"We have a culture that encourages creative thinking and views failure as learning experience"

Vivek Sharma,,
CEO- Pharma Solutions, Piramal Enterprises Ltd
With the recent acquisition of US-based Coldstream Laboratories, Piramal Pharma Solutions has transformed into a full service sterile contract development and manufacturing organization offering end to end solution to customers. Vivek Sharma, CEO- Pharma Solutions, Piramal Enterprises Ltd in conversation with Mahesh Kallayil, talks about the company's key milestones, growth strategies, market trends and challenges.

Tell us about Piramal Enterprises and Pharma Solution division of the company.
Piramal Enterprises Limited (PEL) is the flagship company of the Piramal group, a reputed global business conglomerate. The company is listed on BSE and NSE stock exchanges and currently commands a market valuation of ~ USD 2 .5 billion. 82 percent of PEL revenues are from healthcare related businesses and 18 percent of its revenues are from financial services.

The healthcare businesses comprise of 5 divisions: Piramal Pharma Solutions, Piramal Critical Care, OTC(Over the Counter), Imaging and Decision Resources Group (DRG). The healthcare business is truly global and generates sales from nearly 100 countries.

Piramal Pharma Solutions (PPS) is one of the world's largest contract development and manufacturing organization and generated revenues of USD 328 million in FY 15.

It is a global entity with 3000+ employees and has operations that spread across 11 locations in North America, Europe and India.

Kindly tell us about the performance and milestones of the company during past few years?
Our (PPS) revenues have grown at a CAGR of 18 percent- we had a topline of USD 328 million in FY 15.

We are an end-to-end provider of integrated solutions and amongst the top 10 companies globally in the CMO space. Our leadership position was recognized by our clients who voted us as a top 10 percent global service firm, two years in a row. We have expertise across discovery, development through commercialization, while providing product life cycle management solutions to our customers.

We have made significant investments in the field of ADCs (Anti-body Drug Conjugates) and are widely recognized as a world leader in this area. We were awarded "Best Contract Service Provider" at the World ADC Awards in 2014.

We have also forayed into injectables and have been channeling our investments into innovations such as AFR, Bio Catalysis. We have made substantial capex investments in Coldstream and have also augmented our capacity at Discovery Services.

Our emphasis on EHS initiatives have also been acknowledged at numerous prestigious forums.

Could you throw some light on the drug discovery scenario in India ?
There have been instances where Indian companies have proven their expertise in drug discovery. However these are an exception rather than a norm. Drug discovery capabilities require time to build, have very long monetization timelines, and carry significant risks.

Our view is that we can create more value for all our stakeholders by providing services from discovery through commercialization as opposed to concentrating our resources on innovative drug discovery. Hence we decided to scale back our NCE operations in India.

What are the current market trends?
We are seeing a lot of our clients investing in Oncology. We have therefore invested in oncology, specifically in ADCs to ensure that we can better serve our customer needs.

Our recent investment in Coldstream will help us serve our existing ADC clients better and at the same time enable us to support biologics to our client. We now offer fill and finish services at Coldstream site. Biologics are one of the fastest growing categories and like ADCs require injectables .

We are also seeing biotech clients in Europe and North America placing a premium on geographical proximity. Our facilities in Morpeth(UK) and Aurora (Canada) are well positioned to service these clients. These facilities are integrated with our facilities with India which allows us to optimize costs by running preliminary steps in our India facilities.

We are also observing a shift from simple molecules to complex molecules. In fact we may soon come to a stage whereby simple products no longer exist in the market. We have proven expertise in complex synthesis at our Torcan facility and are well poised to exploit this trend.

What are the major trends and challenges in drug discovery and development field?
There is an increased interest in the pharmaceutical industry to develop drugs for Orphan indications. Though traditionally not seen as an area of focus for the pharmaceutical industry given the limited number of patient population, the trend has steadily been moving towards greater interest in rare diseases from biotechnology and pharmaceutical companies. Pharma majors such as Pfizer and GSK now have stand-alone business units for rare diseases highlighting the growing interest in this space.

As cancer continues to be a clear area of focus for pharma, a major trend seen is the advent of immunotherapies for the treatment of various cancers. Personalized medicines, biologics, and targeted delivery systems also show promise and investment interest as firms target the oncology space.

Clinical attrition is the single biggest challenge for the innovator, leading to a continued increase in development costs. Although the industry has become a lot more decisive in terminating drugs with marginal benefit /returns early, the overall clinical attrition rate has not improved significantly. This has led to firms having to place more compounds in development, in order to grow the commercial pipeline.

This clinical attrition challenge for the clients has in turn turned into a nice opportunity for CMO's. As pharma firms continue to play the numbers game, with increasing number of compounds in clinical trials, CMO's benefit from need for cost effective manufacturers for both drug product and drug substance. Discovery CRO's benefit from the need for external partners to run these early stage programs.

How does the company keep abreast with the ever-changing trends in the pharma industry?
We have an active market intelligence team that monitors several sources on a regular basis, and assimilates and assesses the information. Sources include databases, research reports, press releases, and web based information. Information collected includes market trends, competitive intelligence, regulatory changes, M & A activity, and pricing strategies, among others. We also attend a number of conferences and trade shows where we get a pulse on current and future trends.

Finally, we supplement this information with feedback from our business development team that is engaged with clients on an everyday basis. A white paper that provides a summary along with an executive analysis of the information gathered, is circulated to management at the beginning of every month.

Tell us about the recent acquisition of Coldstream Laboratories as an asset for the division and how it will fit into the company's growth strategy?
Coldstream is an asset that will drive our growth in the injectable space. Within this space, Coldstream allows us to cater to requirements for both oncology and biologics.

The acquisition further consolidates our position in the ADC space by providing fill finish services. We can now provide services from development through commercialization in injectable solutions. The facility is located in North America and this provides us geographical proximity to many of our key clients. We are really excited by this acquisition and firmly believe that Coldstream will be a key cog in our long term plans.

Please elaborate us on the services of Pharma Solutions division and Coldstream
Pharma Solutions offers end-to-end solutions covering entire drug life cycle , from drug discovery and development to commercial manufacturing of offpatent APIs and finished dosage forms. Our capability as an integrated service provider and experience with various technologies enables us to serve Innovator and Generic companies worldwide. Our pre-formulation and route scouting services helps us to take a step further in providing innovative manufacturing solutions to our customers.

Coldstream Laboratories is focused on the development and manufacturing of sterile injectables. With its acquisition, Piramal has transformed into a full service Sterile CDMO, offering endto-end solutions to our customers. Our sterile formulation development site in Mumbai, India, and our ADC product supply site in Grangemouth, Scotland, are forward integrated with Coldstream for clinical and commercial sterile injectable supply.

Could you please share your views on scope for contract manufacturing in India?
India offers access to a workforce characterized by strong process chemistry skills and a vibrant entrepreneurial eco system that has built good facilities across various chemical hubs. This makes India suitably poised to take advantage of the growing trend of contract manufacturing.

Market wise, 70 percent of revenues currently come from outside India. What are the company's strategies to increase overseas revenues ? We have 2 facilities each in Europe and North America which are the largest markets in the world. Our senior management team is also based out of these markets. We have a significant proportion of our business development teams working out of these locations. This proximity to our customers and their end markets will help us drive an increase in overseas revenues.

We are also not regarded as just a low cost player but also an organization that invests in innovation keeping in mind future needs of our client. This value proposition will also be a key driver in enhancing our overseas revenues.

What steps has the Piramal undertaken to bring science and innovation together to maintain the growth momentum in the field of R & D, contracts and investments?
We have invested significantly in latest technologies such as AFR and Bio Catalysis. We in fact have established a bio catalysis center of excellence. We have R & D cells located across the globe which helps us tap into the best talent with minimal location constraints. We have a culture that encourages ideas and creative thinking and views failures as a learning experience. Ideas from each of these R & D cells are consolidated at a central level and this allows us to cross pollinate our sites with best practices.

Over and above this, we conduct periodic sessions with eminent scientist and PEL board member Professor Goverdhan Mehta to further refine best practices and identify potential opportunities.