Davos 2023: Serum Institute To Focus On Non-Covid Vaccines As Risks Recede, Says Adar Poonawalla
"I am really excited this year because I can get back to the non-Covid vaccines," Poonawalla said.
Even as China battles a fresh onslaught of Covid cases, India remains in a “very good position,” according to Adar Poonawalla, chief executive officer at Serum Institute of India. "India is very secure," he said adding that over 90% of the population is fully vaccinated.
“I mean, look at our genome testing in healthcare and testing infrastructure, which is now in place. No one had all this in 2020 and you have got stronger health systems, hospitals, more trained healthcare workers, so we are in a very good position, come what may.” Poonawalla told BQ Prime’s Niraj Shah on the sidelines of the World Economic Forum in Davos, Switzerland.
He also said the Serum Institute has now shifted focus to continue developing other vaccines that had taken a backseat due to the pandemic. The company expects to rollout the malaria vaccine in Africa by the end of this year. The HPV vaccine to prevent cervical cancer in women will be rolled out this year as well. The company is also working on vaccines against dengue and five strains of meningitis.
“I am really focusing on the NBFC operations very strongly,” Poonawalla said about the Poonawalla Fincorp business. “We are more in the retail financing part, we are not giving infrastructure and real estate loans, large ticket loans, only smaller ticket loans. I think it's safer there not very long term, three years maximum four-year loans. So, I think it's a good niche to be in.”
Poonawalla is also hoping to expand their general and health insurance business. “Health insurance is very interesting because it ties-in well with our story of being healthcare providers,” he said.
Speaking about the Poonawalla vision fund, he said, “we are getting SEBI approval soon for that, it’s a category two fund,” and will consist of start-ups along with listed companies. They will infuse their own capital into the fund and will opt for fundraising once they establish a track record.
“Investing in India is at the heart of our corporate strategy of the group,” he said.
Watch the full conversation here:
Edited Excerpts From The Interview
The world seems to be getting back to some concerns because of what's happening in China. How do you look at that situation?
Adar Poonawalla: The world is concerned before I think fully reinvesting in whether its supply chains or other things. Of course, India is the best choice because, you see what's happening in Russia and China and other parts of the world, but India is very secure.
Firstly, I must just reiterate that point because of our excellent coverage, thanks to PM Modi and the government, we are one of the highest covered countries more than 90%, our vaccination track record, given such a large population.
Having said that, recently Covovax our vaccine, which is very effective against the Omicron and other subvariants, is now licenced, so those who want to take a booster, the elderly, the vulnerable, or anyone who is travelling, it's available now and I really think that's something to look at.
If you feel still a bit uneasy, looking at what's happening, and coming back to the China point, we all hope that they get over their issues as we are trying to even offer our vaccines to them. Vaccines from the west, vaccine made in India, because the sooner they take a good booster vaccine, it will certainly help them curtail infections, hospitalisations, and deaths. We are hoping that they appeal to that and let's see what happens.
You reckon, it's a bit of a unique case that China is going through.
Adar Poonawalla: It's not unique, it's because of the policy decisions they have made of a zero-Covid policy. So, you didn't have a lot of infections early on, building of herd immunity, even the vaccine choices that they had and made, they refuse to take some of the other vaccines from the west and you can see the contrast where we are compared to them.
India is safe, you reckon, from Covid perspective?
Adar Poonawalla: Yes, and especially with all the measures and even the recent precautions the government is taking, I think we're in a very good position.
There was a lot of chatter around how India will experience a Covid wave mid Jan.
Adar Poonawalla: It also goes in line with the lessons from the pandemic and how well we are prepared for future outbreaks and pandemics. I mean, look at our genome testing in healthcare and testing infrastructure, which is now in place.
No one had all this in 2020 and you have got stronger health systems, hospitals, more trained healthcare workers, so we are in a very good position, come what may. In the winter months, you do see a spike in flu cases, influenza, pneumonia, Covid. That's to be expected, it happened last year as well.
You are truly a global company, very widespread, with a lot of usage of global supply chains and supplying to the world as well. It's not a particularly easy world to do business, is it easing up a little bit from what it used to be?
Adar Poonawalla: Yes, we have also made some strides and acquisitions, in fact, in supply chain. We no longer want to be dependent on importing a lot of raw materials, syringes, vials. We acquired a company, 50% stake partner with Schott Kaisha now it is called Schott Poonawalla, the Germans to make vials and syringes in India, which is what they were doing, and we have invested with them and so many other areas.
We have never imported items from China. We believe in PM Modi’s self-reliant strategy for India. I think it's better in the long-term and whether it's the climate change, pharmaceuticals, the transition to be self-reliant is accelerating because of the disruptions that we are seeing in supply chain. So, India has learned that we need to be able to manage on our own and we are making great strides there.
So, you are able to do a lot of things maybe the entire sector isn't, is there still a lot of talk that despite and rightly so, that we are trying to do a lot of things in house, but it takes time.
Adar Poonawalla: It will take a few years; certainly, pharmaceutical industry has been dependent to a certain extent for API’s (active pharmaceutical ingredient) and raw materials from China. I have talked to some of my colleagues there and they also are starting to make their own API's and everything in India. It takes a little time.
Maybe the cost of some of these drugs may increase as a result but it's all good in terms of a long-term investment in the India story, and that's the direction we are all wanting to go in.
But a large portion of self-reliance is some years away
Adar Poonawalla: No, you have already seen the change; I think in two to three years you will see the pharmaceutical industry, at least, can’t talk about other sectors, to be fairly self-reliant.
What about Serum’s growth prospects as well, you have tons of things happening within your company, can you tell us a bit about it?
Adar Poonawalla: I am really excited this year because I can get back to the non-Covid vaccines, vaccines where we have been working on our own and with partners for many years.
For example, the rollout of the malaria vaccine at the end of this year for the African continent. This is in partnership with the University of Oxford, it's completed its phase three trials. It's 77% effective, which is a lot more than the existing malaria vaccines in the market.
We have also the HPV vaccine to prevent cervical cancer in women, which we hope to roll out in the first quarter or whatever of this year. So again, in small quantities and in large quantities next year.
Then we have got dengue vaccines coming about in two to three years. We also hope to rollout a vaccine against five strains of the meningitis, bacterial disease that plagues mainly the African continent.
So, many vaccines that we are hoping to rollout and don't forget, we have been working on these for five to seven years. That's been the traditional development time of vaccines.
What's also exciting is that the environment in India that now exists, again thanks to the Modi government and PM Modi’s push on this is that we be able to develop newer drugs innovation in India and vaccines much faster regulatory clearances, streamline procedures and things like that.
So, we are really excited, it's an exciting time to be a company working in India and investing in India and that's been also the shared talk and comments with everyone here.
The India chatter is loud here, what have been your meetings like?
Adar Poonawalla: Everyone understands the quality and scale at which India can operate. There are very few countries in which you have seen that kind of success, whether it's in auto, steel, pharmaceutical, so many sectors, IT services.
So, there isn't much competition to India if you look at it that way or even on the promenade, you have so many States and private sector companies from India, showcasing what we are doing. So, it's a great story overall.
Talk to us about Poonawalla Fincorp. Not that it's not a non-competitive industry, there's so much demand.
Adar Poonawalla: I don't look at it as competition, I think the ecosystem right now with digitisation, which has taken off to a different level now in India, it's so much easier to have a digitised NBFC and run that in terms of dispensing loans, offering other services collecting the money. So, I am really focusing on the NBFC operations as well very strongly.
I think India has unlimited potential because with the growth that we are talking about, professionally and personally, that everyone is going through, the need for credit is going to keep growing along with that growth, to match that growth.
We are more in the retail financing part, we are not giving infrastructure and real estate loans, large ticket loans, only smaller ticket loans. I think it's safer there, not very long term, three years maximum four-year loans. So, I think it's a good niche to be in.
We have also got a general insurance and health insurance business, which I hope to expand on as well. Again, health insurance is very interesting because it ties-in well with our story of being healthcare providers, and we want to integrate that somehow and provide affordable widespread good health insurance to our citizens in India. So, these are the three areas that I am focusing on Serum, insurance and finance.
You are on record saying as a private investor, one comment of yours was that in real estate, the stock market and other things you invested close to Rs 2000 crores, talk to us about it.
Adar Poonawalla: A lot more than that. We are launching the Poonawalla vision fund, we are getting SEBI approval soon for that, it's a Category two fund. Well, start-ups and privately listed companies along with listed companies, so it's going to be a fund having all of that, initially with our own capital and then we will raise capital from others as we build up the track record as well.
At least a billion dollars over the next few years. Again, investing in India is at the heart of our corporate strategy of the group. So, this is in line with that.
I was attending a PwC CEOs survey yesterday and they mentioned that the only thing that Asian and Indian CEOs are afraid of, is not about what's happening to global growth and otherwise, but if they don't innovate, then how relevant they would be by the end of the decade. Any thoughts on It?
Adar Poonawalla: Innovation is the heart of growth. If you don't innovate, you can't just be a generic copycat. So, you have to be able to innovate and reinvest all your profits in your core business.
Serum is always invested, reinvested 90% of whatever profits it makes in its own core business. That's why we were able to build the capacities and capabilities that we have today.