Suven Life Sciences Ltd Management Discussions

Economic overview

World Economy

During 2025 and into early 2026, the global economy demonstrated notable resilience, achieving an estimated real GDP growth of 3.4%, supported by strong technology-related investments (particularly in Al), fiscal and monetary policy support, accommodative financial conditions and private sector adaptability, despite ongoing trade policy adjustments and geopolitical uncertainties. According to the International Monetary Fund (IMF), global headline inflation stood at around 4.1% in 2025.

Global trade remained robust in 2025, with world trade volume (goods and services) expanding by approximately 5.1%, driven by front-loading of activities ahead of tariff changes, surging technology and Al-related exports and adaptations in supply chains.

While tariffs and policy uncertainty slowed momentum in some categories, brisk growth in tech-related trade flows offset these pressures, with notable reorientation of trade linkages.

Risks to the outlook remained tilted to the downside, including escalation of geopolitical tensions (notably the Middle East conflict), potential re-evaluation of Al productivity gains, renewed trade tensions and fiscal vulnerabilities.

The U.S. economy exhibited resilient performance in 2025 amid trade policy adjustments and a temporary government shutdown. It benefited from strong technology and Al-related investments, fiscal support and private sector adaptability, which helped offset headwinds from tariffs and policy uncertainty. The labour market cooled gradually while inflation remained above target for much of the year, influencing monetary policy dynamics. Overall, the economy showed resilience with estimated real GDP growth of 2.1% for the year.

Outlook

Looking ahead, the IMF projects global growth at 3.1% in 2026 and 3.2% in 2027 under its reference scenario (assuming a limited conflict in the Middle East). World trade volume growth is expected to moderate to 2.8% in 2026. Continued technological advancements, particularly in Al, alongside policy support, are expected to provide tailwinds, even as new geopolitical challenges weigh on the outlook.

Indian Economy

The Indian economy exhibited robust performance in FY26, underpinned by strong domestic demand, resilient private consumption, improving investment activity and supportive government policies. According to the Second Advance Estimates and official data, real GDP growth for FY26 is estimated at 7.6%, up from 7.1% in the previous year (under the revised GDP series). This positions India as one of the fastest-growing major economies globally.

Key drivers included healthy private final consumption expenditure (which rose to its highest share in over a decade), sustained public capital expenditure, a recovery in the manufacturing and services sectors and improving corporate and bank balance sheets, which supported private investment. Headline CPI inflation remained exceptionally benign, averaging around 1.7 to 2.1% for much of the year (April to December/March period), benefiting from favourable base effects, softer food prices and supply-side measures. This low inflation environment enhanced real purchasing power and supported consumption demand.

The fiscal position remained prudent, with the central governments fiscal deficit contained below 4.5% of GDP. External balances were comfortable, supported by a narrowing of the current account deficit and resilient services exports. Risks during the year stemmed primarily from global factors, including trade policy shifts, geopolitical tensions in West Asia and volatility in commodity prices (particularly energy).

Outlook

Looking ahead into FY27, the RBI projects real GDP growth at 6.9%. Growth is expected to remain supported by domestic demand, structural reforms, infrastructure push and technological advancements, though moderated by global headwinds and base effects. Inflation is projected to rise moderately toward the 4% target band. Sustained policy focus on manufacturing, innovation and ease of doing business should continue to create a conducive environment for sectors such as pharmaceuticals and biotechnology.

For Suven Life Sciences, these macroeconomic and healthcare trends are particularly relevant because the Company operates in innovation-led drug discovery, with a specialised focus on Central Nervous System disorders. Rising healthcare needs, growing investment in research-led therapies and advances in technology continue to support the long-term relevance of companies focused on novel therapeutic development.

SOURCES:

https://economictimes.indiatimes.com/news/economy/indicators/rbi-gdp-growth-fy-2026-27-mpc-meeting-gdp-forecast-india-eases-growth-forecast-as-iran-wa r-oil- surge-risks-cloud-growth-trajectory/articleshow/130091660.cms Rs.from=mdr

https://www.indiabudget.gov.in/economicsurvey/doc/lnfographics%20English.pdf

https://tradingeconomics.com/india/inflation-cpi

https://www.pib.gov.in/Press Re leseDetailm.aspx Rs.PRID=2233518&reg=3&l a ng=2

The global pharmaceutical industry sustained its resilience through 2025. Rising healthcare demand, ageing populations, the growing burden of chronic diseases and continued investment in innovative therapies underpinned expansion. Market value reached an estimated USD 1.7 trillion, led by biologies, specialty drugs, precision medicine and drug discovery.

Therapeutic priorities sharpened around oncology, neuroscience, metabolic disorders and rare diseases. During this shift, CNS-targeted therapies gained renewed prominence as companies pursued novel mechanisms and differentiated pipelines to address conditions with high unmet need.

Regional dynamics reflected distinct strengths. The United States retained its position as the largest market, supported by deep biotech capital, advanced R&D capabilities and a strong innovation ecosystem.

Europe delivered steady performance, anchored by supply chain resilience, domestic manufacturing and biologies development, though pricing pressures and regulatory complexity persisted.

India further consolidated its standing as a global pharmaceutical and clinical research hub. A skilled scientific workforce, cost-efficient research capabilities, expanding clinical trial activity and rising capital flows into specialty therapies and biotechnology reinforced its strategic relevance.

Innovation-led transformation in pharmaceuticals

The global pharmaceutical industry is shifting from volume-led growth to innovation-led growth in high-value therapies. Rising disease complexity, ageing demographics and widening unmet medical needs are driving investment into specialised therapeutic areas, accelerated development models and research-intensive pipelines.

India is well-positioned within this transition. A deep scientific talent base, cost competitiveness, advancing digital capabilities and enabling policy frameworks continue to strengthen its standing as a global pharmaceutical and research hub.

Together, these forces are opening longterm opportunities for research-oriented companies in high-value segments, particularly CNS disorders, precision medicine and novel drug discovery.

Opportunities in pharmaceuticals CNS & Neurological disorders: The growing global burden of central nervous system conditions- including Alzheimers, Parkinsons, depression and epilepsy- is driving sustained demand for innovative therapies. This creates a meaningful opportunity for companies with focused capabilities in CNS-led drug discovery.

Precision medicine & Biomarker-led therapies: The shift toward precision medicine and biomarker-led therapies is reshaping how drugs are discovered and developed. Companies that align research programmes with patient- specific mechanisms and targeted treatment pathways are positioned to deliver differentiated outcomes.

Collaborations across pharma, biotech, academia and technology: Innovation in pharmaceuticals is increasingly collaborative. Partnerships with global pharma, biotech firms, academic institutions and technology platforms accelerate discovery, strengthen scientific validation and support the development of differentiated molecules.

Regulatory pathways supporting innovation: Global regulators are actively encouraging innovation in areas of high unmet need. Expedited review mechanisms, orphan drug status and priority designations offer clear advantages to companies advancing specialised and differentiated therapies.

Global demand for specialised research capabilities: As global pharmaceutical companies sharpen their focus on complex diseases and innovation-led pipelines, demand for specialised research capabilities is set to rise. Companies with deep domain expertise, scientific talent and focused discovery platforms are well placed to capture this opportunity.

Global policy & Regulatory developments

Regulatory and policy frameworks across major markets during FY26 reflected a balanced focus on accelerating innovation while improving affordability, safety, quality standards and patient access.

In the United States, the Food & Drug Administration continued to enable faster pathways for novel therapies through adaptive trial frameworks and precision medicine initiatives.

Policy attention also remained on strengthening domestic manufacturing and improving supply chain resilience.

Europe progressed with reforms under its Pharmaceutical Legislation and biotechnology programmes, targeting shorter approval timelines, broader access to medicines and stronger support for innovation-led healthcare. Parallel developments, including the EU Al Act, are expected to raise governance standards for artificial intelligence and digital health applications.

In India, regulatory and policy actions continued to reinforce pharmaceutical quality, clinical research and innovation. Enhanced oversight, expanded research infrastructure and growing biotechnology capabilities are set to elevate the countrys role in the global pharmaceutical value chain.

Collectively, these frameworks are fostering responsible innovation and creating clear opportunities for research- led companies with scientific rigour, clinical focus and agile regulatory strategies.

Increasing focus on innovation-led drug discovery

Research and development remained the cornerstone of growth and competitiveness across the global pharmaceutical industry in 2025. Companies stepped up investment in innovative therapies, biologies, precision medicine and advanced discovery platforms to address unmet needs and build stronger future pipelines. Leading global players continued to allocate 20-25% of their revenues to R&D, underscoring the industrys pivot to innovation-led growth.

Oncology retained its position as the dominant therapeutic area, while neurology and CNS saw strong momentum with nearly 3,400 trials globally over the past five years. The FDA approved 46 novel drugs in 2025, a meaningful share of which advanced neurology and specialty care indications. Emerging biopharma companies originated a notable portion of these approvals, reflecting the strength of the innovation ecosystem.

Technology integration & Collaborative research

Strategic collaborations between pharma, biotech and technology firms are deepening to enhance R&D productivity and pipeline development.

Investments in neuroscience, oncology, metabolic disorders, rare diseases and next-generation therapeutics expanded throughout the year, supported by advances in genomics, biomarker research and precision medicine.

In parallel, the industry continued to strengthen clinical trial productivity, accelerate regulatory approvals and modernise digital research infrastructure. According to IQVIA, clinical trial activity and biopharma funding stabilised and improved through FY25, aided by stronger late- stage success rates and broader use of digital tools in research operations.

SOURCES:

https://www.iqvia.com/newsroom/2025/04/stabilization-and-improvement-seen-in-multiple-key-biopharma

https://www.imd.org/future-readiness-indicator/home/pharmaceuticals-2025/

https://www.cbinsights.com/research/ai-drug-research-development-market-map/

Drug discovery

Drug discovery is the foundation of pharmaceutical innovation- the process of identifying biological targets, screening chemical and biological compounds, evaluating safety and efficacy and advancing promising candidates through preclinical and clinical development. It draws on biology, chemistry, pharmacology and computational sciences to deliver therapies for unmet medical needs.

Advancing innovation in novel therapeutics

In 2025, drug discovery remained the high-risk, high-reward starting point for new chemical entities and therapeutic candidates. The global market was valued ataround USD 72 billion and is projected to grow at a CAGR of nearly 9%, reaching USD 150-174 billion by 2034-35. Growth is being driven by rising demand for treatments in complex chronic and neurological conditions, alongside rapid adoption of advanced technologies. Investment continued to flow into CNS disorders, oncology, metabolic diseases, immunology and rare diseases.

Progress in molecular biology, genomics, biomarker research and computational sciences is reshaping the discovery process.

Regulatory momentum reinforced this trajectory. The USFDAs CDER approved 46 novel drugs in 2025- a modest decline from 50 in 2024 but well above historical averages. Approvals spanned multiple areas, with notable advances in neurology, including expanded indications for tenecteplase in stroke, paediatric migraine prevention and Alzheimers therapies. The momentum carried into early 2026, reaffirming the FDAs commitment to high-unmet- need areas, particularly neurological conditions.

Growing importance of Collaborative research & Technology

Collaboration across pharma, biotech, academia and technology firms is strengthening innovation capacity and accelerating pipelines. Digital infrastructure, cloud-based research platforms, high-throughput screening, and computational biology are enabling more efficient and cost-effective discovery models.

Regulators in major markets continue to support innovation through faster review pathways, orphan drug incentives and breakthrough therapy designations. Neuroscience research has gained particular momentum, driven by the rising global burden of neuro- degenerative and psychiatric disorders- creating meaningful opportunities for companies focused on CNS drug development.

This shift aligns directly with Suven Life Sciences research focus on CNS disorders and the broader industry move toward novel, targeted therapies for high-unmet-need areas.

CNS therapeutics landscape

Expanding importance of CNS therapies

The Central Nervous System (CNS) therapeutics segment has emerged as one of the most strategically significant areas in global pharmaceuticals. CNS disorders span both neurological and psychiatric conditions-including Alzheimers, Parkinsons, epilepsy, schizophrenia, depression, anxiety, bipolar disorder, insomnia and attention- deficit disorders.

Demand is being driven by rising life expectancy, growing urban stress, lifestyle shifts and increasing awareness around mental health.

CNS has historically been among the most challenging therapeutic areas, marked by complex disease biology, high clinical failure rates and lengthy development cycles. However, advances in neuroscience, genomics, biomarkers, precision medicine and artificial intelligence are reshaping the discovery landscape and improving our understanding of disease.

The global CNS therapeutics market is estimated at USD 143.32 billion in 2026, up from USD 134.42 billion in 2025 and is projected to reach USD 197.35 billion by 2031, growing at a CAGR of 6.62%. Breakthrough approvals such as KarXT for Schizophrenia and Donanemab for Alzheimers mark a decisive shift from symptomatic control toward therapies targeting causal neurobiology. Research activity is accelerating across neuro- degenerative diseases, psychiatric conditions, rare neurological disorders and cognitive impairment.

Rising global burden of Neurological & Mental health disorders

Neurological and mental health conditions represent one of the largest healthcare challenges worldwide. According to the WHO, over 3 billion people are affected by neurological conditions, making them the leading global cause of ill health and disability, with more than 11 million deaths annually. More than 1 billion people live with mental health conditions, led by anxiety and depression, with an estimated economic impact of nearly USD 1 trillion a year through lost productivity, healthcare costs and social burden. Workplace stress, social isolation, digital lifestyle shifts and post-pandemic psychological pressures continue to deepen the trend. Neuro- degenerative disease is set to expand sharply with ageing demographics across both developed and emerging economies. Dementia cases worldwide are expected to nearly triple by 2050, creating sustained demand for diseasemodifying therapies and advanced neurological care.

Industry focus on Innovation & Drug discovery

Despite historically high development risk, the industry continues to scale up CNS R&D. Companies are advancing novel mechanisms, precision medicine, gene therapies, neuroinflammation pathways and biomarker-based approaches to improve outcomes in high unmet-need areas.

New-age technologies are transforming CNS drug discovery- enhancing target identification, patient stratification, trial design and predictive safety analysis.

Digital biomarkers, wearables, brain imaging and real-world evidence are further enabling earlier diagnosis and personalised treatment.

Global regulators, led by the USFDA, are supporting innovation through breakthrough therapy designations, accelerated review pathways and orphan drug incentives. Recent approvals in Alzheimers, rare neurological disorders and psychiatric illnesses have renewed investor confidence and industry momentum in CNS development. This environment reinforces the relevance of Suven Life Sciences CNS-focused, research-driven approach.

Market trends and industry focus in CNS therapy

The industry is shifting decisively in 2025 from symptomatic management to disease-modifying and precision- led therapies. Neuro-degenerative disorders, led by Alzheimers and Parkinsons, account for over 40% of the market, while psychiatric disorders contribute 34-43%. Antidepressants remain the leading drug class ataround 25-26% share, reflecting the prevalence of depression and anxiety.

Key trends include:

• Greater investment in novel mechanisms, including upstream reparative pathways

• Wider adoption of biologies, monoclonal antibodies and gene therapies alongside small molecules

• Advances in blood-brain barrier penetration and targeted delivery

• Integration of digital therapeutics, Al-driven monitoring and biomarker- guided stratification

• Rising focus on multimodal and personalised approaches for complex CNS conditions

Oncology continues to lead the overall pipeline, but CNS programmes are gaining momentum on the back of renewed investor confidence and regulatory openness to innovative trial designs.

Regional insights and distribution channels

North America remains the largest CNS market, supported by advanced infrastructure, deep R&D investment and high diagnosis rates.The United States anchors global neuroscience innovation through its biotechnology ecosystem, academic partnerships and depth in clinical development. Europe remains a significant market, supported by ageing demographics and structured reimbursement frameworks.

Asia-Pacific is the fastest-growing region, supported by improving healthcare access, rising mental health awareness and increasing investment in neuroscience. India, China, Japan and South Korea are scaling investments in research, digital health and specialised neurological care. India, in particular, is seeing a growing policy focus on mental health, access to psychiatric care and neuroscience innovation. Hospital pharmacies, specialty pharmacies, retail chains and online platforms remain the principal distribution channels. Telemedicine, e-pharmacies, digital therapeutics and remote monitoring are improving access and continuity of care, especially for chronic and psychiatric conditions.

Long-term outlook

The long-term outlook for the CNS therapeutics industry remains highly promising, supported by rising disease prevalence, strong innovation momentum, improving scientific understanding of brain disorders and increasing investments in advanced therapeutics. Despite clinical and regulatory complexities, the CNS segment remains a high-value opportunity for research-focused pharmaceutical companies, driven by significant unmet medical needs and growing global healthcare prioritisation. This long-term outlookaligns closely with Suven Life Sciences focused strategy in CNS-led innovation and novel therapeutic development.