BDR Pharmaceuticals plans $100 mn expansion in the US with manufacturing buyouts

Drugmaker BDR Pharmaceuticals is looking to expand its US footprint through buyouts of manufacturing facilities with an investment of $100 million, its Chairman & Managing Director Dharmesh Shah told ET. The company, which has current revenue of approximately $200 million, is planning to list by 2027, he said.

“We are eyeing asset acquisition for manufacturing in the US…We have evaluated a couple of units and we should be deciding on the acquisition in the next three to four months,” said Shah. The planned acquisition will be funded through internal accruals.

BDR has a significant portion of its business contributed from value-added CDMO operations focusing on key therapeutic segments such as oncology, critical care, women's healthcare and dermatology.

Industry experts said the uncertainty surrounding the US tariffs may prompt many Indian manufacturers to acquire assets in the US that will enable them to avoid significant cost increase they would otherwise incur on exporting the finished drug.

“We want to manufacture in the US certain controlled substances and complex molecules. The reason being that the US, if you have to cater to the defense sector, the preference is for the local producer,” said Shah. “We prefer that we have an establishment there and we do the tech transfer and manufacture there and cater locally to the government.”

Shah added that the company has been planning this expansion over the last one year. “Our thought process has been there for last one year. US is a big market and local defense buying is also huge. It's always better to produce locally,” he added.

“Inorganic definitely helps you to fast track approval,” said Shah.

BDR, which has tie-ups with top Indian pharma companies like Dr Reddy’s, Sun Pharma, Cipla, Zydus, and Torrent, is evaluating 200 ANDAs in the US. These include solid dosage and injectables in cardiology, diabetology, pain management, dermatology and HIV. “Around 45% or 80-90 of these ANDAs are going to be commercialised,” said Shah.

On the impact of possible tariffs on exports of pharmaceutical products from India, Shah said, “The current geopolitical situations are very uncertain due to a lot of things happening. But the operating cost in the US is very high and the dependence on active raw material is largely on India and China - which is the major cost contributing factor. That's where, with India being a preferred partner, Indian generics don't need to worry about.”

India is a major supplier of generic medicines to the US market. Its exports worth about $9 billion in value terms account for 40% of the medicines consumed in the US.

“Because there's a huge difference in operating cost as well as the backward integration strength. I don't believe it is in the interest of even the US to make generics expensive.”

The company, which is now globally into oncology molecule, is also in the process of setting up a new plant for complex oncological injectable at Halol near Vadodara in Gujarat, where it already has two facilities for complex injectable and oral solid dosage in areas such as anti-inflammatory, antibiotics and others.

The company has already started the process for FDA approval and almost seven filings for complex oncology molecules are lined up this year. The company is filing for approval for a new drug delivery system in oncology, for geriatric patients, under 505B2 which is a streamlined FDA drug approval process that allows use of existing data.