Orchid Pharma (NSE:ORCHPHARMA) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Orchid Pharma Limited Q1 and FY 'twenty seven Earnings Conference Call posted by Systematic's shares and stocks. 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. This conference call may contain forward looking statements about the company, which are based on beliefs, opinion and expectation of the company as on date of this call. These statements are not guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Ms. Lavleen Bagga from Systematics shares and stock. Thank you, and over to you, Ms. Thank you, Dhanish.

0:50 Good evening, everyone. On behalf of Systematics Institutional Equities, I welcome you all to the q one FY 'twenty seven earnings call of Orchid Pharma. We thank the Orchid Pharma management for giving us an opportunity to host the call. Today, we have with us the senior management of the company represented by mister Manish Dhanuka, managing director, mister, whole time director, mister, VP finance, and mister, company secretary. I will now hand over the call to the company management. Over to you, sir. Thank you. Good evening, ladies and gentlemen. I'm Manish Dhanuka, Managing Director of Orchid Pharma, and I welcome you to our discussion on the results for the first quarter of financial year 'twenty seven.

1:41 As you may be aware, on July 10, the merger with Anukal Laboratories became effective with an appointed date of 04/01/2024. Accordingly, the FY 'twenty five comparative and FY 'twenty six results have been restated to reflect the combined operations of Orchid Pharma and Hanukkah Laboratory. The financial numbers that we will discuss today are therefore on a combined and comparable basis. They will differ from the Orchid only numbers discussed in earlier calls. As we had indicated in our last call, financial year twenty six was a difficult year for cephalosporin business. It was among the most challenging environments our cephalosporin franchise has faced in the last fifteen to twenty years. In a number of important products and markets, both volumes and pricing were affected with declines of 15% to 20% depending on the product.

2:35 On a restated base combined basis, revenue from operations was INR $12.33 crores for financial year 'twenty six compared with INR $13.98 crore for the financial year 'twenty five. After the first quarter, our focus was on protecting volumes and customer relationships in the challenging market. This involved accepting some pressure on margins, particularly because of product mix and pricing conditions. Consequently, combined gross margin moderated by approximately 4% to 32% in financial year 'twenty six compared to approximately 36% in financial year 'twenty five.

3:22 We remain disciplined on controllable costs, combined employee and other operating expenses were broadly flat at $3.53 crores in FY 'twenty six compared with approximately INR $3.53 crores in FY 'twenty five. However, this cost discipline could only partially offset the effect of lower revenue and gross margin compression. Turning to the current quarter, we have begun financial year '27. On a better footing, revenue from operations increased to INR $30.04 crore in Q1 'twenty seven from INR $2.63 crore in corresponding quarter last year, representing growth of approximately 15%. Combined gross margin improved by approximately 3% points to 33% in Q1 'twenty seven compared with approximately 30% in Q1 of 'twenty six.

4:17 EBITDA improved to INR 25 crore in Q1 of 'twenty seven compared with EBITDA of INR 10 crore in Q1 of 'twenty six. Though we can see some improvement in sales over last year, we feel the industry is still facing overcapacities leading to cutthroat competition. Our focus remains on growing volumes with discipline, improving product mix, maintaining price control over operating costs and progressively strengthening the underlying profitability of the combined platform. We have also started a number of focused integration projects to crystallize savings from this merger. We expect initial benefits of these initiatives to begin becoming visible in the next financial year.

5:03 The AMS business continues to be managed with financial discipline. Its quarterly EBITDA track has reduced significantly, while we continue to build the platform and its long term strategic relevance in antimicrobial stewardship. I will now move to the operational and strategic updates on other businesses and projects. Let me begin with Exclifep. We continue to make measured progress in building Exclifep as a global commercial platform. In Russia, the estimated ten year value of our licensing arrangement is approximately USD 178,000,000. This is an estimated long term value and not current period revenue.

5:49 Execution will depend on registration, launch and market development over time. In Europe, the business is growing at a steady manner, whilst volumes grew by approximately 300% in Q3 of 'twenty six, 170% in Q4 of 'twenty six and about 50% in Q1 of 'twenty seven. So there is a significant Q by Q growth in the volumes. We remain focused on building the business country by country rather than extrapolating early growth rates. In The Middle East and Africa, registration in South Africa has been completed. We now have coverage across the GCC markets. Planned launch activity in the region has been affected by the recent regional conflict and timing of commercial rollout will depend on normalization of conditions in The Middle East.

6:43 We continue to engage with potential partners in other markets and are at an advanced stage of discussion for South America, Mexico, Philippines, Thailand, Morocco and Australia. These agreements will lead to large scale availability of Exblifep across the globe. We are also in discussion with prospective candidates in U. S. And China. Coming to Safedrocone, the project remains on schedule. Some equipment originally sourced from China had to be rerouted through Italy. While this created execution complexity, it has not changed the overall project time lines. We target commissioning by December 26, followed by validation and initial batches during January to March twenty seven period.

7:31 Commercial launch will be subject to the approval process from DCGI. Separately, Guardfree has floated a global RFP process for broader market access and once they finalize the distributors in different countries, as you know, 135 countries are entitled to get the product from GRAD P. We hope to start the supplies as per their progress in the agreements. Finally, on the seven ACA project, our objective remains unchanged, commissioning and the first commercial batch by March '27. This is among the largest and most complex fermentation projects being executed in the country. It's a critical backward integration project, which can provide the advantage of scale to Orchid, and we are putting our best efforts to execute the project successfully.

8:20 More broadly, while the first quarter has shown improvement, it would be premature to assume the straight line recovery. Pricing and demand conditions in our core markets remain competitive and the benefits of merger synergies, product mix improvement and new projects will emerge progressively rather than all at once. Our near term priority is clear, protect and grow the core business with cost discipline, improve margins through volumes and product mix and execute our capital projects safely and on time. Over the longer term, we remain constructive about the opportunities before us. The combined Orchid Ghanaka platform, backward integration into 7AC and the sacredrochol excess project, ex blecept commercialization and selective expansion into regulated finished dose markets create a more diversified set of value creation opportunities than the company had in the past.

9:19 However, these opportunities will create value only through consistent execution. We will, therefore, remain focused on operational discipline, prudent capital allocation, regulatory compliance, timely project delivery and transparent communication with all the stakeholders. Thank you for your continued trust and support in Orchid Pharma. We now welcome your questions. Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. If you wish to remove yourself from the question queue, you may press star and 2. Participants are request to use handsets while asking question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

10:19 First question comes from the line of Shashwant Vijay with SIC Wealth Management. Please go ahead. Oh, yeah. Hi. Am I audible? Yes, sir. You are. Please go ahead. Yeah. Congrats for a good result. I just wanted to... I just had two questions. The first, it was that as you said that the industry pricing pressure cycle is still on. I wanted to understand what is the management thinking. Will there be any margin recovery in h two, or will it take more time? Or will it go to FY 2020? See, I believe that in the non regulated market, the competition will continue. And generally, it depends on the cycle of demand. So it's very difficult to predict in that area. But for us, what is important is the regulated market demand, which also is kind of cyclical.

11:14 And we have seen that the quarter where we have more of the regulated products demand that is much better. And I would consider this quarter as a mediocre in that terms. So we hope in the next two, three quarters, our demand for the regulated products will improve and we can do better performance. Okay. And another one was that since the the more facility of seven ACA will, you know, start in February 2027. So I wanted to know what the expected ramp up and utilization trajectories for that facility, And how much will be the output we capture and how much will be a third party change? Hi. So our ramp up plan is to go to about 80 to 100% in... By the end of the first year. Initially, it could be slow and then increasing progressively.

12:08 With respect to utilization, our long term guidance on this is 80% in house use and 20% selling to third party. Initially, the entire product would be used in house as we develop customer approvals from the new site because it's a pharmaceutical product. So our customers would have GMP approval cycle. Once that starts, third party sales can also start. Okay. Thank you. That's from my side. Thank you. Our next question comes from the line of Tarun Krishna with iPod BMS. Please go ahead. So is it like exports of 7HP from China to India is concentrated with two to three Chinese companies? Or is it like there are a lot of companies with export to India and you can name some of them? And another one, are you expecting them to drastically reduce their prices once they're seven ACS prices fully commissioned?

13:11 Yes. Thanks for your question, Arun. It's concentrated between three to four companies only, not too many companies make this product. It's a complicated fermentation synthesis. The second question is with respect to price reduction. So although you can't predict the Chinese, but what I believe is all the companies are now want to make profit, it's different situation compared to what used to be fifteen, twenty years ago when the state was funding most of the company. So private enterprises want to make profit. The pricing in 780 has been stable over the last ten to twelve years. The weighted average is about $60 So we believe that there is not much room to reduce prices drastically. Okay. That's helpful. Can you name some of these Chinese companies as well?

14:02 So there's a company called Sinopharm, there's a company called Zhuhai United. Then there is Yeely Pharmaceuticals. And there's a company called Livesone Pharma. Okay. Got it. And next one on commercializing 900 and thousand. So for the countries that we have signed the marketing partnerships with, will we be also manufacturing the products for those partners? So we have acquired the asset from Allegra, and they already had a CMO in China. They have a long term agreement of providing the product from the CMO in China. So the supplies will start from that CMO itself, but we will have our margin in the supplies.

14:56 And we do have the right to start manufacturing and as our tepidropol project will get started say in the next year, then we will take validation batches. And hopefully, after two years, we would be able to once we are able to register the product from our side, we would be able to supply some percentage from our side. That's our long term plan. So currently, we are not producing We are producing for our consumption for domestic market. We manufacture supply to Shipla and we sell in our own brand or blisters in India.

15:41 That is manufactured by us completely. Okay. So all the international sales are coming to the bottom. It's from the third party. It will it will come from our CMO in China to begin with. And slowly, we will we will, you know, get registration from our side and partially start to supply from here also. Okay. Understood. Understood. The next one on GCAD. So can we talk around where exactly is this product used in our value chain? And will the commencement of seven ACL plant affect our procurement of GCLE? No. It will not. GCLE is used for different products and seven ACL is used for different products.

16:28 Okay. Got it. And our share of business with Otsuka Chemicals has been increasing since the last five years. So what would be the reason for this? I'm not really aware. You're talking about from the related party report, are you reading from there? Yes. So that is the procurement of GCLE largely that you can see there. So it is dependent on the product demand. As we shared last year, the number had significantly reduced due to overall demand reduction of 15% to 20%. So that is why you see a decline in the overall value. Yes, absolute value, yes. But if I take it as a percentage of our materials cost, that number has been increasing since the last period. That's the point I'm not sure which number you're reading from. So unfortunately, I cannot clarify further on this call. Actually, prices also vary and the volumes vary depending on our demand. So that would have led to some changes.

17:36 But as such, in a strategic alignment with Otsuka with respect to GCLE, there is no change. Okay. Understood. That is improvement rate also this time. We procure our 100% GCLE from Otsuka. So the values may change depending on our demand and the pricing Our next question comes from the line of Nishita with Sapphire Capital. Please go ahead. Hello. Am I audible? Yes, Nishita. Yeah. So so I just wanted to understand with the new facility coming in, everything, what kind of CapEx have you budgeted for FY '27?

18:29 So as such, we have we have not considered very significant CapEx in the next financial year. In this financial year, we will be completing our projects of and. So the entire CapEx would be spent? Okay. Like, can you quantify that,? Yeah. It's already... There is a presentation, but seven fifty crores is for the seven ACA project. 20,000,000 to $25,000,000 I don't remember the growth amount we have disclosed for the sector of all projects. Okay. Okay. Understood. And my next question is on so you mentioned that for regulated markets also are demand is cyclical.

19:18 So, like, can you specify more, like, in which quarters do we have more demand? So you mentioned that Q1 was mediocre in that sense. So, like, you could say, is actually better for us in regulated markets? Yeah. Last last q, we had strength we have seen with the second half is generally having more demand from the It's probably the winter season there. You know? Right. Right. So, like, can we expect the q o q growth to be better than in h two? Like, in this in q one, we had a 15% q o q growth. So can we expect that growth number to be better in h two?

20:05 Yeah. We hope to have better sales q on q basis. Okay. So, like, if you could give some sort of guidance, what sort of growth can we do for twenty seventh? Because we are going to have a q o q growth. So I'm assuming we can, like, can we achieve around 20% growth for the whole year? I don't think it will be prudent to give you any number at this time. Okay. Okay. That's understandable. Thank you so much. Thank you. Our next question comes from the line of with Total Capital. Please go ahead. Hi. Good afternoon, everyone.

20:53 So my first question is on the seven ACA project, and I think in line with one of the earlier participants. So what happened in time g with our vendor, you know, the way China dumped and reduced prices, and we have seen that across many APIs where we start new capacity and try to take market share. China is just doing irrational pricing. So do we have a plan b on that just in case if they decide to dump at a price which is not sustainable? What will happen to the CapEx investment, everything? Anything on that? Yes. I would say rather than having plan B, we decided to have a good plan A and that's the reason we went to Jammu, get some GST benefit, going to to a state where the electricity cost is the cheapest in India.

21:53 So water is abundantly available. The boiler, the steam cost is lower due to available of abundant agricultural waste. So I know obviously we are working aggressively and towards improving our overall tighter concentration so that our yields can improve. Our pilot plant team is working towards that. I think the best you can do is use all your resources to improve efficiencies and that is our target. And when you compare with Pengy, what happens, Anil, we've talked about earlier in other calls. In Penji, three of the large manufacturers came together and decided to collectively increase prices because they knew India could not buy from anyone.

22:45 And because they increased the prices from $10.12 dollars to $30.40 dollars they had that opportunity to crack the price. So you can see the price crashing after PLI. But in seven ACA, that joint cooperation or whatever you want to call it was never happened. And the prices have been stable. So therefore, I said, I don't see much room for China to drop the prices. But having said that, they are unpredictable. Sometimes other things can still happen. What he's trying to say is that even in P G, the Chinese have not dropped the prices to below pre realized level. If you look at the prices of P and G, the current prevailing prices are same as they were in 2019 or 2020. So because of the PLI, they had increased to properly create a war chest.

23:35 They were preparing themselves to fight when the PLI companies start their production. And they brought it back to the normal level. So like Madhu said earlier also, now these companies are largely privatized. And we don't know what future holds for us, but the intent is not as it used to be twenty years back to just flood the market. They want to work on a profitable model. That's the general belief now for the Chinese companies. And we have seen in other products also. We believe that they are dumping the product, but whenever they reduce the price, they definitely have some cost advantage. So we have changed at least I have changed my thinking about the Chinese.

24:21 If I find that the Chinese selling something cheaper, would want to believe that their technology is better and I should look at my technology. That's my belief these days. Got it, sir. Got it. Very clear. So second question is, I think we have a technology partner and I think they also supply to the Chinese manufacturer. So do we have only the process technology transfer or the strain part also is given by them, you know, because the high end strain will make a lot of difference in terms of the end competitiveness. So how is it working? We have a comprehensive agreement with them. They will handhold us during manufacturing process. They will support us in the production stabilization.

25:10 They will continue to develop strain and provide with better strains when they come up with that. And they will help us in improving the technology over the years. They have some incentive to give us those improvements. Okay. Got it. And last question. So, sir, with all this in place, you know, typically, we have seen that fermentation product takes, you know, a longer time to ramp up. So where are we today? And when you say commercial batch, I think that will be a very small of the first part of the ramp up. But eventually, the stabilization will take, what, twelve to fifteen months, is that the time line that you guys are working with?

25:57 We've guiding twelve months, but and I've said that again earlier that our window looking at other experience, it might be longer. Although we have, like Mr. Mani said, the technology partner with us all the way to make sure the risks are lesser. But it is something unpredictable and we wait you'll have to wait to see what actually happens. We have been successfully been able to commercial scale up our existing pilot plant by 20x and we have to another do about 800x from there to Jammu. But it's a little unpredictable. We still remain hopeful that we'll be able to reach full utilization in one year by the end of one year. Okay. And we'll come to know the end output is good in terms of quality and yield by March, right? That's a fair way to.

26:50 So 20 to 800x that we're talking about, that will happen in February, March of 'twenty seven? Yes. The first batch, yes. The first batch, yes. Okay. Got it. Very good. Thank you. Thank you. Our next question comes from the line of Rupesh Tatia with Long Equity Partners. Please go ahead. Hi, Manish. Hi, Ritu. First question is some data you gave on wires. I don't know if it was for in matters of that term. So could you just repeat that? Which one? Russia. Yes, 178,000,000 for Russia. That's what you're talking about? No, no, no. From vials, you gave some growth data, Q2 this much, this many vials, Q3 this many vials. So what was that?

27:47 So that data is. Europe number of buyers growth data, we were just trying to talk about how the business is growing in Europe as more and more market get added. So in Q3 FY 'twenty six, there was a 300% growth Q o Q. And in Q4, over Q3, it was 175%. And in Q1 FY 'twenty seven, there was a further 50% growth over that. So as the volumes are increasing, we are seeing this J curve continue to play out. That's what we were trying to shape. Okay. Okay. So now has Advanced Pharma launched the product in all the markets where it is registered? Sorry, Advanced Pharma what? Have they launched in all the markets? Are there still some market that Advanced launch is pharma is focused in Western Europe. Big five would be their largest markets, which is Spain, Italy, Germany, France and UK.

28:46 They've launched in all of those big five markets and some of the other Nordic countries. But for Eastern Europe, they will have B2B partnerships that they will forge. They have the license for full EU, but rest of the Eastern Europe, they have not made the partnerships to launch yet. Okay. Okay. And I mean, I don't know, at what point this advanced pharma stream start becoming 5%, 10% of the revenue? Do you think it is FY 2028, FY 2029? I would not guide on advanced pharma specifically becoming 10% of our revenue, although I would be happy to see that. So our long term guidance on this is remaining the 1,100,000,000 to $2,000,000,000 that we came up within 2021.

29:35 And looking at even the Russia numbers, we remain optimistic that the partners continue to believe that it's a viable asset. But to actually sell a product and get value out of it is a long term thing and things can change over time. So it would be difficult to say the answer to your question. Okay. Okay. And last year, what are the time lines for registration and commercial launch? So the agreement is just signed, we announced last month. And since that time, I think registration dossier's submission and launch would take about one point five to two years. Okay. Okay. Okay. Now coming to Sefidorokol, update on trial wave off?

30:24 How is that discussion going? Sorry? Trial trial level. Right? This this is where we have to do a trial for Safideroquel for launching in India, and I think we are hoping for a waiver on that. Yeah. That we will come to know only only after we apply. So as you know, there's a pros... There's a there's a sec committee that sits in DCGI after your application. So we are working with GATP to engage the stakeholders in the utilize usefulness of the product and the strong unmet need in the country. But the actual result will come to know after the application.

31:10 Is there any precedent for the waiver? Sorry? Is there any precedent for for where know DCGI has granted a waiver in the past? Yes, yes. Our specified amendment as a back to me, it's with the precedent. We got the waiver because the committee thought that the because of the antimicrobial resistance, the country needs new antibiotics. So we, ourselves, have got this favored. That's why we are more hopeful actually. I see. I see. Okay. Okay. And and this GARP RFQ, do you need any registrations or regulatory approvals? How does that work? Because for one hundred twenty five hundred or just WHO enables you to supply to 125 countries?

31:58 The overall target is that getting the WHO PQ. If you get WHO PQ, then the process of registration in many countries becomes very simplified. And when the product is distributed by nonprofit organizations like CHI and GATP, then it becomes further, I would say, faster. So our target is to file with the WHO and get the PQ. How how much time does it take to get get a PQ after filing? It takes two years, around two years. Around two years. Yeah. We are banking on our sales in India. I think that will be our first market. First market. Okay. Okay. And any update on U. S. Formulation strategy?

32:48 I mean, just somebody maybe you can give where we are at, where will we go in next three, four quarters? Yes. So Rupesh, we just talked about that strategy first time last quarter, and the guidance is still 2020. I don't think there will be quarterly updates on that. We'll be sharing possibly annually updates on that only. So things won't move much in q o quarter quarter to quarter. But I I mean, have you... I don't know. Have you started looking at the products? No. No. The products are already identified in part of our presentation, which products we are going to launch. So it's ceftaroline, ceftarosine, tazobactam, three new molecules and three older molecules in cefafine, ceftriaxone and cefazolin.

33:39 Okay. And are we I mean, where are you on ANDA filings, DMFs for for those? We also looking for some in The US? Yeah. Yes. So, yeah, those will take time. For the generic molecules, we'll be using our cepheidaracol facility to file. So that will require taking validation batches, U. FDA approval, filing, all of that, which will take few years' time. For the newer molecules, we'll be using a CMO to launch faster in the market, but nothing starts before 'twenty eight sometime. Some of the new molecules might be filed by end of next year, but nothing before that. Okay. Okay. And how I mean, what was the EBITDA loss for AMS division in quarter one? Where do you see that for the full year?

34:29 And how how is the discussion to, you know, get distribution license for? It was around 50 lakhs for this quarter. Sorry? About 50 lakhs for this quarter. The results are much better than the last quarter. Okay. Okay. And I mean, if you can share the number also, revenue number from the division? Yes. It was a revenue for AMS was 5 crore. Cepidaracol distribution, I mean, whatever process license? No, not Cepidaracol. The Orglyceph and we have a couple of other brands that sales through MS division was around INR 5 crore of sales.

35:21 Yeah. Yes. But eventually, we are looking to get a... Become a distributor of. Right? So I I I Yeah. Yeah. Will we We are we launch, do we meet the distributor? Yes. Yes. Yes. Yes. Are we are building this network for Safedrofol launch itself. That is the main purpose. And we are in advanced discussion to finalize our distribution agreement with that. Thank you. Our next question comes from the line of Nishita with Saphyr Capital. Please go ahead. Yes. Thank you for the follow-up question. So I just... If you could just reiterate, when are we going to, like, start commercial operations in both of our projects, seven ACA and Safidoracol?

36:13 I missed it. If if you could just repeat that. Seven ACA is March 27, and cefideroquel, you know, facility would be ready by December. And first product approval will take six to nine months from there for cefideroquel approval in India, depending on DCGI granting the clinical trial date. So that would mean q three of next financial year. Right. So 70, see revenue contribution we can see from '28. Right? Correct. Fine. Okay. Okay. Thank you so much. Thank you. Next question comes from the line of, an individual investor. Please go ahead.

37:04 Ankur, you may please proceed ahead with the question. Thank you. Hello. Sorry. Yes. Just one question. Is there any risk to the PII due to the slippage in the timeline or has it not been settled with the government? Sorry, can you repeat the question? PII. We'll probably be entitled for two years. Based on the current scenario, we'll be entitled for two years. Okay. So any scope of getting extension on that? We will maybe try for extension only once the plant gets started. Okay. Okay. And just one more question on this NPNC business, which came from Renuvra's inventories.

37:52 So in this quarter of this INR $350,000,000 revenue, what was the portion of NP consensus? We'll just come back. We'll check and come back. We'll just check. That's a relatively smaller part of the business as of now. Thank you. That's it. You. It's around 20 crores, INR 25 crores per quarter. For this particular quarter, we'll have to separately check and come back. Our Our next question comes from the line of with Nirish Wisdom. Please go ahead.

38:47 Sir, my question again is, more broader, but beyond cepiderochol seventy three, what are like the five, six target products that are probably furthest along in the filing and approval process, sir? Sorry, I did not understand your question, Prathi. Can you repeat? Beyond, what are like the five to six target products which probably are furthest along in the filing or approval process, sir? So there is... I mean, it depends on which market we are talking about. Like we have recently launched this product called Septaroline in India, and our brand is called ORTERO.

39:39 This is a molecule which was only provided by Pfizer, and they have they are trying to withdraw this product from India because probably their costs manufactured in Europe is not viable. So like that is one product which we will slowly manufacture and export to other ROW countries. And if you're talking about The U. S. Market, that is one product ceftaroline, which we plan to file ANDA. And of course, ceftarzetimibevactam combination is another product that we wish to file in the regulated markets. Then after that in the pipeline is a molecule called ceftolozine and tazotrexate. That is in our R and D stage at this point of time.

40:25 So we feel these are a couple of molecules which are going off patent in the injectable space. And relatively, there are less number of players who can manufacture such complex molecules, first of all, and less number of regulated market facilities for the injectable. We feel that, that will give a significant edge to Orchid in the coming years. Got it. Thank you, sir. And another one more question on the enzyme metazolobactam, sir. I think you if I'm right to mention that 1,000,000,000 to $2,000,000,000 lifetime sales potential would be around year four to five post launch.

41:12 So and I think we are active in India, but any other markets or regulated markets today, are active with this product? And what could be the realistic revenue contribution from this for FY 'twenty seven? No, Prateek, we don't give yearly number guidance on this. The 1,000,000,000 to $2,000,000,000 is lifetime sales, not the fourth year or the fifth year. And besides India, it's already selling in Europe and GCC is approved, which is the Middle East market and South Africa is approved launching would be shortly, it would be launched. And like Mr. Manish explained speech, we are talking to several markets in Latin America, Southeast Asia, U. S, China to launch it in other geographies.

41:59 We hope that by end of this financial year, it would be launched in three, four agreements would be in place for three, four more places out of those. Okay. Thank you. Thank you very much, sir, and all the best for future. Thank you. Our next question comes from the line of Vishal Manchanda with Systematics. Please go ahead. Yes. Hi. Good evening, Thanks for taking my questions. On C7 ACA, have you seen any material price changes on a quarter over quarter basis? No, it's pretty stable for last one year. And on our final APIs like cefixime, cefuroxime, are they also stable?

42:46 Cefixime is the one having maximum pressure. Cefuroxime and other 7AC base fortunately seem to be more stable compared to Cefixime. Okay. But on Cefixime, would our spreads be narrowing or the spreads remain the same? Cefixime does not start from seven percent, starts from ten gs and GCN. Yes. But the spreads are kind of going down or they remain as they are? Yes. Cefikmin as a product is under maximum stress with respect to margins. Okay. And is so for even the regulated markets or it's only for the rest of world markets?

43:33 It's for the rest of the world market. It's where the volumes are huge, and that's where the pressure comes from. Okay. Anything that we're going to kind of get reduce our dependence on this product since this is Pangaea derived and we are not backward integrated there? Yes. I mean, we are trying to work on other products, and we have a couple of other products that we manufacture in Hanukkah. We are trying to create a situation where we remain the sole player of those products. Our focus, our strategy is completely different from competitors who are more focused on the volume business, we are more focused on the value based business and more of a diversified portfolio. If you see the competitors in cerulosporin right now, we are the only company which can make about 20 to 25 products, whereas the others, they make three or four products and focus on the volume.

44:36 So our strategy per se as a cephalosporin player is completely different from our competitors in India. And how it plays out, I mean that is the reason we I mean we could see that the generic business of Saprosporin API is going to become a low margin business. And that is the reason we sought to go for a backward integration and a forward integration. And in that mission only we decided to set up 7AC and the injectable facility. So we think we are trying to de risk ourselves from the traditional API business, which is becoming more complete. So post like once you have seven ACA, is there a like ceftriaxone is potentially another large market within the cephalosporin space. So would we is there an opportunity for us to scale up there and kind of scale up quickly there in a shorter time frame?

45:37 Yes. That's that's our plan. So for subtilizer, not just to sterile, we would be supplying to all other players like Aurobindo and other sterile players in India. The non sterile part, which they are currently importing from China. So the market is not just our own sterile product, but our competitors also become our customers. Okay. So you will supply the non sterile version, not the sterile version? Yeah. Absolutely. Okay. But would you have capacities to sell the sterile version to your sterile? Are there adequate capacities if you want to do that? I would not say our sterile can completely consume our seven ACA capacity, but we are reengineering our non Sterile capacity so that we are able to convert the product and supply the non Sterile.

46:27 I think that is a better model rather you see, I mean selling a Sterile product needs approval process, which is more long drawn. So it would make more sense to work with our other players in India. Then there are three, four players, they can take large part of your volume production rather than getting approval process in 200,300 customers. It's better to collaborate with these four manufacturers of sterile who already have the capacity and who already have worldwide approvals. So I don't see much benefit of competing and creating overcapacity. We would rather collaborate with them. Understood. Understood. And sir, on veviceptide, you had once indicated you have been trying to do a non intringing route for an early launch in Europe.

47:19 Is that work under progress and any timelines to that? Yes. I mean, have customers who are taking this product for us for their own development. We also have plans to take our own validation batches and file in Europe. And The U. S. Plan, although unfortunately, last filing had some objections, we still continue to have plans to refile, and that is going on. The filing should be should happen this year for in The U. S. For raviceptan? I'm hoping maybe validation batches maybe this year or early next year and then six months for filing. Thank you.

48:09 Our next question comes from the line of Rupesh Tatia with Long Equity Partners. Please go ahead. Yeah. Hi. Hi. Thank you for follow-up. One question on seven ACA, there is this, you say, cancellation of VAT VAT refund. So has that is that applicable for seven AC manufacturers also in China? Sorry, I'm not sure what you're talking about. In battery Sorry, in battery or solar in a host of other industries, Chinese government used to give a tax refund to the manufacturers and then government now is canceling the refund from April, for some industries April, some industries January like that. So my question is where seven ACM manufacturers in China getting this refund and is it now getting canceled?

49:02 Honestly not aware about this. We heard that slowly the VAT refunds are getting reduced, but not aware exactly of this. Okay. Okay. And another question is what was the sale of NPNC segment in in maybe last year or or this quarter. And any... Sorry. Any high value APIs that we're working on in in NPNC? Yeah. So this quarter sales was 21 crores and we are working on a couple of molecules. We are also planning to scale up and backward integrating these molecules.

49:51 So that launch would be this year, next year? Yes. I mean, it's a continuous process you see in synthetic, you continue to introduce new products. It's not something I would not say it's a news that we would want to discuss on a large scale. It's an incremental improvement that you continue to do in PMC synthetic. You have to keep working either by increasing capacities or introducing new products. So we keep evaluating which options are better at any point of time. But I mean, will it become, let's say, 9% our revenue in three, four years? 25%, no.

50:43 Thank you. Ladies and gentlemen, as there are no further questions from participant, I now hand the conference over to the management for the closing remarks. Thank you and over to you team. Thank you. We thank you dear investors for your continued interest in Orchid Pharma. We value your input and feedback. Thanks once again for your participation. Thank you. Thank you so much, sir. Ladies and gentlemen, on behalf of Systematic Share and Stock, that concludes today's call. Thank you for joining us, and you may now disconnect your lines.