Ladies and gentlemen, good day, and welcome to the Q2 FY 2025 Earnings Conference Call of Sun Pharmaceutical Industries Limited. 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 call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Dr. Abhishek Sharma, Vice President, Head of Investor Relations and Strategic Projects. Thank you, and over to you, sir. Thank you. Good evening, and a warm welcome to our Second Quarter FY 2025 Earnings Call. I'm Abhishek from the Sun Pharma Investor Relations team. We hope you have received our Q2 financials and the press release that was sent out earlier in the day. These are also available on our website. We have with us Mr. Dilip Shanghvi, Chairman and Managing Director, Mr. CS Muralidharan, CFO, Mr. Abhay Gandhi, CEO, North America, and Mr. Kirti Ganorkar, CEO, India Business. Today, the team will provide an update on financial performance and business highlights for the quarter, pipeline updates, and respond to any queries that... any questions that you may have. We will refer to the consolidated financials for management comments. The call recording and call transcript will also be put on our website shortly. The discussion today might include certain forward-looking statements, and these must be viewed in conjunction with the risks that our business faces. You are requested to ask two questions in the initial round. I also request all of you to kindly send in your questions that may remain unanswered today. I will now hand over the call to our CFO, Mr. C.S. Muralidharan. Welcome, and thank you for joining us for this earnings call after the announcement of financial returns for the second quarter, FY 20 25. Our Q2 financials are already with you. As usual, we will look at key consolidated financials. Q2 FY 202 5 sales were at INR 132,642 million, an increase of 10.5% versus Q2 FY 20 24, and an increase of 5.9% versus Q1 FY 2025. Besides the underlying business growth, we also had higher sales of lenalidomide in U.S. in Q2 versus Q1. Material cost stands at 20.3% of sales, lower than the same period last year on account of better product mix. Staff cost stands at 18.7% of sales. Other expenses were at 32.5% of sales, higher year- on- year and Qo Q, on account of higher selling and distribution expenses. Product gain for the quarter was INR 1,281 million, compared to a loss of INR 341 million, same period last year. EBITDA, including other operating revenues, was at INR 39,390 million for Q2, an increase of 23.9% over Q2 last year, with EBITDA margins for the quarter at 29.6% against 26.1% for Q2 FY 2024 and 28.5% for Q1 FY 2025. Net profit after tax for Q2 FY 2025 was INR 30,402 million, up 28% over reported net profit of Q2 last year. EPS for the quarter was INR 12.7 per share. As of thirtieth September 2024, net cash was $2.6 billion at the consolidated level. Now we will discuss the half-year performance. For the first half, gross sales were at INR 257,887 million, a growth of 8.4% over first half last year. Material cost for H1 was at 20.8% of sales, lower than H1 last year, mainly due to product mix, including higher specialty sales. Staff cost stands at 19.1% of sales. Other expenses were at 30.7% of sales, higher than H1 last year on account of higher selling and distribution expenses. Forex gain for H1 was INR 776 million, compared to a loss of INR 321 million for the same period last year. EBITDA for the first half was at INR 75,466 million, a growth of 15.9% over the first half last year, with resulting EBITDA margin of 29.1%. Net profit for H1 was at INR 58,758 million, up 24.5% over adjusted net profit of H1 last year, excluding the exceptional items of H1 FY 2024. Now over to Kirti, who will share the performance of our India business. Thank you, Murali. I shall take you through the performance of our India business. For Q2, the sales of formulation in India were at INR 42,652 million, recording a growth of 11% over Q2 last year. India formulation sales accounted for 32% of total consolidated sales for the quarter. Sun Pharma ranked number one and holds 8.1% market share in the over INR 2,170 billion Indian pharmaceutical market, as per AIOCD AWACS MAT, September 2024. Corresponding market share for the previous period was 7.7%. A small note on the new AWACS market share series. From September 2024, AIOCD AWACS has rebased its data, leading to lower market share reflections. Prior period data has also been rebased. Sun continues to show similar market share gains and volume led growth in the new series. We are amongst the leading contributor to the volume-led growth of the IPM. In top 300 brands of the IPM, Sun Pharma has 28 brands, which is the highest number of brand by any company. For the quarter ending September 2024, we grew higher than IPM, and we have done well across all three presented therapy areas. Majority of the sales growth continues to be led by volumes and new products, launches versus IPM growth, which is predominantly price led. As per SMSRC March, June 2024 report, we continue to be number one ranked company based on prescription volume. Sun Pharma is also ranked number one by prescription with 13 different doctor categories. For Q2 FY 2025, the company launched 14 new products in India. I will now hand over the call to Abhay. Thank you, Kirti. I will update on the performance highlights of our U.S. businesses, which includes the US portion of Taro as well. For Q2, our overall sales in the U.S. business was up by about 20.3% over Q2 last year, to $517 million. The U.S. accounted for over 33% of consolidated sales for the quarter. The U.S. specialty business has continued to do well and has grown over Q2 FY 2024. The underlying business and the prescription trend for the specialty business remains strong. For Q2, we launched two generic products in the U.S. I will now hand over the call to Mr. Shanghvi. Thank you, Abhay. I will now provide an update on performance highlights of our other businesses, as well as give you an update on our R&D initiatives. Our revenue in the emerging markets were at $293 million, up by 3.2% over Q2 last year. The underlying growth in constant currency terms was 5% year on year for Q2. All our large markets, barring a few, have done well in local currency terms. Emerging markets accounted for 18% of total consolidated revenue for Q2. Formulation revenues in rest of the world were $199 million, lower by 3.5% over Q2 FY 2024. Japan price cuts, as mentioned in the previous quarter, are an important reason for revenue decline in ROW. We expect this pressure to flow through next few quarters' performance. ROW markets accounted for approximately 12.5% of consolidated Q2 revenues. We continue to invest in building a R&D pipeline for both the global generics and the specialty businesses. Consolidated investments towards R&D for Q2 FY 2025 stands at INR 7,929 million, overall 6% of sales. Specialty R&D accounted for 38% of our total R&D spend for the quarter. Due to delay in the start of some of our clinical studies, our R&D spend is standing below our guidance for the full year. We expect our FY 2025 R&D spend to be in the range of 7%-8% of our sales. Moving to updates on global specialty in Q2 FY 2025, our global specialty sales were up by 19.2% to reach $286 million. Sun recently entered into a global licensing agreement for commercializing Fibromun, a specialty product from Philogen. Fibromun is an innovative anticancer immunotherapy, which is being investigated in registration trials for the treatment of soft tissue sarcoma and subsequently for glioblastoma. With this, I would like to leave the floor open for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Damayanti Kerai, from HSBC. Please go ahead. Hi, good evening, and thank you for the opportunity. My first question is on R&D spend. So you mentioned a delay in some clinical trials has led to lower R&D spend in first half, and then you mentioned 7%-8% range for the full year. So do you think there will be significant uptick in second half R&D spend? And are you seeing pickup in clinical trials which are currently underway? Yeah, I think the new guidance is based on our reassessment of the money that we will need to spend during the second half of the year. And, we believe that and we understand that for first half, the spend is 6%. For us to reach 7%-8%, it needs to go up by a corresponding number, so that the annual number is reaching the guidance. So but any further delay or slow pickup in trials could keep your R&D lower, like, as compared to, like, your anticipated level? That is true. Okay. My second question is on the litigation, which you mentioned here briefly for Leqselvi. So, any timeline to look at the next update on the IP litigation front? And then you can also please provide some update on your expectation for launch timeline for that product. Thank you. Yeah, Abhay. So we're waiting the court judgment, and, really can't put a time to it, so we do not know. Hopefully soon. And, as far as the, readiness for launch is concerned, post the judgment and depending on what that judgment is, you know, we would be ready to launch the product in the market. Okay. But have you, like, done, like, sufficient preparation to launch immediately once the court ruling comes favorably, or it will take some time? So it will be, you know, a couple of weeks, not definitely a couple of months. So to that extent, we will be ready. Cool. Thank you. I'll get back into queue. Thank you. The next question is from Anubhav Aggarwal from UBS. Please go ahead. Yeah, hi. Just making sure, am I audible properly? Yes, Anubhav. Okay, good. So good evening to all. Just, first question is on Leqselvi litigation itself. I'm just trying to understand the scope of this litigation. So based on my reading, the litigation is mainly on '335 patent, where the expiry of this patent is December 2026, which is like two years from now. So two subparts to this question. One is, is the scope of litigation only for two years, or the scope of litigation is beyond the two years as well? That's one part of my question. And second part of the question is that in terms of worst case outcome, what is the worst case outcome here? That is, does Sun have to pay a higher royalty here, or you may not be able to launch the drug itself for two years? So as we understand the litigation, I think the scope of the litigation is correct. I think the patent which they are using to litigate has an expiry date, and up to that is the worst-case situation, that in case if we get an unfavorable judgment and then even on appeal if we lose, then that is the time to which our potential launch gets delayed. Dilip, on the second part of the question, so is this more the worst case on the extent of royalty that you need to pay, whether 10%, 20%, or is it like, do not launch at all for two years? No, I think generally, royalty in similar, such a situation would be subject to a settlement. It cannot be arbitrarily defined as to what would be the royalty and whether with a royalty we can launch or not. Sure. That's clear and- It's a binary outcome. Understood. And the second question was on the Ilumya. Today, when you are in the Medicare Part B market, the medical benefit product, what percentage of prescriptions are you missing already? Because you do not have approval of psoriatic arthritis. So I'm just trying to understand, let's say, a year down the line, if the Phase III results are good, you have the approval, what... Let's say, what percentage prescription we are missing today and what we can get, roughly? Typically, you, I mean, if I look at the other competitors in the market and their data, and also from conversations with doctors, the split between psoriasis and psoriatic arthritis is somewhere, and you can use this as a ballpark figure, so don't hold me to it, is like a 70/30. The 30% is the market you are roughly kept around with. This is data that you can also validate so in the public domain of the others. I mean, that's correct, but my question was that, is Ilumya already being prescribed on off-label basis for those patients as well? So is the incremental gain not 30% or is it lower? Or your sense is that, that benchmark or heuristic benchmark of 30% still valid for Sun as well? I mean, Anubhav, how do you expect me to, you know, comment on any off-label use? So, I mean, when there are options of other competitors who are, you know, on the label- We have no prescription from rheumatologists. Sure. And if a psychiatrist—I mean, the dermatologist is prescribing for psoriatic arthritis, we wouldn't know. But most likely in the U.S. context, they won't prescribe. Sure. And Anub, you need to also appreciate that, you know, if there are other products available whose label mentions a psoriatic arthritis, then the motivation of the doctor to use another product off label is also very low. Sure, sure. My confusion was only on the Medicaid, Medicare Part D, where none of the other ILs are approved. That's where my question was. I mean, I think I've answered the question to the best of my knowledge, Anub. Thank you, guys. This is helpful. Thank you. Thank you. The next question is from Neha Manpuria from Bank of America. Please go ahead. Yeah, thanks for taking my question. My first question is on Winlevi. A little, you know, given the change that we had in strategy, you know, you talked about it a few quarters back. You know, if I look at the IQVIA data, obviously the trends seem to be, you know, not reflecting that change. Are we seeing an improvement in Winlevi sales quarter- on- quarter? You know, is it in line with our expectations? And, you know, what should we expect, you know, in terms of when should we start seeing that prescription traction picking up based, you know, given that we've changed the strategy only a couple of quarters back? We did expect a fall in prescription post our change. Mm-hmm. which is what I had, I think, given Yes On the previous call as well. The focus was on generating a more profitable prescription. I think we've been able to achieve that. That's why the numbers are all good. Now, on that lower base of prescription that we have, I think now our task becomes to grow on that, quarter- on- quarter. And are we seeing that, quarter on quarter, month on month improvement in terms of prescriptions? Yes, I do see that. Yes. Okay. When do you think we get to, let's say, you know, a sustainable level of prescription that you would be happy about? Would it take us a couple of quarters, a couple of years? When do you think we get there? Honestly, I'm already happy with the traction that we've seen, and if I'm able to grow the revenues with a more- Mm. profitable prescription, then, you know, I'm already happy. But having said that, I mean, the idea is to continue to grow prescriptions in whichever product we market, not only in the U.S., but in any other geographies. I don't have a set goal in mind that, you know, at this point I'll be happy. Understood. Okay. And my second question is on the emerging market business. You know, if you could give us some color on what the focus markets are for us in, you know, the emerging market and how we are thinking about growth in that business, because it does tend to be a fairly volatile. I I understand currency is a big factor there, but otherwise, you know, which are the key focus markets and how we should think about growth in the EM? Name them? Yeah, yeah. No, I think we've already shared the key markets like Brazil, Romania, South Africa. Russia. Russia and- Mexico. Mexico. Yeah, I think those are there with you, and the focus would be to find a way to grow in this market. But at the same point of time, we have sales in many other geographies and many other markets, and all of them together make the emerging market business. Sir, the focus in these markets would be growth over, you know, profitability? I mean, you know, because these are markets, you know, each of them are separate markets, you know, how should we think the growth versus profitability in these markets? Because there's fairly large mix of markets. So the way our budgeting process works is that every country is expected to grow both top line as well as bottom line, irrespective of the size of the market. The focus from the business point of view would be that the corporate office, the business development team, as well as the priority for R&D resources, would be allocated to these geographies before they are available to the other geographies. So that's the essential difference. Understood. Okay, got it. Thank you so much, sir. Yeah. Thank you. Thank you. Next question is from Bino Pathiparampil from Elara Capital. Please go ahead. Mr. Bino Pathiparampil, you may go ahead with the question. Am I audible? Hello? Yes, we can hear you. Okay, great. If I heard rightly, in the opening remarks, it was said that the lenalidomide sales in Q2 was higher than Q1. Is this correct? And could you also give some color why or why? It was also higher year on year. Okay. On the specialty side, this Fibromun, which we had in-licensed recently, I believe it's in registration trials. Any timeline regarding completion of those trials? No, no, I think we've also indicated that the trial is managed by the principal from whom we have licensed the product. So, and they are a public company, so till they, what you call, disclose what is their timeline for filing. However, we have seen before we licensed the clinical outcome data, and we feel that it's an exciting opportunity for patients who are currently significantly undertreated for this disease. Got it. And for utreglutide, utreglutide, you were planning to start a Phase II in second half of this year. Is that on track? Have you started it? Yeah, no, I think if you see our disclosure, what we've said is that it'll move to the first half of next year. Okay, understood. Great. Great, thank you. I'll join back to you. Thank you. Thank you. Next question is from Surya Narayan Patra from Phillip Capital. Please go ahead. Thank you for this opportunity. So, first question is on the R&D spend. While we have become a bit aggressive about adding more and more specialty pipeline, and we had indicated about 8%-10% kind of R&D spend. And now we are cutting down to 7%-8% kind of for the current year. So how should one think whether it is because of the savings that is coming from the enhanced capability, clinical capability, what you have indicated that you are building it up? So is it benefit of that, or it is just deferral of certain things that we have seen in the first half, that is, that as a result of that is the number is reducing? So, what your question is whether it's an intentional delay or whether it's a reason why, because of any other reason, the- Yeah. I mean, whether it is the saving that is coming from the enhanced clinical capabilities, what you are building it up. So that has brought in this kind of saving or it is something else? No, I think there is also delay in commissioning some of the studies. So it's not only in-house, saving from managing the studies. Okay. It's still a long time before we get to know whether there is any significant saving because of the change in the what you call organizational capability. Okay. Okay, and the second question is on the U.S. sales growth. See, interestingly, sir, after many, many quarters, what we are seeing that overall, U.S. sales growth is higher than the global specialty sales growth. So generally, the reverse used to be the trend. That. We've not shared- Specialty. We have not shared the U.S. specialty sales. No, I, I mean, since US is the majority of the global specialty. So, if I reframe that, U.S. sales growth is higher than the global specialty growth. The trend used to be the reverse trend used to be the kind of a trend. So what is driving this U.S. business? Because the base business of plain vanilla generic is obviously facing its own challenges. So what is driving, whether it is coming, something coming from the Taro side or any... What is driving the forces, if you can just indicate, and your outlook for the base business also? I think the reason is, you know, pretty obvious. Our major products, whether it is Ilumya, Winlevi, Odomzo or Cequa, we've done well, and, Okay. The team continues to perform and deliver. That's the reason. Right. See, my understanding, they're trying to reconstruct specialty and generic division. Yeah. But in the past, they were doing because Taro numbers were public, so they were able to reconstruct. So no, I think we need to internally debate and understand whether we want to share more information than what we are already sharing. Sure, sir. Just one last quick update, sir. This Chinese Ilumetri launch, whether we have seen any meaningful progress there, any influence that we can see to our ROW sales? I think we are very happy with the kind of traction Ilumetri has received in a relatively short period of time after launching the product, in China. Okay. We expect it to become a more meaningful product as the time progresses. Sure. Okay. Yeah. Thank you, sir. Thank you. Thank you. Next question is from Shashank Krishnakumar from Emkay Global. Please go ahead. Hi. Thanks for taking my question. Am I audible? Yes. Yeah. Hi. My first question was on the domestic piece. So when we are alluding to volume-led growth, would there be a meaningful difference in terms of volume growth across town classes that you're seeing in our portfolio? Would volume growth be meaningfully higher in metros and tier-one towns, for us, as opposed to, say, class two to four towns and rural markets? ... broadly, it will be difficult to share whether it's higher in Tier 1, Tier 2 cities compared to some metros. But what I can tell you, our volume growth is quite strong, and the volume growth for the industry is on MATs September 2024 basis 0.7%, and we are 5.2%. So strong, and I see that is across the businesses. Maybe geography-wise, I don't have the data to share with you, but it is across the businesses. Okay, thanks. That's helpful. My second question was on SCD-044. So I understand that Amgen has received an approval for Otezla for pediatric use, and while this is an age group where there is no other approved option right now. So is that a patient population group that we could also potentially target? Yeah, I think we are waiting for the Phase II data to come, and then we'll decide whether the size of the... Because many times, the agency also requires that, on approval, that you have to do a pediatric study to get the product approved for pediatric patients. And psoriasis, as well as atopic dermatitis, are both conditions for which, there is a sizable number of pediatric patients. So in this case, there is a business case, but we have to take a decision looking at the Phase II data. But in any case, most of the people that develop the product first for adult, population and then go back to the pediatric. Thanks. Thanks. Thank you. Next question is from Anubhav Aggarwal from UBS. Please go ahead. Yes, I have two questions. One is on other expenses. So in this quarter, other expenses are pretty high. Just we're trying to understand, is there any one-off here? For example, when you in-license Fibromun, have you paid some one-off milestone which is included in other expenses or any other one-off there in other expense? No one-off the other expenses for the quarter. So what explains this almost INR 450 crore increase in quarter? It is mainly driven by the higher selling and distribution expenses in U.S. and EM and certain other geographies. Now, there would also be ramp-up costs for launching Leqselvi and... Which are coming to the, expenses for first time. But would you say, Dilip, that this is the new base of other expense for us? I mean, generally, we don't guide for expenses, but I think our focus would be to run the business most efficiently. Sure. Second question is on Leqselvi. Actually, not just on Leqselvi drug, but on the alopecia areata market. So just trying to understand that when you-- there are two existing drugs in the market, and the ramp-up has been slow in last two years, the, of the market formation. So out of the two factors which I can think of, just trying to understand, which is the biggest factor, which is, leading to a slower ramp of the market. One is insurance access or insurance coverage as factor one, and second is doctors' lack of willingness to write, prescribe this category because of the black box warning on the JAK inhibitor class. So out of these two factors, or maybe third or fourth factor, which you guys can help think about that. Because when I see the two drugs on IQVIA, I only see less than 15,000 patients being treated in total, on this category, and that's what I meant by a slow ramp-up here. So, see, in the U.S., access always builds up gradually. It is not that the day you launch, you will get, unrestricted full access across all the payer groups. Some of them have a new to market block. So I think you should also look at access as a continuum rather than a, event upon launch. But I mean, is access the only reason why the- Not necessarily. See, one of the products also has multiple indications. It also depends on where a company may or may not focus. I cannot speak for anybody else, but our focus will be on growing both awareness as well as usage of our product, in that indication. So, waiting to get to market, and then, you know, we will see whether we can grow the market as well. Sure. That's very clear. One, just some clarity on the other expense question which I asked. Let's say, when you include the milestone payment that you paid for Fibromun, where would you capture it? Would it be captured in the R&D expense, or would it be captured in the other expenses? So it's part of, not part of other expenses. It is part of the balance sheet item. Part of the balance sheet item. Yeah. But have you paid anything for it so far? We have provided for it based on the contract. Okay, sure. Thank you. Thank you. The next question is from Vivek Agarwal from Citigroup. Please go ahead. Vivek? Vivek, please go ahead with the question. Vivek, can you... Yes, yes, please go ahead, Vivek. ... Yeah, sure. So my question is related to your obesity molecule, GL0034, right? You presented the Phase I data in June 2023 and now you post the Phase II trials in 2025 right? So it's more than two years, and the gap seems to be substantial, right? So just trying to understand why there is a big gap of two years. Whether you lack confidence in the asset, or are you looking to out-license the product to any big pharma to take it forward? So how to look at this asset? Thank you. No, I think we are very excited. I don't know whether you've kept track, but otherwise, we've been consistently presenting the clinical outcome data, both in healthy subjects as well as in patients, and I think we believe that we have a very, what I would call, best-in-class product. There is a certain amount of delay in terms of starting the large Phase II study, but we hope that we will be able to make up as during the conduct of the study. Understood, sir. And, sir, is it also fair to understand that your R&D spends are expected to move up substantially once you start the Phase II trial of this particular molecule? Or, irrespective of this particular molecule, we should expect R&D spend to go up substantially and to go up in the 8-9% kind of range. Yeah, we will cover it in our guidance. Okay, sir. Thank you. Thank you. That's all my time. Thank you. Thank you. Next question is from Saion Mukherjee. Yeah, hi. Thanks for taking my question, so my first question is, the intangible assets under development that we see has risen quite a lot in six months, so can you explain what is driving this? This increase in intangible asset development, as I just said now, is for the Fibromun product, which we have contracted license from Philogen. Understood. And my second question is on, you know, the psoriatic arthritis indication for Ilumya. Would this require approaching rheumatologists separately? I mean, I understand that... I mean, do you need to make any additional investments for that indication? We will definitely have to cover the rheumatologists. We are still trying to figure out how. I don't have a complete fix on what will we need to do. We still have time, but it's work in progress. But yes, we will have to cover the rheum segment definitely. Okay. But is it possible, sir, to sort of license out or work with some existing player in that segment? I don't think it will be necessary. I think on our own, we'll be able to do a good job. Understood. Okay, thank you. Thank you. Next question is from Rahul Jeewani, from IIFL Securities. Please go ahead. Yeah, thanks for taking my question. Sir, the sequential growth, which we saw in the U.S. business, so apart from specialty and Revlimid, quarter-on-quarter growth, was there any other driver which led to the growth in the U.S. business on a sequential basis? I think in more ways than one, I have answered the question, but the last way I can attempt is, year on year, the generic business, without Revlimid, has shown growth, but quarter- on-q uarter, it's a small decline. Okay. So, so I was just trying to check that whether there were any one-off and new opportunities sitting for us, in the U.S. generic business this quarter. So that wasn't the case, I believe? I don't think so. Sure, sir. Sure, and the second question, which I had, was on the domestic business. So can you talk about your rep expansion plans for the domestic market, given that, let's say a year back, we had added almost thousand new reps to the domestic business. So what are your rep expansion plans going forward? Thank you. I think, yeah, I shared in the past is like, we have expanded our field force, and today we have 14,000 people on the ground who are promoting product to the doctors. So about future plan, we can't comment it, but whatever expansion we have done in the past, I am thinking that it is helping us to grow faster than the market. Yeah. Sure. Sure, sir. So just a follow-up on that: so do you think that the existing field force which we have that can continue this volume-led outperformance for us in the domestic market? Or let's say, when do you anticipate the next round of expansion happening on the rep side, even if you are not willing to call out the exact number as such? No, no, that's what I said, we can't disclose our strategic plan when we want to expand in the business. These are the calls we take during our budget schedule. Yeah. Sure, sir. Thank you. That's it from my side. Thank you. The next question is from Madhav, from Fidelity. Please go ahead. Yeah, just two questions. First one was on the PsA indication. In case we get favorable Phase III data in H2 CY 2025, what could be the earliest launch for the PsA indication for Ilumya? ... So the attempt always is that whether it's a launch of a new product or a new indication, and you can only maximize your return if you're able to launch immediately after receiving it. So we will always attempt to do it, you know, as soon as we get the approval. So, my question was that in case the Phase III data is favorable, what's the time gap between the Phase III data readout and the approval? Is there like six months or 12 months before that happens, or the approval is granted? When the FDA will approve? Yeah, in case the Phase III is favorable. Yeah. So we will launch as soon as we get an approval in the new indication. And as I, like I said, for another product which was asked, it'll be a matter of, you know, a few weeks and not a few months. Okay. Sure. Okay. And the second question was on the staff cost. In the first half, if I have it right, it's grown 3%-4% only year- over- year. So do we expect that sort of trend to continue for rest of the year, or do we expect some acceleration in the staff cost spending? Thank you. As such, we do not expect any material movement of the staff costs. Got it. Got it. Thank you. Thank you. Next question is from Naresh Sutar from SBI Life Insurance Company. Please go ahead. Yeah, thank you for taking my question. Sir, when we, when Taro used to announce results, the R&D cost was around $60-$65 million that time. So up and, we have seen so many quarters they have not done good in terms of the USA, which is good, which is predominantly Derma portfolio. So is there any thought process wherein we want to reduce the R&D significantly for Taro? Is your question, is the R&D to be reduced for Taro? Yeah, right. Right. Now, now we have to look at the overall R&D investment. We can't look at separately. We can't run two separate businesses, no? It's now part of Sun. Right. We look at the holistic R&D capability and R&D spend. So, and my question was also related to whether the reduction in the R&D guidance includes some part of this rationalization in Taro R&D, because the portfolio itself was not growing good and it was seeing competition every quarter for the deploy? I don't think your assessment and our understanding is correct. Our understanding is that the new product that Taro used to file and launch justified the money that was spent, but there was a steep price cut across other products, which was made up by this, but the overall rate of decline was significantly faster compared to the other products that we had in our portfolio. Okay, understood. Thank you. Thank you. Next question is from Neha Manpuria from Bank of America. Please go ahead. Thanks for taking my follow-up. My first question is on M&A. You know, given that, you know, that's been a core part of our strategy in building out the specialty pipeline so far, we just wanted to get your sense on the environment today for specialty assets in the U.S. You know, we've heard about the biotech funding crunch, big pharma sort of, you know, looking at assets, given their, their sort of constrained R&D. Is it more difficult to get specialty assets, you know, for asset acquisitions? And is that the reason for us, you know, becoming more aggressive in terms of building our own clinical capabilities? Just wanted to understand, you know, the long-term pipeline strategy for the specialty business. So, I think the build up of the clinical capability is more a function of at which stage we are able to or actually decide to license a product. If we decide to license a product which is, let's say, completed Phase III - Mm-hmm. Then we don't have big asset, I mean, for organization. License a product in Phase II or earlier, then we will need an organization which can bring the product to market from Phase II. So it's all a function and our sense is that it's better for us to also look at a mix of market products which are close to market or also products that we can develop on our own. And so is it becoming more difficult for us to get, let's say, near commercial products, you know, for acquisition, you know, in the focus areas that we have, you know, Ophtha and Derma, you know, oncology? Is that the sense that you get when you look at, you know, the market, M&A market? I mean, actually, I have no historical context, so I can't compare that 10 years back it was easier and now it is difficult. But I don't see a situation where if we are interested in an asset- Mm-hmm. and since our area of focus is relatively narrow. Yeah. Too many competing potential bidders. Understood. Okay, that's helpful. And my second question is on Ilumya. Because, you know, Ilumya prescription traction, you know, continues to be very good. Obviously, you know, we had skepticism about, you know, biosimilars impacting that. We have another biosimilar launch coming next year. You know, what's essentially driving the growth in Ilumya prescription, and do you think despite these biosimilar ones, we could continue to maintain the growth momentum in Ilumya prescription? I think I would, I mean, many factors go into it, but at the end of the day, it's about execution on the strategy, and it's a, it's a multifactorial product sale. It's not an easy sale. Mm-hmm. I think we are able to execute on multiple fronts to keep that engine moving. You don't think, you know, another biosimilar in one of the larger, other large products, you know, sort of impacts Ilumya prescription growth? So to be perfectly honest, I mean, we are, sort of, in the overall markets, a relatively small player as compared to the big ones. Yeah. Yeah, yeah. I think any biosimilar will go after the big fish, and not necessarily where the space that we are playing. So I guess, to that extent, I mean, we are relatively insulated as compared to the bigger products. Understood. Understood. Okay. That's helpful. Thank you. One more issue you need to keep in mind is that the overall penetration of biologics in the market- Yeah. is also relatively low. Yeah. So with biosimilars, we also expect the penetration to go up. Fair enough. That's a fair point, sir. Thank you so much. Thank you. Next question is from Gagan Thareja, from ASK Investment Managers. Please go ahead. Yeah, good evening. I hope I'm audible. Yes. Yeah. Yeah, yeah. Sir, sir, the first question is, you know, Taro comparable quarter last year, you know, would have been consolidated at 80%, and this year, it's fully consolidated. Would that roughly add $25-$30 billion of sales, even if, you know, Taro sales wouldn't have grown year- on- year, simply because of the additional consolidation? So as part of the transaction, Taro has become part of Sun, that is in our overall U.S. sales portfolio. Earlier, earlier- Earlier also. Earlier- We were getting separately the Taro- They were giving separate numbers. We have, since no more a public company, part of the Sun, we are just showing the overall net sales of the U.S. business, which includes Taro. No, I get that, but in principle, I'm simply talking about the arithmetic, you know, a 20% extra consolidation would have added to sales, assuming that there is no, you know, precipitous drop in Taro sales at all. No, there is no impact on the top line post-consolidation. No. Because as a subsidiary, we were capturing the top line. At the end, we were providing for minority interest in the profit. Okay, I get it. Second question is on, you know, Nidlegy and Ilumetri and, you know, Ilumya in China. Is it possible to give some, you know, some insight into how these have evolved and developed? No, we do not give country-specific sales detail. Broadly, we think, I mean, overall, looking at the offtake as well as the projections we are getting from our partner in China, we think that the product is doing quite well. Okay. The final one, on the, you know, the post-grant review, which went in favor of Incyte on patent 335, you know, on the legal documents pertaining to that, they seem to indicate that they would be looking for a higher royalty, you know, post, if there is an approval for your product. Do you see a circumstance where, you know, payments, royalty payments will be higher than what you have previously anticipated, and therefore, you know, the overall profitability on the product could be different from an initial base case? You have access to information which I don't have, so... because I haven't seen any disclosures from Incyte, which says that they're expecting a higher royalty. No, no, sir, this is just the transcript of the District Court, New Jersey, hearing on this matter in July. Now, since the matter is sub judice at this point of time, we are not responding to specific questions. Okay, thanks. Thank you. Thank you. Next question is from Saion Mukherjee from Nomura. Please go ahead. Yeah, thanks for the follow-up. Sir, I remember some time back, you know, you had mentioned about the regulatory approval on some of your complex products on the generic side in the U.S. You know, there were uncertainties in terms of the regulatory guidelines, which were delaying things. In the recent past, we have seen some complex generics getting approved. Has the landscape improved, and to that extent, how do you think about the pipeline for Sun Pharma? I personally don't recall any such comment or disclosure in any of our calls. We simply indicated that there are products for which there is lack of clarity from a regulatory point of view. Yeah. I think for product, specific product, there would be guidances which will help, and we see an effort by the agency to work towards clarifying and sharing specific guidances so that industry has a greater visibility on the process to follow for approval of those product. Right. So would you like to comment how does impact Sun? I mean, should we therefore mean that the chances of you sort of crossing the hurdle on the regulatory front is, you know, much more now? No, I think it's very difficult to give a nonspecific response, but our view is that anything which has greater clarity for industry is always helpful for bringing a generic product to the market for you. Okay. And sir, my second question, if you can respond, like, you know, on the GLP-1 opportunity, both from the regulated and from an emerging market perspective, how should we think about that and, you know, Sun's preparedness to address that opportunity? No, I think we are very excited. Only issue is how fast can we bring the product to market, and what kind of clinical outcome benefit we are able to show while the product is in registration. That is what will ultimately help us in terms of working towards getting a fair share of the product globally. Understood. I see the emerging market opportunity, because you presently have a footprint in most of the markets, you know, the key markets. You expect that to unfold over the next, say, two, three years for you? I mean, much ahead of the regulated markets. Currently, the trial is being done in such a way that we will get approval in regulated and emerging market in a phased manner, but starting with the regulated market. If there is a change in the strategy, we will share that with you, but as on today, that is the approach. Understood. Also another thing which I am sure you are aware is that some of the current GLP-1s will start losing patent protection in emerging markets much earlier than the. Regulated. Regulated market. Yes, sir. Thank you. Yeah, thank you. Thank you. Next question is from Ankush Mahajan, from Axis Securities. Please go ahead. So congrats for a good set of numbers. So I'm just looking at a very good set of numbers for the specialty. There's a 7.5% growth on QoQ, which is also. So if I should take a view of two divisions, like one is a U.S. market and other is other markets. So can we say, sir, that the other market is growing faster for the specialty, and still there is a scope that we are looking for the new geographies to enter for the specialty? You're setting my goals for next year? I'm trying. I think he's trying to understand the split between U.S and non-U.S. I can only speak on the US business, and I think there, as I said earlier, most of our key products we have grown. Levulan, as you know, this quarter is always a softer quarter, so I believe that, you know, Q3, even that product will, you know, come up to where it should be, because that's traditionally a big quarter for that product. So I think, you know, I'm personally confident that we can continue to grow our specialty business in the U.S. Thank you, sir. Thank you. Thank you. Next question is from Anubhav Agarwal, from UBS. Please go ahead. Yeah, guys, just last question from me. Just on the ramp-up of the specialty portfolio, so we have derma products, then we added derma oncology products. So just trying to understand how you're thinking about the other oncology, products which are not derma onco, and what about ophthalmics? So that's one set of questions. Second set of question is, Abhay, you mentioned in the press release that you want to leverage your strong cash position to strengthen the pipeline portfolio. So largest deal you have done is close to $600 million, when we acquired Leqselvi. Are you okay acquiring a platform with a broader thing, or you still want to go drug-wise in these three areas, or you want to expand the scope? Can you give some broad comments here? No, I think our approach to acquisition is that we need to find a way to manage that business much better than the current owner, and it needs to help us, strategically help us grow our top line and bottom line in a strategic kind of way. So that will continue to remain our priority and focus. I don't want to take a view about the size of the product or the size of the market, because I think it's better for us to play in a market in which we compete for products which are not aggressively competed by big firms. So we have a relatively small subset because we are a small company, and we need to recognize and reflect that in our action and plan. Your question as to whether we will get into pure oncology business, I think as on today, that is not the intention. We will remain. Because the moment we get into, let's say, first-line breast cancer or head and neck cancer or anything, we then end up competing with all large companies in the world, and that's where we will not be able to compete. So and how about ophthalmology? So we have a dry eye drug, but what about the other areas in ophthalmology? No, I think we continue to look at opportunities which can enhance our basket in ophthalmology. We are very disciplined about our acquisition approach, is that we don't get emotionally committed to any product. So unless and until it makes business sense, we don't progress. We haven't, unfortunately, been able to identify something which is both exciting and something that we think will help us create long-term value. So just a very nice question, but in dermatology, you think, let's say, with the current pipeline that you have it, and the molecules that you're thinking about it, can this be ultimately, not putting a timeline, that if you stay in derma and oncology or derma oncology segment, can you be like three x, four x of the size what you are today, just staying in this derma and derma oncology therapy? I mean, you're talking of my desire or what we wish to disclose? No. Possibly. Because I think as a company, we don't make long-term projections. But I think, if we are playing in this field, it is with a view to become successful. And success means different things in different businesses, and for us to be successful, we will have to gain scale in specialty. That there is no confusion. But, it's difficult for us to commit timelines as well as... Just because we-- otherwise it will end up creating unnecessary pressure for us to do transactions. Yeah, Dilip, my question was not on timeline, actually. I put it wrongly, sorry. The question was simply that, does the derma and derma oncology, in terms of molecules that you want to target, that you do not want to, let's say, compete directly with big pharma, does the space have so much potential that you can keep launching and becoming three x, four x eventually? That, that was the essence of the question. I think if you look at our current pipeline, we have a product, oral product, which we are developing for Phase II for psoriasis. Same product we are also developing for atopic dermatitis. So these are all fairly large market with potential to do much better than what and augment our relationship with the doctors in the market. Sure. Thank you very much. Thank you. Thank you. Next question is from Sudarshan Padmanabhan, from JM Financial. Please go ahead. Yeah. So my question a little bit more on the housekeeping side. The first half, we have seen our gross margin significantly, you know, higher than expectations. I just wanted to know, you know, would we be looking at, say, for the full year, given that the specialty is doing well, you know, the gross margins will trend more towards, you know, 79%-80% as compared to what we initially thought? So we are not giving any specific guidance on gross margins. Yeah, I think even in the past, people have said, "Whether when will your EBITDA reach 30%?" This I think it's... Our focus is to find a way to do our business in a way whereby our EBITDA and profitability improves, but that's not the intention. Intention is to grow both top line and bottom line, and run business more efficiently. Sure, sir. And with the R&D spend probably coming back in the second half, I mean, should we be looking at more or less, you know, margins, at around 28%, which is what you initially guided for? Or, you know, do we see that the R&D spend can be still a little slower, you know, kind of giving some kind of fillip to the margins in the second half? I think we are not guided for any margins as such, so we refrain to comment anything based on the margin for H2. Sure. I understand that. Yeah. Thank you. Thank you very much. That was the last question in queue. I would now like to hand the conference back to Dr. Abhishek Sharma for closing comments. Thank you, everyone, for joining us at this late hour. If any of your questions have remained unanswered, you can reach out to me or investor relations team. Thank you and good evening. Bye. Thank you. Thank you very much. On behalf of Sun Pharmaceutical Industries, Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.