How Syngene Is Revving Up Capabilities In ADCs, PROTACs

Frontline CRDMOs like Syngene see momentum in dual sourcing and the China rebalancing trend no matter which way things go for the US BIOSECURE Act.(Also see "Syngene Chief: Large Cap Biopharma Taking China 'Rotation' More Seriously" - Scrip, 1 May, 2024.)

Syngene’s MD and CEO Jonathan Hunt maintained that the Act to him is a piece of legislation that's sitting on top of a trend that was already there and the tone of conversations with clients is much more around “long term supply chain planning, resilience, dual sourcing capabilities and best value”.

“They were discussing those things years before the BIOSECURE Act was put forward and I suspect they may be looking at those things year after year after the Act passes or doesn't pass,” he asserted.

While they may be independent variables, the trends appear aligned and headed in the same direction, he noted, adding that the rise of the Chinese economy and its competition with the US and the resulting geopolitical tensions creates a landscape that business leaders need to run operations within.

COVID-19 too delivered some tough lessons around the need for supply chain design resilience. (Also see "Califf: Not Wise To Create Problems Related to Chinese Pharma Supply Chain Dependence" - Pink Sheet, 2 October, 2024.)

“It showed us where we'd overoptimized so that we had very taut but very efficient supply chains and sometimes if they're too tight, they break and there's a general learning in many industries not just pharmaceuticals. Sometimes that extra little bit of fat or flexibility in the system is what protects you when the environment changes suddenly,” he explained.

Hunt had earlier indicated that “China switchers” are setting up “pilots” across a broad range of services and often placing them with a select short list of suppliers.

“They then intend to run these comparative pilots through the year and use this as a way of selecting a longer-term partner,” the CEO said in a statement on the impact of the proposed BIOSECURE legislation on Indian CRDMOs.(Also see "Who Will Reap The BIOSECURE Spoils? US Industry Boost Not Guaranteed" - Pink Sheet, 13 September, 2024.)(Also see "BIOSECURE Act: Pfizer To Lilly - Where Are The Likely Sourcing Gaps?" - Scrip, 23 September, 2024.)(Also see "Geopolitics, US BIOSECURE: Pharma Looks To Redistribute CDMO Footprint" - Scrip, 13 September, 2024.)

“We have made good progress and I get a sense we are winning our fair share of these pilots.”

Request for proposals (RFPs) at Syngene are up almost 50% year-on-year in terms of value in the first quarter of fiscal year 2025 – the best Q1 in the last four years.

Hunt underscored that one of the things that Syngene can do for clients is to make sure that they've got “resilience and flexibility” in dual sourcing in where they do their science, development, and manufacturing.

He, though, cautioned that changes in how firms do their R&D and manufacturing are "very cautionary, steady and thoughtful and not overnight changes". (Also see "What’s In Store For CROs, CDMOs – “Stay In Your Swim Lane”, Consolidation, Divestitures" - Scrip, 7 November, 2023.)

For instance, if you tech transfer a product from one manufacturing site to another, that could be “24 months of very structured work”.

“It is a positive wind, and I do think it's going to be a five to10 year long positive enabler for companies like Syngene and India. But if it's two years to tech transfer something, there's going to be no overnight sensations,” he added.

Syngene is also recalibrating its own China dependency for procurement of certain requirements but is “happy to use China supply when it makes sense and that's about risk management”. Developing a local partner network in niche chemistry areas for development services, for instance, has helped the firm reduce dependency on China.

“We're becoming less China dependent than we were in the past and we want that choice,” Hunt added.

The China derisking effort across industry comes against the backdrop of ongoing US-China tensions and the progress of the US BIOSECURE Act, which would curtail US government contracts and grants for services provided by a “biotechnology company of concern.” The bill is seen as a bid to rein in growing Chinese influence in the country and targets firms such as the BGI Group, WuXi AppTec., and WuXi Biologics, among others. The US House of Representatives earlier voted 306 to 81 in favor of the bill, which now heads to the Senate.

The Financial Times recently reported that WuXi AppTec may be considering the sale of certain units and sites, though Scrip could not immediately verify where things stand on this front.