Chestnut Ridge portfolio will add 20 commercial products; to launch 5-6 new products each quarter: Dr. R Ananthanarayanan of Strides Pharma

Dr. R. Ananthanarayanan, Managing Director & Chief Executive Officer, Strides Pharma Science Limited (Strides), talks about Q2FY22 numbers, the US business and associated challenges, development on vaccine side and revenue guidance, biosimilars and Capex, among others, during an exclusive interview with Swati Khandelwal, Zee Business. Edited Excerpts: 

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Q: Please tell us about the highlights for the quarter ended September 2021? 

A: This quarter as well has been a muted quarter for us and the reason for being muted is predominantly the US business, where pricing pressure is existing at present - continued from quarter one to quarter two. The price erosion is something that has caused the US business to degrow. However, at the same time, we have seen a rebound back in our other regulated markets, which grew 27% quarter-on-quarter and the emerging market that grew 22% quarter-on-quarter. So, in comparison to the first quarter in the second quarter, the market growth has been clearly visible and that momentum will continue in the third and fourth quarters. The emerging growth will continue in quarter three and quarter four. The US business on the other hand will continue to see some pressure although we believe that the pricing pressure has now stabilised this will take three to four quarters before the US business gets back to its original growth trajectory. The other highlight for us in this quarter has been the closing of the acquisition of the Chestnut Ridge facility along with a basket of ANDAs that is an exciting one for us because with that we can now launch new products every quarter beginning the quarter one of FY23. And, with all the new products coming in, we expect that over the next three to four quarters the US business should be back on track. We will also start showing growth from the third and fourth quarters in the US but the guidance that we gave earlier of between USD 225-250 million for the US business is now got pushed to FY23 instead of FY22.

Q: What challenges do you see in the US business and are you thinking of new launches in the US market, if yes, what is it and by when it will happen?

A: The main reason for this has been the pricing pressure because our portfolio of products is an acute portfolio and the acute portfolio has been the biggest impacted business with the COVID outbreak in the US because people wear masks and were not moving outside due to which there has been an impact on the acute portfolio. And with inventory lying in the channel, the impact has been on pricing. Now in terms of new launches, as I said, the portfolio, we have acquired from Endo on the Chestnut Ridge facility is going to play for our strength. It has a diversified portfolio of acute and chronic and with that, we will plan to launch. Now, we have got 20 commercial products from the acquisition and we are planning to launch another 20 products over the next several quarters, at least about 5 new products every quarter. So, we are going to be busy in the next financial year. We have already started work on the launch of the products. So, beginning of the first quarter of FY23 that will be five to six new launches every quarter.  

Q: Coming to Positive things for the Quarter. What's happening on the Vaccine side and what revenue guidance will you provide on it? Also, what is an update on biosimilars segments going ahead?

A: In vaccine, the good news is that we have a contract with the Russian Direct Investment Fund (RDIF) and we have been very successful in completing the validation and scale-up for the Sputnik Light portion and that is what we will start. We expect the commercialisation to happen towards the end of Q3FY22 and that is very much on track. As part of the contract, we are bound to supply to RDIF and then RDIF will decide in which part of the world they will supply the vaccine. As far as a biosimilar is concerned, our insulin platform is on track, we have completed the phase-I study and now are applying for permission for phase-III and it continues to be on track as per our original plan for the insulin biosimilars.

Q: Tell us about the kind of CapEx plan going forward especially in H2FY22? Also, you will look forward to any M&A opportunities, if yes, what is the ticket size and parallelly are you seeing interest from some of the investors who want to come in and put in money into your company and are you open to any private equity company/s coming and picking up stakes?

A: In terms of CapEx in the second half is going to be as per plan. We expect CapEx between $6-8 million, which is in line with the plan. So, that is what it would be. As regards, right now, we will focus on getting the business on track, so, I would not like to comment on any private equity interest or opportunity. The focus for myself and the management team is really to get the business back on track, focus on the US, get the US launches and get the US business into growth. We expect that from Q1 and Q2, we should have growth beginning from Q3 in the US. More importantly, our focus is on cost management, the pipeline, we have acquired, which will enable us to do the launches. So, we will focus on the same.

Q: On acquisition please update on the areas and segments where you can look forward to good opportunities? 

A: As far as the acquisition is concerned, first we will stabilise the recent acquisition that we have made. It is being integrated and as I said, we have an exciting product pipeline there and we will launch the pipeline. This is where the focus is at present. In terms of any new acquisition, I don't think that right now we are not looking at it. Right now, it is about leveraging the acquisition that has been done.