Advent-backed CDMO firm Cohance scouts for western API assets to meet demand and hedge against tariffs

Vivek Sharma Executive Chairman of Cohance Lifesciences

Cohance Lifesciences, the private equity firm Advent International-backed contract development and manufacturing organisation (CDMO) is actively scouting for API manufacturing assets in the US and Europe, looking at a dual-shore model to offset geopolitical shocks and to cultivate proximity in manufacturing.

“If I find a US or Europe-based site in API, I would love to do that,” said Vivek Sharma, Executive Chairman, Hyderabad-based Cohance LIfesciences told Moneycontrol in a recent interview. “That allows me to offer an East-West combination. It allows us to offer more.”

The move comes amid lingering uncertainty over US-China trade relations and the potential imposition of tariffs on pharmaceuticals by President Trump. Even though pharma has largely been exempted so far, Cohance is taking no chances. “Even before Trump came, people wanted to do it in the West. But now that strategy has become more relevant,” Sharma said.

Cohance already supplies API intermediates from India but sees strategic value in owning Western manufacturing capabilities. “People sometimes want to have an API being manufactured in the US and Europe for different reasons - close proximity to formulation sites, regulatory speed, or simply convenience,” he said.

The company’s acquisition strategy is modelled on Sharma's previous experience at Piramal Pharma, where he led the acquisitions of pharmaceutical manufacturing sites in Lexington, Kentucky and Michigan. “It offers customers flexibility. If they want Western manufacturing, this is the price. If they want Eastern, I can give you this,” he explained.

Beyond proximity, Sharma emphasized integration benefits. “If I get an API business in North America, I can do backward integration. I can create a lot more value with the same business.”

Cohance’s broader growth strategy includes expanding its capabilities in antibody drug conjugates (ADC) and oligonucleotides.

The recent acquisitions like NJBio and Sapala have bolstered its capabilities in ADC and oligonucleotides. While ADC is closer to commercial maturity, oligo remains in the preclinical phase, with new facilities in Hyderabad expected to accelerate progress.

The company has secured commercial supply contracts with two large global innovators and added 14 new customers to its ADC platform in CY25. It is constructing a $10 million cGMP bioconjugation suite at NJ Bio’s Princeton facility and a dedicated OEB6 high-containment block in Hyderabad for a customized payload program.

In oligonucleotides, the company is investing ₹230 million in a cGMP facility in Hyderabad, targeting 700 kg/year GMP capacity by the end of CY25.

“We are the only ADC commercial supplier of payloads from India, we work with two of the large innovators in the world. We are talking to the third one,” he said.

Antibody-drug conjugates (ADCs) consist of monoclonal antibodies that target tumor cells and cytotoxic drugs linked through linkers. By leveraging antibodies' targetting properties, ADCs deliver cytotoxic drugs into tumor cells destroying them.

Cohance reported consolidated revenue of Rs 549 crore for the first quarter of FY26, marking a 13% on-year growth. The revenue was broadly distributed across three segments - API+ contributed 54%, Pharma CDMO accounted for 37% and Specialty Chemicals made up the remaining 9%. Adjusted for inventory destocking, the Pharma CDMO segment grew by over 30% on-year, while API+ grew by 19% and Specialty Chemicals by 28%.

Cohance generated Rs 232 crore in free cash flow during Q1FY26 and holds Rs 441 crore in cash and equivalents.

As geopolitical tensions and trade barriers reshape global supply chains, Cohance's Vivek Sharma said India given its talent and capabilities will continue to be relevant.

“India has moved from being a cost center to a capability center,” said Sharma, highlighting a growing acceptability in global pharma circles. “Ten years ago, you had to sell India before you sold your company. Today, India sells itself.”

The Trump-era tariffs, which once cast a shadow over China’s pharmaceutical exports, have inadvertently boosted India’s appeal. While pharma has largely been exempted from punitive tariffs, the broader sentiment has nudged global innovators to diversify away from China. “Even if tariffs apply, our contracts are structured such that the impact is minimal. The customer bears it, not us,” Cohance's Vivek Sharma said.

The company has set an ambitious $1 billion revenue target by 2030, a goal it remains committed to despite macroeconomic headwinds. “It’s like setting a GPS. You may take different routes, but the destination remains the same,” said Vivek Sharma.