Suven Life Sciences Company Analysis Report

Suven Life Sciences  Company Analysis Report

Summary

• Suven Life Sciences is a major Indian biopharmaceutical companies with key focus on drug discovery, custom manufacturing and commercialization of novel pharmaceutical products.
• Suven's capabilities include: process optimization and production of organic fine chemicals and pharmaceutical intermediates, APIs, chiral synthesis, generic APIs, orphan drugs, and racemic switches.
• Suven is well known for its collaborative research partnerships with some of the leading global pharmaceutical companies. For instance, it has established two central nervous system (CNS) research collaborative partnerships with Eli Lilly in the year 2006 and 2008, where scientists from both companies work together to identify potential oral compounds that selectively modulate G protein-coupled receptors.
• Due to the global economic slowdown in recent years, Suven’s revenues dropped 8.4% y-o-y to $28m in FY 2010. Its CRAMS business recorded the highest sales of $20m capturing a share of revenues of 71.9% in FY 2010.
• Suven Nishtaa, a joint venture company of Suven Life Sciences, is a pharmaceutical formulations contract service provider for global pharma companies. With over 110,000 sq.ft of world class infrastructure, Suven Nishtaa is a dedicated provider of pharmaceutical product development, scale-up and manufacturing services to both pharma and chemical players.

Company overview

Table 23: Suven Life Sciences snapshot
Headquartered:	Hyderabad, India
Established:	1989
Consolidated revenue (FY 2010):	$28m
Segmental revenue (FY 2010):	$20m*
Employees (2010):	577
*Contract Research and Manufacturing Services (CRAMS).Note: FY = Fiscal Year (April 01 to March 31)

Source: Company information

Established in the year 1989, Suven Life Sciences is one of the major Indian biopharmaceutical companies with key focus on drug discovery, custom manufacturing and commercialization of novel pharmaceutical products. The company has 12 internally discovered therapeutic drugs presently in pre-clinical stage of development targeting ADHD, dementia, depression, Huntington's disease, Parkinson's disease and obesity in addition to developmental product SUVN-502 for Alzheimer's disease and schizophrenia. Suven's capabilities include: process optimization and production of organic fine chemicals and pharmaceutical intermediates, APIs, chiral synthesis, generic APIs, orphan drugs, and racemic switches.

Business segmentation

Suven's business is divided into four units:

• Contract Research and Manufacturing Services (CRAMS) – serves over 20 global life science and fine chemical companies by manufacturing and supplying cost effective pharmaceutical and agrochemical intermediates for meeting world standards of quality, speed and respect for environment;
• Drug Discovery and Development Support Services (DDDSS) – offers scientific drug discovery and research services to global pharma and biotech companies, specializing in physicochemical properties; screening (receptors/enzymes); assay development; drug metabolism and pharmacokinetics studies; microdialysis; receptor occupancy; CNS pharmacology; and safety pharmacology among others;
• Clinical Research Operations (ACT) – provides clinical research support to major pharmaceutical companies across the globe;
• Suven Nishtaa – a joint venture company of Suven Life Sciences, engaged in providing end-to-end drug development services, such as product development for pre-clinical and clinical testing (manufacturing and packaging for Phase I, II, and III trials); new drug delivery systems; analytical services including analytical development and validation, impurity profiling, stability studies and management; regulatory management services, pre-post submission and approval; packaging development and testing laboratories.

R&D focus

Suven is well known for its collaborative research partnerships with some of the leading pharmaceutical companies in the world. For instance, it has established two central nervous system (CNS) research collaborative partnerships with Eli Lilly in the year 2006 and 2008, where scientists from both companies work together to identify potential oral compounds that selectively modulate G protein-coupled receptors. Under the latest deal in March 2008, Suven will be responsible for the identification and selection of CNS compounds while Eli Lilly will undertake the clinical development of the selected candidates and commercialization globally.

Suven also has several state-of-the-art R&D manufacturing facilities which follow cGMP. Its R&D activities include: custom synthesis of lead compounds in grams and kilograms, intermediates in multi-kilograms, R&D of process optimization and clean technologies, and collaborative research programs with major pharma and biotech companies.

Financial performance

Due to the global economic slowdown in recent years, Suven’s revenues dropped 8.4% y-o-y to $28m in FY 2010. Its CRAMS business recorded the highest sales of $20m capturing a share of revenues of 71.9% in FY 2010. The following table illustrates the detailed sales performance of Suven in FY 2010.

Table 24: Suven financial performance by segment ($m), FY 2010
Division	Sales FY 2010 ($m)	Share of revenues FY 2010 (%)
CRAMS	20	71.9
DDDSS	7	24.8
Total segmental revenues	27	97.0
Total sales and other incomes	28	100
CRAMS: Contract Research and Manufacturing Services; DDDSS: Drug Discovery and Development Support Services. Note: All numbers were converted into $m considering an average exchange rate for the fiscal year. FY = Fiscal year (April 1 to March 31)

Source: Company reports

Growth strategies

Certified facilities to cater for the needs of global pharmaceutical companies

Suven has re-certified its quality system ISO 9001:2000 to enhance its contract research and manufacturing opportunities with the global pharma giants. Its cGMP compliant plant at Suryapet, Andhra Pradesh, has been audited and approved by the FDA in January 2009 for intermediates. In August 2008, Suven also received a Certificate of Suitability from European Directorate for the Quality of Medicines for one of its products (tamsulosin). This certificate enables Suven to explore all European markets in the coming years.

Dedicated pharmaceutical product services in the form of Suven Nishtaa

Suven Nishtaa, a joint venture company of Suven Life Sciences, is a pharmaceutical formulations contract service provider for global pharma companies. With over 110,000 sq.ft of world class infrastructure, Suven Nishtaa is a dedicated provider of pharmaceutical product development, scale-up and manufacturing services to both pharma and chemical players. Moreover, the company strongly believes in collaboration-partnership model for delivering high quality products to customers.