RPG Life Sciences plans to spend ₹500 crore to buy a new asset within 12 months. Managing Director Ashok Nair said, "We are looking for another asset, preferably one with USFDA approval." The firm recently grew its revenue to ₹211.6 crore and wants to scale its API business further.
Mumbai-based integrated pharmaceutical company RPG Life Sciences is aiming to deploy approximately ₹500 crore from its committed capital pool towards the acquisition of one more asset within the next 12 months.
"We have already deployed around ₹200 crore from our ₹700-crore committed capital pool and are looking for another asset, preferably one with US Food and Drug Administration (USFDA) approval or synergies with our existing operations," RPG Life Sciences Managing Director Ashok Nair told Business Standard in a virtual interaction.
The move comes even as the company is looking to scale up its active pharmaceutical ingredients (API) business by 25 per cent annually over the next five years through organic expansion and acquisitions.
The drugmaker had recently acquired Actis Therapeutics and Raghav Lifesciences with the backing of private equity (PE) firm InvAscent, with the assets expected to start contributing revenue by Q3FY27.
"Actis and Raghava Lifesciences are expected to contribute between ₹70 crore and ₹80 crore in revenue over the next six months. The acquisitions have expanded our manufacturing capacity fivefold and doubled the customer base," Nair said.
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RPG Life Sciences had transferred its API business to RPG Active Pharma, a wholly owned subsidiary of RPG Life Sciences, and onboarded InvAscent as a strategic partner.
"This was part of our strategy to create a focused API business with dedicated capital, sharper management attention and greater strategic flexibility, while the company also continues to build its formulations business," Nair said.
He added that RPG's existing manufacturing facilities have the potential to generate around ₹450 crore in revenue without significant additional investment, with growth expected to come from higher capacity utilisation, new customers and entry into markets such as Europe and South America.
The company will focus on integrating and scaling these assets while continuing to explore inorganic opportunities.
RPG Life Sciences last week reported 16.5 per cent year-on-year (YoY) growth in revenue to ₹211.6 crore in the September quarter, crossing the ₹200-crore quarterly milestone for the first time.
Nair attributed the margin expansion to an improved product mix, strategic inventory building and price increases for customers, despite higher freight, solvent and packaging costs amid the West Asia conflict. He added that the company had not faced any supply pressures.
On the future outlook, Nair said the company aimed to sustain its growth trajectory, supported by domestic formulations, acquisitions and a recovery in its international formulations business.
He added that the company was becoming stronger in regulated foreign markets in Europe and Canada, and new markets such as Latin America and Africa. "We have secured tenders in some Latin American markets and completed our first contract development and manufacturing organisation (CDMO) project on time," Nair said.
He added that RPG Life Sciences does not expect a material impact on its sales or margins from the government's trade margin cap on cancer medicines.
While maximum retail prices (MRPs) have to be reduced for its oncology brands such as Ivzumab (bevacizumab), along with Densurak, Denbri and Debrumab (all denosumab), Nair said that the company's own selling prices would remain broadly unchanged.
Welcoming the move, Nair said that improved affordability could eventually bring more patients into treatment and support volumes across its oncology and speciality portfolio.
He added that the company was also planning to leverage its existing network of specialist doctors, particularly in nephrology and rheumatology, to promote its recently launched generic version of semaglutide.