Startup Mantra: Make in India success in single-use bioprocessing products

Pune: Ankush Kapoor was working with as large MNC as general manager, overseeing the commercial operations for India and South Asia, and promoting critical raw material used in pharma and biopharma industry was his forte. While Sachin Joshi was in the similar industry, being an industry veteran known for his deep domain expertise, experience and came with immense knowledge in bioprocessing technologies, along with manufacturing of bioprocess systems and consumables during his tenure at a large MNC.

It would have been a good career path if they continued in their jobs as both were doing well in their respective jobs, till their experiences and observations made them see a big problem.

Ankush said, “We saw the availability of single-use consumables required in the manufacturing of vaccines, biotherapeutics was a big problem specially for Indian biopharma companies. There would always be a long wait till the products were delivered to them and during the Covid this became a near impossibility. Indian biopharma companies had to wait for 10 months to even a year for delivery.”

“The pharma and biopharma industry has evolved over the years. Small molecule pharmaceuticals (generic pharmaceuticals) like organic, inorganic chemicals are manufactured through the synthetic route. Since the past few years (20 to 25 years in India), some of the pharmaceutical companies in India have diversified into biologics and have added biopharmaceuticals to their portfolio. Biopharmaceuticals are large molecule-based pharmaceuticals manufactured from “living organisms” known generally as biologics. While many products such as insulin, vaccines, monoclonal antibodies are made from living organisms, the problem is to manufacture these products as it essentially involves three stages.

“One is cultivation or fermentation – that is growing the cells, then purification of our product of interest and lastly formulation. Over 90% of essential raw materials required for manufacturing of biologics, vaccines, and insulin are being sourced from outside the country. This dependency not only inflates production costs, but also makes life-saving drugs unaffordable for many patients in India. Additionally, this reliance on imports often results in delays, as especially experienced during the Covid, as materials were prioritised for larger international players, creating time lags in manufacturing that could potentially result in serious implications on our health,” he said.

Working in this industry, Ankush and Sachin observed it closely. The reason for this dependency was that “there are just four or five big global companies in the business of making these components that the biopharma industry needs worldwide”.

Ankush said, “In fact, they have almost 90% market share globally. Whilst working we had helped several Indian players procure single-use bags or chromatography resins or filters on time through our network.

“We both felt that despite having advanced capabilities in biopharma and a supportive ecosystem provided by the ‘make in India’ initiative, we were still dependent on imports. This must end.”

So, the duo first quit their jobs and tied up with alternative suppliers from Europe and the US to bring niche technologies to India.

These tie-ups were very successful, as it gave the Indian manufacturers an alternative technology access against existing players in the market. In fact, Ankush and Sachin are continuing with it. However, they both had always wanted to get into manufacturing.

Ankush said, “Our heart lay in producing our own products.” But manufacturing is a completely different ball game. It is capital intensive, needs an “army” of people with good manufacturing skills and is a whole new world compared to distributorship.

So how did this decision to expand in manufacturing come about? A desire is one thing, but actually getting down to setting up a plant, getting equipment, technology is serious business.

Setting up

“Indeed, it was a big risk at that time, particularly in the biopharma industry. But Sachin and I took that chance. We could lose everything if we did not succeed. But we were determined, wanted to make a difference in biopharma market. The biopharma companies needed options besides that of the market leaders alone. And we were quite sure that we could find talent here to help us in the venture. So, in 2022, we set up a manufacturing unit in Chakan, Pune that produced single-use consumables and equipment needed by the biopharma companies,” Ankush said.

The duo set up a state-of-the-art manufacturing unit. “We had a pretty good network of people in this industry. We built a core team that worked on building single-use consumables and equipment. Since Sachin had a wide and deep experience of managing manufacturing units in his career, it helped us a lot in achieving our goal,” he said.

They chose to start with single-use consumables because they saw a huge potential in it. Despite the fact that the market was already captured by the large MNCs.

A decade ago, to produce biopharmaceuticals, stainless steel was used conventionally in the manufacture of such products. However, cleaning of the equipment was the biggest problem that the industry faced. There had to be batch-to-batch cleaning and then there had to be a cleaning audit. This then led to a very quick adoption of single-use products as it did not require cleaning and then cleaning validation. This step was completely eliminated, making the manufacturing process easy.

How different was this made-in-India single use bag from the ones that were imported?

Ankush said, “There is no difference really speaking. One, the raw material is available from the same source as is used globally, with all its positive features like non leachabilty, extractable and toxicological data. Some plastic components, fitments, etc. we sourced from the US and Europe. The shape, form and usability of the finished product manufactured by us is exactly the same as is available globally.”

Despite having worked on creating this single use product, the duo has not filed for a patent. “No patent for this exists, globally. Single use bags are something like ‘dal-chawal’. You can’t patent it, right? Even the big daddies do not have a patent for it. What was crucial in the manufacture of this is trying to figure out the how-to, which we have done successfully.

“To ensure quality, we provide esteemed clients with validation guide and all the necessary documents, besides this, customers themselves conduct an audit regarding quality before onboarding us as their vendors,” Ankush said.

Now to sell

The risk that they took by setting up a manufacturing unit would play out now in the market as 90% was “owned” by big MNCs. Who would trust a newbie? What was their USP? Why would biopharma companies choose PharmNXT over established players?

Ankush said, “To begin with, we manufactured the same quality of products that customers import. Secondly and very importantly, we can customise the designs and deliver much faster since we are based in India. Customers based in India can also demand deliveries for every batch or every week or every day and we can satisfy the demand.

“If customers have to import, they have to import in large quantities to avoid high freight costs and time required for getting the material by ships to India. This impacts customers in blocked working capital and piled-up inventory. If the manufacturing plan changes for the customers, it would mean unutilised inventory that may expire and in turn would have to be written-off. This can be completely avoided by sourcing products locally. Also, the global players still take 12 to 16 weeks for delivery, we do it in four to six weeks.

“Moreover, we believe our effort of localisation is improving access of biologics to a wider patient base in India as we are able to supply our single-use products to customers at a much lower price compared to global companies. Single-use products contribute to a significant portion of cost of biologics manufacturing and a 30%-40% reduction in this cost through localisation done by PharmNXT enables lower cost of biologics.”

Though it seemed like a risk initially to get into manufacturing, Ankush and Sachin had it calculated to the last detail. Ankush said, “We were in the distribution business since 2017 and before that in the same industry. We had a large network. But most importantly, Covid made the customers realise the importance of a domestic manufacturer or localisation who could deliver on time, every time. In fact, they were encouraging us to make these single use products in India.

“With the opening of manufacturing facility in 2023, due to the advantages stated above, orders from Indian customers started to come in for large quantities. Over the period of last two years, almost all the Indian biopharma companies have started utilising the advantages of localisation done by PharmNXT and supported us in our journey of localisation and supporting the Indian Industry.

“The successful implementation and adoption of our products by the Indian industry gave visibility of PharmNXT’s products to the global manufacturers and this has helped us export our products to 14 countries, including the US, UK and Europe.”

Money to spin the future

Manufacturing is a capital-intensive business and biopharma, more so. The duo invested about ₹75 crore in their set up and it is still a bootstrapped company, “In another three to four years, we should be able to recover our investment.”

There are no immediate plans for raising funds. “May be in coming years, as the business grows in western and eastern geographies, there may be a need to raise capital for fuelling expansion and growth aspirations. A large part of that can still be supported from within the business, but if the growth is rapid, there will be a need to raise capital in the future. We will wait and watch how we grow,” Ankush said.

Risk is the name of the game and PharmNXT knows how to play this only too well!