Aurobindo Pharma eyes $5-B revenue in 5 years

Aurobindo Pharma, India’s second-largest drug maker by revenue, has set its sights on becoming a $5 billion revenue company within the next 4 to 5 years. To fuel growth, the Hyderabad-based company will be making substantial investments on product development and clinical trials, to build a pipeline of complex and differentiated products encompassing biosimilars, vaccines, peptides, metered dose inhalers, and patches.

The company will spend around 6-6.5% of its revenue, surpassing the average 4% expenditure it maintained over the years. Aurobindo Pharma reported ₹24,885 crore in revenue for FY23, accompanied by a net profit of ₹1,927 crore.

While Aurobindo Pharma expects some of those bets to pay-off going forward helping it beat US pricing pressures, in the interim it’s trying to put its house in order by reorganising its operations, getting focus back, strengthening regulatory compliance and addressing any perceived governance issues.

In an interview to ET, PV Ram Prasad Reddy, the founder-promoter and non-executive director of Aurobindo Pharma, said the rapid growth and expansion over the years has brought new challenges.

Reddy said Aurobindo has initiated corrective measures, including restructuring its business operations, and most significantly, the company has embarked on a mission to attract professional experts and industry leaders to oversee operations, alongside the induction of independent board members for diverse verticals.

“As the founding members of Aurobindo Pharma are aging and with none of the next generation expressing interest in continuing the pharmaceutical legacy, we have actively looked at external leaders who can drive the next phase of growth of the company,” Reddy said.Aurobindo Pharma has undergone a significant reorganisation, restructuring its operations into three subsidiaries. Eugia Pharma Specialities is dedicated to injectables and specialty oral solid dosages; Curateq Biologics focusing on vaccines, biosimilars, and peptides; Apitoria Pharma, an API division. The remainder of the business will be under the parent Aurobindo Pharma. Each vertical within Aurobindo will now have a dedicated CEO and compliance head, aiming to enhance operational efficiency and regulatory adherence. Reddy expressed confidence in the company maintaining an Ebitda margin of 18-22% in the coming years.Reddy said he is still interested in stake sale in its injectable arm Eugia Pharma Specialties, and continues to explore potential acquisition opportunities in the domestic formulation business.