'We continue to grow faster than the industry,' says Sun Pharma boss Dilip Shanghvi

Under Dilip Shanghvi, Sun Pharmaceutical Industries Limited, India’s largest pharma company, is building additional engines of growth with an eye on the future, especially the specialty business, even as it simultaneously focuses on making the organisation more efficient and profit-making. The 67-year-old Managing Director of Sun Pharma, in a rare interview and an exclusive one with BT, talks about his vision for the company, the strategy for success, new targets and the way forward. Edited excerpts:

What is your vision for the company and where is it headed?

I don’t have the ability to predict the long-term future because there are a large number of variables. However, our focus has always been that each of our businesses should focus on improving its performance over what we did last year. If I look at our major businesses—India, global specialty, and generics businesses in the US and Europe, emerging markets and Japan—I’m expecting each of these businesses to do better than last year. It’s only because we keep on improving consistently year after year and we continue to grow faster than the industry. At the same time, we also make research and development (R&D) investments in such a way that some of them produce short-term returns and some produce mid-term returns. And when long-term returns start, it is a step change in terms of the company’s growth. We’ve been making large investments in the specialty business over the past five years, and we are at a position where it will start contributing to the profitability and future growth of the company in a much more meaningful way. 

Sun Pharma has recently launched several new products, including specialty drugs. How does the company plan to differentiate itself in these competitive markets, and what are some of the key growth drivers for these products?

In the specialty business, we have a portfolio of several interesting products. Ilumya is a safe and very effective treatment option for patients with psoriasis. If you look at our five-year efficacy and safety data, we have one of the best profiles in terms of efficacy and safety. At the same time, Cequa, a medication for dry eye disease, and Odomzo for patients suffering from basal cell carcinoma (a type of skin cancer) are also effective treatment options. Each of our products addresses an unmet patient need and produces patient benefits, which justifiesthe investment that we make in developing novel products.

Sun Pharma has made several mergers and acquisitions (M&As) and strategic partnerships in recent years. Are there any new M&As that you are looking at?

We are currently in the process of integrating Concert Pharmaceuticals that we’ve recently acquired in the US. The first priority is to find a way to make a USFDA filing for Deuruxolitinib (used to treat hair loss), at the earliest.

What are the new segments in specialty that you want to explore?

As of today we are not looking at expanding the segments beyond what we already have—that is dermatology, ophthalmology and onco-dermatology. We are continuing to look at opportunities in ophthalmology because we think that we can potentially handle a large portfolio in ophthalmology. We are looking at both companies as well as opportunities to enhance our portfolio in ophthalmology.

What are your plans for India?

In India, we have leadership position in terms of share of prescriptions in 12 specialty segments and the idea is to find a way to increase our share of business in these specialties. And find a way to cumulatively grow our business in such a way that we are able to grow our market share. Last year, we witnessed good growth across multiple therapy areas in the chronic and the sub-chronic segments. Hopefully, we should be able to continue to do that in the future.

Sun Pharma has been focussed on expanding its presence in the US market. Can you discuss the company’s strategy for this market, and how it plans to compete with established players and new entrants?

The US market is very large, so rather than trying to compete all over, we have chosen ophthalmology and dermatology and identified niche products that will help us establish the company with the doctors. As we become more known and established in specialty, it will enhance our ability to introduce more products as well as succeed in getting a greater share of those products when we launch them. We are excited with the response we are getting, both for Ilumya as well as other specialty products in dermatology and ophthalmology.

The US generics market has become very difficult to enter with a lot of pricing pressure. How did you sustain robust growth when your peers have faced losses in the US in recent quarters?

I think we got some interesting new product approvals, so that has helped us in growing our US business. But I think your point is correct. It is an extremely competitive market with a lot of pricing pressure, and it continues to create challenges for all players, especially those who have a large established business. If you have, say, a $600-million business and you de-grow by 6-7 per cent, then you have to grow by $50 million just to stay where you were. If you grow after that, [only] then you can achieve some kind of positive growth.

What about emerging markets?  What are your plans?

We have been consistently growing in the emerging markets in the past few years. And that business has now come very close to a billion dollars in terms of top line. It’s also a profitable business. In some of the geographies like Romania and Sri Lanka, we have leadership position. The idea is that rather than focussing on all markets, we have identified six to seven countries in emerging markets where we want to find a way to continue to grow faster than the market.

In the current environment, amidst the Ukraine war and Covid-19 impact, what are some of the biggest challenges that Sun Pharma has faced over the past three years? And what are the opportunities you are looking at?

The Russia-Ukraine conflict clearly disrupted the global economy. In the same way, Covid-19 also disrupted the global business. What we are proud of is that we maintained a stable and consistent supply chain in spite of multiple challenges. Our team did a great job in ensuring consistent supply of our products to all markets. So, that allowed us to respond to the crisis. We could make many products that were urgently needed by patients even though they were not in our regular production schedule. I am happy that we could respond to the challenge and meet the needs of patients. Also, post Covid-19, multiple disruptions happened in the global supply chain because of the lifting of lockdowns and significant increase in costs leading to disruption in global transportation and so on. But I think we could manage proper availability of all our products.

Sun Pharma is an important player in the global pharmaceuticals market. How do you see the industry evolving in the coming years and where do you see Sun Pharma?

The importance of good health and the ability of drugs to help patients lead as normal a life as possible and also the increase in life expectancy across the world means that drug consumption will continue to increase.

And that increases the importance of competitive costs and high-quality products being available. I see a big opportunity for Indian companies, including Sun Pharma, to play an important role in the world as we continue to evolve.

What is your company doing in R&D? What is your view on novel drugs? When do you think India can have its own novel drug?

Many Indian companies are working on novel R&D, including Sun Pharma, as well as Sun Pharma Advanced Research Company (SPARC). So, hopefully, we should have a product in the market from an Indian company in the next few years. The role of innovation in the pharmaceuticals business is important and I think we have been successful in the generics business. We have to find a way to also succeed in innovative products.

@neetuc_sharma