Zydus Lifesciences Limited (ZYDUSLIFE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Cadila Healthcare Limited Q3 FY '21 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Ganesh Nayak, COO and Executive Director from Cadila Healthcare Limited. Thank you, and over to you.

Good evening, ladies and gentlemen. Welcome to our post results teleconference for the quarter ended December 31, 2020. I do wish that you and your family continue to remain safe and healthy during these times. For today's call, we have with us Dr. Sharvil Patel, Managing Director; Mr. Nitin Parekh, Chief Financial Officer; Mr. Harish Sadana, Chief Strategy Officer; and Mr. Vishal Gor, Senior Vice President, Corporate Finance. While 2020 turned out to be one of the most challenging years for people across the globe on account of the unabated spread of COVID-19, 2021 offers new hope to humanity as various countries have now seen success in the development of vaccines to combat the pandemic. With that, let me take you through the highlights of the quarter gone by. During the third quarter of FY '21, we posted consolidated revenues of INR 38 billion, up 4% year-on-year. Consolidated EBITDA grew to INR 8.07 billion, up 16% year-on-year basis. Our EBITDA margin improved during the quarter as it went up by 210 basis points to 21.3% from the 19.2% registered during Q3 FY '20. Adjusted for loss of export incentive revenues, our EBITDA margins would have been in line with that of the preceding quarter. Consolidated PAT for the quarter was INR 5.27 billion, up 41% on a year-on-year basis and up 11% on a sequential basis. The quarter gone by turned out to be an encouraging one for our India business, which comprises human health, consumer wellness and our animal health business, as the business grew by 20% on a year-on-year basis, registering revenues of INR 16.43 billion and drove the overall performance for the quarter. The U.S. geography, comprising of generics and the specialty portfolio, registered revenues of INR 16.03 billion during the quarter. Our emerging markets business grew by 11% on a year-on-year basis and posted sales of INR 2.93 billion. On a sequential basis, the business grew by 24% during the quarter. Now let me take you through the operating highlights for the third quarter of FY '21 of our business lines. Starting with our human health business in the Indian geography, the pharmaceutical market in India showed further signs of improvement as it grew by 6.4% during the October to December 2020 quarter after registering a flattish performance during the July-September 2020 quarter. Performance of our business also improved during the quarter on the back of steady improvement in demand amidst various unlocking measures being undertaken by the government. In fact, we were the second fastest growing company among the top 10 Indian pharma companies during the quarter gone by. Our specialty cluster grew faster vis-à-vis the mass cluster, and in turn, led to a better performance vis-à-vis the market. Overall, our human health formulations business posted sales of INR 11.04 billion, up 21% on a year-on-year basis. Branded generic business grew by 24% on a year-on-year basis. On the therapy fronts, we gained market share in pain management, anti-infectives and the antidiabetic portfolio during Q3 FY '21, vis-à-vis the corresponding quarter of the previous financial year. We have maintained our ranking in the key therapies of gynecology, respiratory and pain management during the quarter. On the back of continued revival in the economy and the festive season kicking in during the quarter, our consumer wellness business witnessed a strong surge in the revenues with the majority of the brands growing in double digits. Overall, the business grew by 16% on a year-on-year basis, driven by healthy double-digit volume growth. Our Animal Health business in India saw another quarter of robust performance as the business posted sales of INR 1.63 billion with a growth of 17% on a year-on-year basis. Implementation of digital initiatives, along with focused efforts to enhance customer connect led to the improvement in the growth of the business. Our U.S. formulations business posted sales of INR 16.03 billion, down 4% on a year-on-year basis. We launched 7 new products during the quarter. These include the launch of doxorubicin liposomal injection, which is the first complex injectable developed in-house. We received approvals for 9 products, including 4 tentative approvals, and filed 10 additional ANDAs with the U.S. FDA during this quarter. New product approvals for the quarter include 3 first cycle approvals. Cumulative first cycle approvals for the year 2020 now stand at 7. During the calendar year 2020, we received approvals for 38 new products, which is the second highest number of ANDA approvals received by any generic company across the world. Our cumulative filings include 71 filings for injectable products, and our cumulative approvals include approvals for 56 injectable products. This concludes the business review. I would now request Dr. Sharvil Patel to take you through the progress and initiatives in our innovation program. Thank you.

Thank you, Dr. Nayak, and good evening, ladies and gentlemen. As you know, there are continuous efforts to combat the COVID-19 pandemic. We completed Phase II clinical trials of our first-in-class plasmic DNA ZyCoV-D during the quarter gone by. The trials were conducted in over 1,000 healthy volunteers. As part of the adaptive Phase I/Phase II study, the vaccine was found to be safe and elicited strong immune response. We also initiated a Phase III trial for the ZyCoV-D vaccine now. The trial is progressing very well, and we will be conducting it in around 30,000 volunteers across 60 sites in the country. We are expecting to complete the recruitment of 30,000 volunteers by end of February. As you are aware, we are putting up a plant for the production of ZyCoV-D vaccine. The plant is expect to be ready for commercial production by the first quarter of FY '22. The designated capacity of the plant is equivalent to 120 million doses. During the quarter, we also submitted an application to the RCGM to carry out the preclinical and safety toxicity studies of our recombinant measles vector vaccine, which is the ZyCoV MV vaccine, which is in our -- which is a second vaccine candidate for the COVID-19. On the NCE research front, during the quarter, we successfully completed Phase IIb trials for desidustat for the treatment of hypoxia in hospitalized patients in Mexico. Coming to Biologics. We have initiated Phase III clinical trial in India for our Pegylated Interferon alpha 2b in 250 patients. So far, we have recruited 115 patients, and the trial is moving along smoothly. We submitted an IND application to the U.S. FDA for our Pegylated Interferon alpha 2B for the treatment of COVID-19 patients. We are also developing a cocktail of monoclonal antibodies that are targeted towards the spike protein of the SARS-CoV-2 that causes the COVID-19. Regulatory permissions to start the toxicity studies were obtained and the toxicities have been initiated. The studies will be completed by March 2021, and the clinical trials will thereafter be initiated. With this, let me give you an account of the progress made so far on the different R&D projects, other than those targeted towards the COVID-19. I'm very happy to say that the saroglitazar magnesium has been granted orphan drug designation by the U.S. FDA for the treatment of patients with primary biliary cholangitis. This follows the Fast Track -- the granting of the fast track designation by U.S. FDA to the molecule for PBC in December 2020. During the quarter, we also received approval from DCGI for saroglitazar magnesium for the treatment of nonalcoholic fatty liver disease, NAFLD, in India. The molecule becomes the first medicine for the treatment of NAFLD. On the desidustat, which is our second NCE molecule, we have completed large-scale recruitment of patients in the Phase III clinical trial in India for the treatment for anemia in dialysis and nondialysis-dependent CKD patients. In fact, we recruited a large number of patients despite the challenges posed during the COVID-19 pandemic. 392 patients were recruited who are suffering from anemia and were on dialysis for the Phase III trial, also known as the DREAM-D trials, and 588 patients were recruited who are suffering from anemia and who are not on dialysis for the Phase III trial, also known as the DREAM-ND trial. We have received regulatory approvals in India also to initiate Phase I clinical trial for a new chemical entity ZYIL1, a novel oral small molecule candidate targeted at selectively suppressing inflammation caused by NLRP3 inflammasomes. In order to provide a remedy for malaria, we have been developing a molecule which is fast-acting and effective against both plasmodium falciparum and P. vivax strains of malaria parasite. Phase I study in healthy volunteers has demonstrated long half-life and potential for a single dose to cure malaria. We now plan to pursue the development of this molecule in close consultation with the global regulatory agencies. On the biologics front, we received marketing authorization for one biosimilar in India and completed preclinical toxicity study for another biosimilar during the quarter. Talking about our vaccines portfolio, we successfully completed a Phase II/III trial for tetanus diphtheria, the TD vaccine in India during the quarter. On a 505(b)(2) initiative, during the quarter, we submitted an NDA for one product from our specialty portfolio. We continue to explore potential collaborations and licensing opportunities to grow our specialty as well as complex generics business. Till date, we have successfully in-licensed 16 products to build the product of complex generics. This includes true products where we are likely to hold an exclusivity, first-to-file status and are likely to have a 180 exclusivity upon launch. Thank you. And now we will start with the Q&A session. Over to the coordinator for the Q&A.

[Operator Instructions] The first question is from the line of Saion Mukherjee from Nomura.

Sir, just wanted to understand the India growth. If you make adjustment for remdesivir and other COVID-related drugs, what is the underlying growth? And also related to that, given the fall in COVID cases, is there any stock return that we may have to book in the next quarter? I just want to get your views on that.

So with regards to your second question, we don't expect any stock returns for our remdesivir. Obviously, the cases have come down and that, accordingly, the volumes have come down. We still have a healthy volume mix for export. So we still continue to see good traction on remdesivir. In India, as I said, certain therapies have done very well. And so the specialty play, especially the diabetes franchise, has done very well and overall internally grown at good market shares. And so has our respiratory portfolio, which has improved significantly. However, it doesn't reflect right now in the IMS or AWACS right now. So the specialty portfolio is doing well. And pain, we have gained good share in the pain management area. So that's boding well for us. And a lot of new introductions both in the diabetic franchise and in the respiratory franchises are doing well.

Sir, would you say it's in -- adjusted for COVID-related drugs, because that seems to be quite lumpy, so it would be single digit, mid-single digit, some kind of indication if you can provide.

So we don't give a breakup like that, but I can at least tell you that for the quarter gone by and if you look at the top Indian companies and if you look at the external factor, we were the second fastest growing company. And that doesn't cover largely the COVID portfolio because it's obviously hospital-driven.

Okay. Sir, just a couple of more on the saroglitazar for fatty liver, what's the kind of potential you see how large it can be for this particular indication? For -- In India?

So there are 2 indicators -- you're talking for India or global market?

We've got approval from DCGI, right, for India market?

Yes. India, it's a very large opportunity. Today, the prevalence of NAFLD and NASH is very high. And obviously, there is not enough diagnosis and treatment available. So our -- we have, obviously, we have recruited a lot of patients when we got approval for TG and treatment for triglycerides or high triglycerides. But now with this indication, we will see a long-ish therapy in terms of usage. And we are expecting and our vision and our plan is that this will become the largest selling molecule in Zydus in the next 3 to 5 years.

In 3 to 5 years in India. Okay. Okay. And sir, just one last question, if I can just ask, on the U.S. progress for -- you've got the orphan drug designation. So what's the time line? What's your plan? Are you looking for a partner? If you can share something on the time lines and what we should be watching out for this particular molecule for U.S.

On U.S. front, we have 2 indications, PBC and NASH. On PBC, we believe that we can complete everything and enter the market in -- somewhere in 2023. And by NASH, we hope to enter by 2025. There have been recent updates by the FDA, which may help us push this time line better for NASH earlier, so we are very excited about the recent developments with the U.S. FDA. Both the FDAs blessed our work in terms of our protocol. So we are starting our trials very soon. On PBC, it's a very interesting area. Again, no approved drugs. And because of the need of the treatment, we got orphan drug as well as priority fast track designation. So I think we are very excited about it. We feel we can commercialize this ourselves. It doesn't require a large footprint. We are working towards that capability. At the same time, we will continue to also look at options of finding the suitable partners if we feel that they can -- if that option works out better for us. But currently, we are committed to launching these molecules ourselves. And we can see the opportunity side by 2026 for PBC itself is $10 billion in terms of market size. So it offers a very large opportunity for us. And if we are able to get a decent market share being among the first wave of launches, it would bode well for the molecule. And when we get through with the NASH study, then it opens up even a 2 to 3x larger market size for it, which will also require a larger reach, and so we're working separately on that as well.

And sir, how much investment would be required for the remaining development studies before you file the NDA?

So still, we have still a runway of 3 to 4 years to do the investment, and we are planning -- the whole clinical work has been planned by our internal teams. So it is very well managed and we have managed it in the assumptions that we have made in terms of 8% to 9% of our overall spend on R&D.

The next question is from the line of Kunal from Emkay Global.

So first question is on the vaccine. So for the Phase III trial, do you know if it's based on the number of events? Or do you have a fixed [ readout ] on one particular day after the second shot or the third shot?

So currently, it is based on the number of events, 158.

158. Okay. Okay. So now that we are seeing the cases in India is reducing, so does that mean that it might take longer than what we initially expected readout by like March end? So because cases are reducing, so it might take [ more ] longer time to read that event number, right? Or you are still switching to the March end readout?

No, March end, we won't have the readout. March end -- when we hope to complete first dosing, we are a 3-dose vaccine. We expect a readout in the first quarter of the next financial year, not in March.

Okay. Got it. And how much would have been invested on this vaccine in terms of R&D and CapEx?

So all of the investments so far, we have done it through, obviously, internal plans. So it's sizable. I think in the end, we will end up investing anywhere between INR 150 crores to INR 250 crores. Overall, capital investment, R&D and other things.

Okay. And then this plant can be used for any other vaccine, right?

No. Current -- I mean, over a period of time, it can be used for other platforms. But currently, it is planned for COVID only.

Okay, okay. And second question basically is if we are to target some of the emerging markets for the vaccine, what will it require? And have you started any work on that? Like will it require bridging studies or maybe full-fledged studies or -- and have we started the processes?

So it's an important question. We strongly have always believed that this platform offers the most safe and efficacious way of handling such a large pandemic and we are very happy to see the strong response we are getting from different countries. So most -- a lot of the countries are ready to accept Phase II data and get -- and get approval. So we have almost all countries accepting a Phase II trial data for market authorizations. Some will do local studies if necessary. Today, in terms of our opportunity size, we are already -- I mean, we have orders far more than what we can make in terms of what we have committed to. So we have to, now, work on prioritization of supply and prioritization of manufacturing because we have more orders than what we can make.

The next question is from the line of Prakash Agarwal from Axis Capital.

Sir, first question on the U.S., I missed your opening comments. There's a Q-on-Q decline. And you also mentioned on the pipeline, you have 16 complex generics. So what explains the decline given that you had doxil launch? And so if you could help us understand that. And some commentary in terms of complex generics and when do you -- when would this be monetized.

So the decline for the quarter is on account of 2 things. One is, obviously, we didn't have a flu season, as it was predicted also. Also, there was some inventory correction that happened on few products as the year ends in the U.S. for the buyers. So obviously, the new -- some orders were, I would say, delayed from that point of view. We don't have any change in market share, so we continue to hold on to strong market shares. On our main compound, Lialda, we maintained still strong market shares of about 55% and it stabilized. What we did not see is onetime opportunities on this molecule and some because of the year-end. So that we hope will start coming in from the next quarter. In terms of future outlook, we believe that quarter 4 will be trending towards similarly anywhere between $215 million to $220 million. And with the ramp-up happening in quarter 1 of the next financial year, we see a significant uptick in our value from a quarter-on-quarter point of view. And that is because of impact of new launches that are happening now and in February onwards.

Okay. But you mentioned Q-on-Q, because of flu season, I think. Q2 wouldn't have any flu season, this thing. I was understanding why the sales declined Q-on-Q.

No, no. Q-on-Q, there is no flu season. I'm just saying for -- I'm comparing it versus last year.

Your Q-on-Q decline was largely due to inventory correction?

Inventory correction and not enough onetime buys.

Okay. Got it. Okay. Perfect. And secondly, sir, on the cost side, if you look at it, clearly, your R&D initiatives, R&D cost has gone up. But if we do the math ex R&D, your cost is substantially controlled. So how do we see this going forward, especially going into fiscal '22 and Q4, given the marketing, all the companies are talking about that marketing promotions are coming back to normal. How should we see that in Q4 and '22?

So on -- I mean, there are 2 different markets, right, for I think U.S. business, there was no curtailment of cost or anything. I mean the business continued without any hiccups. In fact, we improved our supply chains and everything. When it comes to India business, our one large part of the business, which is at Consumer Health, obviously, it went through a good amount of marketing investment. So it's come back to its normalcy in the last quarter. So it's already achieved that. When it comes to India formulations business, we are at 70%, 80% of -- or 80%, 85% of what we used to spend. So we are back to normal in terms of what we used to spend. And I'm very happy to see that there was a good growth all around the business, whether it was animal business or Consumer Health or Wellness and India formulation. So going forward, we think our costs have normalized. We -- our next year growth on cost will be obviously a little higher than this year, but it will be -- overall, we would see good margin improvement on some of our businesses on India front.

But there will be growth on the cost side, right? I mean, currently, you are around 19% of sales. There would be a 50 to 100 basis point increase or no?

Nitin or Vishal, do you want to take that question?

So yes, there would be some increase in the expenses, but we don't foresee that the expenses would still be in the pre-COVID level because whatever initiatives we had taken while we were in the lockdown, we hope to continue them and build on them further. So we don't foresee the expenses to be coming back to the pre-COVID levels.

The next question is from the line of Anubhav Aggarwal from Crédit Suisse.

Yes. Just one clarity on the Phase III trial that you talked about. So what percentage of the volunteers you have already recruited out of 30,000, let's say, like 50%, 60% or 70% already done? And how many of them you have already started giving the first shot?

So by -- I think we are -- our view is in the next 10 days, we would have had about 15,000-plus people who would have finished first dose. And end of the month, we are confident that we can complete the -- most of the recruitment by first dose.

The first dose would have been given to all the 30,000 by end of February? Is that the way we should...

Yes, yes, yes.

And one question was on the tax side. Nitin bhai, on the budget proposal, goodwill amortization was excluded. And we see in Zydus Healthcare, we almost have a INR 460 crores amortization of goodwill each year. So would there be impact on Cadila's overall taxation because of this?

No. Until financial year '24, '25, we don't envisage any additional tax outgo because of proposed change in goodwill depreciation.

Not even the cash [ tax ]?

No. Because we have unabsorbed depreciation, if you talk of Zydus Wellness specifically. And we have MAT credit and also we have API benefit in Sikkim for both Zydus Wellness as well as Zydus Healthcare.

So Anubhav, you specifically asked about Zydus Healthcare, and you quoted a number of INR 460 crore in depreciation. In fact, in Zydus Healthcare, till 2027, we don't expect any cash outgo on account of tax because of the other things which are available to us, which Nitin bhai just spoke about.

Sure. That's helpful. And one question I had on the India business. So dapagliflozin that we have launched, just trying to understand that can this product of Cadila Healthcare is something like INR 40 crores, INR 50 crores in, let's say, 2 years from now in fiscal '23 as a whole -- because the market is growing very fast and very competitive price...

It will be a very good product. Obviously, we were the first to launch the single product, and we'll soon be launching the combination also. And we have got good traction, so we will see this become a large opportunity in the range of INR 40 crores to INR 50 crores as you mentioned. We also have at least 2 more introductions coming this year, which will be in that bracket of large, I would say. We have one monoclonal therapy coming, which will also be in the INR 40 crore to INR 50 crore range in one year's time. We also have a few COVID products coming, which are very essential in terms of preventive, and we believe those could be very large also for the given year.

And these are -- this COVID drug that you're mentioning, is it prescription, sir?

Yes. Well, it will be prescription, but some part of it will be OTC. We will also be coming out with a testing kit, which will be the first in India, which will be only saliva-based, at-home use.

The next question is from the line of Surya Patra from PhillipCapital.

Sir, just on the vaccine side, possibly I missed your comment a bit. You said about an additional plant that you are setting up for vaccine, this ZyCoV-D vaccine, with 125 million capacity, but we already have a capacity of 100-odd million vials, right? So the cumulative capacity of around more than 200 million, is that the capacity that we are targeting for this?

No, it's not the right interpretation. Our new facility will have the capacity to produce 120 million doses. Our current plants -- current smaller plants can only produce about 10 million to 20 million doses. And we are also finding right appropriate CMOs to additionally produce 50 million to 70 million doses, and that is under the work.

Okay. So then the plant approval and validation, all that process will also take time. Is that the right understanding?

All that has been planned for, and we are ready for commercialization from April. I mean from manufacturing, not commercialization, sorry.

Okay. In fact, so far as the COVID portfolio for us is concerned, see, whether the export revenue of this COVID portfolio is higher than the domestic revenue as of now?

Currently, all of -- largely, it is domestic. We don't have major export revenue on COVID portfolio.

Okay. Not even for remdesivir?

Not significant.

Okay. Third question on the Revlimid, sir. Having seen settlement by your competitors, you are also a potential player to participate in that Revlimid opportunity by settling. So your -- can you share your thought process on that opportunity?

So this is under litigation. So at this point, I won't be able to share anything more. As soon as I'm able to give any updates, we will apprise you of it.

Okay. And regards the U.S. pipeline, we have been talking about the in-licensed product opportunities. In fact, last quarter, it was somewhere around 14-odd in-licenses that you are talking about. Now you have added a couple more. So can you give some additional color how that -- this pipeline would be contributing starting FY '22?

So again, so for the in-license portfolio, all of them are either fall into the complex -- all of them fall under the complex category. Some of them is where we had missed the first-to-file opportunity and we were able to in-license them and we remain first-to-file with the partner and amongst limited players. We have -- a good amount of this portfolio is injectable. They form part of the -- [ where either the process ], the API is complex or the formulation is complex, so complex carbohydrate chemistry kind of APIs, peptides and other things. So that is the kind of portfolio that we have. We still have a pipeline of another 11, which we are in phase of licensing in further. In FY '22, we believe we would see some important launches through this. And as those launches come upon, we'll specifically speak about those launches. But right now, I cannot give you specific answer on a particular launches. But definitely, this portfolio is going to be very valuable. Derisk from a point of view that we don't put capital investment behind it. Derisk because we have been able to file on time earlier than what we would have internally developed. So it's an additive for us. And with -- we have one success so far, which is the -- one of the products that we had launched on the injectable side, Fondaparinux, which was an in-licensed product. You will see similarly those types of products coming through in the next 2 to 3 years.

Okay. And so EBIT, so is it fair to believe that the growth momentum in the U.S. portfolio or U.S. business in FY '20 would be kind of a relatively much better than the recent trend, what we have been seeing?

So FY '20, you're saying?

'22. FY '22.

FY '22, with the important launches that we have planned, yes, we are looking at continuing to grow this. If I -- I mean, we believe we can still do a single-digit -- high single-digit growth. But going forward, with the portfolios coming through, we can see a better trajectory of growth in the coming year.

Okay. Fine. Just last one question, sir, on the R&D side. With the multiple project progressing simultaneously, there is a kind of a pickup in the R&D spend front that we are witnessing this quarter. But do you see there is -- there could be a kind of increasing trajectory that one should see on the R&D spend front? Or what is your thought process there? And how would that be impacting the overall margin performance?

So R&D is a very important growth driver for the organization. So that has always remained very critical for us. And while we have to manage both the expectations of internal development as well as margins, we believe that we will be in FY '22 also around 8% of our overall revenue as R&D, including all of the major developments that we have.

Okay. This quarter is a kind of a aberration in terms of [ incidence ]?

Quarter -- every quarter-on-quarter will change, but overall, our guidance is that we will be around 8%.

[Operator Instructions] The next question is from the line of Sameer Baisiwala from Morgan Stanley.

Sir, any update on Moraiya and your expectation? When can FDA come first half, second half this calendar?

Not really. We don't have any update on Moraiya. As I said, we did complete our correspondence with the FDA, and we received that acknowledgment. I believe our next phase would be to receive any kind of response from the FDA with our responses that we have filed with them and whether they found them appropriate or whether there are any deficiencies further. But we await to those kind of communication. Until then, we won't be able to make any other kind of -- I mean, we don't have any other view other than that. We do see for new products in other plants getting approvals through desktop audit. But for Moraiya, we don't have any update yet.

So if another 6 months, 12 months pass by, then does all the remediation work or CAPA work done, does it start losing relevance because it was implemented quite some time back at the end of this time?

So the 2 large parts of the remediation work, one was related to injectables. And as we have stated before and we have, I mean, communicated to the FDA also, we have stopped all injectables at Moraiya. So that -- with that time point of view doesn't change because, I mean, that one part of our complexity has been removed. The second was to do with cross contamination, and we have taken the right CAPAs, and we continue to -- I mean we appropriately completed all of that. We have been in the market for so long. We haven't had any major recalls only because obviously, we have not had any major -- any contaminations or anything. So I think we are on track in terms of the remediation. I don't think time will change it, but it will not become ineffective because of time.

Okay. Great. Sir, on saro, any color you can share what could be the -- what is your expectation of what the adoption can be in India in year 1, year 2? And second just to that, I mean, it's approved here in India and you're working Phase III in the U.S., is it a theoretical possibility that it gets approved in India but doesn't get approved in the U.S.? I guess what I'm asking is, is that technological leap of faith or it's pretty much a done deal for the U.S.?

So we have -- so in India, we have very -- I mean, we are very, I would say, ambitious in terms of what we want to achieve because this is the first treatment available, and it's a single dose. So the pill burden doesn't exist, and it has multiple benefits beyond obviously improving the liver profile. So we are -- we -- as I said, we believe this can be easily a INR 250 crore plus molecule for us in India. And that is how we are building towards -- building for that. Internationally, because, see, our data on PBC, which is a Phase II readout, is almost an equivalent to an efficacy trial. We have a very large data on safety that we have created. In India, we -- on NASH, specifically, we have biopsy-related data. So I believe that it's, in our view, while it's a process of drug discovery and anything can happen. But on PBC, we are extremely confident that with the data that we have seen both in India and Mexico and in U.S., in Phase II, we are very confident that this can move with very little chances of failure to approval post our successful Phase III. On NASH, it's a difficult field. And the onus is -- I mean, there's a lot of expectations on what is expected in terms of outcome. With the recent guidance of the FDA, I think it's very positive for the people who are working on this indication. So again, we have very strong data in India and in other countries. So again, we are very optimist on that. But definitely, if you say chances on PBC are almost certain, on NASH, as we move forward, we can talk more about it, but our Phase IIb was very good. So we believe that we are on track for this product to become approved for both indications. But obviously, there are always challenges, and one must not take this for granted.

I just have one more on the same, saro. Is the primary endpoint, call it, similar that the regulator wants in India versus what they want in the U.S. or they're 2 completely different things?

So there are 2 areas, right? One is the NASH score, and one is the fibrosis.

For NASH. For NASH.

Yes. So NASH and fibrosis. There are 2 options. The higher end of the spectrum is to get a reduction in fibrosis from F3 to F2. And the broad-based more indication is the NASH score, which is just a reduction in NASH score. So on both those parameters, India and U.S. have similar -- I mean, similar outcomes. It's just that in U.S., they do expect a pre and post biopsy. In India, we did a post biopsy. So obviously, it has to be done. So it's very similar, I would say.

Okay. Just one final from my side, if I may. And I think the previous speaker already asked you. In Revlimid, Sharvil, is it fair to think that you'll be in the first wave of market formation?

I can talk about it once we come closer to the trial getting over, and we'll definitely give a proper update on that.

[Operator Instructions] The next question is from the line of Harith Ahamed from Spark Capital.

So on desidustat, you disclosed today that you've finished patient enrollment in the anemia in CKD indication. So could you give some time lines around these trials? And I see that these are U.S.-registered trials. So the question is whether you'll be able to make a U.S. NDA filing with this trial data, assuming the trial data is positive?

So on desidustat, we have -- the indication that we are working for in India is not the indication we're working for in the U.S. The indication for India and China are similar. And I'm very happy to say that on the India front, we have completed enrollment. And we see -- I mean, we're looking at the Phase II data, similarly, we are able to show good data. This could be potentially the -- one of the first molecules to get approved as an oral drug for anemia for CKD patients and non-CKD patients. The opportunity side, again, this is a INR 100-plus crore opportunity for us in terms of commercial potential in India. Similarly, in China, which is probably the closest largest market for CKD and kidney dialysis patients, again, there, we have tied up with CMS, and it's -- that is also moving on very well. So that has to do with these 2 markets with -- and these are not regulatory filings for the U.S. For U.S., we have -- we're working on an orphan-like indication for people where we started a trial on chemotherapy-induced anemia, and we are targeting those patient subset, and we believe that could be a much better value driver for us in the U.S. market.

Any reasons why we're not targeting the anemia in CKD indication in the U.S. My question is in the context of this being -- yes, sorry, go ahead.

Because by the time -- yes, it doesn't make sense because by the time we get approval, there could be a product that is already generic. So then you don't have the value driver for it.