What are the existing and emerging trends in pharma that will sway/disrupt the CRO and CDMO sector, globally and in India?
One of the things that are dramatically changing the pharma industry is the definition of speed. What has happened through COVID times is that we’ve all learnt that vaccine development could come down from years to under a year. This has created an expectation that we can apply the same approach and speed everywhere else, especially in the pharma industry, which has long lead times to bring a drug to the market and to introduce changes. These are now going to be revisited.
Large companies are also realising that this can be done by partnering with CROs/CDMOs like us. For a large part of 2020 and earlier part of 2021, many of our clients and many of the large pharma companies were working at a reduced scale as opposed to what they normally work, especially in terms of research labs.
On the other hand, companies like Syngene have been able to bring our entire workforce into the campus during the lockdowns and actually generate critical data and move projects along. This has led to increased partnerships between the pharma/biotech companies and CROs/CDMOs like us.
There is one more component to the trend, i.e. newer modalities have become really important. To build on the example and the learnings from COVID, mRNA therapeutics and vaccines, DNA vaccines have now been approved as new approaches to disease management. The very encouraging data that came from Pfizer/BioNTech and Moderna has put into centre stage some of these newer treatment modalities.
Likewise, we’ve seen a need for another new area which is around programmes. It is just an example of how the business dimensions are changing and is now becoming more and more important. So, newer drugs and newer therapeutics, newer ways of leveraging CROs/CDMOs (repurposing facilities, faster tech transfers, efficient scale-up of processes), and bringing solutions much faster to the market, are the trends that are changing this sector dramatically.
How should players in this sector ramp up their capabilities and competence, especially as transformative technologies and their applications grow?
I will answer this question by segmenting the market into two groups, large pharma and smaller biotechs. Large pharma is already realising that there is a need to recognise their strengths versus areas that offer opportunities for partnering. Over the last few years, they’ve been making risk-based decisions on components of their operations that they should expand.
It’s worth spending a little more time talking about the small biotechs and the newer players. These folks are the ones who really need to think harder about what they want to invest in. They have to realise that if they try to do everything from end to end, then this will dilute their resources, and it is going to be very expensive. So, the companies have to take a call and identify their niche and build partnerships for everything else. This is actually getting to be even more interesting since it’s not just partnering with companies but also with academic labs. The thing that’s really important to understand for small biotechs while making their investment decisions and building capacity is to do it in much smaller chunks. Further, they can identify the areas that they want to do themselves and carve out areas where they partner with other organisations. This will be the key to success.
Moreover, they shouldn’t limit themselves to partners of only a certain type. Gone are the days when your partner was somebody who brought some level of financing because you had all the technical horsepower. Now you have to look for technical partners, financial partners and capacity partners.
How is the relationship between CROs and pharma companies changing? What would be the template/s for a successful pharma CRO/CDMO relationship in future?
Let us take a look at our relationship with BMS. Syngene’s scientists are contributing towards research findings and seeking new targets, new opportunities, and new drugs for BMS by performing work comparable to what is done in the US. The future CRO/CDMO will offer end-to-end solutions and operate as a large pharma or biotech company. think that’s a model that we will see more and more. I am expecting that as we move forward, the value that comes from end-to-end capability utilisation will be further leveraged.
The relationship will be one where you start with a certain target, or you have a certain, early-stage, promising candidate, and you start choosing a CRO because they have the capabilities of doing all of the pre-clinical work, the clinical work and the CMC to actually take the candidate through to commercialisation and bring the drug to the market.
So, a small company that has an asset but has not been monetised and developed can do that by working with a CRO/CDMO like ours that offers integrated drug discovery and integrated pharmaceutical development services. This is something that we will see increasing because there are a lot of academic targets that are now looking to enter the mainstream. Venture capitalists and investment firms are identifying such assets to target new and existing targets.
However, they don’t have the wherewithal of how to actually develop them into commercial products, to go through the years of work and generate volumes of data for regulatory approvals. This is one model that I believe will leverage the offerings from a CRO/CDMO. And that’s where we, in Syngene, have been making sure that we are ready to offer integrated drug discovery and development services to our customers.
There’s another area that I would like to emphasise, which is commercial manufacturing capacity in cGMP facilities. As countries revisit their supply chains, there is a realisation that capacity is very limited. As an example, India’s emphasis on API production is leading to more capacity building. In such an environment, the large companies that have the capability in drug development but not enough manufacturing capacity will look to source capacity from CMOs like us. They will reserve their own capacity for either the newer molecules or molecules where the demand scenario is not very clear so that they can modulate that much better within their own environment. To do this, smart capacity utilisation and agility will be achieved through relying on CROs and CDMOs.
What would ‘CRO/CDMO of the future’ look like? What will be its most distinctive features?
The future CRO/CDMO will offer end-to-end solutions and essentially operate like a large pharma or biotech company, having all the components within itself, with the exception of its own pipeline. I think that’s going to be really integral from the CRO/CMO success perspective. The other thing that is going to be really evident in the future CROs and CMOs is their diversity in capability to serve the evolving requirements. Let me take the example of vaccines, I expect that we will see CROs/CDMOs that have the capability to not just manufacture the bacterial vaccines but also manufacture mRNA vaccines, adenoviral vaccines with vertical integration to also provide raw materials and excipients.
The other transition or trend that we will see is the CROs/CDMOs playing a role in is precision medicine. Precision medicine is where you ‘don’t go for volumes but go for more customisation. And CROs/CDMOs of the future will also look to be serving this particular market to their niche capability build-up.
How is Syngene preparing to be future-ready? Please elaborate on key investments, collaborations and expansion plans.
We are investing in our research capabilities and infrastructure. Research capabilities investments include areas like cell and gene therapy, which is the latest technology on the horizon. Integrated drug discovery is a key focus area for us that provides end-to-end capability. We are investing to make sure we have more scientists who are capable of doing integrated drug discovery projects for small molecules as well as large molecules. The second is API capacity. We are working on our API capacity through our Mangalore facility, which will further strengthen our ability to offer vertical integration and/or capacity mitigation requirements that the industry will have. Syngene has also invested in high-potency API facilities. We just expanded our high potency API capability by building a pilot facility. We are also looking at increasing our footprint in Hyderabad and expand capabilities beyond the discovery chemistry that we started with. We are adding lab space in Hyderabad, finishing our manufacturing space in Mangalore, and then also adding a combination of that in Bangalore.
Third, we are investing in our biologics facilities. We have introduced a 500-litre microbial facility which complements our existing 2000 litre mammalian facility. Through our expansion, we are
now ready to produce vaccines, including mRNA vaccines. Lastly, Syngene is investing in digitisation and automation. As an example, we have built capabilities to use data analytics such that toxicological studies can be done “in silico”, reducing significantly the need to synthesise compounds. Our GMP facilities are in transition to use digital batch manufacturing records and turn paperless. Such digital plans will reduce cycle times and further improve record-keeping and audit performance.
So, how much does Syngene plan to invest in the next three years?
About three years ago, Syngene had a $500 million CAPEX plan. It was a five-year CAPEX plan. So that is something that we’re still continuing to work through. And, we are on track to deliver all of the CAPEX investments through that five-year $500 million investment plan that we outlined a few years back. Our FY22 Capex plan includes spending of $100-120 million.
lakshmipriya.nair@expressindia.com
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