Syngene International Limited
Know the Company
Syngene International Limited (Syngene) is a leading global Contract Research, Development, and Manufacturing Organization (CRDMO) headquartered in Bangalore, India. The Company is a 54.72% publicly listed subsidiary of Biocon Ltd, which is the leading bio-technology company in India. Since its inception in 1993, Syngene has been at the forefront of delivering integrated solutions across the drug discovery, development, and manufacturing value chain. Additionally, with a diverse portfolio, Syngene caters to industries such as pharmaceuticals, biotechnology, agrochemicals, consumer goods, and specialty chemicals.
OPEN AN ACCOUNT
Invest in stocks curated and picked by our research team.
The company is renowned for its advanced research capabilities, supported by state-of-the-art infrastructure, cutting-edge technologies, and a workforce of over 5,600 scientists. Syngene’s service offerings are strategically segmented into four core areas such as Discovery Services Development Services, Manufacturing Services and Dedicated R&D Centers.
The Discovery Services division of the company focuses on early-stage drug research, helping clients identify biological targets, conduct screenings, and develop drug candidates. The services include medicinal chemistry, biology, toxicology, and computational and data sciences. Syngene also supports specialized modalities such as peptides, oligonucleotides, antibody-drug conjugates, and targeted degradation.
The Development Services division bridges the gap between preclinical research and clinical trials. Syngene’s expertise covers chemical and biologics development, analytical services, and formulation development. These services cater to the development of highly potent APIs and complex molecules, supporting both therapeutic and diagnostic applications.
Syngene’s Manufacturing Services division provides commercial-scale production for both small and large molecules. Its facilities in Mangalore and Bangalore are compliant with global regulatory standards, including those of the U.S. FDA and European regulatory authorities. The company’s capabilities span the production of APIs, intermediates, and biologics, ensuring seamless transition from clinical development to large-scale manufacturing.
Syngene offers bespoke research centers exclusively for global clients, allowing them to establish and operate large-scale research units without significant capital investments. Each R&D center is staffed with multidisciplinary teams and seamlessly integrates into the client’s internal research network.
Syngene operates from multiple locations in India and maintains a strong global presence through its international subsidiaries and commercial teams. The company’s primary operations are based in Bangalore, where its central campus hosts research, development, and manufacturing activities. Additional campuses in Bangalore house critical functions, including clinical development. Its Hyderabad facility focuses on integrated chemistry and biology services, enabling end-to-end drug discovery solutions from a single location. The Mangalore campus specializes in commercial-scale manufacturing of APIs. Syngene USA Inc., along with commercial teams in Europe and the UK, services the company’s international clients, ensuring efficient collaboration and service delivery across key markets. Collaborating with 11 of the top 15 global biopharma companies, Syngene derives 68% of its volumes from the US, 21% from Europe, and the rest from East Asia and Australia.
Strengths
Over the past three decades, Syngene International has established itself as a leader in contract research, development, and manufacturing services, delivering innovative, reliable, and sustainable solutions to a global client base. The company’s core strengths lie in its robust value proposition, advanced scientific capabilities, and commitment to operational excellence.
Syngene collaborates with over 400 active clients, ranging from global multinationals to small and medium enterprises. The company’s clients span diverse sectors, including pharmaceuticals, biotechnology, animal health, and consumer goods, with a significant presence in the United States, Europe, and the United Kingdom. Syngene collaborates with 17 of the top 25 global pharmaceutical companies including Bristol, Myers, Squibb, Amgen, and Baxter etc. The company’s facilities in Bangalore and Mangalore, as well as its expanding presence in Hyderabad, are equipped with advanced technologies to support diverse client needs, from discovery to commercial manufacturing. Syngene’s robust intellectual property portfolio, comprising over 400 patents held with clients, underscores its commitment to fostering innovation and delivering impactful scientific solutions.
Innovation remains a cornerstone of Syngene’s growth strategy. Despite various challenges in the drug discovery market, Syngene has strengthened its capabilities, including expanding its operations in Hyderabad and acquiring expertise in oligonucleotide synthesis. These advancements position the company to meet the evolving needs of its clients while driving growth in the highly competitive CRDMO sector.
Syngene stands as a one-stop solution provider, offering end-to-end services that span discovery, development, and manufacturing for both small and large molecules. This integrated approach allows clients to seamlessly transition their projects from early-stage research to commercial-scale production.
Syngene’s ability to deliver end-to-end scientific solutions across multiple modalities and industries is a key differentiator. The company offers advanced skills and state-of-the-art technologies often unavailable in-house for its clients, especially emerging biotech companies. Its proven track record with major regulators such as the US FDA and EMA underscores its commitment to compliance and quality.
Realizing the growing global demand for biologics, Syngene has invested significantly in its biologics capabilities. The company recently acquired a biologics manufacturing facility featuring 20,000 liters of installed drug substance capacity and a high-speed fill-finish unit. This facility, scheduled to become operational in the last half of FY25, will strengthen Syngene’s position as a leading biologics Contract Development and Manufacturing Organization (CDMO). With this added capacity, Syngene is well-positioned to support the expanding biologics pipeline, which is projected to grow at a 12% CAGR till 2026.
The company continually upgrades its infrastructure and capabilities to remain at the forefront of technological advancements. Recent developments include the launch of proprietary platforms such as a naive camelid antibody library and Induced Pluripotent Stem Cells (iPSCs) for enhanced drug discovery. These advancements provide alternatives to traditional animal models and improve the accuracy of efficacy predictions in human trials. Additionally, Syngene has expanded its chemistry, biology, and drug metabolism and pharmacokinetics (DMPK) capabilities at its Hyderabad campus, enabling faster project turnaround and cross-functional collaboration.
The pharmaceutical industry’s shift towards biologics and the growing reliance on outsourcing present significant opportunities for Syngene. Emerging biopharmaceutical companies, which dominate the R&D pipeline, often lack the infrastructure for development and commercialization, driving demand for Syngene’s services. By continuously strengthening its capabilities, investing in new technologies, and expanding its biologics capacity, Syngene is well-positioned to capitalize on these market trends.
In Q2 FY25, Syngene’s Discovery Services division, which focuses on early-stage drug discovery, demonstrated recovery, driven by pilot projects from large and mid-sized biopharma clients seeking alternatives to China. To meet growing demand, Syngene plans to expand its capabilities in antibody-drug conjugates, peptides, and oligonucleotides at its Bangalore and Hyderabad campuses.
Capex
Syngene remains focused on aligning its investments with strategic priorities, delivering on pilot projects, and advancing process development initiatives to position itself for medium- to long-term growth. The company’s capex execution remains on track, with $60 million expected to be completed by the end of the current financial year. During the second quarter of the current financial year, Syngene invested $12 million in capex, primarily allocated to research services, including expanding dedicated research centers and facilities in Hyderabad while adding new capabilities. In biologics, a significant portion was directed toward upgrading the biologics facility acquired last year, which is on schedule to commence operations in the second half of the financial year. These investments underscore Syngene’s commitment to building capacity and capabilities to drive sustainable growth. The company will soon launch Unit 3, its upgraded biologics facility in Bangalore, tripling its manufacturing capacity to meet global demand.
Financials
Syngene reported an 9% (Y-o-Y) decline in profit after tax (PAT) for the second quarter of FY25. The company’s revenue from operations also dropped by 2% ( Y-o-Y.). Consolidated PAT in Q2 FY25 stood at Rs 106 crore, while revenue from operations came in at Rs 891 crore. On a sequential basis, revenue grew by 13%, and PAT increased by 40%. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 5%.
The company maintains a strong balance sheet, with a gross cash balance of Rs 1,000 crores and a net cash position of Rs 865 crores as of September 2024, even after meeting its capex requirements for the quarter.
Outlook
Growth outlook for drug discovery companies in India is highly promising, driven by a meeting of factors including a robust pharmaceutical industry, a rising focus on innovation, and strong government support. India’s cost-efficient research and development (R&D) capabilities, coupled with its vast talent pool of scientists and researchers, position it as a global hub for drug discovery. The increasing prevalence of chronic diseases, advancements in biotechnology, and the demand for personalized medicine further fuel opportunities in this sector. With a growing emphasis on indigenous drug development and global partnerships, Indian drug discovery companies are poised for significant growth in both domestic and international markets.
Syngene’s management, at their investor communication anticipates its revenue growth in the high single-digit to low double-digit range for the current financial year, with momentum building in the second half. The recovery in biotech funding to pre-pandemic levels, particularly for late-stage programs, alongside increasing demand from large and mid-sized pharma companies, is expected to drive growth in the coming quarters.
The company remains focused on enhancing operational effectiveness and forging long-term partnerships, particularly with large pharma clients. Syngene’s plans include scaling pilot projects into strategic contracts and leveraging its existing infrastructure to manufacture key starting materials as part of the growing global “China plus one’’ strategy to strengthen supply chain resilience.
Sector: Healthcare
Market Price: Rs. 819.30 as on today
FV: Rs 10/-
Stock Name: Syngene International Ltd
BSE Code: 539268, NSE Code: SYNGENE
Market Cap.: Rs 33280 Cr
Book Value: Rs. 109
Segment: Pharma – API & Research
Incorporation: 1993
Headquarters: Bangalore, Karnataka
