How Pivot Path is in a sweet spot to address pharma’s pressure points 

Pivot Path emerged from Strides Pharma’s internal GCC. Are other pharma companies also following the same playbook? And if so, could you name some examples?

Pivot Path, previously known as Arcolab, started in 2019 as a shared services organisation within the Strides Group. At that time, Global Capability Centre (GCC) was not yet the commonly used nomenclature. 

The idea was to create a common platform for the group’s multiple pharmaceutical entities, which operated across APIs, injectables, oral dosage and biologics. They all had common requirements across IT, digital, clinical, pharmacovigilance, finance and HR, but were operating in silos.

This created inefficiencies in resource allocation and limited knowledge sharing. For example, learnings from an FDA or regulatory audit at one unit were not necessarily reaching another unit. So, the objective was to allocate resources efficiently, build a scalable model and facilitate knowledge sharing.

Many companies today have internal shared services or Centres of Excellence (COEs), but these are largely centralised functions operating within the organisation. We were ahead of the curve in 2019.

A global example is Novo Nordisk. Its IT function eventually spun off as Novo Nordisk IT (NNIT), which now provides services to companies well beyond its former parent. We are taking a similar path, with a focus on large Indian and mid-sized pharma companies globally.

What are the differentiators?

Six years ago, we were a process- and operations centric organisation. We consolidated services, negotiated better rates with partners and vendors, and standardised processes. Our philosophy was COSA: consolidation, optimisation, standardisation and automation.

Unlike many multinational GCCs, we did not have the benefit of labour arbitrage. We had the same people, infrastructure and location even as we transitioned into a standalone entity. So, from day one, we had to demonstrate value.

In the third year, we realised that much of our process improvement was coming through technology and digital transformation. We already had deep pharma expertise, but we identified a technology gap. In 2022, we acquired a Bangalore based technology company and began building pharma-centric solutions.

That is our key differentiator. We combine pharma domain expertise with technology. Technology companies may have solutions, but often need to first understand pharma’s nuances and workflows. We already understand the problem.

Our approach is to use technology for business transformation, not the other way around. We combine domain knowledge and technology to offer integrated solutions.

For mid-sized pharma companies, digital transformation does not have to be overwhelming or highly capital-intensive. We also understand the change management challenge. Those are the differentiators we bring to the table.

How would Pivot Path approach a mid-sized client? What is the value proposition, and what market trends are driving these companies to approach you?

Every company is experimenting with digital or IT transformation. But midsized pharma companies typically have significant legacy manufacturing processes and systems. Many initiatives therefore remain at the process or use-case level. Some POCs succeed, while others take too long and lose momentum.

Legacy systems also need upgrading, whether in enterprise applications, infrastructure or processes. 

Our proposition is to look at digital transformation at the domain level rather than digitising individual processes. Take manufacturing, for example. Instead of digitising one process, we look at the entire manufacturing domain, including manual, offline, hybrid and already-digitised processes.

We can help upgrade infrastructure and networks to the cloud, digitise manufacturing processes, use no-code or low-code platforms for workflows and build a nimble data lake to provide insights for decision-making.

If a company can address all these requirements through one platform, that is the value proposition.

We are now talking to more than 300 unique customers across India and parts of Europe on quality solutions, manufacturing digital transformation, pharmacovigilance and clinical operations. These are our three major solution buckets.

The 70-plus pharmaceutical companies across five continents are our existing customer base, largely through single-line services, particularly PV services. The 300-plus companies represent the new opportunity we are pursuing.

The benchmark for regulatory compliance is increasing. Geopolitical tensions, tariffs, wars and other crises also affect supply chains. How is your solution relevant to these challenges?

The last 18 months have demonstrated how geopolitical developments can directly affect supply chains. Companies focused on the US market are also dealing with constant regulatory and tariff developments. 

At the same time, the generic market is shrinking and price erosion has been happening for several years. This creates margin pressure across both mid-sized and large pharma companies, driving consolidation.

Regulatory expectations are also increasing globally, particularly around manufacturing operations, data management, data integrity and processes. Surprise audits are common, creating additional pressure. 

Companies therefore face price pressure while also needing to invest in compliance through technology and solutions.

Our positioning is to address the compliance and regulatory requirements. We help clients assess processes, upgrade technology and undertake transformation. Our solutions can digitise processes, improve efficiency and reduce data-integrity issues. So, we are in a sweet spot to address both regulatory and competitive pressures through efficiency.

Currently, your company generates about INR 147 crore in revenue. What are the projected growth targets for the next few years? What are the growth drivers?

We are targeting around INR 450-500 crore in the next four to five years, with the majority coming from digital transformation and technology solutions.

The opportunity is abundant, and we want to capture it.

You’re looking at a global scale, not just India. India is a major market for us, particularly for our digital transformation solutions. Technology is no longer a differentiator or competitive advantage. Hundreds of startups use the same platforms.

Our differentiator is domain-led solutions. We want to offer them to Indian companies at a competitive rate so they don’t have to depend on global platforms.

We also want to approach Europe and the US with the same rigor. From a revenue perspective, we see India contributing around 40 per cent, Europe 20-25 per cent and the US around 40 per cent. 

We are working on our US go-to-market strategy. Having recently become independent and raised capital, our focus now is to build the business.

Are you a pharma company or an IT company?

We are purely a pharma company, but we are in a unique position. We acquired a Bangalore-based deep-tech firm in 2022, with 100-120 people. Our solutions are proprietary and IP-owned.

We want to operate in the space between large platforms and the needs of mid-sized pharma. We have designed lighter solutions for them. For example, we have our own validation management systems (VMS) and document management systems (DMS) and can build lighter versions of the large enterprise quality platforms using available technology.

 

We also work with the platform that clients are already running. We help them integrate, customise and run their existing ERP, Quality & Manufacturing environments.

The other challenge is that many startups and AI companies claim to be pharma centric, but they don’t necessarily understand the industry’s problems. We have worked with several startups and often ended up teaching them about pharma.

That was one reason we established our own technology arm. Instead of spending time teaching third-party companies and then seeing them build solutions around that knowledge, we decided to build for pharma ourselves.

The objective is to make digital transformation less difficult and less capital intensive for mid-sized pharma companies. Change management is equally important. Companies need the confidence that transformation does not mean people losing their jobs or power. It is a process.

We speak the pharma language, and that’s where our conversation begins.

What does Ascent Capital’s investment in Pivot Path signal to pharma companies?

Ascent Capital has a strong track record of investing in the life sciences sector and understands the challenges pharma companies face. Their investment in Pivot Path reflects a continued belief in the sector and in the growing need for solutions that address industry-specific operational, regulatory, and transformation challenges.

For pharma companies, it serves as a strong validation of our approach. Ascent’s familiarity with the industry gives them a clear perspective on both the challenges and the solutions required, and their investment reinforces confidence in the value we bring to the market. 

 

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