Ladies and gentlemen, good day, and welcome to the Strides Pharma Science Limited Q2 FY23 earnings conference call. 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 zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Abhishek. Thank you, and over to you, sir. A very good evening, and thank you for joining us today for Strides earnings call for the second quarter and half year ended financial year 2023. Today, we have with us Arun, founder and non-executive chairperson; Badri, managing director and group CFO, to share the highlights of the business and financials for the quarter. I hope you've gone through our results release and the quarterly investor presentation, which have been uploaded on our website as well as stock exchange website. The transcript of this call will be available in a week's time on our company's website. Please note that today's discussion may be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to Arun to make his opening comments. Thank you. Thanks, Abhishek, and good evening to everybody. First of all, apologies for the slight delay in the start of this call. Looks like there was too many investor presentations today, so appreciate your patience. Overall, it's been a significant improvement from where we were a couple of quarters as far as Strides is concerned, and I'm very delighted to report after four or five quarters as far as the business has returned to path of adjusted path. With clear focus on gross margin expansions, cost containment and also exiting several business lines that do not make a greater sense either that has a focus on growth, profits or on cash flows. All of this has led to a healthy margin return for the company. We are happy that we are edging towards our historic highs of gross margins closer to the 60%. We are in line to meet all our previously committed outcomes in terms of our U.S. business, considering that we have reported our best ever quarter since inception of our U.S. business. This has obviously led to margin expansions. We have been very focused on exiting lines of commodities that do not make any sense for us long term or with our price pressures. We have also improved market shares of our existing niche portfolio, getting back to market shares that we lost over the last several quarters. We have significantly improved our supply chain situations. Consequently, our freight and logistics costs have dropped dramatically, considering that we have now brought our supplies back to normalcy. With this and with significant new wins, we are very confident of achieving an EBITDA run rate of $250 million as regards our U.S. business. We are also very confident of now meeting our EBITDA-to-debt ratio to be under three, which should be driven at our EBITDA run rate. It's not common for Strides to have its board meeting so late in the quarter. We were hoping that we would announce the receipt of our consideration that is due from Apotex. I just wanted to give some context here. The money was due on 31st, it's due by 31st of December. We worked hard with the Arrow Australia management to see if we could bring this forward. Of course, this involved cross-border partnership because Arrotex is also owned by Apotex. Those of you who know, Apotex is preoccupied these days with the sale of its business to SK Capital, which was announced a couple of weeks ago. We are now very confident that all the necessary paperwork and board resolutions of the Arrotex side is very close to completing, and therefore, we are now very sure of receiving our consideration ahead of our contractual due date. We hope to give the investors an update very shortly. I hope it's not gonna take too long. I can reassure the investors that there are no contingencies surrounding this payment, and there are two parts to it. The first part, which is $76 million, will arrive to us pre-contractual dates. There's a thirty million, which is subject to certain other conditions. We're working on that. Again, no risk to either. We will keep you all posted. Coming to business and specifics, the U.S. business, as I explained, has now hit a $50 million run rate. We do benefit from seasonality, so we'll see some improved uptick in the following quarters. Having said that, significant market share on existing products and new product launches and the integration of the Endo portfolio helping us add to our revenues and margins. In the other reg markets, you will see this quarter an unusual dip in revenues. This is a one-off situation because we have taken several decisions in our other regulated markets to move away from B2C to B2B, especially markets like Germany and other markets where you'll see it's more an accounting blip for the quarter. I can assure you, I can also guide the market that as early as Q3, as in this quarter, we get back to our historical numbers as part of the other reg markets. That 60-70 crore reduction in revenues or INR 600 million reduction in revenues is a one-off. You'll see improved climb back of revenues but also improved gross margins in that business. Our focus of investing or staying investing in PNOs that have completed the EPS as claimed to in the last 6-odd months, we have improved our network optimization and under recovery significantly. Our OpEx has reduced. We now have a $25 billion-$30 billion OpEx reduction completed. We have seen most of it in terms of the cost we've announced, including the last big one in the U.S., where we have to follow local regulations, issued very recently a WARN notice to reduce our headcount in the U.S. That will lead to a further reduction of $11 million and end the year with a $25 million reduction in costs across the P&L, which is a great outcome considering that we've achieved a lot of this at short notice. Given our guidance on debt to EBITDA, we also have a little more granularity on our debt book, and well, Katheryn will spend some time explaining that. I just want to add some color around it. Strides currently has a very significant inventory pickup, especially for the U.S. and U.K. operations as business comes back to normalcy. We also have very significant inventories due to our headcount change during COVID. As we're building the business, we're also reducing our inventory levels, which will lead to improved cash flows in H2. We're very confident of meeting our guided debt reduction of INR 1,000 crores. Most of it, as you will appreciate, occurs in H2 as we have previously implied. You'll see a slight elevation in our debt book of around INR 100 crores, which is predominantly because of exchange rate reset. While we have grown the business with improved outcomes, we haven't increased our debt. Also very important on the debt book is that our long-term debt is very small compared to businesses of our size. More of our debt is associated with the long working capital cycle times that are required to operate in the U.S., which is over 200 days as an industry norm. We still believe that we have a slightly elevated working capital usage today. As we normalize in H2, we'll see this also coming down. We're very confident of bringing down our net to below three based on our very strong order book in H2. The business that obviously is muted is the institutional business. For those of you who follow this business, this business is typically contracted for 2 or 3 years at a time. The large global contracts with the last award has been continued in H1. We had a very strong H1 with a weaker Q2 and with a very strong Q1, as you would notice. You'll also note that the new contracts are not yet awarded to any companies, and we don't expect this to fall in place until Q4. The institutional business will see a significant softness, but the rest of the business will make up for that. As we all know that it helps us in our recovery of our manufacturing costs, but it doesn't add too much to our gross margins. It's not unfavorable, but I just wanted to guide that institutional business will be soft, although it will not be material in terms of EPS accretion. That's the other parts of the business. Of course, we can take questions. I've covered a little bit, pointing out to me that I've covered a lot in terms of also the from the deck page. Considering that we started a little late, I think we should open up the house for questions. If we aren't able to address all the questions, please don't hesitate to contact us at any time, and we'd be more than happy to explain. Before I do that, I just wanted to give a little more color around Stelis. First, as far as Stelis is concerned, we continue to engage before we get into any arbitration or litigation with our partners in Russia to see how we can find solutions around the stock of Strides that we still hold. Having said that, promoters have committed to infuse along with our lead partners TPG an additional INR 500 crore into Stelis to ensure that we meet all our obligations. Consequently, between Strides and Stelis, between INR 1,300 crore and INR 1,500 crore of debt will be reduced in the group. While you'll also see that the CDMO business numbers reported are not so strong. That is because we have a revenue recognition model which is purely based on work done. We continue to add customers, we continue to get advances. Onboarding customers takes time in this business, from an award to an actual contract, I think can go as long as 8-9 months. We are very, very encouraged with the prospects and the new customers that we are onboarding. We've had three significant regulatory inspections, including two from the FDA and one from the European authorities. We've already completed and this is a year for the first FDA audit, and we're already EU approved. Most pleasing, of course, is to announce that on Friday, we received our first in-house development of our first biologic product for the European market. A lot of our 20-odd contracts that we have signed for recombinant proteins across the world was based on our EU approval. This is a niche product. It's not a massive product, but this is an important product with a 60%+ EBITDA business, which we think post the approval recommendation, national registrations across countries will take in the next 5 or 6 months. Starting from H2, we can see some good uptick in those numbers. Other programs continue, but as we said, we are not investing any new products. Stelis will end up becoming a pure-play CDMO business where we have already invested $250 million. We explained that we would break even probably in the next 18-odd months. Our focus now in Stelis is to reduce our operating losses, improve the order book and acquire more and more customers. We are on track to achieve all of that. We hope that in the next quarter and during the course of this quarter, we will find a solution either way for Smic. It's a take-or-pay contract, so there are obligations around it. We will do everything that is required to protect those rights and benefits that we're supposed to have on that contract. Of course, the geopolitical situation doesn't help the process. Having said that, we'll continue to define solutions. Our strategic process of finding a strategic partner for us to support the growth of Stelis is ongoing. It's very early to tell how that process is going, ongoing in terms of timing. I think for the next quarter update, we'll have better color on solutions around Stelis. We have all the solutions to meet all our debt obligations without any recourse to Strides, which is very important to us as a company. At the same time, we're doing everything now to focus to ensure our biopharmaceutical CDMO business turns around quickly and rapidly like we have done in the case of Strides. That's another overview on Stelis. With that, I will be happy to answer any questions that you all may have. Seema, can you take the questions, please? Sure. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. We have the first question from the line of Mr. Vijay Bhayana from ICICI Securities. Please go ahead, sir. Yeah. Hi. Am I audible? Yes, sir. Okay. Thank you so much for the opportunity, and congratulations on the set of results. Just a few questions. Firstly, on the U.S. side, can you explain how the Endo portfolio has Strides contributing, and this is one way that you're hitting the $15 million to $150 million in the next couple of quarters. From this presentation, what I understood is that roughly about 60 products of the portfolio has been launched and about 20 products are pending approval, and I think we have about 260 therapies. Out of the pending basket, could you just explain what are the kind of products which you believe are sustainable in terms of viable in terms of financial aspects and probably which you might not want to consider from qualitative aspects? That will be helpful. Yeah, sure. You know, what we have effectively done as part of our strategic overview and turnaround strategy for the company is to go back to what we do well, which is to do products which have got some level of difficulty, very few players, small molecules, and we effectively exited all the commodity plays. We don't do any large volume products, where we are not fully integrated or we have control on integration. Out of the 200+ products that have still not been launched or approved, there's a lot of work that has happened, right? Some of these products, especially from the Endo portfolio, are old. We are reworking them for the customers to ensure that we get the right quality, to source change because these are older files. We believe that an additional 80-100 products in the unlaunched or the relaunched products will meet the criteria of gross margin, and we discovered the company is known for pre-COVID, which is gross margin is about 60% and EBITDA in the 22-23 range. That's what we are looking at. We have products for the next 3 years in hand, and therefore you will see that our spend in R&D is more towards output maximization to other territories and other regions as we build out new regions in the APAC region or Latin America, where we shied away, and also building the emerging market too, using U.S. and India portfolio. We now have over 300 products with Bioequivalence studies. Some work has to be done to ensure that they're competitive, they're robust, and we also need to find the right manufacturing house, or network so that we are competitive for the market that we operate. I think about 20 launches per year would be ideal, including new product launches. Products that would qualify, to answer your question specifically, would be at least 80-100 products. Thank you, sir. The reason why I actually asked this question is because a lot of your peers have been talking about price erosion being stubbornly high. If you are keen on launching or relaunching old products, have these products become financially viable again because of your integration, vertical integration? Or is it because you think that the situation of the environment is improving? If you look at the small and niche products, the average sales for Strides was only about $3 million-$5 million per product. That is the range that we have. During COVID, while everybody had their own challenges, we are now seeing lesser players in this subgroup of opportunity because either some of them have exited or it doesn't make any sense to most of them. Now, we don't see price erosion on those group of products because we may be the only player standing or we may be one of the two players standing in these products. We moved away from, you know, very big businesses volumes that we did. We actually took off almost $25-$30 million of products, as they're not adding up to this model, and we introduced new products. As we are showing a nice uptick in business, we are not adjusting for any of the businesses we let go. Mainly some of the existing players, older players have exited these markets, either part of their risk continuation strategy because maintaining ANDAs are expensive, or has benefited us. Yeah. I think we have some nice runways going forward. We have some very good products that are due for approvals also. All of this will continue momentum in gross margin. What is very important is that with the mutual recognition process that is happening worldwide, we are taking our U.S. portfolio to a lot of other markets and getting products approved quicker. That's where you will see growth also coming up because we obviously don't believe our portfolio can get to more than the $400 million-$500 million range that we guided right from the beginning. We had a slip during COVID, but we are bouncing back and getting back to that range in the near term. Got it, sir. Last question from my side. With about around 50+ launches in the next 3 odd years, do we expect this quarterly run rate, $50 million to be the new base and then gradually ramp up from these levels? Where do we envisage the quarterly or an annual number that you should target 3, 4 years down the line? The second is that since you already know the kind of launches that you're gonna do, what will be the pricing rates which Strides would do in the US business from now on? I think 50 could be the new base, gradual ramp up from there, because we will see like a few products in the 60 gap will not meet our profit criteria. Our goal is to get out this financial year at a 60% EBITDA run rate, which was our historical run rate. That's our goal. We are 57% this quarter. This is. We are actually quite pleased with that. $60 million run rate should be the new base. Your second question was a little confusing for me. You were saying that if we have 60 products, what does it look like? Well, I told you the average revenue per product is in the $3 million-$5 million range. But we also have products that we take off. That's kind of. Basically, what I was trying to tell you is that going back to the $400 million guided number for the U.S., we should have had achieved that now and then COVID hit us. We are now back on track towards that journey. We probably have to give us a couple of years considering that we will build out this portfolio slowly and steadily, and will not be in any urgency to grow the U.S. business, at a pace that we won't be able to manage and retain our profitable profit strategy. Thank you. Just last bit, on the filing rates. How many ANDAs do we intend to file every year? No, actually, we don't plan to file too many ANDAs because we don't need to. For us, relaunching products itself is like getting the product back to R&D, right? If we effectively tell you that there are 20 relaunches, trust me that most of these products will go through almost as much work as developing a new product. Our new filings for the U.S. will be sub 10, because we don't need more than that. Got it. Thank you. This is very helpful. Good luck on this. Thank you, sir. A reminder to all the participants, anyone who wishes to ask a question may press star and one on their touch-tone telephone. We take the next question from the line of Samit Singh, Joy Bhatt from Kotak Institutional Equities. Please go ahead, sir. Doctor, am I audible? Yes, sir. My question is regarding the institutional business. In the first half, we saw total revenues of $39 million. How much of a profit can we expect in the second half of the fiscal? Also, about the new contracts which will start contributing from the next year, first quarter, what kind of contracts are we talking about, and how much of an incremental contribution could they provide? Yeah. We have actually, to be honest, we've already completed all our institutional obligations in H1 itself. We have a zero order book because the new contracts will be awarded only in this quarter. We do not know what is the extent of awards that we'll get. What we have done is, earlier this business was extremely important for us, but we have moved a lot of our production to our team in operations and all of that, because there's a lot of talk about made in Africa for Africa. At this time, I don't have an answer for you because I don't have an order book. The tenders have not been awarded as yet. We will give you an update in the next call. Okay, sir. Thank you. Thank you. A reminder to all the participants, anyone who wishes to ask a question may press star and one on your touch-tone phone. We take the next question from the line of Mr. Rishabh Jain, Individual Investor. Please go ahead, sir. Hi. Thank you for the opportunity. My question is regarding the other regulated markets. Our other regulated market revenue saw a significant decline during the quarter. Historically, we used to do around $40 million quarterly run rate. By when do we expect to get back to those levels? Yeah. I did tell you this, in my opening statement, so you probably have noted this, Rishabh, but I'll tell it for your benefit again. We in our, other reg markets, we made certain changes from moving from a B2C model to B2B model, especially in Germany. Consequently, we had a temporary drop for this quarter. I also mentioned that we will get back to our $40 million run rate as early as the current quarter in that vicinity. It's just a one-off quarter event. Okay. Got it. Thank you. Thank you, sir. We take the next question from the line of Sarvesh Gupta, Maximal Capital. Please go ahead. Good evening, sir. Wanted some update on your balance sheet and financial cost. I think, you know, the kind of net debt number, while the EBITDA is growing, but the overall absolute net debt number that we were chasing maybe a couple of quarters back has sort of gone up, much higher along with the working capital, et cetera. Just wanted some color on that because financial cost has also significantly increased, in the recent quarters. The second thing that I wanted to understand is, the sort of obligation that Strides has on its head because of Stelis. What kind of corporate guarantees and obligations have we given? In the existing, funding round as well as the new round of funds that we are trying to raise for Stelis, will that obligation go away? Thank you. Yeah. I'll answer the Stelis part, and then Dudley will answer your earlier question on this. As far as Strides' obligation. Strides is an equity partner in Stelis. It used to own 100% of Stelis. As we were requiring more and more capital, we obviously got newer investors. Stelis, so Strides has INR 700 crores of corporate guarantee to Stelis on behalf of Stelis. Stelis had, in the beginning of the year, including the Sputnik exposures, a total exposure of around almost 1,100 crores. That will come down to under INR 600 crores in this financial year before March. Strides has corporate guarantees issued for INR 700 crores. At no time any bankers had any delays of Stelis shareholders not being able to pay those obligations. If the strategic process that we have currently ongoing concludes favorably, which we think it will, then there will be no debt at the Stelis level. Consequently, there will be no obligations to Strides. Now, even if there are these corporate guarantees, including the Stelis obligations in the next financial year, in FY 2024, we still believe that as a group between Strides and Stelis, we'll still be under three times, given the strong uptake of business in Strides, but also in Stelis breaking even next year coming to our operations. It is in a strong position to meet its obligations. The Strides corporate guarantees were issued over the last five or six years, and none of it has been called, and we don't see any reason why there would be any challenges to meet those obligations. Strides, Stelis shareholders are committed to ensure that it meets all its obligations on time, including Strides. We don't see any risk to the Strides at all, considering that, like I said, promoters and TPG Capital are just infusing INR 500 crore into Stelis to meet all its obligations. Of which already INR 300 crore has been infused. I'll let Badree answer the question related to the debt. Yeah. On the interest costs and the, it's transferred INR 456 million, a similar number like last quarter. When we are taking this interest cost, we are taking the interest cost as well as the interest income that is occurring in the same. If you look at the interest cost has remained at, the reported interest cost remains at INR 466 million both the quarters. Yeah, there's some increase in the total pharma net debt, I think, like maybe. Overall, the increase in the net debt is about INR 200 crore. INR 1.5 crore contributed by the exchange between first April to thirtieth September. So in- It's only a restatement because of the exchange rate fluctuations. Just one second. For FY 2022, we were at INR 1,350 crore in terms of what we had shown as a net debt figure, and now we are over INR 2,000 crore. It's INR 650 crore plus change. If you can give the breakup of this increase. Yeah, because in this debt, if you look—you're looking at a 1,350 number where it says that INR 700 crore of that is the equity investment in Stelis. When you add that back, it is also to the same numbers. Okay. I'll understand it offline. Thank you. Yeah, please do that. We are more than happy to take it further. Thank you. Yes. Mr. Gupta, was your question answered, sir? Yeah, thank you. He's gonna take it offline if he has more. Please write to us and we're more than happy to discuss the numbers. Sure. That's all from my side. Thank you, sir. We take the next question from the line of Mr. V.P. Rajesh from Banyan Capital Advisors. Please go ahead, sir. Yeah, hi. Thanks for the opportunity. Most of my questions are answered, but I just wanted to make sure that I understood Stelis' debt repayment plan. What you're saying is that we expect INR 500 crores to come from TPG and other investors before the end of the year, which will reduce it from INR 1,100 crores to INR 600 crores. What is the second leg that you were describing, which is what is not yet released to what will bring it down to zero next year? Yeah. Basically, shareholders of Stelis is in the process of raising another round of capital, which is basically to ensure that there's enough growth capital for the debt or till it gets into a profitable situation. Because biopharmaceutical business is a 7-9-year gestation period. We're probably not, you know, we are just about 5 years into that journey. It's gonna take us about 18 more months to break even, to be cash break-even in the business. We have appointed a global banker to find a strategic partner for us for a minority interest. That process has just commenced. If that process concludes successfully and at the right valuation, then Stelis will become debt-free as part of that process. Understood. You expect that to be done sometime next year, right? By March, we should be able. I'm sorry. By March of 2023, we should be able to give you an update, a more concrete update. Understood. Got it. Okay. Thank you so much. All the best. Thank you, sir. We take the next question from the line of Mr. Rohit Munjal, Individual Investor. Please go ahead, sir. Hi, sir. Thank you for the opportunity. I have a couple of few questions. There was a press release this morning regarding request of the market authorization from EMA for Kauliv. Could you please highlight the opportunity in terms of, the size and how much sales are we targeting from this product? This is my first question. Second is, have you onboarded any new customers in our Stelis CDMO business during this particular quarter? And the final question is, could you please provide an update on the AmbiVax-C? Thank you. That is all, my side. Right. ECS is an $800 million opportunity globally. Europe is about $200-odd million. We are only the second recombinant player in the market. Now got the approval, now we have to get national approvals in each of the markets. This process can take up to 5-6 months. We are a B2B partner here. We don't market these biotech products ourselves. We have over 20 customers that have been signed up in Europe and other markets. We're covered for the opportunity almost fully. We don't give specific product business opportunities, but all I can tell you is that there's a high gross margin, high EPS product. We do not give specific product-wide sales on this product. We did onboard three new customers during the quarter, as far as the CDMO customers are concerned. You had the third question, if you could just repeat it. AmbiVax-C. On AmbiVax-C. Sorry. AmbiVax-C, we've submitted all our clinicals, which we got outstanding readings on our clinicals on AmbiVax-C. As you know, it's a thermostable vaccine. We submitted our data to the government authorities here in India. They have, however, because it's no more an emergency, they have asked us to do some additional clinical work. We are in discussions with our partners in Boston to work through that and create the protocol. The small additional work, which may take 2-3 more months before we can submit that data that the agencies have requested. It's going on track. At this stage, considering that there's no particular emergency, there is no haste for data seeking also. We are seeing increased interest for products which are thermostable, as COVID hasn't gone anywhere, as we all know. At this stage, there's more work to be done. Okay. Thank you, sir. Thank you. We take the next question from the line of Ayushi Jain, individual investor. Please go ahead. Yes. Thanks for the opportunity. I'm audible, right? Yes. Yeah. I've got two questions. First one, the gross margin. We have seen significant expansion during this quarter. What are the drivers for the same, and are these margins sustainable in the coming quarters? My second question is regarding our OpEx, which includes employee costs and other expenses. We see that we have been very well controlled with that INR 420-INR 425 quarterly run rate. Is there any scope to reduce this further? Yeah. Thanks. Thanks for your question. There's a little background noise, so we couldn't hear your questions well. I get, is the gross margin sustainable? The answer is yes. It's driven by a combination of cost reduction, improved gross margin expansion, reduction in our logistics costs. We believe that this 57% is sustainable, and we can grow moderately, modestly from there. On OpEx, there's a very significant exercise going on in the company to reduce our OpEx. A lot of the actions have been taken, but we have to follow due process in all of this. You'll see that during the course of the year, we would have reduced our OpEx by at least about INR 150 crores over the current level. The flow through you will see only next year, as there are standard practices of serving notice, severance. We are carrying on this cost as you see. Understood. Thank you. you. Thank you so much. Sure. Thank you. We take the next question from the line of Piyush Rana from Yellow Jersey. Please go ahead, sir. Hi. We have delivered double-digit EBITDA margin this quarter after almost 4-5 quarters. Are we confident of getting to our previously indicated 21-20% kind of margin by FY 2024? If yes, like, what would drive this margin expansion? Well, I just think that we have a very disciplined approach of how the business is now being administered or governed and run. If we follow this for the next 2-3 quarters, yes, the answer to your question is yes. We think that we should expand margins even further from the 11% even within this year, for us to even if you assume our guided debt to EBITDA, we need to get this number from INR 100 crore to INR 150 crore, which means that we should be more like the 15%-17% EBITDA even in this financial year. We can speak until then and then probably discuss what happens the next financial year. That answers my question. Thank you. Okay. No problem. Thank you, sir. We'll take the next question from the line of Vibha from Citeline. Please go ahead. Hello. Am I audible? Yes. Yeah, hi. This is with regard to BioXcel Therapeutics, under which the 40 by 40 of biosimilar is expected to be launched. I just want to know, since this goes about, you know, getting minority shareholders into Stelis, what's the logic of, you know, separating out this products business under BioXcel Therapeutics? Because does it not make the case a bit weaker for a higher valuation that you might be trying to get, you know, from the minority shareholder? Does it set back the date for Stelis breakeven? No, it doesn't because you can't be a CDMO and a product company at the same time. It's a conflict of interest. Does it not affect the valuation then? Well, there would be a valuation ascribed to BioXcel, and there's a valuation ascribed to the CDMO business. Right. You know, what is the further plans for BioXcel? Like I said, we've appointed a global banker for a strategic review and all, and all strategic options are on the table as part of that process. It's a little too early in the process for us to give you a guidance. Like I spoke to another investor earlier in this call, March would be a good time for us to give you an update on how that's going. Okay, sure. Just one more question on the strategy for AmbiVax-C. You know, given that there are even intranasal vaccines which are much easier to administer, you know, even self-administer. What would be the strategy for marketing this vaccine? AmbiVax-C, once it gets approval, and when it gets approval, is the world's only thermostable vaccine. It is designed for frontier markets where supply, I mean, cold chain is a challenge. Therefore we just believe that in frontier markets like Africa or parts of Latin America, there isn't enough dollars for convenience, I mean, dollars for high-end products like a nasal spray and other stuff. At this time we are working with global NGOs, large organizations to partner with us, and also working with large governments, as we believe that they need to support our kind of a cause. We don't see... We just see a marginal improvement in the delivery format, in what we have, and I really can't comment on how well a nasal cold vaccine is going to work or an oral vaccine is going to work. I'm sure there's a lot of science behind all of that, but we are just not qualified to to kind of suggest one is better than the other. I believe there's a value in staying invested in a program like AmbiVax. We are staying invested with that. Let's see what comes up with the additional clinical data that is supplied before we take a call on putting more capital around that. Right. My last question is around the institutional business. I believe you earlier said that you're moving some of the manufacturing to Kenya. Which would these products be, and have you identified the specific contract manufacturer or another partner? If you could just throw some light on that. Although it is deconsolidated from Strides, the Kenya business is fully owned, I mean, it's fully managed by us. The company, we own 49 percent of the company effective this quarter. We continue to manage and operate the business. We may not consolidate the top line, but we consolidate the economics. Okay. This would be own facility where you would manufacture these products. Would you be able to name some of them or? It's a regular. We have every product that we have approved under the WHO program. If you go to the WHO site, you'll see all our products that are listed for manufacturing either in India or in Kenya. It's just that we use our capacities for the markets that we are now focusing on. We'll do more and more production to Kenya on the institutional business. Okay. Thank you. Thank you. We'll take the next question from the line of Gautam Jain from GCJ Financial Advisors. Please go ahead, sir. Good evening, sir. Afternoon. Yeah. I was looking at your U.S. business. You have done $106 million in first half, and you said in the presentation your full year revenue will be $250 million. I think you're still to do $144 million in the second half. How confident are you to do that? You see, we are saying that we will be at an exit run rate of $250-$250 million. In absolute, we may be 10 or 15 million dollars less than $250 million. Our gross margins based on what we are now delivering will give us the same outcome if we do $235 or $250. That's our focus. It's not so much how much revenues we are gonna get. It's how much margins we are able to extract out of the new strategies that we are deploying. We will exit at a $250 million run rate. Which means that we have to do an average of around $65-$67 million, which we don't think is very difficult to manage from where we are today. Okay. You also mentioned your demand that your exit net debt to EBITDA would be less than 3. Can you just throw some more light into it? Because then is it like you are annualizing Q4 EBITDA, and then you are comparing it with the net debt at the end of the year? Yeah, that is exactly how it works when we announce the guidance. Okay. You're assuming that your EBITDA margin should be more than 1%-3%? Whatever. Okay, thank you so much. Thank you. Thank you, sir. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments. Thank you, all. Thank you for joining this call, and as we said please feel free to write to us if you have any follow-up questions. Thank you and appreciate your support. Thank you. On behalf of Strides Pharma Science, that concludes this conference. Thank you for joining us. You may now disconnect your lines.