Granules India will be one of the strong players in pharma R&D going forward, says Executive Director Priyanka Chigurupati

The pharma industry appears to be in a flux by the talk of tariffs on imports into the US by the US administration and pricing pressure. What is your take on its impact on the Indian pharma industry going forward?

 From a broader perspective, I think the pharma industry, of course, always has a lot of opportunities. Let’s talk about the pharma industry as branded and generics as two different verticals. Branded pharma is likely to face some level of tariffs if they ever get imposed. Now, there is a 90-day limit for the tariff timeline to be imposed in the US. I do see something happening with branded pharma, but on the generic side, there are pros and cons.

There are manufacturers, wholesalers, Pharmacy Benefit Managers (PBMs) and the end customer. If you look at the whole value chain, what manufacturers actually make on the generic side is very minimal compared to what PBMs make while also making single-digit margins. If there is a proper introspection on how PBMs work and the issue is addressed, costs will decrease which will lead to price reduction for end customers.

But the scenario could be different for the manufacturers of large-volume products. If tariffs are imposed on super-genericized, commoditised products, I think the Indian pharmaceutical industry might pass them on to the end customer, which in our case are wholesalers. We can’t absorb 50 percent tariffs on any of our products.

What about your company’s expansion plans? How is the capacity augmentation happening?

Today Granules India has about 2.5 billion units of installed capacity, which will go to about 7.5 billion by next year and slowly scale up to 25 billion units over the next couple of years.

We also acquired Senn Chemicals AG last year which is into peptides and Contract Development and Manufacturing Organisation (CDMO) business in Europe and are now present in the value-added business. While our core business that we’ve been working on for many years is stable and will continue to grow at a certain rate, we have three to four other verticals that we are investing to step-up value-added product portfolio in controlled substances, oncology molecules and peptides.

Can you give me more details on the product pipeline and any timeline for commercialisation?

On controlled substances, we’ve already started seeing revenues. We’re doing pretty well in the controlled substance space in the US, especially ADHD medications. In oncology, we have filed one product so far, but we were doing some basic CMO business until now. That one product is now leading to 11 products. Over the next two to three years, we’ll have about 11 products in the pipeline that will go for commercialisation anytime from three years from now to the next eight years.

 In terms of markets, how do you plan to expand the reach of your products to new geographies?

As we keep expanding into different regions, we’ll be further expanding the existing molecules into other regions as well. Today, it’s very heavily US-focused, so as we expand to other regions, we’ll see revenues from other regions as well.  Peptides will take some time. Today, it’s already revenue-generating—it’s a company that was already generating revenues when we acquired it. Going forward, as we keep validating and commercializing APIs from that site, we’ll start making more money in the next 18 months.

Can you give an outline of the R & D focus of Granules India? 

Right now, we have about 127 dossiers that we have filed across the globe, out of which 85 are in the US. We have an R&D site in the US as well as in India. We have about 85 ANDAs, out of which 16 are yet to be approved. In Europe, we have 18, out of which 10 are yet to be approved. The rest of the world has the remaining products, which we will be launching over the next couple of years as we keep getting approvals.  We’re augmenting our R&D portfolio in the U.S and India. Ours is an integrated R&D team. Granules will be one of the strongest players in R&D as it is present in API and even starting materials to finished dosages. That is the next wave.

What are your plans for collaborations and inorganic growth?

We’re continuously evaluating inorganic opportunities.. Apart from the products that we get in a deal, we would like to buy skills or technologies that we would have otherwise developed in-house. There are a few areas that we want to focus on which we’ll probably talk about as we get closer to any deals or make any inorganic progress.