From a modest beginning as a generic drug maker, Zydus Cadila is now morphing into an innovative pharma company. Ganesh Nayak, Executive Director and Chief Operating Officer, Zydus Cadila, spells out the company’s long-term growth strategy in an exclusive chat with BusinessLine . Edited excerpts

You have often said that the global development of biotech is moving towards markets like India. How is India gaining prominence in this field?

India will be a hub for the further evolution of this technology because in the same way that our costs are lower in other areas, they are lower for the development of biologicals. Another advantage of India is a bit counter-intuitive: Indians are late to the party in the biological sphere. But because we started late, we have access to newer technology. When the first-generation biologicals were being developed around the world, the efficiency of things like cloning and expression was not as high as it is today. When the science was fledgling, you could expect some X yield —today, that yield can be as high as 5-10X. That is where our advantage is: though we started late, we are starting from an advanced position, and I think we are going to catch up very, very soon.

Having started off as a generic drug maker, your company is gradually evolving into an innovative pharma company. Can you tell us about Zydus’ product pipeline and R&D strategy?

We have a very focused product strategy. We have a portfolio of innovative medicines, including small molecule NCEs (new chemical entities), biosimilars, novel biologics, vaccines and novel formulations.

Lipaglyn, our NCE and a first-in-class medicine to treat diabetic dyslipidemia, is delivering excellent results and we are now developing this product globally for additional indications like NASH and Lipodystrophy.

We continue to pioneer new therapies for treating diabetes and cardio-metabolic disorders. We are developing ZYDPLA1, a once-weekly DPP-IV inhibitor for treating diabetes. Our molecule, ZYAN1, an oral HIF-PH inhibitor for treating anaemia, is currently undergoing Phase-I trials in Australia.

We are also consistently focused on finding newer and better cures for breast, lung and ovarian cancer and haematological malignancies.

We have built one of the largest biosimilars pipelines in the industry. With two vaccine research sites in India and Europe, we have built a robust innovative late stage vaccine pipeline. This will enable us launch a number of vaccines such as influenza, measles, mumps, varicella, typhoid, hepatitis A, B, E and HPV over the next few years. Our vaccines research programme is also focused on developing vaccines against epidemics such as Ebola and Crimean–Congo hemorrhagic fever.

What will be Zydus Cadila’s positioning five years from now?

We have been on the path to innovation since 1995 — we planned 25 years ago to become a research-driven company by 2020. In 2000, we invested in a basic research facility, and created a centre where we could focus on doing novel molecule research and related activities. We have built up capabilities where we can do everything from conceptualising a target, to developing and actually testing it — and we can do all of it in-house. I believe that we have also created a culture that is very unique to our organisation. We instil our values in our people and they are encouraged to, in effect, think differently, and do things differently, and create something unique. This culture of innovation that we have nurtured will shape our fortunes as a global, research-driven, organisation.

Can you elaborate on the growth drivers for the company over the next two to three years?

We are pursuing a two-pronged growth strategy. Firstly, we have identified three geographies which will be our growth pillars in the medium term; they are India, US and emerging markets. Second, the company is strengthening its presence in new product categories such as transdermals, vaccines, injectables and biosimilars besides existing ones such as oral solids and liquids.

This should drive Zydus’ growth in the medium term. We will be investing in development of high-end technologies — Pulmonary, Transdermal, Injectibles, Oncology, Biogenerics and Vaccine. In our India business, the thrust will be on new product introductions and management of chronic diseases with new therapies. We will also continue to build our research capabilities and look at how unmet healthcare needs can be bridged with novel therapies.

Two of Zydus’ facilities — Moraiya and Zyfine — were handed out warning letter by the US FDA. What are the steps taken to minimise the impact of the regulatory action?

There are two things here. Our Zyfine site had no exposure to the US markets and no API was sourced for our products in the US from this site. We have already de-registered this site with the USFDA and also withdrawn all the drug filings applied from this site.

Regarding the Moraiya site, of the two concerns raised, one is specific to a narrow therapeutic index product.

Based on a detailed investigation, we have decided to reformulate the product and have currently discontinued manufacturing this product. The other point is with respect to handling of market complaints and investigation thereof. We have revised the operating procedures and taken steps to validate actual handling. We are confident of addressing the concerns raised and we are also stepping beyond to a more expansive path of improvement and quality consciousness.

We have launched a comprehensive programme over the last one year to strengthen the systems and processes to create a more robust culture of quality. We are working with consultants, focusing on automation and making our processes more robust to ensure that we are fully compliant with the cGMP requirements and able to meet the enhanced expectations of the FDA.

We also have two other plants — one at Baddi and another SEZ in Ahmedabad, which are geared to cater to the US market. So we have initiated transfers of generic filings for select large opportunities as a part of a larger risk mitigation strategy. This should help the US business resume its growth path over the next year.

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