Thank you, Danish. Good evening, everyone.

On behalf of Systematix Institutional Equities, I welcome you all to the Q1 FY '27 earnings call of Orchid Pharma. We thank the Orchid Pharma management for giving us an opportunity to host the call.

Today, we have with us the senior management of the company, represented by Mr. Manish Dhanuka, Managing Director; Mr.

Mridul Dhanuka, Whole-time Director; Mr. Nishant Dalal, VP Finance; and Mr.

Kapil Dayya, Company Secretary. I will now hand over the call to the company management.

Over to you, sir.

Thank you. Good evening, ladies and gentlemen.

I am Manish Dhanuka, Managing Director of Orchid Pharma, and I welcome you to our discussion on the results for the first quarter of financial year '27. As you may be aware, on 10th of July, the merger with Dhanuka Laboratories became effective with an appointed date of 1st April 2024.

Accordingly, the FY '25 comparative and FY '26 results have been restated to reflect the combined operations of Orchid Pharma and Dhanuka Laboratories. The financial numbers that we will discuss today are therefore on a combined and comparable basis.

They will differ from the Orchid-only numbers discussed in earlier calls. As we had indicated in our last call, financial year '26 was a difficult year for cephalosporin business.

It was among the most challenging environments our cephalosporin franchise has faced in the last 15 to 20 years. In a number of important products and markets, both volumes and pricing were affected, with declines of 15% to 20% depending on the product.

On a restated combined basis, revenue from operations was 1,233 crores for financial year '26 compared with 1,398 crores for the financial year '25. After the first quarter, our focus was on protecting volumes and customer relationships in the challenging market.

This involved accepting some pressure on margins, particularly because of product mix and pricing conditions. Consequently, combined gross margin moderated by approximately 4% to 32% in financial year '26 compared to approximately 36% in financial year '25.

We remained disciplined on controllable costs. Combined employee and other operating expenses were broadly flat at 353 crores in FY '26 compared with approximately 353 crores in FY '25.

However, this cost discipline could only partially offset the effect of lower revenue and gross margin compression. Turning to the current quarter, we have begun financial year '27 on a better footing.

Revenue from operations increased to 304 crores in Q1 '27 from 263 crores in corresponding quarter last year, representing growth of approximately 15%. Combined gross margin improved by approximately 3 percentage points to 33% in Q1 '27 compared with approximately 30% in Q1 of '26.

EBITDA improved to 25 crores in Q1 of '27 compared with EBITDA of 10 crores in Q1 of '26. Though we can see some improvement in sales over last year, we feel the industry is still facing overcapacities, leading to cutthroat competition.

Our focus remains on growing volumes with discipline, improving product mix, maintaining tight control over operating costs, and progressively strengthening the underlying profitability of the combined platform. We have also started a number of focused integration projects to crystallize savings from this merger.

We expect initial benefits of these initiatives to begin becoming visible in the next financial year. The AMS business continues to be managed with financial discipline.

Its quarterly EBITDA drag has reduced significantly, while we continue to build the platform and its long-term strategic relevance in antimicrobial stewardship. I will now move to the operational and strategic updates on other businesses and projects.

Let me begin with Exblifep. We continue to make measured progress in building Exblifep as a global commercial platform.

In Russia, the estimated 10-year value of our licensing arrangement is approximately USD 178 million. This is an estimated long-term value and not current period revenue.

Execution will depend on registration, launch, and market development over time. In Europe, the business is growing at a steady manner.

Whilst volumes grew by approximately 300% in Q3 of '26, 170% in Q4 of '26, and about 50% in Q1 of '27. There is a significant Q-by-Q growth in the volumes.

We remain focused on building the business country by country rather than extrapolating early growth rates. In the Middle East and Africa, registration in South Africa has been completed.

We now have coverage across the GCC markets. Planned launch activity in the region has been affected by the recent regional conflict, and timing of commercial rollout will depend on normalization of conditions in the Middle East.

We continue to engage with potential partners in other markets and are at an advanced stage of discussion for South America, Mexico, Philippines, Thailand, Morocco, and Australia. These agreements will lead to large-scale availability of Exblifep across the globe.

We're also in discussion with prospective candidates in US and China. Coming to cefiderocol, the project remains on schedule.

Some equipment originally sourced from China had to be rerouted through Italy. While this created execution complexity, it has not changed our overall project timelines.

We target commissioning by December of '26, followed by validation and initial batches during January to March '27 period. Commercial launch will be subject to the approval process from DCGI.

Separately, GARDP has floated a global RFP process for broader market access, and once they finalize the distributors in different countries—as 135 countries are entitled to get the product from GARDP—we hope to start the supplies as per their progress in the agreements. Finally, on the 7-ACA project, our objective remains unchanged: commissioning and the first commercial batch by March of '27.

This is among the largest and most complex fermentation projects being executed in the country. It's a critical backward integration project, which can provide the advantage of scale to Orchid, and we are putting our best efforts to execute the project successfully.

More broadly, while the first quarter has shown improvement, it would be premature to assume the straight-line recovery. Pricing and demand conditions in our core markets remain competitive, and the benefits of merger synergies, product mix improvement, and new projects will emerge progressively rather than all at once.

Our near-term priority is clear: protect and grow the core business with cost discipline, improve margins through volumes and product mix, and execute our capital projects safely and on time. Over the longer term, we remain constructive about the opportunities before us.

The combined Orchid-Dhanuka platform, backward integration into 7-ACA, the cefiderocol access project, Exblifep commercialization, and selective expansion into regulated finished-dose markets create a more diversified set of value-creation opportunities than the company had in the past. However, these opportunities will create value only through consistent execution.

We will therefore remain focused on operational discipline, prudent capital allocation, regulatory compliance, timely project delivery, and transparent communication with all the stakeholders. Thank you for your continued trust and support in Orchid Pharma.

We now welcome your questions.

Hi. Am I audible?

Yeah. Congrats for a good result.

I had just had two questions. The firstly, it was that as you said that the industry pricing pressure cycle is still on.

I wanted to understand what is the management thinking? Will there be any margin recovery in H2, or will it take more time?

Will it go to FY '28?

See, I believe that in the non-regulated market, the competition will continue, and generally, it depends on the cycle of demand. It's very difficult to predict in that area.

For us, what is important is the regulated market demand, which also is kind of cyclical, and we have seen that the quarter where we have more of the regulated products demand, that is much better. I would consider this quarter as a mediocre in that terms.

We hope in the next two, three quarters, our demand for the regulated products will improve, and we can do better performance.

Okay. Another one was that since the Jammu facility of 7-ACA will start in February 2027, I wanted to know what's the expected ramp-up curve and utilization trajectory for that facility?

How much will be the output be captive, and how much will be a third-party sales?

Hi. Our ramp-up plan is to go to about 80% to 100% in by the end of the first year.

Initially, it would be slow, and then increasing progressively. With respect to utilization, our long-term guidance on this is 80% in-house use and 20% selling to third parties.

Initially, the entire product would be used in-house as we develop customer approvals from the new site, because it's a pharmaceutical product, our customers would have GMP approval cycle. Once that starts, third-party sales can also start.

Okay. Thank you.

That's from my side.

Thank you for the opportunity. Is it exports of 7-ACA from China to India is concentrated with two to three Chinese companies, or is it there are a lot of companies which export to India and you can name some of them?

Another one, are you expecting them to drastically reduce their prices once our 7-ACA site is fully commissioned?

Thanks for your question, Tarun. It's concentrated between three to four companies only.

Not too many companies make this product. It's a complicated fermentation synthesis.

The second question is with respect to price reduction. Although you can't predict the Chinese, but what I believe is all the companies now want to make profit.

It's different situation compared to what used to be 15, 20 years ago when the state was funding most of the companies. Private enterprises want to make profit.

The pricing in 7-ACA has been stable over the last 10 to 12 years. The weighted average is about $60.

We believe that there is not much room to reduce prices drastically.

That's helpful. Can you name some of these Chinese companies as well?

There's a company called Sinopharm Weiqida. There's a company called Zhuhai United.

Then there is Yili Pharmaceuticals.

There's

a company called Livzon Pharma.

Got it. Next one on commercializing enmetazobactam.

For the countries that we have signed the marketing partnerships with, will we be also manufacturing the products for those partners?

We have acquired the asset from Allecra, and they already had a CMO in China. They have a long-term agreement of providing the product from the CMO in China.

The supplies will start from that CMO itself, but we will have our margin in the supplies. We do have the right to start manufacturing, and as our cefepime project will get started, say, in the next year, then we will take validation batches, and hopefully after two years, we would be able to once we are able to register the product from our side, we would be able to supply some percentage from our side.

That's our long-term plan.

Currently we are not producing enmetazobactam for the partners. It's fully partners are producing?

No, we are producing for our consumption for domestic market. We manufacture, supply to Cipla, and we sell in our own brand Orblicef in India.

That is manufactured by us completely.

All the international sales of enmetazobactam is from the third

party?

It will come from our CMO in China to begin with. Slowly, we will get registration from our side and partially start to supply from here also.

Understood. Understood.

The next one on GCLE, can we talk around where exactly is this product used in our value chain and will commencement of 7-ACA plant affect our procurement of GCLE?

No, it will not. GCLE is used for different products, and 7-ACA is used for different products.

Got it. Share of business with Otsuka Chemicals has been increasing since the last five years, what could be the reason for this?

I am not really aware how much It is...

You are talking about from the related party report? Are you reading from there?

Yes.

That is the procurement of GCLE largely that you can see there. It is dependent on the product demand.

As we said last year, the numbers had significantly reduced due to overall demand reduction of 15% to 20%. That is why you see a decline in the overall value.

Absolute value, yeah. As if I take it as a percentage of our material's cost, that number has been increasing over the last five years.

That's the point I wanted to make.

I'm not sure which number you're reading from, unfortunately, I cannot clarify further on this call.

Actually, the prices also vary, and the volumes vary depending on our demand, so that would have led to some changes. As such, in a strategic alignment with Otsuka with respect to GCLE, there is no change.

Understood. That is it from my side.

All the best. Thank you.

We procure our 100% GCLE from Otsuka, the values may change depending on our demand and the pricing factor.

That's helpful. Thank you.

Yes. Hello, am I audible?

Nishita.

Yeah. I just wanted to understand with the new facility coming in everything, what kind of capex have we budgeted for FY '27?

As such, we have not considered very significant capex in the next financial year. In this financial year, we will be completing our projects of cefepime and 7-ACA.

The entire capex would be spent.

Okay. Can you quantify that capex?

It's already there in the presentation, but 750 crores is for the 7-ACA project. And $20 to $25 million, I don't remember the crore amount we have disclosed, for the cefiderocol project.

Okay. Understood.

My next question is on so you mentioned that for regulated markets also demand is cyclical. Can you specify more, like in which quarters do we have more demand?

You mentioned that Q1 was mediocre in that sense. If you could say, is H2 better for us in regulated markets?

Last few-year trend we have seen that the second half is generally having more demand from the regulated markets. Yeah.

It's probably the winter season there. Right,

right. Can we expect the Q-o-Q growth to be better then in H2?

In Q1, we had a 15% Q-o-Q growth. Can we expect that growth number to be better in H2?

We hope to have better sales Q-on-Q basis.

Okay. If you could give some sort of guidance Y-o-Y, what sort of growth can we do for FY '27, because we are going to have a Q-o-Q growth, can we achieve around 20% growth for the whole year?

I don't think it will be prudent to give you any number at this time.

Okay. That's understandable.

Thank you so much.

Hi. Good afternoon, everyone.

Sir, my first question is on the 7-ACA project, and I think in line with one of the earlier participants. What happened in Pen G with Aurobindo, the way China dumped and reduced prices, and we have seen that across many APIs where you start new capacity and try to take market share, China's just doing irrational pricing.

Do we have a plan B on that just in case if they decide to dump at a price which is not sustainable, what will happen to the capex, investment, everything, anything on that?

See, I would say rather than having plan B, we decided to have a good plan A, and that's the reason we went to Jammu, get some GST benefits, go to a state where the electricity cost is the cheapest in India, the water is abundantly available, the boiler steam cost is lower due to available of abundant agricultural waste. Obviously, we are working aggressively and towards improving our overall titer concentration so that our yields can improve.

Our pilot plant team is working towards that. I think the best you can do is use all your resources to improve efficiencies, and that is our target.

When you compare with Pen G, what happened, Dhwanil, is we've talked about earlier in other calls. In Pen G, three of the large manufacturers came together and decided to collectively increase prices, because they knew India could not buy from anyone.

Because they increased the prices from $10, $12 to $30, $40, they had that opportunity to crash the price. You can see the price crashing after PLI.

In 7-ACA, that joint cooperation or whatever you want to call it was never happened, and the prices have been stable. Therefore, I said, I don't see much room for China to drop the prices.

Having said that, they're unpredictable. Sometimes, other things can still happen.

What he's trying to say is that even in Pen G, the Chinese have not dropped the prices to below pre-PLI level. If you look at the prices of Pen G, the current prevailing prices are same as they were in 2019 or '20.

Because of the PLI, they had increased to probably create a war chest. They were preparing themselves to fight when the PLI company start their production, and they brought it back to the normal level.

Like Mridul said earlier also, now these companies are largely privatized, and we don't know what future holds for us, but the intent is not as it used to be 20 years back to just flood the market. They want to work on a profitable model.

That's the general belief now for the Chinese companies. We have seen in other products also, we believe that they are dumping the product, but whenever they reduce the price, they definitely have some cost advantage.

At least, I have changed my thinking about the Chinese. If I find that the Chinese selling something cheaper, I would want to believe that their technology is better and I should look at my technology.

That's my belief these days.

Got it, sir. Got it.

Very clear. Sir, second question is, I think we have a technology partner, and I think they also supply to the Chinese manufacturers.

Do we have only the process technology transfer, or the strain part also is given by them, because the high-yielding strain will make a lot of difference in terms of the and competitiveness. How is it working?

We have a comprehensive agreement with them. They will handhold us during manufacturing process.

They will support us in the production stabilization. They will continue to develop strain and provide with better strains when they come up with that.

They will help us in improving the technology over the years. They have some incentive to give us those improvements.

Okay. Got it.

Last question. Sir, with all this in place, typically, we have seen that fermentation product takes a longer time to ramp up.

Where are we today, and when you say commercial batch, I think that would be the first part of the ramp-up. Eventually, the stabilization will take, what, 12 to 15 months?

Is that the timeline that you guys are working with?

We've guiding 12 months, but and I have said that again earlier, that looking at others' experience, it might be longer. Although we have, like Mr.

Manish said, the technology partner with us all the way to make sure the risks are lesser, but it is something unpredictable, and we'll have to wait to see what actually happens. We've been successfully been able to scale up our existing pilot plant by 20x, and we have to another do about 800x from there to Jammu.

It's a little unpredictable. We still remain hopeful that we will be able to reach full utilization in one year, by the end of one year.

Okay. We will come to know the end output is good in terms of quality and yield by March, right?

So, 20 to 800x that you're talking about, that will happen in February, March of 2027.

The first batch, yes.

The first batch.

Yeah.

Okay. Got it.

Very clear. Thank you.

Hi, Manish. Hi, Mridul.

First question is some data you gave on vials. I don't know if it was for enmetazobactam.

Could you please just repeat that?

Which one?

Russia.

Yeah, $178 million for Russia, that's what you're talking about?

No, no, no, for vials. You gave some growth data, Q2 these many vials, Q3 these many vials,

or

what was that? That data if you can repeat.

Europe number of vials growth data, we were just trying to talk about how the business is growing in Europe as more and more markets get added. In Q3 FY '26, there was a 300% growth Q-o-Q.

In Q4 over Q3, it was 175%, and in Q1 FY '27, there was a further 50% growth over that. As the volumes are increasing, we are seeing this J-curve continue to play out.

That's what we were trying to share.

Okay. Okay.

Now has Advanz Pharma launched the product in all the markets where it is registered?

Sorry? Advanz Pharma what?

Western Europe.

Have they launched in all the markets, or are there still some markets where launch is pending? Yeah.

Advanz Pharma is focused in Western Europe. Big Five would be their largest markets, which is Spain, Italy, Germany, France, and UK.

They've launched in all of those Big Five markets and some of the other Nordic countries. For Eastern Europe, they will have B2B partnerships that they will forge.

They have the license for full EU, but rest of the Eastern Europe, they've not made the partnerships to launch yet.

Okay. Okay.

I don't know, at what point does this Advanz Pharma stream start becoming 5%, 10% of the revenue? Do you think it is FY '28, FY '29?

I would not guide on Advanz Pharma specifically becoming 10% of our revenue, although I would be happy to see that. Our long-term guidance on this is remaining the $1.1 to $2 billion that we came up with in 2021.

Looking at even the Russia numbers, we remain optimistic that the partners continue to believe that it's a viable asset. To actually sell a product and get value out of it is a long-term thing, and things can change over time.

It would be difficult to say the answer to your question.

Okay. Okay.

Russia, what are the timelines for registration and commercial launch?

The agreement is just signed. We announced last month.

Since that time, I think registration, dossier submission, and launch would take about 1.5 to 2 years. Okay.

Okay.

Okay. Now coming to cefiderocol, any update on trial waiver?

How is that discussion going?

Sorry?

Trial waiver, right? DCGI, we have to do a trial for cefiderocol for launching in India, and I think we're hoping for a waiver on that.

That we will come to know only after we apply. As there's a process.

There's a SEC committee that sits in DCGI after your application. We are working with GARDP to engage the stakeholders in the usefulness of the product and the strong unmet need in the country.

The actual result, we will come to know after the application.

Is there any precedent for the waiver?

Sorry?

Is there any precedent for where DCGI had granted a waiver in the past?

Yeah. Our cefepime-enmetazobactam itself is a precedent.

We got the waiver because the committee thought because of the antimicrobial resistance, the country needs new antibiotics. We ourselves have got this waiver.

That's why we are more hopeful, actually.

I see. I see.

Okay. Okay.

This GARDP RFQ, do you need any registrations or regulatory approvals? How does that work for 125 countries, or just WHO enables you to supply to 125 countries?

The overall target is that getting the WHO PQ. If you get WHO PQ, then the process of registration in many countries becomes very simplified.

When the product is distributed by non-profit organizations like CHAI and GARDP, then it becomes further, I would say, faster. Our target is to file with the WHO Geneva and get the PQ.

How much time does it take to get a PQ after filing?

Takes 2 years, around 2 years.

Around 2 years. Okay.

We are banking on our sales in India. I think that will be our first market.

First market, okay. Okay.

Any update on US formulation strategy? Any just summary maybe you can give where we are at, where will we go in next 3-4 quarters?

Yeah. Rupesh, we just talked about that strategy first time last quarter, and the guidance is till 2030.

I don't think there will be quarterly updates on that. We'll be sharing possibly annual updates on that only.

Things won't move much in Q-o quarter quarter to quarter.

I don't know, have you started looking at the products? No,

no. The products are already identified and part of our presentation, which products we are going to launch.

It's ceftazidime-avibactam, ceftaroline, ceftolozane-tazobactam, three new molecules, and three older molecules in cefepime, ceftriaxone, and cefazolin.

Okay. Okay.

Where are we on ANDA filings, DMFs for those? Are we also looking for partners in the US?

Yeah.

Those will take time. Those will take time.

For the generic molecules, we'll be using our cefiderocol facility to file, so that will require taking validation batches, US FDA approval, filing, all of that, which will take few years' time. For the newer molecules, we'll be using a CMO to launch faster in the market.

Nothing starts before '28 sometime. Some of the new molecules might be filed by end of next year, but nothing before that.

Okay. Okay.

What was the EBITDA loss for AMS division in quarter one? Where do you see that for the full year?

How is the discussion to get distribution license for cefiderocol?

It was around 50 lakhs for this quarter.

Sorry?

About 50 lakhs for this quarter. The results were much better than the last quarter.

Okay. Okay.

If you can share the number also, revenue numbers from the division.

Revenue for AMS was 5 crore.

Cefiderocol distribution, whatever, process, license?

No, not cefiderocol. The Orblicef and we have a couple of other brands that sales through AMS division was around 5 crores of sales.

Yes. Cefiderocol is not launched

yet. Eventually we are looking to become a distributor for cefiderocol, right?

Will we be the distributor? Yes, yes, yes.

Yes. We are building this network for cefiderocol launch itself, that is the main purpose.

We are in advance discussion to finalize our distribution agreement with GARDP.

Thank you for the follow-up question. If you could just reiterate when are we going to start commercial operations in both of our projects, 7-ACA and cefiderocol?

I missed that if you could just repeat that.

7-ACA is March '27. Cefiderocol facility would be ready by December, and first product approval will take 6 to 9 months from there for cefiderocol approval in India depending on DCGI granting the clinical trial waiver.

That would mean Q3 of next financial year.

Right. So, 7-ACA revenue contribution we can see from FY '28, right?

Correct. Okay.

Okay. Thank you so much.

Hello. Sorry.

Yeah. Just one question.

Is there any risk to the PLI benefits due to the slippage in the timelines, or has that matter been settled with the government?

Sorry, can you repeat the question?

PLI. We'll probably be entitled for 2 years.

Based on the current scenario, we'll be entitled for 2 years.

Okay. Any scope of getting extension on that?

We will maybe try for extension only once the plant gets started.

Okay. Okay.

Just one more question on this NPMC business which came from Dhanuka Laboratories. In this quarter, out of this 350-crore revenue, what was the portion of NPMC business?

We'll just come back. We'll check and come back.

We'll just check. That's a relatively smaller part of the business as of now.

Okay. Okay.

Thank you. That's it from me.

around 20 20, 25 crores per quarter. For this particular quarter, we'll we'll have to separately check and come back.

Thank you for giving me this opportunity, sir. Sir, my question again is more broader.

Beyond cefiderocol or 7-ACA, what are the five, six target products that are probably furthest along in the filing and approval process, sir?

Sorry, I did not understand your question, Pratik. Can you repeat?

Beyond cefiderocol, what are the five to six target products which probably are furthest along in the filing or approval process, sir?

It depends on which market we are talking about. We have recently launched this product called ceftaroline in India, and our brand is called Orterro.

This is a molecule which was only provided by Pfizer, and they're trying to withdraw this product from India because probably their costs may be manufactured in Europe is not viable. That is one product which we will slowly manufacture and export to other ROW countries.

If you're talking about the US market, that is one product, ceftaroline, which we plan to file ANDA. Of course, ceftazidime-avibactam combination is another product that we wish to file in the regulated markets.

After that in the pipeline is a molecule called ceftolozane and tazobactam. That is in our R&D stage at this point of time.

We feel these are a couple of molecules which are going off-patent in the injectable space, and relatively there are less number of players who can manufacture such complex molecules, first of all, and less number of regulated market facilities for these cef injectables. We feel that that will give a significant edge to Orchid in the coming years.

Got it. Thank you, sir.

One more question on the enmetazobactam, sir. If I'm right to mention that $1 to $2 billion lifetime sales potential with peak hit around year four to five post-launch.

I think we are active in India, but any other regulated markets today we are active with this product, and what could be the realistic revenue contribution from this for FY '27?

No, Pratik, we don't give yearly number guidance on this. The $1 to $2 billion is lifetime sales, not the fourth year or the fifth sale.

Besides India, it's already selling in Europe, and GCC is approved, which is the Middle East market, and South Africa is approved. Shortly it would be launched.

Like Mr. Manish explained his speech, we are talking to several markets in Latin America, Southeast Asia, US, China to launch it in other geographies.

We hope that by end of this financial year, agreements would be in place for three, four more places out of those.

Okay. Thank you.

Thank you very much, sir, and all the best for future.

Hi. Good evening, sir.

Thanks for taking my questions. On 7-ACA, have you seen any material price changes on a quarter-over-quarter basis?

No, it's pretty stable for last one year.

On our final APIs like cefixime, cefuroxime, are they also stable?

Cefixime is the one having maximum pressure. Cefuroxime and other 7-ACA-based fortunately seem to be more stable compared to cefixime.

Okay. On cefixime, would our spreads be narrowing, or the spreads remain the same?

Cefixime does not start from 7-ACA. That starts from Pen G and GCLE.

The spreads are kind of going down, or they remain as they are?

Cefixime as a product is under maximum stress with respect to margins.

Okay. Is it so for even the regulated markets, or it's only for the rest of world markets?

It's for the rest of the world market is where the volumes are huge, and that's where the pressure comes from.

Okay. Anything that we are doing to kind of reduce our dependence on this product, since this is Pen G-derived and we're not backward integrated there?

We are trying to work on other products, and we have a couple of other products that we manufacture in Dhanuka. We are trying to create a situation where we remain the sole player of those products.

Our strategy is completely different from our competitors, who are more focused on the volume business. We have more focus on the value-based business and more of a diversified portfolio.

If you see the competitors in cephalosporin right now, we are the only company which can make about 20 to 25 products, whereas the others, they make three or four products and focus on the volume. Our strategy per se as a cephalosporin player is completely different from our competitors in India.

How it plays out, that is the reason we could see that the generic business of cephalosporin API is going to become a low-margin business, and that is the reason we sought to go for a backward integration and a forward integration. In that mission only, we decided to set up 7-ACA and the injectable facilities.

We think we are trying to de-risk ourselves from the traditional API business, which is becoming more competitive.

Once you have 7-ACA, ceftriaxone is potentially another large market within the cephalosporin space. Is there an opportunity for us to scale up there and kind of scale up quickly there in a shorter timeframe?

That's our plan. For ceftriaxone, not just sterile, we would be supplying to all other players like Aurobindo and other sterile players in India the non-sterile part, which they're currently importing from China.

The market is not just our own sterile product, but our competitors also become our customers.

Okay. You'll supply the non-sterile version, not the sterile version?

Absolutely.

Okay. Would you have capacities to sell the sterile version too?

Are there adequate capacities if you want to do that?

I would not say our sterile can completely consume our 7-ACA capacity, but we are re-engineering our non-sterile capacity so that we are able to convert the product and supply the non-sterile. I think that is a better model.

Selling a sterile product needs a approval process, which is more long-drawn. It would make more sense to work with our other players in India.

Then there are three, four players. They can take large part of your volume production, rather than getting approval process in 200, 300 customers.

It's better to collaborate with these four manufacturers of sterile who already have the capacity and who already have worldwide approvals. I don't see much benefit of competing and creating overcapacity.

We would rather collaborate with them.

Understood. Understood.

Sir, on Zavicefta, you had once indicated you have been trying to do a non-infringing route for an early launch in Europe. Is that work under progress, and any timelines to that?

We have customers who are taking this product for us for their own development. We also have plans to take our own validation batches and file in Europe.

The US plan, although unfortunately last filing had some objection, we still continue to have plans to refile, and that is going on.

The filing should happen this year in the US for Zavicefta? I'm

hoping maybe validation batches maybe this year or early next year, and then six months for filing.

Hi. Hi, thank you for follow-up.

One question on 7-ACA, there is this cancellation of VAT refund. Is that applicable for 7-ACA manufacturers also in China?

Sorry, I'm not sure what you're talking about.

In battery or solar in a host of other industries, Chinese government used to give a tax refund to the manufacturers, and then government now is cancelling the refund from April for some industries April, some industries January, like that. My question is, were 7-ACA manufacturers in China getting this refund, and is it now getting cancelled?

Honestly, not aware about this. We heard that slowly the VAT refunds are getting reduced, but not aware exactly of this.

Okay. Another question is what was the sale of NPMC segment in maybe last year or this quarter?

Any high-value APIs that we're working on in NPMC?

This quarter sales was 21 crores, and we are working on a couple of molecules. We are also planning to scale up and backward integrate in these molecules also.

That launch would be this year, next year?

It's a continuous process. You see, in synthetics, you continue to introduce new products.

I would not say it's a news that we would want to discuss on a large scale, yeah. It's an incremental improvement that you continue to do in NPMC synthetic.

You have to keep working either by increasing capacities or introducing new products, we keep evaluating which options are better at any point of time.

Will it become, let's say, 20%, 25% of our revenue in 3-4 years?

25%? No.

Thank you. We thank you, dear investors, for your continued interest in Orchid Pharma.

We value your input and feedback. Thanks once again for your participation.

Thank you.