Ladies and gentlemen, good day and welcome to Jubilant Pharmova Limited Earnings Conference Call for Investors and Analysts for the quarter and year ended March 31, 2022. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vineet Mayer, Head of Investor Relations. Thank you, and over to you, sir. Thank you, Vineet. Good evening, everyone. Thank you for being with us on our Q4 FY 2022 Earnings Conference Call. I would like to remind you that some of the statements made on the call today could be forward-looking in nature, and a detailed disclaimer in this regard has been included in the press release that has been shared on our website. On the call today, we have Mr. Shyam Bhartia, Chairman; Mr. Hari Bhartia, Co-Chairman and Managing Director; Mr. Arvind Chokhany, Group CFO; Mr. Pramod Yadav, CEO, Jubilant Pharma; Mr. Giuliano Perfetti, CEO, Jubilant Biosys; Mr. Syed Kazmi, CEO, Jubilant Therapeutics; and Mr. Arun Sharma, CFO, Jubilant Pharmova. We also have Mr. Chris Krawtschuk, who is the global pharma CFO. I now invite Mr. Shyam Bhartia to share his comments. Thank you, Vineet. Good evening, everyone. I hope you and your family are safe and healthy. In FY 2022, the company reported stable revenues despite COVID-19 challenges due to diverse range of our businesses. Improved performance in specialty pharma business and strong growth in contract research business was offset by lower revenues in the CMO, API, and generic businesses. In Q4 FY 2022, the company witnessed healthy improvement in operating performance sequentially due to growth in both pharmaceuticals and contract research businesses. However, year-over-year basis performance stood lower due to weaker performance in the pharmaceutical segment. The pharmaceutical segment sequentially witnessed healthy improvement in revenues in all businesses. On year-over-year basis, we witnessed growth in radiopharma and allergy immunotherapy businesses, while lower performance in CMO business due to tapering of COVID-related revenues, lower volume in generic business due to import alert and lower volumes in API business. Contract research and development services business continues to witness strong growth on year-over-year and sequential basis, driven by robust demand from our customers for our drug discovery services. In proprietary novel drug business, our lead program, LSD1/HDAC6 inhibitor, has successfully started Phase I/II trials. Additional IND filings with FDA for pipeline programs are expected to follow in FY 2023. I'm glad to share that API demerger is progressing as per plan and is expected to be effective from July 2022 onwards, with effect from April 1, 2022 as the appointed date. This demerger will enable us to create synergies between CRO and CDMO businesses and help in supporting our customers for their needs from early stage of research to commercialization of active ingredients and will provide competitive edge to this business. I'm also glad to share that board has recommended a final dividend of 500%, that is INR 5 per equity share of the face value of INR 1 each for the financial year 2022. I would like to mention that over the medium term, we have a strong growth levers in all our businesses. To drive growth in these businesses, the company will continue to invest accordingly. With this, I hand over to Pramod to discuss the pharma business. Thank you, Mr. Bhartia. A very good evening to all of you. For the quarter ended, revenue was at INR 1,380 crore, versus INR 1,486 crore in Q4 FY 2021. Our radiopharma business witnessed improvement in sales both year-on-year and sequentially, which is mainly driven by the recovery from easing of COVID-19 pandemic and also some customer order scheduling. The RUBY-FILL installations shows encouraging trend and increased strongly during Q4 FY 2022 versus Q3 FY 2022. The radiopharmacy business also witnessed growth year-on-year due to higher volumes. The turnaround plan is working well and is getting reflected by higher volumes and lower losses. The allergy immunotherapy continued to report robust performance reflected by growth in volumes both year-on-year and sequentially. The business continues to operate at volumes higher than pre-COVID levels. In addition to robust growth in the U.S. market, business witnessing healthy growth in non-U.S. markets as well. As mentioned in the previous call, CMO business is operating at normal pre-pandemic levels now. The COVID-related one-off deals tapered off as indicated earlier. The API business witnessed better performance sequentially. However, on year-on-year basis, performance was lower due to decline in volumes resulting from some stabilization issues after shutdown in Q3 FY 2022. We are planning asset replacement programs in H1 FY 2023 for plant upgradation and capacity expansions, with volume expected to normalize in H2 FY 2023. The generic business performance was driven by lower volumes due to import alert at the Roorkee plant, pricing pressure in the U.S. market, and lower remdesivir sales due to fewer hospitalizations. We have relaunched impurity-free losartan at CTG in the market and are gaining market share. We have also recently launched impurity-free plain losartan and expect to gain market share in Q1 FY 2023. With regard to Roorkee import alert, our remediation activities are ongoing as per the plan, and we expect to complete same by mid of calendar year 2022. I-131 MIBG clinical trial is underway, with launch expected in FY 2025. In Q4 FY 2022, on year-on-year basis, while radiopharma business profitability increased due to recovery from COVID-19 and favorable customer order scheduling, however, overall profitability in pharmaceutical segment was lower due to impact of import alerts, lower volumes in API business, the continued tapering of COVID-related one-off deals in CMO business, and pricing pressure in U.S. generic market. In FY 2022, the pharmaceutical business revenue was at INR 5,651 crore, versus INR 5,790 crore in FY 2021. EBITDA during FY 2022 was at INR 1,087 crore versus INR 1,386 crore in FY 2021. With this, I hand over to Giuliano to provide insight into contract research and development services business. Thank you, Pramod. In our contract research and development service business, under the Jubilant Biosys brand, we continue to report strong performance driven by robust volume growth. The business has a high demand from biotech companies for integrated services, functional chemistry and DMPK, discovery biology and clinical trial data management supported through TrialStat, Canada. Our Q4 FY 2022 revenues grew 51% year-on-year, and the EBITDA grew 30% year-on-year, with a margin of 37.6% versus 43.7% in Q4 FY 2021. Our FY 2022 revenue was up by 50% year-on-year, the EBITDA by 56% year-on-year, and margins stood at 37% versus 35.6% last year. As previously mentioned, we are ramping up capacity utilization at our new state-of-the-art chemistry research innovation center at Noida as per the plan. With this new state-of-the-art infrastructure compliant with the highest industry standards and the work we have done to further enhance our operating model, we are able to successfully support the business expansion in both biotech and big pharma segments by delivering superior quality and superior speed, quality and innovation. In view of the strong demand from our customers, we have approved the first expansion of the Greater Noida facility, which will deliver both DMPK services and chemistry services. I'm also glad to share that we are working to shape the new strategic platform, Jubilant CDMO. The reorganization will enable common management of drug discovery services business, CDMO, and generic business, with primary focus on pharmaceutical customers. Jubilant end-to-end model, leveraging our API business, allows to seamlessly transition our customers through a part or the entire of the complete development cycle, from discovery and research to development and manufacturing, including generics. With this, now, I hand over to Syed to discuss the proprietary novel drug pipeline. Thank you, Giuliano. Good evening, everyone. In our proprietary novel drug business, we are focused on developing potential first-in-class and best-in-class precision therapies in oncology and autoimmune space. The company uses Jubilant's proven discovery engine with a structure-based drug discovery expertise and a track record of partnerships. I'm happy to share that we have now started the dosing of the first patient in a Phase I/II clinical trial of JBI- 802 in patients with advanced solid tumors. The Phase I/II trial is an open label, two-part dose escalation and expansion study designed to define the safety and tolerability, explore predictive biomarkers, and assess preliminary activity of JBI- 802 in study participants with advanced solid tumors. JBI- 802 effectively modulates two validated oncology targets, leading to synergistic antitumor activity with a reduced risk of thrombocytopenia. This is our first internally developed product candidate to enter clinical development. Other advancing programs in our pipeline include an oral brain penetrant inhibitor of PRMT5 called JBI- 778, which is expected to go for IND filing with FDA here in the U.S. by middle of this year, and an IND-track oral brain penetrant PD-L1 inhibitor, JBI- 2174. These two programs are initially focused on brain cancer, including glioblastoma and brain metastasis. We have transformed Jubilant Therapeutics to a clinical stage biotech with higher value creation opportunities driven by emerging data from first in-human study, including potential capital raise at portfolio level as well as individual asset partnering monetization. With this, I now hand over to Arun to discuss the financials. Thank you, Syed. A very good evening, I thank everyone for taking out time and joining us on our quarterly earnings conference call. I would like to highlight the company's financial performance for Q4 and FY 2022. First, I'll cover Q4 FY 2022 financials. Jubilant Pharma revenue stood at INR 1,528 crore versus INR 1,580 crore in Q4 FY 2021. Pharmaceutical revenue was at INR 1,380 crore as compared to INR 1,148 crore in Q4 FY 2021. Contract research and development services witnessed strong growth with revenue at INR 142 crore as against INR 94 crore in Q4 FY 2021. Reported EBITDA during the quarter was at INR 244 crore as compared with INR 381 crore in Q4 FY 2021, with margin of 16% versus 24.1% Q4 FY 2021. Depreciation and amortization expenses during the quarter was at INR 101 crores versus INR 86 crores in Q4 FY 2021. Finance cost was at INR 40 crores versus INR 43 crore in Q4 FY 2021. PAT was at INR 59 crores as compared to INR 173 crores in Q4 2021. EPS was at 3.74 versus 10.86 in Q4 2021. Now I move on to FY 2022 financials. Full year revenue was at INR 6,130 crores versus INR 6,099 crores in FY 2021. Pharmaceutical revenues at INR 5,651 crores as compared to INR 5,790 crores in FY 2021. Contract research and development services witnessed strong growth with revenue at INR 457 crores as against INR 305 crores in FY 2021. Reported EBITDA at INR 1,186 crores versus INR 1,414 crores in FY 2021. Depreciation and amortization expense was at INR 382 crore versus INR 349 crore in FY 2021. Finance cost at INR 145 crores versus INR 184 crores in FY 2021. Blended interest rate, average blended interest rate for FY 2022 improved to 4.56% from 5.07% in FY 2021. Effective tax rate was at 34.5% versus 34.1% in FY 2021. PAT was at INR 413 crore as compared to INR 570 crore in FY 2021. EPS is at 26 versus INR 36.05 in FY 2021. Net debt on a constant currency basis on March 31, 2022 was at INR 1,860 crore versus INR 1,928 crore as on March 31, 2021. On YTD basis, net debt on a constant currency was lower by INR 69 crores as compared to March 31, 2021. Capital expenditure excluding R&D capitalization was at INR 87 crore for the quarter and INR 437 crore for FY 2022. We expect to incur CapEx of around INR 700-INR 750 crore in FY 2023, primarily towards expansion in our CMO business and enhancement of CRDS capabilities and capacities. In addition, we expect product development expenditure of INR 250-300 crores. With this, I would like to conclude our opening remarks. We will now be happy to address any questions that you may have. Thank you. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Anyone who has a question may press star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, if you wish to ask a question, you may enter star and one. We'll take our first question from the line of Vivek Gupta, an individual investor. Please go ahead. Yeah. Thanks for the opportunity. I'll start with a basic one, and then I'll proceed with more of the performance perspective questions. My first question to management is, if you are scheduling a conference call for 5:00 P.M., why are you releasing the results at 4:40 or something? At least give some time to the investors to go around the presentation to understand what is your financial performance. If you cannot deliver the results in the market hours of the same day, at least then schedule a conference for a day later. This is one general feedback. The next point is, we have been talking about this import alert at Roorkee plant for the past some quarters now. When the import alert was issued, we told that it is a small alert, and it is more of hygiene perspective things, and it should be resolved soon. I understand the U.S. FDA inspections were pending, so it might take some time. It might have taken some time. I think, now you're saying that it'll be resolved by mid-calendar year. I'm not sure why we are going in that direction. We are not able to resolve the import alert as per management commentary earlier. The next thing is, I've been seeing that management is using this term for COVID, COVID in every quarter of their non-performance. I expect that going forward, if the COVID is actually the reason, we should use that term. But if it is some other reasons, there's some US generic pressure going on and some other things, let's not use and cover the non-performance behind this term COVID. I also want to understand why we have been reporting such low margins quarter by quarter. We have seen that Jubilant Pharma is not having a clean U.S. FDA record a year also. What precautions you are taking for the other manufacturing facilities which are not under observation for now, so that no further alerts are issued by U.S. FDA? Thank you. Yes, Vivek, this is Pramod. Your feedback on the timing of the releasing the results and the timing of the investor call is duly noted. Thank you very much for the suggestion. We have made a note of the same. With regard to your other questions, coming on to the Roorkee import alert. When the import alert was issued, that time also we indicated that all the remediation activities will be completed by early 2022, in the first half of 2022. Now, the import alert may have been issued due to the cleaning validation, et cetera, not an issue on the data breach or data integrity. But whatever is the remediation required on the cleaning, especially when you are operating the plant with the multi-product on the campaign basis, we have to go through the protocol. I don't think there had been any wrong judgment on the timing part. Even in my call, I mentioned that we expect to complete this in the mid of the calendar year 2022, and we are almost on the verge of that. Once the remediation activities are completed, we are as such keeping the U.S. FDA informed time to time on the progress. Once we have informed to the U.S. FDA that all the remediation is completed, then please appreciate we will have to wait for U.S. FDA to come for the inspection and wait for the outcome of the inspection, though as of now we feel quite confident that the kind of remediation we have done, the inspection should go through well and import alert should get lifted. With Okay. With regard Yeah, yeah. Go ahead, please. No, no. You can go ahead. No, no. Continue, please. Sorry. With regard to your comment on the COVID, for the generic business and the API businesses, there may not have been that much impact on the COVID, but in our commentaries we have been talking about COVID impact predominantly on Radiopharma business, which is an elective diagnosis, where each procedures in the hospital setup lasts the couple of hours. Such procedures, and especially in that also the lung procedures, have definitely taken a hit because of the COVID. While they have taken a hit, the doctors have shifted to the other modalities like CT, et cetera, which may not be as precise and as accurate as the nuclear medicine lung procedure gives the image, but they are more convenient. You can do the CT scan in 5-10 minutes instead of making the patient wait for two hours for the nuclear medicine procedure. In spite of COVID number of cases having gone down, in the U.S. situation continues to remain volatile. The lung procedures are taking time to come back to the earlier level. We have been seeing the same. Our two products which are impacted because of this, the MAA and the DTPA. The DTPA has taken a larger hit than the MAA. That's a reality which we have to accept. There are the reports available, which we have seen and everyone acknowledges that, yes, these procedures have taken a hit. I am missing your third question. If you can please repeat. I'm saying that, as per your history, company's history, you guys don't have a clean. Yes. U.S. FDA record. It is not for the first time that an import alert has been issued at Roorkee plant. As a part of the ramifications or to avoid these type of situations in future, what are the steps that management is taking? The management has. Can you update manufacturing facilities? One is that I may not necessarily agree 100% with you that we do not have a clean record on the U.S. FDA. No, your company history clearly states that. I think it's nothing to disagree or agree. It's in your company's history that you guys don't have a clean U.S. FDA record. A small import alert to resolve, you guys are taking 1.5 years or so. You don't understand the investors' wealth, which is getting diluted in the meanwhile. There is a couple of quarters for non-performance. I do understand it may be a quarter or two, but down the line, if you guys are not giving any good performance, you understand your EPS has got halved from the last financial year. I cannot digest that thing, that EPS has got halved. You guys are giving the statements in your opening remarks, and I think there's nothing to feel proud of with the performance which you have been delivering. I'm sorry if I'm being blunt, but that's true. See, I You can continue, take some other questions. I'll step out. Sorry. No, let me answer your question. We have six manufacturing sites in Jubilant Pharma, and currently our two sites are under compliance issue. The four other sites in North America are having a very clean record, and that's why I said that I may not necessarily agree 100% with you. Yes, our two sites in India do have a compliance issue. Once the site is put under import alert, if you look at the other companies, the time they have taken to come out of the import alert, it's generally always between one year to three to four years. We came under import alert last year, and we are still feeling confident that if U.S. FDA comes for audit in the Q3 and Q4, we should be out of it. That's the status as of now. Our EPS has come down because of the import alert. Performance is impacted, but the performance is also impacted because of the other reasons which we discussed earlier, which we expect now that is going to bounce back. Though we indicated to the market earlier that we expect FY 2023 to be as stable as FY 2022. For each of the business, robust strategies we have in place, we expect quite a turnaround from FY 2024. You had also asked question about what are the measures we have taken. We have taken lot of measures. Each and every observation of any regulatory agency which is there at any of the sites, we are implementing that 360-degree across all the plants. We have also done a lot of changes in the way we manage all our quality systems, the way we have the quality governance in place. We have taken help of the best of the expertise available. The entire team is working very hard on this, and we are ensuring that each and every plant is always ready for any inspection. There have been various inspections in our other North American sites after the Roorkee import alert, and those inspections have gone extremely well. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question at this time, you may enter star and one on your touchtone telephone. Anyone who has a question may enter star and one. We'll take the next question from the line of Vishal Manchanda from Nirmal Bang. Please go ahead. Thanks for the opportunity. Can you quantify as to where are we in DTPA and MAA in terms of below normal? Are we at 80% of the normal sales or 70% of the normal sales? Yes, Vishal. In case of DTPA, we are seeing it's still at about 60% of pre-COVID levels. In case of MAA, there have been variation quarter on quarter. When I look at overall year, we are at about 80%. For the fourth quarter, where would MAA be? Fourth quarter was especially good performance for the MAA and the DTPA kind of the product. I mentioned in my call that this is because of the easing of the COVID as well as some customer order scheduling. Because when we look at overall vials what we have dispatched and overall scans which are happening, we see inventory getting built up in the system, and I expect some correction on that part in the next quarter. MAA and DTPA sales might correct. Radiopharma sales might correct next quarter, 1Q FY23. Yeah. That's what we are seeing the trend, because the overall number of the procedures have not gone up in proportionate to the overall procurement the other customers have done for these products from us. Any guess on when we can see these products be 100% normal quantities being shipped for these products? Maybe four quarters down the line, or it can take still longer? I don't expect that shift will happen overnight. Like DTPA had gone down to about 20-25%. It has come back to 60% in two years' time. We expect it to come back slowly. We feel that it will take at least about a year or more to come back to the pre-COVID level. MAA didn't go down so low. It went down to close to 60% and has bounced back to 80%, but it still has room to cover. Whenever there is MAA used, either DTPA can be used or xenon gas can be used. Is that right, understanding? Absolutely correct. Okay. Xenon gas probably has got a better share now versus DTPA earlier. In our radiopharmacy business we are also distributing xenon of others, and we have seen that the xenon is also equally hit. Is it right to say that doctors are comfortable using xenon gas and hence DTPA demand might not normalize at all? For pulmonary embolism, when it's at a critical stage, then the correct diagnosis doctor can do only with the VQ procedure where they use MAA and the DTPA both. Now, as I mentioned earlier, one can go for less accurate modalities, but then it is the issue of how correct diagnosis the doctor wants to do. On the Radiopharma distribution business, we have been working to turn this around, and this has been a loss-making business for us. Where are we in the journey, and have we been able to re-cut some of the losses there? Yes, absolutely. Quarter-on-quarter, we are seeing that our losses are coming down. The business is still under losses, so we had mentioned that by FY 2024 it will break even. The way the pace at which the losses are coming down, we are very confident that by FY 2024 the business will be at break even. I also mentioned in my speech that we have seen in the last quarter higher volume and which have led to the lower losses. The losses are coming down in that business because of not only just the volume. We have implemented all across the three-pronged strategy. The higher top line, where the contribution flows down to the EBITDA because cost proportionately doesn't go up. The higher operational efficiencies, in terms of drawing up more doses from same number of vials, and also the procurement efficiencies. Procurement efficiencies we have already implemented. We have seen as our volumes are growing, our operational efficiencies are also increasing, plus those higher volumes are also leading to the higher impact into the bottom line. Would you also need to shut down some of the pharmacies that kind of less utilized or significantly underutilized? We have done that. In this business at one point of time we had close to 52 pharmacies, and now we have close to 48. Very strategically on the selective locations we have done that. Plus at some places, we have started operating the pharmacies with the hub-and-spoke model, where, when the requirement at any of the pharmacy is not up to that extent, and that is operating as a spoke to another hub nearby. With that also we have been able to reduce our cost quite a lot in those pharmacies. If you could quantify what is the remediation cost you would be incurring? That's not much. That means it may be just, you know, just a couple of million dollars. It's a small amount. Okay. Just one more on RUBY-FILL. How is that progressing? Sorry, can you please repeat? Is RUBY-FILL growing in market share, and was Q4 good for RUBY-FILL? Yes. On the RUBY-FILL, we remain very upbeat. As I mentioned that our Q4, the number of installs, were substantially higher than the Q3. Overall in FY 2022, the installs could have been better, but we did have the issue related to the COVID. The way currently, we have the product, the pipeline and, we have the number of contracts under negotiations, et cetera, we are seeing FY 2023 to be a very strong year for the RUBY-FILL. Okay. What kind of a growth can we look at for RUBY-FILL? In terms of growth, I can confidently say to you that we will definitely be ending up the FY 2023 with more than 50% the installs with what we started FY 2023. Okay. Finally on MIBG, when can we see the data on that drug? So our The drug being tested for neuroblastoma. Our plan for the submission is FY 2024, and then launch in FY 2025 for Phase II. For Phase III, the plan is to make the filing in FY 2025 and launch in FY 2026. I'm sorry. Both the trials are going fine. The Phase III is ongoing for which indication? Sorry? Is there a separate trial also ongoing for the same drug? Yeah. There are two trials going. The Phase II trial that only Jubilant is doing. That is for the relapse after chemotherapy. The Phase III trial, we are collaborating with the COG, which is Children's Oncology Group, with the CHOP, Children's Hospital of Philadelphia. That is for the first indication. This Phase II trial that you're doing in relapsed patients, can that be used? So you don't have to do a Phase III there. That can be directly used to file your drug with the U.S. FDA. after Phase II we will get approval for the relapsed. Ah. To use it as a You don't need to do the Phase III trial there. Yeah. To use this as a first indication along with the relapse, we will have to wait for another one more year for Phase III to get completed. Okay. Got it. That's all from my side. Thank you. Thank you. Thank you. Anyone who has a question may press star and one. The next question is from the line of Rishabh Sheth from Karma Capital. Please go ahead. Hi, Pramod. This is Rushabh here. Just a quick question on some color on the margin profile for the business. I mean, if you look at our margins, they're kind of down from about 23%-24% last year to about 16% this year on the EBITDA. How do you see the profitability improving going forward in FY 2023 for the whole business? As I indicated that, FY 2023 we see as a stable year in on the lines of FY 2022. Probably, we may not see the improvement in the margins in FY 2023. But if the Roorkee comes out of the import alert in FY 2023, then we plan to do substantial launches of the products because we expect our all the pending 36 ANDAs will start getting approvals. For many ANDAs, the reviews have been completed and only CRL there is on the facility status. All those products will get launched. As I indicated, the RUBY-FILL we plan to ramp up substantially in FY 2023. That will quite a lot of dent in FY 2024. The radio pharmacies will break even in FY 2024. We also plan to launch at least one generic product, though we haven't got the approval yet, but we are expecting approval to come soon. We plan to launch one generic product in FY that is this year, which will ramp up in FY 2024, and then launch at least another two more in FY 2024. Plus the CMOs and the CRDS continues to grow. With all that, you will see the substantial improvement in FY 2024. How should I look at this, Mohit? On a full year basis, you've done about 19% on the EBITDA, and on the quarterly basis you're actually down to 16%. Should we take full year FY 2022 as a reasonable baseline as, in terms of, you know, margin remaining constant, or should we take the fourth quarter as a baseline? In FY23, we see like in Q1 I expect some corrections happening which we discussed earlier for the radiopharma. Quarter-on-quarter I see improvements. We should be able to do for the full year more like an FY a 19% margin. That's what you're saying? It will be difficult to put the exact number. Yes, the margins, as of now, I do expect to be lower than 20%. 19%, 20%. Lower than that, slightly. Okay. Another question was on the pharmacy side, radiopharmacy side. You know, my earlier participant asked that question. My question is more fundamental in nature in the sense that, you know, we've kind of struggled with this business now for many years. It's still loss-making. Of course, you're saying it'll break even in FY 2024. We have many other growth drivers in the business. We have CDMO, we have CMO, we have API, of course, our radiopharma business. Why should, My more bigger concern is that a lot of management time and effort goes into, you know, kind of turning around this business and, you know, trying to make this pharmacy business profitable. Is it worthwhile for the management to spend so much time and effort in turning around a business which kind of has struggled for so many years and we are still saying two years to EBITDA profitability? Does it make sense, or does it make sense to kind of, you know, you know, take a hard decision, you know, maybe relook at this thing and maybe the time and money is better spent in terms of growing other lines of businesses? It's a more philosophical question to, you know, kind of keep struggling with this pharmacy business, which has kind of taken a toll on us in terms of profitability and of course, management time for the last three, four years now. Hrishikesh, let me try and address the question, yeah. It's a very good question, and you are asking the right question because we also ask the same question internally. If we look at overall radiopharma market in North America, and if we put that number close to $2.5 billion. If you see the number of products which are under development by various companies, including us and many research institutes and many other companies. If you look at the way the large pharma companies are getting interested in so-called the therapeutic and the theranostic products in the nuclear medicine space. If you look at the various reports which are available in the public domain. This market from $2.5 billion is expected to grow anything between $10 billion-$20 billion in the next 5-10 years. Huge growth. We, as a company, are most strategically placed in the market where we have our own research and development. We have our own regulatory and commercial team to get the products approved and take them to the market. We have our own sterile fill and finish facility where we can make the product and do the fill and finish. Then we have our own network of pharmacies. If this entire growth has to be captured, ultimately the product has to reach at the imaging center through the compounding part. Most of that route. If you look at total number of networks in the U.S. for the pharmacies, there are only three or four of the networks. All this growth which will happen has to be channelized through these networks which are there. Now, unless we have our own network, if we keep on doing more and more of the research and development investments into this business, and we are also open to look at inorganic growth opportunities in this business for acquiring technologies and acquiring products. Our strategy is not only to have this network, but rather grow this network and have a higher market share in the distribution, so that when we bring the product, we are able to take the product to the customer, to a much larger base of the customer. It's a long-term strategy. In that long-term strategy, this network becomes very important and it fits perfectly. Yes, if it was a short-term strategy, then whatever points you raised are the valid points. Yeah, Pramod, but long-term also is what? I mean, long-term has to be defined, right? It cannot continue till perpetuity. EBITDA profitability is also not good enough. I mean, you have to kind of make an ROI on the investment. I mean, EBITDA profitability might be good to kind of stop the bleed, but you know, does it make sense? That's why I'm saying. At what point of time you kind of throw in the towel and say that, "Look, this is not making sense." You are absolutely right. I'm sure this is the reason why you would have bought it. But the fact of the matter is that it's not really panned out the way you guys anticipated, and it's kind of taken. Of course, a lot of things have happened in the middle, but clearly still struggling in terms of, you know, trying to break even the business. You know, at what point do you kind of take a call as a board to say that, "Look, guys, this is good thesis, but, you know, it's not working for us and, you know, maybe we need to relook at it." That's my question to you that where will you take a call that you know this, you know, this is bleeding, it's not making an ROI, it's taking up a lot of management time, and should we continue with it or not? One is that we are not saying it's a long-term turnaround. We are saying that it will become break-even in FY 2024. Then we are not saying it will stay break-even. From there it will continue to grow, so the EBITDA will continue to improve. If you look at this entire growth which will happen in the radiopharma business, and especially the therapeutic and diagnostic products, when they get launched, they get launched at 80%-90% margin levels, even more than 90% margin level. The important thing is how to make sure that at such high margin product when you bring into your pipeline, you are able to take them to the customer to a much larger base. Even if into the distribution you are not making much of the money, and even if you are making single-digit EBITDA, that's less important than to ensure that as soon as the product is launched, you have a control where you can have a direct access to the customer as much as possible. Thank you. Anyone who has a question may press star and one. Thank you. We'll take our next question from the line of Chindarkar from JM Financial. Please go ahead. Yeah, thanks for the opportunity. I just want to understand the radiopharmacy growth outlook and the RUBY-FILL franchise. How should we look at it in terms of growth, additions and the way ahead over FY 2023 and going forward? As regards radiopharmacy, as we discussed quite a lot just now, in FY 2023, at least, our focus is to reduce the losses and take it closer to the break-even. Then look at the growth. With regard to the RUBY-FILL Can you comment on any additions in terms of RUBY-FILL? How is it going? What are the any parameters you can help us understand the growth strategy? Yes, I'm coming to RUBY-FILL. With regard to RUBY-FILL, here we have a product which is a state-of-the-art product, where we have only one competitor. We believe and our customers also believe that our product is much better and much more safer than the other product available in the market. Based on that strength and the kind of the response we are getting, the kind of traction we are getting from the market, we have been growing our RUBY-FILL franchise. The RUBY-FILL franchise we plan to continue to grow not only in the U.S., but also outside the U.S. We are installing more and more the units in Canada, in Europe, in the various countries. Our product is now approved in Europe. We are also looking at taking the product approved into the various other countries. Ultimately, we have to take the RUBY-FILL to the global franchise. It has market everywhere. Wherever you have cardiac patients, you have the market for the RUBY-FILL. It's a good product. It's a huge opportunity. The issue is that we have to quickly ramp up. There have been various supply chain challenges in this because of COVID, which we expect now are behind us. As I mentioned that, the pipeline is extremely strong. In FY 2023 itself we expect our install base to grow more than 50% of where we closed in FY 2022. Then we'll continue on this growth journey. Anything around the new products that we are going to add or timelines around that, if you can help us understand? I mentioned one product we are expecting approval shortly. If that approval comes, we'll launch that product immediately within two to three months of the product getting approved. Seeing our filings, we expect two approvals in FY 2024. I think at least another two in FY 2025. Okay. Thank you so much. All the best, and thanks for the opportunity. Thank you. Thank you. Any participant who wishes to ask a question may press star and one. We'll take our next question from the line of Vinay Jain from Karma Capital. Please go ahead. Yeah. Hi. Thanks for the opportunity. I hope I'm audible. My first question was on the profitability of the pharma business. If I just were to compare it on a sequential basis, in the previous quarter, which is the third quarter, we reported EBITDA margins of 15%, and that has certain inventory related write-offs pertaining to certain issue and also, the remdesivir or the COVID related portfolio which was there. Now, on a sequential quarter-on-quarter basis, our revenues have gone up by almost INR 200 crore. Despite that, the margin improvement seems to be not that meaningful. Did we have any similar sort of inventory related write-offs which we took in the current quarter as well? In the current quarter, we took some inventory write-offs in the API business. Okay. Other than that, the margins were lower in this quarter in our CMO business. I'll not say they were lower because the margins now have come back to the pre-COVID level. In the Q3, we still had some COVID deals, which were at a much higher margin. Okay. This now, at least for the CMO business, should normalize at the current level, right? The margins which were there for the current quarter for the CMO business, which Yes. The CMO now will be operating at the stable margins. Understood. And In terms of Yes. RUBY-FILL again. Initially when we had launched it, we had stated that the existing market for the single product, which was Bracco's product, was around $65 million-$70 million. We said that the market opportunity could be as big as $250 million. Despite the settlement, the litigation which was going on with Bracco, we were doubling the installations. Even in one particular year, we had even tripled the installations. Last two years haven't been that great for us. In 2021 there were travel restrictions because of which the installations were impacted. This year also, the year gone by, the volumes were lower than what you guys were expecting. Why this 50%? I was under the impression that the installation should at least continue doubling because of the setbacks which we have seen in the last two years. Now that the Bracco-related litigation has also been settled and the court has given the judgment in our favor. When this Bracco litigation was settled, unfortunately, right at that time, immediately after that, we were hit with the COVID. Right. We couldn't take the complete leverage of that. Okay. Currently in the hospital systems, if you see, when they change such type of the product from one vendor to other vendor, and then they make the changes into their entire, the software systems and their other tools. It's a little lengthier process for them. Especially during the time of the COVID, it takes a back seat in terms of the priority. Because of that, the reasons I'll say that the points which you are raising, that the number of installs could have been even more than 50% what we are guiding. I have not guided that it will only grow by 50%. I said it will grow more than 50%. Okay. We need to wait and see how it shapes up. The way the quarter, the current quarter, we are seeing our discussions with the customer. We feel confident that now we are getting back on the track. Understood. 50% is the minimum which you are expecting over 2022. Got it. Yeah. One question related to the proprietary business. Over there, again, we were looking for some sort of funding either at the product level or at the company level to take care of the clinical trials and IND filings. This year, if you see, there is an expense of around $5 million which has been charged to the P&L. Obviously, with the clinical trials just commencing, the expenses are expected to go higher. Any update on the funding part, if you could provide us where we are right now? I'll request Syed Kazmi to address this. Yeah, sure. Thanks for the question. We are indeed in active discussions with some of the top global biotech investors, as we speak. However, I'm sure you are aware of the volatility of the broader U.S. biotech market in the last few months. We have been very cautious in terms of timing and valuation at which we do external capital raise. Okay. We are very confident that the potential for our platform and pipeline of novel assets, and then as I mentioned in my opening remarks, the programs are moving forward. Yeah. as planned, so hitting all milestones. As soon as, you know, the market improves, we are certainly going to be Reactivating these both at the whole core as well as at the asset level, including potential partnering and asset monetization discussions. If you could just give some color and what could be the cost related to IND filing and maybe Phase I and II clinical trials for these products? Or maybe what could be So the The cost required. Again, we are planning to do almost three more filings in the coming financial year. What could be the cost which could be incurred in, say, FY 2023 for us related to proprietary drugs business? The primary cost is going to be on the ongoing clinical trial program that we have with our JBI-802. The second program is going into IND mid-year. As you know, it takes several months to start the clinical program. That will be maybe towards later part of this calendar year. The 3rd IND filing is right now planned in fourth quarter of FY 2023. I think the primary expense, which is typical, as you know, for a Phase I/II study, it is right now focused on the first part, which is dose escalation. That is usually done in 25-30 patients. Typically depending on the number of endpoints and procedures and imaging to look at the tumor size and tumor shrinkage, and all the safety parameters could anywhere between $5 million-$10 million. Mr. Jain may be requested to return to the queue. Go ahead. Several participants waiting. Thank you. Thank you. Thank you. We'll take the next question from the line of Vishal Manchanda from Nirmal Bang. Please go ahead. Thanks for the opportunity. I just had one question. Can you share the cost of getting tested with RUBY-FILL versus normal route that you do cardiac scans? How expensive is a cardiac scan with RUBY-FILL? Vishal, especially in the U.S., it's a little, there's a complicated system because it will depend upon what kind of insurance you have and how much co-pay you have on that. But, If it is entirely out of pocket, what would be the cost? Just a ballpark number, I'll say one can take around close to $2,000. It will depend upon. It could be higher or the lower, depending upon what kind of the policies the people have with their insurance companies. What would be the cost of the SPECT scan, right? Cardiac SPECT scan. That could be probably about the anywhere between, there's a 30%-50% of this. Okay. When you look to launch it in other geographies, you would need to ensure there's a reimbursement mechanism in place considering the cost of the tests. Is that also something that you need to kind of work on while you are looking to build this product in geographies beyond the U.S.? I'll answer this in three ways. One is that you are right. The reimbursement mechanism has to be put in place in the countries where we make an entry. That's what we continue to evaluate. The other thing you have to look at from the patient perspective, like when in absence of the RUBY-FILL, when the patient goes to the doctor with any of the heart issue, heart pain, et cetera, we have seen almost in 80%-90% of the cases, patient comes back with one or two or three stents in the arteries. That's a kind of a common practice. We will do the scan and some blockage will be there and a stent will be put in. With the RUBY-FILL, when they are able to measure the blood flow and they are able to quantify how much is the blood flow in the artery, even if there's a blockage. We have seen that at least two to three patients out of every four patients do not require a stent. The patient feels much more comfortable that they have been able to avoid so much of unnecessary intervention otherwise, which would have been if the stent was put. The third point is that wherever there's insurance, for the insurance companies, the cost comes down. You are trying to compare the cost of the scan, but when you also add the cost of putting the stents and then post-care after that, for insurance companies the cost comes down substantially by ensuring that the doctors are recommending the scan through the RUBY-FILL, and then only the required patients are going through the procedure. Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference back to the management for closing comments. Over to you, sir. Thank you all for joining this call. For any further queries, you can get in touch with me, Vineet, and we'll be happy to answer those. Thank you. Thank you. On behalf of Jubilant Pharmova Limited, t hat concludes this conference. Thank you for joining us, and you may now disconnect your lines.