Aragen steps up investment in complex drug modalities; plans 500 KL new CDMO capacity

Mumbai: Hyderabad-based contract research, development and manufacturing organisation (CRDMO) Aragen Life Sciences is stepping up investments in complex drug modalities such as antibody-drug conjugates (ADCs), peptides, oligonucleotides and high-potent APIs as it seeks to move up the drug development and manufacturing value chain.

Aragen, which works with more than 500 customers, including 16 of the top 20 global pharmaceutical companies, plans to add around 500 kilolitres of small-molecule CDMO capacity, MD and CEO Manni Kantipudi told ET in an exclusive interview. The company is also investing in a biologics drug-product facility, including fill-finish.

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Aragen recently filed its draft red herring prospectus (DRHP) with Sebi for an initial public offering. It makes 60,000-70,000 novel molecules a year, with its discovery business expected to provide an important base for expansion.

The move comes as global drugmakers increasingly seek alternatives to China for parts of their global supply chains, prompting Indian CRDMOs to expand.

"Our long-term ambition is to move from being a molecules company to becoming a medicines company. We want to increasingly move towards commercialisation, including drug substance and drug product manufacturing for customers," Kantipudi told ET.

ADCs are emerging as an important part of that strategy. The company is also developing its own intellectual property around ADC conjugation, including linker libraries. "ADCs are another important opportunity because we have capabilities in antibodies, small molecules and high-potent drugs. This gives us the ability to work on antibody-drug conjugates and develop conjugation technologies," Kantipudi said.

Kantipudi, who co-chairs industry group Innovator Pharma Services Organizations of India (IPSO), said India still needs greater investment in infrastructure, specialised talent and domestic supply chains to compete more effectively with China. Aragen is also looking to take its peptide capabilities beyond discovery.

"In peptides, we believe we have one of the largest peptide teams in India at the discovery level. Therefore, it is a natural progression for us to establish peptide manufacturing capability," Kantipudi said.

The company plans to set up a small peptide manufacturing facility initially for clinical-scale work, with the possibility of moving to commercial-scale production depending on development. Oligonucleotides are another area of focus.

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Kantipudi expects the CDMO business to become a larger growth driver as capacity is utilised. "Our CDMO business will continue to scale, and this is where we expect significant value creation. We have existing capacity that is still available, while we are also adding new capacity based on the pipeline we see coming through," he said.

Going forward, the company will continue to look at inorganic opportunities alongside organic growth, he said.

Technology is playing a key role across discovery and manufacturing. Kantipudi said Aragen's business grew 18% from FY25 to FY26 even as the company had fewer employees, with technology and efficiency gains contributing to the improvement.