Torrent Pharma: The Growth Pill

One unique element that Samir Mehta-led Torrent Pharma kept unchanged in its corporate strategy while wading through the odds, was to adhere to its fundamental values and principles amidst the break neck speed and complexity. The company, which came back to the fore after a long phase of stagnation, saw two critical accolades coming to it in the last four years. It found its top place among India’s fastest growing companies and its leader was named among the most promising CEOs in the country.

Even as the generic drug industry is going through its most crucial phase globally with a crucial pricing pressure, enhanced regulatory scrutiny and increasing competition, Torrent could buck the trend by sticking to the said strategy. Looking at the positive side even at times of crisis and keeping the fundamentals strong through continued innovation helped it strive. Torrent made a strategic acquisition in India at a time when the domestic market was turbulent with the hardest price control regime and the slowest growth. It could also take a risky but informed decision to test the low competition opportunities in the US market with the support of its innovation capability.

According to executive chairman Samir Mehta, the key factors that helped the company to feature in the fastest growing companies during the last four years include the successful integration of Elder portfolio (the business that it acquired in India in 2014) and strong execution of low competition opportunities in the US.

“We also focused on building larger brands with market leading share in India and Brazil and a continued and significant improvement in efficiency across the value chain including field force productivity,” he added.

Torrent Pharma, part of the Ahmedabad-based $3 billion power-to-pharma Torrent Group, posted an average 166.28 per cent growth in revenue and 466.88 per cent growth in profit between 2012 and 2016 on the back of expanded sales in India and strong US sales. The much improved efficiency in the manufacturing process and a better product mix also helped the company to maintain a much higher rate of compounded annual growth during this period.

Several successful launches in the US market led to exceptional growth in profit due to low competition, in some cases. It also achieved business growth in India at 15 per cent despite impact of hygiene improvement measures and discontinuation of promotional schemes. The company launched two biosimilars in India, to increase focus on specialty portfolio. It also acquired and amalgamated a US FDA approved derma products manufacturing facility of Zyg Pharma at Pithampur in Indore during the last four years.

But Mehta, who expects certain challenges to retain this position going forward, also sees better opportunities in the future.

“Improving access to healthcare and reducing spend on it is a major goal of governments around the world at present. But I take this as a challenge as well as an opportunity,” says Mehta.

The other challenges that he sees in the market are the increasing competition leading to pricing pressure across the key markets and a continued compliance requirements under increasing regulatory scrutiny and the need for diversified geographical spread.

“Improving the efficiencies further, developing more responsive supply chain to ensure greater agility and improved speed to the market, identifying niche opportunities across key geographies and exploring inorganic opportunities to broad base product offerings are the strategies that will help the company continue to overcome these challenges,” he added.