While the behemoths of the Indian pharma industry are still battling the gaze of the USFDA and witnessing sharp erosion of their market cap, the clouds of uncertainty have receded for a niche player like Laurus Labs. Based in Hyderabad, in a span of about a decade, this mid-sized firm has become a leading manufacturer and developer of generic active pharmaceutical ingredients (APIs).
Laurus supplies APIs to nine of the top ten pharmaceutical players in the world (top customers include Aspen, Aurobindo, Cipla, Mylan and Natco). The firm’s constant emphasis on cost efficiency, quality control, a higher off-take by global procurement agencies and most importantly, a qualified and experienced management at the helm of affairs has been instrumental in driving growth (see: Fruitful therapy). Incorporated in 2005, the firm went public in December 2016 to pay back a portion of its debt and for funding its expansion. Founder Satyanarayana Chava says, “Customers are willing to bet on us due to our ultramodern facilities, cost effectiveness and an excellent compliance track record. Another important dimension is that we built a product-specific capacity. If we create a multipurpose facility, we will have to make a lot of compromises. Our ability to create a large capacity, more than our current requirement (unlike our peers) has been one critical success factor for us, so far.”
Laurus’ emphasis on automation and quality control has ensured a good compliance track record. In August 2017, USFDA completed the inspection of its API facilities at Visakhapatnam and granted an establishment inspection report (EIR). The company received two form 483 observations for its unit I and unit III, which were procedural in nature. It also recently announced the successful completion of USFDA audit without any observations for its unit II (formulations unit) at Visakhapatnam. In comparison, Shilpa Medicare, which is foraying into formulations, got three form 483 observations in January for its unit I and unit II in Raichur. And earlier in December 2017, it had received 10 form 483 observations for its SEZ formulation facilities in Jadcherla, Telangana. A form 483 enlists deficiencies found during the course of inspection. If no enforcement action is contemplated, or after the