Manufacturing segment will grow fast over the next decade: Syngene CEO

In a Q&A, Jonathan Hunt talks about his company's capex plans and strategic initiatives going forward

Biotech contract research firm Syngene saw its revenue from operations grow 10 per cent to Rs 641 crore in Q3 on a year-on-year basis, while profit before tax also grew 10 per cent to Rs 128 crore. Syngene CEO and MD Jonathan Hunt spoke to Sohini Das and Deepsekhar Choudhury about the company’s capex plans and strategic initiatives going forward. Edited excerpts:

What kind of capex would you have to undertake for the Amgen project?

The Amgen capex is already covered in our multi-year capex plan. It is not a transformational amount or a trend break on the amount of capex we put into the business. It is just operational capex to drive growth.

How is the $120 million capex plan for FY22 progressing?

The capex plan for this year is the largest in the company's history. We'll see where we land on that at the end of the year. Covid slowed down a couple of things because of supply chain issues such as getting capital equipment in from around the world. But strategically, we're on plan.

How important is manufacturing vis-a-vis other parts of your business?

It's becoming more important. It's the smallest part of our business because it's the newest bit of our business. Discovery services is as old as the company which we've forward integrated strategically into development. For manufacturing, we've gone through a capex build phase where we put boots on the ground infrastructure on the ground over the last 4-5 years. And I think over the next 5 and 10 years that will grow and become an increasing proportion of our business – equivalent to the other two pieces of discovery development.

You're doing mRNA research for cancer. Can we expect any interesting breakthroughs?

I would not say we are doing a lot. It is a small, niche area within the larger business. Also, I don’t own the product pipeline. Even if there was great excitement about the projects, my clients own them. We create the patents for them. It is not for me to proclaim the successes if my clients have not put them in the public domain.

Are you diversifying your client portfolio and business?

If you strip away all the medical bits and look at what Syngene does, we are very good at innovation and at any task involving complex biology, chemistry. For this reason, we have a growing business in animal health as that is an adjacency. There are also some less obvious adjacencies. If you buy a top of the range television set that is foldable, the chemistry of that is something we worked on with a leading Asian TV manufacturer 10 years ago.

Are there any paradigm shifts happening in the industry in terms of access to capital?

In the midst of a global pandemic, the government, capital markets and people in general have understood that science can make a material difference in the world. The number of Covid vaccines we have in a short span of time is exceptional. In such an environment, there is definitely access to capital if you are capable of scientific innovation. We are limited only by intellectual capability, not capital.