Remdesivir COVID-19 drug maker BDR Pharmaceuticals eyes IPO in next 3-4 years


While the COVID-19 pandemic came as a surprise to many in India, the Mumbai-based company BDR Pharmaceuticals was already ready to deal with the situation.

There were two reasons. First, it was already producing Remdesivir – which is used to treat COVID-19 in hospitalized patients – as the drug was also used in the treatment of the Ebola virus which broke out in Africa in 2013.

Second, the company was already monitoring the situation in China at the start of the pandemic. This helped her better equip herself when it came to India to face the pandemic.

“We had all the capabilities,” said Dharmesh Shah, President and CEO of BDR Pharma. SMBStory.

Demand for Remdesivir, which was developed by Gilead Sciences, increased overnight amid the pandemic. BDR says that at one point it was producing more than eight lakh units per month, with one batch taking around 80 hours to complete.

This is how the active pharmaceutical ingredient (API) manufacturing company has become a key player in the fight against the pandemic. In this context, APIs refer to the active ingredient in medicine. For example, the active ingredient included in a painkiller to relieve the person would be called an API.

The company has now attracted investor interest. Recently, BDR received funding of Rs 685 crore from Multiples Private Equity by diluting 9.3% equity at a valuation of Rs 7,365 crore.

BDR Pharma plans to use the new funds to build a facility in the United States, begin manufacturing complex molecules, and venture into biosimilars (an identical copy of the original product made by another company), a move that should put him in the same league as Indian pharmaceutical giants such as Biocon, Cipla, Dr Reddy’s, etc.

He is also considering an initial public offering (IPO) in the next 3-4 years.

The trip

Dharmesh Shah graduated with a degree in Chemical Engineering from the University of Mumbai in 1987. After working in the manufacturing, pharmaceutical, paint, tire and HDPE (High Density Polyethylene) and LDPE ( low-density polyethylene) for several years, he joined Hetero Drugs Limited in 1997. The company produces and markets antiretroviral drugs, particularly in Latin America, the Middle East, sub-Saharan Africa and Africa.

He was the company’s business development manager and also ran the company’s marketing.

During his travels around the world, Dharmesh found that the oncology market in India was dominated by foreign players. He wanted to fill that gap and create a company that would focus on critical diseases like cancer.

Dharmesh resigned from Hetero Drugs Limited and established BDR Pharmaceuticals in 2002.

While the company started out as a manufacturer of APIs for the critical care segment, it now also manufactures comprehensive assays. In addition, BDR focuses on four segments: oncology, intensive care, neurology and gynecology.

The founder says he realized the importance of the oncology segment when his father was diagnosed with cancer in 2004.

“I witnessed the pain and agony of people who could not afford treatment. I wanted to work to make medicines accessible and affordable,” he adds.

Recently, BDR launched Biapenem 300mg Injection in Antibiotics segment and Sugammadex Injection in Anesthesia segment for the first time in India.

It also launched cabozantinib for the first time in the country after getting the license from the Drug Controller General of India (DCGI). The drug is used to treat metastatic medullary thyroid cancer, advanced renal cell carcinoma, and hepatocellular carcinoma.

The company has several facilities in Mumbai, Savli and other cities.

BDR Pharma units, 100% owned by Dharmesh, are certified by WHO GMP (World Health Organization Good Manufacturing Practices), COFEPRIS-Mexico (Federal Committee for Health Risk Protection) and the Brazilian Health Regulatory Agency.

Fighting the pandemic and more

A recent market research report indicated that the API market was worth $11.807 billion in fiscal year 2021 (FY2021) and is expected to grow at a compound annual growth rate (CAGR) of 12. 24% over the forecast period (2021 to 2027).

According to several reports, India and China are the main markets for the manufacture of pharmaceutical APIs. However, China is considered the API pharmacy of the world as it exports most of the raw materials for the industry.

Dharmesh says BDR Pharma had ties to several companies in China from where it sourced raw materials for manufacturing Remdesivir. “During the second wave, China increased Remdesivir raw material prices from $4,500 per kg to $8,500 per kg.” Dharmesh said the company succumbed to his tactics due to pressure to bring the product to market.

“It completely tore us apart,” he says, adding Remdesivir prices have doubled as a result, but now the focus is on battery life.

At the height of the pandemic, the drug cost Rs 5,400 per vial.

Towards new horizons

Dharmesh launched BDR Pharma with Rs 10 lakh and it is largely a seeded business.

Explaining to him why he decided to raise funds from an investor who may have an exit in mind in a few years, he says: “We voted to ensure that any excess reserve that we have, will be taken care of for the growth of our existing business and the new investments we plan to make will happen with the money we raise through dilution and we will prepare in three to four years for an IPO.

BDR Pharma says revenue has also doubled during the pandemic. Gross revenue for FY21 was Rs 1,104.36 crore compared to Rs 517.33 crore in FY20. The company’s export revenue also increased more than 4 times from Rs 174.25 crore to Rs 1104.36 crore during the same period. The company has been profitable since its first year when it made a profit of Rs 2 crore.

It has four subsidiaries, including BDR Lifesciences, Magnum Chemi, Virdev Intermediates Pvt. Ltd., and Cibeles Pharmaceuticals. Of the four subsidiaries, BDR Life Sciences is the one that contributes the most to the company’s overall revenues.

Head of BDR Pharma for more than 20 years now, Dharmesh says the pharmaceutical industry is extremely tough and “not as rosy as it looks”.

However, the situation is changing. He says the government’s increased focus on this sector has allowed him to get approvals faster.

“Making affordable drugs can help you serve the country and you can also create a fortune for yourself,” he says before signing.

Edited by Affirunisa Kankudti

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