Zydus gearing up for next phase of growth, eyeing new areas: Sharvil Patel, MD

Zydus Lifesciences is gearing up for its next phase of growth, placing new bets on specialty medicines, complex biologics, innovative products, medical devices, and contract development and manufacturing, managing director Sharvil Patel told ET’s Rica Bhattacharyya in an exclusive interview in Ahmedabad. “The focus is to build capabilities beyond traditional pharmaceuticals,” he said, as he reshapes the over Rs 27,000 crore company through acquisitions, partnerships and in-house research and development (R&D) to enter new areas. Edited excerpts:

You have been at the helm of Zydus Lifesciences for nearly a decade. The company has been increasingly focusing on complex biologics, biosimilars and innovation-led specialty medicines. What is the larger strategy?

From the beginning, our thought has been how to work from being just a pharmaceutical company to becoming a more patient-driven organisation. We cannot conquer everything, but in certain diseases we can create impact. Like, in India when we launched saroglitazar, fatty liver was not even a discussion point. In paediatric rare diseases, we are present in the US. And then, we have this oncology side. We are building more of an ecosystem across not all diseases, but some diseases.

Also read | Ozempic maker Novo Nordisk sets sights on hair-loss market


However, our focus will also be on creating access—when we launched biosimilar nivolumab (branded Tishtha) at one-fourth the price of the innovator, access went up. We will also work on things that are neglected and unsolved from the disease point of view. Even if I look at our next drug Usnoflast, we are looking at indications like ALS (amyotrophic lateral sclerosis, a progressive neurodegenerative disease), an area of unmet need. We’re looking at recurrent pericarditis and ulcerative colitis, among others.

What happens to the traditional US generics engine as you increasingly focus on innovation-led specialty medicines?

I don’t think we’ll be either-or. We’ll have both. These are two different legs that are both growing. US generics is still our largest market and still offers room to grow. We have a portfolio that’s already filed for 2032 and beyond as well as a large pipeline of products to come. That engine will continue to drive meaningful cash for the organisation.

Saroglitazar is the biggest test yet of Zydus’ discovery capabilities. What would a successful US launch look like?

For us, the journey has been quite long. We spent a long time working on discovery, which is when you invent or discover a molecule. And then, the third leg for us is to prove commercial capability. We already have three rare disease drugs that we commercialise in the US today. Now, we believe we are ready if everything goes well with Saroglitazar’sapproval, then we are ready with the commercialisation piece. We have a full-fledged team preparing for the launch. We are looking to target a 18-20% share of prescriptions in the US market because it’s our first foray into this area.

Also read | Drug regulator warns against prolonged use of painkillers, antibiotics

You have been fairly acquisitive in recent times. What is the road ahead for Zydus’ inorganic growth strategy?

Anything that is a new trend is where we will try to use capital to either partner, build or acquire. What we’re keen on in India is to buy brands. We’re more successful in consumer, but hopefully one day we’ll be more successful on the pharma side also. In other markets, we want to either buy or look for things where we have wide gaps. Speciality is the focus for most markets, mostly driven by the US. We will also look for new technologies. Now we have CAR-T (Chimeric Antigen Receptor T-cell therapy )capability. So can we do something more on new generations of CAR-T therapy or gene therapy.

When do you expect discovery-led products to start contributing meaningfully to earnings?

From 2030 and beyond, we will see strong earnings from pure discovery-led business, which is our central business, our oncology business and Saroglitazar and maybe something more as well. In the next four to five years we will definitely see meaningful value being created from these. It will be a mix of that strategy where we will have our own pipeline of products and also more active licensing or acquisitions on the speciality.

Oncology is already a major franchise for you. How do you see it evolving?

Oncology is a very strong success story for the company. We are the only Indian oncology company in the top three in the local market, according to Ipsos ranking. Our aim is to become the largest oncology company in India by 2028.
We are doing far more than just bringing access to these drugs. We have brought ADCs which are the first in the world to India. We have also brought precision diagnostics. We also launched a companion breast cancer screening test to determine whether patients require chemotherapy. We continue to see more opportunities to add around the oncology piece, which now include genetic testing.

Chinese biotech companies have built strong capabilities in novel biologics. Do you see Zydus partnering with Chinese biotech companies?

China is mostly doing novel biologics and they have done a good job. They have achieved a lot of quick follow-on successes and licensed a lot of programmes and built a strong capability. So, we will also look to license for unmet needs in India for novel biologics from China and we are actively working to license from China.

How do you see the GLP-1 (Glucagon-like peptide-1, used to treat diabetes 2 and support weight loss) segment panning out, especially with the innovators expected to launch oral GLP-1s next year in India?

When orals come, obviously it will play a very big role. In the long term, with the new molecules, I think orals will play a bigger role than injectables. But for a short period, we will still have to fight with injectables because orals too are patented.

What are the growth markers for Zydus over the next five years?

We are seeing good double-digit growth on the revenue side. We are at around 24% Ebitda (earnings before interest, taxes, depreciation and amortisation) and we hope to continue to improve in the next five years. As our innovation kicks in and matures, our profitability will improve. Growth will be decent for the next five years.

What are the other capabilities and therapeutic areas you want to build over the next phase?

In India, we want to be a very strong player in liver care. In nephrology, we want to be strong. In cardio, we want to be meaningfully stronger. Pain is an area that we think is important to address with so many challenges that exist, including neuro pain, and then motor neurone disorders. In the future, oncology, immuno-oncology, autoimmune are also areas where we think we will have a stronger play.