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As the large pharma is looking at players like Syngene to bring in prowess to add more fire power to their research engines, the prospects for Contract Research and Manufacturing Services (CRAMS) is rosy. India’s state-of-the-art production facilities and the Union government’s supportive schemes will propel pharma manufacturing. Therefore, overall outlook for CRAMS is robust in terms of growth rates, says Dr Mahesh Bhalgat, Chief Operating Officer, Syngene International in an interview with Nandita Vijay. Excerpts:
How would you describe the current scene of CRAMS in the country?
There is considerable growth momentum because of opportunities in the CRAMS space. We see large pharma moving to divest, in a way that their pipelines need to be funded and regenerated. Two things have been going on in the large pharma space. First is the issue of patent expiry. Second is that their drug pipelines have not been growing with regards to patent expiry. This makes large pharma to look at players like Syngene to bring in the capability to add more horsepower to their research engines and this is where our focus on integrated drug discovery and development comes in. We are aggressively pursuing efforts to offer integrated drug discovery and development services. Given this overall landscape of change, it is evident that this scenario helps large pharma to reduce their capex and have a parallel approach to drug discovery efforts.
What are the visible trends that you see from an India perspective in the CRO business?
There are two factors that are becoming obvious. The first one is the advanced therapy medicinal products. The global drug data base shows over 3,000 gene therapies or gene modified cell therapies in the pipeline. These are anywhere from the preclinical stage or even before companies start the discovery. This database indicates opportunities on the types of modalities that would be sought. The second is the interest in infectious diseases which was not the focus for so long as all the attention was towards communicable diseases or lifestyle disorders. We are witnessing an upswing again to pursue research in infectious diseases along with the evergreen areas like oncology.
What is your outlook about the sector’s performance during the ongoing pandemic?
From a sector outlook perspective, it appears robust in terms of growth rates. The Indian CMO market, which was valued at around US$ 10 billion in 2019, is now expected to be valued anywhere between US$23 and US$ 25 billion in 2025. The reason is that around 1,000 of the 1,600 contract manufacturing facilities in India provide a huge growth opportunity. In addition, the government has been looking at policy changes to support pharma manufacturing.
Raw material access for manufacture is a concern and has this affected contract manufacture?
Our government’s PLI (productivity linked incentive) scheme for APIs (active pharmaceutical ingredients) and the move towards being Atmanirbhar has contributed significantly to overcome the challenges that we faced for raw materials in the recent past. Here PLI will enable capacity expansion of raw materials. For example, at our Mangaluru facility, we are looking at not just producing APIs but also key starting materials (KSMs) to contribute towards Atmanirbhar by leveraging our own manufacturing and scientific capabilities.
What have been the issues impacting CRAMS over the last 18 months of the pandemic phase?
Fortunately, Union government, has recognized that pharma and biotech are essential services. Hence, we have been able to offset issues that other sectors face. Yet our industry has still miles to go to have a quality image. There is need for a workforce with a quality mindset. In clinical trials too, regulations need to evolve. In supply chain, policies on movement of materials have come in. On the regulatory front, India has made rapid changes. Recently we had highlighted the need for a test license to start work early for products, unique to India. In the pandemic environment, regulators have been rightfully focused on clinical data coming from COVID-19 drugs, vaccines, diagnostic tests, among others. Thus, issue of test license as a whole has taken the backseat.
Coming to Syngene, what are the likely capex and talent expansion envisaged?
We are on a five-year capex spending plan, which is on track. For FY22, the company will spend around US$ 100-120 million. We are looking at major expansions to focus on new capabilities, novel technologies and advanced digitization. There will be additional research and manufacturing infrastructure setup.
Our biologics manufacturing capability will be strengthened with a new stand alone or dedicated microbial 500L fermentation plant within the Biocon Park. With the BIRAC grant for viral vector development, we will start work to contribute to the cell and gene therapy and CAR-T areas of treatment modalities. For this we will be adding new bioreactors for viral vector development and manufacturing with a long-term investment because this project is just starting off.
In terms of tech implementation, spanning from artificial intelligence and data analytics, the focus is to ensure becoming totally paperless in some of our operations. Augmented and virtual reality will also be evaluated. We would also include robotic technology to automate some operations
In terms of capacity increase, do you think for this fiscal Syngene’s Hyderabad R&D Centre with 90 new scientists can meet the growing business demand?
Yes, in Hyderabad, we will expand further in terms of laboratory space, and add more staff. The extension of the long-term research collaboration with BMS till 2030 will see a 20 per cent increase to parts of our scientific team. During Phase-3 expansion, we will add another 300 scientists once the lab is commissioned.
How is Syngene strengthening its position as an integrated full-value service provider across drug discovery, development and dedicated research centres?
Complementing discovery, it is the development and manufacturing that is the other end of the continuum. Here there is a huge need with ample growth prospects for the overall CMO industry. The CMO space, has different drivers. One of which is the move about alternatives to sourcing from China. Going by the number of manufacturing facilities that India has, there is an opportunity to leverage this. The second is the need to also manage costs because many molecules going off-patent. The Union government’s PLI scheme for APIs will actually help to start manufacturing more and more drugs in India. Then there is the opening up of the clinical trials through policies and the regulatory landscape.
Would you be able to throw more light on Syngene’s capability in the animal health space?
Animal health is certainly a focus area and would like to become a preferred player for clients in this space. Key orders are coming from offshoots of large global pharma. We have been able to deliver a first-of-its-kind complex multi-drug combination, approved as an orally administered formulation which has been challenging to achieve. We have built dedicated facilities as animal health is of interest to us.
What are the company’s efforts to align with the government to combat Covid-19?
Syngene is contributing to the fight against Covid, through multiple ways. We have a testing facility for our staff and the community which we have used for offering free testing. Protein-based reagent diagnostic kits which are not so easy to develop and manufacture are now available in India by us. We will continue to supply Remdesivir API that is manufactured at our facility. At this point of time, there are no plans for in-house manufacture of this injectable for which we have partners. What we have done is to augment its API manufacture and work with our partners to expand their production. Further we operate with many partners to develop research tools for Covid-19 drugs.
Since you are already engaged for Remdesivir supply would you look at Amphotericin-B for black fungus treatment where Gilead is the innovator for both?
There are already about seven manufacturers of Amphotericin B, for which Gilead is the originator. But all that Gilead now needs is a DCGI approval to allow manufacturers increase their capacity which is being adequately pursued. However, we are not pursuing that opportunity at this point of time.
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