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Edited Transcript of GLENMARK.NSE earnings conference call or presentation 15-Nov-19 3:00am GMT

Q2 2020 Glenmark Pharmaceuticals Ltd Earnings Call

Mumbai Dec 5, 2019 (Thomson StreetEvents) -- Edited Transcript of Glenmark Pharmaceuticals Ltd earnings conference call or presentation Friday, November 15, 2019 at 3:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Glenn Mario Saldanha

Glenmark Pharmaceuticals Limited - Chairman, MD & CEO

* Jason D'souza

Glenmark Pharmaceuticals Limited - Senior VP & Head of Corporate Strategy

* Robert Matsuk

Glenmark Pharmaceuticals Limited - President of North America

* V. S. Mani

Glenmark Pharmaceuticals Limited - Global CFO & Executive 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

* Neha Manpuria

JP Morgan Chase & Co, Research Division - Analyst

* Nitin Agarwal

IDFC Securities Limited, Research Division - Analyst

* Prakash Agarwal

Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals

* Saion Mukherjee

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

* Shyam Srinivasan

Goldman Sachs Group Inc., Research Division - Equity Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to the Q2 FY '20 Earnings Conference Call of Glenmark Pharmaceuticals Limited. (Operator Instructions) Please note that this conference is being recorded.

I would now like to hand the conference over to Mr. Jason D'souza. Thank you, and over to you, sir.

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Jason D'souza, Glenmark Pharmaceuticals Limited - Senior VP & Head of Corporate Strategy [2]

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Thank you, moderator. Welcome to Glenmark's Q2 Earnings Call.

Before we open the floor for question and answer, the review of the operations for the quarter ended September 30, 2019. For the second quarter of FY '20, Glenmark's consolidated revenue was at INR 28,150 million, recording an increase of 9.05%. For the first 6 months of the financial year, Glenmark's consolidated revenue was at INR 51,379 million, recording an increase of 8.2%.

India. Sales from the India formulation business for the second quarter was at INR 8,963 million, recording a growth of 15.16%. The India business continues to outperform the industry growth. As per IQVIA Q2 FY '20, Glenmark's India business growth was at 15.3% as compared to IPM growth of 12.6%. As per IQVIA MAT 2019, the India business recorded growth of 12.3% compared to IPM growth of 10.3%. Glenmark's India formulation business was ranked 14th, with market share of 2.19%.

In terms of market share, Glenmark's India business strengthened itself in core therapy areas such as Cardiac and Respiratory.

In April 2019, Glenmark announced the launch of its novel, patent-protected and globally researched SGLT2 inhibitor, Remogliflozin etabonate, in India. Glenmark is the first company in the world to launch Remogliflozin, and the response from KOLs has been extremely positive. As per IQVIA September 2019, the sales for Remogliflozin is tracking at more than INR 3 crores per month. Remogliflozin is the most successfully launched SGLT2 inhibitor in the Indian market in the first few months from launch, with Glenmark gaining 5% market share in terms of value and 20% market share in terms of volume in the overall SGLT2 market.

In July 2019, Glenmark announced that it entered into a nonexclusive sublicensing arrangements with Torrent Pharmaceuticals to co-market Remogliflozin etabonate in India. Glenmark received regulatory approval to market a combination of Remogliflozin and Metformin film-coated tablets in India in August 2019. The company subsequently launched the product. Glenmark is also targeting to launch further line extensions of Remogliflozin over the next 12 months.

Glenmark has consistently grown ahead of the overall respiratory market in India through niche product launches such as Glycopyrronium and multiple novel platforms such as Digihaler and Nebzmart. This is reflective in our performance as per IQVIA data. As of MAT September 2016, Glenmark was ranked sixth in the respiratory market in India, while as per MAT September 2019, the company is now ranked third in the market with 5% market share as per IQVIA September 2019 data. This is a significant improvement in the respiratory segment, driven by differentiated product launches accompanied by innovative devices for the Indian market.

Glenmark's Consumer Care business consolidated its sales growth trajectory in Q2 despite some headwinds in the large discretionary consumer consumption categories. The consumption consumer business grew at almost 20% to around INR 553 million in the second quarter. The strong sales on brands were also reflected externally as per IQVIA. Key brands, VWash and Candid Powder, registered 24.2% and 22.6% growth, respectively, in the second quarter as per IQVIA data.

U.S. generics. Glenmark Pharmaceuticals U.S. recorded revenue of INR 8,478 million, USD 120.72 million for the quarter ended September 30, 2019, as against INR 8,102.47 million, recording an increase of 4.64%.

In the second quarter of FY '20, Glenmark was granted final approval and launched Ranolzine Extended-Release Tablets, Pimecrolimus Cream, Clobetasol Propionate Foam. Glenmark also launched previously approved product, HAILEY, in the market. Glenmark also received approval for Fulvestrant Injection 250 mg/5 mL, and this is the first injectable approval for the company.

In the 6 months of FY '19-'20, the company has received 9 ANDA approvals, including 8 final approvals and 1 tentative approval. The company filed 1 ANDA application with the U.S. FDA and plans to file additional 3 applications in the forthcoming quarters.

On the manufacturing facilities, Glenmark has 5 FDA-approved formulation facilities, which is Goa, Indore, Baddi, Aurangabad and Monroe. In July 2019, the U.S. FDA inspected the manufacturing facility in Monroe, North Carolina. The inspection covered the OSD, injectable and nebulizer units, and concluded with the facility receiving one observation. The company has received the EIR for the Monroe facility. During the second quarter, the U.S. FDA also completed GMP audits at Glenmark's Goa and Indore manufacturing facilities. The inspection concluded with the Goa facility receiving 2 observations and the Indore facility receiving 0 observations.

During the first quarter, Glenmark had earlier informed that the inspection conducted at the Glenmark's Baddi facility was classified as OAI vide a letter by the U.S. FDA.

With regards to the same inspection, the U.S. FDA had issued a Warning Letter to the Baddi facility. The company is committed to work with the U.S. FDA to implement all necessary corrective actions required to address the concerns raised in the letter and has submitted a detailed response on the same. The company believes that the existing manufacturing and sales of products from this facility will not be impacted. The Baddi facility is expected to contribute USD 30 million in total sales in FY '20, which is approximately 7% of the total sales of the U.S. business. There are no major pending approvals from this facility in the next 12 months. There will be no financial impact on the organization on account of this development.

ROW markets. For the second quarter of FY '20, revenue from Asia, Africa and CIS region was INR 3,487 million, recording an increase of 14.32%. As per IQVIA data for MAT September 2019, Glenmark Russia recorded growth of 8.7% in value vis-à-vis overall retail market growth of 5.2%. Glenmark's overall rank is 47 in the Russian pharmaceutical market.

During the second quarter, Glenmark received approval from the Ministry of Healthcare, Russia to market Montlezir film-coated tablets as a prescription product for the treatment of seasonal and perennial allergic rhinitis in patients above 15 years. Montlezir is expected to be available in the Russian market from Q3 FY '20.

Among the other CIS markets, Glenmark Ukraine showed secondary sales growth of 46.5% in value in the second quarter of FY '20.

The Asia region recorded moderate performance in the second quarter of FY '20 with secondary sales growth of 6%. Growth remains subdued across major Asian markets in Glenmark -- for Glenmark. The Asian -- African subsidiary also recorded moderate growth in the second quarter, with South Africa and the Kenya subsidiary continued to record good growth in the second quarter.

Europe. Glenmark's Europe operations for the quarter was INR 2,850 million, recording an increase of 9.32%. During the second quarter, the CEE region of Europe witnessed double-digit secondary sales growth which was higher than the total market, aided by new product launches as well as key drivers in markets such as Czech. The Western European business continued to be expanding through increased penetration of U.K, Germany, Spain and Netherlands.

Latin America. Glenmark's revenue from its Latin American operations was at INR 1,212 million, recording an increase of 23.08%. The company expanded its presence in the Brazil respiratory market through the exclusive partnership with Novartis for 3 respiratory brands. The launch of the 3 in-licensed respiratory bands from Novartis has enabled the Brazil subsidiary to record good growth in the second quarter. Growth remains subdued in other LATAM markets such as Mexico and Caribbean.

GPL Specialty/Innovative R&D Pipeline. Ryaltris. Ryaltris Nasal Spray is the company's respiratory pipeline asset and is currently under review with the U.S. FDA as a treatment for seasonal allergic rhinitis in the U.S. The company is currently in the process of bringing a partner to commercialize Ryaltris in the U.S. market. Additionally, Glenmark is also working to close a partnership deal for Ryaltris for other EU markets. The company has already concluded partnership deals for Ryaltris in other markets such as Australia, New Zealand, South Korea and China. The company will continue to evaluate partnership opportunities in various markets and also launch the product in some of our key markets.

During the first quarter of FY '20, the U.S. FDA issued a Complete Response Letter pertaining to the New Drug Application for Ryaltris. We continue to work with the agency to resolve the issues raised in the CRL.

GBR 310. During FY '19, Glenmark announced the Phase I results that suggest similarity in pharmacokinetic, pharmacodynamic, safety and immunogenicity profiles between GBR 310 and the reference product, omalizumab, marketed in the U.S. under the brand name Xolair. The company is in discussions with potential partners and is targeting to conclude a deal before initiating Phase III studies for the product.

GRC 39815 is an NCE currently being evaluated as an inhaled compound for the possible treatment of COPD. It is an inhibitor of the ROR gamma t. The compound is currently in preclinical development and the company plans to initiate a Phase I study in FY '20.

Glenmark Life Sciences. For the second quarter of FY '20, external sales for Glenmark Life Sciences was INR at 2,697 million, recording growth of 7.39%. Domestic and ROW regions led the growth in the second quarter, with both regions recording 20-plus percent growth over the corresponding period last year. The company also expanded its presence in the Japanese market. GLS is on track to file 4 to 5 DMFs in the upcoming quarters and continues to register multiple products in other ROW markets.

GLS has 3 U.S. FDA API manufacturing facilities in India, which is Ankleshwar, Dahej and Mohol. In July 2019, the U.S. FDA and Health Canada jointly inspected the Ankleshwar manufacturing facility of GLS. Subsequently, the U.S. FDA has issued an EIR for the facility and Health Canada has rated the facility as compliant.

During August 2019, the PMDA of Japan also conducted an audit on the Ankleshwar manufacturing facility. No major critical observations were reported. Response to the minor observation has been submitted and approval for the facility is awaited from PMDA.

Ichnos Sciences. As part of its strategy to create a leading and cutting-edge biotech organization, Glenmark announced the spin-off of its innovation business into a new company headquartered in the U.S. Setting up of this new company would provide enhanced focus to the business and help accelerate the pipeline towards commercialization.

In October 2019, the new innovation company was launched as ICHNOS Sciences. A spin-off of Glenmark Holding, SA with a track record of improving patients' lives by providing affordable medicines, the new company was formed and approved in principle by the Glenmark Board of Directors in February 2019 and now operates with its own Board of Directors and executive team. Former Gilead executive, Alessandro Riva, is the CEO of Ichnos Sciences.

The innovation pipeline of Ichnos will include 5 novel first-in-class clinical-stage assets in oncology, autoimmune and pain. The assets also include BEAT, a BEAT platform -- a proprietary platform, a development site, 2 research centers, a GMP biologics manufacturing facility and 350 employees worldwide.

During the first quarter of FY '20, Glenmark had invested INR 1,900 million in the innovation business. For the second quarter of the financial year, Glenmark has invested INR 1,935 million, that's for the first half. The total investment is to the extent of INR 3,835 million for Ichnos Sciences. During the financial year FY '19, Glenmark invested approximately USD 113 million and the company expects to invest a similar amount in FY '20 also. Ichnos Sciences would initiate the process to raise capital in the U.S. starting Q4 FY '20 to fund the development of its pipeline and for future growth plans. For further updates on pipeline and the organization, please log on to www.ichnossciences.com.

A few notes before we open the floor for question and answers. Gross debt as of September 30, 2019 was at INR 4,581 crores. Net debt as of September 30, 2019 was at INR 3,665 crores. R&D expenditure was at INR 355 crores, which was 12.8% of sales for the second quarter. R&D expenditure over the first half was at INR 650 crores, which was 12.9% to overall net sales. Employee cost in this quarter includes INR 115 crores pertaining to bonus and incentives. Other income for the quarter, which was at INR 81 crores, was primarily ForEx gain. Inventory was at INR 2,178 crores as of September 30, 2019. Receivables was at INR 2,107 crores. Payables was at INR 1,976 crores as of September 30, 2019. Total asset addition was to the extent of INR 495 crores for the first half of FY '20. Fixed assets was to the extent of INR 343 crores. And intangible assets was to the extent of INR 150 crores, of which product, in-licensed, acquired was INR 130 crores.

Before we open the floor for question and answers, I would like to introduce Glenmark's management which is on the call. We have Glenn Saldanha, Chairman and Managing Director; Mr. V. S. Mani, Executive Director and CFO, Glenmark Pharmaceuticals Limited; and Bob Matsuk, President, North America.

With this, we would like to open the floor for question and answers. Over to you, moderator.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We 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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My first question is on the U.S. performance quarter-on-quarter. Was this driven by (inaudible) product launches? Is this level sustainable? How should we look at this going forward?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [3]

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I mean, I will comment first and then Bob, you can feel free to jump in. So I think, I mean, we've got a number of new launches, right? So products like Pimecrolimus, products like Fulvestrant, they've all been significant contributors to us in the second quarter. And I think, going forward, clearly, we see this level as sustainable given the new product launch -- that we've already launched and given the expected new product launches.

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

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And is the worst of Mupirocin in this number?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [5]

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Say that again, Neha?

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

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Is the worst of Mupirocin erosion in this $120 million number?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [7]

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So I mean, Mupirocin continues -- go ahead, Bob, sorry.

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Robert Matsuk, Glenmark Pharmaceuticals Limited - President of North America [8]

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Yes, sorry. Yes, I think to answer the -- jump in on the first part of your question, we'll continue to gain market share on those new products launched. And on the Mupirocin cream side, I see it as we're -- it continued to decline, but it's, at this point, not as meaningful of a product to us.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [9]

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How many product launches have you done in the first half?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [10]

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Neha, we've got about 8 approvals and most of them were kind of launched.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [11]

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And should we assume a similar momentum in the second half?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [12]

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It's hard to predict new product approvals, Neha, but I mean, we have some exciting product launches coming up, assuming we get approval on time.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [13]

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Understood. And second, what is the status on Baddi? Now that you've submitted a response to the FDA, by when do we -- by when are we expecting to complete remediation for the facility?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [14]

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The remediation is on as we speak. We are hoping that in the first half of next calendar year, right, we should have the FDA back in there.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [15]

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Understood. And if I look at my -- the performance in Latin America, that seemed to improve. I mean, do you mean all of this was driven by the Novartis product launched in Brazil? Or is there any -- because we believe the second half tends to be better, right?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [16]

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Yes. So Latin America, we are expecting strong growth in the next few quarters also. And it's driven by basically, right now, 2 product launches. The Novartis, obviously, is a big driver. The second one is we launched [Baclo] as a first generic in Latin America, a respiratory product. So that's a big contributor in Brazil. And I think we are expecting one more launch towards Q4 right in the -- again in the respiratory space, which will drive Latin America growth. So I mean, I would anticipate this year we should have a strong year in Latin America and next year also. Given the launches that we have and the traction we are seeing, Latin America should see strong growth.

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Operator [17]

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We take the next question from the line of Saion Mukherjee from Nomura.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [18]

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So the first question is on the CapEx number. You had around INR 500 crores spent in the first half. What is the outlook for the full year? And also if you can comment on how you see this playing out next year? And any color on expansion that you are currently doing?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [19]

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Saion, this is Mani here. So we expect the full year to be about -- we've said in our last call also, about [800]. So I think in the first half it's a little bit higher obviously because we had to take care of some de-bottlenecking issues and we had to put in some lines in some of the plants. So there are some spends on that. So I think -- and the next year also, we expect to be lower on the CapEx, at least for a year more, then we'll take a call as we see our capacity expansions coming.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [20]

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Okay. So you are saying it will fall in the second half materially. And in the next year, any guidance you want to give now based on whatever visibility you have?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [21]

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Yes, about INR 800 crores. We don't expect it to go substantially higher than that, give and take INR 30 crores, INR 40 crores, up and down.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [22]

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And the second question is on the cost item. So if we see other expenses just seem to be growing okay given the increase in R&D that we've seen this year -- this quarter, but staff cost has again gone up. I know this is a seasonal payout that you have, but year-on-year, it's up like 13%, 14%, and your sales growth is just around 9%. So I wanted to just understand the thought process there. And any initiative on the cost side? And how should we think about it going forward? Anything you can quantify in terms of your efforts on cost control?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [23]

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So on the other expenses line item. I mean, R&D has increased, but the other expenses we try to grow very minimally towards 6% growth year-on-year. We're not trying to take it at once. And there are other measures we did last year and we continue to do that in terms of how we keep them under control. Employee cost, obviously, as you rightly said, in the given quarter as we do end up paying some bonuses, et cetera. And broadly, on a broad basis, it should be a 9%, 10% growth at best in terms of employee costs. It should not be higher than that. That's what we see.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [24]

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Okay. And then just one more question, if I can, on Ichnos Sciences. Glenn, if you can give the -- time line with respect to the data readout that you will have on your assets over the next 12 months? Any time line that you can share with us (inaudible)?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [25]

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So I think, clearly, I mean, I think there's a lot of activity expected in Ichnos going forward, right? Given the -- we have 2 major data readouts, which we publicly spoken about, right, 27864 and 830, right? These are the 2 big readouts that we're expecting, both Phase IIb data readouts. The rest of the pipeline, we will have multiple news flows coming through on Ichnos going forward. So I think -- there's a lot of activity, I think, over the next 6 to 9 months that you should anticipate from Ichnos.

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Operator [26]

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(Operator Instructions) We take the next question from the line of Nitin Agarwal from IDFC Securities.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [27]

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And Glenn, congratulations for a pretty decent quarter after a while. Two things: one is a -- in the -- typically, we have a seasonality in our emerging market business. So I mean how should we look at the second half of the year in that context?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [28]

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Well, I think -- so our ROW business, we think, will stay at basically 10%, 15% growth on a full year basis, right? We are not -- because I mean the Russian market is growing at about 5%, 6%, a lot of the ROW business is driven by the Russian growth. So I would anticipate full year between 10% to 15% top line growth for the ROW business. But I think -- I mean next year should be a good year given the new launches, even this new product, this Montlezir that we're launching in Russia should be strong. And we are expecting to get some tenders in some of the markets. So next year should be a good year for ROW.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [29]

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And secondly, on our CapEx line, across the board, when you look at the peer group, we've seen a significant moderation in their CapEx intensities. Given the pressure that the industry has faced, most companies have opted to significantly revisit their CapEx intensity. I mean what is our thought process on that? The -- when you talk about...

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [30]

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So I think, look, I mean Monroe is a big contributor to our CapEx, okay? And I think starting next year, because of us anticipating Monroe will go commercial next year, right, at least 2 lines, right, the injectables and the oral solids, right, we think our CapEx should come down next year. I mean that's our view.

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [31]

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Yes. And also, Nitin, as we guided, I mean basically, we're talking about 800. Last year, it was a little more higher than 1,000. So we expect at least for the next 1 to 2 years to be muted. We'll see it best if we can further reduce, we'll try our best. But as we have some aspirations to grow some of the businesses and we have these plants in the U.S., et cetera, we need to invest some money into that. That's the reason why there is some amount of CapEx.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [32]

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And on -- is there a way to probably quantify of the recent CapEx that you would have done over the last couple of years or 2, 3 years, maybe? I mean what proportion -- or is there a certain gross block, which is fairly -- or utilizing a fairly small or limited way at this point of time?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [33]

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Monroe is the biggest one, right, Nitin. I mean we've invested substantially in Monroe, and that utilization will come up next year. But -- go ahead.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [34]

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And is it about $100 million or it's more than that in Monroe?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [35]

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Yes, it's about $100 million -- a little more than $100 million.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [36]

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And Glenn, on that point, what should we expect for Monroe? Like, if we take a 2- to 3-year view of their asset, there's a fair amount of investment that we made there. What kind of product opportunities do we see from their asset?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [37]

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So I think, look, I mean we have some very exciting injectable products coming out of -- which should get approval, right? If that happens, then automatically, you will see a big bump up next year in the productivity of Monroe. So I think between injectables and nebulizers, right, and then the oral solids, it should be a substantial contributor to us.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [38]

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Okay. And Glenn, secondly, on free cash generation thought process. Apart from the cash flow generation easily come through with these capital -- or potential capital coming in Ichnos, I mean how are -- what is our thought process? In general, how do we see cash flow generation in the business now? Are there any special targets you're running with for the next couple of years on free cash generation?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [39]

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So I think, look, I mean this year, we are -- we think the business will generate -- the core business, right, will be more or less flat, but we have some divestments and other things going on, right, which should help us generate some substantial free cash flow this year. Additionally, I think if you look at next year onwards, if Ichnos over time will be self-funding, right, automatically, that will free up a significant portion of investment from GPL into Ichnos. So that will give us additional free cash generation over the years.

So I think, overall, there should be a significant acceleration in free cash generation going forward. I mean this year, we are still carrying the R&D cost, right, for Ichnos, right, which is a big number, right, when you think about it. So we're still at close to 13% R&D cost, and the bulk of that is Ichnos. So I think post -- so next year, clearly, that will change substantially because Ichnos, we think between the partnering discussions which we have ongoing as well as the capital raise and so on, right, we think Ichnos can possibly be self-funding in the years to come. So that will substantially help us generate free cash and delever to that extent.

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Operator [40]

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We take the next question from the line of Shyam Srinivasan from Goldman Sachs.

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Shyam Srinivasan, Goldman Sachs Group Inc., Research Division - Equity Analyst [41]

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First one is on the U.S. business again. In your MD&A, you've written that the dermatology price erosion has kind of come to about 6% to 7% -- 5% to 6% -- 6% to 7% Q-o-Q. I think I recall it was 10% Q-o-Q last time. So are you seeing -- I'm assuming this includes Mupirocin. But if you kind of strip that out, do you think -- are you seeing some early signs of dermatology or topical, that area seeing some signs of stabilization? Or are we too early in that part?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [42]

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So as far as our portfolio goes, right, in derm, look, Mupirocin is the major contributor to the decline. But if you strip out Mupirocin, the rest of the portfolio is pretty much bottomed out. I mean we are operating in a competitive space where you already got multiple players in most of our derm products. So I don't think the price stabilization -- we are already witnessing price stabilization for most of the portfolio, right? Mupirocin is the only one which slides, but it's not a major contributor to us going forward.

So I think that's -- on the overall U.S. portfolio, I mean we are seeing -- definitely seeing some price stabilization happening in the environment. So the overall decline, we think, has started to come off in terms of price declines.

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Shyam Srinivasan, Goldman Sachs Group Inc., Research Division - Equity Analyst [43]

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And Glenn, on the oral side, what would you kind of guide or just say where industry -- are they now mid-single digits now? Have we come to those levels?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [44]

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Yes. They're about 5%, I would assume, in terms of price erosion. And I think going forward, that's the way we see it playing out.

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Shyam Srinivasan, Goldman Sachs Group Inc., Research Division - Equity Analyst [45]

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Okay. And so I remember last quarter, you said we could grow single digits for the entire U.S. business. So that guidance still remains?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [46]

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It does.

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Shyam Srinivasan, Goldman Sachs Group Inc., Research Division - Equity Analyst [47]

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Okay. Second question is on GBR 310. You've written that you're looking to look for partners. So can you just walk us through the time lines between when this could potentially happen and the Phase III studies, please?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [48]

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So I can't give you a guidance on our time line for a partnership. I mean we have ongoing discussions. So as and when we conclude, we conclude. But I mean we are very clear we won't start the Phase III till we get a partner onboard.

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Shyam Srinivasan, Goldman Sachs Group Inc., Research Division - Equity Analyst [49]

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Okay. And the last question is on Ryaltris now. If you can just remind us, just we have got a CRL, but what are the time lines again on how quickly we can kind of get closer to approval on this one?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [50]

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So I think, look, Ryaltris, we have -- we are going to partnership model in most of the markets where we don't have commercial front end. So we've done partnerships in Japan, South Korea, in Australia. We are close to bringing on a European partner for Europe. And as far as the U.S. goes, again, the goal is to partner this out, right? And we have multiple discussions as we speak, right, with various partners to try and close a partnership.

As far as U.S. approval goes, because of the CRL, I think this will end up being sometime in H2 probably next year, right, or H2 calendar year approval. I mean I'm just guessing, but that's roughly the time line for U.S. approval now. But we will have a partner onboard before that.

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Operator [51]

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We take the next question from the line of Anubhav Aggarwal from Crédit Suisse.

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

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Glenn, on India business, roughly, how much Remo would have contributed this quarter? So when you say in the press release 3%, 4%, 5%, that would be IQVIA, right? But our primary contribution would have been much higher than that.

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [53]

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So I think, today, Remo is contributing about 3% to total -- in the growth I'm saying, right? Roughly around 3% growth to the total growth, between 2% to 3%.

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

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And our partner still hasn't launch? Like the Torrent partnership have been launched, and they are already contributing to this? Or they are yet to launch?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [55]

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No. No, they have yet to launch. So I think -- I mean if you look at the October IMS data, I mean Remo was the #1 prescribed SGLT2 in October. So obviously, this is after the fact, so we didn't put it in the MD&A. But the October IMS data which came out, right, Remo was the highest-prescribed SGLT2 in the country, right, ahead of all the other competitors. So just to tell you the traction that the molecule has, right? And I think -- so some of the partners will start from -- in the next few months, right, coming onboard and commercializing.

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

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So just 3% of growth, that's roughly about INR 25 crores, INR 27 crores contribution per quarter already?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [57]

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So I think that's 2 -- maybe 3% is not right. It should be more like 2%, I would guess.

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

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Okay, sure. Now second question was on this generic Faslodex injection. So we already -- this already contributed in the second quarter, right?

(technical difficulty)

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [59]

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Yes, go ahead.

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

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Yes. The question was that before they contributed in the second quarter, but there have been more launches by others as well. So the question was with second quarter for this product, there was a high contribution, and now the contribution has come down? Or this is running at a rate which is similar to 2Q, even now?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [61]

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So it's still a major contributor and it's running at the same rate, Anubhav, as we speak.

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

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And last question. On this product in-licensing that we do, roughly in the last 3 years, very roughly, we would have spent almost like $100 million, right, on these product acquisitions, which are mainly in the European market. Just -- can you just indicate roughly what kind of returns do we make on this, if we look at last 3, 4 years as one basket, not looking at last 1 or 2 years?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [63]

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So Anubhav, I'd like to break this into 2 parts. I think in the last 3, 4 years, in terms of Europe, it has been very consistent. I think what we have done is that a lot of it has been in the U.S., product acquisitions or also in-licensed products. So Europe has typically trended anything between INR 120 crores to INR 150 crores every year. And if you look at the business, it's already up close to [$180 million], [$200 million] and generating a positive EBITDA. And we expect Europe to keep growing in terms of EBITDA and also top line.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [64]

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But what is the returns that you'll make in Europe on this kind of product and licensing strategy?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [65]

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So Anubhav, I don't think we can give you a specific number at this point. But just keep in mind that when we say licensed products, right, I mean they are products like Remo, there are milestone payments going to partners, there are products in the U.S. Fulvestrant also is an in-licensed product, just so that you know, right? There are milestones there. So there is a host of deals that we do globally, okay?

So I just want you to know that, that it's a blended portfolio of products across the globe, right, while we just attribute it to Europe. Europe, also, we have SALMEX, right, which is still a major contributor for us. So -- and there are a bunch of other products, Tiotropium, DPI, which we're expecting to launch next year. So I think there's a large amount of -- there's a pretty large portfolio at the back of this.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [66]

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Yes, sure. No, I appreciate it. That's useful. Just one last clarity on the R&D. Let's say, if we take this quarter, roughly INR 355 crores R&D, if -- how much of this was spent on the NCE part, let's say? What's this -- let's say, if I just take generic, better we call it simple or complex and NCE, just on the R&D side, what's the rough quote?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [67]

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So we've broken it down, Anubhav. We said on the innovation business, in this quarter, it was [INR 1,935 million], what we have spent. So that will be...

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [68]

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And what we've invested in Ichnos.

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [69]

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Out of INR 355 crores, INR 193 crores was in Ichnos.

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Anubhav Aggarwal, Crédit Suisse AG, Research Division - Associate [70]

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So this INR 193 crores will all be included in the R&D expense? Or this is like split out across -- beyond R&D also because they will be spent on the other expenses also on the subsidy?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [71]

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No, no, no. This is primarily related to the R&D expenses completely.

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Operator [72]

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We take the next question from the line of Prakash Agarwal from Axis Capital.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [73]

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Congratulations on good numbers. On the U.S. front, I just wanted to check the 2 good launches that you had, the Pimecrolimus and Fulvestrant Injections. So it has come in the fag-end of the quarter, but have we been able to book a substantial part? And is there enough stocking and this will normalize in 3Q, 4Q? Or do we expect the full quarter impact coming in the next quarter with a much better update?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [74]

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Go ahead, Bob.

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Robert Matsuk, Glenmark Pharmaceuticals Limited - President of North America [75]

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Yes. So I think we'll continue to see growth in the newly launched products coming into this quarter versus just the shelf stock, and then it's going to moderate.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [76]

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So net-net, we'll see the run rate to improve from here on as well?

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Robert Matsuk, Glenmark Pharmaceuticals Limited - President of North America [77]

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Yes.

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [78]

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Yes.

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Robert Matsuk, Glenmark Pharmaceuticals Limited - President of North America [79]

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You will see -- you should see increased market share of new launches.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [80]

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Perfect. Great. And in terms of like contributions from new launches, clearly, you mentioned that derm from the existing portfolio seeing -- still seeing significant erosion. From our new launches paid, is it largely driven by derms? Or like this inject -- first injection product has come, they are more such differentiated products for the second half and for next year?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [81]

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So I think the second half, you should see some good -- I mean we still have a couple of good launches possible, right, on the injectables side as well as on some of the differentiated portfolio. So we'll see how it plays out, Prakash. As you know, it's highly -- it's very hard to predict in terms of approvals, launches these days, right? But if all goes well, we should have a couple of good approvals coming through in the second half.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [82]

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And second, on the balance sheet side, if you see, there is a sharp increase in the financial liabilities, current liabilities, from INR 900-odd crores to INR 1,400-plus crores. So how do we plan to fund this?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [83]

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No, it's not -- I mean, basically, if you look at it, there was this right to use, okay? So in terms of the assets that we have globally, whatever leases, et cetera, so obviously you put that on the asset side, and then you show some portion of that in the liability side. So that's one small portion that has taken the increase.

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [84]

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And also, in that amount, Prakash, the current portion of long-term borrowings is also sitting in. That is why if you look at it, we said that INR 4,581 crores is the gross borrowing -- is the gross debt. Of which, a lot of it is -- or the long-term portion of long term -- the immediate what we have to pay off in the next 1 year is sitting in that amount.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [85]

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Can you quantify that?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [86]

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That is to the extent of around INR 1,000 crores.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [87]

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And what is the plan to fund that? Do we refinance it? Or...

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [88]

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Yes. So Prakash, we refinance that. We already have lines in place, okay?

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [89]

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Okay. And for Ichnos, the stuff that you have created, I just wanted to check because -- would there be a company formation charge which will start, let's say, in the October to December quarter? Or it is like just a paper-form company? And so -- are there costs related to the staff as well as the formation of the company, which will hit us in the Q3?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [90]

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It will be more in the Q4 here, Prakash.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [91]

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Okay. Then you look for raising capital? Is that the way you look at it?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [92]

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No, there are certain things that we need to do to set everything up. There will be some transitions, et cetera. So at that point of time, this will happen.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [93]

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Okay. And lastly, on India piece, what is our thought process in terms of the brand Remo? What kind of target brand sales we're expecting? I mean we're already getting a good run rate. But let's say, 1 year out, we have already seen a lot of switch in this product. So what is the kind of brand sales we're expecting over 12 months?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [94]

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So I think, look, on an annualized basis, right, I mean this product, I think, in the first year itself should have like a -- the exit rate in March should be around tracking at around INR 6 crores a month, okay, somewhere thereabout, right? So if you annualize that, you're looking at already almost an INR 80 crore brand in the first -- not even a year of launch. And from there on, you can anticipate, we will -- we think this has the ability to go out and take market share from the other -- oral hypoglycemics, right, in the diabetes space. So I think this could be pretty big over the next 3 to 5 years.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [95]

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Okay. And the way to -- simply account for Torrent royalty that you receive would be in the domestic or it would be a part of other operating income?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [96]

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So there will be a small portion which we put it as part of the other operating income.

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Prakash Agarwal, Axis Capital Limited, Research Division - Executive Director of Pharmaceuticals [97]

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Okay. Not as part of -- okay, okay.

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Operator [98]

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(Operator Instructions) We take the next question from the line of Damayanti Kerai from HSBC.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [99]

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First, can you provide some updates regarding our plan for a minority stake still in the API business?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [100]

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Sorry, can you just repeat your question?

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [101]

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Yes. Can you update us regarding the plan for minority stake still in the API business? I think we have spoken about that in previous quarters.

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [102]

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Sure. Sure. So I think -- I mean we continue to have a few minority investors who are interested in it, but it's not a big priority for the company right now. I think we are going more down the lines of divesting some noncore, nonprofit-making assets, right? And I think that will generate some significant free cash for the company as opposed to looking at bringing on a minority investor. So I think that's a bigger priority for us compared to a minority -- bringing on a minority investor in the API business.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [103]

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Sure. And regarding our debt reduction plan where we spoke about [INR 7 billion] to [INR 8 billion] kind of reduction per year. So that remains on track? Or...

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [104]

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Yes, it does. It remains on course.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [105]

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Okay. And even though we -- now you've said that this API stake sale is not the priority for us, so the core business plus the other noncore asset sales, that should be sufficient to getting this target?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [106]

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That's right.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [107]

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Okay. And finally, on the U.S. side, I know I think you spoke quite a lot about that. But nonetheless, if you can, I think, update us on some key initiatives which we should be looking at and which will be essential to accelerate growth from our current level, if you can a bit elaborate on that?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [108]

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So I think, look, I think the Monroe, the commercialization of our Monroe facility, right, is a critical event to help us accelerate growth from -- for the U.S. business, and of course, some of the new product approvals that we're expecting in the next 2 quarters.

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Damayanti Kerai, HSBC, Research Division - Analyst, Healthcare and Hospitals [109]

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So Monroe, you said, will be starting launch of products from next fiscal, starting with 2 injectables, and then it should build on from there, right? Or when do you see a significant, well, let's say, commercialization of products from Monroe to start?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [110]

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It's hard to predict. But we've said next year, we anticipate Monroe to be commercial, right? It's hard to predict the time line.

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Operator [111]

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We take the next question from the line of Neha Manpuria from JPMorgan.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [112]

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Just a few follow-ups from my side. At the end of fourth quarter, we've given some guidance when it's, as you know, related to cost. First, being that R&D is likely to be flat -- sorry, lower versus last year, would that be the case still?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [113]

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So I think, Neha, it will be marginally lower, right? We don't expect as a percent to sales, right? I mean in absolute terms, it will be -- it could be flattish, right, Y-o-Y. I mean that's the way we see it.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [114]

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Okay, understood. And similarly, on the manpower cost, also you said as a percentage of sales, it's expected to be lower than last year. It's pretty much trending flattish to slightly higher. Should this moderate significantly in the second half? Is there anything to indicate that?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [115]

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Yes. I think, basically, whatever is the marginal increase that we have year-on-year that -- it's 10%, that's where it will stay at. And basically, that's -- I mean this quarter was a little bump-up because as every year, this quarter is where some bonuses are distributed. That's about it. Otherwise, it would be that similar kind of growth.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [116]

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Understood. And lastly, when can we hear on the divestment of those noncore assets? Because it's been -- we've been talking about it for a couple of quarters now, but we haven't seen anything coming through on that. Are there any discussions going on? Should we expect this soon?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [117]

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So Q3, Q4, you will see some activity around that.

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Operator [118]

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We take the next question from the line of Nitin Agarwal from IDFC Securities.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [119]

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Sir, I just wanted to check one thing. Typically, in the past, we've had on the cost front a situation where there's some amount of lumpiness in our costs in Q4. So when we sort of look through the year, barring the cost that you talked about, that Ichnos-related cost that's going to come through, is there anything else that we should expect by way of a large sort of spike in the cost of other expenses and all in this last quarter?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [120]

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I do not anticipate anything major bumping up in the last quarter. As of now, we don't see anything.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [121]

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And sir, on Ichnos, what kind of cost -- any sense that we can -- we should look to build in, $5 million, $10 million, higher, lower?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [122]

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I think, broadly, it will be similar to lines what we have guided so far. We do not see it going up much higher here.

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Operator [123]

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We take the next question from the line of Saion Mukherjee from Nomura.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [124]

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Just one clarification on the statements on Remo. You mentioned in the press release, it's 5% in value and 20% in volume terms. I understand it was priced like half of the current prices of the NMCs. So is it like 20% because it's twice a day, you're looking at the number of tablets? Or what is exactly the volume percentage? How are you calculating it?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [125]

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So these are the IQVIA numbers that has put in shine that is there in the 20% number.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [126]

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No, but this 20% just looks very high, right, I mean 20% market share?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [127]

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Yes. So this would be -- yes. So correct, so this could be in terms of the units also because Remo is prescribed twice a day. I can...

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [128]

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Okay. So in terms of [pay cap], it would be more like 10%?

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V. S. Mani, Glenmark Pharmaceuticals Limited - Global CFO & Executive Director [129]

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Yes, I can -- we can definitely look at that number and come back to you. But I think the important one, I think, in terms of prescriptions, clearly, Remo has, in this month, become the largest prescriber in the SGLT2 space. But in terms of volume, that point, we can definitely come to you because Remo is prescribed twice a day, while the others, SGLT2s are primarily once a day.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [130]

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Okay. And just one last question on Monroe side. How many ANDAs we have filed from that facility so far?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [131]

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So it's probably around, I would say, by the end of this year, right, we will have at least 6 products filed from there, 6 or 7 products.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [132]

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6 or 7?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [133]

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That's new ANDAs. New ANDAs, and we have some site transfers also which are done.

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Saion Mukherjee, Nomura Securities Co. Ltd., Research Division - Head of India Equity Research [134]

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Okay. So this is largely injectables or...?

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Glenn Mario Saldanha, Glenmark Pharmaceuticals Limited - Chairman, MD & CEO [135]

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Injectables, nebulizers would be the bulk of it.

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Operator [136]

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Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Jason D'souza for closing comments. Over to you, sir.

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Jason D'souza, Glenmark Pharmaceuticals Limited - Senior VP & Head of Corporate Strategy [137]

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Thank you, moderator.

Before we close the call, just to read the disclaimer. The information and statement and analysis made during this call describing the company's objectives, projections and estimates are forward-looking statements and progressive within the meaning of applicable security laws and regulations. The analysis contained herein is based on numerous assumptions. Actual results can vary from those expressed or implied depending upon economic conditions, government policies and other incidental factors. No representation of warranty, either expressed or implied, is provided in relation to this presentation. This presentation should not be regarded by recipients as a substitute for the exercise of their own judgment.

With this, we end Glenmark Q2 Earnings Call. Thank you, everyone.

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Operator [138]

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Thank you. On behalf of Glenmark Pharmaceuticals Limited, we conclude today's conference. Thank you all for joining us. You may disconnect your lines now. Thank you.