Sai Life Sciences - India's WuXi?

[phreakv6]

Sai Life (incorporated 1999. Managed by Krishna Kanumuri who is MD/CEO since 2004) is a small molecule focused CRDMO - i.e they do both CRO and CDMO. CRO contributes 37% to revenues while CDMO contributes 63%. Only comparable competition is Syngene in the listed space and to a small extent Anthem Bio which has around 10% CRO. Comparison with Syngene should be a put-off for many considering how poorly Syngene has grown its business over the last few years. Sai however, has grown even its CRO business 35% over the last 5 years with 38% of CRO from BigPharma (up from 33% in FY24) and 62% from Biotechs.They have increased number of Customers and have also increased wallet-share from existing ones (cross-selling and upselling).

Sai has 18 out of the top 25 (was 9 in 2019) BigPharma names as their clients - names like AbbVie, Lilly, Bristol Myers Squibb, Pfizer, Merck, GSK, Genentech/Roche, AstraZeneca, Sanofi etc (they have MSAs with 8 of these) as customers who all have multiple molecules with Sai. They also have a dedicated CRO facility likely for Schrodinger. Sai has 30 commercial molecules (7 of these are blockbusters) and has in fact taken 5 drugs from discovery to commercial which has to be the most for any Indian CRDMO. There are 6 in phase-3/pre-reg phase. The molecules are across therapies from CNS, Oncology, Infectious diseases, Cardiovascular, Anti-histamine etc.

Discovery phase lasts until the IND filing (Investigational New Drug). Only post IND filing the trials can start and the drug goes through Phase 1-3 and NDA filing. Sai is there in the entire value-chain from Discovery to Commercial.

Sai and Aragen are the only ones that work with innovators with labs in innovation hubs in the West (Sai has labs in Watertown and Boston to work alongside innovators)

The only one in India that is comparable to a WuXi/Pharmaron and probably only one in India deriving almost all its revenue from innovators.

I have been studying the CDMO space over the last few months - so far I have covered BlueJet, Aarti, Neuland, Sai, Laurus and Anthem in some depth. All of them have at least 1 commercial innovator molecule contributing substantially to their sales. This is a new thing for Indian CDMOs and we might probably be in the very, very early phase of it - there is scope for exponential growth for many of them here. Among this peer set, each of them (maybe with the exception of Anthem) has a substantial part of the business in something I don’t like - Aarti with its xanthene/caffeine, BlueJet with its contrast media/saccharin, Neuland with its extensive generic APIs where there’s lot of pricing pressure and Laurus with its ARV portfolio.

What distinguishes Sai among this peer set is that there’s barely any such commodity drag. Its all high science (2605/3401 employees are scientists with 1572 in R&D alone), high margin, high value add in cutting-edge - from chiral chemistry, cell and gene therapies (CGT), targeted protein degradation (TGT), ADC linkers, peptides and oligonucleotides. The overall margins however pale in comparison to a Divis, Anthem etc - this however I think is changing. Sai’s margin trajectory is trending up and there are signs that it can continue as CDMO volumes from its existing molecules go up.

The other thing that I like about Sai is that they have a ready funnel for CDMO business from the CRO FDA approved molecules, unlike the others I studied - which seem to involve an element of luck in capturing large business.

So far among the peer set, the largest innovator molecules are (that I could triage).

CDMO	Commercial Innovator Molecules
BlueJet	Bempedoic Acid
Neuland	Bempedoic Acid, Cobenfy, Austedo, Qelbree (yet to contribute)
Aarti Pharma	Elinzanetant, Obicetrapib (yet to contribute)
Anthem	Rimegepant ($50m ~25% of sales!)
Laurus	Suzetrigine, Abrocitinib, Sepiapterin, Mevrometostat (phase 3)
Sai Life	Atogepant/Ubrogepant (Qulipta/Ubrelvy), Blujepa, Tyvaso DPI, Bilastine, Orladeyo, Simparica, Phase 3 completed - Tradipitant, Lorundrostat, Camizestrant

To me it looks like Sai has all the makings of a business that can become quite large due to its earnings power. They have 160 programs in their CDMO pipeline which gives them the healthiest business visibility among its peers. A lot of Sai’s molecules have fairly large market size as well.

Atogepant/Ubrogepant (Qulipta/Ubrelvy) is an Abbvie drug approved in Sept ‘21 (Patent expiry in 2041) used in migraine prevention and treatment respectively. Its taken every day (60mg dosage) and competition is another recently approved drug - Rimegepant (made by Anthem and Piramal - both have ~$50m in sales per year from this molecule alone). As of now Sai is making a crucial intermediate and the API supplier is WuXi. Sai is probably capturing ~50-60% of the value but is the sole supplier - crazy scale up as well from $4.2m in ‘23, $5.8m in ‘24 to $15.8m in ‘25 so far. Good thing is Atogepant/Ubrogepant are notably superior to Rimegepant in terms of MMD (Monthly Migraine Days) and also cheaper and the same is also reflected in way superior prescription growth (latest UK data). The market size is ~40m patients in the US and another 40m in EU.

Blujepa (Gepotidacin) is a GSK antibiotic drug for uUTI approved only in March ‘25 (patents till 2035) - market size is ~15M patients for UTI in US alone and much larger worldwide - also this appears to be a recurring phenomenon with multiple infections every year. Since Gepotidacin is a first-in-class antibiotic, it might be reserved for treatment of only resistant cases by antibiotic stewardship. Even resistant cases appear to be 5% of the market. The dosage as well is high at 3000mg/day for 5 days. The trend of resistance is increasing and by 2030, it could be 10% of overall market and could end up being prescribed more widely as well. The drug is yet to be approved in EU but it should get approved this year which will increase market size. Sai makes two intermediates and it contributes ~$17m in exports this year.

Treprostinil (Remodulin; Tyvaso; Orenitram) by United Therapeutics has been in the market for a long time but recently the DPI (Dry Powder Inhaler) got approved and its driving up the numbers for Sai that makes a crucial intermediate. This is ~$70k/kg intermediate. Sai makes ~$8m/yr but its scaling up. Patent expiry is May ‘27.

Bilastine by Faes Farma was approved sometime ago in Europe and isn’t approved in US. It is used for treating allergic rhinitis (seasonal allergies) and is a widely used product in Europe as Bilaxten. Patents have been expiring across countries over last 3 years but the product is holding its own with Sai making $16m/yr (no growth though)

Orladeyo (Biocryst) and Simparica (Zeotis) are commercial drugs Sai was making until ‘22/’23 or so but stopped likely due to scale up issues (my guess). Simparica (chewable flea/tick treatment for dogs) esp is a very, very large market and was growing exponentially when it stopped abruptly. I suspect inability to scale-up is what made them lose these molecules. If you track their capacity expansion - its 200 KL in 2017, 450 KL in 2020 and 565 KL by 2022. After this, they added capacity only in ‘25 (110 KL to take it to ~640 KL). FY23 their borrowings had ballooned to 900 Cr+ and interest coverage ratio as well dipped to a dangerous ~2x. This must have put the brakes on their expansion and made them lose customers who needed serious expansion fast (esp. Zoetis). Again all this is my hypothesising. The IPO has substantially brought down the debt and now and the company is expanding capacity again to 1300 KL by 2027 likely due to scale up of Atogepant/Ubrogepant, Blujepa and the phase 3 molecules which are nearly commercialisation.

While management says there are 6 in phase-3/IND, I could only locate 3 of these.

Lorundrostat (Mineralys) is a drug for treatment resistive hypertension. Market size is rather large here at 11-17% of hypertensive having treatment resistance which puts market size at 13-20m patients in US alone. There is another drug which is also in phase 3 by AstraZeneca called Baxdrostat which is also has phase 3 success. Both drugs will likely get to NDA filing in Dec ‘25.

Tradipitant by Vanda Therapeutics is a motion sickness drug which has been filed for FDA approval and should get approved by Dec ‘25. There’s no other approved NK1 for motion sickness and this will be a first-in-class drug.

Camizestrant is a breast cancer drug by AstraZeneca and phase 3 readouts are very positive. Not sure when the phase 3 will complete but it should be in the near future but commercial supplies possibly not before 2027 I think.

Manufacturing Units

Unit II, Hyderabad - Houses the R&D campus for Discovery R&D and for CMC process development.

Unit III, Bollaram - Intermediates for early-stage programs

Unit IV, Bidar - This is the primary manufacturing facility which currently has ~640 KL capacity and will be expanded to 1200-1300 KL by 2027. This facility is FDA approved and has had inspections last year.

Unit VI, Bidar - Oncology unit with HPAPI block (for ADC linkers)

Watertown, Boston, MA - Exploratory Biology Lab

Manchester, UK - Process Chemistry CoE

Valuation

Valuation isn’t cheap at 75x trailing. I think its perhaps 50-60x FY26E. I feel its most comparable to Laurus but Laurus has nearly 50% coming from ARV and generics alone unlike Sai which has a much higher quality earnings. At 18k Cr mcap vs Laurus 48k Cr mcap, I think Sai is very undervalued relatively. Another 47k Cr mcap company like Anthem has 25% revenues coming from Rimegepant alone (Rimegepant is split between Piramal/Anthem while Sai is sole supplier for Ato/Ubro. But lower value capture through intermediate might make it comparable). Sai can very easily do similar numbers with Atogepant/Ubrogepant and in addition to it has several other molecules - I feel Sai is comparable to Laurus/Anthem in terms of value. No one else has a funnel like Sai and I think if they manage their Process R&D and capacity expansions better, can grow for a prolonged period of time easily compared to peers.

Risks

• Sai has lost two crucial molecules in '23. If it was for other reasons than capacity constraints, it might be a reason to worry. Losing late-stage/commercial molecules from CRO/CDMO is the biggest risk
• Valuation isn’t filthy cheap. TPG recently sold 15% of the company at ~875/share. It is amazing that 15% of the company got absorbed though (knowing how BlueJet was struggling to offload).But do I really know more than TPG bothers me a lot.
• While the client concentration is reducing every year, it is inevitable that something like the *gepants grow and overshadow the rest increasing concentration risk. Its a good problem to have though, like Anthem’s Rimegepant

Disc: Invested and have recent transactions. I am a novice who is studying this sector and am bound to have made lot of erratic assumptions. Please do your own research

[Nikunj_Todi]

Thank you so much for the writeup sir .

@phreakv6

No one else has a funnel like Sai and I think if they manage their Process R&D and capacity expansions better, can grow for a prolonged period of time easily compared to peers.

But Laurus has around 110 project under pipeline in CDMO + 15 commercial molecules , so Why do you say that “no one else has a funnel like Sai” ? If you could please elaborate on this , thank you .

[manpritaurora]

Thanks for the deep dive Bharani (@phreakv6).
Just adding a couple of more molecules below that may be worth tracking:

Below is a recent EU import approval certificate for Sai:

There are 2 molecules mentioned in the above approval:

Molecule 1: Nirogacestat dihydrobromide
This is a drug by SpringWorks Therapeutics and is sold under the brand Ogsiveo. It is used for the treatment of desmoid tumors and appears to be the only approved treatment. Ogsiveo received FDA approval in Nov, 2023
In 2024 (its first year), Ogsiveo reported $172 million in sales. Springworks got acquired by Merck in Apr, 2025, so I was not able to find the H1, 2025 sales of Ogsiveo. Another recent positive outcome has been that Ogsiveo has received marketing authorization by European Commission, opening up the European markets.
Overall, it appears that Ogsiveo has just started its growth journey and could be at least a $400 - $500 million drug.

Molecule 2: AR-15512
This is a drug from Alcon that got approved by FDA in May, 2025 for dry eye disease. The brand name will be Tryptyr. As per Alcon, most dry eye disease treatments have limitations, especially slow onset of tear production.Tryptyr differentiates itself by onset of tear production as early as day 1. Alcon expects the peak sales of Tryptyr to be between $250 - $400 million. Source: Alcon’s Q2 2025 concall

Apart from the molecules you mentioned, it would be good to track the scale up of the above 2, especially Ogsiveo that can become much larger if it gets approvals for additional indications.

Disclosure: Not invested. Still studying

[phreakv6]

@Nikunj_Todi

But Laurus has around 110 project under pipeline in CDMO + 15 commercial molecules , so Why do you say that “no one else has a funnel like Sai” ? If you could please elaborate on this , thank you .

Sai has 160 projects in pipeline and 30 commercial molecules for being nearly 1/3rd the size of Laurus by mcap, which is why I mentioned, no one else has a funnel like Sai. Also, pls note that Sai’s molecules are likely from Discovery/Development phase and so are internal funnel (though they say of late lot of molecules are moving from China with a ToT as well) whereas Laurus likely is developing its pipeline through business development or other means of external enquiry. Not to put down Laurus. I think they are doing very well too - but still Laurus ARV, generics and FDCs and other such commodity business makes up more than 75% for Laurus and even in CDMO, the innovator CDMO is contributing only ~15% (Suzetrigine for chronic pain management and Abrocitinib for atopic dermatitis are both good molecules with great scope though) but the price we are paying for it at present is quite high i feel.

I notice in general that lot of businesses including Divi’s actually derive bulk of revenue from normal products but done at great scale - Divi’s makes ~10% of revenues from sacubitril valsartan (Novartis molecule which had its patent expire in July this year. Should see how it affects Divi’s) and even otherwise they make a lot of revenues from ARVs and generic intermediates (DTTA Salt, Ketoamide etc.) but done at scale so they have great margins. Divi’s however is leading investments in GLP-1 both peptides and oral - so it doesn’t matter how they made money so far but what they are investing further in.

I also noticed Anthem actually derives 30%+ (and not 25% as I initially guessed) from Rimegepant and yet market is comfortable paying 45k Cr mcap and 100 P/E for it. These multiples with those risks are somewhat confusing to me. It is what it is.

Specific to Sai, there are few more things I missed adding to my main post.

Levers for growth

Development vs Commercial CDMO proportion - Though CDMO is 63% of revenue - it should be noted that maybe only 1/3rd of it is from commercial molecules. Rest is from development molecules (phase 1-3 supplies). This proportion should go up towards commercial ones - these are the ones manufactured at higher volumes and consequently should lead to much better margins from operating leverage

Depreciation as a % of EBITDA - depreciation is high in Sai - very high infact vs peers like Neuland. This is because of CRO business being such a large part of business. CRO equipment (lab equipment typically) depreciates lot faster than factory equipment. You can see similar trend in Vimta as well. As EBITDA goes up from commercial CDMO, dep as % of EBITDA also will keep reducing - this will lead to improved PAT margins. You can see this already on a good trend (0.71 → 0.59 → 0.41 → 0.33 → 0.29 TTM). My guess is it should be between 0.25-0.30 steady state here on.

EBITDA margin itself can improve quite higher here. Q4, FY25 is a good example of this. There was a high proportion of commercial revenues in this quarter. The margins are depressed only due to a 34 Cr write-off which sits in operating expenses. Otherwise this quarter margin is 33% and is a sign of how things could look 2-3 yrs down the line.

Interest cost reduction - The company has paid off 720 Cr debt as of Q4 from the IPO proceeds. This should bring down interest cost this year to 45 Cr vs 78 Cr last year. There will be a 700 Cr capex this year but very likely it will be funded by the cash on the books of 464 Cr and internal accruals (OCF this year could be 400-450 Crs). My guess is next year also will need good investments of around 700 Crs or so.

Commercial molecules identified so far - AbbVie’s Qulipta/Ubrelvy (migraine), GSK’s Blujepa (uti), Tradipitant (motion sickness), Lorundrostat (hypertension), Bilastine (allergic cold) are all large volume molecules and with the exception of Bilastine, all in the very initial stages of scale-up and long patent lives. Treprostonil (Tyvaso inhaler), Musredo (sold only in Japan), Axitinib (Pfizer cancer drug) and the two molecules @manpritaurora has found (Tryptyr and Ogsiveo) as well have decent market size. I think at some point of time this year Sai could be doing 10-15 out of the 30 commercial molecules at the same time at decent volume. So I am quite hopeful of this commercial scaling and all the above things serving as levers for growth.

Disc: Invested

[24comlb]

Looks like the company has a lot of things going right for them but the first quarter results may not be extrapolatable

Also the valuations look stretched. 70PE for a 15% avg growth rate? If we hope this year would be better than that then next years have to be worse and vice versa. Or is the management underpromising with hopes of overdelivering?

Ofcourse on a relative basis other cdmo companies are priced the same/even more steeply

[AMLAN_KUSUM_MOLLAH]

Very Informative writeup. I understand that Sai Lifesciences in involved in the business of CRO and CDMO with roughly 40% and 60% of the revenues respectively. They have also undertaken expansion in various facilities like Manchester , Boston and Hyderabad to increase their Research Capabilities as highlighted in Annual Reports and Transcripts. But from the Annual Report, it is seen that Capex as well and Revenue Expenditure towards R&D is very NIL.

Also in the Annual Report of FY 2024-25, there is only one line item of R&D as expenditure credit amounting to only Rs 2.4cr.

Being in pharma business with significant contribution from Contract Research, R&D expense seems not to he matching up.

What am I missing here ?

[BuyRightSitTight]

Good question. I went through the AR. Couldn’t find it. Even the Note # 33 from the Notes to Accounts (Other Expenses) does not have R&D as a line item. Not is there a question about it in the concall transcript! Strange. Any insights, @phreakv6 ?

[kautuk]

Some companies show R&D expenses in different heads. For example, salary paid to employees who are engaged in R&D should be a R&D cost (which may either be expensed off or capitalised depending upon whether the intangible asset is in the research phase or development phase as per Ind AS - 38). However, many companies may show the above salary and wages expense as Employee Benefits Expense as well. The end result is the same. If the IA is in research phase, all costs should be expensed off. Now whether it’s done through Other expenses or Employee Benefit is not material.

SEBI regulations and Companies Act, 2013 requires the board to specify the amount of R&D cost that are revenue in nature (expensed off) or capitalised. Since above, the capitalised figure is Nil, that means all R&D expenses if incurred are in research phase and the company has shown them not separately as R&D cost but in their respective heads (like Employee Benefits or Materials Consumed)

Edit: I have no knowledge of the company am not invested, but just answered the R&D query

[phreakv6]

@AMLAN_KUSUM_MOLLAH @BuyRightSitTight The R&D work the company does is for its customers and the same becomes Service Revenues for Sai. Its not R&D that Sai is doing to build products of their own which is why the risk is low here - even when a drug doesn’t make it to IND status in discovery phase (where trials can start) or get FDA approval - Sai always makes money. It may sit as capitalised intangible assets in the innovator’s books (unless its expensed out - which I think is the right way) and in their AR, you will find the R&D spend since these products are owned by the innovators . That’s the whole business model here.

Even the process R&D they do is likely not considered “R&D” as they are limited to specific ways to manufacture a product effectively (as part of the contract) and is only useful as long as the product is with Sai for which there is no guarantee - there’s no point calling them R&D expenses or capitalising any intangibles related to processes (it would in fact be a red flag). The actual capabilities the company is building in chemistries, in its relationships with big pharma and biotechs - this is something you will not find in the balance sheet and is the actual meaningful intangible here.

Other than this, I did a bit more work in getting answers to some questions I had. Mapped a few more products here (thanks to @nirvana_laha’s help in correcting a few and adding a few more) and tried to chart the sales trend for the products. Due to clutter, limiting it to the top 10 in any given year (This is still a subset which I have mapped that are in the legend). The legend is sorted in descending order of overall sales.

Few things I learned

1. Margin drop in FY22 and FY23 was very likely caused due to Simparica not being as profitable. It became a large % of sales and even by sheer tonnage was likely around 30 MTPA at peak utilising capacities and crowding out other molecules.

2. Post FY23, the company has scaled up much more profitable molecules like Bilastine, gepants, Empagliflozin and several high value small volume molecules (like Ogsiveo, IDRx-42). It also had a crazy scale up in CRO which went up from 273 Cr to 467 Cr that has also helped get margins back on track. Avg realisation across molecules went up from $350 to $1000+ post FY23 - thats the sort of step up in value we are talking about.

3. They did not really lose Orladeyo as I had mentioned in my first post. This molecule had a good scale up in fact in FY24. It was a mapping error on my part

4. They have an interesting Eli Lilly intermediate (LSN3547600) - which appears to be an oral GLP-1R agonist (not Orforglipron). This one is not clear and going by volumes, it could be in trial phase (It is likely to be LY4086940 as thats the only one matching my search).

5. Tradipitant seems to have been a Discovery to Commercial drug for Sai. This is the most dreamy scenario for any CRDMO. The good thing is Sai has so many potential winners like this that are sitting in its arsenal. Qulipta however seems to have come directly to commercial (late phase technology transfer from China that the management talks about).

6. Bilastine and Tyvaso seem to be seasonal drugs that are second half heavy - thats why management has mentioned in past calls that H2 is big for them.

Disc: Invested - Have recent buy transactions. I might be wrong in my analysis as I am a novice - please do your own work.

[BuyRightSitTight]

Thank you so much!

This is fantastic work. Really admirable and insightful. This forum rocks because of people like you!

Have you mapped out the CRO/CRDMO landscape in India at a high level with the strengths & weaknesses of the various players on various parameters in, like a table? Would be interesting..

" I might be wrong in my analysis as I am a novice… "

May all novices like us have the analytical skills you have :-) !

[AMLAN_KUSUM_MOLLAH]

What an excellent write up. The amount of research that goes into and then collating in a neat manner is truly inspiring. Would like to know the approach ,method and the structure of your research.

[akash8844]

while reading, found some interesting points about Sai Life:

In 2023: 3 of 32 FDA small-molecule approvals touched Sai’s labs; more than 10% each of the last 4 years.

While overseas units might not be helping much in profitability, they greatly help Sai in getting new business and transfer of manufacturing process. US Boston unit has built 8 biology assays and helped onboard 8 discovery customers in H1FY25

Last 5 years: discovery work led to 5 drug approvals/commercialisations and ~40 IND filings out of services offered for 200 programmes

I was thinking that they might be preferred by innovators for end to end CRDMO services and may be less interested in last stage tech transfers due to limited capacity but surprisingly 12 of 50 late-phase products were tech-transferred in from other sites this shows their CMDO depth.

[BuyRightSitTight]

I’m yet to fully read this JP Morgan report on the Indian CDMO/CRO space but thought I’ll share it here first. JP is overweight on Divi’s and Cohance; Sai Life not covered - but good to understand the competitive landscape, nevertheless.

Uploading: JP_Morgan_on_Indian_CRDMOs_Accelerating_ahead_in_the_global_outsourcing.pdf…

[hash611]

My earlier post had a few errors and I deleted it. I hope this post adds value and has no errors. This thread so far has been immensely enjoyable.

Per my reading, Sai is providing an intermediate to synthesise Imlunestrant and perhaps not camizestrant - both are oral SERD to treat breast cancer. Imlunestrant is being developed by Eli Lilly and expected to be marketed under the brand name Inluriyo. One of the trials (NCT04975308) - imlunestrant + endocrine therapy - had completed its primary study Dec 2024 and has received FDA approval in Sep 2025. The full study is expected to complete by Jun 2027. The other trial (NCT05514054) - imlunestrant + adjuvant endocrine therapy - is ongoing and primary/full studies are expected to be completed by Dec 2030/Dec 2035 respectively. This might also be one of the two molecules that the management refers to in their 1Q-FY26 earnings call as having “a positive readout on Phase III”, the other one likely being and intermediate for lorundrostat (to treat resistive hypertension) as mentioned by @phreakv6 earlier.

Lorundrostat has shown marginally better results versus AstraZeneca’s baxdrostat per Goldman Sachs. Sai seems to be betting big on this high value-add drug creating a 20TPA capacity. A key risk here could be AZ competitively pricing baxdrostat if the efficacy of both drugs is perceived to be similar.

Another large capacity (70TPA) has been created for empagliflozin. It has gone off-patent and pricing should drop significantly, so it is a little confusing why Sai has such a massive capacity for it.

The capacity of Benzindene Triol, an intermediate for Tyvaso, has been increased from 150kg to 500kg. At $65 per gram (now I know why these are referred to as ‘drugs’ ) this could boost revenues (and profitability) for another 7-8 quarters. It loses patent status in May 2027.

Two key intermediates for BioCryst Pharmaceuticals’ Orladeyo (API: berotralstat) now have larger dedicated capacities of 2,500kg each. These have reasonably high realisations and could also be larger contributors going forward with Orladeyo sales expected to grow 35% YoY in CY2025 to $550mn+ (1H-CY2025 sales already +48% YoY). The sales breakup detailed earlier shows sales of $3mn-$4mn in FY25 for Sai.

Products related to the synthesis of Simparica had contributed to 20%-25% of FY22/FY23 sales for Sai. Siegfried AG has been supplying the API (sarolaner) to Zoetis for Simparica/Simparica Trio. Sai seems to have set up a large capacity to produce intermediates for sarolaner. If so, the hope remains that Sai has figured out how to make this large volume product profitable going forward.

Similarly, capacities have increased/created for products involving Quviviq (Idorsia), Vanflyta (Daiichi Sankyo), etc. However, large capacities created for molecules to synthesise APIs like elagolix and imepitoin have been dramatically cut down, likely due to these products going off-patent.

On balance, it seems still a net positive for Sai going forward. Wuxi AppTec is a mammoth today compared to Sai, on every measurable metric. It is even more astounding that Wuxi is a slightly younger company than Sai! Indian CRDMO is a multi-decade growth industry and there should be a slim set of large winners. Depth and pace of research, width and productivity of manufacturing, ability to retain talent, and management focus will be key to create a right-to-win. Of course, the joker in the pack will remain - geopolitics.

Disc: Invested.

[UrsRafeek]

I was going through a post in LinkedIn found this might useful. if you found this irrelevant please remove or report.

[akash8844]

@phreakv6

Atogepant/Ubrogepant (Qulipta/Ubrelvy) is an Abbvie drug approved in Sept ‘21 (Patent expiry in 2041) used in migraine prevention and treatment respectively. Its taken every day (60mg dosage) and competition is another recently approved drug - Rimegepant (made by Anthem and Piramal - both have ~$50m in sales per year from this molecule alone). As of now Sai is making a crucial intermediate and the API supplier is WuXi. Sai is probably capturing ~50-60% of the value but is the sole supplier - crazy scale up as well from $4.2m in ‘23, $5.8m in ‘24 to $15.8m in ‘25 so far. Good thing is Atogepant/Ubrogepant are notably superior to Rimegepant in terms of MMD (Monthly Migraine Days) and also cheaper and the same is also reflected in way superior prescription growth (latest UK data). The market size is ~40m patients in the US and another 40m in EU.

AbbVie Reported Third-Quarter 2025 Financial Results on 31.10.2025. Qulipta/Ubrelvy continue to show strong growth

United Therapeutics Corporation Reported Third Quarter earnings on 29.10.2025- Tyvaso sales grew by 10%

[meekinvestor]

Q2FY26 Performance Highlights

Sai Life Sciences Limited reported a strong performance for the quarter and half year ended 30 September 2025, sustaining its growth momentum across key business segments. For Q2FY26, the company’s revenue from operations stood at ₹537 crore, reflecting a 36% year-on-year increase driven by solid growth in both CRO and CDMO services. EBITDA rose 43% to ₹156 crore, while profit after tax (PAT) doubled to ₹84 crore compared to ₹42 crore in Q2FY25. EBITDA margin improved to 29% from 28% in the same period last year, and PAT margin expanded to 16% from 11%.

September also marked the close of the first half of FY26. For the six months ended 30 September 2025, Sai Life Sciences reported revenue from operations of ₹1,034 crore, up 53% from ₹675 crore in H1FY25. EBITDA for the period stood at ₹281 crore, registering a 101% growth from ₹140 crore, while PAT surged 414% to ₹144 crore compared with ₹28 crore in the previous year. The strong half-yearly performance was driven by healthy demand across the company’s discovery, development, and manufacturing services, supported by improved operating leverage and prudent cost management.

Source: Sai Life Sciences Q2 Profit Doubles to ₹84 Cr; Revenue +36%
Disclaimer: Invested.

[phreakv6]

Putting my thoughts on new things we have discovered since my last post here. This is collaborative work between @nirvana_laha @hash611 @Sanjay_Kumar_E and myself.

Let me start with New modalities. The company claims to be involved in peptides, ADCs, oligonucleotides and lipids.

The TL;DR version for this section is that the company does not have commercial capabilities in these yet, other than in lipids. But they are making good money in the new modalities through discovery work in the CRO business. That’s how their revenues are already 7% in new modalities i.e 118 Cr. Of these, lipids they export only to Avanti polar lipids and it constitutes only ~4 Cr. So 114 Cr is CRO work which means out of the total CRO in FY25 of 627 Cr (37% of topline), 114 Cr has come from new modalities i.e about 18%. That is a really healthy number in a fast growing business.

Lets look in depth about what they are doing in each and what’s the scope for these modalities.

Peptides

It doesnt look like the company is into GLP-1 peptides. The peptides they are making are small chain amino acids and are mostly in discovery for some peptide conjugates (peptide and small-molecule combined together) and other such stuff to see what binds to target. What they supply is peptide fragments and not full-fledged functional peptides. But they are investing in peptides for clinical scale - so if these molecule get IND status (Investigational Drug which can be administered to humans in trials), they can supply to phase 1/2/3. They seem to be working with AstraZeneca, Abbvie, Amgen, Abbvie, BMS etc. currently.

ADC
These are an exciting and high-value area. ADC (Antibody drug conjugates) are drugs that deliver a highly potent API (payload) to a target (cancer cells and the like) - think of it as a guided missile. The targeting is done usually through an antibody (the mAbs like trustuzumab). The antibody and drug are conjugated (joined together) by a linker molecule. Enhertu and Trodelvy (both use Dai-ichi Sankyo’s Deruxtecan payload) are best selling drugs in this category at present but its a category that’s growing very fast and is expected to contribute a lot in the future.

Where does Sai stand in this? Again only in discovery at present. They are however working with Merck (lot of linker-payload scaffold work) and with GSK (complete linker-payload without the antibody biologic at discovery stage - or proof or capability). They are investing into clinical capabilities in case any of these get IND status (evaluating clinical conjugation and fill-finish). Their strategy is to grow with the molecule (recurring theme for Sai as a company) and focus on CRO/clinical as of now. Its nothing to frown at - since discovery/pre-clinical itself is $1b in value by 2029 and some of it is available right now (taken from Cohance ppt)

Oligonucleotides
These are small pieces of DNA/RNA used as drugs. Inclisiran (non-statin lipid lowering drug like bempedoic acid but its a biologic) is a good example. Sai makes amidites through the phosphoramidite process - these are nucleoside building blocks used in solid-phase oligo synthesis for making these DNA/RNA fragments. These end up in clinical drugs, mRNA vaccines and also in diagnostic kits. From my basic research phosphoramidites make up 50-60% of the COGS of oligonucleotides. Unit rate is $50k+/kg. So these are small volume, high value drugs (used in very small quantities per patient). Sai doesn’t appear to be working with any innovator here - most supplies are to what appear like CDMOs.

Lipids
These are fat-like molecules but they are critical for delivery of mRNA vaccines. Sai has 7-8 yrs experience here and have supplied to Avanti Polar Lipids - the biggest company in the world in this modality. These are again high value, low volume.

My guess is most of the 114 Cr comes from ADC discovery and peptide discovery at present (considering no innovator work and value being small in Oligonucleotide reagents). This the most low risk way for building up capability with least investment and staying on the cutting edge of research and technology with innovator’s dime. It reminds me of Foxconn picking up capabilities from working with Apple (recency bias, having read the book few months back). But the risk is, if none of these molecules click - Sai may not make big money from new modalities. They clearly don’t want to put up large capacities and chase for opportunities and only want to do what is required for the molecule. It has worked out very well for them so far in small molecules, so no reason why it shouldn’t in new modalities.

Other than this - this is the updated new important molecules and phase-3 stuff

Commercial - Blujepa, Qulipta, Quviviq, Tyvaso, Bilastine, Inpefa, Ogsiveo, Arixtra, Tryptr, Simparica, Orladeyo, Inlyta, Vanflyta, Kerendia, Jardiance

Phase 3/pre-reg - Lorundrostat (Mineralys), Tradipitant (Vanda), Inluriyo (Eli Lilly), Olomorasib (Eli Lilly). Not sure what the other two are (management mentions 6)

The other interesting find is that Sai is involved in Naperiglipron - Eli Lilly’s oral GLP-1R that is in phase-2 trials. They have been supplying for phase-2 programs since 2023.

Disc: Invested

[akash8844]

@phreakv6

Phase 3/pre-reg - Lorundrostat (Mineralys), Tradipitant (Vanda), Inluriyo (Eli Lilly), Olomorasib (Eli Lilly). Not sure what the other two are (management mentions 6)

In the earnings call, they told that 3 more molecules entered late phase during the quarter, so total should be 6+3 now in Phase 3/pre-reg

[kautuk]

I was looking for the most active threads on VP and came across this company. The average number of likes per post is conclusive evidence that many people read this thread. I"ll never understand the pharma sector and this company in particular. Keeping in mind my inability to grasp the technical words used here, I found something peculiar which I was surprised was not mentioned in any posts above and which I feel should be discussed.

"The NRC (Nomination & Remuneration Committee) has recommended a revised compensation structure considering that Mr. Krishnam Raju Kanumuri is a listed company CEO and has demonstrated significant value creation to the shareholders over the last five years. "Source: Page 101 of Annual Report 2024-25

“The Company competes with global peers, particularly in North America, Europe, Japan and UK, with almost 97% of the Company’s revenue coming from these geographies, and therefore, Mr. Krishnam Raju Kanumuri’s remuneration has to be determined keeping in view international benchmarks.” Source: Page 101 of Annual Report 2024-25

There has been a significant change in the remuneration structure of Mr. Krishnam effective 1 April 2025. Fixed Salary double to ₹ 8 crores per annum and a performance linked incentive introduced for his variable pay (more on that later). The justifications given for the change in the remuneration structure in the company’s annual reports are as follows:

• Company was listed on stock exchange(s)
• Good Revenue & EBITDA growth over the last 5 years
• Since major revenues come from overseas, to align the pay according to those standards
• “Significant value creation for investors” where they specifically mentioned that the stock price of the company grew 54% over a 7 month period
• A total Shareholder Return of 591% from the date of last external investment till 30 July 2025. (TSR is nothing but stock price returns including dividends)

Quite amusing to me that the report mentioned the stock price appreciation twice for their justification of changing the structure. I have not seen such a thing in any other company (please let me know if you have though)

Funnily, the last time I came across the term Total Shareholder Return was when I was reading about Valeant Pharmaceuticals. Quick summary: Valeant was the Enron of the pharma sector with questionable accounting practices. It’s management had a pay structure that paid them a handsome variable pay if the stock price of Valeant was above some threshold. Bill Ackman famously had a long position in Valeant and lost $ 4 billion due to the accounting scandal.

Obviously this is not the case with Sai Life. The parameters (PLI) as discussed below are not based on stock prices but other metrics.

Now the PLI structure is very peculiar per se. Variable pay based on “ROCEs”, “Customer Growth Potential”, “Strategic KRAs”, “ESG” are amusing to me, especially the ROCE one. I have never in my limited time, seen someone’s pay based on ROCEs.

This clause is great though. Clawing back variable pay if accounts are found to be fraudulent. Wow.

Overall, a very amusing remuneration policy. First of its kind eh. What do others think of this remuneration policy?

While I do acknowledge profit and revenue growth backed pay are usually good, but it does give the management more incentive to try and increase those metrics at a faster rate.

Disc: Not invested