Deal with Zoetis could be worth $500 mn in 10 yrs: Syngene In'l chief

In a Q&A, Jonathan Hunt, MD & CEO of the Biocon arm, dwells on his firm's initiatives to overcome supply chain bottlenecks and other issues

Biocon arm SyngeneInternational has signed a 10-year agreement to manufacture the drug substance for Librela, a monoclonal antibody used to treat osteoarthritis in dogs,along with the development and manufacturing of other molecules,with US-based animal health company Zoetis. Syngeneis expanding its capacities and expects to tap more opportunities in this space. Managing Director and Chief ExecutiveOfficer, SyngeneInternational, Jonathan Hunt speaks to Sohini Das on the road ahead. Edited excerpts.

Is there a possibility to scale up this manufacturing contract with Zoetis?

We have had a long relationship with Zoetis of over a decade. It started out on the research discovery side to do original innovative scientific research, trying to find new medicines for animals. It’s the biggest deal we have done with Zoetis, and one of the biggest manufacturing deals we have done. It has got the potential to be $500 million over the next 10-years. Therefore, it is a good step forward for our biologics business because it's really taking us into the commercial scale manufacturing.

Zoetis launched this product Librela in the European Union and it seems to be going very well. Zoetis is now looking to launch that around the world. Obviously, one of the bigger markets there is the United States and they're looking to take it into the United States after they've got the required regulatory approvals there. So all of those things are exciting for them, but they're great opportunities for us.

Have you overcome the supply side constraints that you faced in the last two years?

Global pandemic brought challenges around the supply chain across the world and across industries. Well, what we're looking at for Syngene is the quality of the relationships we've got with our vendors, we're looking at the quantity of relationships we've got, and maybe adding extra supply points to make sure that we can access what we need. We are investing in more stockpiling to ensure we have a bit more inventory and roll materials on hand just to smooth things out, and, in general, I'm happy with it. It's not feeding through to impact our customers. We're able to deliver to them, but it does create quite a lot of workload in the supply chain team.

On the manufacturing side, we've done a lot of the investment that we need to do deals like this. So with Zoetis, this is what we've been doing over the last 3-4 years--putting that capex in. You've seen investment on the biologics side, expanding the capacity. We've done the same thing actually on small molecule manufacturing as well. So currently we're in pretty good shape in terms of having the capacity and infrastructure we need, but given that I see quite good demand,particularly in biologics.I'm always open to investing more if we see customers coming through.

Global pharma R&D spending is likely to grow to $250 bn by 2025. What does this mean for players like Syngene?

The life sciences industry, pharma and biotechnology have evolved its core operating model over the last 20 years. When I joined the industry, the norm was that people largely did everything in-house themselves. One has seen a structural shift in the way people think about organising themselves. Even the biggest pharma companies partner where they see specialist skills that they don’t have. They partner where they see the scale and core capabilities, to access other people's sort of knowledge and infrastructure, they do it also to make themselves more variable, flexible, resilient, fleet of foot in doing it and it drives up efficiency actually, at an industry level, to make sure that we're not all over investing in capabilities, but through companies like ours, you can access the capability you need when you need it, but not when you don't need. So I think that's a continuous effort. I don't think it's gone past halfway.

How are biotech start-ups changing?

In some ways, the barriers to entering or starting up a biotech come down precisely because companies like us exist. So you, you no longer need to start a company with $50- 100 million to get going because you have to build a lot of infrastructure.

You now need a really good idea and a sense of purpose around science, but you can tap into a lot of knowledge and a lot of capability and you can do it with companies like us. FOr example, if you think about a company like IKEA furniture and you get an entire wardrobe in a box and you build it yourself. So, we almost serve that purpose with very sophisticated technology, with our high-tech customers. They don't need to build a biotech company. They just need to access all of the bits we've got and we can build it around.

What kind of manpower hiring is planned by Syngene?

Even during the pandemic we created over 1,000 new jobs and a job for us is, you know, many of our entry-level workers have two university degrees. That is a pretty highly qualified academically and intellectually capable workforce. So we created a thousand of those jobs, even during the pandemic. Even specifically with the Zoetis deal, I can see creating, you know, 100 manufacturing job roles.

What kind of research is planned for Covid-19 therapies?

We will continue Covid-19-related work for as long as it's needed from a societal point of view. And it's almost one of those bits of our business over the last couple of years, which I'd be very happy to see less of and a good example of that will be, you know, Remdesivir.

And we had quite a lot of effort and work going into manufacturing Remdesivir to make sure patients have the medicine that they need. Rolling on to this year, we're not doing a lot on Remdesivir. It will be quite negligible in terms of the contributor to our revenue. And it's an odd thing for a chief executive, but I'm delighted by that. Very happy not to be making COVID-19 drugs as part of a pandemic and national emergency response.

You have tried to diversify your supplier base. What are the plans for this year?

Yes, I think you have to. A very sensible way to go is to have a good sense of a globalised supply chain to not leave yourself overly reliant on any individual supplier to be dual sourced, or at least have that Plan B there. We also try to source locally in India right to give us that localised control as well. So it's a nice balance between the two.