Syngene expands supply chain with China-free options

Syngene International, the contract research wing of Biocon Group has created a fully independent supply chain alternative to China. According to Sibaji Biswas, ED and CFO, Syngene International, “Syngene has created substitutes for Chinese suppliers within India and globally”.

Currently, the company offers clients the option to choose between supply chains independent of China and those still reliant on Chinese sources. While China remains economically attractive due to its large production volumes, “If somebody is willing to pay a little extra, we can offer a completely China-independent supply chain,” Biswas said

Recent months have seen a spike in requests for proposals (RFPs) by 50 per cent year-on-year (y-o-y), he told businessline. This surge follows the passage of the Biosecure Act by the US House of Representatives, which was approved yesterday. The Act prompts US drugmakers to reduce their reliance on Chinese companies like WuXi AppTec and BGI by 2032, citing national security concerns.

Despite receiving inquiries for requests for quotes (RFQs) and RFPs, these transitions are progressing slowly as companies are proceeding cautiously, starting with pilot projects to build confidence in our capabilities, Biswas added.

• Also read: Syngene Q1 net profit down 19% to ₹75.7 crore 

Western sources

Syngene has successfully reduced its reliance on Chinese suppliers in the small-molecule space and sources its biologics primarily from western countries. Additionally, the company has encouraged western stockists to establish stocking points in India, facilitating quicker access to raw materials and bolstering the Indian pharma supply ecosystem.

Syngene collaborates with 11 of the top 15 global biopharma companies. Their volumes are distributed with 67.9 per cent coming from the US, 20.8 per cent from Europe and the remainder from East Asia, including Japan, and some from Australia.

The company reported a dip of 19 per cent y-o-y in profit after tax (PAT) from ₹93.4 crore to ₹75.7 crore in the first quarter of FY24. The plunge in performance was attributed to the reduced funding in the US biotech sector over the past two years which has affected the industry.

Syngene’s stock closed at ₹9,29.15 on Tuesday, reflecting a rise of 3.97 per cent. Over the past year, the stock has performed positively, increasing by 10.72 per cent and maintaining a price of ₹9,29.15 on the BSE.