Welcome to Zydus Lifesciences Limited Quarter 4 FY 2024 Earnings Conference Call. Please note that all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the opening remarks. Please note that this conference is being recorded. I now hand the conference over to Mr. Ganesh Nayak, Executive Director of Zydus Lifesciences. Thank you, and over to you, sir Good evening, ladies and gentlemen. Welcome to our post-results teleconference for the fourth quarter and the financial year ended March 31, 2024. For today's call, we have with us Dr. Sharvil Patel, Managing Director; Mr. Nitin Parekh, Chief Financial Officer; Mr. Arvind Bothra, Senior Vice President, Investor Relations; and Mr. Alok Garg, Senior Vice President from the Managing Director's Office. To begin with, let me give you an overview of the performance for the year. During the fiscal 2024, all our key businesses demonstrated strong performance through the year. Overall, we delivered healthy double-digit growth during the year, in line with our expectations, along with improved profitability. I'm happy to inform you that we achieved the highest ever operating profit and margins during the year. Our branded formulations business in India grew faster than the market and registered double-digit growth during the year, aided by healthy volume growth and new product launches. On the consumer wellness front, the FMCG sector witnessed gradual improvement in demand during the quarter, with an uptick in demand also in rural India. Most of our portfolio has seen demand recovery, which was further fueled by the demand of summer-led brands like Glucon-D and Nycil in anticipation of a good summer. We achieved an important milestone in our U.S. formulations business during the year. Revenues of the business crossed $1 billion for the first time on the back of double-strong double-digit growth. The base business achieved a sequential growth every quarter through the year on the back of volume expansion and new product introductions. International markets business, which comprises of emerging markets and Europe, also delivered double-digit growth, with all key markets contributing to growth during the year. In order to stay competitive and serve our customers in a cost-efficient manner, we continuously analyze the spend base and identify and implement various ideas across functions to improve efficiencies in our operations. We could improve our profitability in the range of 50-70 basis points in the past on account of such initiatives, and we expect similar improvement going forward as well. On the back of our diversified portfolio of products and focused execution efforts, we expect all our businesses to sustain healthy growth. With that, let me take you through the financial numbers for the year gone by. We recorded consolidated revenues of INR 195.5 billion, up 13% on a year-on-year basis. The business delivered robust operating performance with an EBITDA margin of 27.5%, which is an improvement of 510 basis points over the previous year. Consequently, the consolidated EBITDA for the year grew by 40% to INR 53.8 billion. Net profit for the year stood at INR 38.6 billion, up 97%. Our balance sheet strengthened further with a net cash position of INR 8.6 billion as at 31st March, 2024, against the net cash of INR 5.5 billion as at 31st March, 2023. Coming to our quarterly performance, we ended the fiscal 2024 with a robust performance. Revenue stood at INR 55.3 billion during the quarter, up 10% on a year-on-year and 23% on a quarter-on-quarter basis. We registered the highest ever operating profitability during the quarter, with an EBITDA margin of 29.5%, which is an improvement of 440 basis points on a year-on-year and 500 basis points on a quarter-on-quarter basis. EBITDA for the quarter stood at INR 16.3 billion, up 30% on a year-on-year and 48% on a sequential basis. Net profit for the quarter was INR 11.8 billion, up 299% on a year-on-year and 50% on a sequential basis. Now, let me take you through the operating highlights for the fourth quarter of FY 2024 for our key business segments. Our India geography, which comprises of formulations and consumer wellness business, accounted for 40% of the total revenues during the quarter and grew 8% year-on-year. Our branded formulations business in India grew faster than the market during the quarter as well, with 8% year-on-year growth. Portfolio of key pillar brands and innovation products were the key growth drivers. During the quarter, we gained market share in derma and the anti-infective therapies. On the super specialty front, we retained leadership position in the nephrology segment, while in the oncology space, we remained amongst the fastest growing companies in India. Contribution of the chronic portfolio has increased consistently over the years and stood at 41.2% as per IQVIA MAT, March 24, 2024, an improvement of 360 basis points over the last three years. The consumer wellness business recorded revenues of INR 7.8 billion, up 10% on a year-on-year basis. The personal care segment, which comprises of Nycil and the Everyuth brands, registered yet another quarter of strong growth. Performance of the food and nutrition segment improved with mid-single-digit growth during the quarter. We continued to witness gross margin expansion with an improvement of 377 basis points on a year-on-year basis for the quarter, driven by calibrated price increase taken earlier and efficient hedging strategy for key commodities. Now, let me take you through the performance of our U.S. formulations business. The business accounted for 47% of the consolidated revenues during the quarter, with revenues of INR 25.2 billion and delivered robust 37% growth sequentially. As mentioned earlier, the base business continued to expand sequentially during each quarter of the current fiscal on the back of volume expansion and new product launches. We launched 5 new products and received approval for 12 ANDAs, including 4 tentative approvals during the quarter. We filed 20 ANDAs, received approval for 46 new products, including, inclusive of, including 5 tentative approvals, and launched 29 new products during the year. On the international markets front, growth momentum built over the last several quarters continued as the business delivered double-digit growth for yet another quarter with a healthy demand across key markets. Overall, the business posted revenues of INR 5 billion, up 13% year-on-year. During the quarter, we received the EIR from the U.S. FDA for our API facility, which was inspected by the agency during the preceding quarter. Two of our injectable manufacturing facilities, located at Ahmedabad SEZ and Jarod, near Vadodara, were recently inspected by the U.S. FDA and were issued certain observations upon completion of inspection. We are closely working with the U.S. FDA to implement necessary corrective actions. This concludes the business review. I would now request Dr. Sharvil Patel to take you through the key drivers across businesses as well as initiatives in our innovation program. Thank you, Mr. Nayak, and good evening, ladies and gentlemen. It is a pleasure to have you all here on the call today. We are pleased with the performance during the quarter and the year. All our key businesses are focused and on enhancing the value proposition to their customers by fulfilling their diverse healthcare needs. We look forward to expanding our presence in existing therapies and markets, and explore newer avenues to serve our customers better and generate greater value for all the stakeholders. On the India formulations front, we continue to channelize our efforts and resources towards strengthening our position in focused therapy area through multiple levers. Our innovation engine continues to offer novel solutions to our customers and satisfy their unmet healthcare needs. Various strategic interventions done in the past have helped our branded formulations business to deliver double-digit growth over the last couple of years, and we look forward to building on to this momentum. On the US formulations front, we have built a comprehensive portfolio spread across dosage forms by leveraging our in-house development capabilities as well as exploring partnership opportunities. In the specialty space, acquisition of LiqMeds has augmented our capabilities to deliver novel solutions to the patients, while in the rare disease space, we have now a meaningful presence with two commercialized products and one product under filing stage. We expect our US business to sustain the growth trajectory going forward. This will be driven by large product portfolio, strong customer relationships, a network of regulatory compliant manufacturing facilities, an agile supply chain, and an efficient cost management. On the international markets front, we are focusing on growing the business in chosen therapies areas across key geographies by leveraging our global R&D portfolio of differentiated and niche generics as well as specialty products. In Europe, we are working towards strengthening our retail presence in France and Spain through portfolio expansion, improving cost proposition, and increasing pharmacy coverage. We also commenced our UK operations during the year, where we wish to expand by leveraging our global R&D portfolio. Our innovation pipeline across different areas progressed well and achieved important milestones during the year. Success of our innovation effort is evident from the increase in number of patients over the years, who benefited from the affordable and accessible treatment options delivered by our innovative innovation engine to fulfill their unmet healthcare needs. With this, let me talk about some of the material developments on the innovation efforts during the quarter. On the NCE front, we completed the recruitment of patients for phase 2b/3 clinical trials for Saraglitazar magnesium for PBC indication for the U.S. market. The trial will study the effects of a molecule relative to placebo over 52 weeks across 100 sites. The phase 2b clinical trial of Saraglitazar magnesium for NASH indication for the U.S. market is advancing as per the plan. Recently, the National Medical Product Administration of China accepted the new drug application of Desidustat made by China Medical Systems Holdings Limited, CMS. Earlier in 2020, we granted an exclusive license for Desidustat to CMS for China, Hong Kong, Macau, and Taiwan markets. Phase III clinical trials in China have demonstrated positive results. The primary endpoint of the hemoglobin mean change from baseline to the period of week 7 - 9, has indicated that Desidustat is more effective than placebo, increasing hemoglobin levels. Coming to a key development program, ZYIL-1, the WHO's international non-proprietary name, INN, recently approved Usnoflast as the recommended name for the molecule. Usnoflast is under clinical development for four indications at present: amyotrophic lateral sclerosis, ALS, Parkinson's disease, cryopyrin-associated periodic syndrome, CAPS, and ulcerative colitis. For ALS indication, Usnoflast is undergoing phase II clinical trials. ALS affects approximately 31,000 people in the U.S., and an average 5,000 new patients are diagnosed every year with this disease in the U.S. Over 30,000 people are estimated to be living with ALS in Europe, while in India, approximately 75,000 people are living with ALS. People with ALS have a median survival of approximately two years from diagnosis. The US FDA granted the approval to initiate phase II clinical trial of Usnoflast in patients with Parkinson's disease. It is estimated that there are over 8.5 million people worldwide suffering from Parkinson's, with 1 million suffering from the disease in the US. Each year, 90,000 new cases of Parkinson's disease are reported in the US. On the CAPS front, we are the first company to establish phase II proof of concept for Usnoflast in CAPS patients. Results of the study were published in the Clinical Pharmacology and Drug Development. Usnoflast holds an orphan drug designation from the US FDA for CAPS indication. We have initiated phase II proof of concept study of Usnoflast patients with UC, ulcerative colitis. It is categorized by irregular chronic immune response that creates inflammation and ulcers in the mucosa of the large intestine or rectum. In the year 2023, the prevalence of ulcerative colitis is estimated to be 5 million cases worldwide. On the biotech R&D space, during the quarter, we initiated phase III clinical trials for one product. We completed preclinical tox study for one monoclonal antibody and submitted the report to RCGM. On the Specialty development front, Sentynl Therapeutics, our wholly owned subsidiary, received marketing authorization from UK MHRA for Nulibry, for the treatment of patients in Great Britain with molybdenum cofactor deficiency, MoCD Type A, an ultra-rare life-threatening genetic disorder. It is the first and only treatment in Great Britain for patients with genetic disorder. An early access program is in place for Nulibry for enabling eligible patients who meet the specific criteria. Through this program, healthcare professionals can request for the product if it is not commercially available in their country. Recently, Sentynl Therapeutics Inc. acquired world proprietary rights to Zokinvy from Eiger BioPharmaceuticals, for the treatment of Hutchinson-Gilford progeria syndrome, an ultra-rare fatal genetic premature aging disease that accelerates mortality in young patients. Zokinvy is the first and only treatment approved by the U.S. FDA for progeria. The product is also approved in EU, Great Britain, and Japan for the same indication. Thank you, and we can now start the Q&A. Over to the coordinator. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may raise your hand from the participant tab on your screen. Participants are requested to use headphone or earphone while asking a question. The first question is from Kunal Dhamesha. Hi, good evening, and thank you for the opportunity, and congratulations on good set of numbers. So can you highlight, you know, what would be our broader outlook for FY 2025 in terms of revenue growth? And also, I think EBITDA margin, earlier we had suggested that we'll do EBITDA margin north of 27%, but 27% is something we have done in FY 2024 itself. So do we expect to do higher EBITDA margin? So we expect all our businesses to register good double-digit growth at the aggregate level, and we expect high teen growth. This is obviously after assuming competition in Asacol in FY 2025. On the EBITDA margins front, I think assuming we have competition, Asacol, we expect to comfortably maintain FY 2024 margins of 27.5% in the coming year. And, we'll make our best efforts to continue to improve those margins. So yeah, those are the two main observations I have on this. And plus, I would say we still continue to have a robust pipeline of launches, with 30+ launches that we plan for FY 2025. Sure, sure. In terms of R&D expenses, any outlook that we want to share now that we have enrolled patients for PBC trial, does that mean that there would be a step jump in the R&D for FY 2025, or it would be more like business as usual? I think with the revenue growth that we expect, and also there will be growth on R&D, I think we are still, you know, like, giving guidance of around 7%-8% for FY 2025. Sure. And, and the last one, with your permission, sir, on the acquisition of Zokinvy, we know, from here on, whatever that product is doing, what would be our strategy to grow that, you know, revenue? Would it be more on getting. So is it, is it that we are not able to reach, the drug has not reached all the patients that are available? And is it more like geographic, you know, adding more geography in terms of launch, and all? What would be the strategy with that product? Yes, so I do think we believe that, with our current capability that we have in the rare disease space, we believe that we will be able to find better ways of. I mean, we'll do better execution on finding new patients first, obviously, in the US. But we also see the opportunity in other markets with the registrations and access programs we've created for this, to get more patients there. So we do definitely see an opportunity to grow this, in FY 2025 and FY 2026. Sure. I have more question. I'll join back the queue. Thank you. Thank you. Thank you. The next question is from Neha. Yeah, thanks for taking my question. Sir, on the U.S. pipeline, if I would, you know, based on your commentary that you would launch about 30 products, if I look at the pending pipeline that we have, it seems like it's around the 50 or 60, 60 number. So should we assume, you know, as we go ahead, this, the number of launches sort of moderate because we're doing more high-value launches, or should we see the filing momentum materially pick up? What's the strategy to sort of augment this pipeline in the U.S.? So we still expect to file 25 - 30+ ANDAs in FY 2025. This year we had filed 20, but we will see that uptick happen by at least 5 - 10 more. We are also actively pursuing partnership opportunities for in-licensing important products in the US. And recently we obviously announced one, but we are seeing success on that in terms of finding more opportunities. And going forward, as I said, we still hope to launch 35+ products in the US in FY 2025. So I think from that point of view, yes, we still have, we'll continue to have a robust pipeline of products that we have filed and to be filed. So I think we will still achieve 20, 25+ launches consistently. But obviously this year we'll see higher launches. I mean, coming year, we'll see higher launches. Got it. And, you know, how many of these launches, you know, a rough breakup of what you're planning in 25 would be injectable, non-injectable? And just trying to assess the risk, given two of our facilities have been inspected. I know we don't know the outcome yet, and you're doing your best, but, you know, how much of this is injectable versus non-injectable? Any color there? Currently, we believe four, maybe, four products that we may believe may get delayed. That's our current estimate. Okay. Okay, got it. Second is on the India business. Now, we've started seeing some momentum, you know, pick up in the India business, particularly, I'm talking about the formulation business, you know, this year, particularly in the last few quarters. Should we assume that, you know, the growth trajectory for India would be now at a higher level, or, you know, what we saw last year is the momentum that we will maintain for the India business? So as I said, we do expect double-digit growth, but definitely we will like to grow ahead of market, depending on how the market shapes up in FY 2025. But currently, our expectation is to grow in double digits for the India business, which is mostly aided by obviously our proprietary and differentiated products, which are. Mm-hmm. Typically adding value. And also with the efforts that have been put on in certain specialty and chronic segments, we, we will see better momentum for our, growth booster brands that we have allocated. So I think that focus, plus the proprietary and new differentiated techno products that we have, we believe we can deliver double-digit growth. Understood. And sorry, one other question on the U.S. market on Asacol. You know, you said the guidance includes competition in Asacol, so you're assuming that there will be competition this year, first half, second half? I mean, do you have any color on that, or, you know, this is just being conservative? Yeah, I think to be on the conservative side, it's always prudent to assume we will see competition. So that's what we always, when we're giving guidances, we are talking about guidances with competition on Asacol. Understood. Thank you so much, sir. Thank you. The next question is from Surya Patra. Yeah, thanks for this opportunity, sir, and strong, congrats for the strong set of numbers. So my first question is on the margin improvement sequentially, what we have seen. If I just adjust for the, let's say, some Revlimid kind of number out of the total reported, it looks like that your base business has seen the gross margin, which is highest ever. And if this is the case, back-to-back, even third quarter gross margins were significantly better for the base business, adjusted for Revlimid. So what is driving this? Or it is largely to do with the consumer business doing better than expected? So yes, one part of the reason for the gross margins is we saw an improvement on the gross margins for the consumer business. But overall, also, we have seen improvement in gross margins with better efficiencies and, you know, inflationary pressures reducing. So I think both of them have aided, and obviously it's also to do with product mix. As new product sales becomes a larger part of the overall business, the gross margin profiles are much better there. So I think all of that, the so product mix, the wellness business, seeing the inflationary pressures ease and better pricing realization, and, obviously, the mix of market that we have has led to that benefit of improved gross margin. So in that case, so what is the sustainable, means, whether this is a sustainable one or we can grow upon this? That is one. And secondly, the spike in the other expenses also what we are witnessing in this quarter, is it also largely led by the consumer business contributing significantly? Gross margin, without special products, is sustainable and, with continuous efforts in terms of cost rationalization, normal price increases, that we can take in consumer business, we are able to take care of any inflation in terms of input cost. So far as other expenses are concerned, for the quarter, the increase is partly because of, one-off expenses to the extent of about INR 50 crore, and largely because of the seasonality business of consumer wellness. Okay. This, this 50 is one-off? Yes. What, this is relating to what, sir? Those are different items. Okay, okay. My second question is on the, about the US business. So obviously, we have seen a kind of a strong, sequential improvement, obviously, also led by special products. But on the base business front, how should one think about. And, while you were talking about, sustaining the momentum there in the US market as well and all that, so what is the nature of the products or, and while you were saying 30-odd products pipeline for, this year, any special products or any kind of a key product opportunities that you are targeting, if you can highlight, selective few, which will give some confidence about the sustenance of the double-digit kind of performance in the US business. I think there are a couple of things. One is obviously the new launches will scale up, as I had spoken of. Both the new launches that we'll do and the last year's launches that are scaling up, including the products like in the transdermal space. The liquid specialty U.S. business also is scaling up meaningfully. Mm. There is also good contribution that will come in from the animal health business as well as the recent acquisition on Zokinvy, which will start getting realized in a quarter from now. And if you say very meaningfully recent, obviously, we have launched Mirabegron, which is obviously a very significant launch by the company. We have exclusivity or kind of thing in both the strengths, sir, for Mirabegron? Yes, from our best knowledge right now, on one strength, we have one more competitor, and on the larger strength, we are exclusive for now. Okay. Okay, and, sir, the third question was about, let's say. Sorry, it is a continuation to the Revlimid point. So is it fair to believe that Revlimid is going to have a kind of improved contribution in the next FY 2025? Yes. Okay. And regards to business diversification, see, in fact, now, having seen a kind of a sequential progress and improvising our positioning, presence, growth, all that in the domestic side, which now, along with the consumer account, almost 40% and US more than 45%. So these are two growth driver in the recent past, but going ahead for your future progression and all that, are you really thinking about either business diversification in terms of geographically, or you think that, okay, you can enhance the depth of the business in the existing areas only or existing market only, and hence can possibly think about sustaining the growth going ahead? What is your plan going ahead? So I think the two large markets, US and India, I think we are strategically well placed to continue to grow them strongly. So that we are very confident on. Our developing market or emerging markets business is also scaled up meaningfully over the last five years with good growth and profitability. That business unit will continue to explore more market opportunities to enter into with the differentiated portfolio that now we have globally. So that we will see some expansion, but as I said, overall, we are well placed with the portfolio and the future pipeline to see meaningful opportunities in both US and India, which are our largest markets. Okay. If you permit me, sir, one more question. So how to think about this China opportunities? And what is the kind of arrangement that would be? Because, obviously, size-wise, it is a much bigger and larger market, and if we get a kind of preference in terms of the getting the product introduced into their reimbursement list, then it can also kind of a meaningful opportunity. And what is the kind of arrangement that you would be having in terms of revenue sharing? Some sense and some visibility about this, because it could potentially be a really positive surprise for our overall performance. So China is a very, very large market. It's probably number two in the world in terms of HIF franchise. The current approved HIF products in China are already clocking very significantly large, value. So we believe that, if everything goes well and we get approval from the Chinese regulatory authority and with a very strong commercial partner like CMS, we will see, good benefit, I mean, good significant traction for Desidustat to become a very large global product for us. And, it's a royalty-based partnership that we have, so once everything happens, once we're able to commercialize, we can definitely then speak more about it. But we are. It looks, it's a very positive sign, and if everything goes well, it would be a only a two-player market kind of thing, which will offer great opportunity for, Desidustat. So it's manufactured by them? No, it's manufactured by Zydus. Okay. Sure. Yeah, thank you, sir. Wish you all the best. Thank you. The next question is from Sayan Mukherjee. Yeah, hi. Thanks for taking my question. So just one clarification to start with. Your guidance for next year is consolidated high teen growth or double-digit growth? I just missed that. And also on the margin, you, you're expecting it to be flat with Asacol HD competition, or you expect it to improve, for next year? I think on a conservative side, if we see Asacol competition at the basic, we will definitely maintain FY 2024 margin. But if we see scale-up of our new critical launch that has happened right now, and with other benefits, we will work towards improving it further. In terms of growth, yes, again, I think critical launches will play an important role in the growth. So from double digit to high teens will all depend on the successful launches, one which we have done and few we hope to do. So if that all goes well, we do hope to see better growth. And so this number that you mentioned is on a consolidated basis, at an overall company level, double digit to high teen is what one can expect? Sayan, just to clarify, Nitin. Yeah. What we told, all the businesses will register a double-digit growth, and at aggregate level, we expect a high teens growth. Okay, understood. So this Mirabegron launch, I mean, what's your expectation of competitive intensity going forward? Do you have a view there? Our current best estimate is we do not expect, in the near term, any more competitive intensity. So it will be currently in one strength, two players, and on the higher strength, single player market. Understood. And sir, finally, before I join back, on the specialty and innovation piece, there are a lot of moving parts as we see today. So from a next three years perspective, can you just lay out what are the key milestones we should watch out for, the meaningful ones? And also, how should we think about the cost structure here with respect to R&D spend, sales and marketing efforts, you know, on the cost side and investment side, from a next three-year perspective? So for FY 2025, our R&D spend, we believe will be around 7%-8%, is our current guidance. On the key milestones, I think there are 2, 3 critical milestones. The first, which is for our lead candidate, Saraglitazar. So we finished, our recruitment for PBC indication. So one year from now, we will have a readout on the results. And if we see positive results, which we hope, then we will be filing it for, filing it in the U.S. for NDA application. And probably six months to one year from then, we would see, commercialization of that. If we are successful with good data, FY 2026, we will, part of, next. FY 2026, we will see commercialization expenses get built in, for the launch. And FY 2027 more meaningfully. Beyond that, as I said, Desidustat will be the next milestone for approval in China and really taking that off. Third will be our Zokinvy, which is CUTX-101, going through a rolling NDA filing and potentially quarter four of FY 2025, potentially seeing an approval and launch. And then there are obviously multiple product launches that we have planned for in India, day one launches, which will be meaningful. So I think all in all, these will be part of the plan for at least FY 2025 journey. Is there experience of in India? Is there any color? The numbers look a bit low. I mean, what, how do you see that ramping up in India, and what, what are the issues that we are facing in India currently? So in Desidustat, in India, we have seen excellent results. So I think it is one of our best new launches. So we don't see any concern, and for it to become, you know, the INR 100 crore plus franchise soon, is definitely the goal. Okay. There is actually seeing very good traction on Desidustat. We don't have any low growth issues in that market, in that product. Okay, that's great. Sir, one last, if I can. Sir, any color on vaccine, any major uptick you see WHO approval or export opportunities over the next three years? And if you can give some granular details on timeline there. So I think FY 2024, the key milestone for vaccines, will be first to get pre-qualification for MR, TCV and renew the rabies pre-qualification. That would be the most important part. If that goes through well, we will see immediately opportunity on rabies, in a meaningful manner. Post that, I think more it is, calendar year 2026, 2027 for MR and TCV global public tender market opportunity, which will be very meaningful. And, currently, I would say the immediate opportunity for MR will be the India vaccine tender opportunity that is coming up, which we would like to participate and see if we can succeed. And, our flu vaccine and other vaccines continue to scale up slowly. So I think all of that is going well, but I, as I always have said, that more FY 2026, 2027 is the journey where you see major scale-up of the vaccine business. Also, we don't see always because it's not really a vaccine, but our rabies immunoglobulin, which is the rabies monoclonal antibody, also is getting registration across India and other places in terms of getting it into the usage. And that will also see some improvement over the next 2-3 years. Okay, sir. Thank you. Thank you. Thank you. The next question is from Bino. Hi, and congrats on the great set of numbers. Some questions. Sharvil, just following up on the previous question, in Mirabegron competition, what is preventing it? Is it the patents that are still in force, which will run till 2030, or, or is there some FDA-related exclusivity? No, it's to do with litigation and IP. Understood. Today morning, you announced that distribution agreement with MSN. Earlier, you have done one with Synthon as well. Yes. Just for our understanding, you know, in this kind of distribution agreements, what is the sort of profitability that we get? Is it just a distribution margin around 10%, or is it significantly better? No, it's a profit share arrangement. Okay. So it should be much better than a typical distribution agreement. Yeah, yeah, it's an equal profit share. Oh, understood. Have you launched Zituvio Zituvimet already? Sorry. Zituvimet, the Januvia 505(b)(2). Have you already launched it? Yes, we have launched Zituvimet, and Zituvimet IR will be the next one, which has also got approval and all that. We have had good success. It's a tough launch in terms of making a branded launch in the U.S. market, but we are seeing a good traction on it, and we see over the next five years it being a meaningful product for us. Great. One last, if I must squeeze in. This year, 2024, we saw that revenue mix was a bit episodic, more in Q1 and Q4. Is it going to be similar in 2025 as well? Yeah, Q1 will be higher than Q4. Q1 and Q4. Okay, great. Thank you very much. Thank you. The next question is from Nimish Mehta. Yeah, hi. I hope you are able to hear me. Yes. Just, yeah, just one question on the U.S. generics market. I mean, you know, from the data that we have, we see that there has been some significant erosion, price erosion in the month of April. How do you see that? I mean, and what is the impact on our portfolio? So I don't know overall. So we have had, I mean, I think our base portfolio is stable. And as I said, they have been highly genericized, and I think overall, we have seen a good traction on the business. So I think, as I always say, the market has not changed. It is always gonna be a, you know, a large consolidated buying, which if hyper competition comes in, there will be price de-escalation. And depending on where the product is and competition is, that will continue. But with the product, new products and certain capabilities that we have in supply chain resilience and how we have a strong customer insight as well as supply service levels, I think we are seeing good sticky business, so. But I think fundamentally, nothing has changed. The market is still hypercompetitive, if there are more competitors. But as I said, our discipline has always been to not sell products, without making margin, and that is helping us. Yeah, okay, but, I mean, have you seen some fall in pricing on the base business, or? That's what I'm trying to understand. I understand, I mean, the new products and the other strategy that we use for getting the business. But has the base business. No, there is only cost. We don't have a heightened price erosion. It's normal price erosion that is there, but nothing different from the earlier quarter. Understood. If I may, you know, one question on the domestic business as well. I mean, if I'm not wrong, most of the large companies, including ours, have been focusing now more on the generic, trade generic business in the domestic business. So, you know, can you let us know what is the trigger, and if that expands, will that also not require a lot of capacity, I mean, because, you know, it's a volume business, and it's not typically a value business. Just your thoughts on that. Thank you. So the generic trade generic business is generally a little different trade channel that utilizes this opportunity. I think for us, we are more, I would say, measured in our approach towards the trade generic business. We are not. The way we are launching the products is we only focus more on the branded side of our business. And with the portfolio that we already have in trade generics and some of the portfolio that we miss, because we don't want to build it in the branded side, we have that trade generic offering. But by and large, I think we, our focus is more towards the branded side. Trade generic is more opportunistic for us. You don't see a significant growth in that category, which I think other companies are looking at? I think the category is showing growth. It is also gonna be hypercompetitive and price challenged, but there is growth definitely there. But as I said, for us, our focus right now is more on the branded side and the specialty and the proprietary side of the business. This is more of an opportunistic business. Okay, okay. Thank you very much. Thank you. The next question is from Bino. Hi, thanks for getting me back again. Just two follow-up questions. One, there are these two biotech products, one in phase III and one just completed phase I. Are these biosimilars, and are these also being developed for the U.S. market? So the biosimilars, currently our strategy is only focused towards India and emerging markets. One of the phase I molecule is our proprietary molecule that we have started up. We are starting a phase I in June. Understood. Second, there was a recent tentative approval you got for Prevymis, Letermovir. I believe there is an exclusivity which is preventing a final approval, but that exclusivity gets over, I think, in November or so this year. Is that a near-term launch? So unfortunately, I am not 100% clear when that launch will be, but we can come back to you separately if we have a clear view. Yeah. Currently, it is not launched for sure. Okay, thank you very much. Thank you. The next question is from Harsh. Yeah, thank you. Am I audible? Yes. Yeah. Thank you. Good evening. Two, three quick questions. I joined the call a little bit late, so maybe repetitive. But one on LiqMeds', the small molecule portfolio. I think Sujit had mentioned that a large growth driver would be the U.S. market. So just from that perspective, anything for us to keep in mind in terms of important timelines and would FY 2025 see any catalyst just from that business per se, that segment per se? And any launches or partnered assets from that portfolio would get categorized under the number of launches that we already report for the U.S. market, two bits for LiqMeds'. Yeah, so I think LiqMeds, the important thing is that we have today, six marketing approvals for the specialty fiber vehicle side of the business. In the U.K., we have 13 products that have been supplied out of the 15 that we have approved. Number of products that we still have up, waiting approval, there are two more specialty products waiting for approval and another 15 in the U.K., which are waiting for approval. And we will see some of these approvals come through. Recently also we saw one approval come through. So, and this is the more specialty side of the business you, in the U.S. So it's not, it's, I wouldn't say it's, it's the scale-up we'll definitely see in FY 2025 also from the last year. Going forward, we are also seeing meaningful scale-up because these are branded businesses, especially in the US. So once the scale-up happens, they will be sticky with very good profit margins. So should we assume, like, three approvals, come launches in FY 2025 just from this portfolio, roughly? More. Okay, okay. In terms of the margin guidance that we have called out, in case of, as you call, competition and on that part, we had mentioned that the important launch that we have done recently. The scale-up of that is also pretty important along with other launches. So should we assume another high-value launch in second half of FY 2025, which is very similar to the profile of Myrbetriq, to that extent? So I think, as I said, we, I would say the significant scale launch right now has been Mirabegron, but we have to see how do we succeed in that going forward. But yeah, we have still a lot of products that will come for approval, which will add to the value growth for the organization. So yeah, overall, the FY 2025, as I said, we still continue to believe that we'll see double-digit growth, in spite of Asacol competition in the U.S. Sure. And, just from our understanding perspective, we have given the guidance, in case of the, Asacol competition, directionally, if you were to call out a best case scenario, let's say, without Asacol competition, where should we, think about, the range of margins per se? Just very directionally. So without US Asacol competition, obviously, we will see very significantly much higher margins than what we have currently and during the last quarter. So that is the best estimate, but it's. I think there's so many moving parts, it's difficult to say, but, you know, last quarter, we did 29.5% margin. If US Asacol competition is not there, it definitely potentially possible to achieve that across that. Sure, that's helpful. And one last, if I may squeeze in, I might have missed this, but have we launched Vascepa in fourth quarter? We have launched Vascepa, but we don't have scale manufacturing capacity yet. So once we are able to scale up our manufacturing, which we do through third party, which will require at least two more quarters, then we would see more capability of ours to take any meaningful business. But right now we don't have capacity. This is not to do anything with the API supply issue per se, right? You're just getting it manufactured through a third party. Yeah. Okay, thank you. Thank you. Thank you. The next question is from Sayan Mukherjee. Yeah, thanks, for taking my question again. So just one question on acquisitions. You know, the cash balance is rising, and with, very high-value launches that we have seen and we continue to see, I think that's going up. You have done some buyback, but still, I think the cash balance will keep rising. So when you think about acquisition, prospects, you know, we haven't seen Zydus doing much in India, unlike many of, your peers. And then you are investing in specialty. So you know, do you have some size in mind or what exactly you would be looking at? Are you okay doing $500 million -$600 million acquisition? If you can give some color, what's available, what, what you're willing to invest, how you're thinking about inorganic opportunities in general. So I think our first priority will be to diversify our business in the healthcare space. So it's to do more to do with market entry in different geographies if we get an opportunity. But large part of our, what we want to focus on is specialty. So one is our own pipeline and then potentially see an opportunity if we are successful with our own pipeline to coming to approval, to find opportunities to acquire and scale that up meaningfully. So that will be, I think, our first of wish list, to buy some. To build our orphan disease business. The second, obviously, which we are already committed to, is our rare portfolio of businesses. So we acquired Zokinvy, and we hope we can continue on both our internal pipeline, but more importantly, continue to find opportunities in the rare disease space for acquisition. We do hope to enter more markets which are meaningful, either directly or potentially, again, with a differentiated pipeline like LiqMeds that we have. So those will be the first priority of products. In India, we are looking. We will look for brand, you know, more brand businesses, or sorry, brands that can be, you know, which can help us, overall in terms of it, it being accretive to the current business that we do. Again, something that is differentiated would be nicer. We do like the FMCG or OTC space also, so we will look to see what we can do with that, both in wellness or in pharma. So I think those are some of the areas that we are looking at. So I would say the ticket size will not be the constraint that we look at, but, depending on the market and the opportunity, we want to make a profitable business in those places. So in the U.S., our first expectation is how do we quickly scale up and become profitable on the specialty front, provided our current assets see the light of day. And if that happens, then that will be the focus for the company. The different geographies you mentioned, which geography you would be interested in? So I think Europe is something that we need to figure out, right? And, you know, whether it is the, some part, you know, building a rare disease or specialty part of the business in Europe, beyond the great generics that we do. Also look at certain, niche therapy areas and see if we can, look at some opportunities to do something there. And, lastly, also look at the hospital franchise, that is there in Europe. So those will be some areas that we continue to look at. And overall, as I said, our mission now is to make sure that we build patient-centric businesses. So medicines is one part of being patient-centric, but also how do we, you know, build businesses that are beyond just medicine and making sure that we are looking at companion diagnostics, care and other areas that are important for treating chronic diseases. So those are some of the areas that we want to continue to pursue. So in oncology segment, we already built a strong companion diagnostics business with our current book, book of business with both Uncertain and the other Uncertain, product that we have for diagnosis for breast cancer. So we're looking to scale those kind of opportunities further, and build a meaningfully different business, I would say. Great, sir. And just one last, if I can ask on the GLP-1 opportunity, how you see Zydus' position there? You have made filings in the U.S., so, what are your expectations? And if you talk about the capabilities that Zydus has developed here, and when can we see, you know, any meaningful contribution from this portfolio going forward? Yes, I think the meaningful capability is to, obviously, develop a peptide, capability to obviously characterize the peptide, capability to create a drug device combination, and have the capability of both obviously, the drug part, but also the device part. I think those are the capabilities that we have now built. On the commercialization part, I think we, we will prepare for launch of the GLP-1 whenever the patents go, are over, and we are preparing for market-by-market launch, depending on the patent, expiry. Great, sir. Thank you. Thank you. The next question is from Nitin Agarwal. Hi, sir. Thank you. Thank you for taking the question, Sharvil. You know, given the way the commentary for you has been, FY 2025, and also FY 2026 look to be very, very strong years for us, given that we will, we continue to have tailwinds from Revlimid, possibly, Uncertain, as well as, as well as even Mirabegron for now. You know, how should we look about, you know, the year after that, post FY 2026 onwards? Are we looking at potentially a largish cliff coming in the earnings as some of these big-ticket opportunities begin to fade away? Or do you think there is enough in the pipeline to take care of, you know, sort of substitute some of these high-growth opportunities as they, as they fade? Specific to the US, I think as I said, beyond this, we, I mean, we at least have 2-3 other products where we believe we have sole exclusive launches available, in the coming years after 2026. So we do still see a very healthy opportunity for the company to be able to launch meaningful launches with differentiation or sole exclusivity. So we should not look at a situation potentially that we have a largish cliff coming through for the business on the high peak that we do into FY 2025 and FY 2026. Yeah. Currently, I think obviously it all depends on IP landscape and other things, but we have secured some 180-day exclusive launches beyond the ones that we have spoken on. Okay, thank you so much. Thank you. The next question is from Aman Vij. Yeah. Hi. Hi. Yeah. My question is on our peptide portfolio. So if you can talk about how many products have you filed till today, and. Which portfolio? I'm sorry, we didn't get your question. Peptide portfolio. Peptide portfolio. Yeah. So we have currently, I think, two peptides that are in advanced stages, filed and to be filed, and we continue to have a portfolio of another two products that we hope to file. So I would say that is the current portfolio that we have. Sure. And when are you expecting the first approval for these four products? FY 2026. Okay. So no contribution, from, for FY 2025, at least? No. So these are for U.S. markets or even for other markets? We would like to commercialize them in other markets also, but what our guidance I was giving you is, obviously the U.S. market. Okay. So, can we assume that other markets might come sooner than FY 2026 as well? There's a patent landscape to many of the peptides. So for post patent, yes, they will be launched. Sure. My final question is: Do you think these four products will be a small contributor to us or a meaningful contributor in FY 2026 or 2027? I think it's a little too early to say this, but important markets are opening up like India, like Brazil, and more. So we'll have to see how do we do fare there. So we hope they will be important. They'll definitely be important launches from the way the attention has been given by the organization, R&D, manufacturing and all. We hope they will be commercially successful in these markets. And sorry, do you have any FTF filings on any of the dosages for the same? Yes, and on sema, we are first to file. Sema, we are first to file. One particular dose, or is it all the four doses? On the diabetes indication. On the diabetes. Okay. Thank you, sir. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you very much, and look forward to interacting with you during our next investor and analyst conference. Thank you, and good night. On behalf of Zydus Lifesciences Limited, that concludes this conference. Thank you for joining, and you may now disconnect your line and exit the webinar. Thank you.