Weight-loss drug boom helps OneSource lift revenue target to $500 mn
The optimism of the Bengaluru-based contract development and manufacturing organization is largely driven by an expected increase in demand for semaglutide, known under the brand name Ozempic, whose patents expire next year in key markets such as Canada, Brazil and India.
OneSource is accelerating a $100 million capacity expansion to capitalize on the global boom in weight-loss drugs, Sharma said. “We are also preparing for this…we are accelerating our capacity expansion by almost six to twelve months,” said Sharma. The company will expand its drug device capabilities and is set to complete it in 2026, a year earlier than the previous timeline.
The company reported 12% year-over-year revenue growth late Tuesday for the September quarter. ₹375.8 crore and 37% increase in EBITDA ₹106.5 crore, net profit was 106.5 crore ₹44.9 crore against defeat ₹6 crore a year ago. The company reported the following amount of revenue in FY25: ₹1,444.9 crore ($171 million).
Strides Pharma’s listed subsidiary, which develops drug-device combinations such as GLP-1 (glucagon-like peptide-1) pens, has advanced its expansion timeline by up to a year to strengthen its position among several global players offering end-to-end formulation and device assembly, Sharma said.
In addition to its drug-device combination offering, the firm has also seen strong traction in other sectors such as biologics. Additionally, recent acquisitions are expected to support growth over the next few years.
“The biggest opportunity in the short to medium term is really in drug-device combinations,” said Sharma.
GLP-1s, a class of weight loss medications that include semaglutide, are popularly used as pen-filled devices. OneSource is one of the few players worldwide with end-to-end capabilities, including formulation and device assembly.
Sharma said the company is poised for a boom in the market in terms of regulatory approvals for its production and facilities. “But this is largely dependent on our customers getting approval for the generic drug,” he said. Many leading generic drug manufacturers have applied for regulatory approvals in several markets, including Canada, Brazil and India.
“Semaglutide is here to stay. Other major markets will start to open up.” [for generics] soon. Europe starts to open in 2028, followed by the USA in 2032. So, I see GLP-1s as opportunities both in the near term and in the medium and long term,” said Sharma.
biological growth
Biology is another area of the company’s long-term focus. “We’ve really grown the funnel of our biologics business over the last six months, thanks to some very strong customer support from our team, as well as some headwinds,” said Sharma.
The recently revived US Biosafety Act, passed in the US Senate, which bans pharmaceutical and biotechnology players from working with select Chinese companies, is expected to attract more business to Indian CDMOs.
“We are right there with the production capacity and compliance track record,” said Sharma.
The U.S. Food and Drug Administration’s recent draft guidelines to make biosimilar development easier and shorten timelines are a strong headwind, Sharma said. “This will also introduce the cost of developing biosimilars. This will mean that competitive and agile CDMOs like OneSource are in a really strong position to attract these biosimilar players,” he said.
The company saw a 4x increase in its biologics funnel, which includes new methods, early-stage biologics, and biosimilars, in the quarter compared to FY25.
OneSource is also expanding its core business of soft gelatin capsules and injectables. The company recently announced the acquisition of a multi-dose fill-finish facility for injectable drugs based in Poland and an integrated carbapenem (antibiotic) facility in India.
“The core injectables business, as you know, is being expanded with significant new capacity coming from those businesses, and that gives us an immediate footprint in Europe where we can offer solutions to both European and US customers,” said Sharma.
OneSource listed on January 24, 2025, and its share price is up 2.3% since listing. ₹1,750 on the National Stock Exchange. Nifty Pharma index has fallen 3.7 percent since January.
