India Market Open | Wockhardt And Shyam Metalics In Focus | NDTV Profit
- How are #Wockhardt's drug trials doing so far?
- What's next for #ShyamMetalics after launching a Rs 3,600 crore QIP?
Samina Nalwala, Tamanna Inamdar and Niraj Shah speak to the companies' management on 'India Market Open'. #NDTVProfitLive
- What's next for #ShyamMetalics after launching a Rs 3,600 crore QIP?
Samina Nalwala, Tamanna Inamdar and Niraj Shah speak to the companies' management on 'India Market Open'. #NDTVProfitLive
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TVTranscript
00:00 resistance to existing antibiotic is something of the order of 30 to 40 percent
00:06 and therefore one has to go towards the injectable form. So with this
00:12 damphethromycin we would be able to avoid injectable treatment and also
00:20 have the very short three-day treatment. It's a very safe drug, the side effects are very limited
00:28 and we would be launching ourselves a product in India and obviously we will be looking for
00:34 some partnering and collaboration with the other companies in India and elsewhere.
00:41 Right, so Karakivala to begin with will this be and you said in the next few months
00:47 approval should come in hopefully in a month and you should hit the markets very soon in India.
00:51 To begin with this will be full-fledged commercial use or will you begin with compassionate use
00:57 for the local market? As far as damphethromycin is concerned it would be normal full-fledged
01:03 use because we have completed phase three clinical trial and therefore it would be a normal approval
01:10 and we would be able to market for in a normal course and it is an oral treatment for pneumonia.
01:18 Okay, so also what is the size of the local market because I do believe this is far more
01:24 superior than an erythromycin. You talked about how successful the trials have also been and also
01:31 not just India, the other emerging markets I'll talk about in a minute but for India what is the
01:35 sort of market size we're looking at? We are looking at a very substantial market size. We
01:42 are still developing a business plan for that but considering the resistance to existing antibiotic
01:52 erythromycin and clavulanic acid combination we do expect that the market and then ultimately
02:03 you know if oral treatment don't work the doctor goes for injectable cephalosporins.
02:07 So I think this is a very good alternative. It is a very cost-effective alternative
02:12 also. So we do expect a very substantial market size considering the total market is very large
02:20 in terms of usage. Would you be able to quantify that for us sir? Just a range, a ballpark,
02:26 I'll be happy with that as well. I don't think I'll be able to do that but you're talking
02:31 in next three to five years in hundreds of crores. That's lovely. Now I know none of this comes easy
02:38 or cheap right so there's been a lot of money that's gone into research and going through these
02:42 trials for the specific drug. What happens next? You've got to go out and market this drug. It's
02:47 going to cost some more money. Would you consider, how do you plan to monetize this right? Would you
02:53 look at raising funds? I know this is a business where debt is high, your debt equity ratio
02:59 is still sub one but still around 0.6, 0.7. What are you looking to do? How do you plan to fund the
03:04 next leg of getting this to the market? The one aspect is that since this new drug generally is
03:12 used by the specialist, that is the chest physician and pulmonologist, the number of
03:20 doctors available are very small and limited and that is how we intend to launch ourselves.
03:26 We also are planning to partner some of the other large Indian companies who have more extensive
03:35 coverage of consulting physician and from that point of view the marketing spend for this product
03:44 is going to be not very significant for us and out licensing also will help us in terms of liquidity
03:52 management. What sort of deal would you be looking to crack with these other Indian companies?
03:59 We do expect the business to take place mainly basically and we would supply at a certain
04:05 price and we expect those companies to have a good coverage of the specialist we are looking for.
04:13 So, we would be selective in terms of the partners we choose who can do a good job of our model.
04:19 Mr. Khurakivala, I heard you mention hundreds of crores of opportunities,
04:27 would this be the India opportunity or hundreds of crores considering both India and the other
04:32 markets and by when would you hit the other markets? These opportunities I think in India
04:40 alone itself is significant and the other markets would be additional opportunities
04:45 and we expect that in another 9 to 12 months we would be entering other emerging markets
04:54 because we have conducted clinical trial of phase 1 and 2 in US and Europe and this clinical trial
05:02 is in India. So, collectively we have covered about 700 patients in various stages of clinical trial.
05:08 Okay and sir one more question on this is for how long does, pardon my ignorance about this,
05:15 but for how long does the exclusivity for usage in India or other emerging markets stay with
05:20 work hard before other players come in? We have two patents, one is up to 2031
05:27 and another is up to 2037. So, we have fairly long period of time available
05:33 for patent expiry dates and therefore over the years we should be able to build up a
05:41 substantial business as the resistance are increasing every day.
05:48 Dr. Kurakivala, good morning. Tamanna here, glad to speak with you as well. So, just to get some
05:54 idea on ephedraomycin because it's much more effective than what is available out there.
06:00 If you can tell us a couple of things, what would be the pricing be retail relatively,
06:05 would it be significantly higher or how much are you looking at this as an export potential as well?
06:11 Two things, one is I think like a new molecule it would be
06:16 priced appropriately for the benefit it offers the patient.
06:20 So, and since we are going to the specialist and the alternative is injectable also. So,
06:28 we would be moderately priced compared to the current form of treatment for injectables.
06:34 As far as the oral is concerned, it would be obviously rightly priced being prescribed
06:40 by specialist. The second aspect is that we would be going out and finding partners
06:48 even within India and outside India also and that would help us to build the portfolio business.
06:57 So, I think we are more looking in terms of building up use of this molecule on a global
07:05 basis as our primary objective of launching this product and for your just information,
07:12 they were the 20 years or so in our antibiotic drug discovery program, we have already invested
07:19 about 350 million dollars and what is in getting invested in the launch of new molecule is quite
07:26 insignificant compared to what we have already invested. Mr. Kodakiwala, one quick question
07:33 before I move on to WCK 5222. Over the next 1 to 3 years, what is the revenue contribution
07:41 that you are expecting from this specific drug to your top line and bottom line?
07:45 I have already answered that question earlier and it will be very significant and this would
07:56 be obviously like new drugs are fairly high margin product actually. So, more than that,
08:03 I don't have the information to share with you. You should be happy to know while we are in this
08:09 conversation, your stock actually trades at the day's high when pharma generally is not looking
08:13 good in trade. I know intraday moves don't matter but you should be pleased. I am going to move on
08:18 to another drug WCK 5222. This I believe is a 100% cure rate. You have done a few compassion
08:24 uses as well and it's been successful from what I understand.
08:27 Fi25 is what I've read is when this should hit the market full-fledged but could you
08:33 sort of narrow that timeline for me and tell me when exactly can we expect this to hit the market,
08:38 how long will we have the patents on this for and how good is the margins on this product? Because
08:42 again, the success is supposed to be fantastic from what we understand. It's a long patent,
08:46 the global patent is there up to 37 for this product in the US and Europe. In India also,
08:55 patent is there are only 32-33. So, it's a long patent available here and therefore,
09:01 that the opportunities are great. Second, in terms of you said a compassionate use as we
09:07 have already mentioned earlier. So far, we have done 13 patients with 100% success rate on a
09:13 compassionate use where other antibiotics failed worldwide. The third aspect is that we are
09:20 in the phase three clinical trial and it will get to sometime later part of this year and we will
09:28 hit the global market by early in 25, Fi25-25. However, we have also applied for in India with
09:41 the CDI considering that the life-saving issue of this molecule and we lose roughly about 100
09:48 lives a day, a week when the molecule is not available. So, drug controller has given us
09:56 permission to undertake a clinical trial which we will be starting in the next couple of months
10:01 for Meropenem resistance cases where other drugs don't work, we use this product.
10:09 And with this, we expect approval to come within 9-12 months in India
10:15 for emergency use or a limited use. So, I have two very short and quick questions and I'll try
10:23 and make this fast. I want to talk about your contract manufacturing and I know there was a
10:27 deal that you had signed up with Serum. I know in the last fair presentation that you indicated,
10:32 this could be on the ground in the next 10-12 months. Can you update us on that because I don't
10:38 think that deal has still hit the ground running? The deal is there already, the transaction is
10:46 there. We have the contract with Serum and they have identified two molecules. They will license
10:53 the molecule for themselves which we hope that in the next 12 months or so, we should be starting
10:59 manufacturing for them these molecules in our UK operation. Manufacturing as of today hasn't
11:06 kicked off? No, I think it will take time. It will take time. Also, I believe you wore
11:13 contract manufacturing for the UK government and AstraZeneca as well. Any new such deals in
11:19 the pipeline, anything that you're currently talking to or working with because again,
11:22 contract manufacturing is a high margin business for you? Yes, we are in discussion with one
11:29 global company. But we are still at a discussion stage and we have not yet completed
11:35 and arrived at an arrangement with them. So, as and when something happens, we will certainly
11:43 communicate. Sir, before we talk to you about the biological strategy for Walcott,
11:48 I believe you've indicated that the company will look to turning profitable
11:53 F525. Could you confirm that for me? And also, profitability aside, you've also indicated in
12:01 the past where you were looking to offload a lot of your non-core assets, a couple of manufacturing
12:05 units as well that you had. Is that plan on track? Have you monetized anything? Would that be
12:11 expected in the next few quarters and hence you'll turn profitable? So, just a timeline on when you
12:15 turn profitable and if you are looking to sell non-core assets, if there's any movement on that?
12:21 I think let me just deal with the diabetic and biological portfolio. We are focusing this,
12:28 we already have few products in the market and manufacturing. We have developed technology for
12:35 a large number of other diabetic products and we would be focusing on these products on emerging
12:43 market and we believe it is a very significant. It is a strategic move and we intend to introduce
12:48 six to eight products next five years in various emerging markets as far as the biologicals are
12:55 concerned. As far as restructuring is concerned, we are looking at various option of restructuring
13:01 our organization and as and when something materializes, we'll certainly communicate with you.
13:07 You know that you were looking to offload about eight, ten months ago,
13:12 that hasn't happened yet, right? No, I don't think we are trying to look offloading any of
13:19 physical assets. Okay, Mr. Kauragawalla, sorry, just a quick follow-up. Did I miss
13:25 hearing from you about the when and how of the profitability since you've cleared that you're
13:32 not looking to offload any manufacturing assets? I presume the profitability comes
13:36 purely from core operations and does that happen by FY25? Yes, I think it will happen. By FY25?
13:44 Yes. Okay, great. Just one last question, Mr. Kauragawalla, and frankly it's a broad one,
13:53 perhaps not so much to do with your new drug, but I think one that concerns all of us. You
14:00 talked about briefly resistant antibiotics and how the resistance to antibiotics is growing more
14:08 and more. Can you explain to us how big a concern is this and what it means for companies like
14:14 yours where the current crop of antibiotics just stop working fairly quickly after a while?
14:20 See, antibiotic resistance is increasing mainly because there are no new antibiotics
14:28 discovered of significance in the last 20 or 30 years. Even our nifedromycin is coming after 40
14:37 years after nifedromycin in that class of drug. So as a result, most of the big pharma has vacated
14:46 its space long back. So as a result, the resistance are developing and it is very natural that
14:54 existing antibiotic over a period of time develop resistance and therefore you have new drugs.
15:00 And therefore we have a series of new drugs. We talk of nifedromycin, we talk of I222,
15:06 and there are another couple of drugs which are in the pipeline which will come over the years.
15:10 So we are one of the very focused companies in the global sense who have end-to-end capabilities of
15:18 discovering new antibiotics for resistance and we believe that that is a major contribution we are
15:25 making to the healthcare and saving millions of lives. And that will happen over the number of
15:32 years. Earlier, you know, if you remember the O'Neill report UK in UK, he predicted if there
15:40 are no new antibiotics are there, the death because of antibiotic would be the highest,
15:46 even higher than cancer by 2015. And it will cost billions of dollars. But I believe that
15:53 with our products coming in, we will not have that scary scenario.
15:58 Well, thank you very much, Dr. Karakiwal. It is such a pleasure talking to you and understanding
16:03 everything that is happening at Walkhard. We will hopefully catch you soon when you
16:07 report your earnings in the quarter. With that, we will take a quick break. We will come back.
16:12 We get to you Brij Bhushan Agarwal of Shya Metallics on the company's latest announcement
16:18 of 3600 crore rupees QIP.
16:24 Thank you.
16:38 Thank you.
16:52 Thank you.
17:06 Thank you.
17:22 Thank you.
17:36 Thank you.
17:50 Thank you.
18:06 Thank you.
18:22 Thank you.
18:38 Thank you.
18:54 Thank you.
19:10 Welcome, you're watching NDTV Profit. Thanks for tuning in. We have the management of a very interesting company with us,
19:18 Shyam Metallics, roughly 17,000 crore in market cap, but the stock has doubled over the last one
19:24 year. Of course, you have seen mid caps and small caps rally, but this one seems to be different
19:31 because they are foraying into several businesses, including backward integration of their existing
19:38 metals business. And to discuss that and more, we have with us Brij Bhushan Agarwal, who is the Vice
19:45 Chairman and Managing Director of Shyam Metallics and Energy. Right, sir, let me get straight to it
19:52 just to try and get perspective. Where are we today? What are the new businesses you forayed
19:58 into? Give us a quick two minute snapshot for our viewers to get perspective.
20:03 Hi, good morning. Very happy new year. See, we had been observing from last two and two and a
20:10 half year, like if you see the results, like what we pre IPO and last year financial, we almost
20:16 doubled the top line. And the major advantage with focus, if we see, we had been always a very
20:24 distinct company, like very different on our business valuation side, on our product side,
20:30 on the risk mitigation side. We always say that we are a metal mart. We are going to create a FMCG
20:38 metal basket like you see in one of the we are in the aluminium space, we are in the stainless steel.
20:44 We just integrated into a stainless steel business just because we make all the raw
20:50 material of the stainless steel. And down the stream, like if we are doing anything
20:55 forward or backward, it's complement each other very well. Apart from that, if you see from in
21:03 next two to three years, we expect that the revenue is almost going to be double. A lot of
21:07 our expansion, what we declared two years back from middle of coming year, this year itself,
21:12 we'll see plant getting commissioned. So we'll see the numbers increasing. The stainless steel
21:18 plant has also been commissioned. The plant which we took over from the NCLT, this itself is also
21:25 going to be regularised this year. So a lot of happening. And if you see in last two, three years,
21:32 we have always marched towards the value added product, the speciality alloy, the aluminium,
21:41 lithium foil, what we commissioned and our product got approved. In the time to come,
21:49 we see the battery unit which is going to come up in the country, we will be a
21:55 very important partner to them. So the B2C space, if you see in last two years,
22:04 the revenue in the B2C space has gone up three times, threefold. And the colour-coded business
22:11 also, which is going to be commissioned in the coming year itself, is going to add a lot of
22:14 value to our supply chain management. So, quickly, the three businesses you
22:21 highlighted, one was stainless steel, the other was aluminium foil, and the third was EV. Are all
22:28 three of these going to be margin accretive for the business currently? So, okay, let me try and
22:34 simplify this a little more. Talk to us about where your margins are currently and where they
22:39 will be in FY27 once all three of these businesses go fully on road. See, all the business enjoy a
22:50 very special margin. These special businesses generally are at the level of around 15% to 20%
23:00 EBITDA level, these three specializations. But apart from that, if you're talking for the revenue
23:05 of FY26, FY27, I said like this year, we should be able to double in the next two to three years.
23:14 So, if I'm talking of today, this year, we should be able to do a top line of around 15,000 crores,
23:23 approximately 14.5, 15. So, we expect that in two to three years, we should be between
23:28 27,000 to 30,000 crores. And apart from that, we have more vertical line, like this is a flat
23:37 product color-coded, and the long product space also B2C. And if you see throughout the time,
23:44 if you see the track record of last two to three years, we had been increasing the volume,
23:51 we had been increasing the value-added product in our business. And down the line also,
23:57 whatever new businesses and new expansion what we have declared,
24:01 it is more on the downside on the value addition side.
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