Dr. Reddy’s Laboratories Limited (NYSE:RDY) Q2 2024 Earnings Call Transcript

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Surya Patra: Okay. Okay. Just last one question, sir. See, in fact, obviously, there is a kind of a strong cash flow that we have been seeing also supported by REVLIMID, but whatever the case be, but we have been seeing a quarterly run rate of, let’s say, INR 1,500 crores kind of cash flow — free cash flow. And already, we have a INR 6,000-odd-crores kind of cash in books. So could you give some sense of what incremental growth this fund can add to the overall visibility of our growth for next, let’s say, next 1 or 2 years or over a period of 3 years?

Erez Israeli: The beauty of that is that we can use this money for deals. Now it depends what deals we want to have and in what multiples we will have them. I hope I understood the question right. So if it will — what we want to do with this money is primarily for inorganic activities, which can serve us both in the short term like we did with Mayne as well as in the longer term, for example, to acquire assets or products that we can launch in years after. But absolutely, this is the main use of the money, and this should help us to generate growth. But the timing of it, of course, is not certain because we don’t know what type of deal and when it will impact us.

Operator: [Operator Instructions]. Next question is from the line of Aman Vij from Astute Investment Management.

Aman Vij: The question is on our diabetic portfolio. So if you can talk about how well are we placed as a company to take the advantage of the upcoming GLP-1 opportunity that is coming? So I believe you have some FDA filings in that. So in terms of launch ready, are we ready whenever the expiry happens we’ll be there? And do you think this product category can be like a $300 million to $500 million kind of category for next 5 years?

Erez Israeli: So we’re going to be there, definitely day 1. And as for the size, I don’t know. But obviously, I have a great belief in this category.

Aman Vij: And in terms of the important dosages, are we present in all of them and if you can talk about the same?

Erez Israeli: I don’t want to discuss specifics because we do not make it public, but we should have all the relevant ranges. Depends on the geography and depends on the country, but we see this category as a global category for us to launch in all the markets that we have a presence.

Aman Vij: And you are saying we are ready in terms of whenever expiry happens, if you have FDA file we can launch in the next day itself?

Erez Israeli: We are ready.

Aman Vij: Sure. My second question is on this other biosimilars, which I think we have on the osteoporosis side. If you can talk about the opportunity in U.S. because I believe there is patent expiry coming up, so are we planning to launch in the U.S. market? And if yes, do you think we can…

Erez Israeli: Which products?

Aman Vij: Yes, I was talking about osteoporosis teriparatide and there are 1 or 2 more products that we have. So I was trying to understand that U.S. patent, the expiries coming up. So do you think we can have a good market share in U.S. markets with our biosimilars?

Erez Israeli: Yes. So I’m not calling teriparatide as biosimilars. For me these are still equivalent to small molecules. Biosimilars are not normally for products that are bigger like the mabs, et cetera. But specifically for this product, absolutely, I believe that it will be very nice for us. And we will be ready to launch it when it’s possible.

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