Natco Pharma Ltd
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Earnings Call Transcript

Earnings Call Transcript
2019-Q2

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Operator

Ladies and gentlemen, good day, and welcome to the NATCO Pharma Q2 FY '19 Earnings Conference Call, hosted by Edelweiss Securities Ltd. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Deepak Malik from Edelweiss Securities Ltd. Thank you, and over to you, Mr. Malik.

D
Deepak Malik
Analyst

Thank you, and good morning, everyone. On behalf of Edelweiss, I welcome you all for the NATCO Pharma's Second Quarter FY '19 Earnings Call. Today, we have with us the senior management of the company represented by Mr. Rajeev Nannapaneni, Vice Chairman and CEO; and Mr. Rajesh Chebiyam, Vice President, Acquisitions, Institutional Investor Management & Corporate Communications.I would like to hand over the conference to Mr. Rajesh for the opening remarks. Over to you, Rajesh.

R
Rajesh Chebiyam

Thank you, Deepak, and wish you all a very happy Diwali festival, and welcome to NATCO's conference call discussing our earnings for the second quarter of FY '19, which ended September 30, 2018.And as a standard disclaimer, I would like to state that we may be making certain forward-looking statements, which are predictions, projections or statements about future events. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. But we also state that the material in the call, with the exception of the participant questions, is the property of NATCO and cannot be recorded or rebroadcast without NATCO's expressed written permission.Regarding the earnings detail for the second quarter of FY '19 that ended September 30, 2018, NATCO had a consolidated total revenue of INR 583.5 crores as against INR 452.2 crores for the same period last year. It's reflecting a growth of 35%. The net profit for the period on a consolidated basis was INR 181.6 crores as against INR 84.4 crores same period last year, showing a growth of 115%. The Formulations business continued to be stable and strong, both domestic and export front.Okay, we'll pause here. We'll take your questions in terms of split and other details.

Operator

[Operator Instructions] The first question is from the line of Prakash Agarwal from Axis Capital.

P
Prakash Agarwal
Executive Director of Pharmaceuticals

Just trying to understand the quarter better. So last quarter, we mentioned that there's been some delay in recognizing Tamiflu profit share. Is margins holding up or better because of that? Or it's also a function of Copaxone market share increase? And would Copaxone sales would have been better versus last quarter?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think the margin is partly reflected -- some of it is reflecting some of the delayed recognition of the Tamiflu profit of last year -- the last flu season. So that answers the first part of your question. In terms of the base uptick of this coming flu season, it's too early, my friend. I think we have stocked all the quantities. We have -- I think the flu has not taken off as yet, nothing yet. And I think we have to keep in mind that it is not be as good as last year because last year the flu was very intense and less competition last year. This year, I think we should seen more competition. But again, the extent of the flu season cannot be judged. I think we'll have more clarity about the flu season maybe in the next quarter earnings.

P
Prakash Agarwal
Executive Director of Pharmaceuticals

Okay. And the comment on Copaxone sales, would that have improved quarter-on-quarter both in terms of pricing and volume?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Steady -- we're doing steady, and we're doing well. I don't want to do a split, but we're doing well. I would say that it’s all -- it's there in the public domain. The market share has increased a bit up. It's gone from 15% to nearly 20%, so which is good. I think it took a while, it took almost a year to reach that state, but I like what we're seeing. I think things are getting better, and I think we'll -- I think if the same momentum has kept up, I think we should be able to see good value, I think, in the coming quarters.

P
Prakash Agarwal
Executive Director of Pharmaceuticals

Okay. And lastly, any thought on revising the guidance? I mean, we are halfway through, and we have a tendency...

R
Rajeev Nannapaneni
Vice Chairman & CEO

No, I don't want to change anything on the guidance, Prakash. I think we'll stick to what we've said in the past. And again, I've also said it depends on how the flu this year is going to be. I've assumed a very conservative flu numbers, but actual numbers we'll know in the next few months. But no, I'm not changing the guidance.

Operator

The next question is from the line of Ravi Dharamshi from ValueQuest.

R
Ravindra R. Dharamshi
Founder & Chief Investment Officer

My question is regarding the buyback. I just want to understand what is the thought process. Maybe the QIP, we were anticipating Copaxone cash flows to come through, and we wanted to secure our balance sheet and everything. But now we've done it, a INR 250 crore kind of a buyback. Seems a little large. I mean, why do we want to return the funds to shareholders? And also, just for clarification, are promoter -- is Promoter Group planning to participate in the buyback?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Okay. First, to your second question, we are not participating in the buyback. See, I think what I want to tell you is that compared to the surplus that we have budgeted, I think that surplus is far larger than we've thought. And I think as of September 30, the total cash sitting in our books right now is about -- just give me a minute. I'll give you the exact number -- is about INR 1,365 crores. And we have got INR 221 crores of debt. That includes bill discounting. So we're at better cash situation than we originally budgeted. I think some of the surplus has been returned back. And my idea of keeping the cash for future R&D and for any acquisition in the future remains. And it's only a way of just returning some of the surplus. I -- that's how I would look at it.

R
Ravindra R. Dharamshi
Founder & Chief Investment Officer

Okay. And then we shouldn't look at it as a dearth of opportunities to invest for the future?

R
Rajeev Nannapaneni
Vice Chairman & CEO

No, I don't think so. Otherwise, it's a very modest number also. No, I would believe INR 250 crores of cash, holding of INR 1,365 crores, it's a reasonable return back. But at the same time, it is covered by, it's more or less the surplus that we're generating in our operations there. I don't think it's -- it has to be looked at that we are giving back cash because we don't see any opportunity. I don't think I would like to interpret it that way.

R
Ravindra R. Dharamshi
Founder & Chief Investment Officer

Right. And just one more question on Copaxone. Mylan in its con call recently mentioned that they were hitting 25% and 30% kind of market share also in the incremental. So I mean, is that something that you concur? I mean, what is your data point for this thing? And if you can throw some light on why is Momenta, Sandoz not able to gain any kind of market share.

R
Rajeev Nannapaneni
Vice Chairman & CEO

I don't know what they are doing, my friend, so I don't want to answer about them. I think they are doing well. I think Mylan has cut prices very aggressively. Finally, they're seeing some traction. I think we're happy that it has moved. I think it was stuck at that number for a very long time. I think the quantities that we are selling of the products reflects the market share that we have. So I think I'm happy, and I think I'm hoping that we can improve the market share further, and I think we'll see a benefit of that next year.

Operator

[Operator Instructions] The next question is from the line of [ Ashish Rathi ] from Lucky Investments.

U
Unknown Analyst

Rajeev, just wanted to check on the oncology business in India as to how they are. Looking back on the last call, I think that you've indicated that you are expecting a lot of launches on [ niche ] launching them on our side and an aspiration number of around INR 800-odd crores in the next 3, 4 years should be possible [ if you did the first ] INR 150-odd crores in FY '18. Where are you tracking there?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think we have publicly announced, there's a press release where we stated how much of sales are domestic. I think it is INR 193 crores last quarter. So we are in that INR 800 crore range. Regarding the split, I think Rajesh has the data.

R
Rajesh Chebiyam

Yes. [ Ashish ], the specific split is: oncology, we did about INR 97 crores for the quarter; and INR 79 crores on the non-onco brand pharma, which is predominantly hep C brand; and we had just shy of INR 2 crores on the CnD; and the third party, in the [ senate ] we had about INR 17 crores, right, which kind of totals approximately to INR 194 crores for the domestic partnerships.

U
Unknown Analyst

I'm sorry, I didn't [ state my question ] clearly. My question is more than in context of the [ quarter ]. I'm asking for a more longer-term outlook on the oncology business for the company, where we are at around INR 250 crores.

R
Rajeev Nannapaneni
Vice Chairman & CEO

We're very happy. I think we've had a very good growth. I think compared to last year as a whole portfolio, I think we'll grow about 15% to 20% this year. So I think it looks good. And we've had a run rate of about -- as Rajesh was saying, we've had a run rate of INR 96 crores last quarter. So annualized, it's doing more than INR 400 crores annually, so it's a very solid strong business and a highly profitable business. And with the portfolio that we have and the pipeline that we have, I think the portfolio should do much better, I think. It's doing -- it's growing at 15% to 20%.

U
Unknown Analyst

Not INR [ 51 ] crores, right now, correct?

R
Rajesh Chebiyam

Correct.

R
Rajeev Nannapaneni
Vice Chairman & CEO

Yes.

U
Unknown Analyst

[ What is the time line ] for a long pipeline, assets here, just want to know how many products we'll be targeting at as a portfolio?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think as we said at the beginning of the year, ] I think the targeting was 12 to 15 unit launched per year. I think we are on target on that, yes.

U
Unknown Analyst

And the portfolio we have is it backward integrated for us? Or do we actually source it from third-party manufacturers for oncology?

R
Rajeev Nannapaneni
Vice Chairman & CEO

We have certain products we do it ourselves and certain products we go for third parties. It depends on the molecule and the situation. So...

U
Unknown Analyst

And when you say, third party, you also say formulations? Or it's only that you do all the formulations completely with NATCO?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Sometimes, mostly we like to do it ourselves, but sometimes like Laurus is a very good partner of ours, so there we source API from there. So it depends on the product. I mean, it depends on the opportunity and the product. If our supplier is able to put us in the first day of our launches, we go to supplier. If we think that we can be first, then we go -- we do it ourselves.

U
Unknown Analyst

Okay. And last, I'm trying to understand the market share that you have still in the India oncology market.

R
Rajeev Nannapaneni
Vice Chairman & CEO

It's very tricky -- honestly, I -- it's -- because it's a very poorly captured data oncology...

U
Unknown Analyst

[ Data I was asking ] ...

R
Rajeev Nannapaneni
Vice Chairman & CEO

And I can only say, anecdotally, I would believe I am making an educated guess, so I won't [ assume that's true ] okay. I think we probably have about 15% market share of the rupee amount in the market, about 15%.

Operator

The next question is from the line of Sriraam Rathi from ICICI Securities.

S
Sriraam Rathi
Research Analyst

Rajeev, firstly, if you can provide the split for this quarter in terms of revenue.

R
Rajeev Nannapaneni
Vice Chairman & CEO

You want a split of the quarter? It's there in the press release, my friend. Just look it up on the website. It's there already. But yes, Rajesh will run through it quickly.

R
Rajesh Chebiyam

Yes. Sriraam, so it's in the press release, actually, we gave the breakup this time. And the domestic Formulation total was about INR 194 crores for the quarter, right; exports including profit sharing, was about INR 248 crores; the API total domestic plus exports, INR 67 crores; then other operating/other income, that would be included, is about INR 54 crores; subsidiary revenue of INR 21 crores, giving you approximate numbers here.

S
Sriraam Rathi
Research Analyst

Okay, got it. Got it, okay. And it's including the profit share amount for the quarter?

R
Rajeev Nannapaneni
Vice Chairman & CEO

They are there in the split, my friend. We are doing export income as export plus sales of export, we're showing it as -- because we're not doing a split of information. So the combined number is what I just gave, which is INR 248 crores.

S
Sriraam Rathi
Research Analyst

INR 248 crores, okay, got it.

R
Rajeev Nannapaneni
Vice Chairman & CEO

Right.

S
Sriraam Rathi
Research Analyst

And secondly, you mentioned that you are keeping the cash for potential R&D and potential acquisition. So in terms of R&D, if you can update further, I mean, what are the plans now? Because I believe that for the U.S., you mentioned earlier that for investments, you're not increasing the [ 20 ] from here on.

R
Rajeev Nannapaneni
Vice Chairman & CEO

No, I think we're doing well. I think we have good set of pipeline. I think we are increasing the run rate. I think the next 12 months, we'll see about 10 to 12 filings [ whatever our partner is able to ] do. I'm hoping we'll get at least 2 or 3 FTFs, sole FTFs type of products. But again, I can [ only get ] share that information [ with you now ]. But I think I'm very bullish. I think the way I'm looking at this business is, U.S., the competitive portfolio, there's no money to be made. Doing niche, hard-to-do generics, there's good money to be made. Do those and focus on the ROW and our own sub business, I think that's the way you look at the world. And as I said in the past, we -- U.S. used to be a key partner of India. And U.S. used to be a key partner of our business. We added Brazil and Canada. I think now we're looking to add China. So we are trying to keep in my way, the way I look at it is, if we do India, U.S., China, Brazil and Canada. I think it's pretty much covering I think 75% to 80% of the value of this business, yes. The only market that is always missing out is Western Europe, but [ it's challenging to enter market through ] Western Europe. So I think we're covering all the key places.

S
Sriraam Rathi
Research Analyst

Okay, got it, got it. And in terms of potential acquisition which market on Indian emerging market is what we are targeting? Or...

R
Rajeev Nannapaneni
Vice Chairman & CEO

I -- we'll look and see what companies are for sale as of today in the market and then -- but the way I look at it is there's no value trying to buy a front-end U.S. generics business because I don't think they're getting -- I don't think there's a great value. This is my personal opinion. I know somebody who might differ with what I said. I don't think there's much value. I think it's better to invest your money in building a niche interesting pipeline than actually to spend your money on acquisition. I'm not very bullish on a U.S. generic acquisition, personally.

S
Sriraam Rathi
Research Analyst

Okay, okay. Got that, okay. And lastly, on Revlimid, I mean, we are expecting tentative approval by end of this year? Or...

R
Rajeev Nannapaneni
Vice Chairman & CEO

We have a TAD in this financial year. But again, we don't know if we get more queries it might get dragged. But as of today, we have a TAD in this financial year.

Operator

The next question is from the line of Ashi Anand from Allegro Capital Advisors.

A
Ashi Anand

I know you've talking on this in the past con calls, that on Copaxone, I just wanted your understanding, now it’s been almost a year. What were the kind of reasons that market share yields were actually slower than expected? And would this actually act as an entry barrier or ability first to protect market share? Or when new competition does come in, so therefore, will it be a longer kind of period -- a longer period in terms of our profitability? Or do we believe as competition comes in, there will also be [ between ] market share?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think the way I look at it is -- I have exactly opposite view of -- in launching it. It's a very unusual business. I mean, we have given very good discounts. I don't think the price is an issue at all. I believe that our discounts are much better than Teva. I think that's my understanding from my -- that our discounts are as good as you can get. The challenge is the way the reimbursement is done. I think there are incentives for people who have a higher gross price than our gross price. So I think that's -- because an incentive structure in the U.S. market export is inhibiting our ability to get higher market share. However, I think Mylan has done a very good job in spite of all its difficulties. I think we have gone past, I think from what I understand, about 20% market share, it's a fairly good number. And I think my sense is that they're doing well, I'm hoping that it will improve over a period of time, and that will help contribute next year. But I'm not too worried. If the question was if a new generic is coming in, will that change the way we're doing things? I don't think even a new generic comes in, I think price is not an issue at all. I think this is actually playing the contrarian, I think it's not a price issue. It's more about trying to get market share from Teva, and that's the real challenge.

A
Ashi Anand

And they can see Teva [ do the with ] incentive scheme very strongly?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I'm sorry, say that again? Can you repeat that?

A
Ashi Anand

So Teva [ generic gives the incentive scheme ] very strongly, and that's what's...

R
Rajeev Nannapaneni
Vice Chairman & CEO

And that's what's my understanding. And I think from what I -- my interaction with Mylan, this is my understanding. I feel more generics -- as I said, this is a very contrarian thing I'm saying. In most times, when a new generic comes in, there's pressure on the existing generics. Do you know what I mean? That you all have to revise prices. But here, what is happening is the exact opposite. I think even though we're giving a lower price, but [Audio Gap] because of the way the incentives are structured in the U.S.

A
Ashi Anand

And just to understand this aspect a bit better, how possible it is -- is it for us as a generics player to actually go out play the incentive game, so rather than discount pricing, we really do the returns or equivalents in terms of getting the incentive structure right? Or is that an option for us as a company, for us or for Mylan? Or is an innovator really a better place to play that game?

R
Rajeev Nannapaneni
Vice Chairman & CEO

It's how the -- I mean, I'm not as knowledgeable to answer that question. I think this question is better directed at Mylan. I -- from what I understand, I mean, I -- again, I don't want to say something that I don't know enough about. I think generally, innovator’s gross price seems to be higher than our gross price. And I think there's a certain incentive, I think people we get for having a higher gross price. But again, I don't want to dwell into it because I don't know enough about it. I think the question is better directed at Mylan.

A
Ashi Anand

That's fine. That was very helpful. Just secondly, on hep C, how has growth been in this quarter? And what's the outlook? I think last quarter, you mentioned that it's bottomed out. So what should the outlook on this...

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think Rajesh will answer the question, yes.

R
Rajesh Chebiyam

Yes. So broadly, as we said last quarter as well, we see stable numbers from hep C last Q4, Q1 and sequentially now Q2. In fact, we have slightly better numbers for Q2 for hep C. Our brand itself is roughly around INR 74 crores, come from about INR 69 crores in the prior quarter. So we've seen that level of stability. And we expect this to go on like this for now.

A
Ashi Anand

Okay, excellent. Can I just ask one quick last question? On Revlimid, I just want to confirm do we have exclusivity with Revlimid?

R
Rajeev Nannapaneni
Vice Chairman & CEO

We are first to file. I don't want to answer the question on exclusivity, but we are -- we obviously didn't get approval in 30 months. However, we have a settlement date, which allows us to enter early. So I think that's the best way to address that question.

Operator

The next question is from the line of Sudarshan Padmanabhan from Sundaram Mutual Funds.

S
Sudarshan Padmanabhan

Sir, my question is, say, around probably the next 6 months and probably the next couple of years, I mean, as we move toward the higher base and in the second half, I mean, Copaxone now is starting at a higher base; and also Tamiflu being a higher base [ than ] the previous year. What are the kind of milestones or what are the kind of figures that you see probably which can drive earnings? Because second half is where we actually saw the [ occur ] in terms of numbers. And second is, can you also talk a bit more about the U.S. business, I mean, with respect to the erosion, with respect to the competitiveness and probably our strategy? Because you did mention a lot about emerging markets. So how are we looking at allocating resources, I mean, resources and time, probably moving more resources toward the emerging markets? And what kind of benefits do we see for the time line that we see from here?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Sure, sure, sure. I think the way I look at the future is -- and you should understand 2 things, that we had a good flu season last year. So I think we should probably see a decline in the flu earnings. And you ask me what I think, as the market share keeps increasing, I think we should be able to see a good future with time, okay? In terms of -- I think that I have been a strong advocate the last couple of years that we should move away from trying to put so many resources in the U.S., actually focus more on the emerging markets. So I think as of now, as what we publicly stated, a subsidiary we're doing about -- include that subsidiary revenue and our domestic sales, it's about 200 and you ask me I think it will be about INR 220 crores. I think I want this number to go up to a larger number. I want this number to go up, let's say, to INR 300 crores, INR 350 crores over the next few quarters so that whatever decline that we see in the U.S. is getting offset by these markets. And I'm investing a lot of my money in Brazil, Canada and India in terms of bio strategies and launch strategy. I think this is where we're putting our money. And we continue to put money in the U.S. but only for the niche part of the generics, where I think we have an early advantage entry or data complexity. Otherwise, I'm not very keen on doing many ANDAs with the U.S. Yes, I believe that doing a commodity ANDA once in a while, if we could get lucky with our shortage, but actually, it's a horrible business. I don't think there's much money left in the U.S. Once again, it's my personal view. I think a lot of people might disagree, but this is how I look at it.

S
Sudarshan Padmanabhan

And with respect to hepatitis C launches in the other markets and other emerging markets, I mean, do you see that, in a way, that can actually contribute and kind of address some kind of the base effect, which should probably play out in the next couple of quarters or so?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Not really. I think hep C is only one part of I think one -- among the portfolio we have, hep C represents only one aspect of our portfolio, I think, I'm more bullish on the other parts of the portfolio. For example, I'm very bullish on our oncology pipeline, our MS pipeline in Brazil. And I'm very bullish on our oncology pipeline in Canada. I'm very bullish on our oncology and cardiology pipeline in India. So I think we are trying to diversify our portfolio. We have a good resource base now, so we're spending money on R&D in these markets. So we're trying to diversify [ several ] specific areas. But I think, just to go back to your question, we're probably spending 60% to 70% of our money on the emerging markets and India, and maybe spending about 30% of our money on the U.S. Earlier, I think the ratio was probably the other way around. I think we're probably spending 70% of our money on the U.S. and 30% on the other way around, but I think we have reversed the ratio.

S
Sudarshan Padmanabhan

And sir, just a little bit more on the U.S. market. I mean, I'd say 2 years earlier, so FY '15 or FY '16, I mean, the kind of market that we've seen and as we saw a lot of Indian companies as well, even in the U.S., sir, making fair amount of ROEs, I mean, even the guys who do not have a very strong or big emerging market focus. So now I mean, if you're looking at across the board, a fair amount of return ratios have kind of come off. So I mean, it's not specifically for NATCO itself, but what I'm trying to understand is, do you think that it can still go to about plus 20% return ratios? Or do you think that, that is something that can never happen? And probably even if it improves, it can move something like around mid-teens going forward? So even mid-teens...

R
Rajeev Nannapaneni
Vice Chairman & CEO

It depends on your strategy, I mean, it's unfair to say what -- how much money you'll make. It all depends on your strategy. I think my sense is that we'll have higher return ratios if we continue to do a niche, hard-to-do portfolio. If we try to do more commoditized portfolio, then we're going to have really no ROE. So even once in a while, if we bring out a nice, smart product, but we have another spend on a few in the portfolio, then we will not make much money overall. So my view is focus on a niche and ROEs will continue to be good. If you, what do you call it, do more commoditized portfolio, and most of your filings end up being commodities, then I think ROEs will be low. I'll go on to the next person, yes, please. Thanks.

Operator

The next question is from the line of Ranvir Singh from Systematix Shares.

R
Ranvir Singh

One, related to Copaxone, I can understand that Sandoz, for some reason, is not getting market share. But I wanted to say, despite this increase in market share, on the revenue front, it doesn't seem that, proportionately, that has increased. So my assessment is -- but am I right in my assessment? Or do you see the revenues as actually going up? Because you're giving combined numbers, so difficult to understand which part has actually done well. So can you help me understand?

R
Rajeev Nannapaneni
Vice Chairman & CEO

We're not supposed -- I think as far as the conference has been, for competitive reasons, we're not doing a split. I think I've answered that question indirectly. I think what we said is that price erosion has been fairly good, and I think we have gained more market share. And the benefit of that I think we'll see over a period of time. That's the best way I can answer that question.

R
Ranvir Singh

Okay, fine. And on a product side, what I see that for Glivec, can you give any status where we are in, sir?

R
Rajeev Nannapaneni
Vice Chairman & CEO

So we have a TAD I think in this financial year. I think we're expecting approval for Glivec. In Europe, we've already launched. In Canada, we already launched. U.S.A. is the only one that's pending. But even if we get an approval, I'm not very bullish, honestly. I don't think it will be an item which will make such a significant amount of revenue, which will make much of a difference. Even if I'm not -- I know we're pending an approval, I would like to have the approval. But if you want me to make the earnings projection on it, I would say that there's not much to be made on that.

R
Ranvir Singh

Okay. And similarly, on both Sandoz and Tracleer?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Sandoz was good, provided we get a first day of launch. But again, you have a TAD in this financial year, but it's getting dragged because of the ramps. So we'll see. Honestly, I -- if we get a first day of launch, yes, then we might get lucky, but otherwise, I'm not very bullish on Copaxone either.

R
Ranvir Singh

Okay. On the domestic front, sir, in hep C, I see that things are getting stabilized. So a reason is that competition has now stabilized? Or our -- only our shares we have been able to maintain it? Or do you see that volume offtake has actually increased? So what actually is playing out?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Volume uptake has been stable. I think the pricing is stable. I think the business has settled down now. I think that's my personal view.

R
Ranvir Singh

So going forward, this level will sustain? Or you see even higher or some uptick there?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I don't think it will change. I think it will sustain. I mean, that's a fair statement. I think consistently for last 3 quarters, we've been stable, so I think giving us a hint that things are well. I think going forward as well, I think our sales, [ sizing there ] will be fairly stable, and that's my understanding.

Operator

The next question is from the line of Kunal Randeria from Antique Stockbroking.

K
Kunal Randeria
Research Analyst

My first question on this cardio-diabetes division. So monthly, there has been around 50, 60 lakhs for quite some time now. So I just want to understand, I mean, what's happening here? Are we stuck with the litigation of the product or are we unable to launch products, are we not getting enough traction in existing ones?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Kunal, I think I'll answer the question. See, basically what is happening is I'm looking for a couple of big jackpot launches, okay, which would take this 50 lakhs to 4, 5 crores a month. And one, we have publicly stated we try to launch [ the repair requires a ] lot, where there were no generic except [ for orizadalan ] who will be authorized [ in the next core of dirulizid ]. The market for that is I don't know the exact number, it's a fairly large market I think 150, 200 for us. I don't know the numbers but something in that range. But unfortunately, we were injuncted so that court order we've been reserved -- the court has reserved judgment on that in October. So we're expecting a verdict on January. So if any movement has to happen on that, that's probably one product we need to have clarity on. So hopefully we'll get some clarity by January. And we're working on others, 2, 3 ideas which could generate [ doxorubicin ]. I think we'll hear about it when we launch. See, for us, we don't do a model where we launch whatever we have. I think we try to launch something unique. So when we try to launch something unique, the challenge here is there's always a risk of either the approval has to come, the second risk is the legal risk because [ we're probably ] challenging [ the product ]. So I think these are the reasons why I think we've not had a great show on those numbers. But I'm very optimistic that the pipeline this quarter, I think something should work. I think 2019 we'll see a nice [ profit ]. I think that's my personal view. I think we have few ideas of our team. I think something will happen in 2019.

K
Kunal Randeria
Research Analyst

That's good to know. And secondly, just want to get your thoughts on China. So a lot of companies are speaking of entering China. So just want to know your thoughts how easy or tough it is to enter [ with bank ] entry barriers? And do we as a company enter with some of our bigger products like Copaxone or [ Doxin ] and is it easier to replicate those U.S. [ dossiers ] than in China?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think my understanding, Kunal, again, only time will tell again. I'm cautiously optimistic. I don't want to say overly optimistic. What China has done is from what I understand is introduce new rules that says you have an approval in a Western country, they will fast track your dossier to file that in China. So I think there's been -- and if you look at portfolio of companies who are approved in Western markets like the U.S., it means obviously probably the forefront -- the number of approvals in the U.S. And China obviously is a very good market. And so it has great opportunity. So I think the idea here is that if we file on this fast-track basis, I think we'll get some breakthrough. We have few filing spending and we intend to file few products. So we are bullish but as I said, it's cautiously optimistic because of this new rule change. And -- but if you get [ a niche ] in China, you get pretty nice numbers. I think there's no doubt about that. You -- if you get one product to succeed, I think the sale numbers would be as good as a good U.S. launch or a solid India branded launch. The question is the portfolio that you're filing, will that achieve that? Again, as I said, we're cautiously optimistic. But again, we have to see the proof of the pudding is in the eating, as they say. So we'll see I think in the next 2 [ months ]. But we are working on it. I think we are bullish and we're working on it.

K
Kunal Randeria
Research Analyst

Okay. If I can squeeze one more, ask on Copaxone, is my understanding okay that a lot of the contracts are up for renewal now and the new contracts will be effective towards January?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think from what I was told, yes, I think some contracts up for renewal the end of this year and then we'll start to hear something next year. But I think again, this question is better directed at Mylan [ is them ], instead of me trying that question, [ that your ] understanding is correct. And as I said, for the purposes of NATCO, I think as the market shift keeps increasing, we should see good value in our earnings next year.

Operator

The next question is from the line of Nimish Mehta from Research Delta Advisors.

N
Nimish Mehta

A lot of my questions have been answered. [ I here would look ] for questions on the overall strategy. You mentioned that [ Rafi had said you were mentioned quite heavily. But it see, we understand ] there are something like companies [ extremely have done ] and a few are actually dedicated [ to the case of that alub ] including the largest companies [ that payoff ] but none of them have been able to really made an impact on [ the revenue that come ]. And so it's pretty much [ a debts off that, the part will be. ] What is it you are doing so differently in the sales so that you [ have critical about which say ] uplift?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Good question, Nimish. I -- okay. The 2 things I've done differently I think, I struggled in the last 5, 6 years, I'll be the first one to admit I think we have not done any great shakes in the last 5, 6 years. We have done 2, 3 good things. One is I have a new partner in our business. He was a partner of [ sir adam kumada strike ]. Also they sold that -- you're familiar with [ the German contra kumar alida ]. He was [ sir adam kumada ]'s partner in [ strike ] which this business that's been sold to Mylan once and to [ Axtel ] in the past. So I think he's a great guy. And I think one, that's one benefit, one reason why we're very bullish about it. And he has made some changes in our strategy. And we have a unique portfolio, so it's not for the lack of a portfolio. I think we have 2 unique approvals in this financial year that we're launching. I think the value of our Brazil pipeline is [ positive ] in 2019. I think I'm very bullish, I think. We have a couple of, as I said, 2, 3 products that [ we can refer that Natco ] can only generate in the market. I think we should do well. But with the benefit of that, we'll see in 2019. I think what -- my bullishness is driven by 2 reasons. One, we have a good global partner; two, because of our pipeline.

N
Nimish Mehta

Okay. And this product pipeline that you are referring to, would be a branded pipeline or it would be a generic pipeline?

R
Rajeev Nannapaneni
Vice Chairman & CEO

It's [ agenda ] branded generic pipeline.

N
Nimish Mehta

Branded generic, so the way we have it in India.

R
Rajeev Nannapaneni
Vice Chairman & CEO

2/3 market but the -- most of the -- like for the oncology it's mostly [ agenda driven ].

N
Nimish Mehta

Okay, understood. And similarly, on the India business itself, like you've been mentioning that you're going to launch basically 18 niche launches, that's quite a big number. And so basically you're not looking at any [ nuclear ] number. But even in India, you see the number of potential niche markets coming down purely because of the [ patients ] now then. Also now with the standdown on the niche product and stuff like that, so is it fair to assume that most of the products that you will launch will end up in combination in India because that's the way I see launching these products in the niche [ market ]?

R
Rajeev Nannapaneni
Vice Chairman & CEO

That is correct. See, combination issues never bother us because we never [ paid ] any of these combinations. We think our portfolio is always so unique that we never have to go to this combination. See, if you want niche, Nimish, the only way to achieve this, one is you have to go after the [ packet ], right. Or you do something so technologically unique that it will be the first [ sendue ]. That's the only way [ you can succeed ] I think the way I look at India is, at least Natco's [ dealing ] I think is the only way we can succeed. So do something so unique that nobody has a product or do [ what for a patent ]. I think that's the only way. And I'm -- I think I have to reiterate it again, that's the way forward. Otherwise I don't think you'll get good additional launches. That's my strategy. But again, a lot of people do differently, I guess due respect to them, but this is how I think we should grow our business.

N
Nimish Mehta

Okay. But so far, the only thing more [ effect of litigation ] related to the launch in India. So is it fair to assume that now you will see more of those extremely technologically advanced products which may not even [ be end in litigation ]

R
Rajeev Nannapaneni
Vice Chairman & CEO

That's what I was saying. No, I think, just to reiterate again, either you have a technology product, where there's a -- patent is not an issue, is not an issue of technology or you go after a patent. That's the only way you go forward. I think the way I look at it is, that's how [ we things ] should go forward.

Operator

The next question is from the line of [ Kushal Marandani ] from Motilal Oswal.

U
Unknown Analyst

Sir, just would like to understand if any of the products meets CGT designation for U.S. market?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I don't know what that means, my friend. Can you explain what CGT means? I don't know what that is.

U
Unknown Analyst

Comprehensive (sic ) [ competitive ] [ generic therapy ], so basically marketing exclusivity for those products that have...

R
Rajeev Nannapaneni
Vice Chairman & CEO

Oh, yes that's recently, you're talking about that [ npr ] product for approval where there's a fast-track is that what you're talking about, or...

U
Unknown Analyst

Yes, in addition to fast track, there can be some exclusivity because there's no [ generic that compares ].

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think [ there was a storic ] I think [ Carlos gave that ] approval recently if that's the one you're talking about and [ meaning that's ] approval on that product.

U
Unknown Analyst

Right, right, right.

R
Rajeev Nannapaneni
Vice Chairman & CEO

That's right. Do we have such a product which can get that designation? No, not that I know of. We are focusing on different product niches but not particularly those.

U
Unknown Analyst

And just coming back to China market potential, so was it this a regulatory hurdle? Of course, there goes one of the major hurdle to say so, but is there any other hurdles to get this market access?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think this fast tracking is what is getting everybody excited honestly. I think it's not only for Natco, even other companies are talking about this. You're probably aware of this. The fast tracking of products who have -- for companies who have approvals in [ Western world ] and specifically the U.S. So I think as I said, I'm cautiously optimistic. I think I have not been given an approval yet, so I don't want to say that [ I made this much ] money and so on and so forth. But we are optimistic here.

U
Unknown Analyst

But the penetration of the [ existing sizes tend to literally -- or is it they obviously seek ] to get introduced to a local partner or...

R
Rajeev Nannapaneni
Vice Chairman & CEO

[ like even divent ] go to local partners and not toward [ mical ].

Operator

The next question is from the line of [ Vishnin Mishnahar ] from Quantum Mutual Fund.

U
Unknown Analyst

Just a couple of observations from the Indian portfolio. We have around 420 reps and we [ agreed on meter of ] roughly around $20 million or INR 17 million to INR 20 million a year for that whereas the industry sometimes goes from 8 to -- 7 to 8, 9, whatever. So like we have a high revenue per head. I think to that, we are expanding our portfolio [ in a sense by adding ] CVS. And we're adding 20 odd products. So I'm just trying to understand with [ the considerate activity in your portfolio ] right now, tying these things together could you [ stop barson coming ] us to where we see assets with your pretty high run rate for [ MR ] right now?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Where do we see -- I'm not able to understand your question, my friend. So you said 2 things. One is that our rep for these is much higher. That is correct. I think I have to see in the oncology reps do much more than your average earning per month of our reps about 25 to 30 lakhs per person in our oncology and hepatitis C portfolio. But our oncology is fairly normal. I think we made only INR 50,000 or INR 60,000 a month. But obviously it's a growing business. What is your question? Are you saying that the sale is higher? Yes, the sale is high. What is the question? I'm not able to understand.

U
Unknown Analyst

The question is it's like it's a question and understanding also. So as we go ahead, let's put it in this context, a lot of companies do [ an average of ] maybe 8, 9, 10 that number, that's a good number so far. But now as we go diversify more into say [ diabetilogic serie ] and so on and so forth...

R
Rajeev Nannapaneni
Vice Chairman & CEO

Is your question [ if the man ] will come down...

U
Unknown Analyst

Do we see that is coming down and do we -- and adding to that, what extra do we add? Do we add [ besides cbs ] and do we add [ CNSR ] or [ opthamology ]? Could you throw some light on, please?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think, see you have to understand one thing. The 25 to 30 lakhs is an extraordinary number. It cannot be achieved in every segment. I think that has to be clearly understood. Normally, in our business, 6 to 7 lakhs [ per man ] is considered to be very good. If your question that we will able to achieve 25 lakhs in every new segment that we're entering, no, absolutely not. It's not possible. I'd be very happy if [ sol with is ] about 5, 6 lakhs, 7 lakhs per person, I think we have done a very good job. Those 2 businesses are strictly comparable. I mean, yes, I think, does that answer your question?

U
Unknown Analyst

Yes, sort of. And then if I can just ask how many more reps do we expect, say, in the next 2, 3 years to be added?

R
Rajeev Nannapaneni
Vice Chairman & CEO

As of now, we're comfortable with what we have. We have about 300 odd reps. I don't think it's 400, about 300 reps. I'm fairly comfortable with the numbers. The portfolio that we have we're comfortable with this reps.

U
Unknown Analyst

Question on the U.S., see a couple of [ yellow line, wanted to gets online ], do we think of establishing ourselves [ as a fund ] not acquiring any mean by ourselves or whatever, do we have...

R
Rajeev Nannapaneni
Vice Chairman & CEO

[ As a onetime there ] ambition, I think yes, I would believe I will not pull the trigger on it, it's always on our mind. I think I get asked this question in the previous calls as well. Previous question [ our exponent marketing ] and it has not. But yes, I think that's something that we think about strongly about it. But I think we will make this -- I think we have not made that call as of today. The U.S., [ same ] Canada and Brazil we try to go out [ zone from end ] but U.S. historically we have [ been that done ] partnership.

U
Unknown Analyst

All right, right. If suppose down the line we decide to go solo, do we get the volume from whichever, suppose Mylan...

R
Rajeev Nannapaneni
Vice Chairman & CEO

No, we won't get that. No, what is [ trying me to honor in the U.S. ] portfolio you have to go by yourself but [ other ] portfolio I think [ it's they ] honor the contracts.

U
Unknown Analyst

Specific question development this [ not will be the ] case, what scenario can we play out? Are we still launch every quarter or we'll be launching on the same day as, what will happen there, any scenario...

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think I answered this question in the past. I think if another litigant, whoever, enters the market early enough under certain circumstances we get to enter with that generic. Otherwise, our launch date stands at March 22 but however it can be accelerated provided another generic enters the market early under certain circumstances. I think that's the position that we have taken in the past. So [ de thirting ]...

U
Unknown Analyst

Just one last question [ on the RN in the science feasibility ] have you ever looked at things like checkpoint inhibitors, [ bdl1 or something ]? Have you ever -- I'm just asking out of curiosity more so.

R
Rajeev Nannapaneni
Vice Chairman & CEO

You mean like biotech drugs? Is that what you're saying?

U
Unknown Analyst

Yes, yes.

R
Rajeev Nannapaneni
Vice Chairman & CEO

Biotech, I have not looked at biotech. We're still focused on chemistry products but not [ interested ] in biotech.

Operator

The next question is from the line of Sameer Baisiwala from Morgan Stanley.

S
Sameer Baisiwala
Executive Director

How do you see the addressable market for complex generics in the U.S? I mean, which therapy areas, which dosage, dosage forms? And are these off back end, on back end? Some color would be very useful.

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think the opportunity in complex generics is there in oncology, it's there in diabetology, it' there in MS. We're not doing biotech per se. So our sort of strength will be more on peptide chemistry [ on that ] delivery. I think that's probably the one that we would focus on. The addressable market is fairly large. It's only a question of -- but getting approval on these products is a lot of work and it takes quite a few years of work. So -- but the opportunity is there. I think we have an interesting pipeline, we're working on it. But pulling them off is not as easy as you might -- as you are aware.

S
Sameer Baisiwala
Executive Director

I mean, hearing you, would we see the largest part would be injectables?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Yes, most injectables -- yes, injectables could make up most of the pipeline.

S
Sameer Baisiwala
Executive Director

Okay. And overseas you are not finding too many opportunities in there?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I'm sorry what was that you're saying? We are doing. Also we are going to find something unique and niche. But we continue to our strategy is trying to it with chemistry here, I think I've said that in the past. We're just trying to do newer markets on niche products where we can [ pick up core standing what needs to do orty ].

S
Sameer Baisiwala
Executive Director

Okay. And one more question, if I may. On the profit sharing for the quarter, can we assume that you have -- this includes Copaxone full quarter impact at say roughly 15% market share?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I'm not doing a split because the agreement that we have with Mylan can -- prohibits us from doing that. I cannot answer that question. But assume some portion of Copaxone, some portion of, see there's 4, 5 components in that earnings. One is Copaxone is there, Tamiflu is there, Liposomal, doxorubicin is there, Lanthanum Carbonate is there. I think these 4 products drive our profitability. I think that's probably the most, I think I can be open about it and tell you that these drive earnings. But if you ask me for the split, I'm not willing to do that. But if you want, conceptually, these 4 drive our earnings.

S
Sameer Baisiwala
Executive Director

No, I'm not asking for the split [ a year to be sure ] but Copaxone to whatever extent it is there, it captures the full quarter impact at 15% market.

R
Rajeev Nannapaneni
Vice Chairman & CEO

No, my friend, I cannot answer that question, [ bound by ] confidentiality. We have a structure with Mylan which I cannot answer that. Okay?

Operator

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

P
Prakash Agarwal
Executive Director of Pharmaceuticals

Just trying to understand your initiatives on the agrochem side, [ the option in article of association ] if you could highlight [ where you belong ] that will be useful.

R
Rajeev Nannapaneni
Vice Chairman & CEO

Sure. I think in agro, I think as you know, we are a strong chemistry company and I think that's part of our diversification strategy, I think we've identified a couple of small interesting opportunities, opportunities in agro chemistry. So it's still at very early stages at this time. I would not like to say that we have some [ lock up trade ] at this time. But we're working on some very interesting, unique. But it doesn't value that overall [ under be for ] just 1 or 2 items in our value portfolio. But our core focus needs to be [ conificant ] but we found a couple of interesting opportunities, I think that's the reason why we've had to pursue that.

P
Prakash Agarwal
Executive Director of Pharmaceuticals

Sir, would it be fair to say that these are like wait until [ fair it would ] count in a couple of years or it could be near-term opportunities as well?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I can't reveal my strategy. But yes, something like that, it very well could be something like that, yes. Okay?

P
Prakash Agarwal
Executive Director of Pharmaceuticals

Okay. And lastly, on the CapEx side, so 2 things. One is the capital work in progress is about INR 530 crores, which is as high as 50% of your fixed asset. So what is [ shipping ] there and what is the CapEx number for the next 2 years?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think we have a lot of CapEx [ volume running ] 50% of that capital work [ is our buyback asipi ], so I think by [ that acquisition ] completed and go online by the end of this financial year, so I'm hoping by end of this financial year. So that can get capitalized. I think what we're spending on right now, I think primarily we're spending on right track and primarily we're spending on the [ Vizag eno those this factory ] where we're building ability to do all these oncology and non-oncology. So we have a [ Vizag ] product family [ have about ] and we are hoping to trigger inspection for that early next year. And we are spending money on improving our [ extens metry ] skills for our [ not APS the team make we are ] in Hyderabad. So we have some complex peptide drugs that we intend to file [ for the treen customized so keeping to that ] and from some portion of the money we're spending on. And then the capacity expansion in our Hyderabad facility for our oncology line but expected launch in the next few years. And then general maintenance CapEx. The primary 3 big things are Vizag, the API facility in Hyderabad and some capacity expansion in oncology [ labs ] in Hyderabad. So these are the 3 main things we're spending our money on. Okay?

P
Prakash Agarwal
Executive Director of Pharmaceuticals

And CapEx for this year, next year, sir?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think our budget is about INR 450 crores or so for the year. INR 400 crores to INR 450 crores. We've spent half year about 250 so we're on track.

Operator

The next question is from the line of Shaji Kumar Davakar from IIFL Securities.

S
Shaji Kumar Davakar

Do you think the Tamiflu will equally contribute next year after [ association obtains ] new drug approval [ so glusar ]?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think Tamiflu has a good market standing. I think the contribution of Tamiflu will only come down not because of the new -- it will come down because of competition, that's my view. Because the competition [ is going to be following trends to this year ] compared to last year.

S
Shaji Kumar Davakar

Okay, okay. Secondly, what are the key triggers for growth after, let's say, FY '20? Because you are there will be 2 or 3 generics in Copaxone plus Tamiflu, we already know probably may not do well. And you are already indicating [ you reckon bosotan ] you are not very bullish, so what are the key triggers beyond FY '20?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I repeat [ regarding impact ] in the near term, our Copaxone market share improving. And in the long -- in the medium term, which is like around '20, '21, I think my expectation that Brazil, Canada and India should do well. And in the long term, I think we have a whole set of [ if you take ] '21, '22 and long term then we have a whole set of exclusivities coming in, and the problem is I think [ revenuement ] being the big one. But we have other set of exclusivities for our other set of products. So I think if I take a 3-year perspective, I think U.S. is going to drive the earnings. If you take a 1.5- to 2-year perspective, I think [ others may come into play ].

S
Shaji Kumar Davakar

All right. And lastly, is it possible for you to tell us how many niche ANDAs are under development in your R&D pipeline?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think we attempt to do on this [ I think I say lagal ]. But I think -- we think we will have to file about 10 to 12. I believe we won't pull off even 2 unique filings. I think what I'm guesstimating in our pipeline is that even if we pull off even 1 or 2 unique ones, I think we've [ done a good job ].

S
Shaji Kumar Davakar

And is it possible also to, let's say, because you obviously, you can't give what kind of pipeline you are looking at. What kind of size of the molecules that are under development, those 2 specific molecules?

R
Rajeev Nannapaneni
Vice Chairman & CEO

See, if you look at billion-dollar drugs, when we look at $300 million products, sometimes doing a $300 million drug is smarter than trying to do a $3 billion drug [ we had bengize ]. You know what I mean? So the upside, where you get an upside, you can't really tell the day when you file. You have to do a mix of few billion-dollar drugs and some niche products. So what -- I think the best way to answer your question is that we're trying to target about 10 to 12 products looking at products ranging from 150 million, 300 to 2.5 to 4 billion. But I think after [ 12 in ] we probably get a hit in 1 or 2. I think that will probably be so special that it will make a meaningful impact on your earnings. [ The rest of ] them. You will probably end up with other people and not make so much money. I'll take a last question, guys. This is my last question.

Operator

We take the question from the line of Charulata Gaidhani from Dalal & Broacha.

C
Charulata Gaidhani
Analyst

Yes, I wanted to know the timeline for [ the season's ] launches?

R
Rajeev Nannapaneni
Vice Chairman & CEO

We have 2 unique launches in December quarter. So I think the last, we have almost last quarter, we had a INR 12 crores [ loss making follow ]. So I think that when we get what we get at the moment big 2 launches will happen in this quarter. And then we have some other good launches maybe around April to June of 2019, where we are going to be the first [ indiq ] on another product where there's been a limited amount of competition. So we are experiencing [ little amount ] competition. So I think the benefit of Brazil is what we see in 2019, '20 in the balance sheet. I think '18, '19, '19 [ March that ] we see the cash flow [ lost due ] the second half of the year but the benefit of actually Brazil contributing significantly in earnings we'll probably see in 2019 March.

C
Charulata Gaidhani
Analyst

Okay. And what would be the addressable market size of launches in Brazil?

R
Rajeev Nannapaneni
Vice Chairman & CEO

I think it's hard to predict so I can't tell you. But I think we expect I think we should be able -- the new launches should be able to generate about on base case about 10 million or best case about 15 million to 20 million. But it all depends on how things go. See what it does is like what [ attrition ] does, it takes off the loss off the books [ we would have thought that ] INR 30 crores, INR 40 crores [ so that takes into account ]. So once we're in profits, that obviously that starts contributing. So -- and Canada and India also does well. Then so whatever possible loss we might have on Tamiflu gets compensated.

C
Charulata Gaidhani
Analyst

Right. And secondly, what is the normal time line of approvals in China?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Again, I have not got an approval so far, so I don't want to make a prediction. But I was told that with the new policy which allows for fast tracking if you have an approval in the Western market, you can get an approval within 12 to 15 months. That's my understanding.

C
Charulata Gaidhani
Analyst

Okay, okay. So we expect approval in FY '20?

R
Rajeev Nannapaneni
Vice Chairman & CEO

Hopefully, yes. I think in the next financials, we're hoping to see some China launches also, yes, that's right. All right. We thank you all. Thank you all for your time, and a good set of questions. We will publish the transcripts as well in our website so for any future questions. Thank you all, and have a good day.

Operator

Thank you very much, sir. Ladies and gentlemen, on behalf of Edelweiss Securities, that concludes this conference. Thanks for joining us, and you may now disconnect your lines.