A view within Sai Life Sciences’ manufacturing facility in Bindar, Karnataka, India September 2023.
| Photo Credit: Reuters
Drugmakers are looking for to restrict their reliance on Chinese contractors who produce medication utilized in scientific trials and early-stage manufacturing, a transfer that’s benefiting rivals in India, based on interviews with 10 trade executives and specialists.
China has for almost 20 years been the popular location for a spread of pharmaceutical analysis and manufacturing companies as a result of low value and pace supplied by contract drugmakers there.
That relationship largely held agency regardless of a U.S.-China commerce conflict beneath the Trump administration and provide chain havoc skilled by different industries in the course of the COVID-19 pandemic. But growing tensions with China have prompted extra Western governments to suggest that firms “de-risk” provide chains from publicity to the Asian superpower.
That is main some biotech firms to think about using manufacturers in India to provide lively pharmaceutical ingredient (API) for scientific trials or different outsourced work.
“Today you’re probably not sending an RFP (request for proposal) to a Chinese company,” mentioned Tommy Erdei, international co-head of healthcare funding banking at Jefferies. “It’s like, ‘I don’t want to know, it doesn’t matter if they can do it for cheaper, I’m not going to start putting my product into China’.”
Dr Ashish Nimgaonkar, the founding father of Glyscend Therapeutics, a U.S.-based biotech agency testing remedies for sort 2 diabetes and weight problems in early trials, agreed. “All of the factors over the past several years have made China a less attractive option for us,” he mentioned.
Nimgaonkar informed Reuters that when Glyscend points an RFP later within the improvement stage of the medicines it has in trials, Indian contract improvement and manufacturing organisations (CDMOs) could be most well-liked over Chinese ones.
Four of India’s largest CDMOs – Syngene, Aragen Life Sciences, Piramal Pharma Solutions, and Sai Life Sciences – informed Reuters they’ve this yr seen elevated interest and requests from Western pharma firms, together with main multinationals.
Sai declined to touch upon revenue progress however mentioned gross sales have grown 25%-30% in recent times. The different firms mentioned they reported robust revenue progress in the latest quarter.
Top executives on the companies mentioned some prospects wish to add India as a second supply, along with China, for manufacturing. Others are looking for to depart China and even making requests to originate provide chains in India.
The full benefit for these Indian manufacturers is not going to be fast, mentioned Peter DeYoung, CEO of Piramal Pharma Solutions.
It will take time for remedies in early improvement to make it to the market, when contracts would turn into extra profitable for outsourcing companies like his, he mentioned.
Chinese CDMOs are established makers of biologic medication, which require a better threshold of regulatory approval than typical medicines, mentioned Helen Chen, Greater China Managing Partner at L.E.Okay. Consulting in Shanghai.
Hiring a brand new agency for advanced work corresponding to biologic manufacturing can take three to 5 years, she added. “It’s really not something that (companies) just pick up and move like shoes.”
Strong progress
India is looking for an even bigger foothold within the pharma companies sector to spice up gross sales and repute for its $42 billion prescribed drugs trade.
But issues over lax oversight persist. Nimgaonkar mentioned Indian CDMOs must do extra to make sure their repute on high quality requirements matches Western and Chinese ones.
In February, the U.S. Food and Drug Administration (FDA) warned towards utilizing a watch drop made in India linked to the outbreak of a drug-resistant micro organism within the United States that induced one demise.
India-based analysis agency Mordor Intelligence estimates income from India’s CDMO trade at $15.6 billion this yr in comparison with $27.1 billion in China. But it estimates revenues from India’s trade will develop, on common, at greater than 11% yearly over the following 5 years, in comparison with about 9.6% for China.
The Indian CDMOs informed Reuters that their services are routinely inspected by the FDA. An FDA spokesperson declined to remark.
Piramal Pharma has this yr acquired requests from purchasers for “backward integration to India”, which signifies that even probably the most fundamental uncooked supplies are sourced from the nation as a substitute of China, mentioned DeYoung. Piramal buys about 15% of its uncooked supplies from China however is making an attempt to cut back that.
Sai Life Sciences mentioned it virtually doubled manufacturing capability since 2019 and is including one other 25% within the subsequent yr or so to fulfill demand.
Ramesh Subramanian, chief industrial officer of Aragen, a privately-owned Indian agency that has grown from 2,500 to 4,500 workers up to now 5 years, mentioned income progress of 21% final yr was partly pushed by new contracts with Western biotech companies. Aragen counts seven of the ten greatest pharma firms as purchasers, he mentioned, declining to call them.
The shift is especially evident in drug discovery work for typical prescribed drugs.
“New biotechs are deciding to put eggs in both the Indian and China baskets from the start,” Subramanian mentioned.
