In interaction with Krishnakumar V, Executive Director & COO at Eris Lifesciences

The company's business model of building sustainable brands have enabled us to not only maintain but also expand market shares during (and following) the COVID pandemic period when MR-doctor interactions continue to be severely constrained.

"We have an exciting pipeline of patent expiration opportunities coming up in the cardio-metabolic segment over the next 3-4 years, which we plan to leverage." says  Krishnakumar V, Executive Director & COO at Eris Lifesciences

How did the pandemic impact your businesses?  

The pharmaceutical industry too saw a paradigm shift in terms of doctor interactions migrating from a physical format to a digital format. We adapted seamlessly to this trend, conducting more than 2,500 webinars, involving more than 33,000 medical practitioners in FY21, across a range of topics including diabetes, heart failure, and COVID impact on cardiometabolic health, general immunity & epilepsy. Our ethos of building large resilient brands ensured our growth through this period when prescriber preferences shifted to established brands. There were localised supply chain disturbances, which were able to successfully deal with. The company’s revenue exceeded Rs 1,200 crore for the year ended March 2021 with a net profit of Rs 355 crore. This was the third consecutive year of Eris, outperforming the covered market and the Indian pharmaceutical market. 

Our therapy areas also witnessed healthy growth in this period. Our core cardio- metabolic and vitamins, minerals & nutrients (VMN) segments outperformed the covered market for the third consecutive year. We introduced interesting products in FY21, some of which include: 

Gluxit: Our offering in the strategically important Dapagliflozin (SGLT 2) molecule in oral diabetes care. 

ZAC D: A unique combination of Zinc and Vitamin A, C, and D in a convenient once-a-day chewable tablet. 

We also strengthened our prescription ranking among super-specialists during the year; Eris ranks fourth among cardiologists, third among diabetologists, and third among neurologists in the covered market. 

2.     How important is supply chain management for your business? Any disruptions there due to lockdowns?

Supply chain management is an important pillar of our business model since we need to be able to make life-saving medicines available/since we make available life-savings medicines across the country in a timely fashion. We have a WHO GMP-compliant manufacturing facility in Guwahati, catering to 74 per cent of our revenue, and a pan-India sales & distribution presence. Our focus has been to ensure an adequate inventory of stocks across our stocking points. The company’s pan-India distribution network consists of two central warehouses, 23 CFAs/consignees, and over 2,100 stockists, enabling it to reach over 5,00,000 chemist outlets across the country.  

3.     What are the three strong pillars of your company?  

The three enduring pillars of our company have been: 

Chronic & sub-chronic therapy-focussed portfolio: More than 91 per cent of our revenue comes from our chronic and sub-chronic therapy areas, with diabetes care and cardiac care contributing 58 per cent to the overall revenue. These therapies are relatively more resilient to short-term market disturbances. This, coupled with the rise in COVID-triggered diabetes, will result in robust growth for the cardio-metabolic market. Our mother brands enjoy large market shares in their respective categories, with 7 out of the 15 brands ranked in the top 5 in their categories.  

Strong reputation and mindshare with specialists: We chose a differentiated ‘top of the pyramid’ business strategy at inception, when we decided to focus our field efforts on specialists and super-specialists, who represent the ‘key opinion leaders (KOLs)’ Indian doctor hierarchy. We have a two-pronged strategy of building and sustaining engagement with these KOLs– (i) Harnessing the power of cutting-edge science to bring new evidence to light for the management of chronic diseases, and (ii) enabling patients (through their doctors) to take charge of their diagnosis and treatment through our patient care platform. 

Strong balance sheet: We have largely been a net-debt-free company since inception. Our business has been cash accretive from the third year of operation. Today, we rank among the highest cash-generating businesses in our industry with 87 per cent of our EBITDA, translating into operating cash flow in FY21. We have maintained an ROIC of greater than & equal to 30 per cent over the last 12 years. We had Rs 417 crore of surplus cash and cash equivalents on the balance sheet as of March 31, 2021.  

4.     What are your expansion plans and what steps have been taken to increase your market share? 

Our core therapies of anti-diabetes and cardiology are expected to witness robust growth, given the projected increase in the incidence of cardio-metabolic diseases over the next few decades. We expect the onset age of diabetes to get preponed by a few years on account of the COVID pandemic. We rank among the established companies in the cardio-metabolic segment and hence, are well-positioned to actively ride this growth wave. 

Our top 15 mother brands enjoy prominent market shares with 7 out of the top 15 brands being ranked among the top 5 in their respective categories. We have enough tailwinds in our therapies to help us consolidate and grow this brand portfolio by driving better awareness, earlier detection, and comprehensive management of diseases.  

We have an exciting pipeline of patent expiration opportunities coming up in the cardio-metabolic segment over the next 3-4 years, which we plan to leverage. Given our top three prescriptions rank among super-specialists (cardiologists, diabetologists, neurologists), we are well-positioned to take significant market shares in the new product opportunities that are opening up. We also plan a significant expansion in our coverage of specialists and consulting physicians over the next five years. 

5.     What are the biggest growth drivers for your company?  

We are executing five primary growth drivers: 

Expansion of power brands’ franchise: Our business model of building sustainable brands have enabled us to not only maintain but also expand market shares during (and following) the COVID pandemic period when MR-doctor interactions continue to be severely constrained. Prescriber preference has shifted to established brands during this period; this has augured well for us with 7 of our top 15 mother brands being ranked among the top 5 in their respective categories. Our established market standing in diabetes positions us well to take the lead in the management of post-COVID early-onset diabetes (unmasking of diabetes) – Zomelis and Gluxit are highly strategic products for us in this regard. 

New product pipeline: As mentioned previously, we have an exciting pipeline of patent expiration opportunities coming up in the cardio-metabolic segment over the next 3-4 years. We are well-positioned in this space to gain significant leverage from these expirations; our experiences with Zomelis & Gluxit bear testimony in this regard. We plan to launch 10+ new products in FY 22 – our Zomelis SG (Vildagliptin +Remogliflozin) brand is the first to be launched in this series. 

Expansion of physician coverage: We propose to significantly expand our coverage of specialists and consulting physicians in the next five years. 

Therapeutic diversification: We are working on diversification opportunities in high-growth areas such as neurology, women’s health and dermatology. 

In-licensing and acquisitions: On the back of value-accretive deals (e.g., Strides, Zomelis), we continue to look for high-return inorganic opportunities to complement our organic growth initiatives.