Aurobindo Pharma has announced a joint venture with global pharma giant MSD. This partnership will see Aurobindo construct a manufacturing facility to produce biologics for MSD.
The expansion will be via Aurobindo's biologics arm, TheraNym, with a substantial investment of ₹1,000 crore to build the manufacturing facility in Telangana. The facility will include large-scale bioreactors capable of handling mammalian cell culture products and a vial filling isolator line with the capacity to manufacture 25–30 million vials per year.
Brokerage firm Macquarie has raised its target price for
Aurobindo to ₹1,385 and rated it as an outperformer. Macquarie's analysis highlights the partnership with MSD as a significant positive for both the company and the country, marking the first sizeable biologics contract development and manufacturing organisation (CDMO) contract awarded to an Indian company by a large pharmaceutical corporation.
They project potential revenue generation of ₹170 per share from this contract, with actual revenue expected to start flowing in 2027. This collaboration also opens doors for Aurobindo to secure further contracts with other large pharmaceutical companies, particularly in light of the US Biosecure Act, according to
Macquarie.
Dr M Muralikrishna Reddy Makkapati, the head of the biologics business at Aurobindo, said that the company will be manufacturing a biologic product with the new facility equipped with fill and finish capabilities. The company could not detail the nature of the product at this time, but indicated that the investment of up to ₹1,000 crore underscores the company’s commitment to advancing in the biologics space.
He further elaborated on the potential of the biologics market, noting that the market for originator biologics is estimated to be $300–350 billion, with a significant need for reliable manufacturing. The contract manufacturing biologics industry is growing at a rate of 9% year-over-year (YoY) and is projected to expand from $19 billion to $30–40 billion by 2030, according to Makappati.
Santhanam Subramanian (Subra), the CFO of the company, indicated that the capital expenditure of ₹1,000 crore will be spent over the next three years, with one-third allocated in the first year and another third in the second year. The agreement is expected to kick off in FY27.
The company is also discussing options for contract development via its subsidiary, CuraTeQ, which could potentially turn into contract manufacturing. While there are still international markets under discussion, they are exploring these opportunities.
