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Aurobindo Pharma Ltd
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Hello, and good morning. Welcome to Aurobindo Pharma Quarter 2 FY '23 Earnings Call. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Deepti Thakur for the opening remarks. Thank you, and over to you.
Thank you, Aditya. Good morning, and a warm welcome to our second quarter FY '23 earnings call. I'm Deepti Thakur from the Investor Relations team. I would like to introduce my senior management team today on the call with us, represented by Dr. Satakarni Makkapati, CEO of Aurobindo Biosimilars, Vaccine and Peptides business; Mr. Yugandhar Puvvala, CEO of Eugia Pharma Specialities Limited; Mr. Sanjeev Dani, COO and Head Formulations Aurobindo Pharma Limited; Mr. S. Subramanian, CFO; and Mr. Swami Iyer, CEO of Aurobindo Pharma USA.
We will begin the call with summary highlights from the management followed by an interactive Q&A session. Please note that some of the matters we will discuss today are forward-looking, including and without limitations, statements relating to the implementation of strategic actions and other affirmations on our future business, business development and commercial performance. While these forward-looking statements exemplify our judgement and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors may cause actual developments and results to vary materially from our expectations.
Aurobindo Pharma undertakes no obligation to publicly revise any forward-looking statements to reflect in future events or circumstances. With that, I will hand over the call to Mr. S. Subramanian for the highlights. Over to you, sir.
Good morning, everyone. We are here to discuss the results for the second quarter of the fiscal year FY '23 declared by the company. For Q2 FY '23, the company registered a revenue of INR 5,739 crores, a decrease of 3.4% over last year. The EBITDA before ForEx and other income was INR 836.9 crores. EBITDA margin for the quarter was 14.6%. The net profit decrease for the quarter stood at INR 409.4 crores.
In terms of the business breakdown, the formulation business in Q2 FY '23 witnessed sales of INR 4,770 crores and contributed around 83.1% of the total revenue. API business contributed around 16.9% and clocked a revenue of INR 969.4 crores for the year.
For the quarter, the revenue from U.S. market declined by 11% year-on-year to INR 2,637.6 crores.
We have received final approval for 9 ANDAs and launched 6 products in the quarter under review. We have filed 14 ANDAs, including 2 injectables during the quarter.
Revenue for Aurobindo Pharma USA, the company making the oral products in the U.S. has decreased by 19% year-on-year for the quarter in U.S. dollar terms. Revenue for Eugia U.S., formerly known as AuroMedics, the injectable business decreased by 27.6% year-on-year to $49 million for the quarter.
The company as on 30th September 22 has filed 756 ANDAs on cumulative basis, of which 527 has a final approval and 36 tentative approval, including 8 ANDAs which are tentatively approved under PEPFAR and the balance 193 ANDAs under review.
For the quarter, the European formulation clocked INR 1,516.2 crores, a decrease of 8.8% year-on-year, mainly due to Euro currency depreciation. On base currency business, the revenue was EUR 189 million against EUR 191 million on a year-on-year basis.
For the quarter, the growth market witnessed a growth of 17% year-on-year to INR 451.9 crores. The quarter performance was led by strong growth in Canada. Also, this includes domestic Indian sales of INR 65 crores. For the quarter, ARV business stood at INR 164.3 crores, a growth of 13.3% year-on-year.
R&D expenditure is at INR 276 crores during the quarter, which is 4.8% of the revenue. Net organic CapEx during the quarter is around $82 million. The average ForEx rate was INR 79.6123 in September 22, and INR 76.9795 in Q '22 .
Net cash, including investment at the end of September 22 was USD 337 million. The average finance cost is 1.9%, mainly due to running -- varying multiple currency loans. The business generated a free cash flow before CapEx and other items of USD 82 million during this quarter. This was spent towards CapEx, including USD 31 million for PLI [indiscernible] Penicillin project.
With this offer, the investment in PLI [indiscernible] Penicillin project around $63 million against a budget of USD 235 million. This is all from our end, and we are very happy to take your questions now. Thank you.
[Operator Instructions] First question is from Damayanti.
I hope I'm audible.
Yes.
Okay. Sir, my first question is on the U.S. business. So what has happened like this quarter was obviously much lower than what we have seen in the previous quarter. And especially, if you can comment on the Eugia performance and how do we see sales moving in coming quarters? And my second question, will be -- do you maintain your guidance for global generic injectable sales, what you have provided earlier, $650 million to $700 million by FY '24?
Swami?
I think first, we want to take injectables?
No. So first, please comment on the U.S. like what has happened and how do we see things moving...
Now there are two components to this. Obviously, the oral solids and the injectables. I'll talk about the oral solids. We have seen a lot of competition and then this led to price erosion during the quarter and shelf stock adjustment. So we also saw some drop in volume or demand for certain key products, which could be seasonal because we don't think this is long term. This was the main reason for the shortfall in revenue for the quarter.
Okay. So that's on the oral solid portfolio specific or same is true for injectable business also?
I comment on this. I think you asked two questions. One is on quarter performance for injectables. We put it as specialties, oral specialty business and also the future guidance. Let me address both of the things. Number one, yes, quarter 2 is a bad quarter. And in fact, we have seen 2, 3 effects, number one, we have seen volume drop to the tune of around 20%. And also, we have seen price erosion in single digits. But we also had to take some SSA adjustments, shelf-stock adjustments and Vasopressin from quarter 1 to quarter 2. That has actually decreased the revenue. But in general, we don't see this as a trend going forward, but this is a one-off quarter. That's what we feel, and it should come back to the normal run rate.
Number two, going forward, our future guidance, I think going by the current events, what's happening, we are still observing what's going on in terms of -- because the oral -- if you see the elective surgery, everything, hospitals are full. And what we are seeing is there is a significant volume drop not only for us in quarter 1 and quarter 2. And it is we have seen that for multiple competitors. So probably it has to do with some inventory adjustment and it should come back. But our guidance, based on current events, we feel it might get delayed by a year, unless something substantial and some big upside happens. But going to the current events, we feel like it might go into a...
Okay, sir. I think that's very helpful. And my last question is if you can update on the Vizag plant in terms of where the plant is currently standing, whether it's started -- et cetera?
No. In fact, like the construction is complete, and we are doing the line qualifications. And as I mentioned in the last quarter, we will be taking exit access in this year, and we'll start filing in H1 of FY '24. And we still are confident that by end of FY '24, it should start generating some revenues. We will be filing it for all markets by U.S., Europe by emerging markets from this plant, but the plant construction is complete and line stand qualification right now.
Next question is from Alankar.
Sir, my first question is on the recent promoter development. Given that Mr. Sarath has been relieved from his executive responsibilities, can you please explain what were his exact goals and responsibilities in the first place? And who will be taking charge of his responsibilities?
Yes, Mr. Sarath has been looking out on the IT engineering purchases and sort of the logistics. So that is being allocated within the [ whole ] directors, and that will be continued.
And sir, any particular reason for retaining him as a director, sir, considering that his ability to discharge those responsibilities as well would be limited now?
No, he is not going to be an executive director. And so he will be a non-executive director from the Board as a promoter director only.
All right. Okay. And maybe one other question on this plant, sir. Any other members from the promoter family who is involved in some of the non-Aurobindo businesses wherein Mr. Sarath was involved because we have been getting those questions from investors. Any clarity on this would be really helpful, sir.
See, first of all, let's put it like that, the matter is on the [ subsidize. ] We don't want to talk about this matter. And to the best of our knowledge, no other directors are involved in that business.
All right, sir. And my second question is, given that shareholder wealth creation has been an issue for the last 5, 6 years now, how are we thinking about this as well as capital allocation. Now considering that we have been generating good cash over the last few years, is the Board incrementally open to buybacks?
So let me put it like that. As of it, we are having around $337 million net cash. And if you really see that we have embarked on a couple of projects, which are very, very important from -- both from the company point of view as well as from the national point of view, especially in the PenG project, which you now say capital outlay of INR 2,000 crores, right? Probably we are thinking of -- can we be able to accelerate that we are thinking. So at this stage, we probably -- unless that some clarity comes on that and then move forward, this issue relating to the capital allocation like buyback, et cetera, will not be taken.
Understood, Subbu sir.
Probably maybe now the 6 months, we'll get some better clarity on the Penicillin project.
Next question is from Neha Manpuria.
You say clarity on the PenG 'project, I think the $235 million is already earmarked for that, right? So what do you mean additional CapEx on the PenG project, what is about -- what is the amount?
There is -- I mean, the $235 million budget based on the currency exchange rates, et cetera. And what we mean is we have not taken any bank loan as on date. So what we are saying is if you're able to accelerate et cetera, probably the 337 million net cash we are carrying in the books will come down, right?
Going forward in the next 2 quarters, the major outflow will happen. So based on that outlook and what is the new cash generation, et cetera, will be known. We also committed if you really see some -- we are going to put additional biosimilar plant, around INR 300 million crore. So keeping in mind various things, it will be deferred and it will be reviewed only in the [indiscernible] in line.
Okay. So basically, any additional buyback or dividend, et cetera, will be considered only in the [indiscernible] board meeting?
I'm not saying it will be considered. It will not be taken until that time.
All right. Understood. Sir, on the U.S. business, given there was a fair bit of shelf stock adjustment in both the oral solid and injectable business, would it be possible to quantify that number for the entire U.S. business? I know you can't mention product-specific hence I'm asking -- just wanted to understand how much of the impact that we've seen quarter-on-quarter is actually one-off? And what's the new base for the U.S. business?
So first, let me take the oral solids, Neha. After that Yugandhar can talk about the injectable. So the oral solid shelf stock adjustment has been pretty normal. The way it happens. The only thing is since we had the price erosion, which is a little higher. So the shelf stock adjustment would be proportionately higher. Otherwise, I would think that there's no abnormal increase in shelf stock as far as oral solids are concerned.
Yes. I think it is the same, Neha. It is a one-off product, which we had to take the sales price adjustment, it is not a general phenomenon. And as I said, it is driven by the three factors. One is the volume drop and which we feel with the way things are going and all the business back to normal in all the hospitals, we feel volume should go up going forward. And two is related to the price decline, what we have seen in single digits. Third is one-off, shelf stock adjustment. And I can say that it is on Vasopressin, so like we had to take that. This is -- that's why I said this quarter is bad, but we are very, very positive going forward.
Sir, sorry to ask about this. But in that case, is it fair to assume that the [ $330 million ] that we have reported this quarter becomes the base for the U.S. business. And I'm just trying to understand our ability to regain the volume that we have lost is this market share loss, both in the oral solid and the injectable business? Or how much of it is actually something that we can get back in the subsequent quarters?
Neha, like, as I said, number one is we haven't lost market share. We have seen a significant volume drop across various categories. It has nothing to do with the market share loss. We haven't lost the market share. What we are seeing is a general lesser offtake in this quarter, both in oral solids as well as injectables, and which has nothing to do with the market share loss. That's why we feel it will come back.
Understood. Okay. And my second question is on the injectable. You mentioned that the specialty guidance has been delayed by the prior year. But in terms of more one year outlook, do you see injectable momentum, we've not even gone back to pre-COVID levels. So how confident are we of our pipeline coming through to go back to the $70 million run rate that we were doing pre-COVID?
Neha, number one is from a perspective of future outlook. We have been launching a significant number of products, and I expect to launch roughly around 20-odd products in this financial year, and we are filing 20-odd products every year. So from a pipeline point of view, we have been very, very robust and substantial in terms of the filings.
Number two is we are expecting some limited competition product approvals, hopefully, starting from next week. And I'm sure that, that should give us a significant impact going forward. And third is, and as you know, like we do have a settlement on lenalidomide and that will give us the impetus which is required for us to take -- go towards FY '25 and our delayed items because some of the upsides, what I thought would pan out, didn't pan out the way they were supposed to. That's why I am just saying that it might get delayed by a year.
[Operator Instructions]
Next question is from Surya Patra.
Sir, when you say about across board volume decline in the U.S., is it an industry-wide phenomenon?
Yes, go ahead Swami.
Yes. So I'll say this for the oral solid side. What we have seen, we created a certain portfolio of product among the top 20 products, we have seen overall volume decline. I don't want to comment on industry, but we're talking about the products that we are dealing with. We have seen some decline there.
Yes, there is -- certainly, it is similar because we are not -- we don't want to comment on the overall industry, but what we are seeing is the category of products, what we are dealing with have seen a decline in volumes, which is in general, it has nothing to do with the gain. It can be one-off here and there some market share loss, but mainly driven by the, I think, at this juncture, our guess is it's a lower offtake and probably related to inventory adjustments at the wholesalers and distributors. But the way things are going, we feel the volumes will come back.
Okay. Sir, my second question is on the branded oncology business. So trend-wise, what we are witnessing there is a gradual drag, although it is not very significant from the time of acquisition. So this portfolio, how should we think going ahead whether our specialty product will be complementing this one? Or we will continue to see a kind of a drag till sometime when our specialty possibly will start contributing beyond, let's say, FY '24 or so.
I can take that question. We are talking about the oncology brand product, correct?
Yes.
Okay. So the oncology brand product has been steady. That's what I would say. And it continues to be steady. We have been looking for business development opportunities outside and we have been successful in tying up a few of them, and we expect some of these products to start generating business sometime in late '24, early '25, I would say, for the fiscal year '25, we expect some business to be generated in other products. We are very optimistic about the branded product. We have a few other things, which is under development. So we feel very optimistic about it.
Okay. With regards to the U.S. injectable plant and its filing momentum, sir, can you update us what is the status there? And also if you can provide some update about your specialty project, let's say, biosimilars, peptides, vaccines, like that.
So I think I'll just talk about years plan, then I'll ask my colleague, Satakarni to talk on the Biologics part. U.S. plant, as you know, like we have completed the project, and we already done exhibit batches, and we expect to start filing from quarter 1 of next financial year. And we have a pipeline of roughly around 20-odd products, which we have identified. We will start filing. Every quarter, our target is we wanted to do three products. And I think the first product we will start filing from May '23 and after that, it will keep going on, okay? That's on the U.S. plant. So both Vizag plant and U.S. plant, the time lines will be similar in terms of filing products. Satakarni, would you like to comment on Biologics?
Yes. Thanks, Yugandhar. Thanks for the question on the biosimilars. I would answer your question in two parts, one for the biosimilars and one of the vaccines. Between biosimilars in Phase III efficacy trials are progressing as desired. If you remember my last update, I talked about the oncology biosimilar and the large trial that we have been doing in metastatic breast cancer patients even during the COVID headwinds period. Now I'm pleased to inform that we have completed randomization of all 690 metastatic breast cancer subjects in our Phase III efficacy [indiscernible] comparing expression of biosimilar to the innovator's product.
We plan to unblind the clinical trial data starting end of Q3 this financial year because series of filings begin from Q1, Q2, the next fiscal year, starting with India, emerging markets before June 2023 and the big filings of EMEA, which we expect to close by August, September 2023 and FDA filing by October, November 2023. So that's a big filing that we are looking at in the next year.
The other two biosimilars in Phase III clinical trials are also progressing really well. What is important to note is also that from an oncology therapeutic segment focus, we are now advancing also our immunology pipeline. And one of our immunology products, which we think we are one of the first 3 or 4 to be filing in '24, '25 has now -- is now closing on its Phase I trial in Australia, New Zealand. This is a product which serves both in respiratory as well as in dermatology segments. The dermatology segment is very important to my portfolio of products for all into differentiation.
We will be entering into Phase III first-patient injection milestone by Q4 of this fiscal year in the [indiscernible] program. So this is a large trial, which will be carried out in around 15 countries and [indiscernible] Sites and we are excited at the prospect that we'll be able to close this trial somewhere by the Q1 of 2024, that reach defining process in Europe and U.S.
So that's about biosimilars. With respect to the vaccine question, in the area of vaccines, I'm also happy to inform that our [ PCB15 ] vaccine comprising of the 15 serotypes conjugated to the carrier protein, [ CRM197 ], had shown to be immunogenic and induced functional antibodies on all vaccine serotypes in the [ 3 + 0 ] trial that we conducted in pediatric population.
[indiscernible] serotypes that we were evaluating versus the Pfizer's [indiscernible] showed similar or slightly higher immune response and the clinical endpoints have been met. The two other serotypes, which we additionally have the brand those [indiscernible] have also shown [ non-insularity ].
We have submitted this filing last week for market authorization approval to the Indian regulator. I expect the regulatory process for approval to unfold in the next 2 to 4 months' time. Meanwhile, as part of the regulatory requirement, and as part of our aspirations to make this WHO program, we have also initiated on the 7th of October, a [ 2 plus 1 ] regimen pediatric trial in India.
At this time, I think we are well on track to get this product approved in India, followed by a continued impetus to make this product better and increase site database by conducting an additional [ 2 plus 1 ] trial and building on another trial for the WHO markets. And I believe that we will have a WHO filing in 2024. We'll provide guidance on this product as the regulatory [ tubing ] procedure evolves the Indian regulator, probably in the next earnings call, I'll be able to provide you good news on this product. The other early-stage vaccine programs are progressing as expected. I hope I have answered your question.
So sir, is it fair to believe that the contribution of these specialty projects from the advanced market is likely only in, let's say, FY '26 or so?
Can you elaborate your question a bit more?
From the advanced market, let's say, Europe and U.S., that is a target market if we consider, those are like the incremental business from those advanced markets from these specialty products is likely only in '26 or '27 or beyond '25, FY '25, is it so?
So in the area of biosimilars, we are expecting our product approval next year with the filings that we have in Europe. So we expect the revenues to kick in some time in Q3, Q4 of next year. So that's when we will see the commercialization to begin for biosimilars in certain related markets. With the ongoing clinical trials -- the three large antibody clinical trials that we are doing globally, '25 -- '24,'25 is a fair assessment for the revenues to kick in because the regulatory process takes anywhere between 9 to 15 months in Europe and with the FDA.
Okay. Sir, just last one question from my side. So sure about the European market and generally about the margin profile of the consolidated operation. So the Europe is -- the obviously, generally the cost pressure what we are witnessing it is common for all the markets. And our key market, which is a key earning contributor that is U.S. is sitting, obviously, the pricing pressure as well as the cost pressure. So same should be there even in the European market, I believe, which should have, to some extent, pressurized the overall margin.
So sir, if you could share some idea about what is the current situation or current challenges that you are facing in the European market? And how long that can have similar kind of a impact on the overall margin profile? And having seen a kind of market correction in the gross margin level from last year for the consolidated operation, how should one really build in the gross margin scenario for Aurobindo the going ahead for this year and next year?
Yes. So on European business, I will answer, and then CFO will answer on the overall on Aurobindo. So during the quarter, we have not seen a margin competition. In fact, our margins have strengthened because of the various opportunities which have thrown up because of the supply chain disruption in Europe with other competitors. So if you really see our business, our top line has been rock steady at about EUR 190 million terms and we discontinued to loss-making countries business in the first 6 months.
So actually, if you discount for the last year's base of these two companies, we have grown by 3% in the top line. And our EBITDA has strengthened actually to 13% to sales, net sales. So I do agree that there is a pressure on gross margin and also maybe expenses, but we are better positioned versus competition.
On the margin profile? And...
So as Sanjeev said, we have been -- if you really recollected last year, we have been telling about the low teens, et cetera, and the position has slightly improved. And going forward, with the Euro started appreciating, I mean, hopefully, it will get appreciated. I think we can see some improvements only, right? And in terms of the overall company, the percentage of the Euro remains at -- the European business remains at around 26% and continues to remain in the same position. So overall, if you really see Aurobindo, the gross margin as the EBITDA margin slightly improved based on the performance of the European business. It cannot be very significant, at least in bids, maybe around 10, 20, 30 bps like that, we can start moving up only.
But next year should be meaningfully defensive.
See, this said, you would not like to comment on the European because the global...
Generally for the consolidated operations.
Consolidated operations are quite significant. That has been certain manufacturing in India. If you recollect in the last 3, 4 years, they have really taken around -- if I'm right Sanjeev can confirm, we have already moved around 50% of the products to India and...
Yes. It is about 55%.
Most effective manner. And this process is being continued. And also, I don't know, Sanjeev like to talk about European business, injectables moving to biosimilars, you are thinking, can you likely elaborate on that?
Actually, going forward, I mean, we have seen that our business has been growing double the market growth rate. So we expect 5% to 7% growth to continue. Secondly, we are developing more than 200 products which include, of course, injectable biosimilars, but mainly the broadening the product portfolio of oral solid also. So over next 2 years, we will be launching these products and also, we see that there are a lot of opportunities which are coming up because of competition is not able to maintain the steady stocks in the market.
Next question is from Kunal Dhamesha.
First, on the PenG project where we are planning to invest $235 million. Can you provide some kind of color on what are the major parts to the $235 million, including, let's say, equipment, the outer infra, the land costs, et cetera?
So the overall project, $235 million, the major will be -- we are planning to put a desalination plant, and we are also planning the fermentation process, right, power blocks, like that multiple things are being done, and those are all -- purchase orders have been issued and work is being done by the respective suppliers, et cetera, which is expected to come in this quarter and the next quarter.
Significant portion of the buildings have been done for the -- all the blocks, it has been done. So we believe by next, say, September, October, the installation should be over, right? And after the trial and the pilot project and in pilot batches, et cetera, will take place starting October next year onwards. So our target is to complete the project by May -- March '24, and it's our endeavor always to advance it.
Okay. And then the capacities of production, how much would be the production capacity?
Production capacity is around 15,000 metric tons.
Okay. Sure. Coming to the R&D expense, it seems to be kind of -- I think we have guided to be this quarter, 5.6% of the revenue and this quarter, I heard it's 4.8%. So do we expect it to go up given that we now have Phase III trials for biosimilars running? Or would you say the majority of cost for those Phase III trials are already baked in and you would see similar run rate?
Kunal, you are absolutely right. Coming quarter, I think the December quarter and the March quarter, some of the Phase III trials are being conducted as Satakarni explained very clearly. So we expect the overall percentage should grow up. And probably it may go up to 6% level. I mean this quarter is 5% because of the timing of the expenditures and other things, right? But certainly, we're looking around 6%.
And then one follow-up on the profitability of the biosimilar business, especially in Europe, the price erosion seems very strong. So what are your views? Currently, we are doing low double digits in the Europe. Once the biosimilar business comes in, could that have a material delta -- or how should we think about it?
Sanjeev?
Yes, Europe business, even without the specialty products will strengthen the EBITDA margin. That is what our endeavors are with the launch of more new products. But biosimilar and oncology and injectable will definitely help to improve the margins. However, I mean, it depends on the expectations, but we think that it should reach beyond 15% in the coming quarters.
And the last one on the biosimilar, we have said, again, we are investing another 300 crores. What kind of bioreactor capacity we are looking at with that investment?
So Kunal, we are looking at about 15 KL manufacturing bioreactor footprint. That probably makes it the largest monoclonal antibody manufacturing capacities when it becomes fully operational in the country. And we also think the 15 KL manufacturing footprint would provide the foundation for our company's contract manufacturing aspirations and also add in additional capacities for our own products. We look at this plant becoming operational and ready for commercial supplies in '25, '26.
And what would be your current capacity for biosimilars and current gross block?
At present, we are having the 140,000 square feet manufacturing footprint with around 4 into 2,500 liters that is around 10 KL capacities for our internal programs. So we are -- for the first 2 or 3 monoclonal antibodies that will come out of our geographic facility we are well-aligned to capture up to 5% to 10% of the market share without any hiccups. If you can go through the press release that we have made about this 300 crore investment, which is primarily to stretch our aspirations into contract manufacturing, creating a huge manufacturing footprint that allows us to make solid foundation to attract contract manufacturing opportunities in this segment.
Next question is from Prashant Poddar.
Subbu, first of all, there are two concerns I will point out. First one is on the governance standards, given the experience of the Chairman in compliance, Investors who have been with you for more than 5 years, a decade, et cetera, would expect better governance standards wherein the site businesses of directors should also be reported and should be public rather than be coming to know about it much later.
The second one is on your use of cash. I just could not understand your response, honestly. We don't want to buy back or anything to be announced immediately. Obviously, the use of cash is something that the Board of Directors have to decide but your confidence in saying that this money will be needed before -- until May, you do not have any clarity on that. And the response that the capital expenditure will suddenly be increased. I just could not understand that with $337 million cash and INR 800 crore a quarter EBITDA, it just does not -- I mean we can't understand how this cash can be so quickly utilized. And we don't want it to be used for buybacks or anything.
But your lack of clarity on what it will be used for, you just could not add numbers for me. So honestly, this is a disappointment from our perspective. We just want a kind of feedback. And we need better communication from Aurobindo, in all these things.
Yes. Prashant, your point is taken. In terms of the PenG plant, we are already putting around INR 2,000 crores, and out of that, we have spent around INR 500 crores, INR 1,500 crores is going to be spent in the coming year, right? We'd like to accelerate as much as possible. Second point, if you really see, we are -- once we get a clarity, we are already having a gross debt of something like $400 million, right? We will likely use a cash and reduce it. So as much as possible. That's what we are trying to do that. It is not the entire cash. The cash is kept as a reserve and there is a debt of around -- gross debt of nearly INR 4,000 crores, which translates to nearly -- which have been forming part of the [indiscernible] presentation also. We would like to use it and reduce the debt. So that is also -- we are working on that, right?
In this quarter, we could not do because of the -- so much of volatility. We do not know when do we need to bring it and whether the rupee will touch [indiscernible]. We don't want to bring it at a lower price and then later rupee is getting depreciated. The third point, which I want to say is we talked about this INR 300 crores, which has already been announced and Satakarni has explained to that. right? Plus, apart from certain [indiscernible] Of there, which is expected to complete in that, and we have already guided in the past really, we will be doing a CapEx of around $150 million, at least $125 million to $150 million every year. And because we are having -- already having around 23 plants and some more plants will come into operations in the coming year also.
So because of these reasons, we are a little bit conservative, and we like to look at it in the month of May. That is what I said. When I say it is a March results.
Yes. We understand that. So only that at the beginning of every year, when the Board of Directors meet like any large company needs to do, you need to be very, very clear about the use of cash rather than thinking it through as it happens. But CapEx, it's not easy to just increase the CapEx speed as -- I mean, as you said, as much as we can. So the use of cash, large shareholders would only want it to be more stable, to get a more stable outlook on that rather than very quick changing ones.
And lastly, on the corporate governance, the serious work needs to be done there about what directors are doing, et cetera. I mean just because some of them are promoters, they cannot do anything that they want, right? I mean, such a responsible position that of a director of a large company, which is making more than $400 million EBITDA a year and such a large responsibility as an exporter, the largest exporter of pharma from the country, largest manufacturer or supplier to the drug industry -- drug consuming industry of the U.S. it is disappointing to -- because this does not -- this would not even work well with your buyers.
I mean, they would also want you to abide by certain corporate governance, I would believe. And that's all from my side.
Next question is from Rahul Jeewani.
Yes. Hope I am audible, sir.. Sir, I just wanted one clarification. Your injectables specialty revenue guidance of $650 million to $700 million, does that factor in contribution from Revlimid as well?
Yes, it does.
Okay, sir. So then how do you see the revenue momentum on the injectables business to sustain given that Revlimid will be a short-term opportunity for most of the players. So that opportunity might last only 2- to 3-year period. But beyond that, how do you then see the growth on the injectables business?
What we have actually done Rahul, it's actually be what we feel is based on our filings and the approvals what we are getting. We feel double-digit growth -- on a regular basis, even if I take out the Revlimid will continue to happen quarter-on-quarter. That is what we have baked in, and we have good enough pipeline to take care of that. And also, we have added significant capacities looking at the future growth of this business, higher double-digit growth. I'm also keeping Revlimid as it will start for FY '24, and it will remain until FY '26, '27. So like that, I'm just keeping that 3, 4 years of opportunity. I'm keeping that aside, going forward, whatever it does. It's a regular normal trending of business should happen in double digits.
Sure, sir. So if you can just comment what was the Global Injectables revenue for the quarter? I missed that number?
In fact, we don't actually put it as segment-wise results, but it is in the range of around 100 million.
Okay. Sure, sir. And at least the thought process, which I was working with was that, given Revlimid at the end of the day is an oral product, although I know you classify specialty or Onco as part of your global specialty business. But my sense was that the $650 million, $700 million growth will be driven by the injectables portfolio rather than Revlimid being such a large contributor to the growth which you are talking about?
Yes. I appreciate that, Rahul. But that's why like if you see Revlimid initially we work like based on our settlement, we were supposed to launch only in October 2023. So in FY '24, revenue, Revlimid have been an insignificant portion from an overall numbers perspective. But -- and most of the numbers were supposed to come from the regular portfolio of products. But the guidance I'm giving, as I said, like it is going into FY '25 is mainly that regular portfolio also should go to that level, but we need to see, wait and watch. At this juncture, it is too early for me to comment based around the last 2 quarters events.
Sure, sir. So then that implies that your contribution assumption from Revlimid would have been very negligible given that you are launching only in second half of FY '24?
That's right.
Next question is from Tarang Agrawal.
Yes. Okay. Just a couple of follow-ups. One, did you suggest that you want to be probably launching 20 products in this financial year?
That's right.
So in the next half year, we should see 20 products. Is that how I should look at it?
Yes. Overall, this year, we should have around 20 launches.
That's one. Second, if you could give us a sense of what's happening on the Depot business? Is it status quo from your earlier update? Or has there been any developments there?
It is status quo then. As I mentioned last time, we have finished one product, and that is on stability. And the other two products also we should complete it in this year. And post that, we expect the filings to happen from 2024 onwards and status quo literally. And everything is going as per what I updated last time.
Dr. Satakarni, just wanted to get a sense of -- I mean, I think the three biosimilar products that have been filed, they've been filed somewhere in September and January. Any status on product upload inspection from the regulator.
That's a good question, Tarang. So we had two filings with the European Medicines Agency in the oncology space appreviated clinical path. We have -- the EMA had suggested a clock stop for 7 months. We have completed all the procedures and responses leading up to day 120. But because of the paucity of auditors to come and do a GMP inspection, the plot has been stopped by EMA. So that's something which is not under our control. The clock stop will be until the June of 2023. If the situation changes, the inspectors are available ahead of time, then EMA will give us a notice in months time for the GMP inspection.
With respect to our filing of our non-squamous small cell lung cancer drug biosimilar with MHRA in the U.K., where we file this product with only Phase I -- 3-arm Phase I data of our test biosimilar versus the U.S. and EU registered reference products. This is the first time ever that a monoclonal antibody has been filed with only Phase I and not the Phase III efficacy trial. So you should understand that we are pushing the regulatory barriers here.
But I'm pleased to inform that the day 80, which is an equivalent to day 180, with EMA, the day 80 procedure has been adopted by MHRA and it is very highly likely and now this is a forward-looking statement. It is very highly likely that this may become the world's first monoclonal antibody biosimilar that may be approved by our developed regulated market regulated agency without the need for a Phase III efficacy trial.
But I'll give you a question on it. You should understand that this is a forward-looking statement, and then we are pushing the regulatory barriers. But day 80, the only point that is left after day 80 is the GMP inspection. So we are waiting for the GMP inspection for all the EMA as well as the MHRA filings. We'll keep you posted as and when things evolve.
All right. Just a follow-up. So on the Europe filings, would it therefore -- given that the regulator, there's a positive of inspectors or impediments from the regulators and would it therefore mean that your product approval inspection might perhaps been pushed to June 2023.
No, what we have been told, what we have been communicated by them is to take a clock stop until June 2023. They are expecting the regulators scheduled to be available starting Q1 of the next calendar year. If the situation changes, they will keep us informed and carry out the inspection with one month's notice, but based on the formal letter, we expect the inspection to only happen now in June, but an inspection between January to June cannot be ruled out, Tarang.
Got it. Got it. That's helpful. And I just wanted to check, I mean, this is again to an earlier question. Does the base, which is the U.S.-based between OSDs, injectables, OTC, everything, which has just come down to about [ $330 million. ] Would it be fair to presume that this [ $330 million ] would be the new base going forward or a different number as a base for us to understand how -- if we were to ignore the one-offs of this quarter, how should this or how should this business look like going forward from Q3 on.
Yes. So, Tarang, actually, we need to split this into two. One is the injectable side and then the other one is others, specialty side than others. Because, as you know, injectable business, we are considering separately for Eugia specialty. But with regard to the other business, as far as the oral solids are concerned, the generic market would continue to remain competitive in the next few quarters. we believe that this could be due to over capacity of number of accruals that's coming in. But we have a very broad and strong base portfolio, and we have a fairly robust pipeline.
And recently, we got the Unit 7 clearance. We also have other NDAs, which are ready to be launched. So we are looking at the potential launch of around 40 products for the next 12 months. So we think that we should be able to regain the market in terms of value. And then we're also seeing -- we have such a broad portfolio of products. We also see sometimes surge in demand.
Right now, we are doing -- we are seeing good surge in demand as far as the antibiotics are concerned with the onset of flu season. And I think overall, our base should be better. I mean, we should go back to or close to the earlier base or at least to that level. That's how we take. And with regard to the OTC product, they are doing well. They continue to do well. So we have no issues at this point there. I think Yugandhar has already answered on the injectable part.
Thank you. That was the last question. I now hand the conference over to the management for the closing comments.
Thank you all for joining us on the call today. If you have any of your questions unanswered, please feel free to keep in touch with the Investor Relations team. The transcript of this call will be uploaded on our website, www.aurobindo.com in due course. Thank you, and have a great day.
Thank you. On behalf of Aurobindo Pharma, that concludes this conference. Thank you for joining us, and you may now disconnect your lines and exit the webinar.