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How Manish Gupta Built Indegene into a publicly listed Pharma Powerhouse
702 Plays2 years ago
How did Manish Gupta turn Indegene into a global pharma powerhouse from scratch in India’s toughest startup era? In this episode of the Founder Thesis Podcast, we explore the journey of building a billion-dollar digital-first life sciences commercialization leader.
From starting Indegene in 2000 with just $350K of seed funding, to battling cash crunches and eventually scaling into a full-stack partner for global pharma, Manish Gupta shares the raw realities of sustainable scaling. He reveals how Indegene leveraged physician credibility, early tech adoption, and acquisitions to evolve into a trusted partner for medical affairs, omnichannel HCP engagement, and digital clinical trials. In this candid conversation with host Akshay Datt, Manish also breaks down why enduring institutions outlast hype cycles and how Indegene navigated funding winters, regulatory shifts, and global expansions. This is a masterclass in patient capital, contrarian strategy, and building a resilient healthcare tech giant.
Key highlights:
- How Manish Gupta built Indegene into a global life sciences leader
- Lessons from scaling without easy VC money in early 2000s India
- Indegene’s secret growth levers in pharma commercialization and medical affairs
- Navigating regulatory shocks like the Sunshine Act and FDA compliance
- Why digital-first omnichannel is the future of pharma engagement
- Founder insights on sustainable growth, acquisitions, and IPO readiness
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00:00 - Manish Gupta and Indegene’s origin story
05:30 - Early struggles, seed funding, and first revenues
13:20 - Surviving the dotcom bust and scaling profitably
20:45 - First US acquisition and global expansion lessons
30:00 - Pharma industry shifts, compliance, and the Sunshine Act
36:50 - Indegene’s pivot to a Virtual Sales Organization model
44:30 - Building global medical affairs and regulatory capabilities
52:10 - Carlyle and Brighton Park investment, scaling to IPO
1:02:00 - Digital-first future of pharma, AI and real-world evidence
1:08:20 - Founder advice on patience, prudence, and institution building
#ManishGupta #Indegene #FounderThesis #PharmaCommercialization #MedicalAffairs #LifeSciences #DigitalHealth #PharmaMarketing #OmnichannelPharma #PharmaTechnology #IndianStartup #IPOJourney #HealthcareInnovation #PharmaOutsourcing #PharmaCompliance #PharmaDigitalTransformation
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Transcript
Introduction and Background of Manish Gupta
00:00:00
Speaker
My name is Manish Gupta. I'm one of the co-founders and CEO of Indigene.
Infosys and Indegene's Early Focus
00:00:16
Speaker
The 90s saw the advent of companies like Infosys that leveraged Indian talent to service the software needs of the developed countries. In the next decade, were born companies like Indigene, who leveraged Indian talent to service more niche needs of companies in developed countries. In this episode of the Founder Thesis Podcast, your host Akshay Dutt is talking with Manish Gupta, the co-founder and CEO of Indigene.
00:00:40
Speaker
which is a full-stack service provider to global pharma companies. Indigene was started in an era when VC money was not flowing like it is today, and the way to build a business was by making it profitable. In this episode, Manish talks about Indigene's journey of sustainable scaling, starting with helping pharma companies with content and training to eventually becoming the full-stack behemoth that it is today with a few acquisitions along the way.
Funding and IPO Ambitions
00:01:06
Speaker
Indigen is all set for an IPO which intends to raise Rs 3,200 crore from public investors, and this episode is a masterclass in sustainably scaling a global business. Stay tuned and follow The Founder Thesis Podcast on any audio streaming app to learn more about the sustainable scaling and global expansion.
00:01:33
Speaker
So I was born a long, long time back in 1972 in Lucknow. My father was a scientist and he retired from a place called CDRI, the Central Drug Research Institute. He was the director of CDRI when he retired. My dad went to the United States to do a post-doc for a very brief period of time. He was in Palo Alto, then moved to Boston. He was in MIT doing his post-doc with actually Professor Hargoban Khurana, who was a
00:01:57
Speaker
one of the Indian Nobel Prize winners in genetics. Came back in 1978, back to Lucknow. I went to the school in Lucknow, called Lamartnia. Finished my class 12 in 1990, then joined BHU. I had to BHU. Did my mechanical engineering from there. After that, I decided to do an MBA, went to IAM Ahmedabad, and did my MBA over there. I passed out in 1998. Joined a bank, actually, right after that. ANZ Greenlays.
Career Journey of Manish Gupta
00:02:20
Speaker
ANZ Greenlays was a very hard pack that time. They had recently entered India. They must have been like a day zero, day one company.
00:02:27
Speaker
Yeah, absolutely. So they were real, got a job over there, and very quickly after eight and a half months joined Enfi. And Enfi was a very small firm, right? You must have been directly working with the co-founders at that time. Not really. They were still a large firm. In fact, five days after I joined, they had their ADL listing. They just cost $100 million, I think 3-4,000 people. So it was a well-known successful firm by that time. But I started talking to some of my co-founders, one of them who
00:02:53
Speaker
was a senior of mine from Ayam Ahmedabad, and he was a medical doctor, Dr. Rajesh Nair. And where was he working? So he was working with, his stint was with Sara by Labs and Pharma in Ahmedabad. He also adopted out of placement first campus. I think he, again, he was also not designed to work in corporate. So I started talking to him, bunch of others. What was the trigger that you said, okay, let's quit and start this?
00:03:17
Speaker
One was that going back to the impatience thing from my perspective, there was a restlessness. That whole thing of doing things step by step. I just want to do much more than what I was doing over there. And you realize that in a corporate setup, after some point in time, that becomes very difficult to do. I would say that was a bigger trigger. And then second is that again, 1998 to 2001, the general environment had entrepreneurship in the air a little bit. There was a whole thing of starting up. It was, I would say, this was like usinspired.com.
00:03:47
Speaker
Yeah, absolutely. So that a lot of that stuff was going on. See, when you are 25, 26, like most of the people, the opportunity always is you think that, you know, what are you going
Indegene's Healthcare Solutions Approach
00:03:56
Speaker
to change the world? I think was that healthcare has many, many inefficiencies and you could solve them by bringing medical healthcare and technology expertise together. Our thesis was a tech guys don't understand medical domain, which is a very
00:04:09
Speaker
Nuance domain is not as straightforward as many other things. The risks are much higher if you go wrong and the medical guys of course don't understand the technology domain. And if we could build a firm, which has a DNA of really interweaving these two capabilities together, we could solve various problems in healthcare. And we were inspired by a bunch of things happening in the US that point of time. There was a device called Palm Pilot, which has become very popular. I don't know if you've ever seen that. And by the way, very popular in the medical area.
00:04:35
Speaker
Doctors would keep their notes on it. Absolutely. Not only loads, you can actually, for example, if you want to prescribe a drug, you can pull out and see drug interaction. Our thought was you can get your lab report right there on the PalmPilot, if you can make these connections. So there are a bunch of things we thought we could do. So there's a company called Healdion, which has got massive funding in the US. Jim Clark, who was a legend. So they're bringing patient records, insurance, bunch of things together in doctor community was one of the facets.
00:05:03
Speaker
like a combination of drugs related content and patient records, like patient record digitization. Yeah. So the drug related content, actually not only drug related content, it was disease related content, also disease and drugs. So it's relevant to the physician and just drug related content would not make you relevant to the physician. Physicians are
00:05:22
Speaker
whole thesis was that you got to become a one-stop shop of information and knowledge for them. And they learned from various things. They learned from peers. They learned from journal articles. They learned from various cases which have been in different parts of the world and in the country. So how do you facilitate information around some of these things? And of course, drug-related information. But that was a very small piece, and probably the easier part. But how do you build disease-related stuff was the bigger theme. And our thesis was that once you do that,
00:05:50
Speaker
then you can bring in pharma companies into the fold. They would want to partner with you. You get pharma companies to physicians and do various things, market trials, bunch of things. So our third step was getting labs and hospitals onto the chain. That was our broad plan. And we raised some bit of seed capital in 2000 based on this plan. Was there really an ecosystem where you could raise? There were a couple of VC firms which had got started in India.
00:06:17
Speaker
especially the international ones. There was obviously ICCA Ventures, an Indian firm, and then you had a few Indian state firms which were there, but there were two firms. One was called E-Ventures. I don't know if you remember the name. E-Ventures was the firm, but the firm which invested in us was called Ant Factory. Ant Factory
00:06:32
Speaker
was a British origin VC firm, and they set up an India shop. So we were the first investments in India, investment in India from Manfractry. Amazing. And how much did you rinse? It was 350k or 400k, which by the way, was not even large amount, even those days. We erased that money, started building and executing on this land. So the first thing which we did is the tech platform and a content engine, which meant not only from a tech perspective, but how do you source content?
00:06:57
Speaker
in the first place, which is relevant to physicians. So we went out and built, and this was first focus on India, because in 400k, you couldn't have done much more than that. So we did partnerships with a lot of the leading academic centers in India, the likes of AIMS, PGI, some of the private hospitals. We built relationships and answers with a lot of the leading physicians in the country.
00:07:20
Speaker
What we also did is there were multiple marquee medical conferences, especially the national level ones which happened. We took content rights for all of them. We signed up those deals. So we tied up the content ecosystem. We build an internal team to develop content. We build a technology team to make sure this content can be processed and updated very quickly to be used to physicians while it's still topical. And in parallel, we started working on all this lab hospital kind of stuff. I had spoken about how do you build, connect these
Challenges and Strategic Shifts
00:07:50
Speaker
people.
00:07:50
Speaker
So that's what we were executing on, but we were doing things in a systematic, I would say prudent way. That's when somewhere in 2000, by 2000, end or so, you could start seeing the market turning south or submit to, that's when the things start going south from a market sentiment perspective. Did you have enough money at the back at this thing? By this point of time, you were pretty much running out of cash. We had a few lakhs left. And what was your monthly pollinator like?
00:08:17
Speaker
It wasn't much. As you can imagine, if you could stretch $400,000 for two years, so that wasn't really much. We had started making some revenues from pharma, by the way. I still remember in 2001 March, we closed 25 lakhs of revenue. This was pretty much first year of real operations. This would mean you had traffic, like the only way to make revenue is if you could monetize traffic.
00:08:37
Speaker
So it was not necessarily traffic. What we started doing is that we started seeing this writing on the wall and nobody was willing to pay for the website. That was very small amount of money. But this whole conference content, we started selling to doctors directly first. That was one stream. And what do you mean by conference content? Are these recorded videos or is this like a...
00:08:55
Speaker
Now to order video nobody would buy but what we would add is medical education on top of that discussions on with prominent physicians on a particular case or some content which you would have got from abroad one of the centers like Hopkins Cleveland what are those type of places we started using that mix of video and text absolutely and you were selling like in CDs that one time what sold was CDs we started with online when realized online is not going to go anywhere but it's going to be a show of yeah
00:09:20
Speaker
And we had done our first CME online continuing medical education program online. We had done something on TV by 2001. It was very clear to us that either we packed and go back home and look for jobs or do something completely different. Or the last option was that you truly monetize what you had and monetize was not in just generating revenues. You had to generate profits and cash flows over here because depending on external funding was not going to be easy. And we decided that we will just do the last.
00:09:49
Speaker
that we will very quickly monetize whatever we have built. And we had seen early signs of pharma being a place where we could do this. The biggest thing was we started off with selling to doctors directly. Listen, you might have, you just know where you were attended all the sessions. There are tons of other things which are happening in your area.
00:10:04
Speaker
Here is a product you can buy for that. And the good part is that given what we had built earlier on the website, doctors, we had started building credibility with doctors anyway. In 2000 itself, Lancet, which is one of the most reputed medical journals globally, had covered us as one of the most credible sources of information in this part of the world. So that was a good thing, which we obviously used to leverage a lot over here, given that there are these relationships with medical institutes. So doctors, they do some bit of credibility. I won't see.
00:10:32
Speaker
but it's still early days, but using that we could sell to doctors. Now, what really happened is doctors don't like to pay. Nobody in India likes to pay for content. Now, when farmers saw that, you know what, here is a stall in a conference and there's a queue of doctors who are paying advance for content. They will get six weeks later or four weeks later, what the hell is going on? So that's, they saw that and what then they came back, farmers started coming to us and saying, listen,
00:10:59
Speaker
Instead of doing this selling to doctors, why don't you sell this to us over here? What we will do is use our reps to distribute this content. And all they wanted is some branding and all that stuff of theirs, which was a much more doable business model for us over here. So that's one thing which we started selling to pharma. The second thing is that given that we had this medical expertise, given that we had relationships, many times we started pitching to pharma that, you know, what if you're going to launch a product or if you're getting into an area?
00:11:27
Speaker
pharma companies were doing what is called market development. For your drug to sell well, you need to make sure that doctors understand the disease area itself. There's enough and more diagnosis happening. How do you educate physicians about this whole thing? We would start developing content and programs to be able to do all this effectively. On one hand, we were leveraging the conference thing. On the other hand, we were doing de novo content to solve various problems.
00:11:49
Speaker
What is Dino from scratch? Not as we would develop. For example, if there was a, there's something which we had done is that there's a once a day antibiotic being launched in India. There were none that are point of time demonstrate that with the Indian population that, you know what, this has the same efficacy or better efficacy than what is existing in the market. So doing trials on patients, collecting data, then generating content from there. I remember a program we had done for.
00:12:13
Speaker
educating doctors how to diagnose DVT, deep vein thrombosis in the first place over here. You realize that deep vein thrombosis was becoming prevalent in the country, but doctors don't know how to diagnose it well enough. And if they were to diagnose it, then obviously they want to write a prescription on that. From a pharma perspective, it was important that, and that's what market development was. If you are a pharma company, you would help the whole ecosystem understand this better. So we started doing that for many disease areas. You would do like workshops and, or maybe you had some sort of literature that you were mailing out.
00:12:42
Speaker
A combination of all these and multiple channels, you'll have a website, you will still do a CD, you'll do workshops. We will still have some of these computer-based things, the tech angle and our differentiation was coming from there. There could have been people in small shops who could still do the workshops and all that, but we will always bring the tech angle to from a
00:13:03
Speaker
It was, I would say, more coolness from a differentiation perspective. It's not that pharma was really your doctors are buying the tech, but it differentiated any company doing this thing. So using that, we continue to build a business model. In reality, some of the tech part
00:13:19
Speaker
was getting underplayed. What we had started off as a tech muscle was not being leveraged to the full extent, which was unfortunate for the next, I would say three, four years. That's what happened. But to stay afloat and survive. Essentially you were running it like a services business. Yeah, absolutely. Absolutely. You were running it as services business and a very pure play services business with a very small component of tech in this place.
00:13:41
Speaker
So we, by the way, continue to grow on this. I still remember the first few years revenues I remember after that I blank out. For example, the 25 lakhs jumped to 2.2 crores, 2.2 crores jumped to 4.47, then that jumped to 7 crores. By when was it 7 crores? 2004 or 2005.
00:13:58
Speaker
So you could do 2001, 2002 was 2.2, 3 was 4.4. So 4 would have been 7. And we also had turned profitable and not great margins, but just profitable. But the challenge we always had is that we always stretched on cash flows.
00:14:13
Speaker
farmer in India didn't pay on time. First of all, the payment terms would be bad. And this is an intellectual property. First time they were buying at this level, this 60, 90 days will become 180 days. And if you were paying out of your salaries, out of these cash flows, that was a problem. So as founders, for example, all of us didn't take any cash out for almost two years, which was not an easy thing to do, given the backgrounds we came from. And it's not that we had long corporate stints that we had massive
00:14:40
Speaker
savings, whatever was there had been initially burned initial days in the company itself. So that is a big stress. Tell me that name, Indigy. Just a quick diversity. What does it mean? Or why did you choose it? So it is a combination of a bunch of things. This is my co-founder Rajesh who came up with this name, Indi.
00:14:55
Speaker
India angle, we wanted to have an India angle, have this biology thing, we were thinking of innovation always, which had the word indigeneer, so playing with all these things, name indigeneer, and it sounded like a good name. By 2003-04, if you were stepping back and saying lesson, were you having fun?
00:15:11
Speaker
working in the industry, growing while we have all these cash flow issues. We're not clearly doing well financially, but we didn't start the company. One of the biggest drivers for probably all of us, definitely me, was to build an organization which stands out.
00:15:27
Speaker
just not one more vehicle to make some money over here. That doesn't mean that we don't want to do well financially. To build a financial company which is well-known in the long run, I think that's the basics. It was also very evident if you want to be servicing the pharma, the US was 50% of the world pharma market, followed by five large European markets, then Japan, all this stuff. So we said we just have to be there. We said we got to be in the US, and this person who met us, he was fascinated because of the reasons I just mentioned.
00:15:54
Speaker
really fighting it out, the pain sacrifices, all this stuff was very evident, very modest operation, huge amount of frugality, that's the only way to survive in this whole thing. And got this advice that what you're trying to do with the healthcare space, it's tough space, it's going to take some time. And first of all, you can't have a dead investor sitting on your captive.
00:16:11
Speaker
over here. You'll need some more capital. You'll have to do all this stuff. Otherwise it's going to be a challenge, which made a lot of sense. We started talking to, and by that 2004, I would say things were getting slightly better. We decided to raise, try to raise money at that point of time, but we were slightly.
00:16:27
Speaker
disillusioned with institutional capital by what we had seen in that whole phase of euphoria. So it was like that you play the markets, which was in contrast to what we were saying, we want to build an enduring organization. So when we started talking to people, that was one option, but we were worried about that. So while we, and we were talking to probably everybody who had money in the country, stopping by the point of who could have invested. And we met this family office of one of the founders of Infosys, a person called NS Raguan was
00:16:53
Speaker
He was one of the founders of Enfi. He was eldest in that whole founding group. So he had retired in 2000 and he had set up his own family office. He was investing in a few companies here or there through some common friends. We got introduced to them. And NSR liked the broader space. He liked us as founders and they decided to invest. What was the pitch? You were a services business at that time. What did you pitch to NSR Agavan?
00:17:17
Speaker
So we said we could build a services business only, what we call it solutions that are using technology and but a global business. That was a broad pitch in a differentiated space. And I think what you are convinced is that if you think about it, the normal thing to do even in 98, 2000 was to start an IT services firm if you want to become an entrepreneur, right? I live in Kormangla, and I keep joking that every alternate street had an IT services firm. They're pretty much the way where everybody wants to sell something online over the last five years. They are now a SaaS product. So whatever is the flavor of the day.
00:17:43
Speaker
Then those days, flavor was IT services. But we decided not to do that. We thought we'll build a specialized firm, which was not true at one time. Actually, so there's a massive capital restructuring. We did a fairly complicated one where we got all the old investors out and they came and recapitalized the company with some bit of capital, which used to then start exploring the US markets more aggressively.
00:18:02
Speaker
2005 or so it was evident to us that while us is definitely attractive market very large market it was also be not the only smart guys would figure it out it was a much more copy of the market and that's the time and farmer as a sector was extremely comfortable when is extremely comfortable now if you think about this is this is a space or this is the industry which by two thousand five seven had just had a amazing run for decades it had.
00:18:29
Speaker
This was when Rantbacksee was at its peak and Rantbacksee used to do a lot of business in the US, I believe. I'm talking about global pharma. I'm talking about truly global pharma. The reality is that from a revenue percentage perspective, the generic was and still is a fraction, very small fraction of the overall industry. Today also it is less than 10% of the overall from a value perspective. That time probably would have been even smaller.
00:18:52
Speaker
So the global pharma industry had a great run. If you think about it, they had solved many, many problems for humankind. Our average life expectancy going up, I think life sciences played a big role in making that happen. Because of the product, while you had taken a lot of risk initially, once you have some successful products, you had entry barriers and hence you enjoyed a long run over there.
00:19:14
Speaker
Drug pricing at least in developed markets was pretty attractive and the margins of life science companies were pretty high. If you compare a life science 50 billion dollar company with a FMCG company of that size, the life science companies was double. At an original level it was double and hence the market cap was double. You're growing well because of various secular trends.
00:19:35
Speaker
And then all of a sudden you show up saying that you know what you have this fragmented way of doing marketing or medical. We have a better way of doing it. You will save some money. Guys won't care. So we realize that to break into this market, it'll be better that we have a US front end.
Expansion and Operational Challenges
00:19:50
Speaker
Otherwise going to take a lot of time. So we raised some capital and did an acquisition in United States 2005.
00:19:55
Speaker
So we acquired a company almost twice our size and used that as a front in the US. And this team, a company had raised capital from Mach-E global investors in the United States, had a fully running management team, which was very attractive to us that they could run the business. And we would add value in various ways we had identified and we can continue doing many others or things. That was a broad thesis of this acquisition. Pally, we were expanding into Europe, Southeast Asia. So the whole focus was using our capabilities to become more global and
00:20:22
Speaker
And what was this company doing, which you acquired? So they were doing some of the things which we were doing over here. The whole medical education piece using content. They also had a business and training sales reps on scientific and medical issues, not the soft skill training. You think about it when if you want to launch an oncology drug or a high end cardiovascular drug or a diabetes drug.
00:20:43
Speaker
You've got your reps to have conversations about the disease and the drug with these super specialists. How do you train them to have those intelligent conversations around science? And when you are talking about markets where product patent was there, it's finally science with sold your contrast context, the disease areas.
00:21:01
Speaker
So that whole disease material is what we would design. And this company had its own learning management system. It had many tech projects, which could be used simulations of practices, a bunch of things like that. The tech handle was very strong. Interestingly, one of the founders and CTO of this firm, we acquired in 2005, is our global CTO right now.
00:21:21
Speaker
And so they had what those days used to be called computer-based training, like what today we call EdTech. Yeah, absolutely. In this domain, as I said, ready-made learning management system plus a bunch of other tools which could have been used for simulations, as you said, EdTech, for this area. So we acquired them. Now, as things would have it, and that's when I joke that we had a dormant childhood which shaped us as a company.
00:21:44
Speaker
This company, we figured out that we missed something's intelligence, and it was a combination of inexperience and a bunch of other things. There were issues in many... First of all, it was losing money in the first place, which we knew, but we thought we could turn that around over here. But on top of that, there were delivery issues with some big clients, which were not identified during the diligence process. It looked like they could lose revenues with those clients, and that happened by the time we could even intervene. The advices got disputed, basically.
00:22:12
Speaker
Not advice is getting distributed. Clients were not happy with the quality levels being delivered, the price point, bunch of things. So there's lost the business in the next year, or it's essentially the bond went up. They were even losing money, the bond. And these are our thesis of that we were able to do things offshore stuff, build capabilities over here, bring some of our tech, which we had developed. And so we had it.
00:22:32
Speaker
three-year roadmap of how we leverage this company and continue to grow while bringing out costs. But that had to be compressed to months. You would shift the cost centers to India so that, you know, over-reverting. But those capabilities didn't exist in India. That was the issue. So we had to build those capabilities in India in the first place because nobody was doing this out of India at that point of time.
00:22:52
Speaker
And what we also realized is the rigor required to service global pharma customers from a compliance perspective, all the stuff, FDA was in a completely different league compared to what was required over here. But we had offices in Bangalore plus Bombay and Delhi during that time. Bombay and Delhi because that's where a lot of the pharma action was in India. Okay. So those were the same offices.
00:23:15
Speaker
Actually, not only sales offices, a lot of delivery also happened over there. Close to the customer. And when this US thing started happening, we realized that this three-year timeline has to be crunched in two months. Six, nine months or whatever it is, otherwise we'll end up earning a lot of cash. So we pretty much had to let go the entire management team in the United States, take over running this company on a day-to-day basis.
00:23:37
Speaker
build a lot of capabilities over here in quick time to be able to change the course. We also realized that this Bombay anything was an issue because we had to have certain quality standards over here. Whereas in India, while we decided that we will have the same quality standards across the board, even though that meant lower margins. But were there a bunch of practices in terms of how you develop content and all this stuff, which were just not going to sit well with global customers?
00:24:01
Speaker
And then having two different processes, different cultures, just didn't work. We shut down our Bombay Delhi offices, centralized delivery in Bangalore, built a lot of global systems in terms of quality. Did you lose business in India by shutting down those offices? Honestly, I don't remember also because I didn't care at that point of time because the numbers were very different. And not only US, we started winning in Europe and all these were global customers, very, very large FARC companies.
00:24:28
Speaker
who are continuously, even before they start working with you, there will be three-day audits of your processes, systems and all that stuff. So we said we can't have our energy distributed and focus. We service our Bangalore, India customers through Bangalore. I don't think that made such a big impact, by the way, over here. I think the bigger reason for us to continue in Bombay, at least, that most of the talent when we started off was available in those markets, for the Indian market.
00:24:50
Speaker
And rather than disrupting, it was easier to hire talent if you went that way. But then when the hard calls had to be made, we made those hard calls and invested more in training and development. And so we invested heavily in our quality processes, people processes as a firm very early on. As a friend in 2004 of when we started to go to the US, we set up a separate business excellence team, right, as an overhead. This was not easy when you were a seven crore revenue company, then running on your cash flows.
00:25:16
Speaker
there. We set up our HR practices and all this stuff in a fairly robust vision to do training and development, hiring the best people, a bunch of things like that. And training and development was difficult because this domain did not exist in India. So we just couldn't hire experts over here. So we had to move, get people from the United States to train people over here, especially in things like medical writing, medical registration, a bunch of things like that. So I would say a rough
00:25:38
Speaker
period we went through because there's a cultural thing also, right? We learning ourselves, how to service this market. Then there was obviously issues between teams that you have to manage with cashflow issues, burning cash, turning that around, letting off letting people go and at the senior level in the United States, because we had to take control of this thing.
00:25:55
Speaker
Yeah, so by 2008, nine or so, we were a nice little business. I forgot the exact revenue numbers, but I would reckon it'll be in that nine-ish million dollar range, broadly profitable, generating cash, having some good customers, right? Marking names in a more project by project business type of format and stable teams. That's where we had reached after a lot of hard work and pain. And that's when we stepped back and again, asked the question, where do we go from here?
00:26:18
Speaker
In India, you were doing content plus distribution. You would create the content and you would also distribute through CDs, through letters, through workshops, seminars, etc. For your global business, was it the same? Because in India, you would have probably built a database of doctors with their addresses so that you could mail it across to them and so on.
00:26:38
Speaker
No, so that distribution, while we had built a database and all this stuff, the reality was being done by reps. In pharma, by 2002, 3M, our model had pretty much become all pharma. This Dr. Derit, I think we had, I would say pretty much backed out of that thing. Your deliverable to a pharma company would be just the content or content which is produced, say, in the form of CDs and books.
00:27:00
Speaker
processors produce complete end-to-end. They do be distributed irrespective of the channel, irrespective of the CD, irrespective of whether it's online media, those are the things which are being used at that point of time. In the US, it is online pretty much across the board. We would give you an example of another
00:27:16
Speaker
Marking engagements we had done for one of the top five global pharma companies that they want to launch. It wasn't launched actually. It was, they wanted to differentiate one of their oncology products and use the way they want to do it is build what they called a virtual oncology center. So think about online format. If you as a physician go in, there's a patient who walks in and that is being simulated in the 3D type of thing. When people are going meta and all that today, with the underlying tech and plumbing, that's pretty much what is happening that point of time.
00:27:45
Speaker
A patient walks in and the doctor asks, OK, so what is your problem? So the patient will present their symptoms. Here are the issues I'm facing. Doctor will ask a few more questions. And you can ask questions as a doctor. If you're a doctor attending that, you can ask questions. The patient is going to answer that. And the back end programming has been done with various scenarios.
00:28:04
Speaker
So we would have developed this chatbot. Yeah, absolutely. But that's getting recorded. And we would have built the back-end database with well-known oncologies, literature survey, a bunch of things like that at the back. Based on that, you do a provisional diagnosis. Based on the provisional diagnosis, you as a physician get feedback about what you have done. You then order tests. And then how you order tests, you get feedback on that because it's the cost of ordering tests. So actually when you're talking about the United States, then how accurate based on this for your test.
00:28:31
Speaker
You get the test results. Based on that, you finally do the final diagnosis and do prescriptions. You get feedback on that. And the delivery was through streaming, cloud-based? Yeah, it was streaming. Yeah, absolutely. Absolutely.
00:28:47
Speaker
So we started on that piece with the pharma and we were doing well in this whole area.
Pharma Industry Changes and Indegene's Adaptation
00:28:52
Speaker
We had built a delivery capability in India. Scaling was easy for us, scaling up and down. Costs were definitely more competitive. And we had a US front end, which we had built. So customers were comfortable. Otherwise, customers are not comfortable offshoring some of these kind of things at that point of time. The US company became like the parent in a way, or it is a subsidiary. It is a subsidiary. It is still a subsidiary. The holding and parent companies still in India.
00:29:14
Speaker
So yeah, 2009 you were at $9-10 million and you were again in that questioning phase of what next? Yeah. So when we were in that questioning phase, what was going on is that the pharma industry was going through big churn. If you remember going back, I told you that this was industry which had a great run for decades.
00:29:30
Speaker
When you have a great run for decades, one of the floor backs is that you get some excess fat in the system. That was evident, but for a long period of time, you don't care about it. Who cares? If you're doing well, still markets are rewarding you, then it doesn't matter. But by 2009, there are a few things that are happening. And the few things were that it was evident that a lot of companies will lose patents on some of their key products.
00:29:50
Speaker
So close to 200 to $50 billion worth of power, so going off patent. And when they go off patent, you lose 90, 95% of that revenue. Earlier, that pipeline was filled by new products. But that was not happening at that point of time at the pace which should have happened. And the reason for that was manifold. One is you just had the financial crisis, right? And then every government was stretched. And in most of the developed markets, our government is a major spender in health care, the Medicare program in the US.
00:30:17
Speaker
is probably the largest spent area, constitutes a fairly significant portion, I don't remember the exact number, of the overall healthcare spend. Now, with that, the questioning one, if you're going to launch a new product, which is going to be 10-15 times more expensive than existing generic, was much more intense. That was one thing. The second thing is that between 2005 and 10, there were two, three big blow-ups.
00:30:37
Speaker
which had happened from a compliance perspective in pharma. One for a painkiller for one of the big companies and another diabetes pro for another company. They were linked to heart disease and their issues on what was communicated to physicians was not right. The clinical data, which was suppressed and these companies obviously were fine massively, but FDA also was under some bit of pressure. How could something like this happen? And these were products doing billions of dollars of revenue each.
00:30:59
Speaker
They had to be withdrawn and all that stuff. So, F.D. had become much more stringent on what they are approving, what they are not approving, and what you could say. So, there is an act called Sunshine Act, which had come into the United States, because there was also a lot of public pressure on how pharma is influencing physicians, prescription behaviors, a bunch of things by enticing them, ordering them. The way today we talk about big tech, even negative currencies, I think there was that big pharma had become like a bad word.
00:31:25
Speaker
There were some of these things which were linked to almost, you think about it, that you were taking doctors out for Johns, big conferences happening, giving them gifts and those type of things. So there's an ad called Sunshine Act, which came in that anything which you're doing, I forgot the exact, I think the exact number was a hundred dollars. Anything more than a hundred dollars needs to be publicly disclosed. A bunch of things, those kinds of things started coming in, which doctors were very right in interacting because it was just not great for them. Pharma was very about making sure they have all the records, what's going on, and we don't do anything wrong.
00:31:52
Speaker
Whereas the fines could have been massive. Companies ended up paying tens and tens of billions of dollars of fines over a particular period of 2010 to 15, 16 during this period. Due to non-compliance with disclosure norms. Yeah, absolutely. Various things on this side, violating FDA stuff, what you can say, what you cannot say. But this is also a time when China was becoming a very important pharma market and companies were investing in that. Today it is the second largest pharma market in the world, right after the United States. It was way behind.
00:32:19
Speaker
And we had started off. So because of population and because India also has population, isn't it? I think it's a combination of many things. Not so much population was one of the factors, of course, but if you see Japan also is a large market. Before China, Japan was the second largest market. It was also because of drug pricing. They have no drug pricing to be there for a couple.
00:32:39
Speaker
While they obviously had various innovative methods to make sure that they can manage distribution to people who can't afford drugs, while letting farmer price drugs, new drugs and all that stuff at the right prices to make money, which farm to farmer companies to make significant investments in China. So it was an attractive market, but they were investing heavily into that market. India has a more restrictive price control regime. That's why it's not such a big market.
00:33:02
Speaker
Yeah, absolutely. The other thing which was happening is that this is just the emergence of digital in pharma. iPads had got launched, everybody was talking about what was at that point in time called smack social mobile, all that stuff was becoming buzzwords. But I think the whole iPad was a big success in pharma.
00:33:20
Speaker
iPads were given to reps and traditional detail which to be a calendar like structure was replaced by this digital thing. So those conversations around digital which had started. Now it is in this backdrop we as a company were asking the question where do we go from here and we said you know what if you really look at companies just serving the pharma industry there are three big companies servicing the pharma industry, three big categories of companies.
00:33:42
Speaker
Not the companies. One was CROs, contract research organizations. So, two clinical trials and a bunch of things. Now, most of the clinical trial companies had become end-to-end providers, but I'll come to that later. So, that was one thing. And that's the time when, by the way, India was very hot on clinical trials as a destination. Probably you would have heard of that. In the 2010 period, there was a big noise around how
00:34:03
Speaker
because of the large patient pool india could be a great place for doing clinical trials easy to find patients which is a big issue in most of the trials there are a bunch of companies domestic indian companies which are funded one of those areas where the trend plays up so this was one of them what are some of those team of ciaro's proven it in ciaro's.
00:34:22
Speaker
Cero, clinical services, you do search, you'll find some of these names. All of them got funded by the way, by VCSPs and all that stuff. So that happened. And one of the thing we got is that list. So anyway, there was one category. Come back to our evaluation later. The second category was ad agencies. Network agencies do a lot of business with pharma and develop markets.
00:34:43
Speaker
Hundreds of billions of dollars. I've also seen billion dollar, one company doing billion dollars with one ad agency. I prefer stuff. All the communication which is reaching out to physicians and patients being developed. So that is the second thing. The third one, what were called contract sales organization, CSO. Essentially, when you have a drug which is going to be launched, then you need to have extra bandwidth to be able to communicate to physicians or when you have a bunch of products which you think you're not going to pay attention to.
00:35:07
Speaker
Then instead of you having your people, you outsource it to a CSO contract sales organization to manage that. And that was a third category. And by the way, each went up medical representatives as a service. Absolutely. Absolutely. And each one of them had billion dollar revenue companies, not valuation revenue companies in each categories.
00:35:24
Speaker
So when we stepped back and evaluated this whole space, we said in the CRO thing, while India is a hot destination, we don't understand. In clinical trials, India could be a number of percentage of population coming from India can increase a bit. If it is 7-8, it can go to 12-15. But it's going to stop there. FDA is not going to approve a drug which has 50% Indian patients. It has to be a much more distributed thing.
00:35:46
Speaker
And the second is, from a differentiation perspective, what do we bring to the table? Anybody can get access to these patients. It's a very operational, intensely intense thing. We are any one of the regulatory arbitrage guys. And we have no, if we don't see how we could differentiate, we have no interest in being the hundred and first clinical trial company in India. Even if that means couple of million dollars of revenue over the next few.
00:36:07
Speaker
going back to the whole theme of you want to build something which is a unique differentiated so we rejected that the second category was agencies that is very boys club us in europe while the pressure is some consolidation happening realize this coming out of bangalore you all of a sudden you won't be credible and probably we are an even hot agency type.
00:36:24
Speaker
over here. CSO looked like an attractive option to us, but we said we're not going to be a CSO. We will stick to our DNA and instead of CSO, we will be a VSO, virtual sales organization. Our bet was that sales and marketing and a lot of the commercialization processes in pharma will change on the back of technology. And we use broadly technology as the word, which was now digital. That's a bet we took in that 2019 era.
00:36:49
Speaker
What would be the difference between a CSO and a VSO? You won't have reps on the ground. You'll reach out to physicians using various digital channels, calls, emails, websites, vChat, programmatic media buying, a lot of analytics at the back, profiling of physicians, various ways, then reaching out to you with the right message, not one size fits all. A US doctor might be more risk averse, and hence to convert you, I might show more safety data,
00:37:16
Speaker
versus some Dr. X, who's more worried about listening to his peers over here. Which kind of content will be more effective? Which content? Which channel? There are multiple channels. There is a strong data layer behind that. And then obviously you have to develop content which can develop this. It's a combination of content channels and data, which is going to be more relevant.
00:37:38
Speaker
Now, one of the channels could be a rep still, but it's just one of the channels over here. So that's what we're going to do. And we build capabilities around that. Started investing in tech and various capabilities to do this effectively. We had some wins more on emerging markets. Initially, if you're not credible in the United States, especially, and realize that it's a positioning issue, what kind of deals to do with, give me an example.
00:37:58
Speaker
For example, in APAC, there was a company which was going to launch a product in five markets in this region. And they wanted somebody to augment this launch. And the broad model was this. Here are the, there's almost a pyramid of foundations. Top-notch foundations are going to be the heavy prescribers, medium prescribers, and then probably could be prescribers, but low probability.
00:38:19
Speaker
So we would want to spend most of our rep money and focus on the top one, probably a little bit of two. How can you augment us on the first, more on the second and cover the third, primarily from a reach perspective with the messaging on this truck and the broad disease area. We did this for five countries for one of the top 10 or 20 pharma companies in this region. And you use like social media, performance marketing, like these kind of...
00:38:44
Speaker
All kinds of channels. We build a website. We've had inside sales reps calling out. We put ads, programmatic buying websites in each of these regions separately. We did a lot of, we did physician profiling before that over here to even suggest what kind of content can be used, develop the content in this case also.
00:39:00
Speaker
So we did all that stuff. It's a combination of tech content, which is one of the big differentiators of the firm that you have medical doctors, technology guys sitting together and making some of these effect, which by the way, had been done earlier. Also, when I spoke to about the virtual oncology center, you think about it. The same thing was required even there. That point of fire time. So that was the DNA of the firm.
00:39:17
Speaker
We did this in these markets but we were not winning enough in the US and we realized it was a more of a positioning issue because we were perceived more as a medical company and not but this required a bunch of more capabilities. Actually while we had those capabilities, the US was a much more sophisticated market which puts you in buckets and we had to break those buckets as a small firm especially you get placed in buckets much more easily.
00:39:36
Speaker
So we did, by that time we had grown out of our ghost of that acquisition, which was a very torturous one. And friends, some of our board members, everybody had saying, listen guys, the world has moved on. Apparently you also forget that. So we did a small acquisition in Canada, a company well known in this space and not done well, but we used that, acquired that company in 2012 and made art again in the front for our offerings in this area in the United States. This company was doing this exact same like virtual sales.
00:40:05
Speaker
part of that, but it was well known. It was a very strong brand in that thing in the United States. And we added a bunch of things on, onto this company. They had one or two channels, some capabilities. What were they doing? Like when you acquired at that stage, you talk about in terms of revenues or they were doing a lot of things on basically websites, essentially helping companies leverage physicians, visiting websites, right? At the point of time and some of the well-known websites, WebMD, a bunch of other areas, like that MD consultant. So that was one thing they were significant. They also had a technology platform.
00:40:35
Speaker
which they were sending to farmer to able to do all the stuff effectively so some of the remote engagement pieces so as a commission of few of these things is coming to us we acquired them and so we did that we did a couple of other tuck-in acquisitions by the way and all this to our internal accruals during this period we had our initial thing that taught us that you know what we don't want to be in the tuck-in acquisition
00:40:54
Speaker
I mean, acquisition is an acquisition, you would call it, we'll do for capabilities. For example, you know what, here's the problem I got to solve. It might be a capability. It might have been a tech platform, but it's almost you're saying build a decision. I could build this, but it might take three, four years. I'm going to build this at X cost instead of 1.5 X or two X. If I buy it right now, it's probably worth two years I save.
00:41:15
Speaker
not an acquisition you do for size, scale, bunch of things, which was, again, conventional wisdom, which has been given to us, right? That weren't for the environment, you raise much more capital, this thing, but we weren't convinced that's the right thing to do, and for various reasons. Now, we did this stuff. Now, what happened is when pharma was going through all these changes, they started, while we didn't go after these,
00:41:37
Speaker
They started saying, you know what, we've got to do things more efficiently. Some of the things we are doing on the medical side internally, or in a very fragmented way, can be industrialized. Digital can be important. Automation can be important. A lot of the stuff which we are doing with agencies is very fragmented. Decentralized 500 agencies working with us in some of our key markets. Doesn't make any sense. We've got to centralize to 35. And you know what, agencies do a few things well. Let them do that. But if they do 10 things,
00:42:05
Speaker
4-5 of them are probably not done best by them. We could centralize them across brands, across countries, and start moving towards how a digital first organization should be working. When they started looking for partners, here we are doing all these things. The ILB were much smaller, which was a worry for some of these companies, because if you're 50, 150,
00:42:22
Speaker
50-70 billion dollar company you have this small firm which looks interesting but just because of differentiation we could get our foot into the door and win contract and we grew on the back of that between 2010 and 16. 16-17 had a pretty steady growth some token acquisitions here or there. So in this period you were essentially like the
00:42:42
Speaker
go-to-market partner for pharma companies. When they would want to take out a new drug, then you would do both and outreach. It's not necessarily only a new drug. It's essentially what our team today, and that's what we very quickly got down to. We said, listen, we help you commercialize your products using modern commercial and medical capabilities and organizations.
00:43:06
Speaker
and essentially modern means digital first analytics driven commercialization means some of the things on sales and marketing could be for a new drug it could be for a growth product could be for a product declining the strategies you use are different the channels you use the strategy you use might be different but the underlying capabilities
00:43:22
Speaker
remains same over here similarly on the medical side of things by this time we had that also farmer has these broad actually let me if i take a step back farmer does discovery in the labs which is where science happens you file a patent once you got something an animal is going you have an update you file for two things one is you file for a patent and you go to fda for asking for approvals to do clinical trials
00:43:43
Speaker
Clinical trials happen. That whole place thing is called clinical development, which has a lot of medical clinical trials happening, which is what CIOs do. See, at that point in time, you also have divisions called regulatory teams. It's essentially doing a lot of the submissions and all that.
00:43:58
Speaker
There is a team called medical affairs, which starts, which essentially sits between the commercial organizations and some of these clinical organizations, which is responsible for all the scientific interactions and the communication is going to happen with physicians. So it sits between those.
00:44:14
Speaker
So by the time your drug is in phase two, these card teams come in forth and saying, how will you position there at work with the medical messaging? They are the ones interacting with physicians start going out the market, doing multiple things, publications, publishing your results in some of the reported journals, which can then be used as evidence to take out the physicians answering queries from physicians, medical queries, that whole process called medical information management, any material which you're putting out to physicians.
00:44:36
Speaker
needs to go through a process called medical legal review. In pharma, you just can't put out anything. It has to be substantiated by claims. You've got to be comfortable whether you're making the right statement or you cannot be superlative. FDA is going to come after you in a big way. So this team is the one which wets all this stuff. We started supporting them. Then there's the whole process around the safety.
00:44:54
Speaker
drug safety. This is a massive process. While it is therefore being developed, the bigger one is for products in the market. If you have an issue, safety event, adverse event for your drug, and your physician or you or somebody else reports that, there is a host of actions which include
00:45:11
Speaker
reporting to the regulator and if there are enough and more signals that this is a common thing then you got to modify your label which is the regulatory thing so it's fairly complex combination of medical and commercial process so we're supporting all these for pharma using a digital first approach by 2016-17 while we'd grown
00:45:29
Speaker
One of the far shoes was that we had realized that pharma is still doing digital in a very tactical way. Everybody had to do iPads over there and you'll have something on the iPad. Everybody had probably as part of their OKRs, KRS, whatever you want to call them, they were on something digital. So there'll be a tick mark type of a thing.
00:45:45
Speaker
It was very tactical. We were going on back of that. But in 2016-17, we started seeing that change in pharma. We were working with a lot of big pharma companies, and we started seeing their internal conversations, internal PPTs, which were at a board level around priorities, around digital changing things. And our take is that was happening because by that point in time, the fan companies were fairly successful, more than successful, I would say. And every board was probably asking a question, not in our industry, probably every industry. What does it mean for my industry?
00:46:14
Speaker
what does it mean for my company as an opportunity and a threat right now how do I deal with this and the conversation had got elevated to that level when we saw that it was very evident to us that listen we just got to focus on this piece over here in 2014 we had also got into health care providers and peers as part of our thing on the back of obama care if you remember 2014 or so obama care 2013 or whatever it is was here obama care had been launched and we saw an opportunity to get in that area we had started a business which in 2016 17 the new administration came in
00:46:44
Speaker
was floundering because the US industry itself changed drastically. Some of our small customers on the healthcare payer side went bust because of the regulatory changes, nothing from a business model perspective. So on one hand, we were seeing pharma in areas which we had bettered a long time back, becoming more strategic. On the other hand, we had a bunch of other things and we realized this is our time, but we'll have to get focused. So we shut down and merged a lot of things which we had got into at that point of time.
00:47:11
Speaker
rehash them to become more relevant those capabilities for the pharma thing double down on our investments in digital and tech to make this digital first really work we did a few more acquisitions 2016 we did few acquisitions 2019 we acquired a consulting firm in europe focused on digital consulting for life sciences as exclusively because we realize
00:47:32
Speaker
When companies are working with a company like ours, or actually when they are working with anybody to that extent, they are using a very new operating model, centralization, their internal processes changing, relaying our roadmap, what capabilities to build internally, what to outsource, how, a bunch of things like that. And they needed hand holding to some extent. We need a consulting layer to be having a seat at the table earlier and the deal sizes are becoming larger. So we had to make a call whether we build or buy a consulting thing and we are evaluating both.
00:47:59
Speaker
That's when we came across this form in 2019, which we acquired.
Growth through Acquisitions and Investments
00:48:03
Speaker
2016, we had done a few acquisitions. By the way, and all these seven acquisitions between 2012-19 were all, as I said, internal accruals. And just by the cash we were generating into the business through this whole period. 2016-17, we also had contemplated doing a P round and it was to raise some bit of primary capital to do acquisitions more strategically because it was not easy to do acquisitions out of your balance sheet when you were still at a small balance sheet.
00:48:28
Speaker
Plus the fact is we realized that we had investors, we had no pressure, but it was just from a fiduciary perspective, a little bit of exit helps in this thing. So we had gone onto the market for... Who won on your capital at that time in 2016? That's it.
00:48:43
Speaker
The reality is, as founders, also we wanted to generate a bit of liquidity for us after 16, 17 years. We had started drawing salaries from 2005, but there were always sub-par rate. And we were running the company very tightly, as you can imagine, if you're doing acquisitions to cash flow out of your margins, that was the case. But 16, 17 and WordPress year, ARR in 2016, 17, like what kind of.
00:49:03
Speaker
sixteen i am thinking we're done fifty two to be more precise but somewhere in the process we had from term sheets and all that stuff that we really is when we are the same thing what i told you in the market was happening because when i say market the customer side of the question we start observing these.
00:49:18
Speaker
And it was evident to us that we'll have to make changes internally, shutting down some of our units, rehashing them, investing in a more in a few areas, which was not business as usual. Some of this stuff will have to be done. And while we got term, she realized it's not going to be fair to get a new investor. You've told a story and then you realize you got to do all this stuff.
00:49:36
Speaker
It might slow us down. So we as founders had discussions internally. We said that should we do this and everybody was with the opinion, we should not. After working so hard for a long time, for a couple of years now, blowing this up and creating more problems for ourselves and somebody else is not a good thing. Luckily, they had investors who supported the view. They said, it doesn't make sense. They said, we are on no hurry. We are at a good run with you guys. And like the business, you guys, everyone, so we can stay on. This is no issue. So we pulled out of that whole process, by the way.
00:50:03
Speaker
in that period. We continue to then invest in the business, grow it, and just double down on our capabilities, market presence. Then 2020 happened. Like everybody else, you are scared at the beginning of what's going to happen. The world has come to an end. And we tracked our business very closely during that point of time. I remember the first thing we did is that
00:50:22
Speaker
drew down cash from everywhere. We had limits and all this stuff, US, India, saying that they just sit on cash. But then we started seeing that our customers after a couple of months, we realized that they were doing more because they didn't have an option. The biggest thing when people used to ask me, what is the biggest blotting for you? He said,
00:50:38
Speaker
The thing was that it's digital adoption in life science companies. Now, we cannot, we can influence a little bit by doing thought leadership and all this stuff. But listen, at one and a half trillion dollar industry, you can't bend the curve for it. You got to be prepared when the curve bends. We realize that the curve is bending right in 2020 and that's when. Yeah, companies were forced to adopt more digital.
00:51:00
Speaker
do more and we found ourselves in a unique spot of being probably the company as a standalone company with this kind of characteristics and experience of doing this for more than a decade with some of the largest companies on the planet over here and successfully. So we benefited from that and had a
00:51:15
Speaker
could jump between 2020 and 2022 and somewhere in 2021 actually 2020 we also had thought as part of our initial plan that we will bring in do the PE process in 2020. The agreement we had between us and our investors is that we will not even try before 2020. That time is required to do this thing but 2020 or 2021 is when we'll start the process.
00:51:36
Speaker
2020, late 2020, we started the process and we got two new institutional capital partners in early 2021 onto our capital. So Carlisle, which I'm sure you and your listeners will be aware of, came in as an investor. Another firm called Brighton Park Capital, which is a US firm based out of Connecticut, also came in. Brighton Park was a firm, B firm started by a person called Mark Zaga, who understood India very well. He was the Chief Investment Officer of General Atlantic for a long period of time and led a lot of the investment she had made in India for a lot of time.
00:52:06
Speaker
So we bought both of them as investors into the company in 2021. So that's broadly where we are. Today, we see the industry continue. You raised about 200 million in that. Yeah. This must have been like a unicorn round, I'm guessing.
00:52:20
Speaker
It wasn't a unicorn round. It was just below a unicorn round at that point of time. Yeah. And what did you close last year? What's your year? Last year, $223 million. Wow. Amazing. Okay. Okay. I want to understand that evolution of business a little better. 2016, when you decided that you need to do a little bit of retooling in the organization, build more capabilities. So in 2016, you were a VSO or like you told me you had got into other areas.
00:52:49
Speaker
So the business actually, even before 26, what had happened, we started the concept of VSO, but really traction we got was after some point in time. And the scaling happened in a slightly different area over here, which are essentially the whole agency thing, which I spoke about essentially what we call is centers of excellence for commercial and medical.
00:53:05
Speaker
As pharma company started saying, listen, we got to industrialize. We have very fragmented processes on the commercial side and medical side. We got to industrialize them, bring digital and automation to them, which meant that the way we.
00:53:20
Speaker
do things internally, the way we outsource got to change and we got to centralize many of these functions. They started looking for partners like us to develop content, campaigns, data analytics, in many cases on the medical side, manage some of the regulatory safety and medical affairs process and support them at a scale. That's where we got a lot of our growth from. So the combination of the commercial and medical side is still our largest. Medical side would be like a low automation, basically.
00:53:48
Speaker
It's from workflow automation. I gave an example of a process. This was 2013 or 2012. I forgot the exact thing, but a pharma company came to us and there is this whole process called labeling. There's a label in every drug you have. The label is a highly regulated document. And you think that label has claims the drug is making over here, which has to be approved by FDA and all this stuff. Now you think about it. There is a document called Core Data Sheet, which you have all the core data of the pharma company. From there, the label is derived and there's a global label.
00:54:17
Speaker
If you're a large pharma company, you might be selling in 80 markets across the world. And each of those markets will have their own regulations. You've got to be compliant at a global level with your stuff. You've got to be compliant in each of these 80 markets. And regulations in any of these markets could change. And you've got to be complying
00:54:33
Speaker
and making sure you are in line with those regulations. One, the second thing is you might have a safety event which necessitates you to change the label, global level. You might have new trials which have come in because of which you're modifying the label after the FDA approvals and all that stuff. That need to reflect in each of these things. In context of the regulations, this company, which was a top five pharma company, came to us after they had some inspections and ordered findings and issues. And they realized that there were 40, 45 personal complaint, which is a big risk for a company like
00:55:03
Speaker
So they set up a global labeling hub with us to manage these labels in 80-year countries. That's an example of the medical side of things. Is this productized? I can imagine label management being as a product in itself. It's a combination of, and that's broadly our strategy. There are capabilities, things are done in a certain way today. And most of there are capabilities, human capabilities.
00:55:25
Speaker
That is paramount. Now what we have done over time when I said investments in tech is that we have been investing in AI based solutions which sit in conjunction with these capabilities. The reality is none of them are, think about it, none of these are driverless cars today. There are different levels of automation which have been introduced to reduce the human effort, reduce errors, increase compliance, but the capability needs to sit to this today. A combination of regulations and maturity of these algorithms
00:55:53
Speaker
haven't reached a stage where you could do this thing, but we believe it's obviously over the years, both these evolve more and more data, more and more maturity of technology and regulatory frameworks evolving. It will get there, but there's three years, five years or 10 years that anybody's guess right now. Right now, it's a managed service where tech is helping you to deliver better outcomes at lower costs.
Digital and AI-Enhanced Solutions in Pharma
00:56:16
Speaker
And that's what we do for all the things over here. And those are the investments we made. We were to deliver differentiated outcomes vis-a-vis any of the incumbents in this space. The interesting thing is that if you really think about it, one of the things I keep speaking about is that people, especially in India, know about the whole contract, to modify Turing, CDMO as it's called, space. There are very successful companies in this. If you see the spend, sales and marketing is the largest spend area in pharma.
00:56:42
Speaker
And by the way, we can share numbers with you. It's a pretty large spend area, more than 20% of revenues being spent on sales and marketing for these companies. The reason, first of all, and they were large companies in the United States and Europe in this space. The reason you didn't hear about it so much as there was a fragmented spent every country, every brand, as I said, doing their own things. Now over the last few, actually I would say decade, which is now accelerating is companies are realizing that does not work. It's a combination of many things, more pressure on bottom lines.
00:57:11
Speaker
more risk of non-compliance using something which is not in compliance norms. And the third thing is companies also realizing that if you want to be truly digital, like the digital natives, you can't have this fragmented stuff. It could be something which are fragmented or autonomy, but over the infrastructure level, you got to have centralized functions. Otherwise, you'll never know your customers better. You'll never be able to deploy strategies.
00:57:32
Speaker
And that is driving more consolidation and centralization of things. And then that's where a company like us becomes more relevant and has a large area to play in larger deals, which has also driven a lot of this growth we have seen. You were giving me another example in addition to labeling on the medical side.
00:57:49
Speaker
I spoke about the whole area of medical legal review. Now if you think about it, you develop material. Some of our engagements will be the following. That you, we would be engaged by the commercial team. And the commercial teams will engage us for let's say, 35 markets right across the world. That you know what, anything which is going out to physicians, while we left few agencies, we should be doing
00:58:09
Speaker
steps 1, 2, 3. After step 1, 2, 3, they will hand over the stuff to you guys. You will take it all the way to 10, and then it gets deployed in the market. But right there. But before it gets deployed in the market, this whole thing needs to go through a medical legal review process in each of these markets. Now the company would be doing that. Given our medical capabilities, what we started saying is that, listen, this medical legal process is a very intense process. Checking is opting at multiple levels from basic English to claims.
00:58:37
Speaker
references, all this stuff to medical review and you have only so much teams and you want them to do operational work. So we could support that. So you would have a separate contract and it's required from a regulation perspective, a firewall contract with the medical organizations to support that process.
00:58:52
Speaker
So the material which we have developed goes to a pharma company, get thrown across the world to the medical teams, comes to a team over here in India, which is firewalled from this other team, gets back and then it goes. And once that is approved, the final signatory is the pharma company, then it goes to the market. That's another process.
00:59:09
Speaker
I can go on and there are a bunch of things on the medical and commercial side. Now what I described to you on the commercial side is a fully end-to-end process, but within that there are nuances. One is content, other is how you deploy campaigns, data analytics, companies are buying platforms, software platforms, and then you've got to use and make customized those platforms, run them to drive more ROI. Someone is deploying Salesforce that you would customize and make sales.
00:59:36
Speaker
and then run Salesforce on a day-to-day basis and that's where again domain layer is required. So wherever there is an intersection of domain expertise and tech that's where we continue to expand as a company and our filter is not only tech but it has to be domain that's where we can truly stand out as a company and not necessarily
00:59:55
Speaker
from india perspective but there are if you think about the many forms are size scale stand alone across the world in this domain and that's what we choose to when we think about getting into an adjacency or a new area. What is the role of data and analytics? Give me some examples of how that solves problems.
01:00:12
Speaker
A classic thing is this Phoenician profiling itself. Understanding your Phoenician well, like I spoke to you about, that's a core thing. Now, we still do the VSO thing. It's a small portion of our revenue, but now we are beginning traction. First of all, how do you first figure out to even get your Phoenician list, identifying which are the Phoenicians to go after? One is a very simple thing on prescribing, which is the easy one. But then you also do digital profiling. If a Phoenician is a heavy prescriber,
01:00:38
Speaker
But you know what, he's digital savvy. He or she is digital savvy. Then you could have a strategy where you have somewhat of rep coverage, but you can still have a extensive digital thing. But if it's not digitally savvy, then you might want to have more rep coverage. That's a basic point. So you're getting your physician list, then what we call the shortest path to prescription or influencing the behavior to understand that they're having algorithms and data essentially to figure out which channels, which content pieces, right. We'll get the most amount of traction for these physicians.
01:01:05
Speaker
Understanding patient journeys in the first place, from real world data, there is a plethora of data sources that emerged over the last decade. Given that electronic medical records now for the exact numbers, but I believe they used to be six, 7% in 2014, in 2006, seven, actually eight before Obama, the meaningful use act came in the United States. Now it is in that eighties or 90% over there, which is, throws in a lot of data and government is making that more usable. There's claims data from insurance perspective. There's genomic data.
01:01:34
Speaker
So you can use all this stuff to really understand patient journeys much better. And in that context, figure out your messaging and a bunch of other things on the marketing side. The same thing is also being used on the clinical trial side, much more effectively. Are you also doing B2C marketing like to the end consumers or is it just the marketing to physicians that you do?
01:01:53
Speaker
So it's not marketing to end consumers and end consumer marketing is allowed only in a few countries. U.S. is one of them. A very few still see U.S. most of the TV ads will be, but that's a very kind of thing. So we don't do that. But what we do is what is called patient adherence. Supporting on chronic therapies, how do you engage patients that don't drop out, educating them, reminding them, bunch of other things.
01:02:15
Speaker
More and more, if you see the pipeline of drugs and where the pharma focuses today, it's on very specialized products. Oncology is a big one because that's where a lot of the unmet medical needs are and rare diseases. These are complex therapies, very expensive therapies. So bringing patients on board, the interface with the insurance companies, whether the patient is authorized to have a drug or not, then keeping the patient on the therapy. Those are the kind of involved processes a company like ours will be more involved in.
01:02:43
Speaker
So this keeping a patient, like this patient adherence would be through like emails, messages and all is there a patient app for a patient suffering from let's say. It's a combination of everything. There are apps, there are patient counselors, nurse counselors, again, by the way, websites, it's very similar to that pay a whole physician nothing to that.
01:03:01
Speaker
extent. You have multiple channels to reach out to patients. So which line of business contributes how much to your revenue? And which country contributes how much to the revenue? So from a country perspective, it's US, which is the largest, it's got to be clear, I forgot the exact number, but two third of our business. Now the account is from a revenue contribute from a contracting perspective. What that means is that you might have contracted in the US, but you might still be doing work for Europe or some other parts of the world. Okay, because their head office is in the US. So
01:03:28
Speaker
Yes, even by the way, the head office is not U.S. is such a large center of gravity for most of the former companies that they might be doing contracting. Europe also might be doing contracting over there. So U.S. tends to be two-thirds or 70% of that piece, followed by Europe, then China, or Japan and India. So the way we look at our lines of business is we call it enterprise commercial, enterprise medical, and then our VSO business is what we call it omnichannel activation.
01:03:54
Speaker
So if you take the enterprise commercial and omni-channel activation, that's more on the commercial side. That will be the largest portion of our business, followed by enterprise medical. And then we have what we call others, some sort of consulting. We have just four into enterprise clinical, a digital clinical trials. That's almost a startup within industry. That will be a few percentage points.
01:04:16
Speaker
How is digital clinical trials different from the regular clinical trials? First of all, there are many things. One is they are using real world data, real world evidence in the whole trial design process more effectively. The protocol designs in the first place are much more data driven in the first place.
01:04:33
Speaker
This design would include decisions like who should be my sample size, which country should I test this on, and so on. Actually, really much more than once, then that would be what should be my endpoints, what should be my exclusion criteria, inclusion criteria. We see a typical trial. Endpoint is like the hospital or the clinic where the trial happens.
01:04:50
Speaker
No, so what about patients? When you are coming up with a drug and you're doing trials, you're trying to get a label, as I had explained. That label has exclusion inclusions. You would have at the very simplistic way, it would say not for pregnant women, not for children. Now that's much more nuanced than what I just explained. Based on the data you have generated initially, you are seeing where is the higher probability of success for this drug, so that I generate positive data and get into the market over here.
01:05:15
Speaker
Using real-world data, real-world evidence, you can increase that probability of success. That's another example of using data analytics in the first place. Then identifying the sites and identifying the investigators in a much more rigorous way. Using, you think about it, I just mentioned, the real world, your orphanages, oncology drugs are the most prominent ones in the whole pipeline. How do you get patients onto trials? You don't have large numbers of patients in this. If you're using a cholesterol drug or a hypertension drug,
01:05:42
Speaker
It's easy to recruit. Pretty much everyone has that. But some of these patient recruitment is a problem. So using that, then you would use the digital campaigns. Digital channels can be used to, again, recruit patients in those areas. So there are a few areas like that where we are trying to drive more effectiveness in the whole clinical trial process.
01:05:59
Speaker
Partner with traditional CROs to execute, or you partner directly with these components here, clinical, hospital, and pretty much all our business is directly with pharma. We contract directly with pharma. Then go and execute. When you're executing the clinical trial, do you execute it in else? So we are not doing full and full the operational part of the clinical trials. We are still not doing. We are taking pieces which can be disintimidated or made better. So we unbundle that process and add efficiency in that.
01:06:29
Speaker
In the pieces, a digital raw data can play a significant role. Again, we are still staying true to that whole thing of where we believe we can truly add value and stay differentiated. Over time, obviously those pieces increase. And this commercial and omnichannel together would be like more than half your top line? Yeah, it's more than half. There will be 60% or so. There's slightly more than that, yeah.
01:06:50
Speaker
Do you see, post-COVID, that more pharma are reducing reliance on in-person visits, going more for like what you are offering? Is there a threat? That is definitely happening.
Industry Trends and Influencer Roles
01:07:00
Speaker
That is definitely happening. And it's a function of... It worked during COVID. The average lower cost of a rep in the United States is not up to 50K US dollars. But it's fairly expensive. No, there are places where you need a rep. So I'm not saying rep is going to go away completely.
01:07:15
Speaker
it's gonna be there but the use of digital is gonna be more and more prominent because of few reasons one is fairly expensive whereas digital is much more efficient it's much more targeted you can do much more personalized things second thing is more and more doctors are now preferring to have pull rather than push in this world of today that's just here just like you and me I don't want to be called every now and then I'll call you if I have something and most of my information I can anyway get through various channels last but not least is pharma is also worried about compliance
01:07:43
Speaker
A rep having a conversation with a physician, there's only so much you can control it over here. From a compliance perspective, whereas digital, all your messaging is controlled. What you're saying, you have a complete audit trail of all that stuff. And hence, from a compliance perspective, it's much less risky. Is there such a thing as influencers in this doctor influencer who would make TikTok videos?
01:08:03
Speaker
Those are what are called the CUPIN leaders. Some physicians from the world or a particular country will listen to. So typically, you target them. They are the ones you would probably even get during your clinical trials in the first place. If not clinical trials, those are places where you'll, during your initial marketing process. And that's where medical affairs plays a role, as I had mentioned. You have convinced them through science about your drug. And if you got them converted, it becomes definitely that
Advice for Young Entrepreneurs
01:08:26
Speaker
plays a role.
01:08:26
Speaker
Advice would you give to yourself when you were starting way back in 2000? Which is another way of asking, what advice would you give to a young founder? A few things. Bill Gates uses the statement, at least have been attributed to us. You always overestimate what we can do over a two-year period and always underestimate what can be done over a 10-year period. That is so true. That's one piece of advice I would give. So you're saying that have a 10-year plan when you're starting a business.
01:08:51
Speaker
but then you're a resident. It takes that much of time to build something meaningful. The second thing is think about the mark. In my mind, there are two things entrepreneurs have to do. First of all, identify opportunities where you can build businesses. But while identifying those opportunities, you've got to be really critical on thinking about
01:09:09
Speaker
how the market is going to be shaping up over here and there's no way to be 100% sure over there. There will always be probability but many times we as entrepreneurs have more wishful thinking about how things are going to change and the pace they're going to change then what reality is. Be more real if you're building an enduring business around that piece. Your vision can still be achieved over a period of time but
01:09:29
Speaker
don't depend on just financial cycles and to run this whole thing, be much more rigorous on that. So that's one part the entrepreneur does. The second part, which at least we will, I believe as kept us in good stead, we said, you know what, we're going to be entrepreneurial in nature. And, but on the other hand, we also will always be prudent and think about institutional building.
01:09:46
Speaker
building teams, building processes, which can execute on that opportunity. So you can move on to the next thing. We always focus on that. And many times these conflicts, looking, being entrepreneurial, thinking about institutions, being prudent in the conflict, got to find the right balance to strike that. Many times going in one direction more could be much more, could just be detrimental and you can blow up over
Closing Remarks and Audience Engagement
01:10:08
Speaker
here.
01:10:08
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.