Sun Pharmaceutical Industries Limited (SUNPHARMA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Sun Pharma's Q2FY27 Financial Results Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-down phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Abhishek Sharma, Vice President and 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 FY27 earnings call. I am Abhishek from the Sun Pharma Investor Relations team. We hope you have received the Q2 financials, the press release, and the earnings presentation that was sent out earlier in the day. These are also available on our website. We have with us Mr. Dilip Shangri, Chairman, Mr. Kirti Ganorkar, Managing Director, Ms. Jayshree Satagopan, CFO, and Mr. Richard Ascroft, CEO, North America. Today, the team will provide an update on the financial performance and business highlights for the quarter, pipeline updates, and respond to any questions that you may have. We will refer to the consolidated financials during management. The call recording and call transcript will also be put on our website shortly. The Organon acquisition is subject to satisfaction of the remaining customary closing conditions and is on track to close by early 2027. Organon has already announced their corresponding quarter results. Since Organon remains a separate public listed company, we will not be taking any questions today regarding Organon's business performance. The discussion today might include certain forward-looking statements, and these must be viewed in conjunction with the risk 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, Ms. Jayashree Satagopal.

Welcome and thank you all for joining us for the earnings call. After the announcement The financials are already with me. Let me take you through the key consolidated financials. During the second quarter of FY27, sales were at $161,000,000,00, registering a growth of 11.8% vis-à-vis Q2 FY26. The gross margin was at 80.8% for the quarter, higher than the same period last year, largely on account of a better product mix and favorable currency tailwinds. EBITDA for the quarter was Rs. 47,439 million, an increase of 4.8% over Q2 last year. EBITDA margins came in at 29.3%. While EBITDA margins are lower year-on-year, please note that Q2FI26 had some benefit from lenalidomide sales. Adjusted for lenalidomide, EBITDA growth has outpaced revenue growth. Forex gain for the quarter was Rs.785 million, which is lower than Q2 of last year. Reported net profit after tax for Q2 FY27 was Rs. 19,885 million, while registered net profit for the quarter was Rs. 31,620 million. EPS for the quarter was Rs. 8.3 per share. Exceptional items for the second quarter includes provision towards a litigation settlement and on account of organo-related acquisition costs. Effective tax rate for the quarter was 28.3% versus 24.7% in Q2 FY26. Balance sheet continues to be strong with a net cash of $3.3 billion at the consolidated level. Now, let me take you through the half-yearly performance. For the first half, sales were at Rs. 312,836 million, registering a growth of 11% over the first half last year. Growth margin was at 80.6% for the first half. EBITDA for the first half was Rs.91,615,000, registering a growth of 3.8% over the first half of last year. EBITDA margin percentage was at 29.1%. Adjusted net profit for H1 was Rs.62,515,000.

Thank you, Jayashree. I shall first provide you an update on Global Innovative Medicine. In Q2 FY27, our innovative medicine sales were up 6.9% to reach U.S. dollar 356 million. The business accounted for 21.1% of sun sales for the quarter. The performance in innovative medicine continues to be driven by growth across U.S. and ex-U.S. market, across products notably Illumia, ex-U.S., Sikwa, Odumzo. We are pleased to note that Illumia is now approved in the U.S. for the treatment of adults with active psoriatic arthritis. Introducing a healthcare provider administered IL-23 inhibitor broadens our treatment portfolio and creates new opportunities to strengthen patient support and healthcare team engagement. We are planning for a soft launch in November with a full launch in the following months. Illumia continues to do well across international market. As a highlight, recently, Japanese Society for Psorosis Research announced that Illumia to be number two across all biologics in the new patient, across 73 main hospitals in Japan, making a significant improvement over last year. During the quarter, partnership with Leap Therapeutics strengthened our innovative medicine portfolio and expanded our presence in the rapidly growing PCSK9 market outside US and China. Leridolacinib adds to a differentiated once-monthly therapy that can help address significant unmade needs in cholesterol management. Now, coming to India business. The sales of India formulations were Rs 55,523 million for the quarter, recording a growth of 17.3%. India sales accounted for 34.5% of total consolidated sales. Sun Pharma is ranked No. 1 and holds 8.6% market share in over Rs. 2618 billion Indian pharmaceutical market as per PharmaTrack, Matt, September 26. Corresponding market share for the previous period was 8.3. For the quarter ending September 26, we grew higher than IPM, and we have done well across all major representative therapy areas. Sun Pharma's 51.1% PharmaTrack September 26th growth was driven primarily by strong volume expansions. Sun's volume growth was 6.7% for the quarter, compares favorably to IPM growth of 1.8%. As per SMSRC March-June 26th report, we continue to be No. 1 company based on prescription volumes. Sun Pharma is also ranked No. 1 by prescription with 12 different doctor categories. For Q2 FY27, the company launched 15 new products in India. Regarding Organon, integration planning for the Organon acquisition continues to progress across functions and work stream in line with plan. Regulatory approvals have now been secured in majority of the regions with the remaining jurisdiction tracking on schedule. We are now on track to close the transaction as per earlier communicated timelines, that is Q4 of FY27. I will now hand over call to Rick for update on the U.S. market.

Let me share performance highlights for our reported sales of $155 million U.S. dollars for the quarter, declining by 8.2%. This decline is largely due to linoleumine erosion, as the U.S. business has grown by 6.5%. The U.S. accounted for 27% of consolidated sales for the quarter, and we launched five products, generic products. This quarter, we saw a slowdown in Illumia business in the U.S., driven by a mix of factors. This is a key reason behind slower growth in global innovative medicines. We put actions in place to improve performance and anticipate further growth from these, as well as the new psoriatic arthritis indication that cures you. The innovative medicines portfolio in the U.S. continues. Long-term data showed complete responses, and 34% continues to excel at a level of high-grade immune-related... These data reinforced... During the quarter, Sun Pharma also announced agreements with the U.S. government aimed at prioritizing access to affordable medicines for America. According to the White House, 25 other pharma companies have signed similar agreements. As part of the agreement, Sun Pharma will extend most favored nation pricing...

Thank you, Rick. I will provide an update on the performance highlight of our other businesses. While branded generics has continued to grow, innovative medicine has been an important driver for growth in emerging market, with Illumia doing well across the market.

Thank you, Kirti. Let me discuss various R&D initiatives and how we are doing. We continue to invest in building an R&D pipeline for both the global generics and innovative medicine businesses, consolidated investments towards R&D for Q2 27, Stands at 7,784 million or 4.8% of sales. Innovative R&D accounted for 32.4% of our total R&D spent. These numbers are tracking lower than our intended R&D spent, but we expect the second half of the year to catch up some of this R&D spent.

The end of our prepared remarks. Operator, if you can request for Q&A lineup.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then 1 on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Dr. Kunal Damesha with McQuarrie Capital. Please go ahead.

Hi, good evening, and thank you for taking my question. First one on the slowdown in growth for Lumia in US. Rick, can you highlight what is driving that and what kind of actions we have Yeah,

I don't want to get into all the details, but we have identified a few key things that have led to the slowdown. We put key interventions in place already, and as I mentioned, those interventions coupled

over any time period you would like to suggest, like a couple of quarters, one quarter.

Over the next few quarters.

Sure. And just on the psoriatic arthritis front, you know, I think that maybe the prescription would be generated by a different specialty of doctors. So that kind of investment needs to be done in terms of sales force or excess personnel. Is it already there in quarter two? It is.

It's already built into our existing sales force model. Some of the prescriptions will be generated by dermatologists, but using the existing sales force, we will increase our reach and also begin calling out.

Sure. And do you foresee any one-off kind of launch expense for the psoriatic arthritis indication?

We have expenses, but they've been built into our overall budget. They're not extra.

Sure. And second one on the guidance for FI27. I mean, since the first half, we have been clocking at around double digit top line growth. What's the FI27 guidance of high single digit? So at this point in time, is there an update that we want to share? And the R&D, I assume that we're going to, there will be a ramp up in second half. But just looking at the specialty R&D, seems like as a percentage of specialty revenue, it has declined to like single digits in this quarter. So is this the ongoing run rate or there is a phasing out and then there will be some phasing in of clinical trials? How should we think about it?

So I think you're asking two questions. I'll respond to the R&D. I think the R&D investment is a function of the start and our ability to recruit subjects in the clinical trial. So we expect that to pick up, because we're putting in place appropriate infrastructure in place for that. Kirti will respond to the other question.

Yeah, regarding the guidance, I think we'll stick to what guidance we are given at the beginning of the year.

Sure, sir. I have more questions and join back to you. Thank you.

Sure, sir.

Thank you.

Thank you. Your next question comes from the line of Neha Manpuria with Bank of America. Please go ahead.

Yeah, thanks for taking my question. On the specialties for the U.S., I just wanted to understand since it's been, you know, over a year, since we've launched, like, 30 years, you know, close to nine months, we've launched a couple of six. When should we start paying meaningful contributions from these two, you know, launches? And so it should be much faster than, let's say, some of these new launches, because we already have, you know, Iluva already presented in the market for Soryasa, so that should help bring inscriptions.

Maybe let me start with Lexelvian and Loxid, and then I'll move into Illumia. I think we feel confident about both of the launches. If we start with Loxid, we have some very encouraging news, I think, as you heard me share. We recently had an update to the NCCN guidelines, and really what that means now is Loxid is a preferred agent, and that will really help us continue to accelerate access for patients and guide clinician confidence. So that's quite a firm data within LOXID. Already we see, I would say, the same for Lexelvi. We also recently announced new data for Lexelvi. Right now, the Dr. Bob Lexelvi is playing out in their patients. What's nice about the new data is it also shows that in addition to the speed, we see a durability of the efficacy that we saw in our initial publish. As it relates to psoriatic arthritis, it is a new indication for us that the product remains the same. Seeing psoriatic arthritis will be the only IL-20 on a much more frequent basis. As I mentioned, we're training actually our sales force today on the updated package insert.

That's very helpful. And second, the R&D, is it fair to assume they're keeping the 67% guidance for the full year for R&D sales when we mention the second part?

Thank you.

Your next question comes from the line of Tamiyanthi Kirai with HSBC. Please go ahead.

Yeah, hi.

Good evening, and thank you for the opportunity.

My question is regarding the new licensed PCSK9 innovator, which you will be launching in outside US and China market. So just wanted to understand two points here. First, you have moved into cardiology now. In the past, obviously, we saw you have been focused on onchoderma and eye clear space. So going ahead, whether you will be expanding into more therapies beyond for the marketing part, what kind of spend we should assume for this? But do you have to build a separate sales and marketing team for this?

The question is quite broad. So, I would say there are a couple of things. Like, you know, our emerging market business, which contributes almost 20% to total business. So, there are many markets where we have capabilities and field force to promote product to cardiologists. And that is what we will leverage. There are some markets where we don't have capabilities, where we need to go and add those, and that is what we will do in the next couple of months. So, regarding expenses, we cannot give exact detail on how much we will spend on launching PCSK9, but it will be part of our overall guidance and the budget, what we are tracking right now.

Sure. So, it will be, like, across the world launch, except these two markets, right? You will try to launch in as many markets as possible. Okay. That's helpful. And my second question is on Sema Grotide, where you mentioned your partner has launched in Brazil. So, can you update us regarding how you are looking to file this product in other markets? Like, which will be the key market where you intend to enter in next, say, 1-2 years' time for it?

I think in last call also, we guided all of you that we don't inform where we have filed and will get approval for semaglutide. But at the same time, you know, we are present in India, we have approval in South Africa and Brazil. And all the markets, we have commercialized the product. Sure.

Thank you for your response. I'll get back in the queue.

Thank you. The next question comes from the line of Pino Patiparampil with Ilara Capital. Please go ahead.

Hi.

Thank you. That's a bit of a repeat, but I'm just trying to get a little more color on the slowdown in Illumia. Is it something to do with the market getting saturated, or is it something related to the sales strategy or some sales execution, you know, for example, salespeople leaving, et cetera? Is it an execution problem, or is it something to do with the market getting saturated and the strategy of spilling?

A variety of things. I think there's a bit of market, but frankly, part of it is execution as well. And that's the intervention we've put in place.

Okay. Thank you.

I should just add, though, we continue to see plenty of opportunities, quite unique in terms of being able to treat patients that require extra care. And there are a large number of those patients in the United States on Medicare, which is where we do quite well with the process.

Thank you. Thank you very much. Thank you. The next question comes from the line of Krish Mehta with Inam Holdings. Please go ahead.

Thank you for taking my question. I just had a question on Illumia Psorotic Arthritis Indication. If you could provide some color on the size of opportunity in terms of the market potential as well as what it could add to our current Illumia franchise as well as the specialty franchise, it would be helpful, you know, directly to understand how much this adds to us.

Yeah, we don't provide product-specific guidance. What I can share is about a third of it.

Okay, that's helpful. Thank you.

Thank you. Your next question comes from the line of Shashank Krishnakumar with MK Global. Please go ahead.

Hi, thanks for taking my question. My first one is again on Illumia, just trying to understand if we look beyond Stellara and probably at other biologics which we might also include in the competition set for Illumia. Those might also see a loss of exclusivity probably sometime over the next four or five years. Now, two factors. One is our channel dominance in Part B, and then the second is the fact that probably the treatment regimen itself has moved towards IL-23. Now, do you see these two factors sort of helping us defend our Illumia franchise in the medium term, or what is it that you think could change in terms of the market dynamics when you sort of take a portfolio view here?

There certainly are changes in the marketplace that we've seen and will continue to see. I think you mentioned the most important two points, though. The IL-23 class remains the dominant class and the preferred class amongst clinicians in treating psoriasis patients. And Illumia is quite unique in that it's HCP-administered and that it really supports patients that require that extra care, and that is very much a unique attribute to Illumia that no other product has.

Got it. Just a related question here. What is the loss of exclusivity for Illumia itself that we should be factoring in? Should it be 2030 or would secondary protections sort of extend beyond that?

It's not in the foreseeable future, Shishankh.

Got it. And just one last one, if I could squeeze in. So, it seems like this quarter, the U.S. generic business probably on a quarter-on-quarter basis has gone up. Now, was there any short-term opportunity that we benefited from, or was it business as usual?

Yeah, you may have missed it, but I did share in my opening that we launched five new products this quarter, which led to the growth.

Okay, got it. That's helpful. Thank you.

Thank you. Your next question comes from the line of Tushar Manudhani with Motila Loswal Financial Services. Please go ahead.

I think your voice was breaking, Tushar. You were asking for EAM and ROW growth.

I was referring to the mid-single-digit growth in a constant currency basis in emerging markets and ROW markets. If you could share what's happening there and what would drive growth going forward?

So, as far as EM is concerned, I think they're asking a pickup on a quarter-on-quarter basis. This quarter, we did a constant currency growth of 7.6%. And this was again driven by product launches across several markets. So, I think your question would be more directed towards ROW, where the growth is lower.

Even in EM, this is the kind of sustainable growth to think about?

No, we don't guide to any particular growth number, but I think if you look at our historical trend in terms of constant currency, which we report every quarter, broadly, this is the range, plus or minus.

Got it. And on ROW side? Hello?

We are not guiding to any specific guidance. No, no. Cup is covered in the overall revenue growth.

Got it. And just secondly on R&D, while the medicine pipeline which is doing the press release, this is one program which we will have start of phase 3. Rest of it are in the stage where either regulatory filing is to happen or let's say the top line data has to come out. So just trying to understand where we are on the monetary side where the R&D step up would happen.

You are asking for a level of detailing, which generally is not something that we share, because we guide for an overall R&D budget. We don't guide for where we are going to and which product, which market.

Thank you. Your next follow-up question comes from the line of Dr. Kunal Damesha with Macquarie Capital. Please go ahead.

Hi, thank you for the opportunity again. Just one on the India business, this 17% growth, and in the past couple of quarters, we've seen strong growth. Is it broad-based in terms of therapy areas, and if you could also share some details on volume growth versus the new product introduction versus pricing?

Now, what you said is right. India business growth is across therapy areas. So, all the therapy areas we are present, like there are 12 major therapeutic areas where we are present. We are doing well, both in terms of performance on prescription as well as value. And in terms of growth, if you have seen IVAC's number, the IPM is growing by 1.6% in terms of volume, and we are growing by 6%. So, what I am trying to say, our growth is quite robust in terms of, and we are growing by volume and new products. So, almost like 50 to 60% of our growth comes from volume plus new product, and the rest is coming from pricing. So, it is quite a healthy growth in my opinion.

And the other one for Rick, in terms of, you know, the divers of, you know, specialty or innovative medicine, we generally highlight the top three molecules, which is basically driving the growth, right, in our commentary. Do you think that UnlockSate and XLV are close to that, you know, top three, I mean, set now?

I don't think we typically provide rankings of our top.

Sure, thank you and all the best.

But at the same time, Kunal, they are still smaller. In terms of absolute contribution, products like Udomzo and Sequa, WinLevy would have a far bigger contribution.

Okay, so it's basically probably the absolute addition versus the percentage growth, right?

Thank you. Your next question comes from the line of Vishal Manchanda with Systematics. Please go ahead.

Hi, good evening, and thanks for the opportunity. With respect to the organ on deal, can you share what should be an effective cost of borrowing and what percentage of the acquisition cost would be attributable to Goodwill?

Our bankers and institutions in terms of finalizing the, and I think the rate of borrowing should be more or less in line with the current borrowing cost of Gorgonon. As far as your question on goodwill is concerned, I think this will go through the accounting standards and the result and goodwill on the date of acquisition, so I think it's too early for me to comment on it.

You got it. And just one more. There is a media article citing that the Indian drug regulator has asked Sun Pharma to discontinue production of ophthalmic products from its Assam plant. Can you comment whether this is true and whether this would have any material adverse impact on our numbers?

I can't comment on what media has reported, but what I can say is that there are 11 ophthalmology products, which we have voluntarily recalled, and we voluntarily initiated a temporary cessation of our manufacturing activities, and we have kept the Indian regulator informed about it. I think what is most important for us is the product quality and patient safety. And we have taken a remedial action so that we can put everything in place shortly.

Got it.

Thank you very much.

Thank you. Your next question comes from the line of Miharika Agarwal with Nirmal Gang. Please go ahead.

Thank you for the opportunity. My question was on the antitrust settlement. So, how much of the historical generic pricing litigation exposure has now been addressed with this settlement?

I could possibly refer to our annual report where we have disclosed most of the particulars regarding the settlement. I think that will give a fair idea.

Okay, thank you. And in terms of R&D, so we have five novel entities in clinical development, right? So how do we evaluate the commercial potential of these and, you know, how do we look at these going forward, if you could give any credit on it?

So, I think that is the uncertainty related to R&D, because there is, let's say, theoretically one potential of a product. Now, how much of market share we can get is linked with what kind of final clinical outcome we will get. So, while we do the business development plan and investment plan, we presume a certain targeted therapeutic outcome. Sometimes the outcome is better than what we planned, sometimes we don't achieve what we were looking for. So, we have a process by which we decide to invest on a product only if we feel that there will be a decent return on investment after adjusting for risk-adjusted probability of approval. And that's the process that we follow. So, it's difficult to give you, but if you look at many of the products, you see the size of the market. So, that can also help you develop a better understanding.

Thank you. And beyond Illumia, Lexalbi, and Unloxid, which products in the pipeline have the potential to materially alter the specialty growth trajectory over the next two to three years?

Kirti spoke about Lerod Alcibeb, PCSK9 inhibitor, I think. Yeah, yeah.

But that's, yeah, XUS and XSENO. That can be the next product, yeah.

Okay. Thank you. That was all for me.

Yeah, thank you.

Thank you. Your next question comes from the line of Juhi Kumari with Nanolia Financial Services Limited. Please go ahead.

Yeah, hi, thanks for the opportunity. I just had one question left, like the rest of all my questions have been answered. It's related to Oregon on acquisition expense, like we have been recording it in the PLN exceptional expense, this thing. So, like, do we see any other exceptional expense coming from this acquisition in the coming quarter or not?

So, the acquisition-related cost will continue until day one, and some of these could be back-ended, right? So, as we close a transaction in Q4 of FY27, we will have a full estimate in terms of the acquisition-related cost.

Okay, so we will be seeing some other expenses also incurring in exceptional in the coming quarter as well.

Yes, and that is normal as we go through the transactions.

Okay, okay, thanks for the answer.

I mean, if you want guidance, then you should look at other companies doing large transactions. Because any transaction of this size will always involve one-time costs.

Yeah, yeah, correct, correct. Thank you so much.

Thank you. The next question comes from the line of Dara Ganatra with UTIPF. Please go ahead.

Thank you for taking my question. So my question was more on the India business growth. So, we have seen in the last two years the volume growth is hardly anything, and we are now seeing a 6% kind of a volume growth. So, what is driving this volume growth, and what would this number look like, excluding semaglutide? What would this volume growth be? And going forward into H2 and FY28, do you think this kind of volume growth is sustainable for India business?

The second part of your question, I can answer. See, in any business, there are risks. We cannot say in next quarter or following the next two quarters, the same growth will continue or not. So it's very difficult to predict. But in terms of our volume growth and new product growth, I can say we cannot pinpoint only one thing why this growth is coming. We are continuously making effort to build brands, do scientific promotion, continuously expand the field force, improve the number of prescribers and the prescription from the doctors. So finally, it is the outcome of all of this effort, including launches of new product ahead of competition and gaining market share. So, if I put all of these things together, that is what is helping us to grow both in volume and new product, which is our major growth in the last two years.

Sure. Thank you, sir.

Thank you. The next follow-up question comes from Vishal Manchanda with Systematics. Please go ahead.

Thanks for the follow-up. I have a question on Nidleji. I wanted to know the timelines for approval. And second, also wanted to understand whether this is effective enough to, so there's another drug called Nivolumab, which has also shown data in neoadjuvant melanoma, and that is probably showing better outcomes, but that hasn't been filed so far. So, I just wanted to understand your views on how this would compete with Nivolumumab or whether this would also be positioned as an add-on to Nivolumumab in the same setting, new adjuvant setting.

So, what I understand is that the product is filed and we are awaiting approval. I do not have a familiarity with the, what you call, nivolumab data. However, both of these drugs work through very different approach, and I expect, say, like, my understanding is that there are some subsequent studies where Nidlaji has been administered or given to patients after checkpoint inhibitor treatment, And it has produced improved clinical outcome. So I don't know whether it complements or it competes with checkpoint inhibitor. And ultimately everything will depend on the label that both the products will get. My understanding based on my interaction with the company is that they think that the product has a useful place in the treatment options available to doctors for treating this difficult to treat.

Got it, sir. And can we say, like, this can also be a large opportunity, like, maybe, like, an unlocks it, while unlocks it is not shaped up here, but can this be a large opportunity in your pipeline?

It will not be a comparable opportunity because of two reasons. One is that Unlocksit for us is a global product. We don't sell it today in other markets, but gradually as we start getting approval, we will start launching in other markets. Whereas Nidleji, we've licensed only for Europe and a few other markets.

Okay. Okay. Thank you very much.

Thank you.

Thank you. A reminder to all the participants, if you wish to register for a question, you may press star and then one now. Your next question comes from the line of Surya Patra with Philip Capital. Please go ahead.

Yeah, thanks for the opportunity. My first question about this, the PCSK9 Innovator. In the Europe market, since it is already approved, that looks like a kind of a near-term opportunity for us. But, considering the

country-to-country price agreement reviews and all that,

how quickly this could be a kind of a commercial

benefiting kind of opportunity?

How long that it will take in Europe to really penetrate and get the commercial benefit out of it?

Yes, you are from EMA on European basis, then you have to go country by country and submit the dossier for pricing and reimbursement. And usually this process goes anywhere from 6 months to 12 months, depending on the market, depending on the dossier kind of queries we can get. So right now what we said, we are in a pre-launch phase, and we will keep you updated as we move from one market to another market. And once we have a commercial launch, we will also announce it.

And how long it would generally take, sir, for taking it to key emerging markets? A couple of years, time?

It all depends on when we get approval. Our plan is to file in all the markets as soon as we can. Different countries have different approval timelines. Some of the countries also require local studies.

Some of the countries we can also leverage the approvals in the US and Europe. This is all combination of two.

My second question is about the GLP-1 or the semaglutide. Hello, am I audible?

Yeah, yeah, we can share with you, yeah.

So, about the semaglutage, see, in fact, this year, since it is the first year of commercialization for a ski market like India, see, that would have supported growth and all that. But considering the adherence, the patient adherence about it and all that, so is it fair to believe that the product or the segment will see a growth in the subsequent year, second year?

So, I think this is first year only, and if you see the GLP-1 dress, how they perform worldwide, they are doing phenomenally well. So, in India also, we need to give some time, because you will build a new product over a period of time, and usually

our experience is, it takes 3-4 years for you to build any new product.

So, GLP-1 will also go through that phase, yeah.

Okay, okay. Generally, the penetration levels, even in the advanced market, looks really low. So, that is why this question was.

I can't comment specifically on the half penetration.

No, but I think you should look at, even if you get few percentage of the total patients, it's still going to be a very, very large product.

Sure. And if I just ask an extended question on this, see the market like Brazil and South Africa, whether the price erosion scenario in semaglutide is similar like India?

Working with a partner on this product, so all the commercial decisions on this are taken by partner. And generally, we would not like to talk about pricing because it's also un-proprietary information and we cannot disclose about digital investor quality.

Sure. Yeah. Thank you, sir. Wish you all the best. Thank you.

Thank you. The next question comes from the line of Ashtoos Kumar Jaa with Belsani Asset Management. Please go ahead.

Hi, I had a question for the comment made by Jayashree Ma'am earlier on the call. Is it fair to understand that the current borrowing cost, I think I'm looking at the SEC filing of Organon, the latest debt that they raised was at 7.875, and then I think you guys also filed a disclosure to the exchange saying that the latest NCDs were raised at 8.2%. So, I just wanted to understand what is the exact structuring of the debt piece of the transaction that we are thinking of on Orgonon.

So, first of all, when I spoke about the cost of debt, it is the weighted average cost of debt of Orgonon. You would see that some of the bonds were at a much lower rate, which was raised earlier, so one should look at it in totality. Secondly, the NCDs that we issued now is not part of transaction financing. This is part of our normal financing to repay some of our current borrowings. And this is a rupee financing, and what we are talking of organon is mostly a dollar and euro. So, these are not apples to apples to compare.

I hope that...

Understood. So, yeah. So, when you say current borrowing cost, that is basically on the average cost of debt that we see on Organon, right?

Yeah, you should take the average cost of debt.

Thank you. Ladies and gentlemen, as there are no further questions, I now hand the conference back to Dr. Abhishek Sharma for closing comments. Over to you, sir.

Thank you, everyone, for joining us at this late hour. And if you have any questions which have remained unanswered today or you have any follow-up questions, you can reach out to the Investor Relations team. We are here to address your queries. Thank you and a very good evening.

Thank you. On behalf of Sun Pharma, that concludes this conference. Thank you, everyone, for joining us on Human Health. Let's connect your lines. Thank you.

Thank you.