‘Indian pharma’s capability, regulatory compliance help to tap global CDMO space’

Globally, the process of developing a drug is becoming more and more costly and longer than what it used to be. About 10 years ago, people used to say a drug cost $1 billion with a development period of 10 years. The same numbers have actually increased and now it takes $2.7 to $3 billion to develop a drug in about 15 years. 

The research has become more complicated compared to the requirements for clinical products. So, pharma companies have tremendous pressure from the operating business perspective, as it is a capital-intensive industry. They cannot continue to do everything that is required.

Hence, the need for outsourcing continues to grow and their dependency on partners like Suven is ever increasing. Industry will continue to move in that direction.  At the same time, the funding for biotech research has been growing and large pharma do use biotechs as their pipeline. Biotechs do not have the capability to do everything themselves, so they need partners like us. 

India has benefited from the opportunity in the Contract Development and Manufacturing Organisation (CDMO) space and has actually been involved over the last several years in the segment. I see more potential for India to grow from where it is right now.

The progress India has made in terms of building the capabilities and number of scientists work in its favour. Also, India has a much better regulatory record than how it was perceived about 7 and 8 years ago. So, people are more open to outsourcing to India and they don’t question India’s regulatory capabilities or compliance capabilities that what they used to do before.

Last year, the USFDA approved about 50 new products. Out of the 50, 36 or 37 were chemistry related and there were small molecules in this space where India does a lot of work. And India, in my view, will definitely benefit from these things. Every US company has a China-free strategy these days and India is definitely a beneficiary of this approach.

Our investments, in antibody-drug conjugates (ADC) market and oligonucleotides with fast underlying market growth, position us well for sustained mid and long-term growth, though all our business verticals are important for different reasons.

We are very excited with the capabilities we have built in pharmacy CDMO vertical with our plants in India and in the US. The ADC and Oligo give us the opportunity to play in spaces that we were not before and this allows us to really participate in a bigger market space.

We also have a very strong pipeline – about 15 or so Phase 3 products with our partners. We have also invested in people and hired a business development team in North America and Europe and Japan, which have not existed in this company before.

A lot of it is going to come from organic growth and a lot of it is opportunistic as to what we need to invest. Depending on what we need to do we’ll look at the multiples.

I don’t have a figure amount in mind. This this year alone we spent more than ₹200 crores for capex expansion. We are looking to invest more money in our technology expenditure and capabilities in New Jersey as well as in India for ADCs.