Jul 04, 2013 03:37 PM IST | Source: CNBC-TV18

Expect $100m revenue via Elores by FY18: Venus Remedies

In an interview to CNBC-TV18, Dheeraj Aggarwal, CFO, Venus Remedies spoke about revenue prospects of Elores, for which the company recently won patent from Japan.

Venus Remedies, which bagged the patent for Elores antibiotic against Superbugs from the Japanese authorities, expects revenue of USD 100 million from this flagship product by FY18, CFO Dheeraj Aggarwal told CNBC-TV18 today.

The product has so far received 46 patents from the developed world. The company has already launched this product in India and plans to launch it in Japan by end of 2015.

Aggarwal expects that 15-20 percent of global sale of Elores would come out of Japan, as the country is the second largest pharmaceutical market after USA.
The company currently has 25 products under its research and development portfolio of which 13 are already commercialized. Thus, the company still has rich pipeline of research products, Aggarwal noted.

He explained that margins for R&D products are much higher than generic products. "We expect around 40-45 percent margin out of all our R&D products," he added.

Below is the verbatim transcript of the interview on CNBC-TV18

Q: Could you provide us with the expected revenues and margins of this Japanese patent that you all have won and the timeline of it?

A: This is a flagship product for us and it has already received 46 patents from across the world, all developed world and now we have won it from Japan. We know that antimicrobial resistance (AMR) is a huge menace and even World Health Organisation (WHO) is also crying about it. So, our intent is to breakthrough antimicrobial resistance through this product. We have already launched this product in India and globally speaking we expect around USD 100 million revenue from this product by around 2017-2018.

Q: But that is globally what you are expecting USD 100 million particularly in Japan. Have you assessed the kind of market opportunity it will present?

A: Japan is a second largest market after United States of America (USA). So, Japan also throws huge volumes out of it. So, we expect around 15-20 percentage of the global sales would come out of Japan.

Q: What margins are you expecting since you have a patent on it?

A: For all our research and development (R&D) products margins are definitely higher as compared to generic products. So, we expect around 40-45 percentage margin out of all our R&D products.

Q: Although you all have been showing a decent top-line growth. Your profits were down last year especially in the Q4, although on a full year basis there was a 13 percent increase. How is FY14 looking to you? I think raw material pressures continue to pressure you?

A: I would say that quarter-on-quarter basis it is very difficult to maintain uniformity on margins, but on annual basis we are able to do that. There are certain fluctuations on quarter-to-quarter basis of more than one reason. One reason is that there is a pressure on prices of generic products. Two, there are many markets especially in exports, which have turned into tender system of procurement. So when you are dependent upon tenders, so sometimes you are able to get good prices and sometimes you are not able to.

Q: So, how would you look at your run rate in FY14, in terms of top-line and bottom-line?

A: As of now we would be able to grow in the corridors of around 15 percentage.

Q: Any new R&D products for which you are likely to file to get a patent?

A: There are many products. We have 25 products under our R&D portfolio and out of that 13 have already commercialised. So, there is a rich pipeline.

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