Taro Pharmaceutical Industries Ltd (TARO) 2021 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Taro Pharmaceutical's second quarter earnings conference call. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to turn the call over to your host today, Mr. William Coote, Assistant Vice President and Treasurer. Please go ahead, sir.

女士們先生們，早上好，歡迎來到太郎藥業第二季度財報電話會議。 （操作員說明）。提醒一下，正在錄製此電話會議。我現在想把電話轉給今天的主持人，助理副總裁兼財務主管 William Coote 先生。請繼續，先生。

Thank you. Good morning, everyone, and welcome to our second quarter 2020-'21 earnings conference call. We hope everyone is healthy and safe during these trying times, and since safety is our top priority, we are conducting a virtual call. Joining me today are Mr. Dilip Shanghvi, Chairman of the Board of Directors; Mr. Uday Baldota, Taro's CEO; and Ms. Daphne Huang, Taro's CFO.

謝謝。大家早上好，歡迎來到我們的 2020-'21 第二季度收益電話會議。我們希望每個人在這些艱難時期都健康安全，並且由於安全是我們的首要任務，因此我們正在進行虛擬通話。今天加入我的是董事會主席 Dilip Shanghvi 先生； Taro CEO Uday Baldota先生；和Taro的首席財務官Daphne Huang女士。

We hope you have received a copy of the earnings press release, which can be found on our website at taro.com. We anticipate that many of you may have questions concerning not only this quarter's and year-to-date financial performance, but also our markets, operations, strategies, and other matters. While we will try to respond to most of your queries, we will not be able to share product-specific and commercially sensitive information, including pipeline detail.

我們希望您已收到一份收益新聞稿，可在我們的網站 taro.com 上找到。我們預計你們中的許多人可能不僅對本季度和年初至今的財務業績有疑問，而且對我們的市場、運營、戰略和其他事項也有疑問。雖然我們會盡力回复您的大部分查詢，但我們無法共享特定產品和商業敏感信息，包括管道詳細信息。

As a reminder, this call is being recorded and a replay and call transcript will be made available on our website. Before we proceed, I must remind you that today's discussion may include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

提醒一下，此通話正在錄音中，重播和通話記錄將在我們的網站上提供。在我們繼續之前，我必須提醒您，今天的討論可能包括 1995 年《私人證券訴訟改革法案》含義內的某些前瞻性陳述。

Although the company believes the expectations reflected in such forward-looking statements to be based on reasonable assumptions, it can give no assurances that its expectations will be attained and should be viewed in conjunction with the risks that our business faces as detailed from time to time in the company's SEC reports. I will now turn the call over to Mr. Dilip Shanghvi.

儘管公司認為此類前瞻性陳述中反映的預期是基於合理的假設，但它不能保證其預期會實現，並且應結合我們的業務所面臨的不時詳述的風險來看待在公司的 SEC 報告中。我現在將電話轉給 Dilip Shanghvi 先生。

Thank you, Bill. Welcome to all of you and thank you for joining us today for Taro's earning call after the announcement of second quarter and 6-month 2020-'21 financial results. I hope that all of you remain safe and healthy.

謝謝你，比爾。歡迎大家，並感謝您今天在 Taro 公佈第二季度和 6 個月的 2020-'21 財務業績後參加我們的財報電話會議。我希望你們所有人都保持安全和健康。

Taro's results are a reflection of these challenging times we are facing. However, as the COVID pandemic continues to impact the globe, Taro remains focused on delivering quality products to patients and communities that depend on them, while continuing to take the necessary precautions to safeguard the health and well-being of our employees.

Taro 的結果反映了我們所面臨的這些充滿挑戰的時代。然而，隨著 COVID 大流行繼續影響全球，Taro 仍然專注於為患者和依賴他們的社區提供優質產品，同時繼續採取必要的預防措施來保護我們員工的健康和福祉。

How the pandemic will evolve and what the long-term impact from COVID-19 will be, not only for Taro's business, but more importantly on people's health around the world, is difficult to measure and anticipate. And as we have said for some time, we believe that the U.S. generic market will continue to be competitive for the foreseeable future.

大流行將如何演變以及 COVID-19 的長期影響將是什麼，不僅對 Taro 的業務，而且更重要的是對全世界人民的健康，都難以衡量和預測。正如我們一段時間以來所說的那樣，我們相信美國仿製藥市場在可預見的未來將繼續具有競爭力。

On the positive side, September marks the 10th anniversary of Sun's majority ownership of Taro. During this time, the company has grown significantly and enjoyed many successes, including more than 70 filings with the FDA and over 65 approvals.

從積極的方面來看，9 月標誌著 Sun 持有 Taro 多數股權 10 週年。在此期間，該公司取得了長足的發展並取得了許多成功，包括向 FDA 提交了 70 多份文件並獲得了 65 多項批准。

In addition, we have returned additional shareholder values in excess of $1.2 billion through a combination of share repurchases, tender offers, and a special dividend. On behalf of the entire Board of Directors, I want to thank all the Taro employees for their continuing dedication and commitment to serving our customers and patients during this unprecedented time. I will now hand over the call to Uday.

此外，我們通過股票回購、收購要約和特別股息的組合，為股東帶來了超過 12 億美元的回報。我謹代表整個董事會，感謝所有 Taro 員工在這個前所未有的時期為我們的客戶和患者提供服務的持續奉獻和承諾。我現在將把電話交給烏代。

Thank you, Mr. Shanghvi. Welcome, everyone, and thank you for joining us today. I hope you and your families are in good health. Apologies to participants on the call for the late start on account of last minute technical difficulty.

謝謝你，Shanghvi 先生。歡迎大家，感謝您今天加入我們。我希望你和你的家人身體健康。由於最後一分鐘的技術困難，向參加電話會議的參與者致歉。

As you are aware, the pandemic and its impact continue to drag on. In our key geographies, we have witnessed a second or even a third wave of infection. Even as we speak, infections don't show a definite trend of decline. On the external front, this pandemic has caused doctor clinics to close, though we have seen an opening in quarter 2.

如您所知，大流行病及其影響仍在繼續。在我們的主要地區，我們目睹了第二波甚至第三波感染。就在我們說話的時候，感染並沒有顯示出明確的下降趨勢。在外部方面，這種流行病導致醫生診所關閉，儘管我們在第二季度看到了開放。

As individuals and families spend more time at home, incidence of ailment has reduced, footfalls into pharmacies have significantly declined. Clinical trials have been delayed, though now we see a recovery.

隨著個人和家庭待在家裡的時間越來越多，疾病的發病率已經降低，藥店的人流量也大大減少。臨床試驗已被推遲，但現在我們看到了復甦。

On the internal front, we have invested to make factories and offices as much COVID-proof as possible. Team Taro has stepped up to this challenge even as we continue to operate in a hybrid format, partly from home and office. Factories and DCs have operated for every single day through this time, a living testament of the commitment of Team Taro.

在內部方面，我們已投資使工廠和辦公室盡可能多地抵禦 COVID。即使我們繼續以混合模式（部分在家和辦公室）運營，但 Taro 團隊已經迎接了這一挑戰。在此期間，工廠和 DC 每天都在運作，這是 Team Taro 承諾的活生生的證明。

Due to the safety measures we put in place and the dedication of our employees to follow these, we have been able to maintain a safe and healthy work environment and avoid any outbreak of COVID-19 related to our facility.

由於我們採取了安全措施並且我們的員工致力於遵守這些措施，我們得以維持安全和健康的工作環境，並避免與我們設施相關的任何 COVID-19 爆發。

While our sales this quarter have improved over the previous quarter, these are still below previous year, principally as a result of reduced U.S. volumes that reflect the impact related to COVID-19. We are holding steady in our market share.

雖然我們本季度的銷售額比上一季度有所改善，但仍低於去年，這主要是由於美國銷量下降，反映出與 COVID-19 相關的影響。我們的市場份額保持穩定。

In the first quarter, the major change we saw was reduced volumes being bought by the patients and pharmacies, both of generics and OTC products, which we believe is related to lockdown, less store traffic or fear of patients leaving their home. The 6 months were also impacted by the customer stocking we experienced in quarter 4 of the previous year, which from a volume standpoint, was unusually high due to the initial response to the pandemic.

在第一季度，我們看到的主要變化是患者和藥店購買的仿製藥和 OTC 產品的數量減少，我們認為這與封鎖、商店客流量減少或擔心患者離開家有關。這 6 個月還受到我們在去年第 4 季度經歷的客戶庫存的影響，從數量的角度來看，由於對大流行病的初步反應，客戶庫存異常高。

In quarter 2, we saw an increase in our overall volumes in the sequential quarter-over-quarter comparison. And while one quarter does not make a trend, it's encouraging. However, volumes have not completely normalized.

在第 2 季度，我們看到整體銷量在環比環比中有所增加。雖然四分之一沒有形成趨勢，但令人鼓舞。但是，交易量尚未完全正常化。

As Mr. Shanghvi said, how the pandemic evolves during the rest of the year will dictate the future volume levels. However, we have some accomplishments and are encouraged by some trends. As I previously indicated, our products continue to rank #1 and #2 by market share in over 70% of our portfolio in the U.S. generic market.

正如 Shanghvi 先生所說，疫情在今年餘下時間的演變將決定未來的銷量水平。然而，我們取得了一些成就，並受到一些趨勢的鼓舞。正如我之前指出的那樣，我們的產品繼續在美國仿製藥市場的 70% 以上的產品組合中按市場份額排名第一和第二。

We experienced an increase in overall volumes in the sequential quarter-over-quarter comparison. We launched Deferiprone, a product with orphan indication that expands our capabilities to include specialty products. We have received a number of approvals in Canada. And our investments in R&D continue to help us add to our portfolio.

在連續的季度環比比較中，我們的總銷量有所增加。我們推出了 Deferiprone，這是一種具有孤兒適應症的產品，將我們的能力擴展到包括特殊產品。我們在加拿大獲得了多項批准。我們在研發方面的投資繼續幫助我們增加我們的產品組合。

We have successfully launched a number of products in recent months. And since the beginning of the year, we have received 7 approvals from the FDA. Currently, we have 18 ANDAs awaiting U.S. FDA approval with 5 tentative approvals.

最近幾個月，我們成功推出了多款產品。自今年年初以來，我們已獲得 FDA 的 7 項批准。目前，我們有 18 個 ANDA 等待美國 FDA 批准，其中 5 個暫定批准。

We continue to look at opportunities to strengthen our portfolio, either through organic growth, through strategic partnerships, or through strategic acquisition. Let me emphasize, we will continue to be disciplined in our evaluation in order to ensure that any opportunity meets both our business as well as financial criteria. With this, I will now hand over the call to Daphne to discuss the financials.

我們繼續尋找機會來加強我們的產品組合，無論是通過有機增長、通過戰略合作夥伴關係還是通過戰略收購。我要強調的是，我們將繼續在評估中遵守紀律，以確保任何機會都符合我們的業務和財務標準。有了這個，我現在將把電話交給達芙妮來討論財務問題。

Thank you, Uday. Hi, everyone, and welcome to the second quarter Taro earnings conference call. Let me discuss some of the key financial highlights, which are in comparison with the comparable prior year period. First, second quarter highlights, then followed by the 6-month comparison.

謝謝你，烏代。大家好，歡迎來到 Taro 第二季度財報電話會議。讓我討論一些與去年同期相比的主要財務亮點。首先是第二季度的亮點，然後是 6 個月的比較。

For the second quarter ended September 30, 2020, our net sales were $143 million, a decrease $18 million. However, on the sequential quarter-over-quarter comparison, our net sales increased 21% over first quarter.

截至 2020 年 9 月 30 日的第二季度，我們的淨銷售額為 1.43 億美元，減少了 1800 萬美元。然而，在連續的季度環比比較中，我們的淨銷售額比第一季度增長了 21%。

Our gross profit was $82 million, decreased $20 million, and as a percentage of net sales was 57% compared to 63% in the prior year quarter, but improved from sequentially 55% in Q1. Our R&D and expense was $17 million, increased about $1 million as we remain committed to our R&D investment. R&D expenses are not evenly distributed across quarters in our case and primarily vary due to the timing of R&D activities, including clinical studies and certain other expenses.

我們的毛利潤為 8200 萬美元，減少了 2000 萬美元，占淨銷售額的百分比為 57%，而去年同期為 63%，但比第一季度的 55% 有所改善。我們的研發和費用為 1700 萬美元，由於我們繼續致力於研發投資，增加了約 100 萬美元。在我們的案例中，研發費用在各個季度之間的分配並不均勻，主要是由於研發活動的時間安排而有所不同，包括臨床研究和某些其他費用。

Our SG&A expenses was $24 million and that was in line pretty much with the prior year quarter. As a result of the above, EBITDA was $47 million with EBITDA margin of 33% compared to 42% in the prior year quarter. When compared to first quarter, excluding the impact of the first quarter settlement and loss contingency charges, EBITDA increased from 30% pro forma in the first quarter to 33%.

我們的 SG&A 費用為 2400 萬美元，與去年同期基本持平。由於上述原因，EBITDA 為 4700 萬美元，EBITDA 利潤率為 33%，而去年同期為 42%。與第一季度相比，扣除第一季度結算和損失或有費用的影響，EBITDA 從第一季度的 30% 備考增至 33%。

Based on the above, operating income of $41 million decreased $22 million and, as a percentage of net sales, was 29% compared to 39% in the prior year quarter. On a sequential quarter-over-quarter comparison however, excluding the impact of the Q1 settlements and loss contingency charges, operating income increased $11 million and, as a percentage of net sales, increased from 25%.

基於上述情況，4100 萬美元的營業收入減少了 2200 萬美元，占淨銷售額的百分比為 29%，而去年同期為 39%。然而，在連續的季度環比比較中，排除第一季度結算和損失或有費用的影響，營業收入增加了 1100 萬美元，占淨銷售額的百分比從 25% 增加。

Interest and other financial income decreased $3 million to $6 million as a result of the low global interest rate environment. Income tax expense of $4 million decreased $13 million, resulting in an effective tax rate of 7% compared to 23% in the same period last year.

由於全球低利率環境，利息和其他金融收入減少了 300 萬美元至 600 萬美元。 400 萬美元的所得稅費用減少了 1300 萬美元，導致有效稅率為 7%，而去年同期為 23%。

Net income attributable to Taro was $45 million as compared to $56 million as the decrease in operating income and interest revenue were partially offset by the decrease in tax expense, resulting in diluted earnings per share of $1.18 compared to $1.46 for the second quarter last year.

歸屬於 Taro 的淨收入為 4500 萬美元，而去年第二季度為 5600 萬美元，原因是營業收入和利息收入的減少部分被稅收支出的減少所抵消，導致每股攤薄收益為 1.18 美元，而去年第二季度為 1.46 美元。

Now let me turn to discuss the 6-month performance in comparison to last year. Net sales was $261 million, decreased $62 million. As Uday indicated, the customer stocking we experienced in fourth quarter of FY '19-'20 came at the expense of the FY '20-'21 of first quarter. In the second quarter, as previously stated, we realized a 21% bounce back in net sales over first quarter.

現在讓我轉而討論與去年相比的 6 個月表現。淨銷售額為 2.61 億美元，減少 6200 萬美元。正如 Uday 所指出的，我們在 19-20 財年第四季度經歷的客戶備貨是以第一季度 20-21 財年為代價的。如前所述，我們在第二季度的淨銷售額比第一季度反彈了 21%。

Gross profit was $147 million, decreased $57 million and as a percentage of net sales, was 56% compared to 63%. R&D expenses of $30 million slightly increased. SG&A of $46 million, increased $3 million, principally due to higher legal and professional fees as well as higher freight rates and some COVID-related costs. Excluding the impact from the first quarter settlement and loss contingency charges, EBITDA was $82 million, with an EBITDA margin of 32%.

毛利潤為 1.47 億美元，減少了 5700 萬美元，占淨銷售額的百分比為 56%，而後者為 63%。研發費用3000萬美元略有增加。 SG&A 為 4600 萬美元，增加了 300 萬美元，這主要是由於更高的法律和專業費用以及更高的運費和一些與 COVID 相關的成本。排除第一季度結算和損失或有費用的影響，EBITDA 為 8200 萬美元，EBITDA 利潤率為 32%。

Operating loss of $408 million compared to operating income of $131 million in the prior year. However, excluding the settlement and loss contingency charges, operating income pro forma was $71 million and as a percent of net sales was 27% compared to 41%.

營業虧損為 4.08 億美元，而上一年的營業收入為 1.31 億美元。然而，不包括結算和損失或有費用，預計營業收入為 7100 萬美元，占淨銷售額的百分比為 27%，而 41% 為 27%。

Interest and other financial income was $13 million, decreased $6 million from the same time prior year, that primarily was the result of the lower global interest rate environment. FX income of $1 million was $7 million less compared to the same period last year.

利息和其他財務收入為 1300 萬美元，比上年同期減少 600 萬美元，這主要是由於全球利率環境較低。 100萬美元的外匯收入比去年同期減少了700萬美元。

Our income tax expense for the first half decreased $24 million to $12 million. Excluding the impact from the settlement and loss contingency charges, the effective tax rate was 14% compared to 23%. Net loss income attributable to Taro was $390 million of loss compared to $122 million of income in the prior period, resulting in diluted loss per share of $10.19 compared to $3.17 of EPS of the prior year same period.

我們上半年的所得稅費用減少了 2400 萬美元至 1200 萬美元。排除結算和損失或有費用的影響，實際稅率為 14%，而實際稅率為 23%。歸屬於 Taro 的淨虧損收入為虧損 3.9 億美元，而上一期間的收入為 1.22 億美元，導致每股攤薄虧損 10.19 美元，而去年同期的每股收益為 3.17 美元。

Excluding the impacts from the settlement and loss contingency charges, our net income for the first half of fiscal year was $74 million, resulting in diluted earnings per share pro forma of $1.94.

排除結算和損失或有費用的影響，我們本財年上半年的淨收入為 7400 萬美元，預計攤薄後每股收益為 1.94 美元。

Now turning to our cash flow and balance sheet. Our cash flow and balance sheet remain strong. Cash and cash equivalents, including short-term and long-term marketable securities decreased $50 million to $1.5 billion from March 31, 2020. That cash reduction was primarily due to the partial payment to the DOJ settlement. There is a payment plan in place, and we're paying according to the plan.

現在轉向我們的現金流量和資產負債表。我們的現金流和資產負債表依然強勁。自 2020 年 3 月 31 日起，包括短期和長期有價證券在內的現金和現金等價物減少 5000 萬美元至 15 億美元。現金減少的主要原因是部分支付了 DOJ 和解協議。有一個付款計劃，我們正在根據計劃付款。

Our investment policy of our marketable securities remains very conservative, and our marketable securities are of high quality with little to no exposure to distress industries or securities and continue to outperform the benchmark.

我們的有價證券投資政策仍然非常保守，我們的有價證券質量很高，幾乎沒有或沒有接觸過困境行業或證券，並繼續跑贏基準。

Cash flow from operations for the 6 months ended September 30, 2020, was negative $48 million. However, excluding the impact from the settlement and loss contingency, cash flow provided by operations pro forma was $55 million compared to $123 million for the 6 months ended September 30, 2019. I will now hand the floor back to Uday.

截至 2020 年 9 月 30 日止 6 個月的運營現金流為負 4800 萬美元。然而，排除結算和損失或有費用的影響，備考運營提供的現金流量為 5500 萬美元，而截至 2019 年 9 月 30 日的 6 個月為 1.23 億美元。我現在將發言權交還給 Uday。

Thanks, Daphne. As we announced in July, Taro Pharmaceuticals USA has resolved all cases involving the company in connection with the multiyear investigation by the Department of Justice Antitrust Division and Civil Division into the U.S. generic pharmaceutical industry.

謝謝，達芙妮。正如我們在 7 月宣布的那樣，Taro Pharmaceuticals USA 已經解決了涉及該公司的所有案件，這些案件與司法部反壟斷司和民事司對美國仿製藥行業的多年調查有關。

At the same time, the company agreed with the civil division of DOJ to settle all claims related to alleged federal program losses associated with anti-competitive conduct related to the generic drugs that were subject of the DPA and were purchased or subsidized by these programs. The company is in the process of finalizing the agreement with the DOJ civil, but the material terms including the settlement amount and the releases are settled.

同時，該公司同意 DOJ 民事部門解決所有與涉嫌聯邦計劃損失相關的索賠，這些損失與反競爭行為有關，這些行為與受 DPA 約束並由這些計劃購買或補貼的仿製藥有關。公司正在與 DOJ 民事部門敲定協議，但包括和解金額和免責聲明在內的重要條款已經確定。

Concerning the remaining state antitrust investigations and multi-district civil litigation, we continue to work with our counsel to defend these claims. Furthermore, we remain committed to strong corporate governance and fostering an ongoing culture of compliance.

關於剩餘的州反壟斷調查和多地區民事訴訟，我們繼續與我們的律師合作，為這些索賠辯護。此外，我們仍然致力於加強公司治理並培養持續的合規文化。

Finally, I want to say thank you to the 1,500 Taro employees for their contributions throughout this pandemic, demonstrating their commitment and dedication every day to keep our products flowing to customers and ultimately the patients who depend on our medicine. With this, I would like to open the floor up for your questions. Thank you.

最後，我要感謝 1,500 名 Taro 員工在整個大流行期間所做的貢獻，他們每天都表現出承諾和奉獻精神，讓我們的產品流向客戶，並最終流向依賴我們藥物的患者。有了這個，我想打開你的問題。謝謝。

(Operator Instructions). Your first question comes from the line of Ram Selvaraju with H.C. [Wainwright].

（操作員說明）。你的第一個問題來自 Ram Selvaraju 和 H.C. [溫賴特]。

(Technical difficulty) whether or not you intend to continue to avoid the branded space in the U.S.?

（技術難度）你是否打算繼續避開美國的品牌空間？

Hello, could you repeat the question, please?

你好，你能再重複一下這個問題嗎？

Curious if you intend to continue to avoid the branded space in the U.S.?

想知道您是否打算繼續避開美國的品牌空間？

I think what we've said in the past is that we continue to look for opportunities, which will sort of help us participate in the branded space. So our evaluation continues. We haven't yet necessarily committed ourselves to doing anything. I think our work is on on this front.

我認為我們過去所說的是我們繼續尋找機會，這將在某種程度上幫助我們參與品牌空間。所以我們的評估還在繼續。我們還沒有必要承諾做任何事情。我認為我們的工作就是在這方面。

(Operator Instructions). And we do have a question from the line of Girish Bakhru with Bank of America.

（操作員說明）。我們確實有來自美國銀行的 Girish Bakhru 的問題。

The current status of the clinics, how many percentage, let's say, recovery have we seen in the quarter? And if you have simultaneously a number of patient visits, particularly in the derm side?

診所的現狀，比方說，我們在本季度看到了多少百分比的恢復？如果您同時有許多患者就診，尤其是在真皮方面？

Sorry, Girish. We could only hear part of the question. Can you repeat?

對不起，吉里什。我們只能聽到部分問題。你可以重複嗎？

So my question was, one, you said that there was some recovery you saw in quarter 2 in terms of clinics have started to open up, and I do take note of the second wave and third wave that you mentioned in certain geographies. But is there a trend that is indicating that there can be more opening up? And is patient -- inpatient visits are increasing?

所以我的問題是，第一，你說你在第二季度看到了一些復甦，因為診所已經開始開放，我確實注意到你在某些地區提到的第二波和第三波。但是否有趨勢表明可以進一步開放？病人——住院病人的就診量在增加嗎？

I think we see that the trend is positive. But as I also said that with the numbers, what they are, it is a bit of an uncertainty as we go forward.

我認為我們看到趨勢是積極的。但正如我也說過的那樣，隨著數字的發展，它們是什麼，這有點不確定。

And second question was on this acquisition that you had announced, if you could detail some color on that? What does that company have?

第二個問題是關於你宣布的這次收購，你是否可以詳細說明一些顏色？那家公司有什麼？

You mean Aquinox?

你是說 Aquinox？

Yes.

是的。

Yes. So Aquinox is sort of a development stage company, products at a very early stage. So what we've done is we've acquired the company, and we would sort of take those products further, develop those further. That's the intent.

是的。所以 Aquinox 是一家處於發展階段的公司，產品處於非常早期的階段。所以我們所做的就是收購了這家公司，我們將進一步開發這些產品，進一步開發這些產品。這就是意圖。

And these products are in which therapy area, if you could indicate?

如果您能說明一下，這些產品屬於哪個治療領域？

In cancer.

在癌症中。

(Operator Instructions). We do have a question from the line of Shyam Srinivasan with Goldman Sachs.

（操作員說明）。我們確實有來自高盛的 Shyam Srinivasan 的問題。

My first question is on the R&D. Just looking at slightly longer term, we've been spending about between $60 million to $70 million every year. Just trying to see in terms of the pipeline, what we have kind of built towards.

我的第一個問題是關於研發的。從長遠來看，我們每年的支出約為 6000 萬至 7000 萬美元。只是想從管道的角度來看，我們的目標是什麼。

And given the kind of price erosion we are seeing in the dermatology space, are there newer therapy areas that you would like to highlight where incremental R&D is going towards, which will kind of diversify this high dependence on dermatology topical products? If you could share some qualitative aspects around this.

考慮到我們在皮膚病學領域看到的那種價格下跌，您是否想強調增量研發正在走向的更新的治療領域，這將在某種程度上分散對皮膚病學局部產品的高度依賴？如果您可以圍繞此分享一些定性的方面。

So I think, Shyam, we continue to look for products where, I would say, we have capabilities, products which we believe have a good potential in the marketplace. So that's, I would say, an ongoing effort. And that's what we use to develop our portfolio.

所以我認為，Shyam，我們繼續尋找我們有能力的產品，我們認為這些產品在市場上具有良好的潛力。所以，我想說，這是一項持續的努力。這就是我們用來開發我們的產品組合的東西。

At the moment, I wouldn't want to sort of give any leading indicator as to which other areas are we looking at. But that, I would say, is an active work that we continue to do.

目前，我不想給出任何關於我們正在關注哪些其他領域的領先指標。但我要說的是，這是一項我們將繼續做的積極工作。

My second question is on the -- some of the comments in the press release around the competitive intensity in the dermatology space as well as the weakness in the underlying demand. But Taro, as you said, has maintained market share. So how are we enabling this -- maintaining our market share? If you could also highlight some of the competitive activities that you have seen in the derm [pocket as stated].

我的第二個問題是——新聞稿中關於皮膚科領域競爭激烈以及潛在需求疲軟的一些評論。但是正如您所說，太郎一直保持著市場份額。那麼我們如何實現這一點——保持我們的市場份額？如果您還可以突出顯示您在 derm [如所述的口袋] 中看到的一些競爭活動。

So I think as I mentioned in my readout that ensuring that we continue to have good product supply and we continue to serve our customers in the best possible way, I think that is what has helped us keep our market share where it has been. In fact, in some cases, probably increase it as well. So even while we see the overall market demand falling or compressing with good supply chain, I think we have been able to keep our shares.

因此，我認為正如我在讀出中提到的那樣，確保我們繼續擁有良好的產品供應，並繼續以最好的方式為我們的客戶提供服務，我認為這有助於我們保持市場份額。事實上，在某些情況下，可能也會增加它。因此，即使我們看到整體市場需求因良好的供應鏈而下降或壓縮，我認為我們仍然能夠保住我們的份額。

Uday, last question. I know the volumes have been declining this year. But if you could help us disaggregate the price versus any volume trends that you could disaggregate for us? And we have seen signs of the oral space, actually seeing a lot of stability in terms of price erosion this year. Have you seen something similar on your portfolio as well?

烏代，最後一個問題。我知道今年的銷量一直在下降。但是，如果你能幫助我們分解價格與你能為我們分解的任何數量趨勢？我們已經看到了口服空間的跡象，實際上今年在價格侵蝕方面看到了很多穩定性。你在你的投資組合中也看到過類似的東西嗎？

I think similar to what we've said in the past and no different, the price erosion that the company sees is typically dependent on the product portfolio that the company has. And at least in our experience, the price declines that we've seen in the past and probably even in these 6 months, I think it gives us a sense that the price declines are here to stay. We haven't seen any major trend reversal.

我認為與我們過去所說的相似並且沒有什麼不同，公司看到的價格下跌通常取決於公司擁有的產品組合。至少根據我們的經驗，我們在過去甚至可能在這 6 個月內看到的價格下跌，我認為這讓我們感覺到價格下跌將持續下去。我們還沒有看到任何重大趨勢逆轉。

(Operator Instructions). At this time, there are currently no questions in queue. Mr. Coote, are there any closing remarks before we end the call?

（操作員說明）。目前，隊列中沒有問題。 Coote 先生，在我們結束電話會議之前有沒有結束語？

No. Thank you, operator.

不，謝謝接線員。

Ladies and gentlemen, thank you for participating. This concludes today's second quarter earnings call. You may now disconnect.

女士們，先生們，感謝你們的參與。今天的第二季度財報電話會議到此結束。您現在可以斷開連接。