Sai Life Sciences : India's Integrated CRDMO

Sai Life Sciences is an innovator-focused contract research, development, and manufacturing organization (CRDMO) providing end-to-end services across the drug discovery, development, and manufacturing value chain for small molecule new chemical entities. Founded in 1999 by Dr K Ranga Raju as a medicinal chemistry services provider to US biotech companies, SAI has evolved into one of India’s most integrated pharmaceutical outsourcing platforms. The company is now managed by Krishna Kanumuri, who has served as MD and CEO since 2004.

What distinguishes Sai from Indian peers is its near-complete focus on innovator business. Unlike Neuland with its generic API pricing pressure, Laurus with ARV portfolio exposure, or Aarti and BlueJet with commodity chemical segments, SAI operates almost entirely in high-science, high-margin work. The technical capabilities span chiral chemistry, targeted protein degradation, ADC linkers, peptides, and oligonucleotides. This positions Sai as the closest Indian comparison to global integrated players like WuXi AppTec and Pharmaron.

The company operates through two segments. The Discovery (CRO) segment contributed Rs 4.9bn in FY24 and provides medicinal chemistry, biology, DMPK, and computational chemistry services. The Development and Manufacturing (CDMO) segment generated Rs 9.7bn in FY24 and supplies APIs and intermediates for clinical trials and commercial production. This 34:66 revenue split between CRO and CDMO positions SAI with a manufacturing-heavy model that drives stickier, longer-duration customer relationships.

SAI serves 300+ active customers across the US, UK, EU, and Japan. The customer base includes marquee names such as AbbVie, Eli Lilly, Bristol Myers Squibb, Pfizer, Merck, GSK, Genentech/Roche, AstraZeneca, and Sanofi. SAI has Material Supply Agreements with 8 of these large pharma companies. The company has maintained a 100% successful track record across all regulatory inspections, with facilities approved by the US FDA and Japan’s PMDA. No single customer accounts for more than 10% of revenue, and the average relationship tenure with top-10 customers exceeds 12 years.

Discovery Segment (CRO)

SAI operates India’s third-largest drug discovery services business with Rs 4.9bn in FY24 revenue, a 25% CAGR from FY18. The CRO segment has grown 35% over the last five years, with 38% of revenue now coming from Big Pharma (up from 33% in FY24) and 62% from biotech companies. The discovery team has worked on over 140 small molecule programs in the last five years. Of these, 40 have advanced to Investigational New Drug (IND) filing and 5 have achieved commercial drug approval. This track record of taking 5 drugs from discovery to commercial is the highest for any Indian CRDMO. The business operates primarily on FTE contracts (65%) with the remainder through fee-for-service arrangements.

A key differentiator is SAI’s integrated service offering. 69% of discovery revenue comes from customers who use both chemistry and biology/DMPK services. The number of customers opting for integrated discovery programs grew from 29 in FY19 to 60 in FY24. This cross-selling reduces customer switching costs and increases wallet share.

The CRO segment provides a built-in funnel for CDMO business. Unlike peers where winning large manufacturing contracts involves an element of luck, SAI can nurture molecules through discovery and development, then convert them to commercial manufacturing. This funnel currently contains 160 programs in various stages of development.

Discovery Infrastructure

The Hyderabad campus houses 343 fume hoods for chemistry, over 42,650 sq ft of biology lab space (with 11,000 sq ft expansion underway), and 26,300 sq ft of DMPK facilities. SAI maintains overseas presence through a 20,000 sq ft biology lab in Watertown, Massachusetts staffed by 30 scientists, and a process R&D laboratory in Manchester, UK with 60 scientists and a GLP kilo lab. The Manchester facility has developed and transferred over 11 manufacturing processes to plants in India. More than 20 biology assays have been developed and transferred from Boston for larger programs in India.

SAI and Aragen are the only Indian CRDMOs with labs located in Western innovation hubs, allowing scientists to work alongside innovator clients. This proximity accelerates technology transfer and provides IP security comfort that purely India-based operations cannot match.

Schrodinger Partnership

In January 2023, SAI entered a 5-year strategic agreement with Schrodinger to establish Sai Schrodinger Research Laboratories (SSRL) in Hyderabad. This dedicated facility supports multiple discovery programs across medicinal chemistry, biology, process chemistry, and analytical chemistry. The partnership currently deploys 75 FTEs and provides revenue visibility through 2028.

Development and Manufacturing Segment (CDMO)

SAI’s CDMO business generated Rs 9.7bn in FY24 revenue with a 16% CAGR from FY18. The segment focuses almost exclusively on innovator customers, with over 95% of revenue derived from on-patent or clinical-stage products. This innovator focus differentiates SAI from peers like Divi’s and Piramal, which have significant generic API exposure.

SAI manufactures products across diverse therapeutic areas including CNS, oncology, infectious diseases, cardiovascular, and antihistamines. The company has completed technology transfer of 11 late-phase and commercial products in the last three years, demonstrating its ability to absorb complex manufacturing processes.

Commercial Molecule Portfolio

SAI’s commercial portfolio includes several molecules with substantial market opportunity:

Atogepant/Ubrogepant (Qulipta/Ubrelvy) - AbbVie’s CGRP inhibitors approved in September 2021 for migraine prevention and treatment. Patent expiry extends to 2041. Atogepant is taken daily at 60mg dosage. SAI manufactures a crucial intermediate and is the sole supplier, with WuXi handling the API. SAI captures approximately 50-60% of the value chain. Revenue has scaled dramatically from $4.2mn in CY23 to $5.8mn in CY24 to $15.8mn in CY25 YTD. The addressable market is approximately 40 million migraine patients in the US and another 40 million in Europe. Atogepant/Ubrogepant show superior efficacy to competing drug Rimegepant in reducing Monthly Migraine Days, at lower cost, reflected in stronger prescription growth.

Gepotidacin (Blujepa) - GSK’s first-in-class antibiotic for uncomplicated urinary tract infections, approved March 2025. Patents extend to 2035. The US market alone sees approximately 15 million UTI patients annually, with recurring infections common. While antibiotic stewardship may initially reserve Gepotidacin for resistant cases (currently 5% of market), resistance trends suggest this could reach 10% by 2030 with potential for broader prescribing. Dosage is high at 3,000mg daily for 5 days. EU approval expected in 2025 will expand the addressable market. SAI manufactures two intermediates contributing approximately $17mn in exports in the current year.

Treprostinil (Tyvaso DPI) - United Therapeutics’ pulmonary arterial hypertension treatment. The recent Dry Powder Inhaler approval has driven volume growth for SAI, which manufactures a crucial intermediate at approximately $70,000/kg. Current revenue is approximately $8mn annually and scaling. Patent expiry is May 2027.

Bilastine (Bilaxten) - Faes Farma’s antihistamine for allergic rhinitis, widely used in Europe though not approved in the US. SAI generates approximately $16mn annually from this molecule, though growth has plateaued as patents expire across various countries.

Historical Molecules - SAI previously manufactured for Orladeyo (Biocryst) and Simparica (Zoetis, a chewable flea/tick treatment for dogs). Both stopped around FY22-23, likely due to capacity constraints during SAI’s debt-constrained period when borrowings exceeded Rs 900cr and interest coverage dipped to approximately 2x. The Simparica market was growing exponentially when supply ceased. The IPO proceeds have substantially reduced debt, enabling capacity expansion that may allow SAI to pursue similar large-volume opportunities.

Phase-3 Pipeline

SAI has 6 molecules in Phase-3 or pre-registration stage. Three identified molecules represent significant commercial potential:

Lorundrostat (Mineralys Therapeutics) - Treatment for resistant hypertension. The addressable market is substantial: 11-17% of hypertensive patients exhibit treatment resistance, representing 13-20 million patients in the US alone. Phase-3 has completed successfully. NDA filing expected December 2025. A competing molecule, Baxdrostat (AstraZeneca), is also in Phase-3.

Tradipitant (Vanda Pharmaceuticals) - First-in-class NK1 antagonist for motion sickness. FDA filing completed with approval expected by December 2025. No other NK1 antagonist is approved for motion sickness, giving Tradipitant potential first-mover advantage.

Camizestrant (AstraZeneca) - Oral SERD for breast cancer. Phase-3 readouts have been positive. Commercial supplies likely from 2027.

The remaining three Phase-3 molecules have not been publicly identified but represent additional optionality in SAI’s pipeline.

Manufacturing Infrastructure

SAI’s manufacturing operations span four facilities with current reactor capacity of approximately 640 kL, expanding to 1,200-1,300 kL by 2027.

Capacity expansion has been constrained historically. Reactor volume grew from 200 kL in 2017 to 450 kL in 2020 to 565 kL by 2022, then stalled as debt levels became problematic. The IPO has enabled resumed expansion to 1,200-1,300 kL by 2027, necessary to support scale-up of Atogepant/Ubrogepant, Gepotidacin, and Phase-3 molecules approaching commercialization.

The Integrated Model

SAI’s core competitive advantage lies in its integrated discovery-to-commercial manufacturing platform. The company describes this as the “follow the molecule” approach. Of the 50 late-phase and commercial products currently manufactured by SAI, 34 (68%) underwent process development in SAI’s R&D facilities before entering Phase 3 clinical trials. The remaining 16 products were transferred from external facilities, demonstrating SAI’s ability to absorb technology from customers or their existing CDMOs.

This model provides multiple entry points for customer engagement. A customer might begin with early-stage discovery chemistry, then progress through biology and DMPK services, before moving into process development and commercial manufacturing. Alternatively, a customer might transfer an existing Phase 2 program or even a commercial product to SAI’s manufacturing facilities. Both pathways generate multi-year revenue streams with high switching costs. 40% of CDMO customers (by revenue) use multiple services, while over 70% of discovery customers do so. Revenue per top-10 customer increased from Rs 272mn in FY22 to Rs 442mn in FY24, a 63% improvement in wallet share over two years.

Industry Context

The global small molecule CRO market stands at $55bn with an expected 10% CAGR through CY28. The small molecule CDMO market is larger at $99bn but growing more slowly at 7% CAGR. India’s CRDMO industry is estimated at $7.3bn currently and is projected to reach $14.1bn by CY28, representing a 14% CAGR that outpaces global growth rates.

Small molecules remain dominant in drug development. Of the 302 new chemical entities approved by the US FDA between 2018-2023, 72% were small molecules. This supports sustained demand for small molecule CRO and CDMO services despite growing attention on biologics and cell therapies.

Two structural tailwinds support Indian CDMOs. First, China Plus One supply chain diversification continues as global pharmaceutical companies seek to reduce concentration risk in Chinese manufacturing. Second, the US Inflation Reduction Act creates incentives for pharmaceutical companies to optimize manufacturing costs. Industry reports indicate increasing preference for integrated CDMOs offering one-stop platforms from discovery to commercialization.

Competitive Position

In the Indian CRDMO landscape, Syngene and SAI stand apart as the only purely innovator-focused players with integrated CRO-CDMO capabilities. Anthem Biosciences has approximately 10% CRO exposure. Divi’s and Piramal Pharma have significant generic API or formulations exposure.

Peer Molecule Comparison

SAI vs Syngene

SAI differentiates from Syngene in three ways. First, SAI has a manufacturing-heavy revenue mix (66% CDMO) versus Syngene’s discovery-heavy mix (60% CRO). Manufacturing revenue tends to be stickier with longer contract durations. Second, SAI maintains overseas labs in Boston and Manchester that provide customer proximity, facilitate technology transfer, and offer IP security comfort. Third, SAI has dedicated HPAPI capability for oncology manufacturing, an area commanding premium pricing.

However, Syngene has broader capabilities across biologics, oligonucleotides, ADCs, PROTACs, peptides, and mRNA. Syngene also has significantly larger scale with India’s largest CRO operations. SAI’s overseas sites are not yet breakeven, which weighs on near-term margins.

Syngene has struggled to grow meaningfully in recent years, while SAI has compounded CRO revenue at 35% over five years despite the challenging biotech funding environment.

Growth Triggers

1. Gepant Scale-up. Atogepant/Ubrogepant revenue has scaled from $4.2mn in CY23 to $15.8mn in CY25 YTD. SAI is the sole intermediate supplier with approximately 50-60% value capture. The migraine prevention market addresses 80+ million patients across US and EU. Patent protection extends to 2041.
2. Gepotidacin Launch. GSK’s first-in-class antibiotic for UTI was approved March 2025. SAI supplies two intermediates generating approximately $17mn currently. EU approval in 2025 will expand the addressable market. High dosage (3,000mg/day) supports substantial API volumes.
3. Phase-3 Pipeline Conversion. Lorundrostat (resistant hypertension, NDA filing December 2025), Tradipitant (motion sickness, first-in-class, approval expected December 2025), and Camizestrant (breast cancer, commercial supplies from 2027) represent near-term commercialization opportunities. Three additional unidentified Phase-3 molecules provide further optionality.
4. Capacity Expansion. Manufacturing capacity expanding from 640 kL to 1,200-1,300 kL by 2027. The IPO debt reduction has removed the constraint that previously caused SAI to lose molecules like Simparica when capacity could not scale with demand.
5. CRO-to-CDMO Funnel. 160 programs in the CDMO pipeline provide the healthiest business visibility among Indian peers. The integrated model creates a natural pathway from discovery wins to manufacturing revenue.
6. Customer Penetration. SAI’s presence among top-25 pharma companies doubled from 9 in FY19 to 18 in FY24. Multiple molecules with each major customer and 8 Material Supply Agreements provide recurring revenue visibility.
7. China Plus One. Global pharmaceutical companies continue diversifying supply chains away from China concentration. SAI’s positioning as the only Indian CRDMO comparable to WuXi/Pharmaron makes it a natural beneficiary.

Risks

1. Molecule Loss. SAI lost two crucial molecules (Orladeyo, Simparica) in FY23, likely due to capacity constraints when debt levels became problematic. If losses were due to execution issues rather than capital constraints, this would be more concerning. The capacity expansion post-IPO should mitigate this risk, but the episode demonstrates that manufacturing scale-up failures can result in permanent customer loss.
2. Clinical Trial Failure. Phase-3 molecules may fail trials or face regulatory rejection. The probability of success from Phase-3 to approval averages approximately 60% across the industry. SAI’s 6 Phase-3 molecules represent meaningful revenue concentration in this risk.
3. Customer Concentration Evolution. While current concentration is manageable (no customer >10%), successful molecules like the gepants may grow to overshadow other revenue, increasing concentration risk. Anthem derives approximately 25% of sales from Rimegepant alone. SAI could face similar dynamics if Atogepant/Ubrogepant continues scaling.
4. Patent Expiration. Tyvaso DPI patent expires May 2027, which will impact that revenue stream. Other molecules have longer patent lives (Atogepant to 2041, Gepotidacin to 2035), but portfolio refresh remains necessary.
5. Regulatory Compliance. A failed regulatory inspection at Bidar Unit IV, which handles the bulk of commercial manufacturing, could halt production and trigger customer migration. While SAI maintains a 100% track record, regulatory expectations continue tightening.
6. Overseas Operations. The Boston and Manchester facilities are not yet profitable. These sites provide strategic value through customer proximity and technology transfer but depress group margins. SAI has high lease payments (24% of EBITDA versus 2-4% for peers), partly due to these overseas facilities.
7. Biotech Funding Cycles. Discovery revenue correlates with biotech funding availability. While Big Pharma share has increased to 38% of CRO revenue, 62% remains biotech-dependent.