Join us for an exclusive interview with Mr Saransh Chaudhary, President, Critical Care Division, Venus Remedies
"Our top three strategic priorities include forging synergic partnerships for our leading generic & research products, optimising organisational leverage to maximise our gains as well as astute capital investment", says Mr Saransh Chaudhary, CEO, Venus Medicine Research Centre (VMRC), and President, Critical Care Division, Venus Remedies in an exclusive interview with Geyatee Deshpande, Senior Research Associate, Dalal Street Investment Journal.
What is your outlook on the Indian pharma industry?
The Indian pharmaceutical industry, which has remained by and large resilient to the COVID-19 disruption is expected to grow from $42 billion in 2020 to $130 billion by 2030, going by official projections. However, for that to happen, we need to build on our strengths as a major exporter, a world leader in generics, and an innovator in developing new drugs catering to unmet medical needs. Ernst & Young-FICCI vision report has rightly observed that we can achieve the projected growth if we keep the momentum going by reinventing ourselves. In the past year, India has made a mark as a reliable supplier of quality drugs, in addition to small molecules that are being used to treat COVID-19-related complications, when it mattered the most in view of the raging pandemic.
Exports should form a major focus area for the pharma sector in the coming years. We can increase our global share of exports by 2030 by improving on R&D, manufacturing, and supply chain management as well as market access. A renewed focus on innovation-led R&D is the way forward. We should go about it by exploring new models for financing R&D for high-risk and long-term projects. Manufacturing and supply chain initiatives should entail developing capabilities in manufacturing complex generics.
Overall, the growth outlook is quite optimistic in the light of the infrastructural advancements to meet health challenges like COVID-19.
What are the key growth triggers for Venus Remedies?
The major growth drivers of Venus Remedies are research & development, manufacturing operations, and marketing. R&D is the most significant enabler for a research-oriented company like ours. Our R&D wing, Venus Medicine Research Centre (VMRC), is equipped with a robust drug development infrastructure to support scale-up. Having filed two more patents in 2019-20, taking our total number of patents awaiting approval to 50, VMRC is currently working on 19 products across four therapeutic domains. Looking forward, VMRC is primarily focussing on developing our renal guard technology that aims to lower the renal toxicity associated with last-line antibiotics.
We are also revamping our manufacturing operations to ensure higher production volumes by introducing advanced manufacturing technologies and automation. We have taken a host of measures to cut down costs by setting up a new nitrogen plant and introducing power-efficient lyophilisers.
Marketing is another key growth enabler for us. We have an elaborate and carefully worked out marketing strategy that has enabled us to expand our operations worldwide. Armed with 11 international marketing offices, we have tied up with leading pharma companies worldwide to market our products in the international markets.
According to you, when will the pandemic end in India or globally?
Given how the novel Coronavirus is mutating and coming up with new variants in quick succession the world over, it is tough to predict when this pandemic will end. However, we can certainly ensure a pandemic-free world sooner or later if we strictly adhere to the safety protocols by maintaining social distance and wearing masks in public.
However, the real game-changer in ending this pandemic would be the vaccination. India should go for mass vaccination on a war footing to achieve lasting herd immunity, which will eventually reduce the severity of COVID-19 to a typical seasonal flu by denying the novel Coronavirus, a chance to find new hosts and mutate.
What are your top three key strategic priorities right now?
As of now, our top three strategic priorities include forging synergic partnerships for our leading generic & research products, optimising organisational leverage to maximise our gains as well as astute capital investment.
Building on our robust pipeline of patented and generic products, we are constantly extending our footprint to new geographies worldwide through marketing tie-ups with leading pharmaceutical companies in countries where we want to mark our presence. Equipped with CTD dossiers for major regulated international markets, including the European Union, we market our wide range of injectables for critical segments like antimicrobial resistance, oncology, and now anticoagulants via retail sales, institutional sales, and marketing collaborations.
Coming to optimisation of our organisational leverage, we believe that human capital holds the key to wealth creation through constant value addition and improvisation. Over the next five years, attracting the best talent to the company remains a key priority.
Astute capital investment is also one of our top strategic priorities, having defined four areas for capital investment namely infrastructure upgradation, productivity enhancement, regulatory compliance as well as technology & data.
What are your internal growth targets?
We, at Venus Remedies, have an elaborate and carefully worked out marketing strategy that has enabled us to expand our operations in India and 70 other countries across the globe. In the next five years, we aim to achieve a turnover of Rs 1,000 crore and extend our global footprint to at least 100 countries. As a research-driven pharmaceutical company, Venus Remedies will continue to nurture its intellectual property (IP) wealth by consistently working towards developing novel products to address unmet medical needs, particularly in the antimicrobial resistance (AMR) segment. At a time when the COVID pandemic is posing a significant threat worldwide, we realise that AMR is also a silent pandemic, which can erupt anytime, causing widespread devastation if we do not reinvent ways to get the better of drug-resistant bacteria. R&D is one of our key focus areas, and we will work towards attracting the best talent in research and forge international collaborations to bring key technologies and capabilities to India.
What are the reasons behind your company doing so well recently?
Our firm emphasises on financial discipline and our passion for serving our customers better has set us apart. Over the past two years, we have rededicated our efforts to strengthen our relationships with our suppliers & customers through diligent investments. This has really paid off as it has enabled us to seize the opportunities presented to us, which we may otherwise not be able to capitalise on.
As an R&D-driven pharmaceutical company, our inclination to develop new products to cater to unmet medical needs have also stood us in good stead. While VMRC is at the forefront of cutting-edge research in the therapeutic areas of antimicrobial resistance, oncology, hemostasis, and herbal medicine, our focus on building on our robust product pipeline consisting of a balanced mix of generic and R&D-based drugs have given us a definitive edge. With the world being gripped by the COVID crisis, we have risen to the occasion by catering to the requirements of COVID patients through medicines like enoxaparin, which addresses the problem of blood coagulation, and other critical care antibiotics.
Our carefully laid-out marketing blueprint, which has given us an expansive reach within and outside India, has also turned out to be a decisive game-changer. The wide range of injectables produced in our labs for critical care segments like antimicrobial resistance and oncology are marketed through a multi-nodal structure and strategic collaborations. This has allowed us to expand horizontally and reduce our dependence on a few large customers.
We have a booming market in the African continent and South-East Asia. Our investments in the portfolio of antibiotics and anticoagulants to secure a large slice of the market pie in these countries by securing government tenders through competitive bidding have paid rich dividends. Likewise, our extensive domestic marketing operations have taken us on a high growth trajectory.
Lastly, we have also revamped our manufacturing operations by investing in more efficient and advanced technologies to optimise costs and improve productivity.
What are the key growth risks facing your company?
Most of the active pharmaceutical ingredients (APIs) in the pharmaceutical industry in general and the formulations segment, in particular, are procured from overseas. We should be prepared for volatility in the API segment due to the geopolitical crises on the international front. At Venus Remedies, risk management is integral to our core philosophy and working. Our propensity to take risks whets our appetite for growth and has stood us in good stead over the years as it is based on precise projections and proper risk mitigation and management framework.
Like any other pharmaceutical company aiming to propel itself into a higher growth trajectory, we are faced with risks associated with profitability, monetisation of R&D efforts, pipeline, people, capacities, and IT-enabled processes. Still, we have overcome them with a focussed & actionable approach and will continue to mitigate such risks by identifying trends early.
While mitigating the growth risk by focussing on internal efficiencies to improve product and process quality and optimise cost structures, we have also enhanced organisational liquidity through the stringent deployment of working capital & repayment of secured debt. Our increased business volumes have helped in better absorption of fixed costs, leading to improved cash flow.