RPG Life Sciences shifts gears, bets on chronic drugs to expand sales, profits

FILE -- Dr. Paul Casey makes a video call at Rush University Medical Center in Chicago on March 6, 2020. Amid the uncertainty swirling around the coronavirus pandemic some experts recommend that older adults at risk cancel nonessential doctor’s appointments, including wellness visits, instead to consider using Telemedicine sessions, if available, as a reasonable substitute. (Danielle Scruggs/The New York Times)

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In an effort to boost revenue and improve profit growth, RPG Life Sciences has decided to focus on expanding its chronic drugs segment.

The company’s business mix is heavily skewed towards acute drugs, with over two-thirds of sales coming from this segment.

RPG Life Sciences said it wants the chronic segment to account for 50 percent of revenues.

Chronic drugs refer to cardiac, diabetes and neuro-psychiatry drugs, among others, where the patient has to take medication for life or an extended period of time, while acute drugs include anti-infectives and anti-pain drugs that are taken for a shorter duration.

However, cracking the chronic segment would require sustainable engagement with doctors to get more prescriptions. Once the segment is cracked it ensures stable business.

“The size of the (chronic) business is relatively small, our plan is to rejuvenate the existing chronic product portfolio, and ramp up our chronic therapy basket by introducing new molecules,” Yugal Sikri, Managing Director of RPG Life Sciences, said in a telephonic interview with Moneycontrol.

Sikri said that to enable growth in the chronic drugs segment, the company has plans to expand sales teams.

Focus on revenue growth

A pharma industry veteran, Sikri has led domestic formulation businesses at GSK, Pfizer, Novartis and Ranbaxy/Daiichi Sankyo.

At RPG Life Sciences, he is trying to build a sustainable domestic prescription business.

Sikri concentrated on finetuning the company’s systems and processes, such as ensuring sales hygiene, increasing sales force effectiveness, and reining in operational costs. He also worked on re energising legacy brands such as Aldactone (for kidney failure) and Romilast (an anti-allergy drug) through line extensions, new launches of biosimilars and anti-diabetic medication.

The company relies heavily on legacy brands such as Aldactone, Serenace (for schizophrenia), Naprosyn (anti-pain) and Azoran (immunosuppressant).

All those efforts have begun to show in the company’s profitability. RPG Life Sciences posted a 22 percent Y‐o‐Y jump in profit. EBITDA margins have improved from 16.8 percent to 19.7 percent Y‐o‐Y. Revenue from operations, at Rs 97.13 crore, registered a decline of 1 percent Y‐o‐Y.

Sikri says that the company has bounced back from Covid-19. His focus now will be on revenue growth, while keeping a tight leash on operating expenses.

The RPG Life Sciences MD says the resumption of non-Covid healthcare, improved customer or doctor coverage ratio, and ramp-up of recently launched products will all help the company to increase revenue in the quarters ahead.

“It’s been profitable sales growth in the last 7-8 quarters, constantly moving upwards,” Sikri said.