Synopsis: Some of these PE-owned platform companies include Advent International-led Cohance Lifesciences / Suven Pharma, PAG and CX Partners-funded Sekhmet Pharmaventures, and Carlyle-backed Viyash Lifesciences and Sequent Scientific (animal API manufacturer).
Mumbai: The active pharmaceutical ingredient (API) segment in India is witnessing a never-seen-before war for management-level executives, triggered by the emergence of several large private equity-owned platform companies as well as fuelled by the government’s push that is leading to many new entrants in the market, industry insiders and experts said.
Some of these PE-owned platform companies include Advent International-led Cohance Lifesciences / Suven Pharma, PAG and CX Partners-funded Sekhmet Pharmaventures, and Carlyle-backed Viyash Lifesciences and Sequent Scientific (animal API manufacturer).
Besides, some large pharma companies like Aurobindo Pharma have spun off their own API units, for which they are scouting for senior professionals. There are new players like Ahmedabad-based detergent-to-cement conglomerate Nirma, which entered the segment by acquiring Glenmark Life Sciences, the API spin-off of Glenmark.
In demand are chief executives, chief operating officers, chief legal officers and other senior professionals who have an understanding of the global market, knowledge of regulatory requirements and can drive the companies to the next level of growth.
Biocon hired Arun Gupta as COO, Sanjay Chaturvedi joined Aurobindo as CEO for the API business, S Damodharan became CEO for the API business at Sun Pharma, and Vikas Vij joined
IOL Chemicals and Pharmaceuticals as CEO of API and specialty chemicals.
Other prominent moves include Kuber Jagadale (president-API, Emcure Pharma), Sunil Uttarwar (COO, Cohance Lifesciences) and Hiren Shah (COO, AMI Lifesciences).
Global firms too are on a hunt for senior executives to manage their API business. Israel-based pharma major Teva has appointed R Ananthanarayanan as CEO of its global API business.
“It’s a challenge, but we need to find ways to add manpower,” said Shweta Jalan, managing partner and head of Advent International in India. The PE firm is building a platform under Cohance Lifesciences through acquisitions to achieve scale in API production and take advantage of the China-plus-one sourcing diversification strategy of drug makers. Advent has acquired RA Chem Pharma, ZCL Chemicals, Avra Laboratories and Suven Pharmaceuticals as part of its plan to build an API platform.
“API companies were led largely by the entrepreneurs themselves. They haven’t invested much on grooming senior talent, so there is a very limited number of people available at the senior level,” said Annaswamy Vaidhesh, executive chairman of Suven Pharmaceuticals.
Rahul Shah, cofounder and director at WalkWater Talent Advisors, said: “There is a shortage of leadership talent in critical functions like manufacturing, sales and commercial, R&D, regulatory, etc. This is happening because India is emerging as a destination for API manufacturing and more and more investments are getting into this sector.”
The API market in India is estimated to grow to $30 billion by 2028, constituting about 35% of the pharma market. The market is currently valued at about $17 billion.
“The supply chain crisis and de-risking produce a gradual shift to India for API sourcing for use in formulations from China – the world’s largest manufacturer of API. Post-Covid, this presents a great opportunity for Indian manufacturers to ramp up,” said Suresh Subramanian, partner and national life sciences leader at EY Parthenon India.
That apart, there are several new entrants in the market, spurred by the government’s Rs 5,000 crore production-linked incentive scheme and interest from PE firms. There are also large companies that are looking to expand rapidly in this segment. These are leading to demand for senior professionals, he added.
Sanjay Chaturvedi, CEO of Apitoria Pharma, the API subsidiary of Aurobindo Pharma, said the industry should invest in grooming management talent.
“The API segment even within pharma was never the most sought-after career option… we can tap talent outside of the industry and train them,” said Chaturvedi, who was earlier heading API maker IOL Chemicals and Pharma.
The rising war for talent is leading to soaring compensation.
Shah of WalkWater said: “Average CTC (cost to company) range for CXO talent is in the range of Rs 1.75 crore to Rs 2.50 crore – this includes fixed and variable salary.”
Why the War for Talent in API Sector?
- India is emerging as a destination for API manufacturing; sector attracting new investments
- Government’s PLI push and emergence of new players, expansion of existing companies
- Emergence of large PE-owned platform companies
- The API market in India is estimated to grow to $30 billion by 2027-28 and constitutes about 35% of the pharma market
- Pharma sector has seen M&A deals worth $15 billion since 2022 with a large portion of it going into API sector
Soaring compensation:
Average CTC range for CXO talent: Rs 1.75 crore to Rs 2.50 crore plus LTI
Source: The Economic Times