We are working on listing Suven Neurosciences in USA: Venkat Jasti, Suven Life Sciences
Suven Life Sciences is a demerged company. This has drug and discovery and development activity.
Venkat Jasti, Chairman and CEO, Suven Life Sciences, talks about Q2FY21 quarter results and growth forecasts during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: What led to a huge jump in revenue in the September quarter and do you think that this level is sustainable in the future as well?
A: I just want to give a clarification that this Suven Life Sciences is a demerged company. This has drug and discovery and development activity, only. And, revenue generation is only on the services, it is not scalable. Sometimes, now services take six to nine months and whenever it is recognized you will see this kind of growth. Otherwise, you won’t see much revenue. Revenue generation for this activity is only based on the success of the molecules and the clinical trials. So, it is not every quarter and every year. It may or may not happen, if the molecule is not successful there will not be any monetization but if the molecule is successful then yes there is monetization, upfront payment and then milestone payment, royalties and all this and that happens. Right now, we have a compound G3031, which is in the clinical trial in the USA that is for the Narcolepsy, the excessive day time sleepiness. Originally, it is supposed to be ending at the end of the year but because of the COVID, it got delayed. Its analysis will be done in December and the trial will be over by the first quarter of next year. And if the data is good then there will be an opportunity to monetize and the revenue stream will start coming in. The second molecule is 502, which is, which is originally meant for Alzheimer but it did not meet the primary end-point but now we are concentrating on a real sense of Alzheimer disease and that is with FDA now and that will go into the stream in the first quarter of next year for the clinical trials. So, the revenue generation in Suven Life Sciences is there only when the molecule has set certain milestone. Until that time, our revenues are very-very meagre and we don’t see this as sustainable revenues as these are of service revenue, which will drag on to time, i.e. it will take 6 months to 9 months.
Q: The company has filed a loss of Rs 15 crore in the quarter. Your business needs heavy investment and there are reports that promoters stakes sale will happen of Suven Pharma, which will be invested in Suven Life Sciences. How will you raise fund for the company to invest in the company?
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A: There are so many rumours going on since one year but anyway last time when the first-quarter results came, we clearly mentioned that we are looking to strategic investors in the USA because as now we are a drug discovery company people are interested in aligning with us that is one way to look at it. Our asset-based assignment is also positivity in the USA. The third thing is that we are working on the listing of the Suven Neurosciences - the only subsidiary of Suven Life Sciences - in the USA itself. These are various things which we are looking and we have funding still for one more year, as of now. So by the time, we will have an idea what to do and this is what we are concentrating.
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