La Renon zooms to top 50 pharma cos list in India in less than a decade

The Ahmedabad-based Sequoia-backed pharma company has been clocking a CAGR of 70%

Ahmedabad-based pharma company La Renon Healthcare that started its journey in 2008 with funds bootstrapped by founder Pankaj Singh who had just quit his job with a listed pharma company, has managed to make it to the top 50 in the Indian pharmaceutical market (IPM) in less than a decade. 

Growing at a compounded annual growth rate of 70 per cent La Renon ranked 43 in the IPM in terms of moving annual turnover (MAT) in January 2017. 

In fact, in terms of monthly turnover, it ranked 40 in the IPM as per data from the AIOCD-AWACS, the market research wing of All India Organisation of Chemists and Druggists (AIOCD), the association representing over 500,000 medicines sellers across India. AIOCD said that amongst the corporates ranked between 41 to 50, La Renon grew at the fastest pace last month at 66.5 per cent followed by Boehringer Ingelheim at 32.5 per cent followed by Medley at 19.7 per cent. 

The company's fast rise to this rank assumes significance when one pits it against some of the big pharma in the industry; Alembic Pharma, a century-old company ranks 20 in the IPM, Torrent Pharma (started in 1970's) ranks 15. 

With a field force of 850 people, the productivity per medical representative (MR) or executive has touched Rs 5 lakh per month. Starting with 30 people in 2008, it now has total headcount of 1,250 people. 

Eyeing a Rs 1,000 crore turnover by 2019, the company has already set foot in the international market from last month and going forward would focus on the semi-regulated markets in thirteen countries including Kenya, Cambodia, Myanmar, Nepal, Philippines etc. In five years it is eyeing a Rs 1,500 crore turnover by when international operations will contribute about 25-30 per cent of revenues. 

Currently a Rs 500 crore company, La Renon draws almost 30 per cent of its revenues from the nephrology vertical which it had cracked with a portfolio of early stage disease management products. Another 30 per cent of the revenues come from neurology vertical. At present it has 117 brands and six business units including respiratory, critical care, gastrointestinal, cardio-diabetes etc. 

Singh, now the chairman and CEO of La Renon explained his strategy,"We had decided to focus on the chronic segment as the productivity per patient and per executive is higher here." The decision paid off, as the company's operating margins are at 65 per cent at the moment. 

A debt-free company till 2015, it raised Rs 100 crore from Sequoia Capital in a first round of funding, which were used for entering different segments and also ramping up manufacturing capacity. About 55-60 per cent of its formulations production now comes from its subsidiary Stanford Laboratory in Himachal Pradesh, a company it had acquired around 2013-14. The balance production comes from contract manufacturing; both loan licensing and principle-to-principle (P2P) manufacturing. It has a loan-licensing facility for injectables in Indore. 

Meanwhile, La Renon has also started expanding its Stanford facility, which is at present capable of manufacturing products worth Rs 1500 crore. Contract manufacturing sites can add another Rs 1,000 crore worth products.