Big Orders Boost Venus

Five days after Prime Minister Narendra Modi announced the first lockdown to contain Covid-19, Panchkula-based Venus Remedies won a $13 million order, the largest in its 30-year history, from Mexico. The order, for critical care antibiotics Meropenem and Imipenem that Mexico needed to fight the pandemic, was to be executed within three months. For Venus, it was the biggest challenge ever, as abrupt lockdown meant everything was stuck—supplies, movement of people—at least till April 10. There was no option to go back on the commitment as the order was its biggest opportunity to come out of years of troubles—debt, litigation and losses. “People slept in the facility for weeks, and when everything was shut, we worked at 100% capacity, in three shifts, for a good two months, all hands on deck. What we were able to execute played a massive role in making us debt-free,” says Saransh Chaudhary, CEO, Venus Medicine Research Centre and president, Global Critical Care, Venus Remedies. Almost simultaneously, the company supplied the same products to Israel in a $5 million tender.

Chaudhary, whose father Pawan Chaudhary is founder-chairman and managing director and scientist-mother Manu Chaudhary is joint MD and head of R&D, says they also sold a drug, Elores, an anti-infective that they had developed, to Cipla for $10 million upfront payment and another $3 million payment linked to milestones. It also reaped a windfall from enoxaparin, which prevents blood clots, during the second wave of the pandemic in later half of FY2021. The company supplied about $12 million worth of enoxaparin, an anticoagulant that prevent blood clots, in FY2021 as against $1 million in previous year.

The result: Venus ended its loss-making run and earned ₹548.12 crore revenue and ₹61.76 crore net profit in FY2021. This made it a new entrant to Fortune India’s Next 500 list. “Venus Remedies stands out for its reliability and quality standards. It has recorded steady growth in volumes over the years,” says Vishnukant Bhutada, managing director, Shilpa Medicare Ltd, a business associate of the company in the oncology segment.

While Venus has scripted a remarkable turnaround during one of the toughest periods for most businesses, can it retain the momentum? “The results that we have posted (so far) in FY2022 are a testimony to the fact that while same opportunities may not come again, in first nine months of FY2022, we grew over FY2021 numbers. These tenders opened a new area of the market that we were not tapping earlier. So, while the tender from Mexico was the first for us, we won it this year too,” says Chaudhary. “For this year (FY2022), our single vision is that no matter what happens, we want to sustain the growth of FY2021. Right now, we are on track, and will post modest growth over last year,” he adds. The company has set a target of ₹1,000 crore turnover for FY2025.

Meanwhile, in a big shift in strategy, Venus has shortlisted about 25 products with sizeable markets. It will select five of these and try to be first in all of them. It will also work on new launches from a pipeline of 20 products over the next five years. Venus is also looking at consumer healthcare and intends to introduce products in segments like pain management, gastro-enterology, hygiene, stress management, vitamins and supplements. Pain management will be the first priority.

The company also plans to expand the virtual marketplace model that it had tried successfully during the pandemic. “Covid-19 has significantly altered the way domestic pharmaceutical market operates. Technology is playing a fundamental role with popularity of e-pharmacies and tele-health. There is going to be a significant shift towards generics (from branded generics) in India. Our aim in creating the virtual marketplace is to take generics directly to sales outlets, a B2B set-up where supply chain processes are digitalised,” says Chaudhary. Unlike the branded generic space where representatives promote products, Venus wants distributors or chemists to place orders online and get products at the doorstep. Chaudhary says virtual channels accounted for most of the sales of blood clot drug enoxaparin last year. “We used to have about 250 dispatches a day through this mode as against 15 through traditional trade channels. The delivery was much faster. We plan to shift our entire generic business (except institutional sales) to the virtual sales platform from next year,” says Chaudhary.

The company also figures in the list of 55 firms eligible for availing the benefits of government’s production-linked incentive scheme for pharmaceuticals. The scheme, which will be operational from FY2023 to FY2028, will see Venus making fresh investments in plant and machinery, expanding its product portfolio and adding innovative and complex generics in the coming years. “We have secured this approval on the basis of our world-class R&D, potential to grow in size and scale using cutting-edge technologies and capabilities to penetrate global value chains,” says Chaudhary.

With over 100 patents, nine manufacturing plants and 11 overseas marketing offices, the company is hoping to chart a brand new growth path in the coming years.