Syngene's formula for success
Syngene International, a subsidiary of Biocon was listed on the Indian stock exchanges in 2015. Syngene operates as a versatile and client-focused Contract Research and Development Manufacturing Organisation (CRDMO). According to Market Insights Reports, the global pharmaceutical CRDMO service market is projected to grow from $81 million in 2022 to $130.8 million in 2029, with an expected CAGR of 7.1 per cent from 2023 to 2029. CRDMOs specialise in providing services related to research, development, and manufacturing in the pharmaceutical and biotechnology sectors. Outsourcing to CRDMOs enables pharmaceutical companies to leverage specialised expertise, state-of-the-art facilities and cost efficiencies without heavy investments in infrastructure.
Syngene tailors solutions to meet the unique requirements of each client project, offering specialised standalone services or comprehensive, long-term programs covering discovery, development, and manufacturing in the pharmaceutical and related industries.
The Bengaluru campus serves as the central hub for research, development, and manufacturing operations for both large and small molecules. Complemented by campuses in Hyderabad and Mangalore, which house essential supporting functions and the clinical development facility, Syngene employs a total of 8,500 people, with 6,000 being scientists.
Global clients
Syngene International collaborates with 13 of the world’s top 15 pharmaceutical companies and over 450 clients across multiple industry segments. Noteworthy partnerships span from small biotechs to major pharmaceutical entities such as GSK, Janssen, Zoetis, and Merck KGaA, with dedicated research facilities for prominent names like Amgen, Baxter, and Bristol-Myers Squibb.
To cater to its international clientele, Syngene has strategically established Syngene USA Inc, a subsidiary based in the United States, to provide support for clients in the US market. Simultaneously, European clients are served by members of the commercial team located in various locations across the UK and Europe, showcasing the company’s commitment to meeting the diverse needs of its clients across different regions.
Financially, Syngene reported a substantial increase in revenue from operations at the end of the second quarter of FY24, rising by 18.5 per cent year-on-year to Rs910 crore. Adjusted for currency fluctuations, this growth stands at around 15 per cent. Additionally, the profit after tax (before exceptional items) for the quarter demonstrated a notable increase, surging by 20 per cent year-on-year to R122 crore. These figures underline the positive and robust financial performance of the company.
Jonathan Hunt, MD, and CEO of Syngene, leads the business operations and investments of the organisation. With over 25 years of experience in the global biopharmaceutical industry, Hunt expressed his satisfaction with the company’s performance, stating: “I am pleased to report a strong set of results for the second quarter and first half of FY24, particularly in our development and manufacturing services.” Hunt highlighted the addition of a new non-GMP capability centre in development services to meet market demand for agile, cost-efficient, early-phase development, and scale-up services.
Syngene International announced the conclusion of the acquisition of a multi-modal biologics manufacturing facility from Stelis Biopharma. The acquisition of the ‘Unit 3’ biologics manufacturing facility was concluded at a revised gross value of Rs617 crore. The acquisition will add 20,000 litres of installed biologics drug substance manufacturing capacity for Syngene.
It also includes a commercial scale, high speed, fill-finish unit – an essential capability for drug product manufacturing. The company has completed a payment of Rs158.2 crore on 22 December, 2023, in addition to the initial payment of Rs395 crore made on 1 December, 2023. The balance of Rs10 crore is being withheld by the company, to be released after the fulfilment of additional conditions by Stelis Biopharma.
Exponential growth
Reflecting on Syngene’s journey on Indian stock exchanges since 2015, Sibaji Biswas, CFO of Syngene International, emphasised the positive impact of being listed. Biswas stated: “Being listed brings a lot of discipline. In terms of how you behave and how you operate, you are continuously under the microscope which is good and needed.” He highlighted the improvements in managing financials, sustainability, vendor base, and increasing capabilities. Biswas noted the exponential growth since listing, particularly in the last 12 months, marking an important growth story in biologics. He highlighted the company’s transition from clinical to commercial scale manufacturing.
Currently, Syngene shares trade at Rs732, with a 52-week high/low at Rs860.20/545.10. Avinash Gorakshakar, Head Research at Profitmart Securities, provided insights into Syngene’s positioning. He stated: “Syngene is a contract research, development, and manufacturing organisation catering mainly to global innovator pharma/chemical companies, offering integrated scientific services from early discovery to commercial supply.”
Gorakshakar emphasised Syngene’s operation via full-time equivalent (FTE) and fee-for-service (FFS) models and its strategic investments in safety, quality, business development, compliance, and leadership/scientific talent. He anticipates FY25 to be an inflection point for Syngene as capex intensity tapers, driving a sharp expansion in return ratios.
Syngene adopts a highly adaptable approach, catering to a diverse range of client needs and preferences. At one end of the spectrum, there are clients who require straightforward transactional services. For these clients, Syngene efficiently completes specific tasks or assays within defined timeframes, delivering results as requested without extensive collaboration.
Moving along the spectrum, Syngene engages with clients who seek a more profound level of partnership. These clients not only task Syngene with executing the necessary work but also value the company as a thought partner. In these relationships, clients actively seek Syngene’s advice, innovative ideas, and problem-solving capabilities. This approach involves a collaborative and integrated relationship, where Syngene contributes both intellectually and operationally to the client’s projects.
Syngene has cultivated a unique organisational culture and mindset centred around a profound connection with scientific excellence. This fundamental approach ensures its relevance and establishes it as a highly valuable partner for its clients. Moreover, the company has meticulously crafted an operating environment with an unwavering focus on safety, quality, and career development. When it comes to skills enhancement and career growth, particularly for young Indian scientists aspiring to engage in innovative work and collaborate with leading scientists worldwide, Syngene’s
Bengaluru campus serves as a hub. It acts as a scientific teleporter, connecting individuals to the forefront of global scientific advancements without the need for physical relocation. This enticing prospect not only attracts the best talent but also makes Syngene an appealing workplace, offering unparalleled opportunities for professional development and international collaboration
Talking about working along the global business, Hunt said: “The work is all done in India, the collaborators are global. Even though many of the clients are in the US, it means that their headquarters are in the US, but their own scientific network might be global. So it’s perfectly common for us but when we get on a video call with global scientists, they’re joining us from the US, Europe, and Asia, talking to us scientists in India. So it’s a four-way conversation.It’s a global science, and that’s the way the industry works. There’s a global intellectual connection. You don’t solve the sort of scientific problems that the world wants to solve, like a new medicine for cancer or a Covid-19 vaccine without a global effort and a global network,” added Hunt.
Technology advantage
“Artificial intelligence (AI) is driving significant contributions to drug discovery and development by leveraging its ability to analyse vast amounts of data, identify patterns, and generate important insights. Its integration into the pharmaceutical value chain offers tremendous potential to accelerate new drug development, improve manufacturing process efficiency, and enhance patient outcomes. Discovering a drug is a complex process that involves finding a biological entity that can be targeted to alleviate the disease and designing a molecule that can modulate the target with the right pharmacological activity and safety profile,” explains Dr Mahesh Bhalgat, COO, Syngene International.
“Syn.AITM, Syngene’s proprietary platform, is designed to expedite data-driven drug discovery. The platform integrates and learns from diverse chemical, biological, and clinical data to provide better and faster outcomes. The adoption of these AI tools has the potential to help Syngene accelerate the drug discovery process, reduce costs, and increase the success rate of bringing new drugs to market,” adds Bhalgat.
Syngene International has ambitious expansion plans aimed at further strengthening its position in the pharmaceutical and biotechnology sectors. The company’s strategic vision includes both geographical and capability expansions. The outlined approach emphasises a strategic and flexible investment strategy for Syngene’s research businesses. As the research business continues to grow significantly over the next few years, Syngene plans to maintain investments in research activities.
Future investments in biologics manufacturing will primarily be incremental, focused on adding specific capabilities or capacities as needed. Notably, there is a strong emphasis on business opportunities, with investments aligning closely with these prospects. The current capacity for monoclonal antibody production is considered sufficient. Any future biologics investments are anticipated to be primarily through strategic acquisitions, with a focus on optimising existing capacities and capabilities. Regarding small molecules, Syngene benefits from an integrated value chain. Investment in this area will primarily involve minor technology adjustments, reflecting a strategic approach to maintain and enhance efficiency and effectiveness.
Syngene’s investment strategy revolves around strategic acquisitions, targeted capacity enhancements, and technology adjustments. These initiatives are driven by specific business opportunities, ensuring a prudent and responsive approach to furthering the company’s growth and innovation in the dynamic pharmaceutical and biotechnology sectors.