A deep chemistry talent pool, regulatory expertise and high-quality manufacturing capability make India a persuasive force in generic pharmaceuticals. Laurus Labs was established in 2005 by chemist and repeat entrepreneur, Dr Satyanarayana Chava, former CTO of Matrix Labs (sold to US pharma company Mylan in 2006). Laurus manufactures active pharma ingredients (APIs) in factories in Visakhapatnam in Southern India, on a site the size of 35 football fields. Laurus' dominant market share in the treatment of HIV, Oncology and Hepatitis C, is built on novel chemistry which makes for cheaper, more scalable production processes. Laurus has always concentrated on supplying the generic drug ingredients but is now seeking to sell its own finished drugs, bringing cost effective generic alternatives to global markets.
There are a few elements which help explain the success of Laurus Labs:
Chemistry set – Early on, Dr Chava set about improving the production of efavirenz, the chemical name for Bristol-Myers Squibb's anti-retroviral Sustiva. Leveraging his chemistry expertise, Dr Chava and his team were able to produce efavirenz using ingredients that were cheap, stable (the original ingredient catches fire on contact with even the smallest amount of water) and easily available. The replacement ingredients reduced the production costs by a factor of 15x. The team identified a similar cheaper alternative for the key ingredients of Gilead Sciences drug, Viread (tenofovir).
Early focus – Initially, Laurus zeroed in on two therapeutic areas - HIV and Oncology to establish a strong reputation for low cost, high quality products for global markets. The team then built on this base to enter new disease areas like Hepatitis C and nutraceuticals, as well as looking to forward integrate into finished drugs.
Single quality standard – Dr Chava’s philosophy is that regardless of the end user, whether they live in a regulated market like the US or a semi-regulated market in Africa, the quality of Laurus products should be uniform and global. There is no tiered system unlike many other generic drug suppliers and the Laurus manufacturing facilities run on that basis - it’s a “single site for the world”.
The importance of R&D – Back in 2005, there were hundreds of established companies doing what Laurus did. It came from behind by focusing absolutely on R&D driven innovation; today half of Laurus' 2000+ employee base works in the R&D function.
Corporate governance from the start – Unlike many traditional Indian companies where corporate governance arrives with an investor, Laurus built its governance structure from the start. Robust internal systems, professional management and an engaged board underpin a culture which focuses on the development of employees with training and regular feedback loops. In December 2016, Laurus listed on the National Stock Exchange.