As the contract development and manufacturing (CDM) space becomes more crowded and competitive, Piramal Pharma Chairperson Nandini Piramal believes sustainability, besides quality manufacturing and compliance, will be a differentiator.
“It (CDM space) was always competitive, ultimately, focus on quality matters,” says Piramal, adding that in the last six months, five of their sites had undergone USFDA (United States Food and Drug Administration) inspections. And, she adds, “big clients care about sustainability. It used to be ...safety and compliance. But now they ask what are you doing for reduction in carbon emission...” Piramal, told businessline, adding that the company has signed up to achieving science-based targets on this front.
It’s been a virtual baptism by fire for Piramal Pharma Ltd, which listed a year ago. In fact, the decision to carve out pharma and healthcare operations into a separate entity came over two years ago, following which the world went into the full-blown Covid-19 phase.
Recovery and turnaround
The last year was challenging, says Piramal, adding that this year will be one of “recovery and turnaround”.
“There was a slowdown in biotech funding and people took longer time to make decisions. This year, decisions we were waiting for got made. We are seeing the current year as one of recovery,” she said, as the company works on reducing its debt and supporting production with hiring.
Illustrating that the global business mood ahd changed, she said, business travel really started around late 2022, because of Covid-19. Pointing out that audits gave quality-caring business customers greater confidence, she said, “we had 160 customer audits last year, and 40 regulator audits – so we had 200 audits across 17 sites.”
And yet, it’s not the “boom time” of the past, she says. On the recent re-calibration of the business, she explained, “Innovation was happening in emerging biotech, rather than big pharma,” and the CDM focus was on patented products and bio-pharma. Over the last two years, funding for bio-pharma had gone down, cash with people was less and companies with good products were funded or bought-out, she explained. As a result, some of their clients were bought out, which resulted in the rebalance of their business between bio pharma and big pharma.
Dismissing talks of interest in fellow-drugmaker Cipla, where promoters were reportedly looking to sell their stake, Piramal said, the focus in the year ahead would be on bringing down debt, growing organically and operational improvement. Net Debt as on September30, 2023 stood at ₹3,823 crore, The company’s recent quarterly performance was balanced across its three business segments – CDM, complex hospital generics, and consumer healthcare.
Piramal Pharma had posted a 11 percent growth in its revenue from operation at ₹1,911 crore for the second quarter ended September 30, 2023. It posted a ₹5 crore profit after tax in the quarter.