The global active pharmaceutical ingredients (APIs) market size was estimated at USD 237.47 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 5.75% from 2024 to 2030.
According to Grand View Research, advancements in Active Pharmaceutical Ingredient (API) manufacturing, growth of the biopharmaceutical sector, and an increase in geriatric population are among the key drivers of API market.
Additionally, an increase in prevalence of chronic diseases, such as cardiovascular diseases and cancer, is anticipated to boost market growth. Supriya Lifescience Ltd. is one of the leading manufacturer of Active pharmaceutical Ingredients (API) with focus in products of various therapeutic segments like – Antihistamine, Anti-Allergics, Vitamins, Anaesthetics, Anti- Asthmatics etc.
In an e-mail interaction with Financial Express.com, Dr. Saloni Wagh, Director, Supriya Lifescience Ltd. talked about the company’s upcoming business growth plans, recent trends in the industry, status manufacturing services in India and more. Excerpt:
What are your upcoming business growth plans?
At Supriya Lifescience, we have ambitious growth plans. Our primary goal is to double our revenue to Rs 1,000 crore by entering higher-margin niche segments. We have already achieved a 24% growth in revenue, reaching Rs 570.37 crore this year, and maintained an impressive EBITA margin of 30%. Moving forward, we aim to sustain a growth rate of over 20% in our topline and keep our margins at 28-30% for FY25.
To achieve this, we are expanding our product basket, diversifying into contract manufacturing, and targeting regulated markets through robust R&D and new product filings. Our short-term projection for FY25 includes a 21-22% sales growth while maintaining strong EBITDA margins. Additionally, we plan to invest Rs 100 crore in capital expenditure over the next two to three years, funded entirely from internal resources without incurring debt. Our long-term vision is to significantly increase our income by FY27 through new products, market penetration, and CMO opportunities.
You have a strong presence on API Manufacturing with a focus on products of various therapeutic segments like – Antihistamine, Anti-Allergics, Vitamins, Anaesthetics, Anti- Asthmatics etc. Are you planning to diversify into new therapeutic areas?
As a company with a strong presence in API manufacturing, we focus on various therapeutic segments such as antihistamines, anti-allergics, vitamins, anesthetics, and anti-asthmatics. While these areas remain pivotal, we are committed to diversifying into new therapeutic segments. Currently, 80% of our revenue comes from exports, reaching 120 countries, with a strong presence in regulated markets like Latin America, North America, and Europe.
Our strategic goals include increasing our footprint in these regulated markets, enhancing our North American contributions, and expanding further in Europe. We plan to add at least 7-8 new countries to our product basket by the end of this year. While our analgesic and anesthetic sectors continue to perform well, other segments remain stable and are experiencing growth. Majority of our medicines exhibit growth patterns.
To ensure long-term success, we are broadening our portfolio to include anti-anxiety and anti-diabetic drugs. This expansion demonstrates our dedication to supporting varied medical demands and enhancing market reach. By continuously assessing market demands and innovating our product portfolio, we aim to ensure sustained growth and value for our stakeholders.
What are some of the recent trends in the Indian pharmaceutical industry? How can these trends be a growth opportunity for Supriya Lifescience?
The pharmaceutical industry in India has seen some notable shifts recently. One major trend is the focus on research and development (R&D) to create new drugs, which opens up growth opportunities globally. Biotechnology and biosimilars are also gaining ground, presenting a chance for us to delve into this lucrative segment. Digital integration, such as telemedicine and health apps, is enhancing patient care and operational efficiency, which we can leverage for our advantage. Aligning with international standards in regulation is crucial for credibility abroad, supporting our global expansion plans. Contract manufacturing is another area to explore, given our cost-effective production capabilities. The surge in pharmaceutical exports, especially in generic drugs, signals a promising avenue for us to expand our reach.
Investing in R&D, venturing into biotech APIs, embracing digital technologies, and adhering to global standards are key strategies for growth and competitiveness. Additionally, exploring strategic mergers and acquisitions can bolster our market presence and technological prowess. These trends present a roadmap for Supriya Life science’s sustained growth and leadership in the industry.
What are your current offerings in your product basket? Are you planning to expand your product basket?
We are actively expanding our product basket by adding new therapies such as anti-anxiety and anti-diabetes treatments. Additionally, we are enhancing our anesthetic basket by adding more products. Contract manufacturing remains a key focus area for us, and we are forward integrating into finished dosages, aligning with our vision of growing the CMO business. Our current offerings are expanding significantly with the introduction of oral solid dosages, liquid inhalers, and injectables.
We’re investing heavily in R&D with around Rs 60 crore in a new facility at Ambernath and refurbished our facility 6 months back which is located at Lote Parshuram.
Our strategy also involves entering new, highly regulated markets and pursuing contract development and manufacturing opportunities. We’ve already filed for eight to ten products in the US and Europe from our existing portfolio, many of which will be backward-integrated. These steps will likely result in gross margins exceeding 28-30% as our new products stabilize and penetrate more regulated markets.
What is the current status of current manufacturing services in India? What are your upcoming plans for the CDMO segment?
Over the past year and a half, our focus has been on enhancing our CMO/CDMO services, and we’ve made significant progress. Our collaboration with a European company is a strong indication of this, poised to bring in substantial revenue of almost 60 crores annually. This partnership, secured for a , 10-year exclusivity contract. positions us as exclusive suppliers, showcasing our reliability and quality.
Looking ahead, we have a range of exciting projects lined up, set for commercialization in the second half of FY25. Our recent introductions in the anesthetic portfolio have shown promising potential, reflecting our commitment to delivering high-quality products. By FY27, we anticipate that approximately 20% of our revenue will stem from CMO/CDMO ventures, highlighting our strategic direction and growth trajectory in this segment.
80 per cent of your revenue is from exports, primarily to China, South America and the Asia-Pacific. Is geographical expansion or entering new markets on the cards?
As we look to the future, expanding into new markets is definitely on our radar. Currently, more than 80% of our revenue comes from exports, in this 40% is Europe so our main market is Europe and Latam. However, we are now actively pursuing opportunities in North America, recognizing the potential for growth and diversification. Our strategy involves not only geographical expansion but also addressing customer concentration by broadening our product portfolio. We have already initiated filings in the United States and Europe for various products. This move will reduce our dependency on specific products and customers, making our business more resilient and adaptable to market changes. Moreover, we are focusing on registering our products in regulated markets, with a strong emphasis on North America and Latin America. Our recent ENVISA audit clearance with zero observations boosts our confidence in entering these markets successfully.
Additionally, we are investing significantly in our facilities, such as the planned 60 CR investment in our Ambernath site for a new anaesthetic product. This aggressive expansion plan aligns with the global market’s demand, valued at USD 300 million for this API. Overall, with our new products and strategic initiatives, we are poised to enter the highly regulated North American markets with confidence and vigor.
What are your focus areas in FY25? Are you planning to launch news products this year?
In FY25, our focus areas are centred around significant investments and strategic initiatives to drive growth and innovation at Supriya Lifescience. Our investment plans are poised for substantial development, particularly with a target to increase sales to Rs 1,000 crore within three years. We are expanding into higher-margin niche markets and enhancing our product offerings to achieve this goal. A key aspect of our strategy is the establishment of a new facility in Ambernath, focusing on CMO opportunities in the finished dosage area, supported by an investment of around Rs 60 crore.
Moreover, we are planning to introduce six to seven novel compounds addressing critical areas such as anti-anxiety, anaesthesia, and anti-diabetes. Our strong commitment to research and development (R&D) underscores the importance of developing a pipeline of innovative molecules. Additionally, we are venturing into highly regulated markets and exploring contract development and manufacturing options to fuel our growth trajectory. Our backward integration strategy enhances supply chain stability and reduces price volatility for our core APIs. Furthermore, our dedication to innovation is evident through the establishment of two new R&D centres, focusing on product lifecycle management and pilot plant operations for new molecules, contract development, and marketing.
