Blau Farmacêutica S.A. (BLAU3) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the earnings call for the third quarter of Blau Farmacêutica. We're live at the Blau Studios in Sao Paulo with Marcelo Hahn, our CEO and Founder, Douglas Rodrigues, our CFO and Investor Relations; and myself, Matheus Fujisawa, the Investor Relations. Our call is going to take place in Portuguese with simultaneous translation into English, and it will be available as quick as possible on the company's IR website. At the end of the presentation, we're going to have Q&A with a priority for sell-side analysts [Operator Instructions] Now moving on to Slide 3. The highlights in the quarter were for the conclusion of the Bergamo turnaround, which 2 years after the acquisition has already been at the same level of gross margin as the other Blau factories and was the main driver for the company's eighth consecutive increase in gross margin. Our revenue was at BRL 475 million, the same level as last year. And a highlight is the Aesthetics BU and the 11% growth in launches. In the hospital segment, we continue to have limited production capacity in some classes of medications and drugs, and we had a drop in the public channel due to the natural volatility of the channel. If we analyze the last 12 months, our public revenue has still been growing, though by 4%. In our gross margin, we reached a level of 41%, mainly through Bergamo, as we've already mentioned. And besides this, we had a mix of sales and a dollar exchange rate that were favorable for our margins. We performed an inventory provision at Hemarus, adding up to BRL 8 million due to the plasma collection costs being a little higher than our perspective for sales of this plasma in the future. So we had accounted provision in the cumulated detail. If we just consider this the gross margin would have reached 42%. Now the recurring EBITDA margin reached 24% in the third quarter, a drop of 80 bps in regards to third quarter '24, but would have reached 26% if we were to exclude this provision, which would be a peak of 90 bps in the same period with the gross margin gains that would more than offset the increase in expenses. And finally, our accounting net income reached BRL 106 million, a growth of 52% in regards to last year, levered by the accounting of the interest and currency variation in the development of Prothya and we were still not impacted by the Hemarus provision. The recurring profit was at BRL 72 million, excluding this effect of Prothya and a growth of 5% and 15% versus the previous quarter. And now I'll pass the word on to Marcelo to talk about the latest advances we had.

Thank you, Matheus. Good morning, everyone. I want to quickly highlight the quarter. So our efficiency gains during the year, even with all of the challenges that were presented over time. And what's most important, they were beyond the results where all the advances Blau has been achieving that will allow for results in 2026 and transformational growth when we look at the mid- to long term in the company. Now with the expansions and improvements in production processes, we can see that these factors are going to increase our volume of units produced by approximately 70%. I also want to highlight that we've completed the validation and qualification of 2 new production lines at Blau São Paulo. And now we're waiting for the ANVISA inspection to get approvals, and we should start having this contribute to results from the first quarter of '26 already. Two other production lines will be delivered during the first half of '26, and they should contribute to revenue in the second half of '26. In addition to these expansions, we're improving our operations with increments of new shifts trying to have uninterrupted production and the implementation of a new packaging area in Pernambuco that should be delivered by the first quarter of '27. Next slide, some photos of the new lines that have already been completed. The new line of ampoules have already developed a more modern concept with more productivity than other production lines at Blau São Paulo, very similar to the P210 at the Cotia plant, which was the most recent expansion the company had before these new lines. The new line of antibiotics also has the same concept and should address the production capacity for one of the main categories that we have pending sales to for the company. In aesthetics, we recently launched the Fillage line with Hyaluronic Acid in 3 different presentations that reinforce our portfolio of Blau Aesthetics, which already has the Botulim and the Botulinum Toxin. We also had the approval from ANVISA aesthetic use cannulas, and this should be launched by the first half of '26. On the next slide, we have the receipts of EUR 52 million from the investment of Prothya. We've already accounted for interest and exchange rate variation in the third quarter of '25 and cash will be recognized in fourth quarter of '25. This amount is going to be used especially for transformational investments that are already underway, such as the monoclonal antibodies and an increase in production capacity among others. Another important source of financing for growth comes from incentivized funding at a cost below CDI, such FINAME used for the acquisition of machinery and equipment. We're also looking for our projects to have incentivized financing lines for our research, development and innovation projects. Then on Slide 8, we talk about monoclonal antibodies, and we're really proud to announce that we have already completed the full development of AMDB-12, the development of the API production bioprocesses all the way to the finished drugs at Blau's facilities with all the validations required by the health authorities. The company was concerned with developing a very robust comparability journey. Currently, the drug is in stability and preclinical trials will be completed this month. And we should begin the clinical studies on humans in the first half of '26, AMDB-13 and AMDB-15 are in the process of developing bioprocesses at Blau's facilities and they're going to go through the same development process as AMDB-12. We intend to complete these processes by the second half '26 and AMDB-15 by the first half of '27. AMDB-14 will have a clone development phase and should follow the same process as this patent will end by 2029. And we're also conducting the clinical trials of Alphaepotin, fulgurcin, and pegfulgurcin.

Now thank you, Marcelo. Now as we see gradual increase on Slide 9, the share of the launches in the revenue as well as investments in research development and innovation, especially due to advances in monoclonal antibodies that Marcelo just mentioned. We expect to have an acceleration in the launch of revenue from -- in the launches revenue in line with the acceleration of the market size and the TAM of the drugs that are going to be launched. Just for the products that have already been submitted for approval by ANVISA, we should see an acceleration of about 60% compared to the previous cycle. It's worth mentioning that this number was BRL 3 billion 2 quarters ago, and it rose to BRL 3.1 billion in the previous quarter. And now it's at BRL 3.2 billion. And the trend is that this number should continue to grow. Moving on to the net income -- net revenue, sorry. We reached BRL 475 million in the third quarter of '25, in line with the value presented last year. In the last 12 months, you can see that the growth was 5% in our net revenue. If we look at the hospital segment, we can highlight that there was about 11% growth in launches. However, the capacity limitations in some production lines as well as credit restrictions for customers due to a persistent scenario of high interest rates and a drop in the public channel, which impacted the performance in this quarter. The highlight for this quarter was the aesthetics business unit, driven by the change of customers in the distribution of the Botulim, our Botulinum Toxin. And in pharma business unit in retail, there was an important recovery in the quarter because you must remember that in the last quarter, the pharma business unit was the one that was dropping the most. And this quarter, it was already stabilizing its performance. And our perspective is that in the next quarters, it will get back to growing. And finally, in Plasma, there was no revenue in the quarter as well as there was also no revenue last year. Now I'll pass it on to Douglas.

Thank you, Matheus. Good morning, everyone. Well, guys, I think here, the main highlight once again is our gross profit for the eighth quarter in sequence, there's been the evolution. So the company has been exchanging the mix, and this is very important, very relevant, especially considering the sustainability of these results in the future. And of course, there's some complexity, but the company has been performing at excellent results. So it's not easy to do what we're doing. But even in a scenario with capacity restrictions and no growth in revenue, we've addressed the increase in the gross margin. And if you look at the margin, excluding the effect of the provision of the Hemarus plasma operation at a level of 42%. So that's the margin we were searching for in the last quarters, but a more favorable mix has already helped us reach this in this quarter. Another point that's also an important highlight. I want to congratulate all of our teams as the conclusion of the turnaround of Bergamo. Up until 1 quarter before, we were saying the markets that we were finished until the end of this year. But now it's the third quarter, and we've already demonstrated the strength of the company, the resilience of our business and especially how the company, especially in the industrial front has optimized the operation and optimization of the capacity has been able to optimize this. And so we're going to definitely unleash more productive capacity. The trend is that we'll lever and gain more operational margin. This moment is really all about focusing on using the best mix favoring our current profitability and not looking -- and not losing our view for the future this quarter. We could have a momentary frustration, but that's because, of course, we could have potential to deliver more results if it wasn't for our productive capacity issue. But looking at this, you can see this future perspective really brings in more sustainability. We're shifting the company's mix in a sustainable manner, and we're delivering robust results. So in regards to the impact here, I think Marcelo has mentioned this a bit. Basically, we're talking about project provisions to recognize the negative margins. If you look at the structuring here, it's maybe greater than what we could have today as practice prices. Of course, we continue to negotiate and search for new customers. But as we have new customers and new pricing, we'll understand what really would be the impact in results. So far, it's provision for negative margins. And moving on to the next slide. When we consider the EBITDA and we see the main highlight is the gross margin, and we have an elevation of about 3 percentage points basically. Of course, this is amortized by the increase in SG&A and R&D expenses. In the accumulated results, we have a growth and the RDI, of course, to handle this new cycle development. And when it comes to SG&A, the company has been structured and prepared for this new cycle. And this cycle is still locked at this moment. But as it's unlocked, we'll bring in this dilution. And naturally, the company has a new structure to be able to handle all of the transformational projects we've already been handling, especially in this quarter, if you consider like a lot of investors even asked us about this, but the elevation of administrative expenses, et cetera, but this is due to an adjustment in provisions. And if you dilute this over the last -- the next quarters, if you normalize this. But here, you also have another effect. If you look at the accounting results, there is a tax provision. We're reclassifying this as nonrecurring and adjusting the [tax] effect of the Hemarus provision. So you're delivering a margin -- an EBITDA margin of about 25.8%, which is an evolution at 11% of the levels before. So -- and so also about what the company expects as margins for the company. We also looked at the divestment of Prothya EUR 52 million in our balance sheet. So if we adjust this and even the Hemarus provision, we can see that the net income still has an evolution and growth of 5% in regards to the other period. And so that's a margin. If you just consider the provision FX, it's the best margin in the company and basically 17% net income, and that demonstrates not only the operational gains even with these impacts, but the tax efficiency as well. So I think the company today has this capacity to look at tax planning even before Pernambuco and that's going to be levered even more because we're investing in R&D. We have laid the bank benefits. We have the approval of the interest on capital and equity and all of the results that we're going to lever at Bergamo have the benefit of using a tax loss base with a deferred income tax authority in its balance sheet. So that's especially for the cash effects, and that's an extremely important topic, of course. Now here's the biggest challenge the company had, and we want to balance out the working capital issues, especially when we consider these working capital and the stock levels, et cetera. And so considering the mix of products -- and so imported products have more added value, of course as well as unleashing productive capacity and the turnaround of these projects. And so this is a challenging equation, but the company today has a plan to get back to inventory levels. And so -- the public market is kind of blocked. And so the company -- and the success was always to foresee possible movements, especially items with greater volume. And that also considers the stock composition. And so if the company is launching new product lines and we'll launch them soon, we are going to build this inventory. And so that's basically the composition of the increase in the inventory that you're considering in this quarter. And so this deadline is kept. That's pretty much constant. And so that's a recurring level. Sometimes you improve this. But I think the main point is the inventory turnover, right? And so this is mainly due to the evolution of the projects to unleash productive capacity. And so there was an R&D CapEx considering the consumption of the inventory in these products. And so that's important to highlight also that the company, especially considering monoclonal antibodies and it's natural that you would have more investments in R&D. And so that's why there's also a specific increase in the quarter. And as these projects advance, you have more relevant R&D. And so also the share of new products has been growing as well. So this is the dynamic, and this is what we've been working on. And this is how we can search for better results quarter-over-quarter. And so when we look at the company's cash position, you can see that this is the position in the quarter, and it still doesn't recognize the effect of the Prothya cash divestment and then the company will be cash free basically. And so this is a low leverage, but it's basically -- if you consider this, it's basically the working capital. So if we consider the cash generation of the company despite relevant levels of investments, which are really well behaved. So cash generation handles the CapEx. And then basically, I think one of the main points here is how to unleash this inventory and generate more cash. And anyways, the company still have low leverage with Prothya cash -- it becomes net cash and very well positioned in the market to be able to handle strategic movements and follow this plan, right? Now I'll pass the word on to Marcelo for his final comments, and then we'll get back to Q&A. Thank you very much.

Thanks, Douglas. The final message is that Blau is investing to capture market opportunities and the drop in patents, providing more details in the next 3 years, we should be growing our volume of production by about 70% and the launches should grow by at least 60%. This is going to allow us to grow at levels above market and that are projected at a growth of about 10% a year. Besides this, we'll continue to have optimization and expansion in Latin America. This growth should dilute expenses in a relevant manner because most of the expenses are already incorporated in our current results in the company. This new cycle should be marked by the expansion of the capacity in Pernambuco and the gain of relevance in the monoclonal antibodies and the results of Blau, investments that should be crucial for the acceleration of our expansion internationally. With these investments and the benefits of the SUDENE, we should recover the historical margins of the company in a sustainable manner way, in a more relevant way that will allow for the compensation of investors. Now I'll pass the to Matheus.

Thank you, Marcelo. Now we're going to start our Q&A session.

[Operator Instructions] The first question we have is from Lucas Nagano at Morgan Stanley.

We have 2 questions here. The first one is about the capacity expansion for next year. We have some components here. And so there should not be big changes in the first quarter. And how this should represent the profile of growth next year if they're already starting quickly or strong in the first quarter, if it's going to be more gradual. I think it would really help us understand the view of the market growing 10% a year in the next cycle. And we would like to understand what this acceleration process would be. And the second question...

Well, let's move on to the next question first. We have Lucas -- sorry, Felipe Amancio from [Itaú BBA]

First is about the hospital revenue, as we saw a slowdown mainly due to public and I wanted to understand...

Felipe, we had a technical issue here with the audio. We didn't have the return, Lucas was in the middle of his question. I'll go back to Lucas and I will come in with you. I'm so sorry about that. We had a slight technical issue. Sorry about this, bear with us company, we'll go back and Lucas can complete his question. Live show, you always have these kind of events, let's say, right? So let's try to go back. Sorry about that.

And so what should be if we consider these -- we want to understand how this process would be understanding the comment on the market growing and how this acceleration should be, which lines should scale up more sales and all of that. So this is the first question. The second is about the stock. This should also -- if this would be more accumulated enough, could you get back to that?

So I want to remind you all that the company's revenue historically, the comparison in the third quarter was the best quarter in the history of the company. So we're repeating the best quarter in the company, and we're not satisfied with the results. We have conditions to deliver more. And basically, we're going through this market and product shift in the mix. We're changing with products that had immunoglobulin for products and I have to produce a lot more. But in exchange, that would consider that we have better margins. And that makes it very clear that production brings the results we're expecting. So we expect to grow the results of the company, because of we can have the release of the production lines. And so we're waiting on this and recognizing that they exist that they're qualified and validated in the best practices for production. And with this, we'll eliminate this bottleneck that we have of some products and where we have the demand, the sale, but we're not able to deliver. So I think that's the first point for growth in the next year. And so when we consider the stocks, we are prepared for this production to understand the production of these 4 lines. And so we are considering stock that's above normal levels in the company and we're expecting to reduce the stock in the beginning. And so we should consider the production this in the next month. And with this, we'll start reducing the stock. And so besides all of this, we would be prepared for the alphaepotin and then we would stock up as well because I think the biggest differential with Blau is the capacity to have a quick delivery and we need to have all of these inputs in-house so that we can perform this quick delivery. So I think that's pretty much what demonstrates the moment we're experiencing at the stock. It's a one-off moment. It's not recurring. It won't be recurring, and we understand all of this just as a revenue, right? So we understand that we have the capacity to deliver more revenue and growth. But we, on the other hand, are also taking care of the company's margins. We should -- we could be selling more finished, ready products with more added value and better margins, but that would impact the results and the margins of the company. So we would also prefer to wait a bit and hold on the revenue of these products to keep the margins of the company at the levels we're at. And so just to add on to this, the fourth quarter and with occasional opportunities that could be a highlight, but then that kind of unleashes the revenue and the inventory and then over '26 as the new lines come in, the operation, they will scale up, right? So then you also have the launches from next year. We start accelerating the size of the market that's going to be launched. Of course, this should be reflected in an improvement in the revenues of the launches, right? So thanks for the question. Let's head to the next one.

And then Felipe from Itaú. Felipe Amancio from Itaú BBA.

So we have 2 products here, also the hospital revenue, we saw there's a slowdown in the revenue in this segment. You talked about this a lot. And I want to understand what are the main reasons that could be leading to the slowdown in the market, right? Just to understand if there's a trend in the sector even maybe impacting the growth and understand if besides the supply/demand of the company, there's some other point you would like to highlight in regards to demand and then capital allocation is another point. So we want to explore a bit of the plans for the cash and the investments in Cotia. You even talked about this to be able to support the current investments of the company. And I want to understand if maybe you see space for an increase of distribution to shareholders?

Well, starting off with the market here. We don't see, for example, in the market we operate in, the patient or chronic patient needs are stronger. And so there's a reorganization among other buyers to postpone to be able to -- and so this is pretty much the situation. But we also see the growth of the consumption, right? And the amount of patients also continues to grow in chronic diseases also. So especially alphaepotin, which are products for chronic renal patients, right? So this is a one-off moment, right, to postpone and understand this. And what's really made a difficulty is to understand the capacity -- productive capacity. And so the products we have capacity with to grow. And so we're going to be able to unleash this with the new production lines. And so as Douglas mentioned, we have been studying exactly what we're going to distribute and we're considering the analysis to understand the best opportunities when it comes to JCP payments. And I think Douglas can even talk about this, he has better details there. But that's the idea, this cash reinforces our cash position. And we're assessing the opportunities to be able to search for a better balance between us compensating shareholders and preserve cash for the company. So we're keeping up with these studies, and we're looking at how the closing in the year should take place. And probably up until the month of November, we should get back with a better definition. But the idea is to reinforce our cash and strategic investments.

Our next question is from Eduardo Resende, UBS.

We have 2 questions here on my side. The first one is to get a bit of your view on the plasma business in the U.S. and what's the dynamics like to search for new contracts? If you guys have already prepared anything you want to share the market in this sense? And secondly, what are the short-term margins of the company looking at 2026, right? So we had really successful integration with Bergamo. And I wanted to understand what you guys see as other levers for margin expansion now in the short term. And so that's it.

Well, we have different avenues. So we can consider the best margins, production of these new lines. And just to understand, we've already hired people that are going to work on this and these people are already contributing to that. So they're in their qualification processes, validations, et cetera, but they're already employees, right? So from the moment when these people contribute to bring in company revenue, we're going to be working on the dilution. So just to help you understand. On the other hand, we also have other opportunities for avenues of growth. So we didn't consider this year, but there's also a possibility of growth through M&A with a stronger cash position. We would also be able to consider possibilities in this sense. So there are many different means for growth and ways to bring opportunities to the company when it comes to margins. So the margins are a bit above this. Of course, Bergamo is very relevant if you consider the effect at the moment of the integration sort of through the margins downwards. And so this is transformational, of course. And when you consider the short and midterm, basically, the evolution of the margin is going to really come through the utilization of better productive capacity. And as you unleash capacity, you also grow the revenue. And so now there's a lot of this evolution, right? And this is probably going to be to the short term. But when you look at the long term, then you already have transformational projects, which is where you have monoclonal antibodies and you released it in the Pernambuco plant, then you'll have a new cycle on a new margin level, right? But up until then, you want to search for the best productive capacity, right? And I think then you also have the plasma market issue in the U.S. and the dynamic there. I think that was the first question, right? Yes. Okay. So we are prospecting new opportunities to sell the product. We've already been in touch with different manufacturers for plasma. And so I don't want to provide information on who these players are yet, but we have more than one party interested and 3 companies actually are interested in this plasma, and we're going through an audit process from one of the manufacturers next week actually. And we went through a process also changes in the plasma collection centers. Up until then, we were working on the entire process manually. And then this week, we started with an automated process. with the FDA requisition. And for now I can say that we have compliance -- we're complying 100% with the FDA requirements. And we understand that it's a matter of time until we bring in this news, right? So we also have an expectation with the plasma stocked up, not only now but also in the future. And so when the -- as soon as we have any revenue coming, our IR team can also provide more information to you.

Now our next question is from Maria Eduarda Resende from BTG Pactual.

I just wanted to ask you about this question regarding plasma, especially the provision of BRL 8 million in this quarter. And I wanted to understand a bit more about this decision and how this discussion took place with the auditing, with the acknowledgment of this adjustment in the quarter and if this should be reflecting on a one-off revision of the prices if there's a structural change in the plasma market and the new negotiations you discussed? And if it is structural, what exactly changed in this scenario, right, if the global supply demand for currency, et cetera? And finally, if we should expect new provisions up ahead or if there's adjustment now -- should already reflect this current stock of plasma? So I think that's it on my side.

Well, great. So let's -- basically, what we have today is we have the expectation of the price for commercialization. But even considering the fact that we've already been quite a while without commercializing, then you're elevating the level of cost. So of course, clearly, when you look at the cost of the inventory, it is higher than prices. And then any price to discuss about the range of prices if it is [elastic, recurring], if it's average price level what we do? But in any way, we have this a weighted average that demonstrates the cost of the inventory because -- and that's greater, right? So occasionally, we recognize $1.5 million in this quarter, and that's going to really depend on the evolution with the costs and the price we're going to commercialize. So remember that there we were gaining a lot of efficiency. And so it really depends on this dynamic, right? Maybe we'll have more adjustments, but that's really going to depend on the dynamic. And this is a normal process to recognize a negative margin to be able to keep up with the accounting rules, including.

Our next question is from Raphael Elage from Bradesco BBI.

Also the expansion of capacity up ahead in line with the APMO schedule, right? So basically, these 4 new lines would be sufficient to support the company's growth according to schedule AP -- 1000, there should be another incremental capacity until you reach the point where AP would sustain this growth overall? And if it would make sense to have a possible M&A, maybe, of course, always double clicking on this with lower leverage. Is this appropriate cash as well? And I want to understand this dynamic a little more. Then finally, looking into the short term, BRL 200 million launches this year and you have the target of BRL 700 million. And how are you imagining the short term until the end of the year? So just to understand these 2 matters here.

Well, starting off with this point. On the launches, Raphael, we highlight what was published on the slide. So we have about BRL 700 million this year, and then we have an acceleration to another BRL 1 billion next year. And so these follow -- on track, right? So besides this, we are addressing the growth for the next years. And then we also consider the construction project in Pernambuco. And in this period, we're working on some occasional improvements. We're improving processes. We have been working on these lines -- in an uninterrupted manner 24/7, and we're changing our work methods, right? So we don't have any bottlenecks in production for the next 2 to 3 years until we begin our operation in Pernambuco. And so the idea is to have this bridge, right, even after they have the Pernambuco project is phased out, right? And about the M&A, I don't imagine at this moment that there's going to be an M&A considering productive capacity, right? We understand that what we are currently searching for when it comes to innovation and the 4.0 industry, 5.0 industry, especially in Pernambuco with robotics. We don't see any other players in the market in the hospital segment with these robust investments in this area or plants available.

At this their audio is cut off. Just a minute. The guys in the room had a technical issue, and they have no audio. So we are waiting for them to recover that so we can resume translation. [Technical Difficulty] Guys, we had a problem here. We do not know what was the reason for this issue. We are coming back here just with audio, and you will see just the Q&A projected. We were answering Raphael Elage's question. And Raphael are you still in the room?

Yes. I am.

Okay, guys. Thank you. You were answering the M&A issue that we're now searching for. So the company is not expecting to perform any acquisition. So the products we work with are hospital projects. And we understand that we have a manufacturing unit that already has automation and we think about this in the future with robotics, and we're not expecting to increase our capacity with M&A, right? So we expect to have other business units or product lines that can complement our current product line and business, but not thinking about productive capacity. We have another analyst. And so we had a technical issue and there is a drop in audio and image, but we're coming back. We'll answer the questions on chat. We have other questions on chat as well. I want to say sorry about that. We're committed to answer all of the questions from investors here. So yes, you can hop in with your question.

Okay. Just a quick question here. We have 2 actually. The first one is you talked about the taxes and the effective rate, transformational investments, et cetera. And I want to understand what the dynamic is up ahead? And the nature of this [subvention]. And so considering the [indiscernible] JCP, right, if we consider this as a more recurring practice. And the other point is there's actually a mix of the follow-up in the stock and capacity. And I want to understand if this expansion productive capacity expected to begin in 2026 should also come along with the increase in stock, right? So I'd imagine that there would have to be some acquisition for support of this new expansion, right?

Yes. Let's talk about the stock and maybe I didn't hear the previous comment that I was talking about how today, the current level of -- today the stock is not normal. It's above normal. And we've already performed this acquisition of the input for the new product lines. And so we're already working on this inventory in-house. And just as we've already hired our employees working on these productive lines when it comes to training, qualification, validation, and we understand that when we actually begin producing for commercialization purposes then these stock levels will drop. That's what our expectation is. So we don't have this increase of stock in the future. Now about the effective rate, basically, what we have is we have JCP, the interest on equity and capital. So then you have R&D, you have the late thing where you have this exchange as you invest. And the subvention is basically because we're already operating with our unit in Pernambuco. So imagine the ICMS benefit in the state allows you to have up to 2 years before the installation in the industrial unit where you can subcontract your unit outside of the state of Pernambuco to perform the industrialization process and you then perform the exit there. And you can capture the benefits of the ICMS with the subvention in the results. And so that's a benefit we're already capturing now. When we look up ahead, once we already have the packaging product line, then we'll capture the benefit of SUDENE, which has a greater potential to reduce the effective rate. But up until then, I think those are the main factors that will contribute to the reduction in maintenance of the effective rate.

Now we're going to head to our questions on the chat. The first question is from [ Andre Santana], a shareholder. Here that's an individual. And it's a question that analysts already submitted about taxation issue, right? We've actually already covered this topic here during the previous questions. But anyway, thank you for the question, Andre. Our next question is from Ricardo Strobino from 4UM Investimentos. And he wants to know more details on factors that are blocking growth. We talked about this already, but we can cover this some more, right? Capacity, credit restrictions, if there's any other -- I think the main point is capacity. And of course, we have been very careful with credit to not have NPL on our balance sheet. But of course, we have a big opportunity for growth and these investments in these 4 product lines that were made. We will be increasing our supply of products and with this will also increase our revenue, not only here in Brazil, but also in other geographies, right, because as the company has been evolving in sales, out of Brazil as well. So we have [Mauricio Almeida], he's also an individual investor. And so thank you, [Mauricio], for investing in our business. He wants to know if there's any program to visit the company's headquarters? Yes, here in the pharmaceutical industry, everything is very regulated, the safety issues. So sometimes we prioritize professional investor visits. But of course, we can always plan on having a visit organized along with other investors coming in and maybe consider your presence as well. It's going to be a pleasure to welcome you guys. Thank you so much for this question, Mauricio. [indiscernible] from the [indiscernible] said, well, with the rough year results and resources does the company expect to pay off this? Well, we don't want to anticipate this. I think that's not the intention we have our gross debt flow that's really been maturing in the next 3 years. This is a relevant cycle when it comes to investments. Then I think as you highlighted, search for incentivized lines that can bring in the benefits of reductions in financial costs. And eventually, we could even think about another operation that can provide us with a little more oxygen in the next years. But we don't want to anticipate the maturities. There was never this discussion, right? But that's a great question, yes, but we have no intention to anticipate it. Well, thank you very much. And then we have another question from [Nicolas from Quantitas] . And he says we reached a gross margin of 42%, excluding the provision with Hemarus. We want to know if this is sustainable looking ahead? Well, I believe so. And especially with the monoclonal antibodies where we're 100% verticalized and producing in-house, the company margins will go up a lot more. And -- we talk about margins, for example, but when you consider the markup of the company today, it's a really low value. And so we had a quarter that we're not satisfied with. But even so, when it's equivalent to the best historical margins, and we still see the company's markup not develop, right? But we also understand that there's a lack of investor education and a closer relationship with investors to explain more about the monoclonal antibodies and verticalization and our own production in-house and producing all of the ingredients that go into my drug in-house, which gives me, for example, the margins of the producer and for the finished products, that's going to definitely contribute and leverage more because those are the most relevant products with more added value, more volume in the company. And we do hope to bring in greater results. So we've been having -- and so if you consider despite this being stable, we had significant other advances that are going to allow us to have really good performance from '26 onwards. So beyond thinking about financial numbers in the quarter, we're demonstrating everything we had in recent advances, new production lines, launches, advances in monoclonal antibodies and opportunities even with the gross margins, et cetera. Most of the expenses are already in-house with revenue getting back to growth can dilute. And then you have an opportunity also in the tax front that's not something that should be excluded, right, with, SUDENE. You have about 65% reduction in the taxes to be recovered. So this is very significant and it's going to contribute to the margins as well. We're starting off with this journey as a pharmaceutical industry that has high complexity, drugs in our development cycles and during regulatory journey, clinical journey is a lot greater than other simpler products like OTC and nutrients and nutrition, et cetera. So we have cycles that are 5, 7, 10 years. And that demand requires time, but we are sure this will be surprising results in the future. Thank you very much, Nicolas, for your question. And anything else? Now we covered everything. Just final comments here. We are not satisfied with our results because we saw our cycle grow a lot due to our preparation for activities in the new factories and we'll be delivering a better cycle in the next months. And we understand that there's a lack of growth in our results. We're going to bring this growth with the release of these productive lines through ANVISA. And everything is well addressed and covered here. We're really keeping an eye open when it comes to this. And I know a lot of employees are watching the earnings call. I want to thank you all for your performance and excellent results. And of course, we want more always. But we are experiencing a challenging moment, economically, financially and politically and a lot of volatility as well. So despite all of this, we have a solid sustainable company with -- that's cash positive and really performing great investments and results will come over time. It's just a matter of time. I want to thank you all for having believed in our business and for being here today. Thank you very much. Well, thanks, guys. I have -- with this, we're officially closing our earnings call for the third quarter. If you have any other questions, you can contact our IR department. Thank you. Bye-bye, guys. [Statements in English on this transcript were spoken by an interpreter present on the live call.]