Passing of Biosecure Act a positive development

 We have been observing a steady change since the pandemic, where global pharma companies are increasingly looking to India and Southeast Asia as alternative supply chain destinations. The recent news in the USA (the passing of the Biosecure Act by the US House of Representatives)  has accelerated the need for supply chain resilience, which is expected to be a long-term strategic shift. 

We see this as a positive development. Other CROs and CDMOs outside of China are also observing the same shift — Pharma companies are now exploring new partnerships among multiple suppliers to evaluate capabilities and service quality. India boasts of a significant pool of skilled scientists, researchers and technicians, with a high output of STEM graduates annually. Additionally, India’s adoption of advanced technologies, such as digitisation and automation, enhances manufacturing efficiency and quality, instilling confidence in global pharma companies, and the numerous US FDA-approved facilities here underscore the commitment to meeting global quality standards. Further, the Indian Government has been supportive in fostering a conducive environment for the sector, introducing various initiatives to promote research, development and innovation. This includes incentives and policies that encourage local manufacturing, reduce dependency on imports, and foster collaboration between the government and the private sector. It is good to see the national initiatives being embedded by the States as well, like the Biotechnology Policy 2024-2029 recently announced by the Karnataka Government; the Telangana Government has also made commitments like the expansion of existing R&D clusters and the establishment of integrated greenfield pharma villages. Other states like Haryana, Odisha, and Gujarat have also announced various incentives under their biotechnology policies. 

The quality of science is perhaps the biggest differentiator for an outsourcing partner. At Syngene, our growth is built on our reputation for high quality standards and the depth of our capabilities to drive scientific innovation from discovery right through to commercial supply, which puts us in a strong position. These aspects have led to us building strong partnerships with 11 of the top 15 pharmaceutical companies in the world, including GSK, Zoetis and Merck KGaA, Amgen, Baxter and Bristol-Myers Squibb.

The change in the Biosecure Act around the timeline of implementation has lessened the urgency with which they are looking for alternatives, but it hasn’t changed the direction of travel. What we are seeing most commonly, is that these “China switchers”, as we call them, are setting up “pilots’ across a broad range of services and often placing them with a select short list of suppliers. They then intend to run these comparative pilots through the year and use this as a way of selecting a longer-term partner.  We have made good progress and I get a sense we are winning our fair share of these pilots.

Other leading indicators are also turning more positive. Our Request for Proposals (RFPs) are up by almost 50 per cent YoY in terms of value in the first quarter of FY25 – and that’s the best Q1 in the last four years. We are also kicking off multiple pilot projects in Discovery Services, which have the potential to scale to larger contracts over time. 

One significant area that we are offering to our clients is the resilience of their entire manufacturing supply chains. We have led the industry in India in introducing a China-independent supply chain, whereby the entire manufacturing of a potential drug is done without resources from China-based suppliers. This approach helps mitigate risks associated with overreliance on China. More generally, we focus on evaluating all supply partners to ensure lower risks and greater resiliency. This direction in the industry is being adopted by big pharma and we are empowering our biotech partners to take the same robust approach.

Apart from this, we continue to remain focused on our strategy, we continue to deliver growth, gain market share relative to many of our closest competitors, invest in new capabilities, clear multiple client and regulatory audits, and position ourselves well for the future.