India’s CRDMO Market:

Building Momentum Through

Operational Excellence
JUNE 2025
YCP has produced this white paper for information purposes only. While every effort has been made to ensure the accuracy of the information and data
contained herein, YCP bears no responsibility for any possible errors and omissions. All information, views, and advice are given in good faith but without
any legal responsibility; the information contained should not be regarded as a substitute for legal and/or commercial advice. Copyright restrictions
(including those of third parties) are to be observed.
Table of Contents
Executive Summary 3

1. Introduction 4

2. Overview of the Indian CRDMO market 5

3. Key challenges faced by Indian CRDMOs 6

4. Unlocking value in the short term 7

5. Enablers for value addition 21

6. Conclusion 24

India’s CRDMO Market: Building Momentum Through Operational Excellence 2

Executive Summary
The Indian CRDMO (contract research, development and Operations
manufacturing organization) market is at the tipping point • Set up robust data collection systems that capture
of growth due to several tailwinds. While the industry comprehensive, high-quality data while minimizing
looks at collectively addressing structural challenges, the risk of tampering or manipulation.
CxOs at individual companies still need to demonstrate • Benchmark KPIs with similarly sized organizations and
short-term performance to meet investor expectations setup time-linked targets to achieve improvement in
and win customer trust. This white paper offers a practical those key performance indicators (KPIs)
framework for CxOs to drive short-term operational • Balance the need for short-term impact in areas like
excellence while building toward long-term growth safety and production (to meet sales targets) with
long-term goals (operations excellence initiatives)
The CRDMO industry has unique challenges, • Simplify processes by critically evaluating value-
especially for India based players: added and non-value-added processes across the
• Variability in demand has disproportional impact organization, especially those related to functions
because of sub-scale operations like process research and development (R&D),
• Dependency on China for a significant proportion of production, quality, and engineering
raw materials • Consistently perform T-minus planning around client
• Lack of experience and talent availability in newer proofs of concept (POCs) that are required to move
scientific modalities like antibody-drug conjugates up the value chain in new modalities like ADCs, CGT,
(ADCs), cell and gene therapy (CGT), etc. etc.
• Set up digitized batch planning processes to meet
Given such complexities and at this phase of the varying production volume requirements
industry’s growth, the following initiatives can allow • Set up optimal governance around each initiative
C-suite executives to drive operational efficiency: taken in the organization, ensuring leadership time is
fairly utilized on most critical decisions
Strategy and Business Development
• Establish a structured process for monitoring client
biopharma pipelines to proactively identify sales
opportunities
• Perform continuous market sensing in areas like
pharma investments, organization restructuring,
competitive moves, etc.
• Deploy separate teams for client acquisition and
retention to create integrated drug development
opportunities
• Establish a robust capital expenditure (CAPEX)
deployment program team that ensures on-cost, on-
time and on-quality execution of initiatives

India’s CRDMO Market: Building Momentum Through Operational Excellence 3

1. Introduction
The excitement surrounding India’s CRDMO market is term (12-24 months) to meet investor expectations or gain
impossible to ignore for anyone involved in the country’s customer trust. What is certain is that organizations can’t
healthcare and life sciences sector. Some companies are wait for resolution on long-term industry-wide challenges.
doing IPOs, others are receiving capital infusion from
private equity players, and research reports are estimating Improving short-term performance in commercial,
significant growth over the next 5-10 years. All factors operations, or manufacturing spaces can create a cycle
seem to suggest an unstoppable forward march for the of long-term profitable growth for organizations. In
CRDMO market. this white paper, we will set up the case for near-term
performance enhancement and provide a framework that
Industry leaders have highlighted fundamental limitations C-suite executives can use to start instilling excellence in
hindering individual company scaling. However, such their respective businesses/functions without necessarily
concerns are unlikely to be addressed in the near term. losing track of long-term impact. We will borrow lessons
Government policies will likely evolve with consensus, and learned from large global CRDMOs, including those in
recently formed industry bodies will gradually resolve Asia, but focus on solutions that are relevant to the India
long-term challenges like talent shortage. Industry players market.
must still demonstrate strong performance in the short

Focus
Compete Effectively
Build Scale and with Global Players
New Capabilities
Operational Excellence

World
Leadership

<2 years 2-5 years 5+ Years

India’s CRDMO Market: Building Momentum Through Operational Excellence 4

2. Overview of the Indian CRDMO market
The global pharmaceutical industry has increasingly encourages firms to diversify operations beyond
been focusing on streamlining its operations and China.
focusing on their core of cutting-edge R&D and scaled • Government initiatives such as BIRAC (Biotechnology
commercialization. This has fueled the rise of CRDMOs, Industry Research Assistance Council), “BioNest,” and
resulting in a global industry worth USD 200 billion. the PLI (Production-Linked Incentive) scheme are
fostering pharma R&D and API manufacturing.
India’s CRDMO market is booming, projected to grow at • With over 700 US FDA-approved facilities, India has
~15% CAGR until 2028, surpassing the global average reinforced its regulatory compliance and quality
of ~9%. Key factors contributing to the growth of Indian standards.
CRDMOs are: • Access to funding is expanding as private equity
• The evolving geopolitical landscape with the “China investments in CRDMOs grow and several CRDMOs
+ 1” strategy and policies like the Biosecure Act, raise capital through IPOs.

4-Year Growth Forecast of India’s CRDMO Industry

15%
11%
9%

Global CRDMO Indian CRDMO India Pharma

Source: India Briefing report, [Link]

The sector’s emergence has created several favorable conditions benefiting firms:

• Integrated offerings are on the rise, with firms consolidating CRO, CDMO and CMOs under one umbrella via greenfield
or brownfield investments.
• Consequently, Indian CRDMOs are gaining prominence, transitioning from basic service providers to essential long-
term strategic collaborators.
• There is an increase in POCs in upcoming and high-margin growth areas such as ADCs, messenger ribonucleic acid or
ribonucleic acid (mRNA/RNA) therapies, and CGTs (beyond chimeric antigen receptor T-cell or CAR-T).
• Small and mid-sized biotechs, despite their limited in-house capabilities, contribute to approximately 70%2 of new drug
approvals in the US. Indian CRDMOs are beginning to establish themselves as primary vendors for these firms.
• Access to capital is allowing players to commission CAPEX toward high-growth, high-margin segments such as ADCs,
cell and gene therapy, and more.

While the Indian CRDMO market stands at a critical turning point, set to double in size
over the next five years, will it witness the rise of at least 4–5 CRDMOs with a billion-
dollar topline?

2
Biotechnology Innovation organization

India’s CRDMO Market: Building Momentum Through Operational Excellence 5

3. Key challenges faced by Indian CRDMOs
The industry is expanding but faces numerous challenges.

Infrastructure and Technology Gap: There is a need for technological and infrastructure revamp to
support the manufacturing of next-gen therapies such as biologics, and gene therapies.

Skilled Workforce Shortage: While India produces 25,000 PhDs annually, high turnover rates of 25-30%
and the high projected industry growth may lead to a workforce shortage

Dependence on Imports: The pharmaceutical industry relies heavily on imported active pharmaceutical
ingredients (APIs), with 35% of the total coming from abroad (70% from China1), leaving it susceptible to
supply chain issues and Biosecure Act restrictions.

Evolving Regulatory and Compliance Pressures: Global regulations, such as Current Good
Manufacturing Practice (CGMP), International Council for Harmonisation (ICH), and standards and
environment, health and safety (ESH), environmental, social, and governance (ESG), are becoming
increasingly strict, demanding continuous adaptation from CRDMOs.

These challenges are exacerbated by the complex regulatory environment in India where, despite supportive government
policies, there is a need to streamline the existing regulations.

• To sustain the growth and tap into various upcoming opportunities, the Indian CRDMO industry
needs to overcome internal constraints and drive reforms in the long run.
• In the short term, the CRDMO players should streamline internal processes to unlock top and bottom-
line levers.

1
BioSpectrum India Sources: Avendus report, YCP Auctus Analysis

India’s CRDMO Market: Building Momentum Through Operational Excellence 6

4. Unlocking value in the short term
Indian CRDMOs face the typical challenge of rapidly enhancing topline while simultaneously becoming more operationally
efficient. To do both in a highly competitive market, competing with both local and global players, requires a holistic
approach.

The YCP Auctus Value Creation Framework helps executives assess various levers to boost short-term value and build
strong systems for ongoing long-term impact.

Levers to Create Shareholder Value

Revenue Growth Efficiency - ROCE Profitability

New Geographies / Capacity Utilization and

Procurement Costs
Modalities / Services Production Efficiency

Sales Excellence Manpower Productivity Manpower Costs

Inorganic Growth Inventory Management

Quality Management

Enablers

Integrated Business Planning

CAPEX Allocation Technology
and Management Systems

India’s CRDMO Market: Building Momentum Through Operational Excellence 7

4.1 Pathways to revenue growth
Achieving fast growth is a combination of developing a sharp strategy (focus areas, M&A, etc.), but also executing on that
strategy with excellence. Best-in-class companies do both in parallel and stay dynamic to make the best use of market
opportunities.

4.1.1 New market expansion strategy: targeting emerging modalities, services, and
geographies - Primarily valid for CDMOs, CROs, CMOs

Targeting new modalities

Historically, Indian CDMOs specialized in generics and vaccines. With increasing global demand for
biopharmaceuticals, mRNA, gene therapies, nanomedicines, ADCs, and peptides, Indian companies need to expand
their offerings to remain competitive.

Sample actions for targeting new modalities

1. Develop a long list of potential new modalities to enter via

1.1 Continuously monitoring global drug pipelines
1.2 Participating in industry conferences (e.g., BIO International, Convention on Pharmaceutical Ingredients i.e.
CPhI and reviewing scientific publications
1.3 Engaging with clients to understand their evolving needs

2. Identify modalities to offer based on

1.1 External factors: Market growth potential, competitors and their differentiation strategy
1.2 Internal factors: CAPEX requirements, return on investment (ROI) strategic alignment, and synergies with
existing capabilities
3. Determine if existing capabilities are conducive for new modalities build vs. buy decision needs to be made
4. For build:
3.1 Develop manufacturing facilities with multi-modality adaptability and recruit or upskill personnel
3.2 Launch dedicated POCs to validate manufacturing
3.3 Conduct pilot runs and scaled-down production trials to ensure operational readiness.
5. In parallel, support sales in securing long-term contracts through the development of pitches/POCs for novel
modalities

Sample KPIs to track new modalities

Number of new modalities introduced, revenue contribution from new modalities

India’s CRDMO Market: Building Momentum Through Operational Excellence 8

 Expanding into new geographies

Indian CRDMOs, traditionally focused on US clients, can broaden their geographic footprint by targeting to European
markets and other emerging pharmaceutical centers. Broader client coverage will enable these organizations to
develop new revenue sources and enhance their global standing.

Sample actions for expanding into new geographies

1. Identify potential geographies to expand client base

1.1 Identify regions with low or limited presence
1.2 Understand demand by reviewing drug pipelines, competitive positioning of CRDMOs
2. Understand local regulations for compliance and quality standards
3. Leverage KOLs, local partners, and industry events (BIO, CPhI, DIA) to build credibility and generate leads
4. Filter potential clients based on their pipelines, alignment with the company’s in-house capabilities, and strategic
direction
5. Evaluate the necessity of a local sales office to improve responsiveness to customer needs, facilitate regulatory
interactions, and enhance brand credibility in the new market

Sample KPIs to track new geography expansion

Number of new clients, revenue contribution from new geographies, effectiveness of local sales offices

Offering integrated services

Pharma companies prefer CRDMOs with end-to-end capabilities over multiple vendors, creating opportunities for
CDMOs/CMOs to shift towards CRDMO positioning and act as strategic partners rather than piece-meal vendors.

Sample actions for offering integrated services

1. Select modalities to do end-to-end offering based on market demand and financial upside
2. Develop necessary capabilities, example if we assume transition from CDMO to CRDMO
2.1 Infrastructure and CAPEX - Research labs equipped with state of art tech, pilot scale facilities to bridge
research and manufacturing .
2.2 Talent acquisition – Cross-functional leaders to manage integrated projects, scientific experts
3. Target a healthy client mix by diversifying modalities and pipeline stages that CRDMO supports, mitigating the
risk of low pipeline conversion from R&D to manufacturing
4. Marketing and client engagement
4.1 Educate clients on the benefits of using a CRDMO model, highlighting efficiency and cost savings
4.2 Position the organization as strategic partner, sharing risk and revenue with clients while offering dedicated
capacity, investment, and collaborative innovation and technology

Sample KPIs to track introduction of end-to-end integrated offering

Revenue increment from offering integrated services, client retention rate, revenue gain from upselling/cross-selling

India’s CRDMO Market: Building Momentum Through Operational Excellence 9

4.1.2 Enabling sales excellence – Primarily valid for CDMOs, CROs and CMOs
To achieve revenue growth aligned with strategic goals, a robust sales excellence framework is crucial for both cultivating
existing clients and attracting new ones.

By creating dedicated key account management (KAM) teams and structured training programs, CRDMOs can cultivate
strong client relationships and establish long-term partnerships. Key account revenue can see a ~20% lift for organizations,
as demonstrated across industries.

Sample KPIs to track sales excellence

Number of new customers, lead-to-conversion ratio, customer retention rate, customer lifetime value (CLV)

Sales Excellence Framework

Components of Sales Strategy Execution Levers

Organizational Structure
Customer Insights
Sales Incentives
Competitor Differentiation
Sales Resources and Tools
Internal Alignment
Pricing

India’s CRDMO Market: Building Momentum Through Operational Excellence 10

 Components of Sales Strategy

Customer Insights • Using pre-defined criteria, identify target customers by

Alignment of strategy and segmenting the pharmaceutical market
approach with customers • Recognize key customer needs and potential avenues for
and their needs growth
• Map the sales process to mirror the customer’s buying cycle

Competitor Focus • Gain insight into competitors’ market positioning and

Awareness about the operational methods
competitor and their • Grasp the shifts in industry needs and competitor responses
capabilities • Evaluate market benchmarks and identify areas of differentiation

Internal Alignment • Align sales strategies with organizational goals, including

Alignment to overall growing high-margin product lines and entering new markets
organizational strategy • To ensure a unified go-to-market strategy, marketing, product
development, and operations must be aligned

Execution Levers

• Develop a sales team structure aligned with the company’s

Organizational strategic goals, organizing the team based on strategic priorities
Structure • Establish KAM roles and create a systematic process for acquiring
and retaining clients

• Regularly assess and revise sales targets across tiers of sales

organization
Sales Incentives • Develop an incentive system to rewarding both client acquisition
and revenue growth from current clients
• Incentivize expansion into new service modalities and offerings to
boost client revenue growth

• Invest in sales training and create supporting materials such as

pitch documents and POCs
Sales Resources
• Utilize sales tools such as customer relationship management
and Tools
(CRM) and lead generation software for reporting, forecasting, and
review

• Use pricing strategies like cost-plus, value-based, competitive, or

milestone pricing, depending on the product or service type
Pricing
• Implement a pricing strategy that carefully balances discounts
against profit margins
• Drive sales with strategic PoCs and discounts such as bundled and
volume-based option

India’s CRDMO Market: Building Momentum Through Operational Excellence 11

4.1.3 Inorganic growth via M&A – Primarily valid for CDMOs, CROs, CMOs
M&As employ two strategic methods: horizontal or vertical integration.
• Horizontal integration (expanding service offerings and market reach)
• By acquiring complementary expertise, a CRDMO can offer a one-stop shop
• Scalability and flexibility are improved by shared resources
• Vertical integration (strengthening supply chain and execution)
• Securing raw materials internally, such as APIs, KSMs (Key Starting Materials), reduces dependency on China
• End-to-end service building is a key factor in the global competitiveness of Indian CRDMOs
• Integrated drug development avoids delays

Sample actions for inorganic growth strategies

1. CRDMOs must tailor their investment strategy to align with strategic objectives, financial resources, and exit plans.
Options include full buyout, minority stake, joint ventures, or partnerships
2. Create a dedicated M&A team skilled in deal structuring, due diligence, and post-merger integration
3. Design an internal strategy playbook for deal sourcing, analysis, and completion
4. Partner with investment banks, scouting agencies, and research firms to find and assess potential acquisitions
5. Target organizations with capabilities and expertise that supplement CRDMO deficiencies, either vertically or
horizontally
6. Assessment of valuation
7. In addition to the standard financial, tax and legal due diligence checks before making the final offer, also check:
7.1 Technology and digital infrastructure
7.2 Customer and market synergy analysis
7.3 Cultural and organizational alignment

8. Monitor performance post-integration

Sample KPIs to track inorganic growth

Cost synergies realized, EBITDA growth post-acquisition, ROI

Summary - Revenue Growth

CRDMOs can strategize fast growth by:
• Offering new modalities by understanding evolving market demands and leveraging existing capabilities or
developing new capabilities accordingly
• Targeting clients in geographies that are underpenetrated for the CRDMO, considering local demands, existing
capabilities, and setup of regional offices
• Offering integrated solutions to position itself as a strategic partner, supporting clients end-to-end. Ensure a
healthy client mix to mitigate pipeline conversion risk
• Inorganic growth (horizontally or vertically) by analyzing investment approaches, setting up an M&A
team and playbook, and engaging with IBs to identify potential target
• Ensure execution by investing in sales excellence. Develop sales processes aligned with customer needs and customized
based on competitive insights
• Enable the sales team by defining an appropriate sales organization and incentive strategy and enforcing disciplined
pricing

India’s CRDMO Market: Building Momentum Through Operational Excellence 12

Case Study
Revenue Growth

Founded in 2011 and headquartered in Songdo, South Korea, Samsung Biologics has distinguished itself by demonstrating
one of the highest revenue CAGR. Its robust client base boasts collaborations with 17 of the world’s top 20 pharmaceutical
firms. The company’s aggressive expansion and investment in innovation are fueled by its backing from Samsung Group.

Samsung Biologics Revenue (In Billion USD)1

CAGR
42.62%

3.335
2.709
2.201
1.15

2021 2022 2023 2024

1
Samsung Biologics Annual report . The exchange rate used for KRW to USD conversion Source: YCP Auctus Analysis, Samsung Biologics Annual report, FiercePharma
is 1 KRW = 0.0007334 USD

Beyond capacity expansion and operational excellence, Samsung’s revenue growth is fueled by:
Expansion in new modalities
• Samsung launched ADC services with a dedicated facility and expanded its partnership with LigaChem Biosciences to
support ADC programs
• Samsung created the S-DUAL platform to improve its capabilities in complex molecules, establishing itself as a leader in
bsAb development
• Established a dedicated mRNA drug substance production suite at its Songdo site in the first half of 2022, to capture
business in this segment
• Samsung made strategic investments in cell and gene therapy companies via its Samsung Life Science Fund
Targeting clients in new geographies
• Established new regional sales offices in biotech hubs like Tokyo and Boston to be in proximity with their clients and
improve communication
Integrated offerings
• Samsung expanded offerings from bulk manufacturing to end-to-end services, including development, formulation,
and fill-finish in biologics
Sales excellence
• Enforced “Samsung Biologics way” within their sales force, which focuses on customer excellence through operations
and quality, helping them to attract and retain clients
• Samsung secured contracts with companies such as Eli Lilly and AstraZeneca, signing 42 product development
agreements within two years of operations
• Samsung signed agreements with big pharma names such as Pfizer and BMS, which helped them to build credibility
and leverage these partnerships to network

India’s CRDMO Market: Building Momentum Through Operational Excellence 13

4.2 Improving efficiency to get better ROCE
Indian CRDMOs are actively investing in CAPEX but don’t have sufficient measures to track the return on capital invested. As
the CRDMOs mature, it is vital for them to have adequate transparency and track capital being invested.

4.2.1. Capacity utilization and production efficiency – Primarily valid for CDMOs and
CMOs
Indian CRDMOs frequently lack real-time insights and problem-solving for factors like equipment downtime or raw material
shortages, leading to production interruptions and underutilization. Unstructured batch planning and poor forecasting also
lead to idle capacity. Below are some interventions to help optimize utilization.

Sample actions for capacity utilization and production efficiency

1. Project and batch planning: Enablement planning for the next 12 months with cross-functional teams, with a
rolling plan at three months to plan for raw materials, development cycle, and capacity allocation
2. Batch tracking and execution governance: Timelines of key activities tracked across the product life cycle
and classification of products to channel efforts judiciously
3. Real-time data monitoring and ‘root-cause’ analytics:
3.1 Identification of key delay drivers and developing action standard operating procedures (SOPs)
3.2 Leverage tools like Aizon Predict for real-time yield prediction and root-cause analysis
4. Establish an engineering excellence control tower to ensure equipment availability, monitoring, driving on-
time and on-quality batch production

Sample KPIs to track capacity utilization and production efficiency

Batch charging efficiency (BCE), batch cycle time (BCT) overshoot, deviation resolution time (hours/days),
overall equipment effectiveness

India’s CRDMO Market: Building Momentum Through Operational Excellence 14

4.2.2. Manpower productivity – Primarily valid for CROs
Manpower productivity in the pharmaceutical industry is impacted by high chemist turnover rates, limited training and
development programs, and unclear productivity and efficiency metric tracking. To address the same, we have listed a few
solutions:

Sample actions for manpower productivity

1. Synthesis planning exercise to set a target for the month with weekly governance meetings and progress
tracking
2. Appoint head/support researcher or high-performing researchers who can help solve complex chemistry
challenges in the lab
3. Introduce checklists and documentation for route planning and execution to enable ‘right first time’
reactions
4. Improve chemists’ productivity by increasing accountability and focus on limited set of products, thereby
building expertise
5. Introduce in-house training programs for existing and new employees

Sample KPIs to track manpower productivity

Compounds per scientist per month, DMTA (design, make, test, analyze) cycle time, % right first time (compounds)

4.2.3. Inventory management – Primarily valid for CDMOs and CMOs

Inventory management in CRDMOs often faces challenges, with an inventory turnover ratio of around four times. Indian
CRDMOs can enhance efficiency by upgrading from outdated systems or manual processes to advanced inventory
management solutions.

Sample actions for inventory management

1. Implement advanced inventory management systems will leverage automation and real-time data
integration.
2. Employ just-in-time (JIT) inventory management strategy to reduce excess stock and optimizing supply
chain responsiveness.
3. Conduct regular inventory audits and cycle counts to ensure accuracy, minimize discrepancies and improve
inventory control

Sample KPIs to track inventory management

Inventory turnover ratio, inventory carrying cost (% of total cost)

India’s CRDMO Market: Building Momentum Through Operational Excellence 15

4.2.4 Quality Management – Primarily valid for CDMOs, CROs, CMOs
For CRDMOs, quality serves as a competitive differentiator in an evolving market. A well-implemented quality management
system (QMS) enables organizations to eliminate redundancies and waste

Sample actions for quality management

1. Implement a comprehensive pharmaceutical quality system

1.1 Quality policy and objectives: define clear quality goals aligned with industry standards and client
expectations
1.2 Establish quality processes: establish standard operating procedures (SOPs) for all operations
1.3 Document control: maintain thorough documentation of processes and changes to facilitate transparency
and compliance
1.4 Training programs: training programs to initiate and instill a quality mindset within employees
1.5 Quality harmonization across facilities: ensures uniform quality standards across facilities.

2. Periodic audit and improvement initiatives

2.1 Regularly conducting internal and external audits to identify areas for improvement
2.2 Use eQMS, which helps in real-time monitoring of product performance and supports in taking corrective
and preventive action
2.3 Integrate quality by design principles across the product lifecycle by embedding tools like Statistical Process
Control (SPC) and 5S Methodology

Sample KPIs to track quality management

Inventory turnover ratio, inventory carrying cost (% of total cost)

Summary - Efficiency (ROCE)

For CRDMO players, improving ROCE is crucial for long-term financial sustainability and getting an optimal return on
CAPEX. A few initiatives to improve ROCE include improving the following metrics:
• Capacity utilization and production efficiency by batch planning 3-12 months in advance, real-time monitoring
for RCA, and ensuring governance
• Manpower productivity by optimal planning, standardizing processes, and training employees
• Inventory management by regular inventory audit, employing JIT inventory management
• Quality management by implementing comprehensive pharmaceutical quality systems and periodic audits

India’s CRDMO Market: Building Momentum Through Operational Excellence 16

Case Study
Efficiency Improvement

Founded in 2008 by Dr. Ge Li, WuXi Biologics has emerged as a global leader in the CRDMO industry, ranking third in sales
within the biopharmaceutical CDMO market. The company has robust clientele (including pharma/biopharma and medical
devices companies) of over 6,000 customers spread across over 30 countries. Wuxi delivers an ROCE of 10.4%1 for FY24,
which is overindexed versus their industry peers, showcasing a testament to its efficiency.

Key factors behind Wuxi Biologics’ efficient ROCE, offering lessons for Indian CRDMOs:

Capacity utilization and production efficiency • WuXi Biologics invests heavily in developing its
• The WuXiUP Platform enables continuous production, workforce’s skills to ensure high productivity and
which maximizes facility utilization by reducing batch- quality. The company provides an extensive range
to-batch transition times. WuXiUP achieves 5-15 times of training programs, including technical upskilling,
higher productivity compared to traditional fed-batch leadership development, and continuous learning
processes. opportunities.
• WuXiUI’s downstream technology doubles purification
processing capacity while reducing processing time by
50%, leading to higher final drug substance yields of
up to 70%
• The company incorporates next generation
technologies in its facilities, such as advanced
analytical tools like Raman Process Analytical
Technology, which enhances efficiency in production.
• WuXi Biologics’ manufacturing sites leverage single-
use technologies (SUT) and modular facility designs.
Disposable single-use bioreactors and equipment
eliminate lengthy cleaning/sterilization downtime
between batches.

Manpower productivity and inventory management

• WuXi Biologics implemented over 370 Kaizen projects
in 2023. These projects led to significant cost savings,
inventory reduction of 270 million RMB2, and saved
over 1,000 labor hours.
• WuXi Biologics is transitioning towards becoming
a “Digital 4.0 Enterprise,” which involves integrating
systems like ERP (Enterprise Resource Planning), MES
(Manufacturing Execution System), WMS (Warehouse
Management System) to enhance data transparency
and real-time monitoring across the supply chain.

1
Wuxi Biologics Annual report 2
Wuxi Biologics ESG report

India’s CRDMO Market: Building Momentum Through Operational Excellence 17

4.3 Profitability Growth
4.3.1 Raw material cost – Primarily valid for CDMOs, CROs, CMOs, though higher
priority for Manufacturing
Material cost, determined by the quantity of raw materials used and their procurement price, accounts for 50-60% of total
expenses. Additionally, reliance on raw material sourcing from China exposes Indian CDMOs to supply risks and price
volatility. In light of these challenges, we have outlined various solutions to optimize both the quantity and cost of material
procurement.

Sample actions for reduction of raw material cost

1. Material Procurement (Price) Optimization

1.1 Strategic sourcing – Reduces raw material costs by diversifying suppliers across regions and consolidating
procurement to unlock better pricing and volume-based discounts.
1.2 Exploring scientific and economical substitutes – Assess alternative processes that achieve the same
final product structure using lower-cost raw materials without compromising quality.
1.3 Risk mitigation strategies – Manage exposure to raw material price volatility through mechanisms such
as dynamic hedging algorithms, which automatically trigger futures contracts in response to anticipated
price spikes.
1.4 Quality audits – Conduct regular audits to ensure consistent quality across procurement sources and
maintain compliance with global standards.
2. Material Consumption Optimization
2.1 Adopting lean manufacturing principles – Minimize production waste by implementing practices such
as Just-in-Time Inventory, Total Productive Maintenance, and Value Stream Mapping to improve efficiency
across operations.
2.2 Leveraging continuous manufacturing – Enable real-time monitoring and control to reduce material
waste and improve process consistency.
2.3 Solvent reuse and recycling – Explore solvent recovery through distillation systems to reduce
consumption and environmental impact.
2.4 Catalyst recovery – Evaluate methods for effective reclamation and reuse of catalysts to optimize input
utilization and reduce costs.
2.5 Improving yield per batch – Monitor and refine chemical processes to increase batch yields, ensuring
more efficient use of raw materials.

Sample KPIs to track raw material cost

Procurement cost as % of total production cost, purchase discounts and savings, % raw material reused, yield (per
batch)

India’s CRDMO Market: Building Momentum Through Operational Excellence 18

4.3.2. Manpower cost – Primarily valid for CDMOs, CROs, CMOs, though higher priority
for CROs​
Manpower costs, representing 25-30% of total expenses, are significant costs, while high attrition rates (20-30%) increase
recruitment and training costs. A shortage of skilled talent drives up wages as demand outpaces supply. Additionally, many
Indian CRDMOs still use paper-based systems and manual quality checks, increasing human intervention.

Sample actions for optimization of manpower cost

1. Implement continuous manufacturing (CM) technology reduce manual involvement by real-time

monitoring.
2. Shopfloor/bench transformation optimizes task allocation and tracks efficiency in real-time to move towards
a leaner organization.
3. Automation tools that can be leveraged:
3.1 RPA (robotic process automation): automates digital, rule-based tasks, reducing manual effort in data
entry and processing
3.2 Digital Twins: simulates physical systems for real-time monitoring and predictive insights
3.3 Cobots: assists in physical, repetitive tasks, reducing manual labor while ensuring productivity
3.4 EMBR (electronic master batch record): enables real-time data capture, eliminating manual monitoring
4. Industry-academia partnerships: collaborate with leading institutes to co-develop curricula or research
scholarships, enabling recruitment

Sample KPIs to track manpower cost

Manpower costs as % of total operational costs, revenue earned per FTE, savings via automation

Summary - Profitability Growth

For CRDMOs, profitability can be improved by controlling two major cost drivers:
• Material cost – This accounts for 50-60% of total cost. To reduce this cost, focus should be on:
• Material procurement optimization by implementing risk mitigation strategies, strategic sourcing of suppliers, and
exploring economical substitutes
• Material consumption optimization by adopting lean manufacturing and material recycling or recovery
• Manpower cost – This accounts for 25-30% of the total cost. Strategies to reduce this cost include shopfloor
transformation and automating manual and repetitive processes.

India’s CRDMO Market: Building Momentum Through Operational Excellence 19

Case Study
Profitability

Lonza, headquartered in Basel, Switzerland, ranks among the world’s largest healthcare manufacturers. For over a century,
Lonza has specialized in small molecules and biologics, serving diverse therapeutic needs. In contrast to competitors facing
shrinking EBITDA margins, Lonza maintains consistent margins, highlighting its effective cost control.

LONZA EBITDA Margins1

32%
31%
29% 30%

2024 2023 2022 2021

1
Source: YCP Auctus Analysis, Lonza annual report, [Link] ​

Some key factors that have helped Lonza drive profitability, which Indian CRDMOs can take inspiration from:
Lonza’s new “One Lonza” strategy focuses on streamlining operations, cutting costs, and improving efficiency within its
core CDMO business. The company restructured, eliminating non-core businesses and forming three integrated platforms:
Integrated Biologics, Advanced Synthesis, and Specialized Modalities.

Key Cost Reduction Initiatives

• Raw Material Savings:
• By standardizing raw materials in single-use technologies, firm improved procurement efficiency, leveraged
economies of scale, & secured better supplier pricing.
• Implementing Lean principles reduced waste, optimized material usage, and cut excess inventory costs.
• In its Small Molecules division, Lonza has embraced Machine learning and AI-driven retrosynthesis to identify
shorter, more efficient pathways and cheaper starting materials for APIs
• Handheld Raman devices introduced to verify incoming raw materials faster, cutting quality control lead time
from ~three weeks to one. The site could reduce on-site inventory from six to for weeks of supply, freeing up two
weeks’ worth of raw materials
• The company consolidates and rigorously evaluates suppliers. It launched a Responsible Sourcing program that
embeds ESG and efficiency criteria, ensuring suppliers work on reducing waste and align processes in tandem with
Lonza’s goals.
• Ensuring multiple qualified suppliers for key materials and integrating supply chain data into process design has
increased Lonza’s resilience and bargaining power.

• Manpower Costs
• Lonza has invested heavily in digital transformation, such as in advanced manufacturing execution systems (MES)
and automation software to streamline production workflows,
• In addition to plant floor automation, Lonza has introduced automation in labs, such as automation of bacterial
endotoxin testing in their quality control labs.
• Process analytical technology (PAT) enabled real-time monitoring, reducing manual intervention, labor costs, and
production errors.

India’s CRDMO Market: Building Momentum Through Operational Excellence 20

5. Enablers for value addition
5.1 CAPEX allocation
A key driver of transformation within any organization is capital investment, making it essential to establish a well-defined
approach for CAPEX planning to maintain a strong balance sheet. In this context, we have developed a CAPEX allocation
framework:
• Defining Investment Requirements for Each Initiative
• Clearly define capital and operational investments required per initiative.
• Analyze the expected operational impacts and alignment with strategic objectives.

• Financial Modeling
• Develop a detailed financial model considering multiple investment scenarios and their impacts on overall financial
health.
• Prioritize projects as Core (growth drivers), Strategic (future opportunities), or Non-Core (potential divestitures),
evaluating them against both financial benchmarks (e.g., ROI, interest rates) and strategic criteria (e.g., regulatory
risk, market alignment).

• Define Investment Timelines

• Based on the prioritized initiatives, define clear timelines for investment initiatives and create detailed roadmaps
for implementation.

• Budgeting and Funding Strategy

• Strategically allocate budgets optimizing the funding mix:
• Internal Cash Flow: Short payback initiatives (MES, AI, automation).
• Debt Financing: Predictable ROI initiatives (facility expansions).
• Government Grants & Incentives: ESG and compliance-driven projects.
• Equity Financing & JV Partnerships: High-risk, high-reward projects
• Governance and Execution (as detailed in 5.3)
• Establish a CAPEX governance structure with accountability reporting directly to the CFO, tracking KPIs such as
CAPEX utilization rate and revenue per dollar spent.
• Conduct periodic reviews, adjusting budgets based on evolving market and execution

India’s CRDMO Market: Building Momentum Through Operational Excellence 21

5.2 Technology
The industry is rapidly embracing AI, Internet of Things (IoT), and data analytics to enhance efficiencies across the value
chain. These technologies drive innovation, improve regulatory compliance, optimize processes, and enable seamless
collaboration, positioning CRDMOs for greater success in a competitive pharmaceutical landscape. Below are some
reference technologies in use across the value chain:

Drug Discovery
• AI-Enabled Route Planning: Retrosynthesis is used to identify cheaper starting materials for a
target molecule by use of technologies like ChemAIRS SYNTHIATM, ReTReK.
• High-Resolution Mass Spectrometry (HRMS): Precise molecular characterization, improving
Drug
drug candidate identification & mechanism-of-action studies.
Discovery

Digital Transformation and Market Analytics

• AI-driven market insights: AI-powered customer 360 analytics, omnichannel marketing
campaign tracking, and segmentation improve strategic decision-making.
• AI-integrated CRM systems: AI predicts customer needs by analyzing interactions, enhancing
client engagement.
Commercialization
Advanced Manufacturing Technologies
• Continuous manufacturing: Continuous manufacturing can cut biologics production time by
30-40%1 compared to batch methods.
• Digital twins: Virtual replicas simulate manufacturing processes to optimize conditions before
implementation, reducing trial-and-error costs by 20% 2.
• IoT-based quality control: Real-time monitoring via IoT sensors (e.g., Siemens'
implementations) ensures optimal production conditions by tracking parameters.

Proactive Maintenance and Process Optimization

Manufacturing / • Predictive maintenance: AI-driven analytics detect potential equipment failures, enabling
Operations preventive interventions and minimizing downtime,
• Process optimization: AI algorithms analyze historical manufacturing data to identify
inefficiencies and recommend process improvements. AI can expedite the development of large
molecules, reducing development timelines by up to 30%3.

Real-Time Supply Chain Visibility

• IoT-enabled tracking: IoT sensors enhance inventory and shipment tracking, reducing delays
and improving efficiency.
• Cold chain management: GPS-enabled IoT sensors monitor temperature-sensitive shipments,
reducing spoilage rates.
• Barcode scanning: This allows for tracking materials across the value chain.
Supply Chain
and Logistics
Digital Platforms for Logistics Optimization
• ERP & IoT integration: Platforms like PCI | bridge™ integrate ERP and IoT data for real-time
supply chain visibility, cutting inventory costs.

1
Pharma Advancement, 2PBC Today, [Link]​ Source: YCP Auctus Analysis, industry reports​

India’s CRDMO Market: Building Momentum Through Operational Excellence 22

5.3 Integrated business planning and management systems
Effective governance is essential for CRDMOs to translate their strategic interventions into tangible outcomes. It provides
the framework for accountability, transparency, and strategic decision-making, ensuring that commitments are backed
by concrete actions. Governance relies heavily on integrated business planning to ensure that different parts of the
organization work together effectively. The following are three key components:

1 Tiered Governance and IBP Council

• Set up a governance structure, comprising leadership,

project management office (PMO), and project teams
Stakeholders Frequency
with clear processes for decision-making, including
sign-offs at every step.
• Establish a Central Integrated Business Planning Board Update, Monthly
CXOs
Council comprising leaders from R&D, manufacturing,
supply chain, finance, and regulatory affairs. This
Central Integrated
council should serve as a final decision-making
Business Planning Fortnightly
authority for all cross-functional collaborations. Council
• Define responsibilities, KPIs, and review cadence
across the company tiers to track and monitor Leadership/
progress at every level. Product/ Fortnightly
• Track bottlenecks arising due to miscommunication BU Heads
or lack of synergy by tracking KPIs such as order
fulfilment time (sales and manufacturing), invoice
Project Director, Weekly
processing time (supply chain and finance), etc.
Managers
• Periodically create war rooms by visually displaying
the KPIs and project status to enable quick decision
making.

2 Management Information System (MIS)

• Build dashboards offering both aggregate amd detailed view (at overall, wave & functional level), highlighting key KPIs
and progress.
• Leverage various MIS tools such as Microsoft Excel, Tableau, etc. to monitor progress.
• Integrate data from ERP systems, CRM tools, supply chain platforms, and financial systems into a single repository with
real-time updates to ensure cross-functional collaboration.
• Establish a centralized MIS repository for real-time data access and automate data collection from various sources
(APIs, databases, spreadsheets).

3 Documentation

• Develop scalable and transferable process flows across departments with SOPs and checklists for consistency.
• Maintain decision logs and periodic audit reports for accountability and transparency.

India’s CRDMO Market: Building Momentum Through Operational Excellence 23

6. Conclusion
While most Indian CRDMO players are still sub-scale compared to their global and even some Asian peers, there
is a significant opportunity to create many USD 1 billion topline players in India. The industry as a whole will grow
fast, but individual companies will chart their own path. This path will depend on their ability to fully leverage the
ongoing tailwinds, and on sustaining execution excellence to win client trust. The next two years are very critical for
organizations to standout amidst global competition and start a flywheel that will ensure further scale and long-term
success.

At YCP Auctus, we are closely working with India CRDMO players to drive execution excellence initiatives across their
value chains, functions, and businesses. We are closely observing the ambition to be globally competitive and are
excited to be partnering with some very capable executives. Reach out to us if you would like to discuss how we drive
change on the ground and drive sustainable impact.

India’s CRDMO Market: Building Momentum Through Operational Excellence 24

Authors
Mridul Karkara
Partner
Mridul is our Partner based in India focused on serving Healthcare and Life Sciences clients
globally, including the US, EU and SEA. Over his 15+ years of experience, Mridul has worked
across the sub-sectors of the industry including Big Pharma, Biotech, CDMO, Medical Devices,
Healthcare Services and Digital Health. His project experience spans across corporate growth
strategy, launch execution support, operational performance improvement and supporting
pre-deal M&A activities.

Aishvarya Agrawal
Director
Aishvarya has extensive expertise across the pharmaceutical, contract development and
manufacturing organization (CDMO), and health IT sectors. With over 8 years of experience,
Aishvarya has supported clients in enhancing operational performance and productivity,
developing strategic initiatives, and navigating merger and acquisition (M&A) activities. Prior
to joining YCP Auctus, Aishvarya served as an investment banker at Axis Capital.

India’s CRDMO Market: Building Momentum Through Operational Excellence 25

Authors
Shubhangi Jasoriya
Team Lead, India
Shubhangi has ~5 years of consulting experience collaborating with clients from
pharmaceutical, financial services, and IT sectors. She has supported a range of mandates
including market entry, corporate strategy, market research, and the management of strategy
offices and PMO. She has contributed to projects across Southeast Asia, including in India,
Philippines, Thailand, and Hong Kong. Prior to YCP Auctus, Shubhangi has worked with
Mastercard (Data & Services) and ZS Associates.

Aryan Khandelwal
Analyst, India
Aryan is an analyst with YCP Auctus, specializing in strategic advisory across deal strategy,
operational optimization, and data-driven decision making. He brings a strong foundation
in corporate finance, enabling him to drive value creation through rigorous financial analysis
and strategic planning. He holds a Bachelor of Business Administration degree from Shaheed
Sukhdev College of Business Studies, Delhi University, India.

India’s CRDMO Market: Building Momentum Through Operational Excellence 26

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