- Morepen Laboratories secured a Rs 825 crore multi-year CDMO mandate from a global pharma company
- The mandate marks Morepen's first order from a regulated market and signals strategic repositioning
- Supplies under the deal will start within 4-5 months and execute over 12-15 months
Morepen Laboratories has secured a multi-year Contract Development and Manufacturing Organisation (CDMO) mandate worth about Rs 825 crore (around $91 million) from a leading global pharmaceutical company. The deal, announced earlier this week, underscores the drugmaker's strategic pivot towards long-term, regulated-market partnerships, according to its Chairman and Managing Director (CMD) Sushil Suri.
“This is the first mandate from a regulated market and it is just the beginning of the new positioning of the company. The idea was to get a more structured customer programme, instead of a spot business, which we have learned over a period of time,” he told NDTV Profit during a conversation on Feb. 26, 2026.
The new Rs 825 crore mandate validates the company's technical skills, ranging from Quality Control (QC) and patents to Drug Master Files (DMFs).
“We expect the pipeline to grow as we continue. So, this is a big change for the company,” he said.
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Supplies under the mandate are expected to commence within the next 4-5 months, with execution scheduled through Q1 of the following financial year, subject to customary operational and regulatory processes, the company informed the stock exchanges on Feb. 23.
The filing added that “one of the most significant” CDMO mandates in the company's history, the new order underlines the drugmaker's increasing global manufacturing footprint. The order is expected to be executed within a period of approximately 12-15 months from the date of award, as per the stock exchange filing.
Suri explained that CDMO engagements typically take several quarters to materialise, as they involve extensive regulatory, technical and commercial discussions.
Unlike quarterly or spot orders, global pharma companies prefer long-term supply arrangements that offer stability, resilience and continuity, particularly amid ongoing geopolitical and supply-chain uncertainties.
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“The major thing you have to understand is that CDMO programmes are not spot programmes like our quarterly results. So, big companies work for long-term supply chain, they work for resilience, they want stability, and of course, they want continuity,” the top executive noted.
A typical cycle from initial discussion to securing a CDMO order takes 15 to 18 months, given the complexities of chemistry, regulatory compliance and infrastructure audits.
According to Suri, margins should improve further as revenue quality changes, with a higher share coming from predictable, long-term contracts.
“Once the revenue quality shifts from a spot business to a long-term customer-driven programme, which is more structured, then we get better visibility of supplies and revenues. And of course, we get better visibility of the cost also. So that way, I would say the margins are the least of the worry today,” Suri said.
Exports already account for about 70% of the company's active pharmaceutical ingredient (API) business, with domestic sales dominating its medical devices segment.
Over the next three years, export exposure in APIs could rise to nearly 80%, as Morepen Laboratories prioritises higher-yielding global contracts and scales back lower-margin domestic business.
“In API, 70% of the business comes from export and devices, of course, is 99% domestic only. So, within the API business, today export is 70%. Going forward, I would say it may go to 80% in three years because with this long term CDMO programmes, our exposure to the global regulated market should increase,” the top executive underlined.
Shares of Morepen Laboratories were trading 0.2% higher at Rs 44.27 apiece on the NSE at 2:27 p.m., while the benchmark Nifty50 was down 0.18% at 25,435.4.
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