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 Covid-19 has given an excellent recognition to Indian pharma. In the short-term, the world will continue to focus on the capability of Indian pharma companies in producing Covid-19 vaccines. In fact, India's ‘vaccine diplomacy' is much-followed and admired, especially when seen against ‘vaccine nationalism’ demonstrated by some regions, says Dr. R. Ananthanarayanan, MD & CEO, Strides Pharma Science, in an email interview to Nandita Vijay. Excerpts:
How would you portray the current pharma scene in India and globally during Covid and post pandemic? What are visible trends you sight?
Although India has been widely known as the Pharmacy of the World, it has seldom got its fair share of recognition before the pandemic. Historically, India played a key role in making drugs affordable and accessible. Covid-19 has enabled recognition for Indian pharma.
In the short-term, the world will continue to focus on the capability and output of Indian pharma companies in producing Covid-19 vaccines. In fact, ‘vaccine diplomacy’” has become an admired move by India especially when seen against ‘vaccine nationalism’ demonstrated by some regions. In the longer term, several issues such as the debate on generics in the US and geo-political problems closer home in India may have an impact on business, although it is too soon to comment. Broader issues such as regulatory compliance or even e-commerce have acted as a differentiator and disruptor respectively. Initiatives by the Government such as the Production Linked Incentive (PLI) scheme could also lead to a significant impact on cost, exports and indeed, even the global supply chain.
What could be the positive and negative impacts of the Union Budget 2021 on your financial projects for the next fiscal… customs duty drawback among others?
Due to the pandemic, the industry had high expectations from the Union Budget of 2021. Healthcare did get a big boost with increased outlay of Rs. 223,846 crore, including Rs. 35,400 crore for Covid-19 vaccination programme allocation and Rs. 64,184 crore for a new scheme to reinforce the country’s primary, secondary and tertiary health infrastructure. Such allocations are extremely welcome and laudable. From a pharma business perspective, going forward, we look forward to support on incentives for R&D and lower GST for life-saving drugs as these will greatly help pharmaceutical manufacturers.
How much and what type of technology adoption enabled Strides to sustain its operations during the Covid-19 pandemic?
The pharma industry especially generic player has always been resistant to making changes to the traditional way of operation and digital adoption. This has primarily been due to lack of employee awareness, perception and regulatory constraints. However, the current pandemic has forced us to break these shackles and re-orient ourselves and reimagine business and operations.
When the lockdown started, pharma companies were classified as an essential service and technology enabling remote connectivity and Work From Home to keep manufacturing plants running.
Being a pharmaceutical company, we already had some advantages of sanitization and gowning process in place, but that had to be significantly augmented. We pruned down employee loading at each operation station, primarily packaging, to ensure social distancing. This threw up ideas on new ways of operation like replacing door handles with foot door openers to ensure contactless movement to change rooms, entry to plants and rest rooms.
An internal mobile application was developed to continuously touch base with employees, check well-being, receive feedback and address concerns. It enabled contact tracing among employees to ensure safe work environment. Being a part of regulated industry, compliance and audits are a regular feature. In the new normal, virtual reality/wearables allowed internal audits and training.
Business continuity plans provided additional focus on 3Ps: People, Patients and Purpose. We are using the experiences of the last year in creating a roadmap for ‘Future of Work’. This would involve using digitization, remote working and leveraging technology from a forward-looking perspective. We have put in motion workgroups with cross-functional experts to demystify the future of work. Our three guiding principles are: simplification, continuous learning and resilience. We see a confluence of digital technology and talent maximization to reimagine the new ways of working.
Could you detail on this statement during the Q3 corporate results ‘extremely weak flu season in the US impacts demand for winter portfolio, select products continue to witness price erosion’. Also in Q3, what factors enabled Strides to report an impressive performance in the regulated markets?
Typically, November to March is the flu season in the US characterized by a sharp pick-up in our winter products. This year, lower incidence of the flu was accompanied by higher use of flu vaccines which led to weak demand for the winter portfolio in Q3. Additionally, patient footfalls at hospitals and pharmacies continued to remain below pre-Covid-19 levels leading to subdued demand for a few products and a softer off-take by wholesalers. However, we reported a steady performance, and continue to remain optimistic about our US business based on market share and ramp-up of new launches. In the medium term, the US business will continue to benefit from our focused product selection strategies with relentless supply commitments and customer advocacy.
Our Other Regulated Markets (ORM) business delivered a strong bounce-back in Q3 led by healthy volume traction across UK, EU, Australia and South Africa. Going forward, our order book continues to remain healthy with new launches to gain momentum.
Our core business markets are the US and ORM where portfolio maximization strategy is yielding the desired results. Our US strategy to build front-end and taper partner business is playing out to plan. Front-end business now contributes 86% of our US revenues with superior supply chain execution through compliant manufacturing and continued focus on new products. Through R&D investments we would develop a range across multiple therapeutic segments, leverage portfolio fungibility across ORM to unlock value.
Could you throw more light on the Florida plant? Going by the 86% revenues generated and the ANDA, would Strides slate more investments?
The US retail business is largely serviced by our Indian facilities. Our Singapore facility presently manufactures oral solids for procurements administered by the Department of Veterans Affairs (VA). In FY’20, Strides acquired, the US FDA approved Florida manufacturing facility specialising in soft-gel capsules for which we rank as among the leading global manufacturers. This site augmented our capacity and is an alternate to support our growth plans in retail and the VA business. Currently, the Florida site is undergoing technology transfer. Some filings are on with more in due course as we plan to invest in diverse products.
Coming to Strides vaccine production plan could detail on this facility location, status of line-equipment installation and at what stage are the discussions to partner with related global developers for manufacturing?
The vaccine suite is part of the Stelis Biopharma, Bengaluru. The equipment installation of the vaccine lines is approaching completion and qualification has commenced. This will give high-speed filling lines with an annual capacity of 500 million doses of liquid vaccines or 300 million doses of lyophilized vaccines (10 dose MDV). The suite will cater to vaccine types: viral vector, protein subunit, RNA and DNA. Stelis is presently in advanced discussions with global Covid-19 vaccine developers to offer manufacturing services.
Strides Pharma board of directors approved in-principle the demerger of its biotech business under Stelis Biopharma. The transaction is subject to approval from shareholders, meeting customary closing conditions.
Strides has been recognized for its antiretroviral drugs, but not much is discussed about it, could you tell us the reason?
All that can be said is that Strides, develops and manufactures anti-retroviral and anti-malarial for the institutional business, and for Africa. As one of the leading Indian suppliers of drugs in this segment, we continue to be part of the fight against global pandemics.
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