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Time of India
24-05-2025
- Business
- Time of India
China's India Headache: The growing pharmaceutical industry
When the world sneezes from a US-China chill, Indian companies rush to make medicines. Literally. Sometime in April, Vivek Sharma, executive chairman of Suven Pharmaceuticals , was on a trans-continental call with the top officials of a tech-driven global pharmaceutical ingredients company, for a potential deal. It could possibly be a future asset for the Hyderabad-based firm that is evaluating high-end, specialised platforms in a bid to bulk up its technological prowess and grab manufacturing mandates from pharma and biotech giants in the West. Before that, in December, Suven acquired a controlling stake in NJ Bio Inc, a contract research organisation based in Princeton, US, that focuses on antibody-drug conjugates, a targeted therapy for cancer. The $65 million acquisition has positioned Suven as a key player in the market of contract development and manufacturing organisations or CDMOs. These are third-party companies that provide a range of services to global pharma—from early-stage re - search to regulatory submissions to the manufacturing of the latest drugs. Suven is one among a host of Indian CDMOs like Aurigene, Sai Life Sciences, and Syngene International , which are prepping for the next phase of growth and expansion through strategic mergers and acquisitions abroad amid a rising call from global pharma companies to nearshore projects in US and Europe. 'We remain focused on building a technology-led global CDMO platform. Our acquisition strategy is around assets that bring in cutting-edge technology and strong scientific talent,' says Sharma. Meanwhile, Biocon company Syngene International has just completed its acquisition of Emergent BioSolutions , a biologics-manufacturing facility in Baltimore, US. Biologics are medications that come from living organisms, like proteins and genes. The $36.5 million deal gives Syngene 'a strategic foothold in the US by bringing it closer to the wider customer market,' says Peter Bains, MD and CEO, Syngene International. Several Indian CDMOs, which have been helping drive the innovation engines of large pharmaceutical companies in the West, are scouting for suitable assets in the US and Europe to fast-track their capacity building. 'The business development guys of almost every CDMO in India are out there on the US East Coast and some parts of the West Coast, evaluating possible acquisition targets,' says a top industry official. While the Indian facilities of these companies have been helping global drug makers for years, they are now exploring strategic acquisitions in specialised, high-growth therapeutic areas such as biologics, cell and gene therapy and oncology. 'What we are looking for are enhanced capabilities—particularly in research and complex chemistry. The idea is to establish highly specialised labs where our scientists co-create solutions alongside innovator partners,' says Sharma. However, 'India will remain our hub for commercial-scale manufacturing, where we continue to enjoy a global cost advantage.' NEARSHORING & GLOBAL PHARMA Nearshoring and reshoring are gaining momentum among global pharma majors that are looking to mitigate risks posed by supply chain disruption and rising offshore cost. According to a report by consulting firm LoEstro, pharma companies in the West are investing in local and regional facilities to reduce supply chain risks, ensure regulatory compliance and enhance production resilience amid global disruptions. Siva Chittor, CFO of Sai Life Sciences, says, 'We are seeing a growing customer preference for nearshoring.' Sai has been an early mover in this space, establishing R&D labs in US and UK about five years ago. 'These labs allow us to be closer to our customers,' he adds. A key driver is the increasing trend of global customers looking to re-balance their supply chains from China. Multinational pharma companies in US and Europe want to diversify their manufacturing bases in a bid to reduce their over-reliance on China amid geopolitical uncertainties and a growing divide between Washington and Beijing. However, such is the dependence on China, that US's proposed BioSecure Act , which seeks to restrict American companies from doing business with Chinese drugmakers, has been put on the backburner. If US puts hurdles for Chinese pharma companies, it will create huge opportunities for India. Indian CDMOs, which have a significant presence in small-molecule manufacturing, are now stepping up into biologics, which are large complex molecules, and advanced therapeutic modalities that can help them snatch a large slice of the pie from Chinese manufacturers. 'The Indian CDMO sector is well poised for growth to capitalise on the changing global dynamics,' says Akhil Ravi, CEO of Bengaluru-headquartered Aurigene Pharmaceutical Services. 'Factors such as robust infrastructure, regulatory compliance and highly skilled talent pool have strengthened India's position to become a preferred strategic partner for global companies in drug development. We remain committed to expanding our capabilities and capacity to meet rising demand in small-molecule APIs (active pharma - ceutical ingredients), peptides and bio - logics,' says Ravi. Peptides are smaller forms of proteins. Says Bains of Syngene: 'India is entering a critical phase in the evolution of its CDMO industry. A CAGR of 15% in 2019- 24, double the global growth rate of 7-8%, indicates that there are strong tailwinds for India.' At Syngene, the conversations with its customers are around its end-to-end ability to strategically support them in R&D and manufacturing and its long-term sup - ply chain resilience. 'We are seeing in - creased visits by both large and mid-sized pharma companies, which are running comparative pilots with a few organisa - tions as a way of selecting longer-term partners. We have been successful in con - verting a majority of these pilots into fulltime contracts,' says Bains. Deepak Jain, MD and CEO of Jubilant Ingrevia, which has partnered with glob - al drug firms for manufacturing drug intermediates, expects 6-7x growth in pharma contracts over the next few years. 'This is a golden opportunity for India. If not India, who else?' he asks. Inorganic expansion, through acquisi - tions abroad, enables Indian companies to stave off the threat of tariffs and geo - political impact and access highly skilled manpower, says Sujay Shetty, global health industries advisory leader, PwC. 'Also, from the IP perspective, it makes more sense if they are on the ground there since they will be running highly confidential projects for clients that could be multinational innovator companies or biotech companies,' he adds. Piramal Pharma, which recently announced a capex of $90 million for the expansion of two of its US facilities in Kentucky and Michigan, will focus on organic, brownfield expansion in the drug development and manufacturing service business, says chairperson Nandini Piramal. The company has four manufacturing facilities in North America and two in the UK. 'We are one of the best-positioned CDMOs to benefit from pharma companies wanting to onshore manufacturing in US,' says Piramal. The overseas facilities of Indian companies will be mostly in advanced therapeutic segments. Says Annaswamy Vaidheesh, former MD of GSK Pharma India: 'Their strategic priorities are in - creasingly aligned with high-value segments such as biologics and advanced technology platforms that require differentiated capabilities and offer greater margin potential.' Biologics require specialised facilities and expertise that drive up production cost but can generate higher profit margin. However, Vaidheesh warns that establishing a fully onshore, end-to-end sup - ply chain for US clients through Indian partners will take time, as it involves scaling capabilities and aligning regulatory and operational processes. 'Innovators typically assess whether a CDMO has the bandwidth to take on new programmes. Without demonstrable ca - pacity, even strong technical competen - cies may not suffice,' says Vaidheesh. Key Indian companies have been in - vesting heavily to enhance capacity. Aurigene has made significant additions to its infrastructure and established a new biologics facility at Genome Valley, Hyderabad. Chinese companies have been the preferred CDMO partner for US companies —grabbing 80% market share—because they are good in speed and low in cost. India is well-positioned to play a greater role in global supply chains, but the pace and quality of transition will depend on several factors. Speed of execution has been a major pain point for Indian CDMOs, which have to go through multiple levels of domestic regulatory approvals that delay consignments to customers by three-four months. 'Speed and agility are key expectations from global innovators. Chinese CDMOs have set high benchmarks in terms of responsiveness. Indian players need to invest in systems and capabilities that allow them to meet these expectations competitively,' says Vaidheesh. RISING PE INTEREST Rising growth opportunities and the China+1 plan of MNCs have led to sustained investor interest in the Indian CDMO space. Over $900 million has come from private investments and nearly $750 million has been raised through IPOs over the past 15 months, according to Grant Thornton. 'This reflects the segment's growing strategic relevance, driven by global demand for outsourced development and manufacturing and India's established expertise in generics, APIs and complex formulations,' says Bhanu Prakash Kalmath SJ, partner and healthcare industry leader. Another significant development has been US President Donald Trump's executive order that directed drug companies to reduce the prices of medicines in 30 days. While that could still see negotiations, some experts suggest the direct result will be companies' looking at partners in India to cut their costs of research and production. This seems like a shot in the arm for Indian CDMOs. Can they now make a dent in the time-tested Chinese pharma supply chain? The results are awaited .
Economic Times
19-05-2025
- Business
- Economic Times
Mutual funds bet big on healthcare stocks after Trump's tariff pause. Is the danger really over?
Live Events Mutual funds with highest exposure in health stocks Returns snapshot Outlook (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Donald Trump 's 90-day pause on reciprocal tariffs announced on April 9, 2025, brought much-needed stability to stock markets and lifted sentiment in the pharma and healthcare sectors, which had been clouded by pharmaceutical sector found itself in a unique position, having received exemptions in the initial tariff announcements which kicked-in on April 2, though no clarity on what lay ahead. Between April 2 and April 9, the Nifty Healthcare index had declined by over 3%, or nearly 1,300 the Nifty Healthcare index staged a strong rebound following the pause, rising 7% or around 2,650 points over the remaining 12 trading sessions of the month. This recovery was accompanied by notable institutional activity, with mutual funds increasing their holdings in 11 healthcare stocks in April compared to was also among the sectors where MF ownership was higher by over 1% versus the sector's weight in the BSE 200 to a Motilal Oswal report, 17 funds were over-owned and MFs weight on the sector stood at 7.6% in April, behind private banks (18.9%), technology (8.3%) and automobiles (8%). Meanwhile, the healthcare sector in BSE 200 stands at 5.4%, the report MoM buying of 11.43% in April was seen in midcap stock Syngene International . It was followed by Glenmark Pharmaceuticals Dr. Reddy's Laboratories and Laurus Labs where mutual funds added stake by 7.63%, 6.05% and 3.85%, like Lupin, Aurobindo Pharma, Divi's Laboratories, Sun Pharmaceutical Industries, Abbott India, Ipca Laboratories and Biocon also saw mutual fund action towards the buying healthcare stocks also went under the hammer and saw a sell-off. These were Zydus Lifesciences Torrent Pharmaceuticals , Max Healthcare Institute, Mankind Pharma, Granules India, Fortis Healthcare, Cipla, Apollo Hospitals Enterprise and Alkem selling was highest in Torrent Pharma and Zydus Lifesciences at 8.34% and 4.87%, respectively. The next in the pecking order were Granules, Apollo and Mankind where MFs sold 3.89%, 3.64% and 3.61%. The others saw a sell-off between 1.67% and 0.46%.Sumit Bhatnagar, Fund Manager Equity at LIC Mutual Fund said that the healthcare sector often remains resilient due to the essential nature of its services and products and innovations and an aging population continue to drive demand. However, the potential impact of Trump's tariffs on the healthcare sector is a valid concern in his view and tariffs could increase costs for healthcare companies which could affect their profitability. "These increased costs might be passed on to consumers or could lead to reduced margins for healthcare companies," he told and Quant top the list with holdings of 11.5% and 11.1%, respectively and are followed by Axis MF (10.4%), Mirae (9.7%), HDFC MF (9.1%) and Sundaram MF (8.4%).The lowest holdings are for SBI MF (5.1%), MOFSL (5.5%) and UTI MF (6.1%).Nifty Healthcare index's 1-year returns stand at 17%, outperforming Nifty which has returned 12% in the same continued to show trust on Syngene in April despite a 6% drop in share price over a 1-year period. Meanwhile, mutual funds sold shares in laggards Zydus Lifesciences and Alkem which have fallen 14% and 2% in the past 12 remains the best performer in the pack with 60% returns and MFs added stakes in April (1.13%) and March (2%). Glenmark and Laurus, which also saw significant MF action, have returned robust 44% and 36% Abbott, Sun Pharma and Biocon have also given double-digit returns in the same period while IPCA, Aurobindo and Dr. Reddy's have delivered single-digit funds booked partial profits in stocks like Fortis Health, Max Health, Granules, Mankind and Torrent Pharma whose 1-year returns stand in the range of 21% and 56%. Apollo Hospitals has yielded 18% returns while Cipla has been an underperformer with just 6% sector is again in the eye of the storm as Trump has signed an executive order to bring the prices for prescription (Rx) drugs in line with other developed nations. The order institutes the Most-Favoured-Nation (MFN) price model for drugs as a ceiling which means the US will pay for drugs at the same levels as the lowest paid by other countries."The policy initiatives, if implemented fully, may lead to increased compliance/operational cost for foreign manufacturers, including those in India. We expect generic pharma to continue to underperform due to uncertainty," Nuvama Institutional Equities said in a note. It prefers Ajanta Pharma, Torrent Pharma and Divi's Securities sees the generic companies unlikely having any impact, though it expects Sun Pharma with its specialty business in the US, to see some impact of MFN price ceiling for a few of its products. JM Financial sees over 20% growth visibility for hospitals and CDMO for the next 4-5 years. Amongst the hospitals, it likes Max Healthcare, Aster DM and Fortis while Piramal Pharma and One Source in UBS expects healthcare to outperform Nifty over the next 12-month period as the Zurich-based brokerage reiterated its positive stance on Nifty, seeing an 8% upside with a target of 26,000. In a note of caution on generic pharma export names, it expects earnings downgrades starting in 2HFY26.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
19-05-2025
- Business
- Time of India
Mutual funds bet big on healthcare stocks after Trump's tariff pause. Is the danger really over?
Live Events Mutual funds with highest exposure in health stocks Returns snapshot Outlook (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Donald Trump 's 90-day pause on reciprocal tariffs announced on April 9, 2025, brought much-needed stability to stock markets and lifted sentiment in the pharma and healthcare sectors, which had been clouded by pharmaceutical sector found itself in a unique position, having received exemptions in the initial tariff announcements which kicked-in on April 2, though no clarity on what lay ahead. Between April 2 and April 9, the Nifty Healthcare index had declined by over 3%, or nearly 1,300 the Nifty Healthcare index staged a strong rebound following the pause, rising 7% or around 2,650 points over the remaining 12 trading sessions of the month. This recovery was accompanied by notable institutional activity, with mutual funds increasing their holdings in 11 healthcare stocks in April compared to was also among the sectors where MF ownership was higher by over 1% versus the sector's weight in the BSE 200 to a Motilal Oswal report, 17 funds were over-owned and MFs weight on the sector stood at 7.6% in April, behind private banks (18.9%), technology (8.3%) and automobiles (8%). Meanwhile, the healthcare sector in BSE 200 stands at 5.4%, the report MoM buying of 11.43% in April was seen in midcap stock Syngene International . It was followed by Glenmark Pharmaceuticals Dr. Reddy's Laboratories and Laurus Labs where mutual funds added stake by 7.63%, 6.05% and 3.85%, like Lupin, Aurobindo Pharma, Divi's Laboratories, Sun Pharmaceutical Industries, Abbott India, Ipca Laboratories and Biocon also saw mutual fund action towards the buying healthcare stocks also went under the hammer and saw a sell-off. These were Zydus Lifesciences Torrent Pharmaceuticals , Max Healthcare Institute, Mankind Pharma, Granules India, Fortis Healthcare, Cipla, Apollo Hospitals Enterprise and Alkem selling was highest in Torrent Pharma and Zydus Lifesciences at 8.34% and 4.87%, respectively. The next in the pecking order were Granules, Apollo and Mankind where MFs sold 3.89%, 3.64% and 3.61%. The others saw a sell-off between 1.67% and 0.46%.Sumit Bhatnagar, Fund Manager Equity at LIC Mutual Fund said that the healthcare sector often remains resilient due to the essential nature of its services and products and innovations and an aging population continue to drive demand. However, the potential impact of Trump's tariffs on the healthcare sector is a valid concern in his view and tariffs could increase costs for healthcare companies which could affect their profitability. "These increased costs might be passed on to consumers or could lead to reduced margins for healthcare companies," he told and Quant top the list with holdings of 11.5% and 11.1%, respectively and are followed by Axis MF (10.4%), Mirae (9.7%), HDFC MF (9.1%) and Sundaram MF (8.4%).The lowest holdings are for SBI MF (5.1%), MOFSL (5.5%) and UTI MF (6.1%).Nifty Healthcare index's 1-year returns stand at 17%, outperforming Nifty which has returned 12% in the same continued to show trust on Syngene in April despite a 6% drop in share price over a 1-year period. Meanwhile, mutual funds sold shares in laggards Zydus Lifesciences and Alkem which have fallen 14% and 2% in the past 12 remains the best performer in the pack with 60% returns and MFs added stakes in April (1.13%) and March (2%). Glenmark and Laurus, which also saw significant MF action, have returned robust 44% and 36% Abbott, Sun Pharma and Biocon have also given double-digit returns in the same period while IPCA, Aurobindo and Dr. Reddy's have delivered single-digit funds booked partial profits in stocks like Fortis Health, Max Health, Granules, Mankind and Torrent Pharma whose 1-year returns stand in the range of 21% and 56%. Apollo Hospitals has yielded 18% returns while Cipla has been an underperformer with just 6% sector is again in the eye of the storm as Trump has signed an executive order to bring the prices for prescription (Rx) drugs in line with other developed nations. The order institutes the Most-Favoured-Nation (MFN) price model for drugs as a ceiling which means the US will pay for drugs at the same levels as the lowest paid by other countries."The policy initiatives, if implemented fully, may lead to increased compliance/operational cost for foreign manufacturers, including those in India. We expect generic pharma to continue to underperform due to uncertainty," Nuvama Institutional Equities said in a note. It prefers Ajanta Pharma, Torrent Pharma and Divi's Securities sees the generic companies unlikely having any impact, though it expects Sun Pharma with its specialty business in the US, to see some impact of MFN price ceiling for a few of its products. JM Financial sees over 20% growth visibility for hospitals and CDMO for the next 4-5 years. Amongst the hospitals, it likes Max Healthcare, Aster DM and Fortis while Piramal Pharma and One Source in UBS expects healthcare to outperform Nifty over the next 12-month period as the Zurich-based brokerage reiterated its positive stance on Nifty, seeing an 8% upside with a target of 26,000. In a note of caution on generic pharma export names, it expects earnings downgrades starting in 2HFY26.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Business Standard
24-04-2025
- Business
- Business Standard
Syngene slides on tepid results and toned-down forecast
Syngene International dropped 12.83% to Rs 653.85 after its lacklustre Q4 performance and a cautious FY26 outlook spooked investors. On a consolidated basis, net profit of Syngene International declined 2.81% to Rs 183.30 crore while net sales rose 11.03% to Rs 1018 crore in Q4 March 2025 over Q4 March 2024. Reported EBITDA rose 9% year-on-year to Rs 363 crore in Q4 March 2025. EBITDA margin (%) stood at 35% in Q4FY25, lower than 35.7% in Q4FY24. For the full year, net profit declined 2.71% to Rs 496.20 crore while net sales rose 4.41% to Rs 3642.40 crore in the year ended March 2025 over the year ended March 2024. Reported EBITDA rose 1% year-on-year to Rs 1,114 crore in FY25. EBITDA margin (%) stood at 30% in FY25, lower than 30.9% in FY24. In its outlook for FY26, the Syngene management anticipates the reported revenue growth will likely be in the mid-single digits. They also foresee the EBITDA margin moderating from current levels to the mid-twenties and a year-on-year decline in profit after tax. Commenting on the results, Peter Bains, managing director and CEO, Syngene International, said, "Looking at the year ahead, while the wider global market dynamics remain uncertain, we expect the business momentum to continue with pipeline build in both small and large molecules, supported by new pilot programs and conversion of existing pilots in discovery services. On an underlying basis for fiscal year 2026, we expect revenue growth in the early teens reflecting a broad-based growth across research, development and manufacturing services. Adjusted for inventory balancing in large molecule commercial manufacturing at client level, the reported revenue growth is likely to be at mid-single digit." Deepak Jain, chief financial officer, Syngene International, said, "Looking ahead into the next financial year, we expect the momentum to continue, with reported revenue growth at the mid-single digit level. As we bring the new biologics manufacturing facilities into operations, the additional operating costs and depreciation will impact margins. With this, we expect EBITDA margin to moderate from current levels to the mid-twenties and year-on-year decline in profit after tax." The company's board recommended a final dividend of Re 1.25 per equity share for the financial year 2024-25. Syngene International is an integrated research, development, and manufacturing services company serving the global pharmaceutical, biotechnology, nutrition, animal health, consumer goods, and specialty chemical sectors.
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Business Standard
24-04-2025
- Business
- Business Standard
Syngene International tumbles 10% as Q4 profit slips; key highlights here
Shares of Syngene International plunged over 10 per cent in Thursday's intraday session after the company reported a 3 per cent year-on-year (Y-o-Y) decline in net profit for the fourth quarter of the financial year 2025. Syngene's stock fell as much as 10 per cent during the day to ₹674.25 per share, the worst intraday loss atleast in over five years, according to Bloomberg data. The stock trimmed losses to trade 8.8 per cent lower at ₹683 apiece, compared to a 0.23 per cent decline in Nifty50 as of 9:40 AM. The company's shares snapped their two-day gains on Thursday, after recovering over 15 per cent from its lows of 652, which it hit earlier this month. The stock has fallen 20 per cent this year, compared to a 2.6 per cent advance in the benchmark Nifty50. The company has a total market capitalisation of ₹27,499.3 crore, according to BSE data. Syngene International Q4 Results breakdown The healthcare company's net profit narrowed by 3 per cent Y-o-Y in the fourth quarter of the financial year 2025, while revenue from operations grew by 11 per cent to ₹1,018 crore as compared to the same period last year. The reported revenue stood at ₹1,037 crore. The company's Ebitda (earnings before interest, taxes, depreciation, and amortisation) stood at ₹363 crore, a 9 per cent increase. The Ebitda margin stood at 35 per cent. Syngene International management commentry The subdued first half was impacted by a sector-wide downturn in US biotech funding, while the second half of the year showed signs of recovery, according to Peter Bains, managing director and chief executive officer of Syngene International. Looking ahead, he expressed cautious optimism, citing sustained business momentum driven by a growing pipeline in both small and large molecules. This will be supported by new pilot programmes and the conversion of existing pilots within discovery services. The highlight of the quarter was the acquisition of a state-of-the-art biologics manufacturing facility in the US, strengthening Syngene's position in the fast-growing biologics CDMO sector and providing a strategic foothold in the US market, according to Bains. "Our biologics CDMO business witnessed robust growth supported by commercial manufacturing alongside new development projects. High conversion of pilot projects into full programmes in discovery services supported the growth in our research division."
