Divi's Labs plans to foray into peptide fragments, expects API pricing to stabilise

Divi's Labs reported its Q1 results on August 3.

Pharma company Divi's Laboratories announced plans to foray into peptide fragment molecules, advancing from the peptide building blocks it currently manufactures. "We are foraying into peptide fragments, post which the company aims to get into manufacturing peptide APIs (Active Pharmaceutical Ingredients), but that remains a long-term goal," the management stated in an earnings call.

Fragments represent the second stage in the process of manufacturing peptide APIs. Several building blocks are used to create peptide fragments, and several fragments combined together form a peptide API.

"Innovators are also eager to pair with us for these products. We will get into APIs when our innovators show interest in that; currently, we have received requests to dive into fragments, so we are investing in that segment," the management said.

Meanwhile, the drugmaker commented on the API pricing environment, stating that it expects prices to stabilise in the near future. API prices have been under pressure for the past two years due to inventory destocking by Chinese companies post-COVID, given that the shelf life of these products is around four years.

Regardless, the company expects the excess inventory to soon bottom out, thereby easing pressure on pricing. "Our clients have not lost market share but are just witnessing price pressure. We expect this to stabilize soon. Our volume growth has also remained in line with our double-digit revenue growth," the company said.

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