Eris’s revenue has grown six times since FY11

Give us a brief about the journey of Eris Lifesciences in India.
We started our journey in 2007, and are the only publicly-listed Indian pharma company with a domestic branded formulation business model. We chose a differentiated business strategy at inception. While most new entrants tend to start off with regional business models in acute therapies focussed on local general physicians, Eris chose to build a pan-India cardio-metabolic business pivoted around super-specialists.

Eris’s revenue has grown six times in the last 10 years (since FY11) to reach Rs 1,212 crores in FY 21 and net profit has grown approximately 17 times in the last 10 years to reach Rs 355 crores in FY 21.
We have an integrated business model with our WHO-GMP compliant manufacturing facility in Guwahati catering to 74 per cent of the revenue, and a pan-India sales and distribution presence. We are building our second manufacturing unit in Gujarat with a capital outlay of Rs 120-130 crores.

We acquired the Indian branded domestic formulations business of Strides in November 2017, and also acquired Zomelis, a Vildagliptin brand from Novartis AG in December 2019. Both these acquisitions have proven to be value accretive for our business. Recently, we announced our entry into the domestic insulin, analogues and GLP1 markets on the back of a joint venture with Mumbai-based M J Biopharma.

We are expanding our footprint in medical devices through our Circa range, currently comprising blood pressure monitors, IR thermometers and India’s first blood glucose monitors with patented gold cartridge technologies. We are augmenting the range with Continuous Glucose Monitors (CGMs) and HbA1c monitors as well.

We also continue to pioneer the generation of actionable medical evidence through initiatives such as the India Heart Study (IHS) and India Diabetes Study (IDS); these studies are helping create bodies of knowledge hitherto unknown and are paving the way for better management of health and treatment outcomes. The IHS is the only study of its kind on hypertension that is based on the Indian population and has been jointly accepted by the European Society of Hypertension and the International Society of Hypertension.

Tell us about the major focus areas of the company and the contribution it has made specifically to the Indian pharmaceutical industry.
We are deriving 92 per cent of our revenue from chronic and sub-chronic therapies, primarily consisting of oral anti-diabetes, cardiac and vitamins-minerals-nutrients (VMN). We have outperformed the Indian pharma market by approximately 50 per cent since pre-COVID levels.

We have enough tailwind in our therapies which enable us to consolidate and grow this brand portfolio by driving better awareness, earlier detection and comprehensive management of diseases. We are also investing in expanding our coverage of specialists and consulting physicians. We will continue to focus on our core therapies of cardio metabolic and VMN. We are also investing in CNS, women’s health and dermatology.

In the past few years, you have made some large acquisitions. Tell us about their current status.
We acquired the Indian branded formulation business of Strides Shasun in 2017, and by discontinuing tail-end brands, we focussed our attention on Renerve, Raricap, Ginkocer, Serlift and Desval. Through optimisation of the field force, we were successful in ramping up the field force productivity by approximately 2.5 times in a span of three years. The nutraceutical brand acquired from Strides – Renerve – has grown from Rs 77 crores (November 2017) to Rs 139 crores (September 2021), a CAGR of approximately 17 per cent since acquisition, after absorbing a seven per cent reduction on account of GST implementation. In addition, through in-sourcing manufacturing of key products in the portfolio to our Guwahati facility, we were successful in bringing about a significant reduction in the Cost of Goods Sold (COGS) from 35 per cent to 22 per cent.

Zomelis, a Vildagliptin brand we acquired in November 2019, has registered more than six times growth in monthly sales run-rate since acquisition. We have been able to reduce the COGS by over 500 bps since acquisition by insourcing manufacturing to our in-house Guwahati facility.

What impact did the COVID-19 pandemic have on Eris Lifesciences’ business revenues?

During the pandemic period, the pharma industry saw a massive shift to digital in terms of MR-doctor interactions and doctor-patient interactions. We, at Eris, were able to seamlessly adapt to the new reality. We demonstrated strong resilience in the face of COVID with market-leading growth and robust financial performance. Excluding COVID drugs which were a short-lived phenomenon, the core Indian pharma market has grown at 8.3 per cent p.a. since pre-COVID levels, whereas we have grown at 12.2 per cent p.a. – this represents an outperformance of nearly 50 per cent.

We had three product additions to our portfolio during this time:
◆ Zomelis: Market leader in the Gx Vildagliptin space with annual sales of over Rs 58 crores (MAT November 2021); monthly sales have grown by six times in less than 24 months
◆ Gluxit: Market leader in the Gx Dapagliflozin space with annual sales of over Rs 30 crores (MAT November 2021); mon