Aspen Pharmacare Holdings Limited (APN) Earnings Call Transcript & Summary

Afternoon, everyone, and welcome back to the second session. I hope all of you in the room enjoyed your tour of the facility. We're going to head right into the next speaker, which is Lorraine. Lorraine, if I can ask you to come up please. Thank you.

So the lights are bright here. So good afternoon, everyone. I really do hope that you enjoyed your tour of the site today, and I really just want to thank Elizabeth and the site leadership team and all of those who have assisted. The organization was brilliant. It really went well. So thank you very, very much. So today, we've showcased to you our manufacturing capacity and capability. And Aspen have responded to major disease burden time and again. And we continue to refine what we do in order to have a rapid response should it be needed at any time. And as you will have seen, we have a first mover strategic advantage as the demand for Sterile -- advanced Sterile technology is definitely on the rise. So in terms of our commitment to patients, promoting access to medicines through the provision of a reliable supply of high-quality affordable products using our manufacturing platform is the driving force behind everything that we do in manufacturing operations in Aspen, and serving the patient takes center stage. So I'm coming to quality by design. And quality is at the core and heart of everything we do. And certainly on our tour, I'm sure the guys heard quality at least hundred times. So I'm hoping it was similar on the rest of the tour. It's just an absolute non-negotiable in pharma. And we have an intricate process, where precision and excellence are just absolute requirements. There's not any negotiation on that because we have to ensure the efficacy of our medicines for our patients and their health and well-being. So quality can't just be assured by taking it off to the lab that you saw, doing a few tests and saying, "Okay, it passes all the tests, the product's quality and we can release it." Quality is carried through -- right throughout the value chain. So right from choosing who supplies us with components, materials, even our building suppliers, there are all sorts of checks and balances that we put in place, all the way through the product lifecycle to releasing it and even beyond. So for example, stability testing. So we carry on testing products right throughout their shelf life to make sure that everything that is received by a patient, no matter whether it's just being released or it's near the end of its shelf life, it's good. We also post the sale of products. We constantly monitor the safety of our products. So we take complaints and information from patients and doctors alike and we process it in databases, and we then use that information to really improve the quality of our products or improve the quality of our product information. So how do we assure this compliance, because it's got to be everything that we do? We breathe, think, sleep quality. And so we have a few levers that we have to assure compliance. The first one is we have some internal controls. We have internal audits. We have self-inspection. And these processes are undertaken by various internal Aspen personnel, reported on and acted upon if needed. We also then have multiple visits from regulators. They have different inspection cycles for different factories, but it's at least every 2 years. They come, 2 or 3 auditors, 3 weeks at a time. They spend going through everything from A to Z. And then our suppliers, our customers and prospective clients, they also come around frequently. And I think I had a look for the South African operation this year. 35 out of the 52 weeks have had either a visitor audit, a regulator audit or some kind of assessment going on at the site. And then our sites have multiple approvals from stringent regulators. So I think some of you saw the Japanese product running. We service the USA, right across Europe. So some of the most stringent regulators have given us approval. And that just assures that the products are always safe and reliable for use by our patients. So I think today you all had the opportunity to go and have a look at where we do the manufacture of the Fondaparinux API. And so as part of our continuous assurance of excellence and quality, we have to remove any chemical impurities from anything that we deem suitable for human use. So I think you would have seen on the wall there -- I think Elaine showed you -- it's very complex chemistry. There's a total of 59 steps, the 53 that you saw and then the 6 that we do here in NDB. And it starts with the manufacture of what we call 3 building blocks. So we have 3 chemicals that we combine together. One of the building blocks is made in a bunker because it's a highly explosive reaction. And we make these 3 building blocks of 3 separate suppliers. So we keep the integrity of our know-how very carefully. So what happens is we combine these building blocks into the API, the crude -- what we call crude or impure API, which is there on the left-hand side of the screen. Now that's done at our API site in the Netherlands, okay? So they buy the building blocks, they put it into crude and they deliver it here to the -- to NDB. NDB then tests it. And you can see the line on the top there, the brown line. So all those little bumps that you can see along that line are the impurities that are still present from the complex chemical reactions that have been carried out. So, what we do here is then -- I think you all would have seen -- we take it through the charcoal, we take it through filters, we do precipitation. And we get the pure substance which is greater than 95% pure out of the process. And I know some of you asked. We start off with many kilos and end with a few kilos. So it's an intense process and it removes all of those impurities. And then what we do is we take that pure substance and we take it back to our laboratory, where you saw some of our very sophisticated equipment, and we test it and then we get the blue line. So the big spike on the blue line is actually the Fondaparinux. But you can see that all the impurities have been removed and reduced. And you can see the material then loses its browny, orangey color and becomes the pure white substance. And we're always striving to improve continuously on how we can purify more and more. Then if I come to the next point which I wanted to make on quality -- and I'm sure you all saw the automatic visual inspection that we did today. So because all injectable products are delivered directly into the body and some are even directed into the bloodstream, it's absolutely essential that we cannot have the tiniest of contaminant in there. If you have a look there, I've got a picture of a 100 micrometer particle. I think that's the limit of what the naked eye can detect. And we've got to detect particles even smaller than that particle. So we've developed the process. And you all saw our automatic visual inspection. For those who were in my group, you got a little cheat. We went to have a look at the new visual inspection line, which is our 22 camera high-speed line. But we have these cameras that you all would have seen working on the visual inspection line. And they have the ability to detect any particles that -- or any, actually, anomalies. So they can pick up cracks in syringes. They can pick up little chips of glass. They can pick up anything. And there's some 300 cameras that work behind those machines picking up all the different particles or anything. And then you saw that they were being rejected and moved off. Sometimes we have a false reject. We take them back. We do it again. And if they're still rejected, we reject them. But that gives us the assurance that absolutely no particles will go anywhere in an injectable product. Some of you may also have seen the manual visual inspection, which is also a mandatory requirement, where they were looking at that special -- in that special light. And interesting to note that they have a specific time for which they can work to make sure that there's no personnel fatigue in doing that visual acuity against those lights. So you would have seen the little stopwatch there where they're timing what they do. So quality is the first and foremost consideration of our customers, and that's all our customers. And when we engage with our new prospective customers, really one of the first things -- before we get into commercial negotiations and discussing all sorts of technical detail, the first thing they want to do is come and do a quality audit. And they send sometimes teams of 3, 4, 5 people. They come for a couple of weeks, and they go through all our processes, procedures, the way we operate. And once that's been successfully completed, we then come to the next step, which they will then come and do some audits such as health and safety, environment, cybersecurity. They look at our technical capabilities. So they do the quality. They then do all this diligence. And then once we've said, "Okay, we're compatible," then we move to a more commercial process. And not every pharma company has the same quality offering. I think you would have seen today we have cutting-edge technology. We have a high level of automation, which eliminates the possibility of human error. And we have a very strategic approach to quality. As I said earlier, it's at the core and heart of everything that we do. These are just some of our customers. The bottom one is Viatris. But these are some of the quality statements. So you can see from Big Pharma, it's a real big focus. These are all off the Internet, where they have these statements on their websites. So, what is our Sterile value proposition? And I think core to our value proposition is our motivated, capable and patient-centric teams that we have. And really the mindset of the teams is, they make it happen, okay? That's -- anyone you talk to who is involved in the projects, they'll tell you that we're going to make it happen. And our rapid and compliant execution of technical transfers and then the subsequent commercial manufacture through our solution-oriented and patient-centric approach is critical to our success. So I'm sure Himant will take you through it a bit later, but we say, "Okay, what date do we need the product out the door? How do we work backwards to make sure that we can meet that timeframe?" And we frequently receive recognition from our customers. J&J, when we were doing the COVID vaccine, they referred to us as the jewel in their crown. And I'm going to read an extract of an email that they sent our teams at the end of 2021, where they said, "At the end of a very challenging year, we wish to express our sincere thanks to the entire Aspen team for the exceptional performance. Together, we pushed boundaries and achieved goals which initially seemed unachievable." When we started with the J&J vaccine, we weren't the first company that they were working with on the tech transfer. But when we finished, we finished in first place. So we really -- and I'll let Himant take you through all the timelines. But it was unprecedented in the industry. Then as you know, we're working with Novo on the insulins. Again, we've applied our transfer approach, which is very different to their standard approach. And recently, they sent us a photo of them all having a cake that had Aspen written all over it and they were celebrating that we'd met one of the milestones, because they actually just didn't really believe it was achievable. But we made it. So they definitely celebrated. And these endorsements come from some of the biggest pharma companies globally. So it really is something that we are exceptionally proud of. So how do we do it? Well, we have a no risk, no rust approach, because not everything is going to work according to a plan. Of course, we all sit down, we do a beautiful plan. But we're not naive to think that, that plan is just going to execute day-by-day and everything's going to go just as we hoped it would. And it's our ability to find solutions and our agility, our agile approach, which are really the core enabler of what we do. And it's really valued by our customers and our partners. So I'm going to give you a couple of examples. They gave me a limited time here, so I can't take you through them all. I'm very sorry. But you'll just get a couple. But you can always catch me afterwards; I'll give you the rest. So recently we were approached by Novo: "Really need to get insulin out in the African continent. How quickly can you help us?" So we had a look at their vial. It's a very special vial. It's not like ones that we use. And we looked and we said, "Okay, if we get a line, it'll take this long." And then one of the teams said, "Hey, what about if we take that line over there and adapt it?" So we looked into that with our equipment supplier, and lo and behold, they actually said, yes, we can do this. So that shaved between 12 and 18 months of the project. And I think Martin also shared with you how we adapted the building. So he was showing you that we had to do some building infrastructure changes to accommodate it. But that's all done and complete and the project is moving forward. So that's the type of agility and ability we have. And then another example which I want to share with you, and I can actually even show you some parts of it. But we started a vaccine transfer project with one of our customers, and they also asked for very tight timelines. And we said no problem, started the project, been in running for a few months actually. And we got a phone call, "Can we have an urgent meeting?" "No problem." They said, "Oh, we need to tell you that we actually have to change from glass syringes to plastic syringes." So we said, "Oh, okay." Formed our little task team. We all sat down. We got our equipment suppliers together and we said we've got a new challenge. Always wanting to see how we can improve on what we do. And it might seem like a small change. And if you look at it, it's quite hard to tell. I think I showed some of you the plastic syringes. They also look a little bit like glass. But it's not quite that simple. So if you have a look at the bottom there when you walk out, there are 2 tubs under the -- one opaque tub and one transparent tub with syringes in it. Now the plastic syringes come in the transparent one and the normal syringes we use for thrombosis come in the opaque one. So what's the problem? When you saw the filling line running, we have sensors that track that tray all the way across the process. But now the sensors can only detect the opaque tub. Suddenly being able to shine through the transparent material now means we have to adapt the line to do all of the -- make all the sensors able to work off the transparent tub. Then we went to visual inspection. And some in my group, we did a quick detour and had a quick look at [ Vulcan ], which is where we're going to be doing the visual inspection for this plastic syringe. And yes, the material is different. So the cameras and the algorithms and all the different activities, the syringe is a slightly different diameter. So all those line adaptations and recipes for the visual inspection had to be changed. And then if you go through to packing, you would have seen all the syringes going through into -- out of the comb or nest into the machine to be labeled. Of course, this one is different. So all those robots that we have there doing this now need to be changed in order to be able to work with that syringe. But really this taskforce did incredible work. And I'm very happy to report that there was no impact on our tech transfer timelines and the project is running with the same end date. And then just on technology transfer. So I'm not going to steal Himant's thunder. But really an efficient and compliant tech transfer process is a critical differentiator, because sometimes they can take 3, 4 years if you don't have this rapid approach that we have followed. And of course, if we follow the rapid approach, we get our capacity full quicker, we also get access for patients much quicker. So for us, it's really something that we pay critical attention to. And we have teams that are really geared up to be able to find solutions and deliver technology transfers quickly. Then importantly, executing on our capacity full strategy. So you can see there, and I'm sure all of you know this, but we've got -- and Sean mentioned the multilateral partnerships, the partnerships with various companies, the Novo, we've got mRNA. So we've announced recently some of the partnerships that we have, and we have a number of other partnerships under discussion at the moment. So I left a space there. Watch that space for -- in the coming months. Hopefully, soon this slide will be very crowded. And I'm very happy to report that we are on track with our various projects in terms of everything that's within Aspen's control. We're meeting all our milestones. For the Serum vaccines, we are targeting SAHPRA, which is the South African regulator, as well as WHO pre-qualification next year. That's something where we're quite reliant on the cooperation of the regulator, but we have a lot of interaction with them to really drive home the importance and to collaborate with them. So just in closing, I think it's been alluded to already, January '24 is, I think, 5 weeks away now. And that's where we really start executing on our capacity full. You've seen some projects in full swing here, very much likewise in [indiscernible]. And we really do look forward to the very exciting times that we have in terms of delivering from 2024 onwards. Thank you. I'm going to call on Himant now, who is going to take you through the technology transfer process.

Okay. Good afternoon, everyone. I'm going to take you through the technology transfer process, but I'm going to do it in relation to the COVID vaccine project. So we have a proud history of undertaking numerous tech transfers with various multinational companies, and that's come through in all of the presentations. This experience coupled with our tech transfer -- rapid tech transfer process enabled us to transfer the J&J COVID vaccine ahead of all other CMOs. Having started in a position of seventh, we were able to transfer the vaccine first within a period of 6 months. Now to put this into perspective, like Lorraine said, a tech transfer of this nature would have taken anywhere between 18 and 24 months. And I want to pause on that time line, because many -- all of us have lived through the COVID pandemic and I want you all to think about what 18 to 24 months' time line would have meant if that's what it took for us to achieve manufacturing the vaccine. We would never have an impact on any patient. So this is a monumental effort. This incredible achievements coupled with our excellent service delivery post the transfer led to J&J, as Lorraine mentioned already, referring to Aspen as the jewel in the crown. Today, I'm going to provide you some insights into our tech transfer process so that you can understand how we achieved this monumental effort. The tech transfer process usually starts with the information exchange. And this is normal at the beginning of the process, whereby both companies exchange intellectual property. And during COVID, many of the CMOs undertaking the tech transfer were susceptible to cyberattacks. We at Aspen, we were in a fortunate position in that our IT infrastructure had a high level of security, meaning that we can receive the IP from J&J and store it safely. And the reason why there were cyberattacks was because of the IP being precious and the amount of research that was behind by IP. Once we receive the IP, then we undertake what's called a due diligence, and it's a mutual due diligence. This normally occurs in 2 phases. The first phase will be a desktop due diligence and the second phase will be an on-site physical due diligence, which Lorraine mentioned already about the audits that are undertaken at all sites. Now during the desktop due diligence what Aspen will be looking at is we want to understand the product, we want to understand the process for manufacturing the product, and we're also looking at the materials used to manufacture the product. This is done so that we can determine whether it's feasible for us to manufacture the product at our site. Now during the J&J COVID vaccine, we went through the due diligence for the product and we picked up a very important fact on the drug substance. The drug substance couldn't be processed with a high level of intensity of light and we needed to put the drug substance into a room with less intensity lights. And this is important because what -- we will then look at this and we'll consider our infrastructure, "Do we have a room to place the drug substance in with a low intensity of light?" So that's important for us. Now when a partner company or J&J looks at Aspen and they're undertaking due diligence, they're basically looking at our infrastructure; they're looking at our capabilities, which you saw at NDB is vast; and then they're also looking at the quality systems that we have in place, which Lorraine mentioned. Now when they look at this, they're looking at it from a perspective of risk to their product, patients as well as their reputation. Many of you will recall during the COVID pandemic that there were a lot of travel restrictions. And this proved challenging for J&J because then they couldn't come on to our site and undertake the due diligence. So to overcome this challenge, we were able to provide them with a live interactive tour. It was a virtual tour of the site, and it was done using state-of-the-art technology as well as using Google Lens. And this was very important for the project because it enabled J&J to assess our infrastructure and our capabilities and actually led to them appointing us as a CMO. Now I'm going to take you through -- and the next step, sorry, is establishing commercial terms. So once we've done the due diligence, we move on to commercial terms. And what sets us apart from other CMOs is that we have high-speed machines, they have cutting-edge technology, high levels of automation. And this allows us to afford economies of scale and also thereby adding a commercial benefit to our customer. Now I'm going to take you through the more technical aspects of the tech transfer. And I think here is where we showcase our capabilities, we walk the talk and we produce the product of the highest quality specifications needed by our customer. So in this process, I'm going to start with the drug substance. And this was key for us to receive the drug substance timeously from J&J for us to meet our project time lines. But it is also key for us to receive ongoing continuous supply of the drug substance so that we could maximize our output from the site. To this extent, we supported J&J in receiving the drug substance by applying for import permits in advance of the shipments being sent because these had long lead times. We worked with customs officials to make sure that the shipments were offloaded and cleared timeously. And we also alerted customs officials so that they were aware that shipments were coming on the weekend and we ensured that they had presence at the ports during the weekends. So when we received the drug substance at minus 60, we didn't have to transfer it into a freezer at the same specification, minus 60. And I think you will recall during COVID there was a lot of media coverage around the cold chain distribution for the finished product to the patient. And equally in the manufacturing sector, we had a similar challenge. We had to maintain the cold chain during the entire manufacturing process. And during that, we had to establish our freezers. And when we spoke to J&J, they referred us to their supply in the U.S., whom we engaged with. And the supplier came back with a 6 months lead time and said that's the time just to start the manufacture. So we then couldn't accept that time line and we pivoted to work with a local manufacturer in South Africa and we were able to manufacture the freezers -- design and manufacture the freezes with the supplier in a period of 3 months. And these freezers were made out of shipping reefers or shipping containers. And these were really adequate for the role that we needed them. So once we have the drug substance, I'm now going to take you into the thawing step. And thawing may seem relatively straightforward because it's basically transforming it from a solid form into a liquid form. However, it wasn't that easy for the J&J drug substance, because once we thawed the drug substance, we couldn't refreeze it. So our planning and our processing had to be exceptional and meticulous. And we also -- like I think Martin showed it in his slide with the drug substance in the thawing room -- we had to have a thawing room that had motion sensors so that when people entered, the light came on. Otherwise, the room was always dark. So once we thawed the drug substance, we then transfer it to a vessel. And to that vessel, we add the remaining materials, which are mixed to form the product mixture. This product mixture is transferred into our filling line, and our filling line basically fills an exact volume into each vial. Now our filling lines are capable of detecting the volume on each and every vial to make sure that they are exact. And some CMOs use what's called a statistical sampling. So they take a portion of the vials and check whether the volumes are identical. Now filling the exact volume in the vial is really important because it ensures that the patient receives an accurate dosage of the medicine that they're receiving. So once we fill it in the vial -- I think you've seen a lot of inspection on all of the presentations and at the site -- we send it to the inspection area. And just to recap on everything. When it's at the inspection area, basically we're looking for defects and we're looking for foreign particles. I'm not sure if you'll manage to see this, but we also have trained manual inspectors at the site. So these individuals are trained to identify defects. So when the line ejects what it thinks is a defect, it then gets passed through or it gets sent to the manual inspectors to look at. So once we've done with inspection, we send it through to the packaging area. Here, we label it in the branding of the customer. And in the case of J&J, we transferred the finished product to the minus 20 freezer. Now once it's in the freezer, we have to undergo the quality control testing, the release testing. In the case of the COVID vaccine, there were numerous labs that tested our product around the world, including the J&J Laboratories. And we had a 100% success rate whichever lab -- irrespective of which lab tested our product in the release testing. Now there's a -- this is a very unique story when it came to the COVID project because it was a first for all of us. And the labs were really constrained during COVID because they were testing for multiple companies and they had a tight scheduling. And a plane was charted to pick up our samples from PE -- and the pilot didn't even get off the plane -- and the samples were sent back to the U.S. for testing just so that we didn't miss the slot with the lab in the U.S. And that was the key for us in progressing in the project. Now once we finished the testing, we generate data. And this data is really important from a regulatory perspective in registering our site. And what is the regulator looking for? They're looking to see that our data that's generated at the site is comparable to the original data generated by J&J. And we had no queries on our submission when J&J submitted our data. We were registered on the first shot. And one would think now that the tech transfer process is over and we can walk away. And it doesn't end there. We also have the logistics and commercialization to take care of. And to do this what we did at Aspen is we partnered with the logistics service providers from J&J because of the cold chain shipments. And we ensured that our teams were adequately trained to handle and manage the shipments of the finished product. Another interesting fact from that was each and every pallet -- Martin showed you the data loggers, which measured the temperature during transport. And on top of those data loggers, we had -- each and every pallet had a tracking device, meaning that J&J could check the pallet anywhere at any given time in the world. So they could identify the pallet, track it, because the cargo was very valuable. And this was a security measure. And I'd like to close by saying we're very proud of the fact that we produced 225 million doses of COVID vaccine. And I think we saved the lives and improved the quality of lives of many people. This is our mission at Aspen and this is something that motivates the teams that Lorraine mentioned when we undertake tech transfers. Thank you.

Thank you, Himant. Thank you. So it's been a long day. And when I put on a presentation, "We're good at doing tech transfers," and you guys are looking at this one line, "What" -- "where's the number?" I just thought it would be good for you to understand what a tech transfer involves and what it entails. And it's a lot more than 2 longish words. So a really fantastic achievement from our teams, and in that regard, a very important achievement for what we hope to do. And for all of you who've come today, I really appreciate those of you who've come in person, because just like tech transfer, to truly understand this business and where it's going, I think you have to see the sites, you have to see what we're doing on the sites to see it's real, and to see the technologies here. Besides the fact that you're getting 10,000 steps in, so you're getting points on your health programs, which was -- that you also got a little bit of exercise here. So I'm going to talk a little bit -- just a little bit about Aspen aside from manufacturing. And I'm not -- you've seen everything you have to see on manufacturing. I'm not going to spend -- take you through a whole lot more, and rather leave a little bit more time for Q&A. But let's have a look at what Aspen is trying to do strategically and just look at our strategic focus. Commercial pharmaceuticals, remember, is 3/4 of our business in sales and obviously the bigger portion of the profit because we lose money in our finished-dose for manufacturer. The way we see our business -- and our business is very up -- I look at our business in commercial pharma as without China, and then there's China, and then there's manufacturing. The commercial pharma business without China is about 2/3 of the business in rough terms. It's sort of what the turnover is. And we talked about the house and the house needing strong foundations. And it's very hard to launch or build anything unless you have strong foundations. And that's what we've been trying to do, is consolidate that foundation, get predictability so that you have the confidence to be able to launch. And I think this is the phase we're in now, to tell you that with 2/3 of the business, we're very clear that we have a very strong foundation. The other 1/3 of the business sits between China and manufacturer. And manufacturer is like 25. And the balancing, just less than 10%, probably sits with the Chinese business. This business without China has shown sustained organic growth. And over and above the organic growth, we've got an ability to supplement this business because of the -- we've got a very good footprint and a very different footprint from most. And so we are able to get to transactions that leverage this footprint. You've seen some of the transactions that we've done already even in this period coming up. The transaction for the LatAm portfolio will once again bolster our footprint in Latin America, which is an important area for Aspen, as well as the Lilly transaction in South Africa. What is -- what you should also know, to go back to organic growth, is we're trying to get in these transactions the pipelines as well. So yes, we want a pipeline of branded products, a pipeline of generic products outside of what we do ourselves, but to be able to have partners that bring them to us. And these are pipelines we wouldn't ordinarily have access to. And we have achieved that in those 2 transactions. The LatAm transaction goes live on 1 November, and the Lilly transaction is also being cleared by regulators and we think we have a 1 January start there. I must say every time we look at our plans for Mounjaro launch in South Africa, they increase. And Lilly said whatever number you put there, put a multiple on top of that. And it is definitely the most exciting launch we've ever had for our South African business. And we've had many exciting launches in the business, obviously, over 2.5 decades. And the launch date is for next year, probably around the middle of next year to anticipate. Of course, we've got -- we need regulatory approval. And as you know, this product has now been approved for weight loss, including diabetes in the U.S. So a very exciting launch for our team and teams are very excited with what they might be able to do with that product. So 2/3 of our business predictable, good organic growth, pipelines to sustain it, and many people approaching us. It's sort of a stampede. One multinational comes to you, then another. GSK can do it or Lilly can do it, Amgen can do it. Maybe there's another plan for people who can do things better than ourselves. And just taking on Amgen, the growth that we've achieved relative what Amgen did is very material to them. And they say, "It was a really good call." So it's -- it makes sense for everybody in both parties. China has sort of hung over Aspen because it's been a bit of a dilemma for us because it's been an unbelievable performer within Aspen. And we've taken -- we had a great team and they took products that were declining at 19% and they've more than doubled the business since. And so we've got a fantastic team. And the Chinese business -- the China economy and the pharmaceutical business is a very big opportunity. And I look at people and I say, "Oh, China. But it's not growing so much anymore." Well, it's doing really bad. It's dropped from 10% to 6% growth rate. I think everybody else and the rest of the world will put up their hands and say, "Please give me 6% tomorrow." And that's important for us, because as more and more people get into absolute wealth or absolute ability to afford their medicines, that's been part of our model across emerging markets. They want the branded product. We make it accessible. And so the Chinese market is a very real opportunity for Aspen. However, hanging over us after all this good performance is something called VBP. Now we can discuss what VBP means, but in terms that are easy to understand, it sort of says post patents. It's a Chinese way of taking a product post patent in a forceful way, but it's post patent. In other markets your turnover drops. And then you're able to build it up afterwards if you put the right protection. So very important for us was 2 areas in our focus for China. We wanted an area where we could protect our team, which is mainly dealing in hospitals. Remember, anesthetics Fraxiparine mainly dealing in hospitals. How do we put more products onto that platform to compensate for the VBP impact? And also, how do we license products in? Because the other opportunity that's proving very interesting for Aspen is that many Chinese companies with good technologies want to use Aspen either to -- as a company that can give them a global footprint with anesthetics, a company that can look very good on an IPO as opposed to potentially a local company and a company that's not -- there's quite a lot of -- there's been quite a lot of issues in the Chinese market about how people have traded in there in terms of bribery, corruption all the rest, and they feel comfortable that Aspen wouldn't be involved in all of this. And we're busy piecing together a puzzle on that side. And the second part -- so that's preserving what we call hospital. And everything goes through a hospital in China. But I'm talking about hospital-based products, where you're going to go into a hospital and get an injection. And how do we preserve that good team and grow it? And 2, how do we get what we call more retail-focused products. Now retail-focused products are not, as you might think, going into a supermarket or something like that. It's products you get in the pharmacy, where you would say, "I don't want that particular medicine, I want that brand because I recognize and like," and you've got some discretion over what you wish to choose. I think we've made a very good progress, and it's taken a lot of hard work and years. But we've got a high degree of comfort of managing products that will fit on top of our portfolio, give us what we're looking for in maintaining our team and then having new products that we'll in license that will give growth and sustainable growth into the future in that team. So it often means looking at other products that are either post VBP or post-patent that we can add on top that don't have the risks of being eroded. And then also bringing in sort of new chemical entities that we do have a patent, but it's a long way off. We're also trying to work in the retail space. But I think the first part of the business, we have a very high degree of confidence of where we're going to do. And all I can tell you is probably just watch that space. And hopefully, we can get you some sort of update on that shortly. On manufacturing and our strategic focus for manufacturing, it's a critical success factor to our strategic vision and ambitions. And today is -- we bring you here because it's that important. Of course, it seems crazy to be talking about a business that's a quarter -- it only makes up just 25% of the sales in the business. But it's an important business for us commercially, which we -- Sean has taken you through some of the numbers -- and what we achieved socially and it gives us a capability to really enhance equitable access. And a lot of people say, "Oh, equitable access." There's a commercial angle to equitable access. So don't think that this is only a one-way street. As Sean mentioned to you, commercial -- having volume is a very important part. And I'm glad you've walked around these factories. You see we have a lot of fixed costs. If I can put volume in here, I get that volume at lesser increments. And that's what access often gives us, is big volumes that is able to pay your base cost and you're able to put other volumes on top. In addition, just the tech transfers that Himant was referring to, we've been very fortunate in that -- being involved in ARVs, for example, we might have had 10 or 15, whatever number of tech transfers from multinationals, each coming with how they wanted to put an ARV into Aspen to get access. And that was cool. But what was better for us was that we learned, from every tech transfer we learned something. And whether we took one step out of that process or 2, by the time we had everybody's best -- their best tech transfer process, we were able to take steps out of each. And we now have a situation where people think that Aspen is the best tech transfer company in the world in terms of what we do. And a lot of that has been because we created access. Lots of companies felt the need to give access, gave us the tech transfers and we took the best out of -- we picked ours of the best tech transfer process to be able to be in the situation we are today, where we are able to do tech transfers at less -- at quicker than twice what the industry standards might be. From a commercial point of view, the delivery here is material to growth and returns. I don't need to recap all of this. But I think it's clear that we have installed capacities. And you've seen the costs are all there. There's a real need now to be able to put more volume in there to get the recoveries. And calendar year 2024 is an inflection point for us. We moved from losses for many, many years. And the sort of only spike we had in terms of either getting out of losses was largely in the COVID when we sold some of the COVID vaccines. But we moved from significant -- from loss-making to significant profitability. We had always hoped in our plan with COVID when we switched out was that -- the assurance that was given to us at the time was that this was a 2- or 3-year project and was going to be 2 or 3 years, and then this all kicked in and COVID might dissipate and go away. It just -- it went away a little quicker than we realized and certainly a lot less than we were led to believe by those that were going to buy the vaccines from us. Sean has covered the fact that it gives you a fundamental shift in returns on assets and materially advanced in profitability. We put the products in. We don't -- there's no better profitability you can make than making more profitability off the same number of assets that you have. And our focus -- we all focused on where you're going on and what's next, but really our focus has to be on our existing contracts, which will achieve a contribution of ZAR 4 billion, with material upside at full capacity. But our focus has to be on delivering that first -- the first ZAR 4 billion, which has a very high percentage of EBITDA attached to it or incremental EBITDA. The API business took quite a knock during COVID times, but it's -- happy to tell you it's been restored to pre-COVID levels. It's a very important part of this manufacturing. If you take our manufacturing in rough terms and say -- on a piece of paper you're doing ZAR 10 billion of sales and you make ZAR 1 billion. Bear in mind that the manufacturing business is here and finished up making big losses of over $1 billion. So all of that profitability is coming out of our API business. One of the very interesting shifts that we've seen is the heparin price, which over time seems -- we initially told you it was a commodity and it just kept going up and up and up and literally went up -- literally the cost went up fivefold. And so we though, "This heparin prices" -- "maybe it's not a commodity." And of course, there was swine fever and in COVID it was very heavily used. But what we're seeing now is a very rapid unwind of the heparin pricing. The heparin price -- I was chatting outside to a few of you. The heparin price and the heparin process, you're buying effectively something that is a waste product. So it isn't worth anything to the slaughterhouses. It's worth -- in fact, it costs them money to get rid of it. But suddenly it became gold. And so, the price goes up and up and up. And you can't negotiate with anybody because there's somebody else who will pay even more. Now nobody wants to pay anything. And this is a real opportunity for Aspen because one of our biggest drags in our manufacturing business and one of the bugbears in here is the extent of working capital that we have tied up here and our inability to control particularly the heparin component of that working capital. And I was -- I think I was also chatting outside -- and sometimes in life you've got to known when you're skillful and to be honest enough when you've just got lucky. And we haven't been skillful in heparin. We've just been lucky in the process and that it sort of went up. And you're buying here. And then 18 months later or a year later whenever you're selling it, it's worth more. But this is the first opportunity we've had since we've had heparin almost a decade where we are able to talk to people and say, "Now you see. What you thought was gold is now worth nothing." So let's think about what really goes on in this process. You've got something you want to throw away. We've got real technical skills. And I want to tell you the heparin and the heparin process are amongst the advanced skills that one requires in pharmaceuticals to be able to manage this process. The biological product is coming up the bloody stomach, intestine of a pig and you're turning this into a product. There's quite a lot of science to get it from there into your leg and arm and backside or where do you take it. But it's a lot of -- and so, let's respect the science, let's respect you've got something. But let's also not -- if you're going to charge us 100 for something and we're going to have to keep putting on each -- every time we have a yield or it's going to go to 150 and 200. And it's just going to become unaffordable. Let's rather see it for what it is, which is there. And let's see if there's a model where we can share together in that process. And we are getting some very positive responses. What that -- the potential it has for us is very simple. We shared -- we don't -- we are not part of the commoditization process. We're able to deal with our end customers and know we're competitive. And of course, it has a significant reduction. And we're going to have a significant reduction in our cost of holding stock anyway. I'll remind you we have an unwind coming to Viatris. There is a reduction in the costs. And also, we've truncated one of our processes by 6 months, from 12 months to 6 months in the process, which means we even have to hold less stock. So I think we're really working hard to make sure we're in a situation where we derisk ourselves from the commodity cycle and the values associated with heparin. And hopefully, when we next talk in our next presentation in a few months' time, this is something that's been well addressed. So why Aspen? I'm not going to tell you anything more. I think -- when I tell you why Aspen, I think you've walked the walk, you've heard the people that can really talk to talk. As I told you, their talkers and their workers, and you've heard from the workers today. But you know why Aspen? We punch above -- way above our weight to deliver access. I'm not going to take you through the time lines, but I want to tell you each step there of the way has been a jump up further above how we do what we do from the very early days. And it gave us so much satisfaction what we achieve. I mean it's great when you achieve good results and -- but also gives you satisfaction when you achieve these type of results. And we sort of got addicted to it. And it just keeps going. And looking at that man taking steps, he looks a bit like Johnnie Walker going up those stairs. The difference between Johnny Walker and me is he seems to get stronger as the steps get higher. But I think every time I have a Johnny Walker, I'm not walking as well by the last one or better by the last one. But to tell you, certainly I think I am. But he certainly is. And I think the bottom line here is we're really passionate about what we do. We have a real purpose. And there's really a good reason to wake up and embrace every day. And I always say you cannot just rely on material things alone to deliver your happiness. Whether it's your personal or business life, there's got to be a greater purpose to do what you do. So we have that and we've got a great team. Our teams have taken you through their facilities. They've taken you through their processes. If I take a step back and say, "Well, I'm not a very technical guy. Have we really got something here or not?" And I think if you're unsure, the only way I can answer this question for you -- because I'm not a very technical guy. I don't have nearly the skills of the people that spoke before me here, except maybe Sean. We've got a client base of pharma giants, an endorsement, which is a real endorsement of capability and process integrity. When you look at these clients and you see that every major multinational recognizes Aspen and endorses Aspen. At the end of the day, what has Big Pharma got? They've only got intellectual property. That is the -- and that intellectual property is in their products. The products are their baby. This -- you don't just hand your baby over to a stranger unless you make sure it's in really capable and safe hands. And that's what they do. And so when I say Aspen's highly regarded, you hear lots of people, "Oh, my company" -- you see hundreds of presentations, we're this, we're that. I'm saying listen to us. That's fine. Believe us if you choose to. But if you're unsure, understand, there's your stamp of quality and your assurance that you might need. I really love the stories that Lorraine and Himant shared in terms of how we find solutions. And we are incredibly agile. Lorraine told you a story about glass to plastic. Let me tell you there were complex engineering solutions required there that I actually thought we couldn't get through. I mean I even said, "Put me on the line with the bloody glass maker, the plastic maker. I want to hear what was going on here." And what was achieved by this team was just incredible. And so, well done to the team here. So it's clear that we've invested in top class infrastructure and facilities. You've seen that. And it's really only trumped by the people and the team and the passion with which they do things and the passion with which we find solutions. So I think that's a good enough reason for Aspen. One of the other areas is -- I think Sean might have said the words -- we're at the right place, the right time with the right capabilities. There is an incredible increase as we speak and it's literally moving weekly, daily for Sterile demand for cartridges and prefilled syringe capabilities. It's absolutely unprecedented. You find the machinery suppliers are now needing more than 24 months to supply you. This is -- it might have been 9 months, 12 months, even 18. But now it's now more than 24 months. The obesity market is going to need billions of weekly demand to meet. And so why do I say billions? Well, think about a person taking it once a month or needing it. That means you're going to need 80 million people to give you 1 billion doses. It's as simple as that. And you've got to go and find somebody who's got 1 billion doses of spare capacity. Now you've seen a pretty big site here that's got 350 million doses. You're going to need 3 of those, but they've also got to be empty. We can -- best we can offer you -- if you come to us, the best we can give you is 100 million. It's very hard to find 10 sites that can even give you -- there's very few sites that can give you 100 million. So this is a market which is going to -- is a big market. And you can do the math. Remember, they're saying this market is going to need 800 million, 900 million. The reality of the market is this, there is a demand, there is a very large demand, but only the rich can afford it. So you're going to be -- you have to be rich to be able to access this market for where it is now. So this is your first surge. But the second surge has to come as well because a lot of these products are going generic, not necessarily the ones that are there, but some of the earlier generation of Novo products. So your other customers that are approaching are people who want to have first-to-market opportunities in this space. And it's very likely that the American system, which has now given some sort of enforced price -- products -- cuts on products. No health system is going to be able to afford $100 billion of just extra costs. So I think your next wave is going to be lower-cost products coming in, also increasing volumes, which will be the biggest surge of volumes. What you see now there's a second wave to come and I believe it's a generic wave that comes. And that's -- from an Aspen perspective, we're pretty agnostic. Of course, it's easier to negotiate a price of -- 2 if someone's price is 100. It's a lot harder to get 2 if their price is 10. But it's not a very big percentage. So I think that's how we are seeing the obesity market. The largest players are investing very aggressively in capacity expansion. I think it's in every -- you read in every paper, you read in news ads. And they're looking both at internal and external capabilities. One of the bigger logjams is actually not so much full finish, but the API. The API is a peptide. And these peptides require a lot of investment and there are a lot of steps and processes. And Aspen has a good understanding of peptides because we make a lot of our own on our Dutch facility as well. So that is going to be a sort of an area they're going to invest heavily in, and of course in full finish. So our opportunity -- the opportunity for those with immediate available capacity as Aspen has. And I think Sean said, listen, you've got to invest in the right time. So it's the chicken and egg. When do I put the capacity in? Do I wait? If you wait and you put in, I believe you're late. There might be something later on, but you're late for this wave. So you've got to make some pretty bold decisions earlier, which Aspen made. They weren't uncalculated decision. They weren't anticipated in the obesity market. But they were funded by the anticoagulants and other things. But by funding it through that way in savings, we actually created a bigger opportunity. And so, it's really having that capacity at the standards now. And there are processes being run at the moment. And we're hopeful to be selected in this process. The nice thing is that -- as a general rule, dealing with the multinational and this process can take years, the whole process they run through. But these processes have a lot of urgency, as you can imagine. And so the timing of outcomes is imminent. Our initial feedback is really positive. You've heard Lorraine give you the feedback from the multinationals in terms of their comments around Aspen and the ability to do it. So our capabilities are really well respected. And I got that firsthand from the highest sources saying, "Wow, you're really on our radar. We think you guys are fantastic. And we love what we see in your facility." So we're hopeful. But if it's not this, it will be something else. We filled half our capacity quite quickly with other products and there's an -- but there is -- I can't deny that there isn't a short-term opportunity or potential here that we would hope to be a part of. And then, finally, manufacturing is -- it's something that sort of has to be in your DNA. We -- at the moment, it's very hard. We see lots of exciting opportunities, so one gets distracted. But full focus has to be deliver on existing opportunities. You keep -- you've got to keep being grounded and say, "This is what we've got. We never had this." We've had 5 years of having a solid foundation. EBITDA has been flat. But gee, we've done a lot of damage to the debt that was at over ZAR 50 billion and it's come down. And we spent -- at the same time, spent all the money on these facilities, gave you dividends. But the reality is the EBITDA hasn't grown. But we have settled all our debt and debt obligations. Here is an opportunity for our next surge in EBITDA and EBITDA profitability. And this is what we now need to deliver. And this is the start. This first ZAR 3 billion of EBITDA that comes with this first wave is really great because it just goes right through the income statement. And then, finally, I think manufacturing excellence is in our DNA. It's -- you've got to try and find your position in an industry. We're not like backline players. It's not glamorous and glitzy. It's more like scrumming. It's a dark art. You spend honest endeavor pushing machines around and sort of putting your head where no one else wants to go. So -- but I do know that with effective execution, as we've seen, we've got an opportunity to convert our investment in our bomb squad in manufacturer into a global trophy. And that's what our aspiration is here today. And hopefully that we'll keep you updated on the trip as we go along. But as I said, the starting whistle is soon. It's 5 weeks away, as Lorraine pointed out. So great. So thank you once again. And thank you for your interest and time taken to listen to our story. Much appreciate it. Thank you. Are we going to go into Q&A?

Yes.

Okay. Cool. Thank you.

Thank you so much, Stephen, and the second session speakers. We will now go on to the Q&A session for the day. We have -- as a reminder for those who are attending online, there's a Q&A tab that you are requested to pop your questions in. And we'll get to you after we've attended to the questions in the room. And with that, I'd like to offer those who are here with us today to raise their hands if they have a question, and please wait until you receive the mic to ask your question for the benefit of those who are joining us online.

[indiscernible] Have you got the questions online there?

Yes.

There are? Okay.

So we've got some questions online. The first question comes from Letlotlo Lenake from Investec. You have guided to increased free cash flow as a result of lower working capital requirements. How will this additional cash be utilized, debt repayments, reinvestment, return to shareholders through higher dividends?

Yes. Look, there are numerous ways to return to shareholders. And so at the time, at the appropriate time, you've got to look. But if your profitability is going to go up substantially and your share price stays where it is, probably a better way to return to shareholders is to buy your shares back I would have thought. And as -- it's not a very well-kept secret. If we could buy all our shares back tomorrow, I certainly would be the buyer. It's just a little bit out of range. But I think we'll -- the reductions in working capital are not material enough to make massive differences to Aspen and would probably go initially against our -- it would go to reduction of our debt. I think if we look at our working capital, the total value of working -- of Heparin alone must be about ZAR 4 billion. So it's not going to be maybe a massive influx. But just I'll let Sean...

Yes. Maybe just to add, if you remember, we also guided that we've spent this 8-year period or a lot of that period investing in our manufacturing. So you have seen that we have started to invest in our commercial pharma with these deals that we've announced and all the opportunities that we're looking at in China. So that would also be part of that strategy as well, is to reinvest in our commercial pharma business as that's been starved of, let's call it, real investment over that period.

Yes, I think the -- I think what you should take out of this is we've done a lot of our strategic spend. So when I called it strategic spend -- strategy is always dangerous that is strategic because often it's an excuse for not getting returns. But we've spent a lot of money on our facilities and we need -- as Sean brought it in his slide, we need to harvest those opportunities. I don't think you're going to see us doing those type of big spends without returns. If we are to spend, to Sean's point, it's likely to be in commercial pharma. And that's a well understood model. You buy something on day 1 and it gives you a turnover on day 1 and profitability on day 1. We are not likely to be embarking on another manufacturing site project. Before we even do something like it, we've got to get proper returns. And I'm not talking IRR returns that you do. We've got to get proper returns for the risk. We need the reward for the risk we took. And that means we need substantially higher returns than what, let's say, I got this in my IRR model.

Okay. Next question is from [ Irwin Frish ] from [ Giga AG ]. The question is about GLP-1s. Do you have interest from pharma for GLP-1 production? And is that something that you would consider?

So there's 2 parts to the GLP-1 production. So for those of you that don't know necessarily what that means, that refers to the diabetes/obesity product. There's the peptides, as I referred to earlier, the actual making of the API, which is something we could look at and probably should. But our full focus is on the finished full portion of it and delivering what we need to deliver here. And yes, we do have an interest. Yes, we do talk to all the major players. And there are other players in the market as well. So those people that want to be a first to launch of a product, for example, in the U.S., they need to be thinking about where they get the manufacture now. And as I said to you, if the world is going to have 800 million patients, and that comes to, I don't know, 10 billion doses, there's quite a lot of capacity that's going to be needed. But I believe if it's going to go from 0 to 800, the smaller portion of the first growth will come to those with high-priced products. So the Americans will get it, et cetera, et cetera. But the next wave of lower-priced products will be the ones that drive quite a big volume share.

Okay. The next question is from Luresha Chetty from Ashburton. She's got 2 separate questions. I'll speak about the first one. You have provided us with current and committed prefilled syringe capacity at 65%. Perhaps can you give us a sense of how much of that relates to already commercially manufactured volumes such as Viatris, diluents and your thrombosis business?

Sure. I mean, in very rough terms, because there's no such thing as an exact number on all of these, is that -- and when you think about manufacturing, I'll just digress for a while, it's a bit like filling a shopping center, okay? You start with your big guns that give you -- cover your costs and give you big volumes. And that's sort of where our thrombosis is, which, between ourselves and Viatris, around about 150-odd million doses of product. And then there's a further 100 that's coming online. Some of it is already online like vaccine diluents for GSK. But the rest comes out of mRNA and other contracts largely around flu vaccines and further diluents. And that gives you another 100. Now with that, it gets us into the profitabilities that you've seen. But the real profitability comes before the last 100. As I said to you later -- earlier, if you fill it for EUR 1 or EUR 2, whatever -- it's a really big incremental game for us. And for those of you that did the walk through with us, you'll see there's not a lot more OpEx you can add to those 3 filling lines that are all working as we speak. Is that -- sorry, was that the question? Or did I go off?

No, no. That was the question. The next question is, can you give us an update on -- are you on track, sorry, for mRNA and the winter seasonal vaccines to begin contributing in the second half of FY '24?

Yes. Sorry. Yes, it's the second half. It's in -- and yes, it's the second half of our financial year '24. Sorry. It was not the first half of calendar year '25. I got a bit confused there. Yes. And Lorraine -- as Lorraine told you, she's on target. If we miss, it will be because it might be -- and we won't miss the number because our numbers are there. If we go beyond that number, it's because Serum has come online. There's quite a big opportunity there if we get our -- if we get the regulators and that aligned. But we've sort of really put that number very low in our call for calendar year -- financial year '24 and financial year '25. We haven't put big numbers in that space. And the numbers we've done have -- already go to the contracts that we have because we feel comfortable that we are in control, totally in control of that process. So yes, we're on track. But I think Lorraine said as much. That was it. Who am I to argue? If you notice that there's -- things get done at Aspen properly. Why? We've got only women running the operations. Elizabeth runs the site. Lorraine runs the business operation. It becomes very easy.

I'm going to give an opportunity to anyone on the floor. Otherwise, I'll move on to questions in the room.

Now there's one here in the front.

Okay. Great. If I could -- over to you, sir.

So you've talked about building strong houses and also you're having a bomb squad and everything. And you've done extremely well, right? In the therapeutic areas you've been in the past and aesthetics and thrombosis, highly niche and super specialized areas. Now with this foray in low-cost biologics and into insulin, you're kind of opening up a big third arm, right, if you will. In terms of maximizing this opportunity, what are the things that you need to do to invest in being able to really get the full potential out of what you're doing with Novo and in some ways with Lilly? What are the kind of investments you'll need to make? What areas, like manufacturing, technology platform, building your talent base? So that's one question. I'll have a couple of other questions. But I just wanted to kind of understand a little bit how you're thinking about this.

So -- and this is just not a cliche. But if you live in Africa, retaining talent is not always easy. And so -- and really good talent often gets pulled out. Even during the COVID period, you find John N. Nkengasong get hit, the African. He was so brilliant. The Americas have taken him to head the PEPFAR funds. And Strive, who headed the whole operations, he's been pulled into the Gates Foundation. So you get headhunted at every level in this. So having a -- and so you can site and whine about it or you do you actively manage the process and stay in charge of the process. And to do that requires a lot of training and training skills. And these are the -- and one of our big funds, our biggest fund in Aspen is the IFC. And they are great. You don't often -- people talk about bank as being partnered, but these are important partners to Aspen because they sit here and they support us in wanting to build their talent pool with us. And our view is to create courses that we go through universities, you come to practicals with Aspen, and we deliver a pool of human capital into the African continent. So that is something that we really want to be a part of and IFC want to be a part of with us. And so that is very exciting. But maintaining that capital is a critical part. In terms of structures and physical build, I think we're in a good space because -- but you do need to change things. So you saw the sites today. mRNA did put pressure on us in certain areas. We've had to build warehouses to cater for this very cold chain. At the same time, we had to increase the lab and the lab equipment by more than 25% to cater for testing on RNA, which is different testing to others. So there are different stresses and strains and people like Nova in the South African facility. They've got specs way beyond what machine respects when we get a standalone, the standards are off the charts, but we will work to those standards, take the machinery up to those standards. It does require an investment. But -- the interesting part is the more you invest and the more you go up from standard, the less competition you have and the more opportunity -- and you also have a bit more flex in terms of pricing generally as well in terms of getting returns. So I don't think we have to invest more in -- there will be no massive jumps in machinery, but I think that we have to keep investing in talent pool. I use South Africa as an example, but it's the same in France. And France would have down the road, there's GSK. Nova are building a site now for their weight-loss products up the road. So there's always a pull on talent in every continent, every place, but we are more sensitive to changes in the -- on the African continent.

A second follow-up question to this is that obviously, you're doing everything possible on the operations manufacturing side, right? But Lorraine is going to cover whatever is contractually there. How are you going to get Novo to give you pretty much that head space that you desire, right? Everybody getting access in Africa to a low-cost, high-quality insulin, right? So how would they be incentivized to do that? Is that going to be primarily their responsibility? Or is there going to be some kind of a partnership that they will involve you and grow the overall by much bigger than what they have been doing on their own?

So Nova are capacity constrained on insulin. And so they've come to Aspen. Their commitment is to take it from 1 million patients to 4 million patients. The cost of that insulin is a fraction of what it comes into, for example, the developed markets. So it's not absolutely affordable. So they -- and that -- a lot of it is due to what Aspen could provide in terms of taking a product and converting it. And so they can easily pass it on. And remember, they've also got capacities. On the same line, you make insulin, you can also make Wegovy weight loss products there's lot of pressure on that. So we're providing solutions for insulin. It's pretty -- it should be quite easy for them to get involved in now it's now portable to the multilateral agencies across Africa. So I think that the ability to create access is easy and also the multilaterals and the African patients are who also under service have got an ability to pay for these products. So I think the part we have played was to be able to get them a conversion cost that's so efficient to make it easily accessible and really -- and it's on the African content for them. So there's a desire to go from, I think it was 16 million doses with rent about 60%. Is that 64%, something like it. So there's -- it was a fourfold increase. And so it's a big jump in patient numbers. And if that goes, I'm sure then there's more to be had, we have the capacities to increase. Now that's where we might -- if we want to go beyond 5 vial, we would have to pay more for another vial line and another line. But it's -- the payback on those lines is really quick as long as you have a volume commitment. That's a very important part of what Aspen wants to achieve is to have those volume commitments. Very hard to get them during COVID era because someone say, "I don't know if my COVID vaccine is going to work. I'll pay your costs, but I'm not going to pay you, to give you a long-term contract, you need to partner with us. And so that's -- but it's a different thing that someone said I want you to make insulin or you say, okay, you know what your volumes are -- you show that comment. I went 5 years, I want 10 years, and you've seen what it takes to do a tech transfer process. Forget about Aspen, other people are giving you an 18, 24-month process. All the regulatory changes, you're not even seeing a site as good as this, why would you want to go and switch out of it. So I think those contracts will stay with us for as long as we perform.

Just the last question, if you will. With respect to Aspen, with the kind of place that you're holding within the Africa continent with these capabilities you've built over the years, how do you see this diabetes foray? It can be a very, very big -- it's one of the biggest segments, right, you're entering. If you look at compared to your past 2 segments, Anaesthetics and thrombosis are niche super-niche compared to diabetes, which is like ocean. So when you look at Aspen, say, 5 to 10 years from now, how will -- how do you see yourself competing with there are industry players in Morocco, there is a small hub there, doing some insulin work. There is another one in Egypt that is coming up. What kind of things that you would need key success factors to enable Aspen to jump and come into the forefront and be the #1?

I think you talked about thrombosis and aesthetics. But remember, we're going right into the lines then with pediatric vaccines Wegovy. One thing I've learned in life, you can't complain -- if you're going to go and compete, you must go compete properly. And you can talk towards but if you think that we are competitive on ARVs, when 60% of the costs in the AP are made in China and India. Well, if we can compete in that space, when there's hardly any API cost in these other spaces, and facility costs only, and we are competing with only 40% of the opportunity. It's almost marking up on the 16, you've got to compete with them. Aspen has an ability to compete. We're really fortunate within our South African facility and that it's a large campus. We have many, many expenses that are common. So we can add lines without adding huge incremental costs. Even at this NDB facility, if you say we want another line, I was talking to the team with me. It's no problem for us to put another line in, and the team here will build that site and maybe they'll build it in 12 to 18 months. Our delay will be the machine takes 24 months or more. But once you put it in here, those incremental costs, as you saw on the line, there are very few people on the line. So it's not a lot of extra cost to put on and a ready establish side. But if you say, "Hey, take this up and go next door here and build a say, "Oh, my goodness, you info so much cost, you can't make it. Now South Africa relative to NDB from an ability to absorb costs sort of on steroids and that it's a big campus, it's fully absorbed across many different manufacturing forms besides steroids. So that is our ability to compete. And you can talk about competing. But then where you've got to do it -- and I think we've had 25 years of showing that we can compete. It might not be the first price to be competing with India and China and on their own space, but we can do it at that level. But at the same token, we're good enough to be -- to give Lilly, Novo where else, what are they looking for as well. And that is unique to Aspen. There's not a lot of people can do that. And I say that I think that ability to compete comes from generic routes because we've always been competing largely with India generically, successfully in the spaces that we want to plan. So I'm very comfortable that if we can give Gavi vaccines, we can be even more competitive in areas like insulins, et cetera, where there's shortages of the API. There's not a lot of competition. There's short, but there are other areas that open up for us in biologicals as well that we'd like to be a part of too. The Johnnie Walker has got a few more steps. We had a Johnnie red there at the bottom, and we got to Johnnie Black and what was the way -- we haven't we've got green now at the top, but we've still got a few humps to get to that. I don't know what platinum and the blue one. So there's still a few more steps to go there just because that's the last steps, not the end of the road. There's mabs, there's more biological that we can look at. There's a lot of their cancer products. So there's a lot we'd like to look at and be a part of. And many people are embracing the -- I suppose all of us are like that, but the industry sort of flocks and Aspen of the people to be with can't go anywhere else, you must go there. And we're building that reputation. It's not built overnight. It's not done with words. It's done with all the people that spoke before me who really execute on those words. So I think we're in a very good space there. And -- but you're as good as your last game. So you just got to always stay on guard.

Stephen, you mentioned here that you see that the diabetes obesity market is going to grow when prices are coming off. And then you also mentioned that in China, you were thinking about generic business in China when we come sort of post patents. And if I relate to these 2 statements with the last question here, can you see a possibility when semaglutide is going off patent, the Chinese market is the first one that is going off that you can actually provide the API and also the fillings for the Chinese market in your manufacturing sites. Is that a possibility? Or is that not a question?

It's not out the question, Christen. I'll tell you why. We supplied Gilead products to China out of our facilities in South Africa. So our South African facility has got a proven track record of providing millions of packs into the Chinese market. And you've got to decide what part of that market you want to plan and be in. There are quite a few new -- a lot of people going into peptides because of the semaglutide, but it's not a very easy space to be in and from what I'm seeing out in the market and my intelligence out there. It's the same players getting a little bit bigger mainly European players in that space who are getting a little bigger, adding 300 or 400 kilograms of capacities to that site. So I think it's a market we really got to watch and see the space. We'd like to be a player in that market to manufacture. I think our advantage is be relatively agnostic where the volumes go just as long as the volumes are there, and the capacities we've got available are really small in the scheme of what could take off in that market.

So what kind of capacity you have?

No. Well, the capacity -- so the people are talking from an API level of 3.5 to 4 tonnes of manufacturing, there's hundreds of kilograms out there that's all I got my volumes right the answer. So there's that in terms of volumes of syringes, we've got ZAR 100 million I told you that I need to 10 for the people they think they needed $1 billion. So we've got a very small -- and we can only fill our capacity once. As I say, I don't -- I think we'd be too late with our capacity. We put another line in we took 2.5 years, we late. And I think either those companies would have found somebody else or put their own capacity in as well. So I think we've got to -- we can do it once and hopefully soon.

So Stephen, so you pointed out earlier, I think it was ZAR 5.5 round of share of earnings from these contracts by '26, yes. So that's somewhere between sort of ZAR 50 and ZAR 75 round of share in terms of value, which the market isn't giving you much for at the moment, yes? So I suppose there's 2 things. One, what's the risk to the core business? That's the first question. And then secondly, in terms of time lines and news flow, when do we hear, for instance, the names of the players that you've signed here? That's the first thing I think that was when tech transfer was completed. And secondly, with regards lot talk about the obesity market, you're obviously in discussions with people. These guys presumably are going to have to make some decisions relatively quickly over where they go with customers. So when might me -- when might we hear on that? So the question is, one, where is the new flow from here for the market to get more comfortable that 50 million risks to the core portfolio? And when do you expect Lilly to knock on the door.

I think that in terms of news flow around manufacture and manufacturing contracts, in terms of the mRNA player within here, we would expect to announce that around about April. Lorraine, you're happy with that because the arrangement, the commitment, whatever the contractual position is that will be announced post tech transfer and as soon as it's commercialized. We're hoping to have those commercialized in financial year '24 and it will be in that last quarter. So early in the last quarter, otherwise, it aren't going to make your June results. So -- and we've told you that we think it will. So we will be announcing that then. The obesity market options looking at what they call a thing called requests, RFPs or RFQs requests. Basically, they send things out to you to say, can you do this? And can't you do that? We're obviously an advantage with Nova having had a very successful transfer and having them make cakes with the name Aspen and that was quite a nice picture, except it was -- didn't look a very edible cake that I saw I think Aspen name stayed intact on top of it, you're going to dig into that. But so those processes are relatively quick, and I think you would get responses somewhere between from December to February, March next year, it shouldn't be -- you'll know in a very short space. So there's nothing here that I think drifts past the sort of April date in terms of announcements. So that was your first question or sorry.

The core, the core business.

The core business, and that's what I tried to demonstrate in the slides the -- if we achieve what we want to achieve in manufacture. And we -- our commercial pharma business without China is 65% of the business. And if the current manufacturing is 25, you've got 90% of your business, which is either the manufacturing is delivering the sort of numbers that you mentioned. And the commercial pharma business without China is an absolutely rock-solid business. And it turns out all the cash. The only reason we're all sitting here today, the only reason we can build all these factories is because that base business doesn't require heavy investment. What it does. We pay lots of people. We've got a lot more reps than anybody else on the road in emerging markets, but that's a fixed cost that we put more and more products on top of. And that business is absolutely rock up here, we get shakes. We have a Russia does this Venezuela does that. But it's in a strong position and there's less than 10% of our business, which we've had to really work hard to hasn't been an intensive care, but we knew intensive care was coming, which is the Chinese component Alex. And we've worked very, very hard on it, and I'm hopefully that also in the similar time periods I gave you for the rest, you'll hear something on what we've done in China. But even if we don't do anything in China, it's a one-off knock and you've got the rest pumping forward. But I'd be -- I don't want to take a knock in China, not the knock, it's an opportunity loss, we don't hold everything together. And so it's certainly not part of our plan. Was that everything was another one, sorry.

Yes. I think that's everything.

So -- but I think it's high predictability in 2/3 of the business and high cash flow.

In other words, you're pretty comfortable that the core business doesn't fall all the cliff.

And that's what we always talk about in terms of a foundation of houses that we couldn't jump another step if your base wobbles. And our base was not stable in the past. And things that we bet on, like Japan, we thought was going to be a great market and they've brought in all these mandatory price decreases you have to get out. I thought we were going to be very good at heparin in Europe. We weren't so good. We got to get out. But there were areas we didn't think we'd be so good in like API and they churn out lots of cash and all the rest. And so once we had predictability, then you can move forward of your -- and predictability is really for us is cash flow. And we've got predictable cash flows over the biggest chunk of our business. And the place that's fully absorbed cash in our manufacturing has now got to produce the results to really drive our business forward. And you say, "Oh, if you drive 5 brand earnings they will give you 70 to 80 round more. I think there's a halo effect for the whole business because there's a credibility. And these guys have been talking about the story. We're not sure if we believe them or didn't believe. And now we believe and then you get different stories. And that comes with all its own risks and rewards. I've been in this business at a 7 or 8 and I've been here when it's over 100. Let me tell you when it's over 100 from a management point of view is the most scary part of the business. We're still below. We're growing 50% or we know you're joking -- so it's -- I'm not here to talk about share prices. I'm here about to deliver on our vision, and that vision is about turning big capital investments into strong cash flows. And whenever that comes to an earnings and share prices, it will be what it will be, but it's got to come now.

Sorry. So maybe just sticking with the core business, if we can call it that, so regional brands, ex China. One of the key things, Aspen's done really well over the years is it's dealmaking ability. So doing Viatris LatAm or doing Eli Lilly, and that keeps the revenue ticking over there. Just in terms of your competence and your strategy on that front, to what extent is the deal making institutionalized? Is there sort of a long to strategic plan? Or is it more you want to be agile, you want to be opportunistic, see what comes up. Just a high level sort of how is it institutionalized within Aspen and what's your thinking there?

You always have to be agile and opportunistic, okay? But what is it that makes somebody say, "We want to work with Aspen. So when you say institutionalized, there's an institutionalized within Aspen and there's a story coming in from the outside. The more people that want to do a deal with Aspen because they trust your -- the way you carry yourself, your marketing codes. Those are very strong and critical factors. And then you look at the market and say where is this market going. And you see these obesity products this is start even becoming -- if you want an obesity product, you can even get it in Europe or Australia. It goes to America first because they pay Okay. So -- if that's the case that Europe can't -- by the time you get to emerging markets, how much do they really want to be there? How much does this make sense? And is there somebody that can manage those emerging markets, which is something I've sort of spoken to you about over time until we've got this footprint. I believe it's a matter of time before more and more multinational say, we're not sure that we are the right people to be. They're not going to come to Aspen and give us Europe. It's almost impossible to get Australia from something. But it's not impossible to talk to us about Latin America, China. Even though China is a big market, -- there is a real anti-China feel around the west. People will say to us and say to our Board, it's not if China goes into Taiwan, but win. So there's a completely different view of the world depending upon where you sit. So there are opportunities in China now that we've never seen before. And so I think that our opportunities will come because others will follow people who fit on to our footprint and said, but this is the way to go, which push, you have to deliver, but we have always delivered. So I do think that part is work in progress, and we have done deals in the past. And even after the couple of deals we've done in South Africa recently, there's a couple more molten there say, well, maybe this is the right model for us. So as soon as they struggle in Lat Am or struggle in Africa, we are the only option in terms of a go-to partner. I talked to another really big multinational, and they say there's only -- and they treated Europe as one, but there was only -- I just want to get that wrong. It was other 12 or 14 territories that they ideally would want to be. They just took a commercial at there's 12. The rest, what do they want to do entirely? Whatever they do in South Africa, if they take their business up by fourfold, tenfold, it's still not even -- it's not even on 10th of one product in the U.S. Why are they here.

Any other questions in the room?

Roy Campbell, Morgan Stanley. Just maybe one for Sean. A slightly technical question, but Stephen spoke about the heparin price coming off. Firstly, how does that play into the -- how does that impact the contract that you have with Viatris and the kind of the stock that you earmark for that? That's number one. And number 2 is, is there a risk that you have to write any of that down to a lower of cost to net realizable value given the price coming off?

I'm happy to answer that one, sorry, because I did the deal with yes. So effectively, the purchase price for the LatAm product is settled by cash and the quantity of heparin, a fixed quantity. And that doesn't change. So we're in a good space. And that mops up a big chunk of what we have. We are filling up now our heparin at much lower costs. So there are no risks around net realizable value. What we're really trying to achieve is not a short-term win or medium-term gamble is to say, hey, how do we deal with this effectively for 5 years? And the only way to deal in our opinion, to deal with it, is to go to the people that supply and it costs them nothing, add our costs to it and say guys we've got something together in here and whatever we sell for we'll do some type of split together. To me, that is the logical model if you take a step back from it. And we could not get people to listen to us, as I told you before. However, it just takes them to have to throw away 1 batch, 2 batches, 3 batches, and get used to the fact, which is now where they are, that they don't have the value they thought they had, for them to say, okay well that doesn't sound like a bad idea what you're doing. So and suggesting and we want that in a long-term partnership and then we can trade with anybody because you will have the lowest cost of goods and the commoditization risk is now no longer sitting with Aspen and we really a middle person we shouldn't be taking commodity risk. We've been smarting off laying it and the price has gone up, but I can't look in the eye and say, listen, we've got this thing under control. We don't. But if we do get it the way and we've got it under control, that will be probably the best part of any APR business that we have or section of an APR business if we're able to achieve what I've articulated here. So Viatris not impacted in terms of pricing because we're going to give them that fixed quantity at the price that was done for the purchase price and we don't have an NRV risk.

Second question is this, maybe if you can just talk a little bit more around the potential of Mounjaro in South Africa. It's still early days. Is the insurers up for it? Who's the market? It's -- we can see it's a tough economy over there. So who's the target market and why the excitement?

Funny enough, the target market aren't necessarily people with diabetes or people that are overweight. You might see it, that's what, certainly what we're seeing is lots of people taking the product for, it's wrong because you really should be giving it to diabetic patients first. The market, sure, the economy is tough in South Africa. It's tough everywhere. The South African economy has grown with no power. The German economy decreases with lots of power. So we can want as much as you want, but at the end of the day, wonder with a bit of power what type of relative growth you'd have. And Aspen get a good look at global economies because of the number of markets we're in. That said, there's only a percentage of the market that can afford these products. And I don't think many governments are going to be able to pay for these products no matter where they are at the prices that they are at the moment. In the South African market because of the shortages of products like Ozempic if they sell at 1 people are buying them at 3 and 4. They're going to -- they're not beauticians, I'm trying to think of the word, it's not an [indiscernible], what is it, but an [ aesthetic ], sorry. They're going to, they're going to people like that, there are people paying multiples just to get access to those products and you don't need to sell if something selling for a $1,000 or $2, 000 a month, you don't need a lot of patience to be able in absolute numbers to get there. So yes, people are battling, but there are always people who seem to be prepared to pay for these products. But I go back to the point I made on the whole market, that is only a small percentage the big number because you've got decent volume with a high price. But you're going to -- I think if you get your pricing right you're going to have a massive volume with a lower price it might still come to the same numbers and I think the South African market you should see in terms of the former which would be because the pricing is we are -- we get a transfer price from lily so it's there'll be a smaller volume but the pricing is high enough to make it a very large product And did you ask me how big it was going to be? I always at Alex, I can't remember. I don't even want to give you a number. Whatever they tell me, they say you can double that or triple that. I'm not going to give you a number until I actually see it, but it's a big number for us. He's got a lot of questions from people that we didn't walk you enough in that facility. I said, tie them up. Run them ragged.

I'm [ Philippe Pleziya ] from [ Popaaco ]. I have a question regarding local production in Africa. During COVID outbreak, there was so many discussion about enhancing local production in Africa. And today, after the COVID epidemic, do you see any change in the context? Do you think that local production from political side in African countries, today do you think there is a potential? And Aspen as you are already in Africa, in South Africa, production, could you have a competitive advantage? And do you have a strategy of developing activities in other countries in Africa?

It's a really good question. I'm so glad you touched on it because it sort of was not covered sitting here in France. But African medicines and supply of African medicines and the things that you refer to, Stephen, can you just move a little bit that way? I've got to thank you. Sorry, thank you for that. It's a very political subject. And anything, in my opinion, anything that becomes political seldom gets commercial focus because people like to pontificate and talk. And those people that are politicians are talkers, and they're not doers. So I mean that with no disrespect, but that has been my experience to date, and one of the big let downs that we had as a company in terms of the COVID space. In terms of the manufacturing, we had countries like Mauritius wanted to put, everybody wanted to manufacture, and sort of the noise has gone down a bit. In my personal opinion, you simply can't have lots of sites everywhere across the world. Having had a walk through here, you'll see you can't -- it would be really bad to take half the volume out of here and put it into another site down the road here in France because you're going to have 2 sites that don't work rather than 1 site that works really well or 2 sites that half work. As a company, we are focused on being able to provide 1 vaccine for every African. That would be where we want to get to that there's a pandemic that Aspen is the company that can provide the whole of Africa. That said, it's too big an obligation for 1 company. It's too big for us to sleep at night, to have that. So there needs to be other centers within Africa to be able to spread the risk and just the pressure. Having lived through 1 COVID, I want to tell you the pressure. I've never felt pressure like that. Every day, the president's phoning me. And is the electricity on? Is it off? He's got the switch here. It was a very, very emotional time and a very tricky time. And it's not a pressure I would wish on anybody else. So I don't think there's space for too many plans. And so Africa's got to be smart around that. Probably the biggest thing I can tell you on this is, is there the political will to do this and we will find out on the 6 of December. There's been many engagements, I think it's the 6th of December, so it's only a few just so next week. There's a very important meeting that Gavi are having and that meeting will cover some key areas like what are we going to do and these tangibles not they've all said on big stages now we want to support Africa local manufacturers, but on the 6 of December we are supposed to get the tangibles i.e. If you launch product A only, we'll pay you ZAR 10 million in finished form, if you do the APR we'll pay you ZAR 20 million for every vaccine that you make every vial we're going to pay you X cents for that vial or Y cents. That's the level of what we're doing and how we're going to -- and we will have a fund or we won't have a fund that will be dedicated to Aspen, sorry, African manufacturer. I hope it's just Aspen, but to African manufacturer. And this is how many billion dollars are in this fund. They are sitting with surplus funds as well. Bear in mind, they were sitting with lots of funds that came in for COVID. If I remember, it was $6 billion more than they spent, et cetera. And how are they going to use some of that to promote this regional manufacture in Africa? Is Aspen looking to put more sites in Africa to do this? We've got sites in Ghana, we've got sites in Dar es Salaam, we've got sites in Kenya and Nairobi. We really are -- we would be happy to try and assist as I mentioned through the training and the human capital. Build another site. Sure, we've got -- we sort of stretched. I've got our manufacturing people, you've seen them all here. We've got South Africans sitting in France. We've got French people coming to South Africa, and we stretched in manufacture, and we don't want to be -- I think that would be a bridge too far for us without certainty of volume. And I simply, I trust, even when Lorraine tells you, we on track, she'll tell you we on track with Novo, we on track with mRNA. We're just not sure where there's politics involved. Will the WHO give us the registrations or not? It's the same thing and having been burned so badly by the promises made. And for those of you that listen to the podcast with the African CDC and Gavi and the promises of over 1 billion doses to Aspen and the delivery of 0, because J&J got those doses, not Aspen the ones. We've got to be really cautious about bills. So we're going to focus really on human capital and see how this works. We're going to have to focus on our own strengths. In life, sometimes it's better to make something strong stronger than try and dilute that effort too far. And I think we've got a strong operation in South Africa that we should build on first if the idea is to create pandemic preparedness. But we're not the only manufacturer. There's people in Egypt that are working hard. There's other people in South Africa, there's Senegal, but I just can't see 50 countries making their own vaccines. I think it would be counterproductive.

Okay. I will -- is there a question in the room?

So the 6 of December put that in your diary and let's see and we'll see if the politicians deliver on what they promise But certainly there is a commitment in the walls. I don't mean to be disrespectful. There's certainly been high engagement It's not just suddenly a surprise. There's been very high engagement and we feel really positively towards what we are positive and I hope it's not misplaced but we are positive about what will come out of that area. Also you're finding a lot of multinational companies, you've got important products for access globally -- for globally but also for access, who see advantages to making in Africa for Africa. And don't discount the fact that you can come to Aspen and make an insulin or any product and have access for Africa at a really good price. But you can also sell it in the U.S. and Europe. So there's real value in coming to Aspen. You can get all the ESG points you want, but you also can get a better cost of goods and you can make it yourself. And there's wildly those commercial advantages to it gives us real strength.

Okay. Well, lovely. Thank you. Thank you all. Thanks for walking the walk with us literally and kicking the tires and as you can see there's still a lot of work to be done here, but we've -- we're getting ourselves into a good position. Yes, we sort of getting ourselves onto the track. So thank you so much.

Thank you everybody.