My guests today are Dilip Shanghvi, executive chairman of Sun Pharma, and Glenn Saldanha, managing director at Glenmark Pharma. Between them, they have built two of India's most consequential pharmaceutical companies. One through ruthless capital discipline and the instinct to occupy territory nobody else wanted. The other through a 25-year bet on innovation so unfashionable it made investors furious. Both were driven by the same ethos: if Indian pharma has to make it big, it can't play it safe. Today, of course, the compunctions are different. Big pharma is in a quiet panic. Patents are expiring, pipelines are thin, and the Chinese, earlier dismissed for copied innovation, are suddenly the ones doing the landmark deals. AI is in every lab. The old rules no longer apply. In this conversation, we try to understand how much India, the pharmacy of the world, will matter in the next century of drug making. Listen on. It's Monday, the 23rd of Feb. I am your host, pharma editor Vikas Gandhar. Welcome to the latest episode of Corner Office Conversation.
Mr. Shanghvi, you started with just two products, you mentioned, one, two representatives, one of which was you. And because no one was doing neurology, you were doing it at that time. Did you really think that it will become so big? 40, 45 billion market cap, close to 60,000 crore in revenues.
No, I don't think. And that reflects my conviction that all of us have potential for doing far more than what you end up doing. It's important to find a way to get out of your comfort zone and take risks, take bets on the future so that you can achieve far more than what you would achieve without that.
Right. So you also mentioned that while efforts are important, you also need a lot of luck. Where did you find luck, and where did it not work for you?
No, I think the biggest element of luck would be that by default we got into relatively less competitive therapy areas, which were also small markets. But as India continued to evolve and chronic diseases, aging-related diseases started becoming a bigger part of the business in the country, it allowed us to grow along with that growth. So let's say when the industry was growing at around 3, 4, 5%, these therapy areas were growing at 20, 25%. And we were present there, we rode the wave to growth. We went into this business by default, or because that was the only thing we could have done, and we were at the right place, right time.
Absolutely. To you, Glenn. Last year was a big milestone year for you and for the industry. $1.9 billion deal, AbbVie, a lot of patients came in there. But through a lot of challenges. I still remember 2004, Forest Labs, going into that history. To now, there was a kind of a slump time when things looked like, okay, where is it all heading? Was the business model itself faulty? Because we know what happened with the investors. What gave you the courage? How did you really take on these bets? Must have been a very tough situation for you.
I think a lot of my learnings came when I was in the US, actually. So I used to work at Eli Lilly in the US and then PricewaterhouseCoopers in consulting. That journey helped me a lot in truly defining that to be a global pharma company, you have to have innovation and science at the backbone of it. And then of course, we started with small molecules. 2004 we did Forest, and then we did a number of licensing deals on that journey. I think the first five or seven years we did a lot in terms of out-licensing, got significant cash flows. And then the next decade was really hard, right? The 2010 to 2020 was extremely tough, where whatever we did failed. We had lots of setbacks, lots of failures, clinical trials failing, investors yelling at us, saying you guys are putting so much of capital and good capital. And we even spun out IGI during that time into a US company, which is our innovative arm, Glenmark Innovation, 100% owned subsidiary, into a US company with a vision that we will raise capital in the US markets. And even that didn't work out. But we continued funding it, continued pruning the portfolio until we ended up with one asset, ISB 2001, which we think is a world-class asset. So it's been a 25-year journey for us on innovation, and today that's a reward that we see coming from it.
Right. Both of you, you know, now we are seeing the kind of lift that innovative products can do. You mentioned that you spend hundreds of millions of dollars on one product, you get a major jump in your revenues, versus two to three million dollars that you do for each, and it also grows, but it doesn't change the game going forward. Sir, do you think that composition will change dramatically? You're already 20% of your revenues coming from innovative products. So that question will also be to Glenn. So why don't you start?
I mean, the Glenmark journey is we are constantly trying to move up the value chain. And if I look out over the next five to ten years, with a number of innovative assets coming into commercialization, some of it we licensed, the three oncology products, and then of course ISB 2001, we still hold all the emerging market rights for it. So that'll be a commercial launch for us in all India and all emerging markets. And then on the back of that, we have several other assets that we are working on. So I think the next five to ten years will be a very rich period in terms of innovation, in terms of commercialization. So far, all our efforts, the last 25 years of mine, have been in the discovery end and the clinical end. Right now we are actually moving up into more late-phase development and commercialization. So that's the next wave of how the next five to ten years will work for us for the company.
I share the excitement which Glenn has about the future. Our focus is to find a way to grow our innovative product pipeline from, let's say, 20% of business to becoming a bigger part of the company as we move forward. And when I look at both what we are doing within the company, or development of GLP-1, also based on Phase 2 study, that initial indication on non-blinded data we have, I think it's a differentiated GLP-1. So very excited about how the composition of business will continue to evolve with a greater part of future growth also coming from innovative products.
That landscape has been changing quite a lot. I mean, once we hear about a twice-a-month injection, the next time we hear it's probably a month, once every four weeks. And yeah, so basically the market is blowing up in a big way. I was hearing a discussion a couple of weeks ago. Somebody spoke about Lilly being a trillion-dollar company. Before the next trillion-dollar comes from another company, probably Lilly will be in the next trillion-dollar. So it'll become a true two-trillion-dollar company. So it's really changing the game in a big way. The environment is actually gearing up for a big change in innovation. We saw the FM budget also mentioning a lot about biosimilars, a lot about thousand clinical trial sites which will be accredited. We had the honorable DOP secretary also speak about a bunch of things. Do you think this is going to be a new start? And we also saw a lot of industry discussions happening. So where do we go from here?
No, I think clearly we see regulatory changes which should overcome many of the historical hurdles by which, let's say, a relatively low number of clinical trials were being done in India. Because we have a large patient pool and skilled manpower to conduct clinical studies, and I think it will also create a scientific capability within the country so that we can leverage that also. I think the PRIP scheme, the desire to improve the innovation component of business for Indian pharma, I'm quite excited about the future, which is going to be different from our past. One element which is critical is to also look at talent very closely and see how we can bring back people of Indian origin to come and set up companies here, more startups. That's a critical element which will further catapult the innovative aspects in the country.
