiate preclinical study for one of our next monoclonal biosimilars, denosumab.

On the international front, Rabimabs, our novel biologics quick release, received orphan drug designation from the U.S. FDA for the quarter. We continue to file the dossiers of different biosimilar products in the regulated authorities of different emerging markets. We also continue to have 4 active novel biological programs running.

Talking about our vaccines portfolio, we initiated work on the development of hepatitis A/E, hepatitis A and typhoid conjugate combination vaccine, and the equivalent human papillomavirus vaccine.

We completed the dossier of initiating Phase IIb clinical trials of our inactive therapeutic tuberculosis vaccine. We have also been selected by WHO as a potential technology receiver of (inaudible) injectables, IPV, after the results of evaluation.

Coming to initiatives on the 505(b)(2) development. We have 15 products under different stages of development at present, targeted towards oncology, rheumatology and pain management therapeutic areas. Of these, 3 products are at the pre-IND stage of development, but are not ready for an ANDA submission.

As mentioned earlier, I endeavor to -- would be to manage all these programs and also the generics as well as the conservative pipeline within our resources.

Thank you very much, and now we'll start with the Q&A session. Over to the Q&A. Over to the coordinator for the Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We'll take the first question from the line of Neha Manpuria from JPMorgan.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [2]

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Sir, in the opening comments, you mentioned certain one-offs. Could you give us more color on what this was related to?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [3]

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Yes. These are mainly related to the stamp duty, which we had in our wellness business for merger of the acquired business with the existing entity. Some consultancy fees for integration and on the other projects which are in the human health center, and also some onetime quotations. The total amount was about INR 70 crores.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [4]

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Okay. And this does not include any remediation cost from Moraiya or payments to consultants related to Moraiya?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [5]

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No.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [6]

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And could that be significant, even this quarter onwards?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [7]

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No.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [8]

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Okay. My second question is on Moraiya. What's your expectation in terms of time line to complete remediation and therefore, invite the FDA for a reinspection?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [9]

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So as we have spoken about earlier, the -- we have been -- there are 2 areas which were of -- observations are related to. One was related to the product contamination issue. I think, largely, we have been able to address the questions on the product contamination. And we have committed that we'll be doing 100% analysis of all the samples, and also submitting that data to the FDA. And that, we should be able to finish in the second quarter of this year.

In regards to facility accreditation on the injectable site, this is something that we are working on, and we feel we should be able to do so by end of third quarter.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [10]

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So realistically, you should be able to call the FDA next calendar year?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [11]

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There are 2 -- so there is a new method in terms of how they schedule sites is usually (inaudible) get back to you. What you said would be the clear time line. Logically, they will come in the next year, the other year, but there's also a possibility of something happening this year as well.

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Operator [12]

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The next question is from the line of Prakash Agarwal from Axis Capital.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [13]

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On the U.S. business, just trying to understand the fall, particularly from the big 3 products going down. But on the guidance that you gave, I got -- I didn't hear that loudly. You said, on the generic space, ex-specialty, you still expect a single-digit growth led by 25 new launches, out of those, 5 to 6 are high value. Is that correct?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [14]

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Yes, that is right.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [15]

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So in the past, we have talked about $900 million kind of number. How does that number look for now -- or for '20?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [16]

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So that $900 million, as I said, is the scale of the specialty product of fentanyl. It has, obviously, the AG sales of testosterone gel. So those who are not the pure generics business that we are doing.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [17]

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So Prakash, just to reiterate what Ganesh is trying say (inaudible) in his remarks, our U.S. government business, excluding the onetime AG business which we did last year, we expect that business to grow in single digits in the financial year '20. And it excludes, as I've already said, 2 products, the AG business, which is just onetime and our specialty business.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [18]

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Okay. So I mean is there a number we are guiding to versus $900 million which you guided last year?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [19]

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The generic business last year was $800 million.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [20]

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Okay. And the 2 continue to see price erosion, right? I mean the fentanyl has some competition and AG has several competition now. That's how we should model it?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [21]

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To quantify, fentanyl has already had the price erosion, which is obviously built into this quarter. And I mean we didn't have any AG sale -- significant AG sale in this quarter -- no AG sale in this quarter. So both have been -- they're in the current base.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [22]

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Fair enough. Understood. And I also wanted to understand the [Invest] 116 impact. What would be the cost which would have gone down below the EBITDA line and the depreciation and...

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [23]

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(inaudible) material at all. It started at (inaudible).

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [24]

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Okay. So these numbers...

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [25]

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You can consider there is no impact.

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Operator [26]

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The next question is from the line of Kunal from SBI Capital.

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Kunal Dhamesha, SBICAP Securities Ltd., Research Division - Analyst of Pharmaceuticals [27]

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So my questions are mainly expense in terms of what you have guided for FY '20? R&D expense has increased year-on-year significantly indiscernible].

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [28]

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Look, I really (inaudible) also color to change, expect our R&D expense to be between 7% to 8% of our revenue.

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Kunal Dhamesha, SBICAP Securities Ltd., Research Division - Analyst of Pharmaceuticals [29]

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Okay. Okay. And for the India business though, can you give me the split on '20 then, the 7% to 8%, than maybe FY '19? And then how do you see the segments moving quarter 1 of FY '20 in terms of growth?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [30]

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About 8% to 10% of our standard businesses today is generic generic. Everything else is branded.

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Kunal Dhamesha, SBICAP Securities Ltd., Research Division - Analyst of Pharmaceuticals [31]

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Okay. And so the generic generic business is growing at a slower pace than the branded business?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [32]

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It is not growing right now. There is a significant disruption in the generics business so it's not growing.

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Operator [33]

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The next question is from the line for Purvi Shah from Sharekhan.

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Purvi Shah, Sharekhan Limited, Research Division - Pharma Equity Analyst [34]

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In Neha's question, you stated that there was a one-off of INR 170 crores. This was -- or that was included in other expenses. So if you remove that, around INR 845 crores, INR 850 crores is the other expense. So is that the run rate that we expect to see going forward, sir?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [35]

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When we said one-off expenses, which are extraordinary direct expenses of about INR 170 crores, excluding them, other expense is INR 950 crores.

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Purvi Shah, Sharekhan Limited, Research Division - Pharma Equity Analyst [36]

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Okay. So INR 950 crores is the number that we should be going for?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [37]

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Look, this will be without any one-offs, yes.

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Purvi Shah, Sharekhan Limited, Research Division - Pharma Equity Analyst [38]

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Yes. And so that's what I'm saying, so INR 950 million actual number without the one-offs, which is the run rate that we should be going for?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [39]

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Yes.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [40]

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Yes.

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Purvi Shah, Sharekhan Limited, Research Division - Pharma Equity Analyst [41]

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Yes. And so if you could just also help with the debt figure and the tax rate that you're guiding for FY '20?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [42]

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So the growth rate as of (inaudible) was at [INR 1,240]. And net debt of [INR 6,515].

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Purvi Shah, Sharekhan Limited, Research Division - Pharma Equity Analyst [43]

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Sorry?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [44]

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[INR 6,515].

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Purvi Shah, Sharekhan Limited, Research Division - Pharma Equity Analyst [45]

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1-5?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [46]

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Yes. Tax rate, overall at the credit level, we are running about INR 20 crores to INR 30 crores.

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Operator [47]

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The next question is from the line of Anubhav Aggarwal from Credit Suisse.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [48]

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One question on levorphanol. Now, Sharvil, I think you're now thinking about reducing sales force. (inaudible)?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [49]

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Whatever -- well, we have reduced already the sales force. Going forward in terms of -- we are doing one more restructuring in the last quarter. I don't see a significant reduction of sales force will happen but a reorganization will happen.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [50]

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So when you say reorganization, do you have any other products you feed from operations?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [51]

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No, because the sales force that we have is covering our business into market specialty. So accordingly, the sales force is really on it. (inaudible).

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [52]

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No, levorphanol.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [53]

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Levorphanol. Okay. Now on levorphanol, we have not reduced sales force yet. It's continuing with the same strength on the sales force as of now. We will take a call depending on further entry of any generic, which we don't see on the immediate front. But we are evaluating the business every month. And depending on it, we'll decide whether to continue with sales force or not.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [54]

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Look, IMS showed that the competition has already taken almost 60% market share. IMS could be wrong. But just trying to understand, is the product size sufficiently enough for us to carry this?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [55]

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So as -- if we continue the trajectory right now, we can break even, and go a little better than that, I mean, profit. But if the sales, if we don't feel it will fall further, then we should be able to sustain it because we are looking to add some portfolio for the current field force to promote. So if we are successful in doing so in the next 3 to 6 months, we would not need to take any drastic call.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [56]

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Okay. And just a clarification. You mentioned that last year, fiscal '19, you -- levorphanol plus the AndroGel agent put together for the full year was just $100 million?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [57]

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$125 million plus. Yes.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [58]

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$125 million. And just the last question, just for clarity. The (inaudible) is sub-$100 million products for us and more than...

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [59]

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Yes. It's substantially lower.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [60]

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It's substantially lower than $100 million?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [61]

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It's doctor’s fee.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [62]

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I'm sorry?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [63]

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They're lower than [$68 million].

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Operator [64]

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The next question is from the line of Kunal D from SBI Capital Markets.

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Kunal Dhamesha, SBICAP Securities Ltd., Research Division - Analyst of Pharmaceuticals [65]

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Yes. So just want to understand consumer business a little bit here. So the revenues are higher in quarter 1 and quarter 4, but then profitability is lower in quarter 1? And that is true for the year. Because last year also, quarter 1 profitability was lower, and quarter 4 was higher.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [66]

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Kunal, sorry, could just repeat your question once more, please?

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Kunal Dhamesha, SBICAP Securities Ltd., Research Division - Analyst of Pharmaceuticals [67]

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So profitability in consumer business, does it change drastically quarter-to-quarter? And we have seen that revenue is higher in quarter 1 and quarter 4 in our press release. So revenue goes down in quarter 2, quarter 3. But then profitability improves significantly in quarter 4.

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [68]

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So quarter 4 and quarter 1. Quarter 1 is the highest in terms of revenue and also in terms of profit, absolute as for the acquired business. For the -- and quarter 4, we also -- good in terms of both sales and profit. Quarter 2 and quarter 3, for acquired business are much lower because we build working capital requirements and also inventory for the season. And the sale of the product, which are more to do with the season, summer season, come down. That is only for acquired business. For our Zydus Wellness business, they have a more even trajectory for the quarter.

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Operator [69]

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(Operator Instructions) The next question is from the line of [Yashvi Gopani from Gopani Securities and Investment].

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Unidentified Analyst, [70]

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Sir, actually, is there a debt figure number (inaudible) June?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [71]

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The debt as of 30 June was INR 7,740 crores, that is gross. And net debt for the period was INR 3,316 crores.

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Operator [72]

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The next question is from the line of Damayanti Kerai from HSBC.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [73]

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Sir, you mentioned some 32 pending ANDAs from Moraiya. So out of that, how many are for injectables which we are transferring to Liva?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [74]

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So currently, whatever we are transferring to Liva are mostly older approved product. And all the new products are being filed from Liva. I don't believe that's a substantially large number, but I'll ask Vishal to give it to you off-line. But it would be in the probably 1 or 2 and not very significant.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [75]

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Sure. Sir, moving to India, obviously, you mentioned, we have around 10% sales coming from the (inaudible) business. And you mentioned there is some significant disruption to that part of the business. So can you explain a bit further what is happening there and how do we see outlook for this business?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [76]

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So currently, that business is challenged. I think there is a lot of pressure on the availability of credit and the availability of capital in the market with many of these indirect wholesale channels. So on account of that, we are seeing issue in terms of movement of goods for this. So I think that the financial stress that's existing for some of these -- for these types of particular business has -- is affecting the growth of this sector. So we have to wait and see how it -- either they improve or not. And we'll know more also in this quarter whether this was just a one-off or if there is a significant issue to demand.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [77]

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Sure. On the branded part, I believe some of the secondary data sources like AIOCD, after reporting a very weak growth on the volume side for last couple of months, this month, they have reported double-digit -- good growth. So what's your take on that? How do we see the volume growth in India market? Is it actually slowing? Or there is some problem in how these data sources capture the readings?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [78]

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No. That's a good question you raised. And I'm glad that you are so updated with it. That data came just this morning or late last night. And as you would have seen, the market is now showing 13.4% growth or so. And for us, it is in consonance with what -- I mean I mentioned in my opening talk where you see -- because that data also shows that guidance is growing at 18%. So it's in line with what we have been talking about, trying to grow at 1.5x where the market is going. So coming back to your question of whether this data is right or wrong, we have no reason to believe that because there is -- we have definitely seen in the last 45 days an increased demand. And I mean I have not gone through the data, but they give it category-wise, the respiratory and GI and cardiovascular. So we have reason to believe that in the coming quarter also this growth of 10-plus should continue.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [79]

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And so I think if you look at the 4-month period, there is still decent growth for the overall market, and we hope this growth trajectory for the market improves.

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [80]

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I mean if you'll see the last 4 months, that is from May to July, the market has grown at 9%, and we are growing at some 11.5% or so. So the market is also showing good growth, and it also reflects what our internal progress are, which I mentioned in my talk, which is against 9%. If we are growing at 11.5%, it means the market is growing, and we also are getting back on the track, fast track.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [81]

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Sure, sir. And finally, any comment on impact of online pharmacies on our business or in the India pharmacy business in general? Anything you're seeing or it's too small to make an impact right now?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [82]

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Not as yet, not as yet.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [83]

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But once they scale up, we can see some price inflation come in, right?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [84]

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Time will tell.

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Operator [85]

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The next question is from the line of Prakash Agarwal from Axis Capital.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [86]

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Like you said, Lialda is around sub-$50 million currently. Any color you can throw on the optimal run rate?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [87]

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It's about $8 million to $10 million quarterly.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [88]

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Okay. That helps. And on the Moraiya, so the way to look at it is like, as you said, there's a lot of work going on already. But in terms of the cost, a, how should we look about -- I mean is there a substantial consulting or -- and remediation cost that we expect? And also you mentioned one point on the injectable business. So should we factor in some loss of sales on the injectable front also?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [89]

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So I'll answer the last question. On the injectables front, it has been -- in my last call also, I just allude to it, that we have suspended selling of injectables from our Moraiya facility. So it has had some of the other products for the last quarter that impacted about $10 million to $15 million -- $15 million of revenue annualized. So that is the impact that we have had. This will resume more so in the -- until the next financial year once the Liva file transfers are finished and start getting approved.

With regards to Moraiya, Moraiya has had a good cost reduction during the year. And it will continue to have a cost reduction going forward also. We don't believe because -- due to remediation, we will see any significant cost increases.

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Operator [90]

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The next question is from the line of Saion Mukherjee from Nomura Securities.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [91]

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I had a few questions on the domestic business. You mentioned a lot of our SKUs have been discontinued. I'm wondering, sir, what is the amount of revenue that we would have lost on account of discontinuation, just to kind of understand the real growth here.

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [92]

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So the revenue loss is on 2 accounts. One is that it moves away from the base and the second is we get good returns because we can continue some of the selling products. So it's not significant. It's about 1 -- 1% to 1.5% maximum if you take goods back as well.

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [93]

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So otherwise, on the sales itself, per se, these are exactly 0.7%. Even if we account all the collateral damage and that's why he mentioned that number.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [94]

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Okay. Sure. Sir, you also mentioned about your mass market and speciality products. I mean that's the way you're kind of looking at it and strategizing. Sir, in your branded business revenue mix, how would you -- how do you segment this between these 2 segments, mass and speciality?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [95]

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Once we reorganized it, I will come back to you with that detail because it's still a work in progress. So if you can give me one more quarter, I can come back to you with -- and we will definitely talk about the reorganization.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [96]

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Sure. Sir, I just -- I mean to improve regions, one of the things you mentioned, I think you have like 6,500 of peoples. I mean are you planning to add substantially to that? I mean anything that you can share?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [97]

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So we won't be adding any more people. We are going to reorganize business units, which will lead to some deeper penetration. For the people, the number will remain constant for the moment.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [98]

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All right. And sir, on the profitability front, I think you alluded to substantial improvement in profitability with margins being a lot higher. So FY '19, sir, despite all the reorganization, it appears that you had a margin closer to 30%. I mean are you seeing that in the domestic business, EBITDA margin could even go higher than 30% going forward?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [99]

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Yes. In fact, I think our sales trajectory is close to double digit. We can see even further margin improvement. So we have new facilities last year like (inaudible) and all which are not 100% utilized. So all of those are also going to help going forward once we're able to fully utilize them (inaudible) the other facility end up on. So all of that will help better utilization of resources.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [100]

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I mean, overall, when you look at your EBITDA margin profile. I mean if you have -- let's say, doing 20%, 22% EBITDA margin, domestic is like north of 30%, you have a scaled-up U.S. business, your R&D is very much on a site which is not very high. I mean how do you explain -- what is the key drag on your profitability today, key segments that were dragging down your profitability?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [101]

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So Europe is one where we are, obviously -- which is significantly dragging our profitability. The second is the emerging markets which is still to be scaled up. And we are doing something that translates in (inaudible) in terms of facility as well as in terms of R&D. So that -- while on the EBITDA side it's good, but it will have some effects immediately on this. Then the whole biologics and vaccines, we do not break even or make profits on that right now. And our plan on biologics and vaccines is to -- in the next 4 to 5 years, we're talking about creating a $0.5 billion business. And we believe that, that business, once it scales up will build more profitability to the business. But currently, these are loss-making businesses.

And finally, sales of patches, we have invested a lot of money on patches. But obviously, we don't have any returns on it yet.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [102]

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Okay, okay. And sir, last question, if I can, just one clarification. You had mentioned a number for biologics. So that would be -- biosimilars, so that will be entirely India, right, sir?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [103]

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No, it will be India plus emerging markets. But emerging market is smaller right now. It will stop.

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Operator [104]

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The next question is from the line of Sameer Baisiwala from Morgan Stanley.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [105]

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Sharvil, just to understand the U.S. trajectory. I think that Q1 did $195 million, and I should back out to a level of about $10 million. So $185 million, is it pure generic runway? And if it's to be compared with the full year last year, $800 million?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [106]

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We have $186 million, $700 million, $800 million, yes.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [107]

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Okay. On $800 million you are going to grow at single-digits for this year?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [108]

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Sameer, in the last year, $800 million, there was (inaudible) also which is not going to repeat in this year.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [109]

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Oh, I see. Right. And the second question is for e-pharmacies in India. My understanding is that they sell the branded product, and if that's correct, so therefore, if e-pharmacies scale up, it should not impact really your business because they should then be buying the branded products from the manufacturer (inaudible)?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [110]

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Yes, I think, it's the current business model of generics branded. I think the heavy discounting that they do is on their own.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [111]

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So are you selling to e-pharmacies?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [112]

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(inaudible) right now.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [113]

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(inaudible).

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [114]

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I said that what you said is correct. Currently, they are selling branded prescription medicine, which they do discount on their own. But the current model will not take the branded generics part unless the model changes.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [115]

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Okay. And I'm a bit confused on Lipaglyn. Now you have successfully completed Phase III trials in India for type 2 diabetes. But for the U.S., we're to start trials for NASH. So why these 2 -- why it seems 2 different indications and which of the 2 are more promising?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [116]

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Okay. So, okay let me give you -- sorry, (inaudible) in terms of the molecule and its attributes, it has an overall mechanism of action which obviously helps both on the lipid front and on the metabolic disorder related to diabetes. And all of those lead to lower pricing -- price band and lower (inaudible) content which is, obviously, some of the markers in liver. And on Q4, we believe that this product has the potential for multiple indications. There are 2 more niche indications which we are also working on which is PBC and lipodystrophy which are one of them being an orphan indication. So there are multiple opportunities for this market.

In India, we believe we could have -- I mean we could -- first wanted to demonstrate the results on diabetes that's why we have indicated this trial for India for Phase III. For doing a global Phase III on diabetes is very, I would say, an expensive trial to do with -- you're required large outcome trials. So that, I think, we could not immediately prioritize. But we believe that the immediate and the most critical opportunity is that there is a gap in the market that there's no molecule available today for NASH and NAFLD. We have data on this on our Phase II in India which showed very good data but we decided that we would initiate the Phase II trial in the U.S. for NASH, so that's the trial we have just completed enrollment on. And we will -- on one hand, we will publish these results in the third quarter of this year. And if the data is good, then that product will move forward for the global trial for Phase III. We believe NASH is a very large opportunity, NASH and NAFLD data. When we design for opportunity for product, we look at the opportunity in the market and competition. So on this area, there is no product that is currently approved. There are a few products that have entered Phase III. So there is still a lot of opportunity to be able to quickly complete this Phase II which we have and move on to Phase III. So that's the opportunity that we have decided to target for the global market, including India. And we will further add all these new indications also. India has further in terms of the developed clinical pipeline programs developed pipelines which we have. So India has already finished its diabetes trials as well.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [117]

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So why did you not do NASH Phase III in India?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [118]

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Which one? The NASH Phase III in India is also finished recruitment, and Mexico also.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [119]

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Okay. And sir, in the U.S. on global trials, Phase II or Phase III, India submission approval, my guess is it's at least 5 years away. And if I'm not wrong, you have been developing this for last 8 to 10 years. So why your development cycles have been such a long one?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [120]

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So just a couple of things, this product was never identified for the areas of NASH. We identified this for the areas of hypertriglyceridemia and diabetes. So we did get the BG approval. And now, we can see globally, the BG market is not very large. So we didn't want to try for the BG approval for the global market. The diabetes trial has its own issue. So that was, obviously, the shutdown. For NASH, it's something that we saw good data coming out of, that's why this program for NASH has just started just a couple of years -- 2 years ago. So from that point of view, our speed is pretty good because we just identified the program a couple of years back. And NASH and NAFLD data, that has just really recently got their (inaudible) at the last 5 years. From (inaudible) NASH molecule point of view, what you see is, right, molecule has been under development for a longer period of time. But in terms of which target to go after and which is the mode of action, which area to look after, that is something that has happened recently for us.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [121]

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Okay, fair enough. And then final question from my side, when you say you would be launching 5 to 6 high-value products in the U.S., any ballpark range of the dollar value of these assets?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [122]

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So they are between $5 million to $10 million each.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [123]

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And that's high value?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [124]

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Yes, because I don't believe that we will always find the very, very large products. There will be some of that. We believe, we will continue to launch optical products, and all of that will help in terms of overall building the value. And then there will be some high-value products, much more higher value products that come through. But those are -- will only be handful.

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Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [125]

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So sir, on speciality, you said you'll launch 35 or so, so if I back off this 5 to 6, on balance 30 launches would be all under $5 million?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [126]

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Yes. For the next year, over this year. We have a lot of specialty around complex injectables which would come up in the coming years. And then some also for 2 files which are age-driven, so those are still a year or 2 out.

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [127]

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Sameer, just to reiterate, we said we are planning to launch, not 35, 25 new launches, new products in the U.S. in the next 3 quarters. Of which about 5 to 6 would be between $5 million to $10 million annualized opportunities.

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Operator [128]

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The next question is from the line of (inaudible) from Isha Securities.

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Unidentified Analyst, [129]

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Just one question on the U.S. business that wanted to know what has been your focus on therapy areas in the U.S. business? And what are our next top revenue contributing product there, especially in the generics space?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [130]

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The U.S. business which you're talking about is the generics business, so there is no therapy focus when it comes to the generics in the U.S.

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Unidentified Analyst, [131]

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Like what would be areas like the new launches have been and in some like (inaudible) U.S. or that was...

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [132]

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No, there are -- generics -- they don't -- U.S. Generics is built on (inaudible) developing portfolio, depending on the (inaudible). They are not defined by Therapy Area.

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Unidentified Analyst, [133]

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Okay. Okay. And sir, have been like top revenue contributing products are there -- what will be the important products for FY '20 per se?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [134]

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We don't give product by product details.

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Unidentified Analyst, [135]

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Like an aside like which are our main products there?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [136]

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As a whole SME franchise is a large portfolio. The (inaudible) franchise for us so far. Then in all of the -- there's a sum of parts.

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Operator [137]

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The next question is from the line of Nimish Mehta from Research Delta Advisors.

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Nimish Nagindas Mehta, Research Delta Advisors, Research Division - Research Analyst [138]

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On the domestic one, just trying to understand the key generics disruption. You mentioned that there has been some issues with (inaudible) it gets some business of distributors will it not also be impacting the branded and the distributors? And how do we segregate these problems in the industry?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [139]

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So it has not affected the branded. So these are all -- and I don't have any firm data points to corroborate any of the details, but we believe that just also the stores that are there and all of the global initiative which are for low price generics will impact directly the GACS part of the business. As there were generic wholesalers who work on very different markets profile and, obviously, their financial capabilities also will be very different than these formulations (inaudible). So I believe far more pain was probably there in the generics distributors versus the branded distributors.

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Nimish Nagindas Mehta, Research Delta Advisors, Research Division - Research Analyst [140]

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And those set of distributors are different as in for the trade generics and the branded generics?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [141]

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Yes, they are different.

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Nimish Nagindas Mehta, Research Delta Advisors, Research Division - Research Analyst [142]

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Okay. And one minor question on the discontinuation of products in your area. Initially look into the $3 million, have we kind of seen the impact this quarter or will you be (inaudible)?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [143]

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Impact is there in this quarter.

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Operator [144]

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The next question is from the line of Nitin Agarwal from IDFC Securities.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [145]

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So on the specialty business, now with (inaudible) actually coming down to a reasonably lower number. I mean how are we looking at this business now going forward in terms of adding incremental products? What is the outlook for the business for us going forward now?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [146]

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So there are 2 pro strategies that has been our way. One is we are -- we talked about our own portfolio that we are developing. One of the products we have also been able to file an ANDA on and they're still few products that are under development, which will (inaudible) next 1 or 2 years. So our core pipeline is going to take between 1 -- at least around 2 years to (inaudible) in terms of having a good, decent scalable pipeline. Then we are actively looking at in-licensing products, as we have some good offering idea discussions going on that. And we are potentially looking for some acquisition also in areas to overcome on the next 2 years gap rate portfolio.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [147]

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And secondly, on -- you mentioned that in the (inaudible) business, essentially as well 1/3 of the business comes through in this quarter. Does it have a corresponding impact on your other component expenses also for the quarter?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [148]

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Sorry, could you repeat it?

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [149]

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I mean since you mentioned that the (inaudible) business has a -- it's a pretty heavy quarter from a revenue perspective in there in Q1. This is a correspondingly high component of other expenses also this quarter?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [150]

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Yes, it does.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [151]

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We should see some of that moderation also coming through as a revenue from the business comes off in the coming quarters?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [152]

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Yes. You are right because mostly they are sales linked. So once the sales, absolute sales comes out, some of those costs also come out.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [153]

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And can you help us with a little bit of broad seasonality? You said 1/3 of the business comes in this quarter. I mean how does the other 3 quarters really play out from a seasonality perspective on this business?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [154]

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So I said, quarter 4 and quarter 1 are the large quarters because of (inaudible), which are (inaudible) nature. The last part of quarter 2 and quarter 3 (inaudible) comes from mostly complex and the (inaudible) sales. So that's how the mix of the business is. For prices, well, let's brands (inaudible) as well as current brand, they are more, I would say, they are more even in terms of their quarter-on-quarter.

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Operator [155]

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The next question is from the line of (inaudible) Nirmal Bang.

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Unidentified Analyst, [156]

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I just have one question with regard to (inaudible) in the U.S. I just noticed you have launched a (inaudible) brand called (inaudible) there. Any reason for launching this kind of brand?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [157]

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I'm sorry, you will have to repeat that question again. Some part of it I don't get.

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Unidentified Analyst, [158]

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So just in regarding the (inaudible) $800 million and (inaudible) in the U.S., I could see that you have launched that product under a brand name called (inaudible) in the U.S. Any reason to promote that kind of brand name?

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [159]

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I'm not fully sure. First of all, you're getting the names wrong. So I don't think we have any of that brand or I mean this asset was not let loose. I mean whatever brand you were talking about.

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Unidentified Analyst, [160]

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Can you begin mentioning my name under (inaudible) it is --

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [161]

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Yes. But that is (inaudible) that is not the brand that you are talking about.

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Unidentified Analyst, [162]

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Yes. So that is (inaudible), but I could see your own brand from that product. (inaudible)

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Sharvil Pankajbhai Patel, Cadila Healthcare Limited - MD & Director [163]

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No.

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Operator [164]

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Ladies and gentlemen that was the last question. I now hand the conference over to Mr. Ganesh Nayak for his closing comments. Sir, would you like to add any closing comments?

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Ganesh Narayan Nayak, Cadila Healthcare Limited - COO & Executive Director [165]

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Thank you very much. It was nice interacting with all of you and look forward to interacting with you again after this quarter's results. Thank you, and good night, and have a nice weekend.

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Operator [166]

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Thank you. Ladies and gentlemen, on behalf of Cadila Healthcare Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.