Glenmark Pharma Q1 2013 Earnings Call 3 Aug’12
Operator Good morning, ladies and gentlemen. I am Aachal Rastogi, the moderator of this call. Thank you for standing by and welcome to the Q1 Earnings Conference Call presented by Glenmark Pharmaceuticals Limited. For the duration of presentation, all participant lines will be in listen‐only mode and we'll have a Q&A session after the presentation. I would like to now hand over the conference call to Mr. Jason D'Souza. Over to you, Mr. Jason.
Jason D'Souza, Investor Relations Thank you, Aachal. Welcome to Glenmark's Q1 earnings call. Before we begin the call, we'll just go through a brief overview of the results.
For the first quarter ended June 30, 2012, Glenmark's consolidated revenue was at 10,404 million, an increase of 19.83%. Revenue from the Generic business was at 5,300 million, a growth of 57.67%. The Specialty Formulation business excluding out licensing revenue was at 5,046.45 million, recording growth of 22.85%. The specialty business India, sales for the formulation business in India for the first quarter ended June 30, 2012 increased to 2,797 million, a growth of 24.14%. As for ORG IMS MAT June 2012 data, Glenmark climbed three ranks from 24 to 21st registering value growth of 28.6% versus IPM growth of 13.9%. As per ORG IMS MAT June data, Glenmark market share increased in dermatology from 8.22% to 8.84%, cardiac from 2.41% to 3.05% and respiratory from 2.71% to 2.92%.
Africa, Asia and CIS region, for the first quarter revenue from Africa, Asia and CIS region was at 1,348.40 million, recording an increase of 28.81%. For the first quarter, secondary sales growth for the Russian subsidiary is at 36%, the Russian subsidiary improved its ranking to 58 in June '12 as compared to 67 in June '11.
Respiratory and dermatology segment registered strong growth in the quarter. In other CIS markets Ukraine, Kazakhstan and Uzbekistan are showing ‐‐ continuing to show positive trends in secondary sales. Glenmark has shown good growth in secondary sales at 65% in the first quarter in Ukraine.
The Africa, Middle East region posted healthy secondary sales growth of 44% for the first quarter due to significant contributions from the power brands. South Africa, Kenya and Egypt achieved highest ever secondary sales value for the quarter, while Nigeria, Tanzania, Ethiopia and Yemen continue to record strong value growth.
The political and economic environment in the Africa Middle East region continues to be uncertain. The Asia region continues to perform well with secondary sales growth in excess of 30% for the quarter, all power brands and key units are performing well in the region. The focus strategy of brand building is driving the performance in Asia. Glenmark's revenue from its Latin America and Caribbean operations were at 630.51 million a growth of 6.52%.
All subsidiaries in the region, Brazil, Venezuela, Mexico and Peru continue to record good secondary sales growth. During the quarter, the Brazil subsidiary launched one product, the Mexico subsidiary received two approvals ‐received approvals for two dermatology products, while the Venezuela unit launched one product during the quarter.
Glenmark's Europe operations revenue for the first quarter was at 269.66 million recording growth of 25.36%. Secondary sales growth for the region was 17% against the de‐growing pharma industries. The company launched several products successfully further validating the marketing capabilities and prescription generation efforts.
The generics business, U.S. formulation, Glenmark generics registered revenue from sale of finish dosage formulations of Rs. 3,923.58 million recording an increase of 56.22% in rupees terms. In the first quarter, Glenmark was granted approval of three ANDAs comprising of two final and one tentative approval.
Final approvals were granted for Desogestrel Ethinyl Estradiol Tablets and Norgestimate and Ethinyl Estradiol Tablets. As well as Lamotrigine immediate release tablets. Tentative approval was granted for Zolmitriptan orally disintegrating tablets. The company filed one ANDA with the U.S. FDA during the quarter.
During the quarter the company launched five oral contraceptive products and also launched Imiquimod, a derma product. Glenmark's marketing portfolio as of June consists of 80 generic products authorized for distribution in the U.S. market.
The European business continued to steadily expand through product sales and licensing income by expanding its presence for distribution partners in more European countries. An innovative only supply a new pack size of an existing one product and one new product was launched in this quarter in UK. One additional product in three European markets in partners was also launched. The
Germany business launched two products during the quarter, one being supplied through tenders. Netherlands and Germany entity continue supplying products to the existing health insurance contracts. Overall the business posted revenue of 332.27 million an increase of 89.48% over the corresponding quarter of the previous year.
Oncology, during the first quarter, the oncology business based out of Argentina filed two product dossiers in Brazil and Venezuela. Glenmark revenues from Argentinian operation were 59.44 million, an increase of 28.98%.
The API business, the business continues its leadership position through major product drivers. The company has also continued to expand presence in U.S., Europe and Brazil through new molecules. The company has also maintained R&D, the company has a pipeline of five NC and NB molecules in clinical trials including in‐license molecule Crofelemer. Glenmark's PDE IV inhibitor Revamilast has obtained approval for conducting phase IIb trial in asthma and RA in the UK, India and other regulatory bodies in Europe and Asia.
The asthma study is currently recruiting patients. In these countries recruitment for RA study were in completion. The phase IIb study is being carried out will determinedly efficacy and safety of the molecule and will also provide dose range findings for Revamilast in both the indications.
In parallel to these two clinical studies, Glenmark is also conducting various other clinical and non‐clinical studies to ensure timely entry in phase III trials. Glenmark plans to file an IND for Revamilast in the U.S. in Q3 FY13. Glenmark intends to initiate Phase III trials for at least one indication by end of FY13. GRC 17536, a TRPA1 antagonist has proven highly efficacious in treating inflammatory and neuropathic pain in animal models.
Glenmark has completed the phase I study in the Netherlands. Single and multiple ascending doses have been well tolerated with expected pharmacokinetic profile. Glenmark has obtained approval for Phase II proof‐of‐concept study and pain indication in the UK and awaiting approval in Germany. Additionally, Glenmark has filed for a Phase I, IIa study for respiratory indications in the UK and is awaiting approval.
GRC 15300, a TRPV3 inhibitor for neuropathic pain and osteoarthritic pain and other inflammatory pain has completed phase I trials in the UK. Globally, this is the only reported TRPV3 specific antagonist molecule to enter clinical trials, a development and commercial license for this has been granted to Sanofi. A phase IIa proof‐of‐concept study in neuropathic pain has been initiated in Q1 FY13 and is currently ongoing.
Vatelizumab GBR 500, a monoclonal antibody, which has the potential to be a broadly applicable anti‐inflammatory compound in diseases like Crohn's and multiple sclerosis.
Phase I studies for GBR 500 has been completed in the U.S. GBR 500 has been licensed in June 2011 to Sanofi, an application has successfully been filed in Q1 FY13 to initiate a PoC trial in ulcerative colitis in the U.S. and other countries.
GBR 900 licensed from Lay Line Genomics, Italy for monoclonal antibodies against neuronal factor receptor TrkA. Preclinical research on GBR 900 project is being carried out in Glenmark's biologic center at La Chaux‐de‐Fonds, Switzerland and is progressing well.
Phase I enabling toxicity studies for GBR 900 have been initiated Glenmark plans to file a phase I study in Q1 FY14. Crofelemer, Glenmark's in‐licensed molecule Crofelemer completed phase III clinical testing for HIV‐associated diarrhea in the U.S. The trial was conducted by Salix Pharmaceuticals in the U.S. and the PDUFA date issued by the U.S. FDA is September 5, 2012.
The pivotal study in adult acute watery diarrhea conducted in India and Bangladesh is actively recruiting patients. Glenmark is working on a developmental and regulatory strategy towards obtaining approvals in Glenmark territories. This would be Glenmark's first innovative product launch across 140 countries where it has exclusive marketing and distribution rights.
With respect to Napo's purported termination of the collaboration agreement, the arbitration panel granted an interim order which prohibits Napo from terminating the collaboration agreement for treating the collaboration agreement as terminated. The final arbitration hearing has been concluded and the order is awaited.
Before we begin the call, we just like to mention a few things pertaining to the Q1 results. This is during the quarter, the company subsidiaries at Switzerland has used CHF as the functional currency for the preparation of the consolidated financial statements. Because of this, the loans that are there on the India subsidiary now will translate to USD178 million. The loans which are there in India will translate through an MTM loss of 875 million. In addition to this there has been a gain of 324 million, so the net MTM loss of 550 million has been captured in the P&L.
The balance loans remain with the Switzerland subsidiary which is to the extent of $230 million. On other points, the R&D expenditure for the quarter is 83 crores which translates to around 8% of sales. The fixed asset spend during the quarter is at 70
crores. Net working capital remains between the 125 to 130 days for the quarter.
Before we begin the call or open it for question‐and‐answers, I would like to introduce the management team. We have Glenn Saldanha, the Chairman and Managing Director of Glenmark Pharmaceuticals; we have Mr. Rajesh Desai, the Executive Director and CFO, Glenmark Pharmaceuticals; Mr. Terrance Coughlin, CEO of Glenmark Generics Limited; Percy Birdy, Senior VP Finance, Glenmark Generics Limited.
With this Aachal, we can open the floor to question‐and‐answers.
Questions And Answers
Operator Thank you so much sir. Participants', we will now begin the Q&A interactive session. [Operator Instructions]. The first question is coming from Mr. Anubhav Aggarwal from Credit Suisse. Please go ahead, sir.
Anubhav Aggarwal Hey, good morning all. Just one question, in the U.S. generics, if we were to exclude Cutivate contribution, let's say from March quarter and June quarter, what in the U.S. dollar, our sales would have grown, sequentially?
Corporate Participant Sorry. Can you just repeat that Anubhav?
Anubhav Aggarwal Yeah, sure sir. Basically the question I am asking about, we approximately did around $72 million sales in the U.S. generics for this quarter. If we were to exclude Cutivate contribution from the March quarter and from the June quarter, would there be sequential increase in U.S. generic sales?
Corporate Participant Yes Anubhav. The sales would have increased even if you were to exclude Cutivate. So there I think the growth in the other segments as well like portfolio of OCs which we are ramping up and at several other products.
Anubhav Aggarwal Corporate Participant Yes, absolutely.
Anubhav Aggarwal And just a last question here. On Revamilast, now your press release says that your patient recruitment is almost nearing completion right now. So, how long is the study going to run, basically when can we have the data out?
Glenn Saldanha We anticipate we will report the Phase IIb data end of December or early Jan on the RA indication.
Anubhav Aggarwal Okay.
Glenn Saldanha So after Christmas time frame, end of December, early Jan is when we anticipate we will report RA data.
Anubhav Aggarwal And Glenn, how many patients you are ‐‐ essentially how many subjects will the study be done on?
Glenn Saldanha This is about 450 subjects approximately.
Anubhav Aggarwal Okay. Thank you. I will join back the queue.
Operator Thank you so much, sir. The next person in line we have is Mr. Aditya Khemka from Nomura. Please go ahead, sir.
Saion Mukherjee Hi. Good morning this is Saion Mukherjee here. Glenn I have question on Latin America what is the kind of secondary sales growth that you are seeing? And if you can throw some color on the market the pipeline that you have created,
Glenn Saldanha Sure. So, Latin America although, the current quarter was quite muted because of certain reasons, but the secondary sales are very strong in Latin America. So we are growing, we continue to grow the region in excess of 35% at the secondary levels. And I think Q2 you will see a very strong norms back in terms of the sales coming out of Latin America.
I think the two, three major markets that are contributing to this, so you have, Brazil is the largest, you have got Venezuela where we're doing exceptionally well now. And Mexico is the third market where we've just started to make some indoors with the new product approvals that we've received. So, we've got two approvals in dermatology in Mexico.
In Brazil, we got two very nice approvals and that will contributing from Q2 onwards, you should see an upswing in sales coming out of Brazil, we're just launching ‐‐ which is list at, where we are just I think second, first generic or second generic in Latin America. So, that launch is starting
So, I think Latin America you should see. And then thereafter this year we expect another two or three more launches in, and every year you should expect about four or five product launches in the Brazilian market alone.
Saion Mukherjee Okay. Okay. That's helpful. Thanks a lot.
Operator Thank you so much, sir. Now we have Mr. Manoj Garg to ask other questions. Please go ahead, sir.
Manoj Garg Yeah. Good morning and congrats for good set of numbers. Glenn just want to understand like we have been doing pretty well in the SRAM market. But if we look at this quarter again like the LATAM, SRAM market was also more or less little flat when we talk about in the constant currency. So, can you put some light on that?
Glenn Saldanha So, it's a same story with SRAM. SRAM if you see Russia if you look at pharm expert or IMS, I mean there quoting a growth at about between 30 plus percent in the first quarter so secondary growth is very strong. We had some channel inventories in Q1 which we've now corrected, so Q2 onwards you should see a good growth coming out of the SRAM markets again. The secondary ‐‐ they key is that demand line continues to be very strong in all our markets international.
Manoj Garg Okay. Okay. So, do we expect again around 25% kind of growth or 20%, 25% kind of growth in SRAM market as we move forward? Clearly even will ‐‐ that is the minimum we should expect that's about between 20% to 25% on an annualized base. You may have some quarters where you will have ups and downs but if you look at it on a full year basis, we feel pretty comfortable about a 20%, 25% top‐line result.
Manoj Garg Okay. Another question for Mr. Desia like even we adjust our mark‐to‐market loss in the other expense line item, still the other expenditures have gone up by 40%, any specific reason, any one‐off item or it's all operational expense?
Rajesh V. Desai, Executive Director and Chief Financial Officer No it consists of R&D expenses of around 55 crores. In addition to this 55 crore of net exchange loss, if you will take these two expenses out, operational expenses are in line with the revenue side, If you will compare with the Q4 number, it is in line with this. So there is no extraordinary increase in the other operating expenses.
Manoj Garg So, what was the corresponding R&D expenditure in Q1 FY12, versus Rs. 83 crores which we have reported this quarter?
Rajesh V. Desai, Executive Director and Chief Financial Officer It is around 45 in other expenses and approximately 20 crore, 21 crore in manpower. So, approximately you can take 60 crores, 62 crores.
Manoj Garg 60 crores, 62 crores. Okay. Wish you all the best. That's all from my side.
Operator Thank you so much. The next person is Mr. Balaji Prasad from Barclays. Please go ahead sir.
Balaji Prasad Hi, thank you. Good morning everyone. Thanks for taking my call. Firstly can you give some more color in the Crofelemer arbitration, last I heard we are expected to have come out of the final order in June and July. Is there anything holding to that?
Glenn Saldanha So there is no further update, we are just waiting for the final verdict on the arbitration. Any change in the confidence level regarding the ‐‐ Glenn?
Glenn Saldanha Sorry, can you say that again, any change in the...?
Balaji Prasad Any change in the confidence regarding the...?
Glenn Saldanha I think we feel pretty good about our situation.
Balaji Prasad Great. Secondly, can you just also give some more color on the therapeutic areas that you are expecting approval for in the LATAM region this year and also these are your own filings?
Glenn Saldanha So Latin America like most of the ROW markets right now, our primary focus is dermatology, respiratory, oncology. These are the three main segments and next segment will go after this cardiometabolic basically.
Balaji Prasad Okay.
Glenn Saldanha These are the four segments that we operate in.
Balaji Prasad Okay, thanks. Lastly could you just throw some light on the launch schedule for the oral contraceptive is, if I remember you right you now have around 10 approvals and you have five launches till date.
Glenn Saldanha We have five in Q1 launch and five in Q2 is our strategy right now on the oral.
Balaji Prasad Operator Thank you so much sir. The next person in line we have is Sonal Gupta from UBS. Please go ahead.
Sonal Gupta Hi, thanks for taking my question. Good morning everyone. Just a couple of questions, one is on the personnel cost side, we're not seeing the cost if I look at in a sequential basis for the last couple of quarters, the cost have largely been flat and that is despite the currency sort of depreciating a lot, so I would imagine there is a currency component to it as well. So could you just explain I mean on how we should look at this thing?
Glenn Saldanha If you see the manpower cost to the sales percentage, it is ‐‐ and compared with Q1 of previous year, which ranges from 17.78% to
15.91%. Your observation is right. This Q4, if we compare with Q4 of previous year, it is almost same.
But we expect that it will go in second quarter, because our policy ‐‐ the company's policy to consider the increments and all will start from second quarter onwards. So that is why it is acquiring as a stagnant number in this.
Sonal Gupta Right. And the other question I had was, I mean there's been a significant improvement or reduction in the raw material cost. So is this just a mix affect or do we ‐‐ I mean what explains that because till last quarter to this quarter Q4 to Q1, there's a significant improvement.
Glenn Saldanha See you should, I mean going forward ‐‐ we always said that Q4 is slight aberration in terms of the GC effect. I mean going forward you should expect us to be at this kind of a GC level. I think as the scale growth you will see more and more operating leverage coming in both on the ‐‐ in terms of the product mix as well as in terms of the expenditure levels. And margins will just keep getting better from here that's what we predict.
Sonal Gupta Okay. And just finally on the overall contraceptive side in the U.S. I mean from some players we are hearing that there is a lot of price erosion in this space. So, could you just talk about what's the trend that you are seeing on the oral contraceptive side?
Terry Coughlin, Chief Executive Officer So far, till date we are seeing very real price erosion, I would say less than 10% as we have entered the market. So, over the past 12 to 24 months since we have launched it, I think we have nine or 11 oral contraceptives in last four months in the market. Across the board, we've seen less than a 10% price erosion on that portfolio as we enter. And has stayed steady since then. Okay, great. Thank you so much.
Operator Thank you so much, sir. The next person we have is Mr. Ravi Agrawal from Standard Chartered. Please go ahead, sir.
Ravi Agrawal Yeah, hi. Thanks for taking my call. Good morning, everyone. The first question was on Revamilast and you mentioned that you are looking at a Phase 3 by end of FY13 for one indication. I am just wondering also our stated policy as to looking for partners around Phase 3 on Revamilast. I am wondering I mean how does fund look at both of these events? And is there some possibilities of something coming out at the end of FY13 on account of that?
Glenn Saldanha Revamilast as you know we are multiple trials ongoing. So, we've got the RA study which reports in December‐Jan we're running an driver where we may get some interim data towards the end of Jan for the ‐‐ is what we anticipate. So, I think both these events if the data looks good will then obviously trigger partnering discussion with outlined discussion, that's the way we are looking at it. So, the intent is really to partner as of date, we just got data and even get a partner on Revamilast pretty quickly is what we anticipate. And that's the way we are moving forward. So, by the time we start Phase 3 we should have a partner onboard.
Ravi Agrawal Okay. So if I understand we are essentially indicating that by let's say in December or early Jan when this data come in that's when you would presumably start to look for partners. I mean then and of course if the data is good then you will essentially then, especially six months is a fair period to look at beyond that right, if the data is correct?
Glenn Saldanha Okay. We don't guide to time lines right, Ravi. But all I can say is we have active discussions ongoing even now but it would be unreasonable to expect any partner to conclude a deal right without having a Phase 2b data.
Ravi Agrawal Sure. Okay. Fair enough. The second question was to Ted I mean there are some other corporates essentially indicating that pricing environments in the U.S this time around has been very, very severe, and much more severe than previously anticipated. So, is there anything one is seeing, or assuring as far as Glenmark is concerned on their products about the pricing environment in the U.S. Has it got you guys also by surprise or...?
Terry Coughlin, Chief Executive Officer Are you talking about severe reductions in pricing or...? We are talking of general pricing on base and core products in terms of ‐‐ we always know that there is a trend towards lower prices on any given period of time. But the extent of the severity of that. Has been much more than you've previously seen or it's just been as usual?
Terry Coughlin, Chief Executive Officer It's been as usual, right. And it's really on a product‐by‐product basis. We've seen some prices decreased as new competitors that have entered, we are seeing some prices go up as competitors have. So, no more than this typical market and it stayed fairly steady actually. If you look at our portfolio, it may have affected other portfolios more than other. But given that we grew a class traded over these past five to seven years as in a more unique and ‐‐ portfolio but initial within a competition, we have not seen much price erosion. Even out of commodity items that we see, there may be a one‐off here there but overall we have not seen too much pricing pressure over the past couple of quarters.
Ravi Agrawal Okay. And my final accounting question, this gain of 32.5 crores, I presumed that's also being offset in that 55 crores is a net number which has been taken in the expenditure.
Rajesh V. Desai, Executive Director and Chief Financial Officer Yes, correct. 55 is a net number.
Ravi Agrawal Okay. Thank you, sir. Thanks.
Operator Thank you so much, sir. Ms. Monica Joshi is the next person to ask question. Please go ahead ma'am.
Monica Joshi Yeah hi. Good morning and thank you for taking for my questions. Can I just wanted your thoughts on the semi‐regulated markets in specialty. And also combine that with your LatAm markets. Now I am not looking at one or two quarters, but let's say if the trend in the last five quarters and based on what your annual report says couple of inlicensing opportunities have come across and you have gone ahead inlicense products across these markets.
So why do we not see despite an obvious increase in the portfolio. We are somewhere getting stuck between that 22 to 25 average range in SRM in dollar terms and in LatAm somewhere between $10 million $12 million. So I just wanted to understand your thoughts on what is it that you look for in inlicensing? And despite having your organic and inorganic expansion, why are we not
seeing traction in these two regions?
Glenn Saldanha I think SRM if you see the emerging markets as a whole, we've done exceptionally in these markets and the kind of growth that we are witnessing, if we take a two‐year, three year or ‐‐ you will really recognize the kind of traction we've seen over the last three years in these markets. And also even now, if I look at the emerging markets, I think we in all these markets on a consolidated basis are growing comfortably at 25% to 30%. So, we are looking almost $200 plus million between $200 million to $250 million growing at 35%, which is very healthy overall.
So again I don't know the specific numbers that you are referring to Monica. But if I look at on a GE horizon, I am pretty sure the markets have grown CAGR of 25% 30% for the company. I think going forward also you should see that kind of traction continue. So emerging markets continues to be a very strong base. As far as the licensing type goes, at the end of the day you cannot expect ‐‐ there are no transformational inlicensing deals happening in these regions. I mean we continue to license products to support the existing business. So we are not doing any transformational licensing deals where we 30 lacs is one product and you get $10 million or $30 million. It's very unlike the U.S. market or probably only the U.S. can give you that kind of traction.
So, these are all licensing deals which we got to support the existing business, and that's the way to look at it. So you won't see transformational stuff happening over this region. But on a sustained basis, if you take a five‐year view, they will grow 35% CAGR across the board, which is a very healthy number and also they are all cash generators, they are free cash generator. Latin America, this year onwards there will be free cash generator. I think this is the last year, where we may have to make some small investments in that ‐‐, next year you will see free cash coming out of Latin America also. So I think, it's a very good build up, it is probably a write‐off in most of the variant companies in terms of emerging markets.
Monica Joshi Thanks Glen for that response. Just a clarification, so when you inlicense your products in these markets, do you have any upfront payments that you make to your partner?
Glenn Saldanha It's very small. It's extremely small. I mean these are mostly dossier inlicensing, so now more of upfront is extremely small.
Monica Joshi Okay. Just one clarification on the debt, I didn't understand what you said in terms of dollar denominator and Swiss franc denominator. Is your gross debt today 178 plus $230 million?
Glenn Saldanha Yes, correct.
Monica Joshi So, that's roughly about $410 million?
Glenn Saldanha Yeah. And can you also tell us how this has moved from March in dollar terms, March 31st?
Glenn Saldanha March also, our dollar‐denominated debt was approximately $410 million only. So there is no change in the overall debt provision except MBM losses added to ‐‐
Monica Joshi And just one clarification, you mentioned R&D cost at 65 crores or 85 crores?
Rajesh V. Desai, Executive Director and Chief Financial Officer 83 crores.
Monica Joshi 83 crores. So, is this the quarterly run rate that one should look at?
Rajesh V. Desai, Executive Director and Chief Financial Officer We are seeing that 7% of sales is what R&D cost will be for us for the entire year.
Monica Joshi So, we are looking for the 300 crores?
Rajesh V. Desai, Executive Director and Chief Financial Officer Correct. 290 crores was the base in last year.
Monica Joshi Thank you so much. And wish you the best.
Operator Thank you so much, ma'am. Now we have Mr. Nitin Agarwal from IDFC Securities. Please go ahead.
Nitin Agarwal Hi, thanks for taking my question. Glenn, on the U.S. business if I remember in Q3 we were at about $63 million, $64 million of run rate which is about 72 odd this quarter. Anyway, due to this period we've had ‐‐ we've had the full ramp
Terry Coughlin, Chief Executive Officer So, Nitin I don't know the answer to your question, right. I mean the U.S. business continues to see growth as we stated before and I just want to reemphasize that what is the niche products or new product if there is no other competitor in, whether there is one or three, it take us anywhere from three to four months to maximize products. So, I think that we continue to see growth and then with the ‐‐ from the U.S. and you continue to see growth through these approvals where we had 15 approvals last year. It took us the whole year to launch those and will take us several more months to see the full effect on the sells because of our marketing strategy is just not blinking in the market and transferring the price we go strategically after one piece of this and gradually grow so that we don't step that's why you see the growth happen in a continuous manner.
Nitin Agarwal Okay. So, I mean, so if I heard which then what you're seeing is on the product that you've launched we'll probably see lot more traction on this product as we go forward?
Terry Coughlin, Chief Executive Officer
Yeah, you will see continued growth throughout this fiscal year on the basis of some new approval throughout the year and from the approval that we had last year to continue to grow.
Glenn Saldanha You should continue witness the ‐‐ of first step right?
Nitin Agarwal Yeah. Looking at if anybody look at the portfolio of approvals that we have got and we look at the size of the business we've built compared to some of the peers in the leverage you will be able to get some approvals, seems like not done justice to the approvals that you have got so far?
Nitin Agarwal Yeah. But Nitin there is always a lag between approvals and launch that's what we've been always consistently saying that so, take the proceeds for instance, as we are yet to launch from the we're just launching now in Q2 right? So there is always that lag.
Terry Coughlin, Chief Executive Officer And I think on that side it does take 24 months because of all the components required. And even as we launch it it still takes three to nine months to get traction even if customers switch over their inventories to bleed off and it does take a whole year to get a whole effect of launch of a product which are already generic. So, I mean Glenn on that issue is that a issue that even a last couple of years we've been extremely conscious about controlling our working capitals or cycles. Is that been some sort of data which we've taken in terms of probably building up inventories and advance, at least inventories to certain products which is probably stores on as far as scaling on from these launch approvals that we've got?
Terry Coughlin, Chief Executive Officer What ‐‐ you might want it. No matter whether it's generic or not. The FDA is very implement of changing labeling and things at the very last moment. For the ‐‐ in the projects which you are going to get and approval because anything can come up to you to ‐‐ and given that you have concerned, and labeling concerned it's very hard to predict and product ready‐to‐go in one or any type of launch.
Glenn Saldanha So, Nitin I don't know what you are expecting from the U.S. business, I mean we've reported 56% growth over last year rates, even if you take the currency impact maybe 4%, 5%. So I mean, the growth numbers are phenomenal. So I don't know what beyond this, I am not clear about what the expectation is.
Nitin Agarwal No, the issue is not about ‐‐ it's a splendid number I mean, just that one would have thought with a pipeline that you've got which is phenomenal ‐‐ approval pipeline one would have just thought ‐‐ expect or hope, we could probably done a much better and I mean, potentially it could be much better run rate coming out of this whole thing is what the thought was. If you're not ‐‐ nothing taking away from and not taking anything away from the performance which is there. It's just the pipeline that you bought is so staggering?
Glenn Saldanha So, it just take time I think you just have to be more patient. It takes time to switch on products as Terry said, which are already generates that. It takes time to switch customers and to switch to gain market share. On a day one loss just ‐‐ on a product where we ‐ our performance generic is a different ball game. But our products which are already ‐‐ it takes time to switch customers. But as
you know the OC particularly right, the portfolio, it's been a slow, it's not been that easy to break into the OC sector. But we have done a reasonably in breaking that. We continue to work towards getting more and more market share in terms of these products.
Terry Coughlin, Chief Executive Officer ‐‐ in respect with our products.
Nitin Agarwal Alright. And sir lastly on the gross margins, considering the fact that the currency was there in the quarter as well as Cutivate as well as Malarone, I mean what's our comfort level in terms holding on to these gross margin levels as we along assuming... So we will continue, I think in the gross margin, we will continue to sustain going forward because we continue to launch a bunch of niche products, you will see we've got, we're expecting some more approvals, mostly in niche areas. So all that will help keep our gross markets intact on a sustained basis. The other thing is Cutivate is not that significant a contributor, right. If you assume that there will be one more player in October, Cutivate will be not that significant that can swing things for us in terms of margins.
Nitin Agarwal Sure, okay. Thanks very much and best of luck.
Operator Thank you so much sir. Now, we have Mr. Binu Patiparambil from IIFL Capital. Please go ahead.
Binu Patiparambil Hi, just two, three clarifications. The ForEx loss of 55 crores is entirely in other expense line?
Glenn Saldanha Yes.
Binu Patiparambil Okay. And can I have the net debt number in rupees?
Glenn Saldanha Net debt in rupees is around 2,240 crores.
Binu Patiparambil Okay. Isn't that significantly higher than where we entered March more than the ‐‐?
Glenn Saldanha More than the 200 crore ‐‐ it will convert this 230 million demonstrates loan into INR. Then if there is this addition of 109 crore. So overall debt because of MTM, it will increase to the extent of 195 crore, 196 crore, which is reflected in debt increase.
Binu Patiparambil Okay. What was the ending number for FY12 net debt? Net debt was 1,924.
Nitin Agarwal Okay, right. The interest cost Q‐o‐Q have seen a decline where as you know given the dollar‐rupee depreciation Q‐o‐Q it should have typically gone up by 10% odd.
Glenn Saldanha Yeah. Actually what happens during last year we changed debt portfolio from domestic to this foreign currency debt, which is resulted in the reduction which has reflected in this quarter. So here onwards every quarter we will see similar number.
Nitin Agarwal So you changed to U.S. dollar middle of last year, so if I compare the end of...
Glenn Saldanha No, not entirely. It is a gradual process carried out throughout the year. So only cost was not reflected in this previous year. So this year you will see that type of benefit. So average cost for the previous year was around 40 crore and there is some small reduction, we have seen in this Q1 of around 38 crore and we expect that this will continue.
Nitin Agarwal Okay. And finally the Revamilast Phase 3 study that you planned to start by the end of this year or this financial year, where would that be?
Glenn Saldanha It's not this financial year, I think we said ‐‐ you said Phase 3 revamilast?
Nitin Agarwal Yeah.
Glenn Saldanha Phase 3 Revamilast is from next year results, next financial year.
Nitin Agarwal Sir, I thought you firstly said... We said five ‐‐ that is dependent on the Phase 2 results so.
Nitin Agarwal By end of FY13 is what's written in your release.
Glenn Saldanha Correct. That's filing, right?
Binu Patiparambil No filing is separate. Yeah, you have planned to file IND in Q3 and intend to initiate Phase 3 trials by end of FY13.
Glenn Saldanha Correct. So, this is we'll have to wait and see the Phase 2 result first and I think both the Phase 2 results which come out in last month is then when we will ‐‐ we can commence.
Binu Patiparambil Okay, okay. But where ‐‐ which geography would this be? This trial..
Glenn Saldanha I think it's a typo there. It should be towards the end of FY14, not FY13.
Binu Patiparambil Okay. Okay. Thank you.
Operator Thank you so much. The next question is coming from Mr. Bhagwan Chaudhary from IndiaNivesh Securities. Please go ahead, sir.
Bhagwan Singh Chaudhary Yeah, good morning and thanks for taking my question. My question is on the EPA part, we have grown 55% almost in this purpose. So even on a sequential basis...
Glenn Saldanha Bhagwan Singh Chaudhary Yeah. It's regarding the API business. This has grown substantially in Q‐o‐Q basis as well. So anything that you can what is driving it?
Terry Coughlin, Chief Executive Officer I mean it's just on the API ‐‐ I mean as we continue to file more and more ‐‐ all our third‐party customers gain approvals over the past six to nine months in the regulated markets specifically the U.S. and Europe and we're seeing several of our products just being sold in larger volumes into those markets or region, returning to the increase on the API sale side.
Bhagwan Singh Chaudhary So can we expect the same kind of run rate going forward as well?
Terry Coughlin, Chief Executive Officer I think what we stated is that we faced 20% to 25% growth year‐on‐year...
Glenn Saldanha So you should see similar of run rate I would assume going forward on the API side.
Bhagwan Singh Chaudhary One more question on the ‐‐ despite it being a consistent numbers in three‐fourth year, as well as limited ‐‐ despite that we are growing continuously with about 20% run rate. So, means can you elaborate us what exactly what strategy in that market and what
is driving that or it is the natural demand in the markets, we have that kind of portfolio which is driving that?
Glenn Saldanha For domestic growth we are seeing very strong growth, I mean consistently if you look at IMS if you look at all the different third‐party data sources, ‐‐ is very strong in terms of what's happening in the domestic market. I think a lot of it has got to do with the restructuring we did last year in terms of realignment of sales force, changing the marketing mix focusing on the right products, continuing to drive market share in some key segments. So, I think all that is driving our performance, right.
The domestic segment I clearly believe we will continue to outperform the market. I mean we should grow anywhere from 30% to 50% above the market growth. However, I think Q2 I would anticipate some slowdown in the domestic market because of the poor monsoons, right. You should see some slowdown happening in the domestic market overall. Particularly for companies that have an exposure to the top core segment or to the antibiotic segment, who are into acute care will have some slowdown is what I would anticipate for Q2. But I think all‐in‐all, the domestic segment continues to be strong for Glenmark. We still continue to believe we'll grow in excess of 30% to 50% above the
Bhagwan Singh Chaudhary So, how many field force we have currently, and are we planning to add some more?
Glenn Saldanha We have 2,700 people right now in the field, approximately 2,700 people in the field in India. Currently we don't have any plans to add any extra man power.
Bhagwan Singh Chaudhary Okay. One last question just want to get the number what was the ForEx loss and gain in other expenditure Q1 FY12?
Glenn Saldanha We said 55 crores ForEx loss, it's reflected in the other expenses.
Bhagwan Singh Chaudhary Sir, in the previous quarter in the last year previous?
Glenn Saldanha Previous year first quarter there was no exchange loss.
Bhagwan Singh Chaudhary And if I am reading rightly that in the previous quarter in the Q1 FY12, material cost was somewhere 30%, so am I reading it rightly in this quarter it is 35%.
Glenn Saldanha That's correct.
Bhagwan Singh Chaudhary What was the reason in ‐‐
Glenn Saldanha So we had a product ‐‐ right which positively impacted Q1 of last year which subsequently we walked away from. And that's what led to the higher GC and higher EBITDA margin in Q1 of last year. Okay. That's all from my side. Thank you.
Operator Thank you so much sir. [Operator Instructions]. I am getting next question from Mr. Manish Bishnoi from Macquarie. Please go ahead sir.
Manish Bishnoi Hi. I have two questions. One is OCs. What sort of contribution is it making to your U.S. revenue, is it 5%, 10% at this stage?
Glenn Saldanha So, we don't give breakups in terms of specific products or portfolios on the revenue base.
Manish Bishnoi Okay. So you won't be able to tell how significant is it in terms of contribution right now at this stage?
Glenn Saldanha No.
Manish Bishnoi Okay. On mark‐to‐market loss of Rs. 550 million, the rupee moved from 51 to 55, that's around for Rs.4. And if you are saying your U.S. dollar that is on 400, that should be around Rs. 1.8 billion.
Glenn Saldanha Yeah that is what we have explained in the beginning. We have two different debt structure. One is the debt which is sitting in India and which is actually getting qualified for a charge to P&L, whereas the debts in Switzerland, which is reflected as a foreign currency transitional losses. So overall you are right what we have said is the increase in debt because of interior it's around, approximately 196 crore, 197 crore out of that 78 crore which is charged to P&L against this as MTM losses. And there is a gain of 32 crore. So net exchange in not reflected on this P&L is 55 crore.
Manish Bishnoi And the rest has gone through the balance sheet?
Glenn Saldanha Yes.
Manish Bishnoi Okay. So you put that in the translation once in the balance sheet. Okay, thank you. That's all from my side
Operator
Thank you so much sir. The next person inline we have is Mr. Alok Dalal from BNP Paribas. Please go ahead.
Alok Dalal Yes, hi. Good morning everyone. Glenn, how many ANDAs do we target to file for FY13?
Glenn Saldanha This year we should be at about 16 to 18 ANDAs.
Alok Dalal 16 to 18, okay. And Glenn, one question on OCs, when do you think you will hit peak sales in OCs, is it fair to assume that it would be FY14?
Glenn Saldanha It takes around two three ‐‐ around two years right now, having said that we have one of our market right now, we have another dozen in our profile, a few more we're in the process of filing. So no approval time lines, you know we have two years for now OC, peak sales on the OC side.
Alok Dalal Okay, okay. Thank you so much.
Operator Thank you so much sir. The next person we have is Mr. Praful Gaurav from Nirmal Bang. Please go ahead.
Analyst Yeah, hi. Thanks for taking my question. Glenn, I had a question on the Salix income, have we booked any income from Salix in this quarter?
Glenn Saldanha No, we have not booked because of the conservative approach, we decided to this ‐‐ income only when our plant for ‐restart. So probably there is some second quarter onwards we'll start growing. Okay. And that would be divided over a period of four, five years, right?
Glenn Saldanha Five year, five years.
Analyst So roughly we have been booking around $3 million to $4 million?
Glenn Saldanha Yes, around 4 million.
Analyst Okay. So that answers my questions. Thanks.
Operator Thank you so much sir. Mr. Krishna Prasad is the next person to ask question from Kotak. Please go ahead sir.
Analyst Yeah, hi. Good morning and thanks for taking my question. Just one Revamilast, if you can give a sense on what you got indication which is keeping you excited. I mean would you think it would be the RA side or are we still excited about the regulatory opportunity.
Glenn Saldanha I think it's anybody's guess. So I think Revamilast, all‐in‐all we feel pretty confident right, about both the indications that we are running right now. And we feel pretty good about the program in general. The safety side, the safety data so far looks pretty positive which has always been a concerned area for a number of ‐‐ force in development. So, I think both indications look very good as of now. And so we are hopeful that we get some data coming out of these current trials.
Analyst And you said, respiratory will also be available by end of the calendar year. Is that correct?
Glenn Saldanha So respiratory we expect, we bring in interim analysis which will hopefully will get us some data by end of Jan or early Feb.
Analyst Right. Just another question on the OC portfolio. So I would assume that we've now launched all the products where we've got approvals for right I think about 11 products?
Terry Coughlin, Chief Executive Officer No, we're still in the process of launching a couple of ‐‐ license that we have approved. All of them have not been launched. Again it's huge aspect in the packaging aspect of things. But they are all of them have not been fully commercially launched.
Analyst Okay. So, the issues with respect to the ‐‐ recall, those have been sorted out at this point or is there anything that is still impacting this?
Terry Coughlin, Chief Executive Officer No impact at all on the primary call everything has been completely sorted out with no effects at all.
Analyst Sure. Just a last one I think you did talk about pricing pressure in OC market I mean is there a number that you talked about I mean in terms of the price erosions that we have seen?
Terry Coughlin, Chief Executive Officer
I mean on the OC side as we've entered the market as anyone enters the markets, price erosions go down slightly for customers change. And we've seen less than 10% price erosion in overall market on the OCs as we've entered, again only in our specific business all ‐‐ so far.
Analyst Right. I mean is that sort of an average number you are talking about or specific class because I mean, in some cases probably you would have about three, four players in the market?
Terry Coughlin, Chief Executive Officer As now the OCs we've entered there's been a couple of three players, the majority is that two players and a couple are only at one player. So on any typical launch in the U.S. as another player enters if we're going to get any market share we do have to do some kind of price erosion our approach has minimal as possible. In this range starts at least little ‐product because the price control by use of but we're seeing less than 10% in our market share that we desire.
Analyst Operator Thanks so much. Now Mr. Arvind Bothra from Bank of America wants to ask another question. Please go ahead.
Arvind Bothra Hi, two questions from my side. One Glenn, you mentioned that going forward with the increase of operating scale as well as continued performance in most of our key markets we expect margin trajectory to move forward. If I am not wrong you were earlier indicating at margin between $0.20. So, do we see a revision to that or would you just give a directional call that the margins from current level can improve significantly?
Glenn Saldanha So, just a directional call that margins will only keep getting better. And again I'm not looking at it on a quarterly basis, right, I mean I'm looking at it over the next two or three year horizon right you should see margins just continues to improve from here.
Arvind Bothra Okay. And R&D cost for now that we've reached the seasonably high level, you think there's further scope for increase specially when we are saying by year end some of our products would advance even further to Phase 3, et cetera not assuming that we might out license it, but if we continue the development should R&D cost step up significantly?
Glenn Saldanha I think R&D cost at 7% of sales the ‐‐ will go beyond that, I mean in any given year, right.
Arvind Bothra Thanks. And finally on the tax rate can you just guide us to where the tax rate would move going ahead?
Glenn Saldanha Yeah, we expect We expect tax rate on annual basis around 14% to 15%.
Arvind Bothra Okay. So we continue to take max credit, if I am right?
Glenn Saldanha Yes, yes, yes. Okay. Thanks, thanks. That's is from me.
Operator Thank you so much sir. Now Mr. Kartik Mehta from ICICI Securities is the next person. Please go ahead sir.
Kartik Mehta Yeah, hi. Can you share the current amount of hedges that we have. And on the debt part, can you share whatever current portion of the long term debt, that is overall to be repaid in FY13?
Glenn Saldanha Can you repeat your question Kartik?
Kartik Mehta Yeah. First is, what is the amount of hedges that we have now?
Glenn Saldanha We don't have any hedges, but we ‐‐ this will have some forward contract but that also is the distance, this year we still have restricted ourselves from this.
Kartik Mehta So what could be the amount of forward contracts as of percentage of net ForEx inflows that we see?
Glenn Saldanha This is very ‐‐ now almost you can take this, it's around 22 million, which is coming from the previous year ‐‐ beyond that we don't have anything.
Kartik Mehta Okay. And on the debt, can you share how much is the current portion of the long‐term debt that we are expected to repay in this year?
Glenn Saldanha Around 240 crores is the repayable in this year.
Kartik Mehta Glenn Saldanha Yeah.
Kartik Mehta Okay. And ‐‐
Glenn Saldanha 240.
Kartik Mehta 240? Okay. And would that be for all the non‐rupee debt or would that be ‐‐?
Glenn Saldanha No, it is a non‐rupee plus ‐‐ mostly non‐rupee.
Kartik Mehta Mostly non‐rupee.
Glenn Saldanha Yes.
Kartik Mehta Okay, thanks.
Operator Thank you so much sir. [Operator Instructions]. The next question I am getting is from Mr. Anubhav Aggarwal from Credit Suisse. Please go ahead sir.
Anubhav Aggarwal Yeah hi. One question for Terry. Terry, you have a DMS filing for very good trend which is ‐‐ that was in 2005 filings. I understand this a very difficult product to make because after being phosphate there is still around $400 million size. Two questions here, is it one of the filings in your 39 pendings with the regulator? Second is what makes this product so difficult that after such a long time, we still don't see many ‐‐ here? ‐‐ one business, the 39 to 40 before ANDAs we have. I think prior to this extreme remarkable to develop that now. And before extended release and there are several different extended release programs are very hard to develop as there are many other products. So I am assuming over time you will see additional approvals, somewhat like total ‐‐. The company has a long time to get, it is very difficult product to develop, but as you see more and more companies that are getting approval, we expect the same on the program. Somewhat it's more difficult to weekly file the ‐‐ and others.
Anubhav Aggarwal And sorry sir I missed it. Did you say that is it part of your ANDA filings currently or not?
Terry Coughlin, Chief Executive Officer We don't comment on what is in our ANDA portfolio, so I can't say whether it is or isn't.
Anubhav Aggarwal Okay. That's fair. And just the second question is on the ‐‐ this is for Glenn. The R&D mix 83 crores spread. I know that we are just looking at the quarter, but if you can actually give a sense that last year innovative R&D spend was 60% and generic was around
40%. Now this year would it be 50%‐50% or will it remain the mix more still inclined towards the innovative R&D?
Glenn Saldanha I think Anubhav, typically we can't guide to that specific amount, okay. We don't give you the exact breakdown. All we are saying is 7% of sales and that's the way to look at it. And within that 7% we will operate may be the innovative R&D spend very low and generic will be higher and that's the flexibility that you should give us on the R&D side.
Anubhav Aggarwal That's fair Glen. Thanks...
Glenn Saldanha If you saw our last year's numbers right for the most part.
Anubhav Aggarwal Okay. Thanks for taking my questions.
Operator Yeah. Thank you so much, sir. The next question is from Dheeresh Pathak from Goldman. Please go ahead, sir. 32 crores ForEx gain that you talked about in the call, what was that on account of?
Glenn Saldanha Dheeresh this like receivables and other things, as well as there are various subsidiaries whatever gain ‐‐ which is a late position other than MTM losses.
Dheeresh Pathak Okay. So, adjusted for that MTM, EBITDA in this quarter is about 220 crores, right? So, now just help me understand that had ‐‐ there is also benefit of the currency in this 220 crores because you would have realized revenues at a better exchange rate, and that would have slowed down. Although some costs would have been dollars, but the net result would have been a benefit. So, is there a number that you've worked out the benefit that is there in this 220 crores because of the rupee depreciation and if you can share that?
Glenn Saldanha So, it's about 1%, between 1% to 1.5% of the EBITDA is higher on account of the currency gains.
Dheeresh Pathak Okay. So, about 22 odd crores is from currency?
Glenn Saldanha Yeah.
Dheeresh Pathak Okay. And can you just refresh me that why the EBITDA margins ex of licensing income was higher in June 2011 quarter?
Glenn Saldanha Well, because of the one product, which we were selling in last year when we raised prices and we made a lot of money in Q1 but subsequently because of the shortages that existed at that point in the U.S. market on this ‐‐ because of appetites and some of the other manufactures who had the problems, manufacturing problems we were able to raise prices and make a lot of money in the quarter but subsequently when it ‐‐ away the margins came off.
Dheeresh Pathak Alright. Thank you so much. Thanks so much, sir. The next question is from Mr. Balaji Prasad from Barclays again. Please go ahead, sir.
Balaji Prasad Hi, thanks for taking my question again. Most of my questions book‐keeping have been answered. Just one on your hedging policy considering the currency volatility are you planning to change your current hedging policy at all or would you stay the same?
Rajesh V. Desai, Executive Director and Chief Financial Officer No, we have no plan to change our hedge policy.
Balaji Prasad Alright. Thanks Mr. Desai. Good luck.
Operator Thank you so much, sir. The next in line we have is Mr. Aditya Khemkha. Please go ahead.
Saion Mukherjee Yeah, hi this is Saion here. A couple of questions firstly on the U.S. What percentage of your revenues would be OC currently? And secondly your launch in ‐‐ how are you seeing the market shaping out for you?
Terry Coughlin, Chief Executive Officer As unfortunately we don't indicate what percentage of specific products our the overall portfolio again the deals that contribute at the overall U.S. portfolio. And then our ‐‐ is going well, we were the fourth player to enter the market but we have started and this one took a while for the launch only because of a lot of components and changes on the approval which late in the ‐‐. But we are starting to get up the traction and volumes and costs were down in both side.
Saion Mukherjee Okay. And going forward you've talked about 16, 18 ANDA filings that you expect this year. You had been working on several niche segments and lot of filings have happened. So, in terms of going forward if we look at two, three years is any change that we would see in terms of the therapeutic area on new segments. Are there enough these niche opportunities you think are still available which you can go after as you have done in the past?
Terry Coughlin, Chief Executive Officer Again we'll continue to see dermatological products will continue to see ‐‐ product, we'll continue to see some of our controlled open products we have our quality products. So we do have a good portfolio of the next three to five years already in the pipeline ‐‐.
And Saion every year as we stated right we will have one new segment which we will start filing in, right. And that's the way we view it. So this year we are filling oncology products, next year we have another niche segment year after that we will have another niche segment. I mean that's technically how we will go ahead.
Saion Mukherjee Okay, okay. And just one last question on the Indian market. Glen, actually you have very strong position in some therapy areas like ARBs or the derma product. So, are you growth‐dependent also to an extent on price increases, how do you see that compared to the rest of the market?
Glenn Saldanha I think volume growth now is very strong for us. So we did ‐‐ you did see price increases, but we saw ‐‐ we are now witnessing some very good volume right across our portfolio. So typically if you take on a annual basis, if you ‐‐ you can assume we will have about 3% to 4% coming out of price increases. The rest is all volume growth.
Saion Mukherjee Okay. So, 3% to 4% of the growth approximately is on account of price.
Glenn Saldanha Exactly.
Saion Mukherjee Okay thanks. Thanks. And all the best.
Operator Thank you so much. And the last question for today is coming from Mr. Sonal Gupta from UBS. Please go ahead sir.
Sonal Gupta Hi. Thanks. Just one small question again. On Oxycodone, there was some warning letters issued by the FDA to some other players, so have you seen a further ramp up in this product? Could you just talk about how this is shaped up in this quarter and going forward how do you see it?
Glenn Saldanha I think that the product has been steady ‐‐ They are acting out of better last year to ask but this a little different approach since we had an ANDA. There was one company very, very small amounts out there. And given the FDA decision, Oxycodone was previously ‐‐ product that was consider under, we did our ANDA, it was just their process to get them off the market. But you ‐‐ they do not have enough ‐‐ or enough volume you will get in market to see any
Sonal Gupta Okay, great. And just one thing ‐‐ sorry, just to repeat this. You have 230 million of Swiss franc and about $160 million of U.S. dollar loans. How is that?
Glenn Saldanha No, no we said 230, means both are USD figures. Both the figures that we gave Sonal are $230 million which is in the Swiss subsidiary and $178 million, which is in India.
Sonal Gupta Okay. So it's just at the USD one gets directly gets translated on the balance sheet?
Glenn Saldanha Correct. Absolutely right.
Sonal Gupta Okay. Great. Thank you so much.
Operator Thank you so much Mr. Gupta. I request Mr. Jason D'Souza to take over the floor for final remarks as there are no further questions.
Jason D'Souza, Investor Relations Thank you Aachal. I'll just read out the disclaimer for all. This document and the information during the call was by Glenmark Pharmaceuticals Limited. The information statement and analysis made during the call and in the document describing the company's objectives, projection and estimate are forward‐looking statements and progressive within the meaning of applicable security laws and regulations.
The analysis contained herein is based on numerous assumption. Actual results may vary from those expressed or implied depending upon economic condition, government policies and other incidental factors. No representation or warranty either expressed or implied is provided in relation to this presentation. This presentation should not be regarded by recipient as a substitute for the exercise of their own judgment.
With this, we end Glenmark Q1 earnings call. Thank you very much.
Operator Thank you so much sir. Thank you so much everybody. With this, we conclude the conference call for today. You may all disconnect now. Thank you for participating. Have a great day.
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