Over to Sanofi management. Thank you. Good afternoon, everyone, a warm welcome to the Investor Call of Sanofi India Limited. My name is Radhika Shah, I am the Company Secretary of Sanofi India Limited. I have with me Mr. Rodolfo Hrosz, Managing Director, Mr. Vaibhav Karandikar, who is the CFO of Sanofi India Limited. Good afternoon, everyone. Good afternoon, everyone. Good afternoon. All right, we begin this investor call. There are two important announcements before we start. First, please note that the proceedings of this meeting are being recorded. Second, please note our standard disclaimer that certain statements in this call may be forward-looking. The actual results may be affected by many factors that may be different from what is envisaged in terms of future performance and outlook that is being discussed today. Moving on to the agenda of this call, we have divided this call into two parts. In the first part, the management will make a presentation covering the strategy of the company and the performance for Q4 and in FY 2022. In the second part, the management will take the questions from the investors and participants. The Q&A is likely to end by 3:00 P.M. All investors and participants are requested to keep their questions brief and avoid repetition. I now hand over the call to Rodolfo and Vaibhav, for a quick presentation. Thank you. Thank you very much, Radhika. We can go to the first page. Good afternoon again to everyone. Next. Let's go to the next page. I think we went through the disclaimer already. We went through the disclaimer. Can go to the next page. Very well. Just a quick snapshot of Sanofi India. 67 years of commitment to India. Top three pharma multinational company in the country. Three brands within the top 100 in the pharmaceutical market in India. Nearly INR 26 billion in total net sales. Sanofi India Limited, listed company with approximately INR 127 billion market cap, 2,300 employees, operating across India with 3,000 distributors and 100,000 pharmacies reached. Strong industrial presence with a very strong manufacturing site in Goa and 12 CMOs exporting to over 60 countries around the world with 5 billion tablets produced yearly. Strength of legacy brands of 70% of our Sanofi India Limited business stems from seven top brands which are well-entrenched in the country. Next. In terms of our ownership, 60.4% is owned by the promoters, with nearly 10.5% retail shareholders, and then nearly 32% owned by institutional investors. We note that there is an addition of nearly 50% in the number of retail shareholders in the last year. Next. Before I continue, given that snapshot of Sanofi India, I wanted to just take a moment to put in front of you the vision statement of the Sanofi Group globally. At Sanofi, we chase the miracles of science to improve people's lives. Now, next. One-fifth of that statement can only be fulfilled in India. One-fifth of people's lives on the planet is in India, right? India, soon to be the largest population on Earth, that is expected by July this year. Counting down the days, theoretically, 125 days until we're the most populous country in the world. Next. Population which is driving India's economic steady growth, as you've seen and you follow and you know it better, even better than myself, very steady economic growth in the recent past, projected also into the future. Next. That is also true when we come to healthcare. Healthcare is poised to benefit from this economic growth as gaps in healthcare close over time. Healthcare's GDP, percentage of the GDP into healthcare has increased dramatically. It is projected to be 2.5% of GDP by 2025, doubling in a 10-year period, which is quite phenomenal. This is, of course, a consequence of the strong commitment of the Indian government to healthcare. We've seen many programs that promote healthcare being deployed by the government, such as the Ayushman Bharat and the eight years of Health India, promoted by the Prime Minister himself. Next. Within that market, we see some trends that are of particular attention to us at Sanofi India. First of all, yeah, if I start from the upper left box, we just mentioned strong macroeconomics, strong commitment and support from the government, which will make India the fastest pharma market, fastest-growing pharma market in the world, right? Within that, we still see lots and lots of opportunities for growth, which project a very interesting scenario for this market altogether, going forward. Take for instance, the non-communicable diseases treatment gap. It's a huge gap. 50% of patients with NCDs are untreated in India. 50% of patients treated for NCD are not on treatment goals. If you take diabetes, for instance, 76 million diabetes patients, and 40 million of these of that population is under treatment and diagnosed. If you go down to number of people in treatment, the number goes down many millions more. At the end, there is only 20 million on goal, on treatment goal, but with another 10 that are under treatment but not under adequate treatment. The gaps are throughout the different stages, from diagnosis to getting to treatment, to getting to the right treatment at the end, which represent an opportunity and a gap that needs to be closed and also an opportunity for growth. That is one example in diabetes, but many more exist in other NCDs. Another key dimension, a key element of the market in India, innovation has represented more and more a driver of growth. If you compare the, on the upper right, corner, 2018 and 2022, you see how much more innovation represents a significant portion of the growth of the market in total. Also, when you look at the, not only the portfolio, but the way we engage with the HCPs in the country, it has transformed. Through COVID and post-COVID, we see an increased adoption of digital channels by HCP, adoption of a hybrid reach model for reps and visits and conferences and events with doctors. More than 1.2 billion cell phone connections in India provide ready platform to drive digital health initiatives in this field. If you go to the trade, we see fast modernizing trade channels, right? Pharmacy chains are clearly outpacing the market. They are growing more professional. They're consolidating and expanding in India. Distributors are modernizing and consolidating. Old mom-and-pop organizations are becoming more professional, consolidating in smaller and bigger groups and modernizing their ways of operation. Hospital chains continue to expand at a fast pace, outpacing the market as well. See clear modernization in the trade in general. If we focus even more and go to e-commerce, it is a very clear acceleration that you all are aware of, with e-pharmacies expecting to grow an annualized rate of 40%-45% between 2021 and 2027. The penetration of e-pharmacies in the country is about to reach 70 million households by 2025, coming from only 9 million in 2022. Significant trends, significant important trends that we pay attention to when we talk about our plans going forward. Next. When you talk about the portfolio of Sanofi India Limited, we're well-positioned across seven of the top nine therapies in the India Pharmaceutical Market. This chart shows you the therapeutical areas in the pharma market from biggest to smallest. You can see that in seven of the top nine, Sanofi India Limited is present. We're present with penetration in subcategories that ranges from 767%- 661%. There is room even for us to continue to expand our penetration in the subcategories, all of the categories where we're playing, and also our market share for still significant opportunity to increase market share of the within those categories in which we play. Over time, we have been able to build very strong leading brands in these segments. Lantus is number one in its segment. Allegra, the same. Combiflam, number three in pain. Amaryl, Cardace, and Clexane, all number one in their respective segment. This is not to mention Targocid and Frisium, also brands that are leading in their respective segments. These six make it to the top 200 of the pharmaceutical market in India. Significant achievement from the past. Next. When and when we talk about the past, in Sanofi India, we are pretty proud of the past. Strong brands were built, solid quality reputation for the company in the market. We're one of the top four, top three multinational companies in India, with a very senior and capable leadership team and very experienced teams across the organization that have been responsible for the building of these brands throughout over the years that we just mentioned. When you think about the future, we see a very attractive future. We see a resilient economy, both in terms of GDP, as well as in terms of the currency for an emerging market. We see healthcare gaps that exist but are being closed through growing healthcare budget, which leads to a fast-growing market that we believe is going to continue to be the case for many years to come. India is also a market where brands make a big difference and live very long, we are a brand company. Not only that, India is also a strong talent pool, not only for ourselves here in India, but globally, as you know, and see and can attest yourselves. In the next slide, we talk a little bit about the present. If we're proud of the past and attracted to the future, when we look at the present, we see some strengths. In terms of strengths, we see that insulin, our insulins business and our consumer healthcare business are of particular interest given their representative as in our business, given our market share and relevance in the India market, and given the fact that these two segments of our business grow ahead and above our own average growth. They are today already growth drivers of the business in India. Next. At the same time, when we think of the opportunities that exist in the present, we see a number of factors that can be improved. First, we can focus more on growth drivers, which are two main, you know, current driver, engines of growth. We believe we can focus even more on those. We can leverage more on local opportunities, as opposed to depend too much on the global strategies only. There's lots of local unique opportunities in India that we can tackle, and we intend to do so. We can improve HCP centricity by having bigger baskets and fewer reps calling on the same doctor with a fuller basket of options and better service to those doctors. We can expand reach by reducing overlaps in our current coverage. We can regain innovation momentum, where in the last few years there's been fewer introductions in Sanofi India. There is opportunity for us to do a lot more, both with global products that exist in Sanofi India, can be brought to India, and also with local opportunities for innovation that can be produced here locally as well. There is an opportunity for us to master the emerging markets and modernizing channels. We aren't completely up to the modernization that has happened in the trade so far. There is an opportunity to build partnerships for reach. There's different potential partners could help us take our products through a more capital distribution and capital reach within the country. We think there is opportunity in the ways we work to drive more empowerment and more agility as well. Now, with all that in mind. Next. With all that in mind, we took a step back in the leadership team in the last few months, came and devised a new plan to accelerate the growth of the business in India. We called it India for India. Sanofi's India for India plan. Next. In this chart, you can see the four pillars that we devised as growth pillars for the business going forward. The first pillar is, of course, diabetes, our biggest and stronger business in Sanofi India. There we believe there are three main elements and three main opportunities that we want to tackle. One, to strengthen the positioning of our portfolio. We have a range of products, and we can dedicate them to specific segments with more clarity. Second, we believe we can expand the spectrum of offering. We're one of the large, across-the-board, full spectrum or fuller spectrum, players in diabetes. We have oral diabetes and injectables as well, and we can and intend to expand the fullness of our offer for this disease. Also, we believe there is an opportunity for us and a need for us to engage with stronger disease awareness initiatives to facilitate the understanding of this disease and potentially the therapies associated with it. When we go to the second pillar, our second focus for growth going forward is consumer healthcare. In that pillar, we have a very strong business, a thriving brand with Allegra, which we want to double down on and invest even more to accelerate its growth. To do that, we also believe we need to deepen our consumer understanding in order to unlock, you know, triggers of growth for this business. We can expand its range as well, leveraging an array of products that exist in our global portfolio. Third pillar for our growth is end-to-end innovation. In there, we see three elements. First, we can and will leverage to the maximum extent possible our global portfolio with products that exist in the global portfolio of Sanofi that aren't here in India yet. Plus explore many possible adjacent local innovations, projects that have been developed in India for India needs that we intend to pursue. The second element in that pillar it is to explore further supply localization. Today, we have a significant portion of our sales in India that is already produced in India. We believe we can localize even more. There are a number of advantages from that strategy, from reliability, from reduction of cost, and also to be aligned with the Make in India campaign from our government. Right? Third piece of that column is to seek and establish partnerships that can allow us to extend our reach in this vast country. Taking our products to every little city, every small city across the different states. The fourth pillar, fourth and final pillar of our of our strategy is the go-to-market pillar. In there, again, we have three elements. The first element is to build a customer-centric and hybrid model, which we have begun to do in a redeployment that took place in Q4, which I'm going to mention a little more in the next slide. The second element in go-to-market is the creation of a trade organization that caters the whole portfolio of Sanofi India to our trade partners, be those distributors, pharmacy chains, e-commerce companies, or hospitals as well. Looking at that interface with more attention and elevating it to a world-class interaction with those partners. The third element on that go-to-market pillar is to drive pilots of transformative nature, be those in the way we deal with e-commerce or in the way we engage with the HCPs or in the way we manage our key accounts in the country. In the next slide, we speak a little bit about the Q4 deployment. Through the months of Q4, we deployed the new ways of working in India, which included a reorganization from eight business units to three. Addition of an innovation function and team. Addition of a trade function and organizing a team under that function. The number of HCPs reached by the field force increased, even if the number of reps was constant. It is only possible because we reduced overlaps, that allowed us to reach more HCPs with the same number of reps. Our key accounts and hospital coverage was established, it's in the process of being implemented. There's been a change in resource allocation from a historical basis, marginal variations to more insight-based and insight-driven going forward. I think with that, I conclude. Next slide. I hand over to Vaibhav to tell us a little bit more about the numbers this period. Vaibhav. Thank you, Rodolfo. Good afternoon, everyone, again. As Rodolfo mentioned, the Q4 deployment was presented in the previous slide. The quarter 2022 was the first quarter when this deployment model was put in place. It is also a quarter which is largely a comparable quarter. If you recollect, we sold the nutraceutical business in September 2021, and when you look at Q4 2022, it is therefore a largely comparable quarter because the effect of the divestment does not is not seen in this quarter. There is an impact of sales of Soframycin and some other exceptional items. If you look at the quarter in question currently, on a published basis, when you look at the retained business, we show a de-growth of 2%, but on a comparable basis, there is a growth of 3.8%. We had some challenges in this quarter in Tagamet, which is one of our big brands, which Rodolfo talked about, where we had some supply issues. That is one of the reasons also why you have a slight, negative, domestic, retained business growth of -2%. On a profit before tax basis, you can see that we are up 33%. Again, on a comparable basis, we would be up 22%. What we have taken here from a comparison perspective is, ignored the Soframycin-related impact. We've also equalized the exceptional exports growth in this quarter. In the sense, as you see, export growth is 26% over the previous year. We have equalized that impact also. Therefore, when you look at it from a pure comparative quarter basis, we are from a profit before tax, we are growing at 22%. Operating efficiencies also, which Rodolfo talked about, both in resource mobilization, deployment, have kicked in during this quarter. As we go along, we will also see that in the next quarter as we go along. Full-year performance, the domestic retained business, again, same - 2%. If you look at excluding the exceptional items which I talked about here, it's of course there's an element of nutraceuticals, there's an element of Soframycin, there's also an element of the COVID impact that we had in 2021, where we had exceptional sales during this period. If you look at all that, there is a restatement of around the comparable sales number at around 3.7%. Profit before tax on similar lines shows a de-growth of 5%, but on a comparable basis it is 6%. Overall, as to summarize on this slide, the Q4 2022 is the first quarter where the compare... It's largely a comparable quarter. It can from a comparison and a growth perspective, it is easy for us to monitor Sanofi performance quarter on quarter from now on, because the exceptional impact largely diminishes going forward. Next slide, please. I just wanted to put this slide just for everyone to know, we talked about divestments in the past by Sanofi. There are two the two graphs on the top talk about the CAGR on the retained business and CAGR on the published business. That means including the divested portfolio. If you see that the CAGR for the full portfolio, including the divested portfolio, is in the range of 5%. Our CAGR, if you consider the retained business purely, is 7.2%. That means on the retained business portfolio, the focus is clearly there, and that focus helps us in delivering better results in the areas that we want to look at going forward. Rodolfo talked about being present in seven out of nine top therapy areas. Quick comment on the profit before tax. If you can see, the margin profile has improved. We were at 22% in 2017, and since then, you can see that the growth is steady. This is of course profit before exceptional items, and we are now at 28% as profit before tax to sales. The margin profile clearly shows an improvement over the years. There have been questions on dividend. I think Rodolfo talked about the strategy. The strategy is essentially about global innovation, using global innovation, using local innovation. Localization of manufacturing is also one part of our strategy. Important to note that the localization of manufacturing is largely by leveraging the contract manufacturing network in India, which is where India has a significant amount of strength, and of course, the partnerships. To summarize, even if you look at all these three initiatives, they are the growth that we are talking about with global, local innovation partnerships and localization of manufacturing. It's largely an organic growth. Therefore, looking at this particular organic growth momentum in the future, the cash needs of the companies were also assessed. If you can see from 2017 - 2022, our normal dividend accordingly has increased because when we generate cash from a cash cycle point of view, we are very positive. With an organic growth focus going forward, looking at the cash needs, you can see that the dividend payout percentage has increased steadily over the years, and that's reflective in the chart. I think that's something which we wanted to share with all the shareholders as well. The concept and the rationale behind this whole payout is also linked to the way the company is thinking from a strategy point of view. I stop here. A quick recap on the financials, and I'll let Rodolfo take it forward. Okay. Next, please. Yeah. I think before we conclude, I think the final message from our side is that we are stepping up our game on ESG. We have developed those first integrated report. We'll be disclosing ESG figures in our upcoming annual report for the first time. Aiming at robust governance structure to drive responsible and ethical business culture beyond compliance. Those will be the central points there. This will allow us to leverage the very strong CSR initiatives that we have undertaken over the years in Sanofi India Limited. We'll be able to organize that in a clearer way and communicate about that also with more clarity going forward. We close, yes. Thank you so much, Rodolfo, Vaibhav, for your presentation. Before we move on to the interactive Q&A session, which is planned, just quick comments. We will respond to your queries within the boundaries of our internal policies and SEBI regulations. As required by law and our policies, we will restrict the responses to clarify on matters which are already available in the public domain through our annual reports, quarterly financial statements and disclosures. There are many granular aspects of our business or financials, such as product wise or state wise, therapy wise, sales, margins, profitability, which we consider confidential, hence we will not be able to comment on some of those aspects. We do not provide any earnings guidance, hence we will not be able to respond to the queries on future business or future product launches, et cetera. You may please raise your queries accordingly. As I had mentioned, in the exchange communication, we will take the questions in the sequence based on your registration. In case of multiple registrations from the same participants, we will take questions from the first registered participant and give others the opportunity at the end. In the interest of time and for keeping equal opportunity for all the participants, please limit the number of questions to one or two. I now hand over to the Chorus team for taking on the Q&A. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Participants who wish to ask a question over the video presentation may click on the live interaction button on your screen. Please allow access to your microphone and camera and click on Join. The operator will announce your name, after which you will be requested to unmute yourself. Participants who wish to ask a question via phone, may please press star and one on your touchtone telephone. You are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Girish Shetty from Banyan Tree Advisors. Please go ahead. Hi, ma'am. Can you hear me? Yes, we can hear you. Hello. Okay. Thanks for the opportunity. My first question is on Lantus. Just wanted to know the quantum of price cut and from when will it reflect in our financial statement. Also we wanted to know how is the arrangement with the parent in terms of sourcing and profitability. Just wanted to understand if the parents will absorb the part of the price cut in case of Lantus. That is my first question. I'll ask the second one. Any other question or? No, you can start. Okay. currently the draft prices have been notified by the government. We have three Lantus SKUs, there are ranges of price cut which have been communicated as per the draft price notification. It's the average price cut is approximately 25%. However, two things, or two caveats to point out, it's a draft notification. The company has made some representations in terms of the mode of calculation and inclusion of certain SKUs. The government is the government gives time typically to companies to make representations, and then based on the representation, there's a reconsideration of this. The final prices are not notified yet. We await the final price notification and the consequent reduction, if any. Having said that, in case there is a reduction, we have clarified on this platform in the past, there is a certain margin profile which we have with for the imported product business, and that's on arm's length basis. Therefore, in case there is a drop in profitability below the arm's length, this would be compensated by the group. Effectively, it means the purchase price of the product will drop, the discussions will be taken with the group companies for that. There may be a short-term impact depending on the inventory that we have, the carrying inventory. To answer your specific question, the purchase price of Lantus from the group will be reduced to ensure that the arm's length profitability is maintained. Okay. sir, just a follow-up. just wanted to understand because it is an arm's length transaction, is there any tax liability or any legal implication where you have to change the transfer price agreement to incorporate this, that the parent will reduce the price for Lantus? Any other instance where this has happened in the past that post a drug price coming at a price control that the parent has taken a price cut? Just wanted to understand if this is a normal practice in the industry? As I mentioned, arm's length, once your profitability is arm's length under the income tax rules, there would be no tax litigation because arm's length is a reflection of the statute. That means you have to be compliant and therefore to be at arm's length is not an option. It needs to be done. Therefore, to answer to your second question, it's not a choice or... that we have. It's something which is mandatory that needs to be reflected as per the income tax laws. Okay. Understood. Okay. That's it from my side. Thank you. Thank you. We take our next question from the line of Amay Chalke from IIFL Investment Managers. Please go ahead. Amay, could you please unmute your microphone and go ahead with your question. Mr. Amay Chalke, could you please go ahead with your question? There seems to be no response from this line. We will therefore move to our next question. That's from the line of Bhavya Sanghavi from Nirmal Bang. Please go ahead. Bhavya, could you please unmute your microphone and go ahead with your question? Yes, please go ahead. There seems to be no response from this line. We'll take our next question. That's from Gagan Thareja from ASK Investment Managers. Please go ahead. Yeah. Am I audible? Yes. Yes, Gagan. Go ahead. The first question is around Frisium and Cardace. I presume, the revised NLEM pricing also impacts Frisium and Cardace if I understood it correctly. Can you help us understand the impact on these two? Also, I mean, will the WPI-linked price increase that'll come through in the next year, to what degree will that help you offset what impact happens now? In case of Cardace, as you know, the plain tablets are under price control. The average reduction that we expect is in the range of 14 odd% for Cardace looking at each SKU, some similar to Frisium. The next WPI increase, the question that you have, will be in April 2023. The current WPI, if you see the traction, it is not as high as previous year, which was at 10.7%. As per the law, the government needs to give you a WPI increase in line with the index, we are hopeful that the same, when it's published, it reflects the same numbers. To answer your question on WPI, depending on the final government notification in April, the price changes can be implemented. Right. you know, between the impact that you'll see on Lantus and Frisium and Cardace, while, you know, you have arrangements which might help you offset, you know, the impact to a certain degree, in terms of transfer pricing, what impact, you know, would flow down to your profits, assuming that the current notification is the final one? As I mentioned. To what degree, if you can help us understand that? As I mentioned, we don't give specific product profitability guidance, but the profit margin as percentage to sales would be maintained whenever we do an arm's length adjustment. Does that answer your question? Yeah. Yeah. It, it helps me understand this. Lantus hasn't grown this year either. I mean, the impact will only come through in the next year. What's been the reason for Lantus not growing this year? Is there a market share loss? I'll take this one, Vaibhav. Lantus' performance this year was negatively impacted by a high focus of the organization behind the acceleration of Toujeo. Toujeo grew very strongly. Part of that growth was it came out of Lantus. In combination, we had Toujeo growing very strongly at a very high rate, as you can analyze from our numbers. The consequence is that there was a reduction of focus and reduction on the sale of Lantus. Going forward, this is going to be analyzed, as I can't talk about the future here. This is true. It happened, and it happened because Toujeo received most of the focus of the organization, and it grew very steady in 2022. Right. Going ahead, I mean, if you could enumerate and if possible, also help us understand a little detail of the new product introductions that you intend to do through the listed entity. I understand that Sanofi as a group might, you know, introduce new products in India, but, you know, what would come through the listed entity in terms of numbers as well as, you know, therapy focus of those products. If you could help us understand that bit a little. Yeah. Everything we discuss here is Sanofi India Limited only. Everything that we discuss and the slides that we share with you, they are related to Sanofi India Limited. In there we speak about innovation, right? So that's not the private arm of Sanofi in India. That's Sanofi India Limited. Now, as to which products and numbers, we don't disclose that. we're unable to answer that part of your question. But as I mentioned, the slides I shared with you are about Sanofi India Limited. In there you see innovation listed. So part of your question is, are launches going to happen under Sanofi India Limited or not? I mentioned that it is our plan to pursue those launches for Sanofi India Limited. When you say you want to increase local manufacturing footprint, if you could give us some idea of how much gets manufactured locally and what do you aspire to do, let's say, over the next, you know, 3 - 5 years? Is it possible to understand this in a little more detail? We can give you the specific numbers in terms of which percentage will change in terms of our local manufacturing. I give you the information that we see that as an opportunity for the future of the business in India. A large portion of our portfolio is produced locally. We have a very big and very important site in Goa that produces many of the products that we manufacture, that we commercialize in India. We operate with nearly 16 Contract Manufacturing Organizations in India that also provide a great part of what we sell in India. We believe there is opportunity for even more. As part of our pro-portfolio is imported, we think some of the some parts of this portfolio that is imported could eventually be produced in India as well, improving reliability, costs, and being in line with the Make in India campaign. Thanks. I'll get back in the queue for more. Thank you. Thank you. Thank you. Our next question is from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hi, am I audible? Yes, sir. Yes. Hi. Okay. Thank you. Thank you for the opportunity. I've got three questions. One on insulin glargine. If Toujeo grew at the cost of focus on Lantus, did the overall insulin glargine franchise grow in calendar year 2022 over 2021? That's number one. Number two, in your presentation, we did see a lot of focus around wanting to expand partnerships to grow this business. If you could sort of elucidate further in terms of what you mean there. The third, you know, over the last two years, we've seen you shedding a reasonable chunk of your business, you know, the tail brands and the tail businesses. Is there possibility of some more of it going forward? Or we should now see that sort of ending? Thank you. All right. Let's take each one of the questions. Starting with the last one. We don't disclose our M&A plans. You did see that the divestments that were made improved our growth or compound annual growth rate in sales growth. We do that intelligently, evaluating when is it that we should compete ourselves and when is it that we should divest. That, to that question, I can't answer you more than that. I mean, if opportunities are correct and if the value creation for the shareholder is adequate, then we would always pursue different opportunities in M&A. We don't have any specific plan to discuss with you, right? Your second question was about. Overall glargine. Yes. Yeah. Overall glargine. Overall glargine has gone up. Yes, it did go up. It grew, in. 2%. Sorry, how much? It's 2% on a full year basis. 2% on a full year basis altogether. Yeah. There was another element in the question. Right. That was around, you know, you spoke about. Oh, partnerships. Yes. Yeah. Partnerships. We believe that there is potential for us to partner with other players in the market to make our products more readily available to a larger percentage of the population in India, right? Today we have a footprint in India, as I mentioned at the beginning, with 3,000 distributors, and we reach 100,000 pharmacies, and we reach a number of doctors. We believe that by partnering with certain with different potential partners in India, we can extend and increase our capillarity, get to more doctors, get to more patients, get to more pharmacies and get therefore our products to more patients ultimately is. That's the belief. This is one thing that we'll be exploring going forward. Got it. Would it imply a lot, maybe perhaps some out-licensing deals? I think that's probably where you seem to be suggesting. Is in-licensing a proposition? I mean, given that you have a very deep connect with your HCPs, and there are portfolio gaps in even in your diabetes franchise. Would in-licensing possibly be a probability for your business? At this point, partnerships like I described, is a very ample territory that we believe can aggregate value for the business. No one specific type of partnership has been defined as the goal going forward. We don't exclude in-licensing or out-licensing. Those are both viable types, potential types of partnerships going forward. There is no specific partnership in the works in that sense. We don't exclude any of these types going forward. I understand. Thank you. Thank you. Our next question is from Vishal Manchanda from Systematix. Please go ahead. Vishal, could you please unmute your phone, unmute your connection and go ahead with your question. There seems to be no response from this connection. We will therefore move to our next question. That's from the line of Varun from Bryanston Investments. Please go ahead. Yeah. Hi, am I audible? Yes. Yes. Yes. Thank you for arranging this call. The MD spoke about Sanofi's presence in faster-growing therapies. What we are seeing is in oral diabetic and cardiology segment, the treatment is shifting to newer class of drugs. For the brands like Cardace and Amaryl, what is your strategy to remain at the forefront? Not sure I got the question entirely. Could you repeat? You spoke about, you know, Sanofi's presence in the fastest growing therapies. What we are seeing is in oral diabetic and cardiology segment, the treatment is shifting to newer class of drugs. For brands like Cardace and Amaryl, what is your strategy to remain at the front end? Thank you. Now I understand. Yes, we do evaluate different sub-segments of the therapies. What I showed you is that we're present in seven of the nine largest therapies in India, right? We think that there are sub-segments. I mentioned that we have a varying range of penetration in those large seven categories. We constantly evaluate which other sub-segments of these categories we want to enhance our presence. We're constantly evaluating that and that's a good observation. Yeah, it's part of our constant ongoing work to identify potential segments of interest and therefore, then plans to penetrate in those segments of interest as we go forward. That's something that we constantly look at. Okay. how large is. Sorry. If I may, to give you a little better answer there. That will connect back to the innovation pillar, right? We won't innovate for randomly, right? Innovation as a pillar for growth for Sanofi India will be grounded on specific opportunities in specific segments of high growth. Just to try to give you a little better, more complete answer based on what we shared with you already. Sorry for interrupting. Go ahead. Okay. and How large is the calcium and Vitamin D3 market in India? How do you think is Dupixent positioned in the overall market? What would be your ranking in general? How large is the pediatric market? Because that seems to be our area of focus. I didn't hear you very well again. Could you repeat? Yeah. I just want to understand how large is the calcium and Vitamin D3 market in India, and how is Dupixent positioned in the overall market, and what would be your ranking in general, and how large is the pediatric market within this, given that it is also focus area? Thank you for the question. It's a very specific question. I don't know from the top of my head. I can't answer you right away. I think we may be able to provide an answer after with those numbers. Yeah, sure. We've noted your question. We can go on to the next question. Sure, ma'am. We'll take our next question from the line of Cyndrella Carvalho from JM Financial. Please go ahead. Am I audible? Yes. Yes. Yes, Cyndrella. Your voice is breaking up a little. I hope this is better. Yeah, this is better. Thank you. Just want to understand, if you can share with us what is the current NLEM exposure, as a percentage of sales? Yeah. Yes. I think let me check that. Vaibhav can confirm. You're talking about the total current portfolio under NLEM? Yes. Currently it's at around between 15%-16%. In case Lantus gets included in the price control, which is likely to happen, that number will go up to 40%. All right. As you were earlier adding, if the WPI index-related increase comes in, how much of impact we'll be able to offset? Can you help us understand that? I mean, the WPI needs to be notified by the government, but we are expecting in the range of 8%+. Okay. As of now, based on the notified, Lantus, segments, what is... Cyndrella, I think there seems to be some. Yeah. Network issue at your end. The impact that we are anticipating. Cyndrella, I'm sorry, but you'll have to repeat your question. We couldn't hear you. I was asking, considering the three strengths which have come under NLEM from Lantus perspective, what would be the tentative impact to our understanding? I would. As I mentioned earlier, the impact in terms of reduction for the largest SKU-. On the top line. The largest SKU impact is around 25%. As I mentioned, the bottom line impact will be limited because it will be a pass-through from a perspective of the gross margin, essentially back. I will not specify the impact as of now because it's still draft prices. I'm giving you a range. Okay. If we look at the brand selection, what is the reason for a huge decline that we are seeing on a vaccines? Can you help us understand that? Which... It's Clexane. Oh, Clexane. It's because of essentially 2021, we had a huge peak because of COVID, and I talked about it when I spoke about the financials, and we talked about the normalizing impact. The last year, during COVID, we have a significant spike in sales, and that has an impact in 2022 when you look at it on a comparative basis. From this year onwards, we should expect a normalized base going ahead. Is that a correct understanding? You can say. In terms of the impact of COVID, et cetera, being out of the question now, going forward, it's more normalized growth. Okay. There is no NLEM impact expected in that brand, right? Clexane is already under price control. Every five years, there is a revision in prices. There is a re-averaging impact for Clexane also. Okay. If you look at the gross margins, we have seen a quite benefit coming to us. Is this sustainable? What has driven this? Are you referring to the quarter four? The entire year as gross margins. When you look at overall gross margin percentage or the material cost percentage, there's a slight improvement. I mean, I'll not necessarily talk about it from a point of view of the future, but a couple of factors to think through. There's a mix impact, of course, which is important. The product mix, especially in the domestic segment, can have an impact. In case of exports, the strengthening of the, you know, the Euro, From the beginning of the year to where we are today, that also gives us some benefit. I will not comment on the future sustainability of the margin, but yes, there is a slight improvement in margin structure, and if all things remain equal from a mix point of view, you could expect the same set of margins. Having said that, you need to monitor. There are a few levers for this, which is domestic business, export business, mix between the two businesses and the mix between the domestic business, which would have an impact. I can't give you a specific direction, but yes, the margin profile as a material cost of sales is currently maintainable. What would be our going ahead strategy, focusing on the top 10 brands? Are we envisaging any strategy specifically to grow these brands? Because our growth has largely, even if I consider the retained brands, which has been around 7% CAGR. How should we look at it? Given that we'll have some impact on that. Yeah. What is our process? Any color will be helpful. Yes. Cyndrella, with going forward and the way we shared with you in the beginning is our pillars of growth point is to focus on the diabetes brands and CT brands as the key growth first for the business going forward. We're gonna be doubling down our resources and investments and attention and focus on these two categories to drive the brands in, within those two categories harder, and leverage the already existing positive momentum on these brands. I think that's the extent to what we can disclose with you which was part of the presentation in a way, right? It's not the top ten brands that we're driving. We're driving CT and diabetes and CT with a, with a heightened focus and increased resources behind those brands because of their relevance, because of their good momentum and the fact that they already grew above our average. We're doubling down on our growth engines. Yeah. Thank you so much. Thank you, Cyndrella. Thank you. Our next question is from Vishal Manchanda from Systematix. Please go ahead. We've unmuted your mobile connection, Vishal. Please go ahead. Thank you. Am I audible? Yes. Yeah. my question is on Insulin Aspart, you received a regulatory approval from the DCGI. I- Yeah. Would you be able to launch this drug in India this year? It's just me, but I couldn't understand. Yeah. You'll have to repeat your question. Your voice is breaking up in between. My question is on Insulin Aspart. The CDSCO approved Insulin Aspart for Sanofi this year. I'm not sure. We'll check and get back to you. It's from Biocon, and it will be launched sometime late. This is an insulin, mealtime insulin that you got approval for. A new insulin that was approved. What is the insulin that was approved? Aspart. Aspart. We'll get back to you. Go to the couple questions. We're gonna do some research and get back to you before we close the call. Let's get to it. Okay. Let me take the next one, please. There is this question, on the insulin. Market share on Vitamin D3. Vitamin D market share, right? We come back to those two. Okay. Let's keep going. Thank you. We'll take our next question from the line of Himanshu Upadhyay from o3 Capital. Please go ahead. Yeah. Hi. good afternoon, and thanks for a detailed presentation. I have few questions on that. It is good to know the strategy, but can you tell what the actions taken in last one year, especially on ground and the actions you aim to take in CY 2023? In terms of actions, what we are trying to understand is, was there any new product introduced or you are planning to introduce? Because I don't think in last two, three years we have done anything on that front. You have stated that you are focusing on innovation or reinvigorate the innovation process. Yeah. What have we achieved till now under you in last one year? Can you elaborate something on that? That is a very good question. Where are the gaps you are thinking? Very good question, allows me to clarify one point. The plan that I have shared with you was developed in the months after my joining the company, right? That is a joint plan developed with the leadership team in the second half of 2022. As I mentioned, we did deploy a new organization and ways of working already in Q4, right? That is one element that we could act immediately. Obviously, when you talk about innovation in our market, in our industry, it isn't immediate, right? The moment you commit to innovation, you put resources behind it and you start to work on it. Due to the nature of innovation in the pharmaceutical industry, with the many needed approval gates in terms of development, quality, regulatory, etcetera, it takes time, right? You could not see any impact from the moment this plan was conceived in Q3 2022 till now, because it would, this would be impossible, right? The plan aims at bringing innovation to the market. It will happen in the coming quarters and years, but it will happen in the coming years, let's put it this way. It could not have happened in the immediately. In consumer goods, you would be able to, you know, decide to innovate and tomorrow you're innovating. In our industry, it takes a little longer. What action was taken since the plan was put in place is the deployment of Q4, which we highlighted in our presentation, where we changed the organization from 8 -3 business units, enlarging the baskets offered to the doctors when we connect with the doctors, and extending the reach of the organization by reducing the overlaps that existed between the eight business units that were run in the business up until then. That of course will have some time to mature and there will be some time for us to see the full benefit of the changes that were made in Q4. That happened in Q4, and we think that even in Q4 we already see some impact from those changes. We continue to see that as we go. I don't know if that answers your question, but it important to clarify, this is not a three-year-old plan. This is a four or five months old plan that we have just recently deployed. Rodolfo, just to supplement that, I mean, what Rodolfo's talking about, the fact that very clearly there is an acceleration on the global and local innovation that has been planned with India for India. If you look at it in the last two years, there is this deployment of launch of Toujeo in cartridge form, which is not available anywhere else in the world. using the TouStar pen, which is a specific India kind of an innovation, which is launched only in India. It's not launched in 2022, but if you look at it between 2021 and 2022, there has been a clear uptake in Toujeo because of this launch of the cartridge. There is also clearly Allegra Nasal Spray as one of the additional products that we talked about in 2021. There has movement in the innovation pipeline from Sanofi. Rodolfo clearly he was referring to the fact that the acceleration that is reflected in the presentation is more going to come in the future years. Does that answer your question? Okay, one more question. Partially. I would say partially, okay? You are saying you are starting to put more resources, can you elaborate more in terms of number of men you have increased or number of amount of money you are spending more on R&D? That is what the action on ground means to me, okay? That is not what I am hearing anything about. Okay. Yes. We can take this thing further. The next question is, Diabetes is the important focus area, okay? You're trying to increase the franchisee of that business, okay? Can you elaborate in last one year? Because we are doing this call every year, that's why I'm asking, okay? How much has the doctor's prescription increased for Lantus and Toujeo or the patients we are serving increased in last one year with our diabetes franchising? Can you elaborate on that? How much has the penetration of ours increased, okay? This is the number one priority, but if you can give the actions these were taken, this is what we have reached in terms of distribution reach, doctors reach, what was in comparison to one year or two year back, that is what we want to hear about. Okay. That. Yeah, that's the one of the questions. Maybe the first part I take on. Yeah. Maybe the first part I'll take. You made a specific comment about increasing of headcount, increasing of expenditure on R&D. When you look at the global innovation that Rodolfo talked about, this global innovation is essentially the pipeline which comes from the parent to us. We don't need to spend on the R&D for that global pipeline. Similarly, he pointed out that the local innovation also we leverage on the CMO network in India. We did talk about in-licensing opportunities, exploring those. When you look at pure R&D, as I said, whether it's global or local innovation, we don't need to put upfront cash on the table for getting the products that we need for our teams. The second question is from a pure increase in sales deployment or sales force deployment. Again, if you see the slide that Rodolfo had presented to us, it was more on the smart way of resourcing. Instead of repeating calls on the same HCP by different people, we talk about ensuring that the messaging is done more efficiently. It's also about efficiency, more than the numbers. We are looking at this more holistically rather than only looking at it from a point of increasing headcount in absolute terms. I hope that answers the first part of your question, and I let Rodolfo to take care on the second one. Yeah. I think the second point was, you were asking for some specific numbers, right? Like Vaibhav addressed the point on the investment in R&D, it's not really the right measurement for trying to understand the level of innovation that will come through in Sanofi India because we leverage innovation that is developed globally, right? We don't actually do full R&D here, we already have resources dedicated to R&D that we just use more intelligently and more efficiently to localize global innovation to the Indian market. On the... I think one number we can share with you that you ask to know how much more resource and focus have we put on diabetes. We have put another 200 people in diabetes. We have strengthened the diabetes business coverage with 200 people in our ranks. A significant step up from what we had before. Okay. In terms of prescription, how much have we expanded our diabetes franchise? Can you give some idea and the presence in terms of doctors you are reaching currently versus, let's say, one year back? Yeah. I don't think we can disclose, those numbers, but, let me check here with my- 2%. With my colleagues. I think, Can we disclose this? Yeah. There's 2% increase in prescriptions of for our insulins. From a overall patient coverage point of view, we had around 6.5 lakh patients in 2020, and that has gone above seven lakhs in 2021, and the focus continues in 2022. The number of patients is of course, a reflection of the number of HCPs that you reach. Yeah. Okay, thank you for the replies. You're welcome. Thank you for asking a question that allow me to clarify the fact that this is a new plan, right? Not an old plan that we've been operating for long. It's a new plan that aims at accelerating this business and driving growth going forward through these four pillars that we laid out, diabetes, CHC, innovation, and go-to-market. Thank you. Thank you. We'll take our next question from the line of Abdulkader Puranwala from Elara. Please go ahead. Mr. Puranwala, please go ahead with your question, sir. There seems to be no response from this line. We'll take our next question from the line of Saurabh from Multi-Act. Please go ahead. Yeah. Thank you for the opportunity. Am I audible? Yes. Yes. Yeah. sir, I needed a clarification on Lantus. You said that around 25% would be the impact because of NLEM. Was that on a particular SKU or on the blended sales for Sanofi? It was blended for Sanofi, but as Vaibhav mentioned before, the prices haven't been set yet. We will only be able to assert the, you know, what is the exact impact on each one of the different SKUs once the prices have been set by the government, which hasn't been the case yet. This is directional decrease, estimated directional decrease, and there is still a debate on the final prices that is still open. They become final once- sir, second question was. Hello? Yes, go ahead. Yes, we can hear you. My second question was with respect to the revised transfer pricing agreement that, you know, you might second with the parent. Is the goal to have a fixed percentage of margin on the sales that we would like to maintain or the absolute profitability, which we are doing right now, we wish to maintain that particular number? The arm's length profitability is on a percentage, and it's not fixed. It evolves every year based on benchmarks and comparisons. Therefore I cannot say it's gonna be a fixed percentage. Having said that, purely if you look at it from an arm's length profitability point of view, it's a percentage of sales that we look at to ensure arm's length. Sure, sure. Just if you could answer that, what would be like, Lantus' margin versus a company average margin? Would it be significantly higher or, you know, on a similar line? We don't disclose product profitability margins like Radhika mentioned, I will not be able to share that information. You can infer that from an arm's length principle, that will be protected, right? Locally. Okay. Sure. Yeah. Thank you. Thank you. Our next question is from Sameer Deshpande from Fairdeal Investments. Please go ahead. Request you to please unmute your microphone and go ahead with your question. Mr. Sameer. Hello? Yes. Hello. Actually, I joined late, so I would like to know if, you know, the sales we had last time of nutraceuticals and Soframycin, et cetera, included. Excluding that, on like-to-like basis, what was the growth in sales for the current year? Like I mentioned in my slides, if you look at on a comparable basis, it's 3.7% for the retained business. Excluding if you don't adjust, you know, the COVID impact, et cetera, the published number is -2%. On a comparable basis, considering the high COVID impact of 2021 and some other issues on product quality and supply, it's a +3.7% growth. Including the pricing impact and reduction in volume, et cetera, they are adjusted. Purely the comparable, yes. I think we need to move to the, to the concluding question and then I want to get back to the two questions that we were not able to answer immediately and provide some information to those that asked. Yeah. Yeah. I think the first one is, Aspart is a competitor product, not a Sanofi product. I don't think that we're well positioned to answer your questions in that sense. It is something that is being applied by a competitor of ours. The status of their application is best known by the competitor than by ourselves. Vitamin D, we got the number that I think you asked. The size of the market is INR 800 crore for Vitamin D3, right? We see it growing at 3%. I think the question included our market share in Vitamin D. That's 5%, right? INR 800 crore growing at 3%, with a 5% market share for Sanofi. I hope I've answered the two pending questions with these statements. Yeah. We cannot hear you. Mr. Deshpande. Mr. Sameer Deshpande. Hello. Yes. Do you have any more questions, sir? Yes. We are unable to hear you very clear, sir. No, no. No, no, I don't have any questions. Thank you. Thank you. We just heard that you don't have any questions. What you said before, we couldn't hear. Sorry. If you do have one, you know, if we couldn't hear, please write and we'll make sure to come back to you. Okay. Thank you. Thank you very much. Ladies and gentlemen, we take that as the last question for today. For further queries or questions, we request you to write to the company. I now hand over the proceedings to Ms. Radhika Shah. Over to you, ma'am. Thank you. Thank you. The shareholders will soon receive our annual reports, and we will of course give you more details on our performance in that annual report. Our AGM will be held on 11th of May, where the shareholders will get an opportunity to interact with the company and the entire board of directors. We would now really like to thank all the participants for attending the investor call. Thank you very much. Thank you very much from our side. Thank you everyone for joining the call. Thanks for the great interactive session. We have made our efforts to give you the clear and most complete answers as possible. Stay safe, take care, and thanks once again for joining the call. Thank you.