Syngene International Ltd. FY2020-21 Annual Report Key Takeaways

Syngene International Ltd. FY2020-21 Annual Report Key Takeaways

 In continuation of my previous blog here is the updated version link to Initial Blog - https://myweekendspot.blogspot.com/2020/10/syngene-next-giant-player-for-cdmo.html

Company Overview

Incorporated in 1994 as a subsidiary of Biocon, Syngene International (SIL) is a leading contract research organization (CRO), which supports R&D programs of global innovative companies.

 

SIL offers outsourced services to support discovery and development for organizations across industrial sectors like pharmaceuticals, biopharmaceuticals, nutraceuticals, animal health, agrochemicals, etc. It currently caters to 400+ global players including Bristol-Myers Squibb (BMS), Abbott, Baxter, and Amgen, among others. SIL derives 95% of its revenues from exports.

 

Syngene continued to build on its integrated drug discovery and development portfolio during the year, including a five-year collaboration with 3DC, the drug discovery, and development subsidiary of Deerfield Management Company. Under the agreement, the two companies will collaborate to advance therapeutic discovery projects, from target validation to pharmacological proof of concept and pre-clinical evaluation.

Syngene is proud of its partnership with Albireo Pharma as the work completed in our laboratories of advancing odevixibat from pre-clinical supplies to regulatory filings in Europe and the US has put the compound on track to become the first approved drug for PFIC3 patients. Other research projects which progressed during the year focused on leukemia, Parkinson's disease, inflammatory disorders, fibrotic disorders, and orphan diseases.

 

During the year, the Company expanded its research facility in Hyderabad by adding capacity for an additional 90 scientists. It also commissioned a new microbial manufacturing facility during the year to reduce its dependency on external service providers.

The Company reported quarterly revenue from operations of Rs. 659 Cr and Rs. 2,184 Cr for the full year. Underlying revenue from operations (excluding export incentives) for the quarter grew 13% compared with the same period last year and by 12% for the full year. Profit after tax (before exceptional gain) for the quarter increased by 15% year-on-year to Rs. 138 Cr, and by 4% to Rs. 382 Cr for the full year.

Rapid Increase in Revenue - Trend over the Years

The company made meaningful progress on the strategic development of the Company by adding to their Integrated Drug Discovery portfolio, expanding our footprint in Hyderabad, completing the qualification of our manufacturing site in Mangalore, and building our presence in the animal health sector.

Increase in number of Clients

Growth driven by an increase in sales from existing clients and acquisition of new clients. Engage, expand, and extend the strategy to extend client relationships over a longer period of time. Growth in the total number of clients Increase in average revenue from largest clients. Increase in the number of services offered to clients.

Capital Expenditure

Capex for the year was Rs. 4,669 Mn (USD 67 Mn), lower than planned by around 25% as they deferred certain projects due to the pandemic. Lower capex was also due to the release of additional capacity resulting from the introduction of shift working, especially in Discovery Services. 

Of the total capex, 15% was deployed in the API manufacturing facility, 31% in Discovery Services, 13% in the Biologics manufacturing facility and the remaining 40% in the Dedicated Centers, Development Services and common assets. Capex currently stands at Rs. 35,634 Mn (USD 510 Mn) as on March 31, 2021.

Increase in Scientist Count

Future Outlook

The year ahead offers positive prospects reflecting the strong fundamentals of the global biopharmaceutical industry against a backdrop of potential further disruption due to the second wave of the pandemic. The extension of their strategic collaboration with Bristol Myers Squibb until 2030 will provide scope for new areas  of R&D within that relationship. 

The company has initiated multiple expansion and capacity-building initiatives.The phase-III expansion of the Hyderabad laboratory is ongoing and will offer capacity for an additional 300 scientists.The company is collaborating with the Biotechnology Industry Research Assistance Council (BIRAC), under the National Biopharma Mission, to build a viral vector development and manufacturing plant for cell and gene therapy. 

They added capacity to their mammalian cell biologics manufacturing capabilities as well as commissioned a new microbial facility, further enhancing their services in biologics. The Mangalore API plant has completed the qualification stage and beyond the GMP approval from the Indian regulator, they are working towards other regulatory approvals while adding clients and projects.

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