Indegene eyes clinical-research acquisition to widen pharma services play

The company is evaluating specialised CROs, data-management and patient-recruitment businesses as it looks to expand across the pharmaceutical value chain

Life-sciences services company Indegene is scouting for acquisitions in clinical research, including specialised contract research organisations (CROs), data-management businesses and patient-recruitment capabilities, as it looks to expand its presence across the pharmaceutical value chain, Chairman and Chief Executive Officer Manish Gupta said.

 

“We're looking at various kinds of things — specialised CROs of a certain size, but very specialised with some bit of a technology angle,” Gupta told Business Standard. The company is also evaluating businesses involved in data management, patient recruitment and technology for clinical-research processes. Discussions are, however, at a “very, very preliminary” stage, he said.

 

Clinical research currently forms a relatively small part of Indegene’s business, and Gupta said the company was “very keen” to expand in the area through acquisitions. It is also evaluating opportunities in patient engagement, marketing technology, regulatory and safety services.

   

Indegene provides technology- and domain-led services to pharmaceutical, biotechnology and medical-device companies, spanning drug development, regulatory and medical affairs, and commercialisation.

 

The company reported revenue from operations of ₹1,063.1 crore in the April-June quarter of FY27, up 39.7 per cent year-on-year, and profit after tax of ₹116.2 crore. It ended June with net cash of ₹1,380.2 crore, providing headroom for further acquisitions.

 

The company has so far used acquisitions largely to deepen its commercialisation capabilities. Its biggest recent transaction was the acquisition of US-based pharmaceutical marketing-services company BioPharm for up to $106 million, comprising $65 million upfront and up to $41 million in contingent consideration. BioPharm added media, data, analytics and omnichannel marketing capabilities.

 

Earlier acquisitions include New York-based CultHealth, bought in 2022 for around $48 million, UK healthcare communications agency MJL Life Sciences, and European healthcare communications group CAKE Kommunikations.

 

Gupta said the broader capabilities could help Indegene take on a larger share of work from existing pharmaceutical customers. Its largest client currently generates around $40 million annually, which the company believes could grow to $100 million over the next few years.

 

While much of Indegene’s growth over the past two years has come from clients outside its top 20, it is now also looking to accelerate growth among its largest accounts.

 

Artificial intelligence could further change the economics of this work. Gupta estimates AI can lower the cost of certain pharmaceutical commercialisation processes by 30-75 per cent, depending on the process and capabilities involved.

 

He does not, however, expect pharmaceutical companies’ overall sales and marketing expenditure — currently around 25 per cent of revenue — to decline significantly. Instead, he expects spending to shift further towards digital channels, technology and patient programmes, while AI accelerates the centralisation of commercial functions.

 

For FY27, Indegene expects organic growth to be better than last year, with the second half stronger than the first, while margins are expected to return to their earlier trajectory.