Sudhir Vaid, Chairman & Managing Director, Concord Biotech

7 Aug 2023 , 03:18 PM

Can you share some insights into your company’s journey so far and the key milestones achieved in the field of biopharma/biotech R&D?

I acquired Concord Pharmaceutical Limited in the year 2000 and renamed it as Concord Biotech Limited in 2001. With a history marked by strategic advancements, RARE Trust acquired shares in 2004.

The year 2005 brought a significant achievement—the first USFDA inspection of our API facility. Subsequent years saw further recognition, including the EU GMP inspection of our manufacturing facility by the Government of Upper Bavaria in 2011.

We expanded our reach when we received ANDA approvals, leading to the launch of our formulations business in India and emerging markets.

Notably, Helix Investment Holding’s investment in 2016 strengthened our growth trajectory.

Continuing our expansion, we inaugurated a second API manufacturing facility in Limbasi in 2021, and construction is underway for a new injectable manufacturing facility at Valthera.

Demonstrating our commitment to quality, the Valthera plant successfully completed a USFDA inspection in March 2023, followed by the Limbasi plant in June 2023, marking another milestone in our pursuit of excellence.

Why should retail investors invest in your company?

Retail investors are presented with compelling reasons to invest in our company, grounded in solid foundations and promising prospects.

Our company’s financials stand on a robust footing, reflecting a fundamental strength that provides a stable base for potential growth.

With an expanded capacity encompassing both API and formulations, including the upcoming addition of injectables, we are poised to capture emerging market opportunities and address a broader range of healthcare needs.

Our extensive pipeline, housing a variety of products, underscores our commitment to continuous innovation and ensures a dynamic portfolio for sustained expansion. Moreover, we possess significant growth drivers, particularly in the form of CDMO opportunities, which open doors to diverse revenue streams and heightened market presence.

A noteworthy aspect of our company is its track record as a dividend-paying entity, illustrating a history of value sharing with our investors. This financial transparency and commitment to rewarding shareholders further solidify our appeal to retail investors seeking stability, growth, and a stake in a promising venture that combines financial promise with ethical business practices.

How does your R&D approach leverage cutting-edge technologies and innovation to develop new drugs or therapies?

Concord’s expertise in the intricate field of fermentation stands as a testament to our extensive technical capabilities, honed meticulously over the past two decades. As an organization deeply rooted in research and development, we boast a dedicated team of over 145 professionals committed to advancing scientific frontiers. Our R&D efforts have garnered recognition from the Department of Scientific and Industrial Research, Government of India, underscoring our commitment to rigorous and innovative exploration.

Our molecule selection process is guided by a multifaceted approach. We prioritize molecules based on intricate manufacturing demands, aiming for technical sophistication that sets our products apart. This dovetails with identifying market niches with minimal competition, allowing us to carve a unique path and potentially emerge as global leaders in those areas.

A hallmark of our journey lies in our substantial investment in R&D, consistently surpassing 3.5% of our revenue year on year. This financial commitment underscores our dedication to pioneering breakthroughs that have the potential to reshape industries and improve lives.

Our R&D endeavors span a diverse spectrum, encompassing the development of new products, enhancements in cost-efficiency and processes, seamless technology transfers, the scaling up of initiatives, and the reinforcement of backward integration. These initiatives collectively amplify our innovation quotient, enabling us to remain at the forefront of technological advancement.

How do you plan to expand your market presence in both domestic and global markets?

In light of the evolving market landscape, Concord is strategically poised to amplify its market presence both domestically and globally. The immunosuppressant market, valued at 1 billion USD and experiencing a notable CAGR of 9-11%, is witnessing a shift from innovator to generic products, coupled with an increase in the wallet size of our existing customers. Similarly, the oncology and anti-infective sectors, with market sizes of 1.4 billion USD and 3.2 billion USD respectively, offer compelling opportunities for expansion.

To capitalize on these dynamics, Concord has devised a multifaceted approach. Firstly, we aim to bolster our market share by engaging new customers, leveraging our strong API supply capabilities. Simultaneously, we are committed to enhancing our engagement with existing customers, thereby augmenting their wallet share. Additionally, the commercialization of APIs through our robust R&D initiatives will further broaden our product portfolio, empowering us to cater to a more diverse range of market needs.

Our expansion plans encompass an enriched presence in existing formulations, with a strategic focus on the introduction of new formulations, including injectables. By diversifying our offerings, we aim to address a wider spectrum of healthcare demands, both nationally and internationally.

An integral component of our growth strategy involves the expansion of our Contract Development and Manufacturing Organization (CDMO) business. This avenue presents a prime opportunity to extend our capabilities and collaborate with partners seeking our expertise in API manufacturing and formulation development.

What are the potential risks or challenges that your company faces in the biopharma sector, and how do you plan to mitigate them?

In the dynamic landscape of the biopharma sector, Concord acknowledges and actively addresses potential risks to ensure sustainable growth. Regulatory risk, a shared concern for all pharma companies, is meticulously managed through a multi-faceted approach. Continuous enhancement of our quality system lies at the heart of our strategy, bolstered by a relentless commitment to adherence to regulatory guidelines. Our workforce’s training and development play a pivotal role, ensuring that every team member is equipped with the knowledge and skills required for rigorous compliance.

Monitoring and controlling essential systems and meticulous documentation, coupled with stringent quality checks, form integral components of our risk mitigation strategy. Additionally, we prioritize facility maintenance in strict accordance with regulatory guidelines, ensuring that our operations consistently meet and exceed industry standards.

Confronting competition risk head-on, Concord deploys proactive measures to maintain its market edge. The cornerstone of this strategy is our continuous investment in research and development (R&D). By fostering innovation, we consistently introduce novel products and processes that enable us to differentiate ourselves from competitors. This commitment extends to process development, where we focus on optimizing efficiency while maintaining the highest quality standards.

Furthermore, we embrace a culture of operational excellence, streamlining our processes to enhance efficiency across the board. By nurturing these operational efficiencies, we enhance our ability to remain competitive while delivering exceptional value to our customers and stakeholders.

How does your company contribute to sustainability and corporate social responsibility in the biopharma/biotech industry?

Concord is deeply committed to fostering sustainability and championing corporate social responsibility (CSR) within the biopharma/biotech industry. Guided by a comprehensive CSR policy overseen by a dedicated committee of Directors, we have woven environmental, social, and governance (ESG) principles into the very fabric of our operations.

In the realm of education, Concord actively engages with neighboring villages, enabling the installation of smart classes in local schools and extending scholarships to economically disadvantaged students pursuing their studies at esteemed institutions. This initiative reflects our dedication to nurturing future leaders and fostering knowledge dissemination.

Our pledge to environmental sustainability finds expression in multifaceted projects. We contribute to water harvesting and tree plantation efforts, laying a foundation for a greener future. Additionally, Concord extends its hand to healthcare endeavors, offering free health check-ups, medicines, and treatment facilities. This approach ensures that quality healthcare reaches even the most underserved segments of society.

Collaborating with government agencies, we strive to fortify rural areas by enhancing drinking water access, promoting hygiene practices, and bolstering sanitation infrastructure. Furthermore, our advocacy efforts extend to gender equality and women’s empowerment through comprehensive awareness programs.

Please share the snapshot of the company’s financials.

Concord’s financial performance reflects a robust and well-balanced foundation, evident in its fiscal snapshot. With a revenue of INR 853.16 Cr., the company has demonstrated consistent growth and revenue generation. The healthy EBIDTA of INR 345.25 Cr., accounting for 40% of the revenue, underscores Concord’s efficient management of operational costs and its ability to generate strong operating profits.

Moreover, the company’s prudent financial management is highlighted by the Profit Before Tax (PBT) figure of INR 322.01 Cr, constituting 38% of the revenue. This indicates a strategic approach to managing tax implications and optimizing the bottom line. Concord’s dedication to responsible financial practices is further showcased by the Profit After Tax (PAT) of INR 240.08 Cr, which amounts to 28% of the revenue. This reinforces the company’s commitment to generating sustainable profits while considering various financial obligations.