Syngene International to invest about $100 mn annually in research and biologics in FY24

Syngene International, a subsidiary of the biopharmaceutical major Biocon, has outlined an annual investment plan exceeding $100 million with a primary focus on research, biologics, and small molecules moving forward.

The company has made a cumulative investment of approximately Rs 4,500 crores over the last 5 years. Out of this total, about 50 per cent has been allocated to research activities, nearly 30 per cent dedicated to small molecules, and the remaining portion utilised for large molecules, IT, digitisation, and other needs.

“The drivers of our growth have been multifaceted. Over the past several years, one of the primary growth catalysts has been our research expansion. This encompasses both the volume and diversity of research endeavors we undertake. In the recent past, the growth has been particularly driven by our biologics division,” Sibaji Biswas, Chief Financial Officer (CFO), Syngene International said during a recent visit to a Syngene facility.

“Although all our businesses are experiencing growth, the rapid expansion of the biologics has introduced transformative dynamics to the equation. By year-end, the numbers indicate that approximately 40 per cent of our revenue will stem from development and manufacturing, a shift from the past where research occupied a larger share at around 70-30,” he noted, adding that this evolution points toward a balanced distribution in the coming years.

To meet the increasing demand, the company acquired new land in Hyderabad, which will serve as an expansion hub for research activities. This is an extension of the company’s existing Hyderabad campus, already housing approximately 900 scientists at the Genome Valley. "Consequently, our investment trajectory will be in line with the traction of demand we foresee in the upcoming years," said Biswas.

The company recently invested in the biologics business, accelerating its growth. Syngene International, in its investment strategy, aims to concentrate on enhancing capabilities alongside capacity expansion. 
“From a strategic perspective, our decision was to progressively advance into the development and manufacturing segments of the value chain. This approach involves leveraging our leadership in research services, particularly in the Contract Research Organization (CRO) aspect of the business, and expanding into both Development and Manufacturing Services, with the aim of becoming a leading Contract Development and Manufacturing Organization (CDMO),” said Jonathan Hunt, MD & CEO, Syngene International.

“We favor this strategy because it aligns with our customers' value chain and provides a well-balanced approach with significant synergy and resilience. We believe this strategy has been successful in driving our progress and delivering positive results,” he added.

The investment in research is consistent and steadily growing along with Syngene’s business, but recently the company has invested significantly in development and manufacturing. The research investment necessitates continuous investment in capacity expansion, such as setting up research facilities and acquiring equipment.

In 2022, Syngene International signed a 10-year contract to manufacture biologics with a long-standing client, Zoetis. "Revenue contribution from development and manufacturing is expected to grow to 40% this year, up from 30% in the past. This is because commercial manufacturing is gaining momentum. This growth has been substantial and is largely attributed to the Zoetis contract, and we should see more of these in the future," said Biswas.

Biswas said that commercial manufacturing has significantly bolstered the company’s growth capability. "Over the past year and a half, our growth has accelerated, evidenced by the reported growth of above 20 per cent. Looking ahead, commercial manufacturing will remain a robust driving force, and we foresee a more balanced revenue split between research and development and manufacturing in the future," he said.

Also Read: This Noida-based start-up is offering a centuries-old investment instrument in a digital avatar