Refused to commit on semaglutide canada price erosion.

Yeah, thanks so much, Aishwarya. Good evening. My first question is on the US business. You know, while I know you talked about product-specific erosion and Revlimid quarter on quarter, should we expect any Revlimid at all in the third quarter? And, second question on the US business, we've seen a product discontinuation this year. Last year, we saw Nuvaring being discontinued. We continue to spend a fair bit on R&D. How should we think about the U.S. product pipeline? Because, if I look at Reddy's approval history, while we have got a fair bit of approvals, we haven't really got any meaningful, large launch approval outside of Revlimid, and probably Vascepa was the last one that I can think about. So, Erez, I just wanted your thoughts on how we should look at some of these, more meaningful launches coming through, now that Conjugated Estrogen has been discontinued. How do you think about the U.S. growth?

So, we should assume that we will have, but less than what was in this quarter. And likely that it is either going to be the last quarter, or maybe some tail that will go into Q4. But, by and large, Q3 will still have Revlimid in it. On the R&D question - first, I agree with you. There were certain products that we tried for a while to get an approval. And, as we did not get, we, kind of, pulled the trigger on them. We, kind of, gave ourselves certain timelines that if we don't, we just move on. As we speak, the main products in the United States, as related to R&D, will be the biosimilars. I think the main product, in terms of significant growth in the United States, will be Abatacept. On the small molecules, we do have meaningful products that are coming - primarily peptides, long-acting peptides. Some of them we missed the first-to-file, but they are still meaningful. The overall pipeline is about 100 products, as we speak, give or take, in the pipeline and out of that, I would say around 20 that will be considered what you call the complex generics. But as we discussed many times in the past, it's hard to predict on these products. So, your observation is correct. What we, absolutely, did is that we are re-looking our portfolio, and we are focusing on products that we believe that we have a good chance to be first-to-market, as time will come.

Understood, Erez. Erez, if I were to just extend this question then to, let's say, our Semaglutide filing or an Abatacept filing, what gives you confidence on getting approvals on those filings? Even in case of Abatacept, now that Bachupally, we have got a CRL on Rituximab. I'm just wondering, I know there's always risk to approval, but how should we think about management's confidence in getting approval for Semaglutide in Canada, or next year as we think about Abatacept?

So, let's start with Abatacept, and I'll go to Semaglutide after. On Abatacept, we are supposed to submit the BLA, and I'm very confident about it, in the end of December of this year, calendar year. End of December 2025, which is exactly the date that we aim to. Here, I have a high level of confidence. It's also important to us because it will open the door for us to launch also the sub-cutaneous, which is the more important SKU, at the beginning of 2028, subject to settlement, of course, of the IP. The confidence comes that we are not going only with Bachupally, but we increase the chance, because we will have also, for the United States, a CMO that will make the product. I'm less concerned about the European approval, because Bachupally was already approved by the European authority, but not yet by the US FDA. And also, in the case of the U.S., we don't yet know what will happen with the tariff on biologics. While we feel now more comfortable, given all the press, that likely there will be no tariff. We need to see when the guidelines will come. But as a biologic, we don't know, and we feel the need to have a backup also there. So, if we will not be able to launch from Bachupally, we will be able to launch from the United States, and this will enable us with also a potential challenge, if it will happen on tariff. On Sema, we are expecting the feedback from Health Canada in the next few weeks. It can be any day, but it can be within the next few weeks. And we will know, if we get a deficiency or not. I'm certain that we will launch all the 12 million pens that I discussed with you last time. Obviously, if it will not be in Canada, it will be in other places, so the launch is going to happen. The question, of course, if we'll get a CRL, or we'll get something in Canada, obviously, the pricing may be different. But, I'm confident that we will sell the product. The question is in which market they would come. Can I guarantee that we'll not get the CRL? No, I cannot. I wish.

Thank you for the opportunity. My first question is again on Semaglutide. So, Erez, can you remind us, the legal status, which was underway in India, the litigation with Novo on Semaglutide.

Sure. We are challenging the patents in India. And, it's currently in the High Court in Delhi. All the hearings were done, and we are waiting for the decision of the judge. We don't know exactly when she will submit her decisions. And likely that whoever will not like the decision, will appeal. So, likely that it will continue after. But at this stage, the hearings are done, and we are waiting for the outcome of the decision of the judge.

And sure, and just to clarify, this outcome should not be impacting your plans in the ex-India market, right? The markets outside of India?

Depends what will be the decision of the judge. What we are seeking, we believe that the patent is invalid, and in any case, as we speak today, by the decision that was done in May, we can produce and export, not to do it in India, but the court, in the decision back in May, allowed us to continue to make the product and to export it. In the current state, we can launch in India only at patent expiration, which is right now dated at March '26.

Okay, that's clear. My second question is going back to Abatacept. So, just clarifying, earlier discussions. So, did you mention you have a CMO in place to manufacture that product, in case Bachupally takes some time to get the clearance from the FDA, or what is arrangement? Like, what kind of risk mitigation strategies are in place?

Sure. Correct, I did mention that we will have a CMO in the United States to produce Abatacept, in addition to a capacity that is built in Bachupally, India, and it's mitigating three risks. One, is in case of, again, CRL or any regulatory challenges that we will be able to launch from an already approved FDA site in America. Second, if there will be any tariff or any other potential restriction or regulatory burden, as it's related to make or sell biosimilars in the United States. And the number three, to increase capacity, it's allowing us more capacity, in a case that we will get a nice market share. So, we're absolutely going with the CMO option in the United States.

Okay, that's helpful. And my last question is, for Semaglutide, I understand you're working on, your in-house fill-and-finish capacity. So, can you share the update on that project?

It's going on. It will not impact the launches in the next 12 months, because, by the time that we will have to submit and qualify, it will be post-approval in all the countries. So, we are working with the partner that we have today. This is the famous 12 million units that we discussed in the past. This is still relevant, maybe with some upside, but right now, I think, we are about the same range. And, this will happen with the current partners, but we will have two cartridge lines in FTO-11, and this will be significantly expanded capacity. To many, many more millions. Let's say, in that respect, it can go to even up to $50 million, but it's all theoretical at this stage. It will be relevant not for the next 12 months. But for the period after that.

Hi, good evening all of you. First question on, the India market, India business had a strong growth in the quarter. Is there anything in particular that helped you, and was there any impact related to the GST disruption in the quarter?

Yeah, so we managed well the GST. So, the GST was not a significant obstacle for us. We managed it well. It's just execution of our strategy, the way we discussed it. For many quarters, we identified the therapeutic areas that we want to focus on and we made several inorganic moves to buy brands, that allow us relevant access, as well as, licensing of innovative products. And just working well, and it's likely to continue. We said all along because we believe that innovation will allow us to outpace the market. And we feel very, very comfortable now about that strategy. I think more and more people see that now.

Understood. You have recently done this acquisition of the Stugeron brand from Janssen. Could you give some idea about what sort of revenues does that business have in its acquired form?

So, a 100 plus in terms of size, something like this. [Bino: $100 million?] No, 100 cr, this is India. [Bino: That is India? Okay.] Richa Periwal: Bino, it's India and Emerging Markets put together. [Bino: It's 100 cr, and for that, if I'm right, you paid $50 million.] Correct. [Bino: Okay, understood. And, any benefit of that in the growth for the quarter? Is some 20 days of that part of India business?] M. V. Narasimham: Not much. Insignificant. Erez Israeli: You can take it as no real impact.

Yeah, hi, thanks for taking my question. So, my first question is on the US base business. There has been a lot of price erosion over the last 3-4 years, since you have launched Revlimid. How is the base today versus, let's say, before Revlimid? Is it up, down? If you can give some colour, so that we get a sense where we should, you know, assume the number post-Revlimid?

So, it went down, primarily not so much on volume. There were some products, about, I think, five, that faced competition and price erosion. And that's what took it down. It's not significantly down. Most of the decline that you see is Lenalidomide. But if you want to compare, it is down.

And do you see it, sort of, stabilizing now from the current level, or do you think there is scope for further price erosion, and if you can just give some colour on the pricing dynamics in the U.S. at this point. Anything has changed?

No, no change. I think it stabilized, and I believe that its stabilized also for a while, besides the products here and there. But, yeah, I don't foresee additional trends like that in the coming quarters on the base products. The erosion that will be, will be on some of the products that we launch. Those can still face erosion, because not all of them, what you call, exhausted their potential erosion. But it's insignificant as we speak.

Okay. My second question is on Semaglutide. This 12 million, that you mentioned, you feel confident about selling. So, if not in Canada, where will this volume be absorbed, in your view? Which markets?

Of course. Sure. So, we are going to, either directly or through partners, obtain approval in the next, let's say. 12 to 15 months in 87 countries, most of them are very small. The notable countries, besides Canada will be India, Brazil, Turkey. And then we have partners that are selling in several countries of Latin America, so I cannot highlight a particular market, and also in Asia. We have also B2B partners that are also preparing their own launches, and we have partners on both the API as well as on those pens. So, I believe that, the main markets that I mentioned can take, let's say, the lion's share of this quantity. Depends, of course, on the success and the date that we'll actually launch. And the rest will be taken by the B2B parties. Also, the markets that I mentioned are divided to two types of countries, the COPP countries and the non-COPP countries. So, it will be a certain sequence in which it will come to play. So far, and in the demands that we have already, just the orders that we are discussing, gives me confidence that, if the approvals will come, then we will be able to sell that, yes.

And Erez, if I can just add, like, this is for 2026. Now, what about 2027? How does this 12 million move up in 2027 in your estimate?

So, it can move up, even to, for sure to 15, but it can move up even further than that, depends on the evolution of the product and the qualification of FTO-11, which will significantly ramp up the capacity. It will be towards the second half of 2027. I'm talking, now, calendar, not FY.

Hi, good evening, thank you so much for your time. I think we've delivered double-digit growth in the ex-US markets. Are we confident of maintaining this trajectory over the next one or two years? That's my first question.

Yes, very much so.

Okay, and could you highlight any key drivers? Like, do we have new launches lined up, or what can help that steady growth? Because India especially, 13% was quite a good number, ahead of market. So just wanted to understand what could drive it.

So, each one of the markets, we have different drivers. So, if you want, I can highlight the markets for you, the main markets. In Europe, it's primarily a combination of the NRT business and the leverage of the U.S. portfolio, in which the pipeline is coming up, and the launch of biosimilars - Rituximab, Denosumab and Bevacizumab that we have in the UK. In the case of India, it's primarily our inorganic moves that we made on innovation, and acquisitions of brands that we did, in addition to a normal growth that we had on the legacy pipeline. So, I always mention that in India, our legacy pipeline will be like the market, and what we are adding value is in the places in which we are bringing products better than the standard of care. This is the strategy. And now that we have accumulated enough of those, it's starting to show. It took us, as I'm sure we all remember, quite a few years to build that. In the Emerging Markets, it's primarily, again, leverage of the generic business, especially on injectables and oncology, as well as, biologics - all of our biologics are going to Emerging Markets, and in each one of them, we have SLA, depending on the market, selective innovation that we also license, as part of our deal with India. In the case of Russia, it's primarily our legacy brands as well as some licensing and acquisitions that we made in Russia, on both the OTC, as well as the Rx. API - It's focus primarily is on peptides, and there is also a lot of demand for the peptides on the API side. I hope I covered all the markets for you. If I forgot something, please let me know.

Okay, okay, understood, got it. And, if we file on time, the approval will be in line with the expiry in early calendar year '27, that's how we should think about it?

That's the idea, yeah.

Yeah, hi, thanks for taking my question. Just the first one on Abatacept, so basically, the first filing that we'll do would be for IV version, right?

Correct.

And, what kind of, the further development the subcutaneous version would require?

There is another set of tests that allows us to submit the subcutaneous, but it doesn't require additional study.

Okay, so, no Phase III, but some form of characterization, etc.? And, the first, filing that we'll do by December 2025, would that include Bachupally as a manufacturing source, or the CMO as a manufacturing source?

Correct. Bachupally. Bachupally will be the start, and the CMO will be a tech transfer from Bachupally.

Okay, tech transfer. So, then Bachupally would be still the keystone for us, in a way.

Yeah, but in the United States, I'm absolutely building, especially for the subcutaneous, that the CMO will enable our Day-1 launch, for the mitigation that we discussed before.

Sure. And the second one on Semaglutide Canada. So, basically, let's say, since we talked in the earlier Q1 earnings call, your expectation about the market formation, has that changed now? On the day of patent expiry, or how should we think about it? Given that there are more filers whose filings have been accepted by the regulatory authority in Canada.

No, so nothing changed, at least in my perspective. We are expecting the market to be competitive. There will be multiple players. The question is just the day that we'll get approval. So, it's all about that. That did not change. I believe that the market formation will be as expected. Once there is an approval, there is an application for reimbursement, and according to the rules in Canada of the pricing, that's how the market will play. So, nothing changed in the way I think the game will be played. It is now it's about obtaining approval and, obtaining a good outcome from the litigation in India.

Sure, and lastly, on India, for Semaglutide, we have basically conducted trial for Ozempic and Rybelsus. So, does that enable us to launch the weight loss version, which is Wegovy generic as well?

For Wegovy, we'll have to have an application by itself. It will be separate.

Got it. And so, with respect to Rituximab, now that we are thinking of having a CMO, so will that require at least the stability data from CMO site, and hence, they need more time to get through the regulatory process?

The CMO that I mentioned is for Abatacept, primarily for the subcutaneous, and it will require a tech transfer as well as stability, but we believe that we will be able to be ready for the big quantities, which will be in the beginning of calendar '28. So, we should be good by then.

Understood. And just lastly, on the PSAI segment, where there has been improvement in the gross margin, quarter over quarter, while we are still lower than the historical gross margin. But, if you can just help understand in terms of the current gross margin, and how to think about it over the next one to two years.

So, we expect, going forward, the PSAI gross margin to be in the range of 20-25%. [Tushar: Compared to 15% currently, right?] No, this quarter it is 18%. Based on the product mix, and overhead leverage, I think the range you can expect, going forward, is 20% to 25% for PSAI gross margin.

Hi, good evening. So, firstly, I would like to understand how your R&D will take shape, given that you're developing a few biosimilars, like Pembrolizumab and Daratumumab. And, of your R&D budget, how much you would be earmarking for biosimilars and Aurigene, so basically your non-generics business.

Sure, so just to clarify, Daratumumab - we are not developing. It's a product that we licensed from Henlius, a Chinese company. Denosumab was developed by Alvotech, and we have a partnership with them. So, in that respect, the main products that are done internally is still Abatacept, and we basically finished the clinical trial of it. As you can see, the R&D is about 7%, right now, of the sales, and likely, that it will stay in this range, for now.

Thanks for the opportunity. My question is related to NRT and branded markets like India, EM. So, the growth was quite decent across the board, and it's a really commendable job. So, just want to understand, how to look at the investment that you are making behind these markets. Are these sustainable investments, or let's say it can be cut down in future? Thank you.

First of all, I don't think you see the investment in Emerging Markets. As we speak, we got the market in certain waves. And the markets that we did not get are still managed by Haleon, and we are paying them a fee for doing that for us. So, naturally, as market is coming to us, the fee for Haleon is going. And therefore, the margins are going up, because we don't need to pay them, and we are starting to invest. The markets that we are investing are the only the markets that we got at the beginning, meaning UK and Scandinavia. Right now, it's absolutely not a steady state. We have two more waves to go. What I can tell is so far, it's exceeding our expectations, both, on the pace of growth, as well as on the margin. In both cases, it's much better than what we presented internally, when we approved the project. So, it's a kind of a good start, I would call it.

I understand, Erez. And, just a related question here, on operating expenditure. So, on absolute basis, how we should look at the operating expenditure in FY27? So, can it continue to increase, let's say, from '26 level, maybe relatively at a slower pace, or is there any possibility of absolute decline in operating expenditure, let's say, in '27 compared to FY26? Thank you.

So, this quarter, we have 30%, and then, if you adjust the one-off, I think, we are close to 29.1%. And then, for your modelling, I think, we'll be in the zone of 28% to 30%.

Hi, thanks for the opportunity. Just on, Rituximab, again, so given this is the second unsuccessful PAI and CRL that we've had. Are there any specific challenges related to this facility? I'm asking, also because this is a biologics facility, and our track record otherwise on compliance has been quite excellent in recent years.

There is nothing specific, per se. As this is a sterile plant, we got queries that are related to that nature of the site. We believe it's addressable. In the case that they will come with another set of questions, we have an alternate line as a backup, which is FFM-2. FFM-2 is for fill-and-finish, for those on the line. So, we may need to move the product from one line to another, in a case that it will not come well on the first one. So, it's primarily related to the first line that we have, FFM-1. Some of the design of it raised those queries, and also last time. We are addressing it, but if it will not work, we'll have to move to FFM-2. I'm not worried on not getting approval, I'm certain we will get approval. Just to remind all of us, Rituximab was deliberately chosen, in order to start the regulatory process on time, to make sure that by the time that Abatacept will come, Bachupally will face those kind of stuff, and it is serving its purpose, and hopefully we can resolve it soon.

Okay. Quick one on Tocilizumab biosimilar. It's been a while since we got an update on that one. Can you share the status of that program?

We are not planning to have it as a global product. We will have it only for India.

Okay. Yeah, and then one quick follow-up on the previous question, the cost reductions that we've alluded to in the past, around 500 - 600 basis points. of reductions. Are these reflecting to a small extent in the first half numbers, or should we wait for the coming quarters for this to actually show up in numbers?

Yeah, I believe so. You can see that by the fact that Lenalidomide is going down, we are maintaining reasonably low numbers. So, it's absolutely a reflection of those mitigations. Of course, the full force of it will come as quarters will come. MVN also shared the numbers, so we believe that with SG&A of around 28%, and R&D of around 7%, it comes to the famous 5 to 7 that was said, and there is even opportunity for more, if we need to. So, we are very, very sensitive to the margins. And naturally, we're discussing it every time, and we will absolutely be very disciplined on those.

Hi, hi, good evening. My question was on the GLP-1. Do you only plan to do fill-and-finish, or do you also manufacture API drug substances? How much manufacturing capacity do you have, and which all markets are we targeting for this?

So, we have, CTO-6 making the API. I mentioned that the overall potential of all the investments that we put can reach even 800 kg, but we are very, very far from this output at this stage. We don't need also. Just, that, but, we are preparing it not just for Semaglutide and Liraglutide, but also for 40-something peptides that we identified, and we are going to develop, either by ourselves or with the partners in the next coming years. So, right now, we will have sufficient capacity for the demands that we'll have for Liraglutide, Semaglutide, and the submissions to the relevant authorities of all the peptides, that will be off-patent, including Tirzepatide. That will be, obviously, an R&D project, but it's very important to submit it in the relevant markets. And we're also making the product. We are planning to make it in FTO-11, and also with the partner. In general, the approach will be that we will have, for every important product, in-house capabilities, as well as partnership capabilities for all kinds of risk mitigations.

Okay, so can you just, like, expand on the fill-and-finish also? What's the capacity we have, and the status on that? And the markets we are supplying for that?

I think we discussed it. We have 12 million pens for Semaglutide with the partner. We have two lines of cartridge that will be at FTO-11. They can reach even 50 million, but right now it's all theoretical. The cartridge lines are on the way, and they will be assembled and will be ready. Not for this 12 months, but after.

Yeah, hi, thank you, good evening. Yeah, so just one question on the India business. So, sir, can you segregate the volume and price growth?

So, Sumit, the price is in the range of normal 5%, and then, the balance growth is mainly from the new products and volumes.

Okay, so going forward, should we expect this to continue, or can we expect any significant growth in volumes also?

You should expect to continue. We will have new products, volume, and the price will be in that range that MVN shared with you.