AuroSource Company Analysis Report

AuroSource Company Analysis Report

Summary

• AuroSource is the Contract research and Manufacturing Services (CRAMS) division of Aurobindo Pharma which offers outsourcing options to many biotech and pharmaceutical companies across the globe.
• AuroSource's portfolio includes several specialized R&D capabilities, with strong expertise in customized APIs, intermediates, pre-formulations, and formulations.
• In the last few years, AuroSource has made a significant progress in CRAMS sector and established itselves as one of the Asia’s largest manufacturer of cephalosporins and penicillins.
• In spite of global recessionary conditions and severe competitive pressure, Aurobindo Pharma strengthened its position in all geographies and improved its marketing reach. Although its formulation business has a share of revenues of over 50%, its generic pharmaceuticals and API segments remained the other major contributor to its consolidated sales of $770m in FY 2010.
• AuroSource's manufacturing services covers a wide range of techniques such as plant scale material for clinical trials, commercial scale chromatographic separation and lyophilisation. Moreover, the Company’s multi-product FDA inspected site for oral dosage formulation is one of the Asia's largest solid oral facilities, equipped with a zero discharge system.

Table 10: AuroSource snapshot
Headquartered:	Hyderabad, India
Established:	March 2010
Consolidated revenue (FY 2010):	$770m
Segmental revenue (FY 2010):	NA*
Employees (2010):	6,500 approximately (worldwide)
*Aurobindo Pharma did not disclose its segmental revenue.Note: FY = Fiscal Year (April 01 to March 31). NA = Not available.

Source: Company information

Company overview

AuroSource is the Contract research and Manufacturing Services (CRAMS) division of Aurobindo Pharma which offers outsourcing options to many biotech and pharmaceutical companies across the globe, through one of Asia's largest solid oral sterile API facilities, five sophisticated R&D centers and strategic warehousing locations for shorter order-to-delivery time. Its portfolio includes several specialized R&D capabilities, with strong expertise in customized APIs, intermediates, pre-formulations, and formulations. AuroSource has a strong experience of over 1,000 regulatory filings and exports to over 125 countries. AuroSource's core competence lies in its low-cost manufacturing and quality consciousness, which is also supplemented by its geographical reach and marketing channels.

Business segmentation

AuroSource's manufacturing services are divided into APIs and finished dose forms. The company has a distinctive approach in development and manufacturing of APIs. With over 300 research chemists and the command of having processes for over 200 different APIs, AuroSource is one of the preferred partners for many innovator companies across the globe. It has one of the Asia’s largest facilities dedicated to cephalosporins and penicillin production.

AuroSource's finished dosage form manufacturing arm offers sterile manufacturing, clinical supplies, late life-cycle management and packaging solutions. Other offerings span tablets, including multi-layer, sustained, chewable, to capsule suspensions. In addition, the company has specialized capabilities of Wurster coating, melt extrusion and lyophilized vials.

R&D focus

AuroSource have a dedicated technology transfer team and process development laboratories within its manufacturing sites, facilitating seamless transfer of all relevant technology during each project. In the last few years, AuroSource has made a significant progress in creation of required infrastructure, meeting global needs for supply of APIs and entering into the high opportunity area of clinical trials outsourcing. It also has one of the Asia's largest manufacturing facilities of cephalosporins and penicillins.

Custom synthesis at Aurobindo Pharma, AuroSource's parent company, offers its comprehensive services with a promise of quality and consistency. It has a dedicated kilo lab at its R&D centre in Hyderabad. All six cGMP compliant manufacturing plants of the company conform to international standards, with a variety of high pressure and sterile reactors, spray drier, and hydrogenators. Aurobindo's custom synthesis for outsourcing needs is focused in two key areas:

• Organic custom synthesis – offers a full range of services from designing novel routes with complete chemical, chromatographic and spectroscopic back-up for starting materials, intermediates, reference compounds, metabolites, and resolution of enantiomers;
• Chemical development – offers scale-up of existing processes, preparation of intermediates in milligram to kilo lots, process optimization, development and use of purification techniques.

Financial performance

In spite of global recessionary conditions and severe competitive pressure, Aurobindo Pharma strengthened its position in all geographies and improved its marketing reach. In FY 2010, Aurobindo's consolidated revenue grew by 11.6% to reach $770m. Generic drugs sold in India were the company’s main source of revenue. Aurosource and API business still accounted for just under half annual FY 2010 revenues at an estimated $360m. Aurobindo did not disclose FY 2010 contract manufacturing revenues.

Growth strategies

Aurobindo's investment in CRAMS business

In early March 2010, Aurobindo Pharma launched a new CRAMS brand, AuroSource, to handle its contract research and synthesis of APIs and intermediates for the global pharmaceutical and biotech companies. Currently, it is setting up a modern R&D facility at Pashamylaram (near Hyderabad) to house about 150 scientists and plans are also underway to offer medicinal chemistry and other discovery services. The AuroSource team, which is recently separated from the parent company, has already commercialized over 200 APIs and 120 finished drugs in the global pharma and chemical market. Thus, this new operation will streamline its drug development and contract manufacturing processes in coming years. In addition, AuroSource expects to offer a range of services including customized manufacturing solutions for APIs, pre-formulations, formulations across every stage of the lifecycle, and lifecycle management solutions.

Diversified contract manufacturing capabilities

AuroSource's manufacturing services cover a wide range of techniques such as plant scale material for clinical trials, commercial scale chromatographic separation and lyophilization. It offers six modern scalable facilities which can effectively handle up to 30 unique APIs at a given point of time. Moreover, its finished dosage formulation facilities offer sterile manufacturing, clinical supplies, late life-cycle management, and packaging solutions. AuroSource has four formulation facilities, of which one is solely dedicated to penicillin ranges and one to oral and parenteral actives. Aurosource's multi-product FDA inspected site for oral dosage formulation is one of the Asia's largest solid oral facilities equipped with a zero discharge system.