Indegene was founded in an era when VC money was not flowing. Manish talks about Indegene’s journey of sustainable scaling, starting with helping pharma companies with content and training to eventually becoming the full-stack behemoth that it is today with a few acquisitions along the way.  This episode is a masterclass in sustainably scaling a global business!

Know about:-

• Medical representative as a service
• Difference between CSO and a VSO
• Past acquisitions
• Trends in pharma post-pandemic

Read the text version of the episode below:-

[00:00:00] Manish: My name is Manish Gupta. I’m one of the co-founders and CEO of Indegene.

[00:00:03] Manish: So I was born long, long time back in 1972 in Lucknow, my father was a scientist. He retired from a place called CDRI, the Central Drug Research Institute, he was the director of CDRI. When he retired

[00:01:45] Manish: my dad went to the United States to do Postdoc, for a very brief period of time he was in Palo Alto, then moved to Boston.

[00:01:53] Manish: He was in MIT doing his postdoc with actually Professor Har Gobind Khorana, who was one of Indian Nobel Prize winners in genetics. Came back in 1978 back to Lucknow, I went to the school in Lucknow called La Martiniere. I finished my class 12 in 1990. Then joined IIT-BH U, did my mechanical engineering from there. After that I decided to do a MBA went to IIM Ahmedabad and did my MBA over there, I passed out on 98. Joined a bank actually right after that in ANZ Grindlays.

[00:02:19] Akshay: ANZ Grindlays was a very hot pack that time. They had recently entered India. They must have been like a day zero day company.

[00:02:26] Manish: Yeah, absolutely. So they were way up. I got a job over there and very quickly after eight and a half months joined INFI, and I NFI was very small firm. Right.

[00:02:35] Akshay: You must have been directly working with the co-founders at that time.

[00:02:38] Manish: Not really. They were still a large firm, and for five days after I joined they had their listing.

[00:02:42] Manish: They had just cost a hundred million dollars, I think 3-4,000 people. So it was a well known successful firm by that but started talking to some of my co-founders, one of them who was senior of mine from IIM Ahmedabad a nd he was a medical doctor, Dr. Rajesh Nair.

[00:02:57] Akshay: Where was he working?

[00:02:58] Manish: So he was working with his assistant was with Sarah by labs in pharma in Ahmedabad he also had opted out of placement first from campus.

[00:03:06] Manish: I think he, again, he was also not designed to work in corporate, So started talking to him, bunch of others.

[00:03:11] Akshay: What was the the trigger, that you said, okay, let’s quit and start this?

[00:03:16] Manish: One was there is that, going back to the impatience things, from my perspective, there was restlessness, the whole thing of doing things step by step, I just wanna do much more than what I was doing in life, Over there. And you realize that in a corporate setup after some point in time, that becomes very difficult to do I would say that was a bigger trigger. And then second is that again, 99-98 to 2000-2001 the general environment had entrepreneurship in the air,

[00:03:39] Manish: a little bit. There was a whole thing of starting up. It was a, I would say.

[00:03:43] Akshay: This was like USinspired.com.

[00:03:46] Manish: Yeah, absolutely. So that a lot of that stuff was going on. See, when you are 25-26 like most of the people, the opportunity always is you think that, you know what, you’re gonna change the world, our thing was that healthcare has many, many inefficiencies, And you could solve them by bringing medical, healthcare and technology expertise together.

[00:04:03] Manish: Our thesis was a tech guys don’t understand medical domain, which is a very nuanced domain, it’s not as straightforward as many of other things, the risk are much higher if you go wrong. And the medical guys, of course, don’t understand the technology domain, and if we could build a firm, this is the DNA of really interviewing these two capabilities together.

[00:04:21] Manish: We could solve various problems in the healthcare. And WR inspired by a bunch of things happening in the US that point of time. There was a device called Palm Pilot, which was become very popular.

[00:04:30] Manish: I don’t know if you’ve ever seen that. And by the way, very popular in the medical area.

[00:04:33] Akshay: Doctors would keep their notes on it and

[00:04:36] Manish: Absolutely, not only notes you can actually, for example, if you want to prescribe a drug, you can pull out and see drug interaction,

[00:04:42] Manish: our thought was you can get your lab report right there, on the Palm Pilot. We can make these connections. So there are a bunch of things we thought we could do so there’s a company called Heathyon, which had got massive funding in the US, Jim Clark, who was a legend so they’re bringing patient records, insurance, bunch of things together, and Dr. Community was one of the facets.

[00:05:01] Akshay: Like a combination of drug related content and patient records like patient record digitization.

[00:05:07] Manish: Yeah.

[00:05:07] Manish: So the drug related content, actually not only drug related content, it was disease related content, also disease and drug. So to the physician, and just drug related content would not make you relevant to the physician, physicians our whole thesis was that you’ve gotta become a one-stop shop of information and knowledge for them. And they learn from various things, they learn from peers, they learn from journal articles, they learn from various cases which have been in different parts of the world and in the country, So how do you facilitate information around some of these things?

[00:05:36] Manish: And of course, drug related information, but that was a very small piece, the drug and probably the easier part, but how do you build disease related stuff was the bigger theme. And our thesis was that once you do that, then you can bring in pharma companies in the, into the fold,

[00:05:52] Manish: they would wanna partner with you. You get pharma companies to physicians, and do various things, market trials, bunch of things once you have, so our third step was getting labs and hospitals onto the chain. That was a broad plan, And we raised, some of seed capital in 2000 based on this plan.

[00:06:09] Akshay: Wow. Was there really an ecosystem where you could raise? Or like.

[00:06:12] Manish: There were a couple of VC firms which had got started in India. And especially the international ones, there was obviously ICICI ventures an Indian firm,

[00:06:19] Manish: and then you had few Indian state firms which were there. But there were two firms. One was called EVentures. I don’t know if you remember the name, E Ventures was a firm and, but the firm which invested in us was called Land Factory. L and Factory was a British origin VC firm, and they set up an India shop.

[00:06:33] Manish: So we were the first investments in India, investment in India from Land factory.

[00:06:36] Akshay: Amazing. And how much did you raise?

[00:06:38] Manish: It was 350K or 400K, which by the way, was not even large amount of money, even those days, we raised that money started building an executive on this plan.

[00:06:47] Manish: So the first thing which we did is the tech platform and a content engine, which meant not only from a tech perspective, but how do you source content right in the first place, which is relevant to physicians.

[00:06:58] Manish: So we went out and built, and this was first focused on India, Because in 400K you couldn’t have done much more than that. So we did partnerships with a lot of the leading academy centers in India, the likes of AIMS, PGIMER, some of the private hospitals. We built relationships with lot of the leading physicians in the country. What we also did is there were multiple medical conferences, especially the national level ones, which happened. We took content rights for all of them, we signed up those deals. So we tied up the content ecosystem. We build an internal team to develop content. We build a technology team to make sure this content can be processed and updated very quickly to be used to physicians while still topical. And then entirely we started working on all this lab, hospital kind of stuff I had spoken about. How do you build connect these people?

[00:07:47] Manish: So that’s what we are executing on, but we are doing things in a systematic, I would say, prudent way. That’s when somewhere in 2000 by 2000 end or so, you could start seeing the market turning south, or mid to that’s when the things, when things start going south from a market sentiment perspective .

[00:08:05] Akshay: Did you have enough money at the bank at this stage?

[00:08:08] Manish: So by this point of time, you were pretty much running out of cash, We had a few lakhs left .

[00:08:12] Akshay: And what was your monthly ball net or like your payroll?

[00:08:15] Manish: It wasn’t much as you can imagine, if you could stretch 400,000 for two years, so that, that wasn’t really much. We had started making some revenues from pharma. By the way, as still remember, in 2001 March, we closed 25 lacks of revenue, this was pretty much first year of real operations.

[00:08:30] Akshay: So this would mean you had traffic,

[00:08:31] Akshay: like the only way to make revenues if you can monetize traffic.

[00:08:34] Manish: So it was not necessarily traffic. What we started doing is that we started seeing this writing on the wall and nobody was play willing to pay for the website. That was very small amount of money.

[00:08:43] Manish: But this whole conference content, we started selling to doctors directly first. That was one stream.

[00:08:48] Akshay: And what do you mean by conference content? Are these recorded videos or is this like

[00:08:52] Manish: The recorded video, nobody would buy.

[00:08:54] Manish: But what we would add is medical education on top of that, Discussions on prominent physicians on a particular case, Or some content which you would’ve got from abroad, one of the centers like Hopkins, Cleveland, what are those type of places?

[00:09:06] Manish: We started using that a mix of video and text.

[00:09:08] Manish: Absolutely.

[00:09:09] Akshay: And you were selling like in CDs?

[00:09:11] Manish: That time the only thing thats old was CDs we started with online, but relies online is not gonna go anywhere. S gonna be good to show off. Yeah. And, we had done our first CME online, Continuing medical education program online.

[00:09:22] Manish: We had done something on tv. By 2001, it was very clear to us that either we pack and go back home and look for jobs or do something completely different. Or the last option was that you truly monetize what you had and monetize was not in just generating revenues, you had to generate profits and cash flows, over here, because depending on external funding was not going to be easy. And we decided that we will just do the last that we will very quickly monetize whatever we have built. And it, we had seen early signs of pharma being a place where we could do this,

[00:09:53] Manish: the biggest thing was far, we started off with selling to doctors directly. That, listen, you might have, there’s no way you ever attended all the sessions.

[00:09:59] Manish: There are tons of other things which are happening in your area. Here is a product you can buy for that, and good part is that given what we had built earlier on the website doctors, we had started building credibility with doctors anyway, In 2000, Lancet, which is one of the most reput medical journals globally, had covered us as one of the most credible sources of information in this part of the world. So that was a good thing, which we obviously used to leverage a lot, over here, given out the our these relationships with medical institutes. So doctors there’s some bit of credibility, I won’t say, still early days, but using that we could sell to doctors.

[00:10:32] Manish: Now, what really happened is doctors don’t like to pay.

[00:10:36] Akshay: Nobody in India likes to pay for content.

[00:10:38] Manish: Now when pharma saw that, you know what, here’s a stall in a conference and there’s a queue of doctors who are paying advance for content, they will get six weeks later or four weeks later, what the hell is going on?

[00:10:51] Manish: So that’s, they saw that, and then they came back, pharma started coming to us and saying, listen, instead of doing this selling to doctors, why don’t you sell this to us? Over here, what we will do is use our reps to distribute this content,

[00:11:04] Manish: and all they wanted is some branding and all that stuff, of theirs, which was a much more doable business model for us, over here. So that’s one thing which we started, selling to pharma. The second thing is that given that we had this medical expertise, given that we had relationships, many times we start pitching to pharma that, you know what, if you’re gonna launch a product or if you’re getting into an area, pharma companies were doing what is called market development,

[00:11:27] Manish: for your drug to sell well, you need to make sure that doctors understand the disease area at itself. There’s enough and more diagnosis happening, How do we educate physicians about this whole thing, So we would start developing content, And programs to be able to do all this effectively, And on one hand, we were leveraging the conference thing. Other hand, we were doing Denovo content to solve various problems, right?

[00:11:47] Akshay: What is Denovo?

[00:11:48] Manish: From scratch, we would developed, for example, if there was a there’s something which we had done, is that there’s a once a day antibiotic being launched in India.

[00:11:55] Manish: There were none that are point of time, demonstrate that with Indian population that you know what this has the same efficacy or better efficacy, then what is existing in the market. So doing trials on patients, collecting data, then generating content from there.

[00:12:08] Manish: I remember a program we had done for educating doctors how to diagnose DVT, Deep Vein Thrombosis, in the first place. Over here you realize that deep vein thrombosis was becoming prevalent in the country. But doctors don’t know to diagnose it well enough, and if they were to diagnose it, then obviously they gonna write a prescription on that. From a pharma perspective, it was important that, and that’s what market development was, If you’re a forward-looking pharma company, you would help the whole ecosystem understand this better. So we do start doing that for many disease areas.

[00:12:35] Akshay: You would do like workshops or maybe you had some sort of literature that you were mailing out.

[00:12:39] Manish: So combination of all these, combination of all these, and multiple channels. You’ll have a website. You will still do probably a CD, you’ll do workshops, we will still have some of these computer based things,

[00:12:51] Manish: through the tech angle. And our differentiation was coming from there, There could have been people, small shops who could still do the workshops and all that, but we always bring the tech angle, from a, it was, I would say, more coolness, from a differentiation perspective.

[00:13:03] Manish: It’s not that pharma was really your doctors are buying the tech, but it differentiated any company doing this thing. So using that, we continue to build a business model. In reality, some of the tech part was getting underplayed, what we had started off as a tech muscle, was not being leveraged to the full extent,

[00:13:21] Manish: which was unfortunate for the next, I would say 3-4 years, that’s what happened. But to stay afloat and survive.

[00:13:27] Akshay: Essentially. You were running it like a services business.

[00:13:30] Manish: Yeah, absolutely. Absolutely. We were running it as services business and a very pure play services business with a very small component of tech.

[00:13:36] Manish: In this place. So we by the way, continue to grow on this. I still remember my, the first few years revenues. I remember after that I blank out. For example, this 25 lakh jumped to 2.2 crores. 2.2 crores jumped to 4.47, then that jumped to seven crores.

[00:13:51] Akshay: By, when was it seven crore?

[00:13:53] Manish: 2004-5 or so. So you could do 2001. 2002 was 2.23, 3 was 4.4. So 4 would’ve been 7, and we also had turned profitable, not great margins, but just profitable. But the challenge we always had is that we always charge stretched on cash flows, pharma in India didn’t pay on time,

[00:14:13] Manish: first of all, the payment terms would be bad. And this is intellectual property. First time they were buying at this level. This 60-90 days will become 180 days. And if you are paying out of your salaries, out of these cash flows, that was a problem. So as founders, for example all of us didn’t take any cash out for almost two years.

[00:14:31] Manish: Which was not an easy thing to do given the backgrounds we came from. And it’s not that we had long corporate stands, that we had massive savings, whatever was, there had been initial burned initial days in the company itself. So that was a big stress.

[00:14:43] Akshay: Tell me that name, Indegene, just a quick diversity here. What does it mean? Or why did you choose it?

[00:14:47] Manish: So it is a combination of bunch of things. This is my co-founder, Rajesh, who came up with this name Inde, India angle, we wanted to have an India angle had this biology thing you’re thinking of innovation always which is had the word indigenous. So playing with all these things, the name Indegene came in and sounded like a good name,

[00:15:04] Manish: But 2003-4, if you were stepping back and saying lesson where we are having fun, they’re working in the industry, growing, while we have all these cash flow issues, we are not clearly doing well financially, but we didn’t start the company.

[00:15:15] Manish: We, we, one of the biggest drivers for probably all of us definitely me, was to build an organization which stands out, just not one more vehicle to make some money, over here. That was no, that doesn’t mean that we don’t want do well financially, to build a company, which is well known in the long run.

[00:15:32] Manish: I think that’s the basics, it was also very evident if you wanna be servicing the pharma, US was 50% of the world pharma market, followed by five large European markets, in Japan. All this stuff. So we said, we just have to be there.

[00:15:45] Manish: We said we gotta be in the US. And this person who met us he was fascinated because of the reasons I just mentioned,

[00:15:50] Manish: we were really fighting it out. This, the pain sacrifices, all this stuff was very , very modest operation,, huge amount of frugality, that’s the only way to survive. In this whole thing and we got this advice that, what you’re trying to do, the healthcare space, it’s tough space.

[00:16:04] Manish: It’s gonna take some time. And first of all, you can’t have a dead investor sitting on your capital, over here. You’ll need some more capital. You’ll have to do all this stuff. Otherwise it’s gonna be a challenge, which made lot of sense. We started talking to and by that 2004, I would say things were getting slightly better.

[00:16:19] Manish: We decided to raise, try to raise money at that point of time, but we were slightly disillusioned with institutional capital, by what we had seen in that whole phase, of euphoria. So it almost like that you play the markets which was in contrast to what we were saying, we wanna build an enduring organization.

[00:16:35] Manish: So when we started talking to people, that was one option, but we were worried about that, So while we, and we were talking to probably everybody who had money in the country, sopping by the point of fund who could have invested. And we met this family office of one of the founders of Infosys, a person called N. S. Raghavan was one of the founders of Infi. He was the eldest in that full founding group. So he had retired in 2000 and he had set up his own family office. He was investing in a few companies here or there. Through some common friends, we got introduced to them. And NSR liked the broader space.

[00:17:04] Manish: He liked us as founders, and they decided to invest right.

[00:17:08] Akshay: What was the pitch like? Because you were a services business at that time. Like what did you pitch to N. S. Raghavan?

[00:17:13] Manish: So we said we could build a services business only or we call it solutions,

[00:17:17] Manish: to using technology and, but a global business that was a broad pitch in a differentiated space. And I think what you convince is that, if you think about it, the normal thing to do, even in 98-2000, was to start IT services firm. If you wanna become an entrepreneur, right? I live in Koramangala and I keep joking that every alternate street had a IT services firm.

[00:17:33] Manish: They’re pretty much the way where everybody wants to sell something online, over the last five years or now a SaaS product. So whatever is the flavor of the day that those days flavor, was IT services, but we decided not to do that, we thought we’ll build a specialized firm, which was not true at upon in time.

[00:17:46] Manish: Actually, it’s So there’s a massive capital restructuring.

[00:17:48] Manish: We did a fairly complicated one where we got all the old investors out, and they came and recapitalized the company with some bit of capital which we used to then start exploring the US markets more aggressively. But 2005 or so, it was evident to us that while US is definitely attractive market, very large market it was also, we are not the only smart guys who had figure it out.

[00:18:07] Manish: It was a much more competitive market. And that’s the time when pharma as a sector was extremely comfortable, when I say extremely comfortable, now, if you think about this is, this is a space or this is an industry, which by 2005-7 had just had a amazing run for decades, it had.

[00:18:26] Akshay: This was when Run Maxi was at its peak and Run Maxi used to do a lot of business in the US I believe.

[00:18:31] Manish: Yes. I’m talking about global pharma, I’m talking about truly global pharma. The reality is that from a revenue percentage perspective the generic was and still is a fraction, very small fraction of the overall industry. Today also, it is less than 10%, of the overall from a value perspective.

[00:18:47] Manish: That time probably would’ve been even smaller. So the global pharma industry was had a great run. If you think about it. They had solved many, many problems for humankind, our average life expectancy going up. I think life sciences played a big role, and now making that happen cause of the product patent.

[00:19:03] Manish: While you are taking a lot of risk initially, once you have successful products, you had entry barriers, and hence, you enjoyed a long run, over there, drug pricing, at least in developed markets, was pretty attractive. And hence the margins of life science companies was pretty high,

[00:19:17] Manish: if you compare a life science $50 billion company with a FMCG company of that size, the life science companies was double the, at an origin level, it was double, and the market cap was double. You are growing well, because of various secular trends, and then all of a sudden you show up saying that, you know what?

[00:19:35] Manish: You have this fragmented way of doing marketing or medical we have a better way of doing it. You’ll save some money, guys won’t care, so we realized that to break into this market, it’ll be better that we have a US front end, otherwise going build, take a lot of time.

[00:19:48] Manish: So we raised some capital and did an acquisition in the United States 2005. So we acquired a company almost twice our size. And we used that as a front in the US and this team, a company had raised capital from Maiky Global investors in the United States had a fully running management team, which were very attractive to us,

[00:20:04] Manish: that they could run the business and we would add value in various ways we had identified, and we can continue doing many other things. That was a broad thesis of this acquisition. Parallely we are expanding into Europe, Southeast Asia. So the whole focus was using our capabilities to become more global in nature.

[00:20:19] Akshay: And what was this company doing, which you acquired?

[00:20:21] Manish: So they were doing some of the things which we were doing over here, the whole medical education piece using content, but they also had a business and training sales reps on scientific and medical issues, not the soft skill training. You think about it, when, if you wanna launch an oncology drug,

[00:20:36] Manish: or a high end cardiovascular drug or a diabetes drug. The cardio reps to have conversations about the disease and the drug, with these super specialists, how do you train them to have those intelligent conversations around science? And when you are talking about markets with product, patent was there it’s finally signs with sold,

[00:20:55] Manish: your contrast in context of the disease areas. So that whole disease material is what we would design. And this company had its own learning management system. It had many tech pro things which could be used, simulations of practices, bunch of things like that, the tech angle was very strong.

[00:21:10] Manish: Interestingly, one of the founders and CTO of this firm, we acquired 1,005 is a global CTO right now sitting out of LA.

[00:21:18] Akshay: So they had what in those days used to be called computer based training. Like what today we call EdTech.

[00:21:23] Manish: Yeah absolutely.

[00:21:25] Manish: In this domain, as I said ready made learning management system, plus bunch of other tools which could have been used for simulations, as you said, EdTech kind of thing for this area, so we acquired them now as things would have it, and that’s when I joked that we had a tormented childhood, which shaped us,

[00:21:40] Manish: as a company. This company, we figured out that we missed some things, intelligence, and it was a combination of inexperience and bunch of other things that there were issues in with many, first of all, it was using money in the first place, which we knew, but we thought we could turn that around over here.

[00:21:53] Manish: But on top of that there were delivery issues with some big clients, which were not identified during the diligence process. , it looked like they’re going to lose revenues with those clients, and that happened by the time we could even intervene.

[00:22:06] Akshay: The invoices got disputed, basically.

[00:22:08] Manish: Not invoices getting disputed. Clients were not happy with the quality levels being delivered, the price point, bunch of things. So there’s lost business in the next year or with essentially meant the burn went up, they were losing money. The burn under vis-a-vis art thesis of that delivered to do things offshore stuff,

[00:22:24] Manish: build capabilities over here, bring some of our tech which we had developed and so we had a three year roadmap of how we’ll leverage this company and continue to grow while bringing out costs. But that had to be compressed to months.

[00:22:36] Akshay: You would shift the cost centers to India so that

[00:22:38] Manish: yeah, over, over time.

[00:22:40] Manish: But those capabilities doesn’t exist in India. That was a issue. So we had to build those capabilities in India, the first place cause nobody was doing this out of India at that point of time and what we also realised that the rigor required to service global pharma customers, from a compliance perspective, all the stuff FDA was in a completely different league,

[00:22:59] Manish: required compared to what was required over here. But we had offices in Bangalore plus Bombay and Delhi during that time. Bombay and Delhi. Cause that’s where a lot of the pharma action was in India.

[00:23:10] Akshay: Okay, so those were sales offices?

[00:23:12] Manish: Actually, not only sales offices, a lot of delivery also happened over there,

[00:23:14] Manish: close to the customer. And when this US thing started happening we realized that, this three year timeline has to be crunched in two months, six, nine months or whatever it is. Otherwise, we’ll end up earning a lot of cash. So we pretty much had to let go the entire management team,

[00:23:28] Manish: in the United states take over running this company on a day-to-day basis. Build lot of capabilities over here in QuickTime to be able to change the course. We also realized that this Bombay, Delhi thing was an issue because we had to have certain quality standards over here where, whereas Indian while we decided that we will have the same quality standards across the board, even though that meant lower margins but were there a bunch of practices in terms of how you develop content and all this stuff which were just not gonna sit well with global customers and then having two different processes, different cultures just didn’t work.

[00:24:02] Manish: So we shut down our Bombay, Delhi offices, centralized delivery in Bangalore built lot of global systems, in terms of quality.

[00:24:10] Akshay: Did you lose business in India by shutting down those offices?

[00:24:13] Manish: Honestly, I don’t remember. Also because I didn’t care at that point of time. Cause the numbers were very different.

[00:24:18] Manish: And not only US, we started winning in the Europe, and but all these were global customers, Very, very large companies who are continuously, even before they start working with you, they’ll be three day audits of your processes, systems and all that stuff. So we said we can’t have our energy distributed and focus.

[00:24:34] Manish: We service our India customers through Bangalore. I don’t think that made such a big impact, by the way, over here, I think the bigger reason for us to continue in Bombay Delhi, is that most of the talent when we started off was available in those markets for the Indian market,

[00:24:46] Manish: and rather in disrupting it was easier to hire talent if you went that way. But then when the hard calls had to be made, we made those hard calls, and invested more in training and development. So we invested heavily in our quality processes, people, processes, as a firm, very early on,

[00:25:01] Manish: as in 2004 of when we started to going to the US we set up a separate business excellence team, right? As a overhead, which was not easy when you were a seven crore revenue company, I’m running on your cash flows. There we set up our HR practices, all this stuff in a fairly robust way, vision to do training and development, hiring the best people, bunch of things like that,

[00:25:18] Manish: and training and development was difficult because this domain did not exist in India, so we just couldn’t hire experts over here. So we had to move, get people from the United States to train people over here, especially in things like medical writing, medical illustrations, bunch of things like that so it was a pretty, I would say a rough period,

[00:25:33] Manish: we went through because there was a cultural thing also, right? we learning our sales, how to service this market. Then there was obviously issues between teams, which you had to manage the cash flow issues, burning cash, turning that around, letting off, letting people go.

[00:25:46] Manish: And at the senior level in the United States, cause we had to take control this thing. So by 2008, nine or so, we were a nice little business. I forgot the exact revenue numbers, but I would reckon it’ll be that nine-ish million dollar range, broadly profitable generating cash, having some good customers, right market names, in a more project by project business type of format and stable teams.

[00:26:07] Manish: That’s where we had reached after a lot of hard work and pain and that’s when we start back and again, ask the question, where do we go from here?

[00:26:13] Akshay: In india, you were doing content plus distribution. Like you would create the content and you would also distribute like through CDs, through letters, through workshop, seminars, etc.

[00:26:24] Akshay: For your global business, was it the same? Were you also, because in India you would’ve probably built a database of doctors with their addresses so that you can mail it across to them

[00:26:33] Akshay: and so on?

[00:26:33] Manish: No. So that distribution, while we had built a database and all this stuff, the reality was being done by reps.

[00:26:38] Manish: In pharma, by 2002-2003, our model had pretty much become all pharma. This doctor direct thing. We had I would say pretty much backed out of by that thing.

[00:26:46] Akshay: Your deliverable to a pharma company would be just the content or content which is produced, say in the form of CDs and books and brochures?

[00:26:56] Manish: Produce, complete end-to-end ready to be distributed. Irrespective of the channel, irrespective it’s the CD, irrespective of whether it’s online medium. Those are the things that is being used. That point of time in the US it was on online,

[00:27:07] Manish: pretty much across the board, we would, give you an example of one of the market engagements we had done for one of the top five global pharma companies that they want to launch. It wasn’t launch actually was they want to do, differentiate one of their oncology products,

[00:27:21] Manish: and use the way they want to do it as build what they called a virtual oncology center. So think about online format. If you as a physician go in, there is a patient who walks in. And that is being simulated, in the 3D type of thing when people are on meta and all that today,

[00:27:36] Manish: without the underlying tech and plumbing, that’s pretty much what is happening at that point of time, a patient walks in and then the doctor ask, okay, so what is your problem? So the patient will present their symptoms, here are the issues I’m facing,

[00:27:49] Manish: doctor will ask a few more questions, right? and you can ask questions, as a doctor, if you’re a doctor attending that you can ask questions, the patient is gonna answer that. And the backend programming has done, been done with various scenarios, so we would’ve developed this chat chatbot.

[00:28:01] Akshay: Yeah, absolutely.

[00:28:02] Manish: And, but that’s getting recorded. We would’ve built the backend database with well known oncologist, literature survey, bunch of things like that. At the back based on that, you do a provisional diagnosis, based on the provisional diagnosis, you as a physician get feedback about what you have done within order test,

[00:28:17] Manish: and then how you order test. You get feedback on that because it’s a cost of ordering tests, especially when you’re talking about the United States, That how accurate based on this for your test, you get a test results based on that you do you finally do the final diagnosis and do prescriptions,

[00:28:32] Manish: you get on that.

[00:28:34] Akshay: And the delivery was through streaming cloud based?

[00:28:38] Manish: Yeah. It was streaming. Yeah, absolutely. Absolutely right. So we started on that piece with the pharma, and we were doing well in this whole area. We had built a delivery capability in India. Scaling was easy for us, scaling up and down, costs were definitely more competitive. And we had a US front end,

[00:28:53] Manish: which we had built. So customers were comfortable. Otherwise customers are not comfortable offshoring some of these kind of things at that point of time.

[00:29:00] Akshay: The US company became like the parent in a way or it is a subsidiary.

[00:29:04] Manish: It’s a subsidy, it is still a subsidiary.

[00:29:06] Manish: The holding and parent company is still India.

[00:29:08] Akshay: So, yeah, 2009 you were at nine 10 million ARR. And you were again in that questioning phase of what next?

[00:29:14] Manish: Yeah.

[00:29:14] Manish: So when we were in that questioning phase, primarily, what was going on is that the pharma industry was going through big churn.

[00:29:20] Manish: If you remember going back, I told you that this was the industry which had a great run for decades, but when you have a great run for decades, one of the fall backs is that you get some excess fat in the system, that was evident. But for a long period of time, you don’t care about it.

[00:29:32] Manish: Who cares, if you’re doing well still markets are rewarding you, then it doesn’t matter. But by 2009, there are a few things that are happening. And the few things were that it was evident that lot of companies will lose patents on some of their key products, so close to 200 to 250 billion dollar worth of also going off patent.

[00:29:48] Manish: And when they go off patent, you lose 90-95% of that revenue. Earlier, that pipeline was filled by new products, but that was not happening at that point of time at the pace, which should have happened. And the reason for that was manyfold. One is you just had the financial crisis, right? Every government was stretched.

[00:30:06] Manish: And in most the developed markets government is a major spender in healthcare, the Medicare program in the US is probably the largest spend area. Constitutes a fairly significant portion. I don’t remember the exact number of the overall healthcare spend. Now with that, the questioning one, if you wanna launch a new product, which is gonna be 10-15 times more expensive than existing genrate was much more intense,

[00:30:26] Manish: that was one thing. The second thing is that between 2005-10, there were two, three big blowups, which had happened from a compliance perspective in pharma, one a painkiller. For one of the big companies and another diabetes brought for another company. They were linked to heart disease,

[00:30:40] Manish: and there were issues on what was communicated to physicians was not right. The clinic data, which was suppressed. And these companies obviously were fined massively. But FDA also was under some of pressure, how could something like this happen? And these are products doing billions of dollars of revenue each,

[00:30:54] Manish: they had to be withdrawn and all that stuff. So FDA had become much more stringent on what they’re approving, but they’re not approving and what you could say, so the, there is a act called Sunshine Act, which had come into the United States because there are also a lot of public pressure on how pharma is influencing physicians, prescription behaviors, bunch of things,

[00:31:10] Manish: by enticing them, hording them.

[00:31:13] Akshay: The way. Today we talk about big tech in a negative connotation. I think there was a big pharma had become like a bad word.

[00:31:19] Manish: There was some of these things which were linked to almost, you think about it that you are taking doctors out for joints,

[00:31:24] Manish: big conferences happening, giving them gifts and those type of things. So there’s app called Sunshine at which came in that anything which you’re doing, I forgot the exact, I think the exact number is a hundred dollars. Anything more than a hundred dollars needs to be publicly disclosed,

[00:31:36] Manish: bunch of things. Those kind of things started coming in, which doctors were very right interacting, cause it was just not great for them. Pharma was very about making sure they have all the records, what’s going on, and we don’t do anything wrong cuz the fines could have been massive,

[00:31:48] Manish: companies ended up paying tens and tens of billions of dollars of fine, over a particular period of 2010-15 and 16 during this period.

[00:31:56] Akshay: Due to non-compliance with disclosure norms.

[00:31:58] Manish: Yeah, absolutely. Various things on this site violating FDA stuff, what you can say, what you cannot say.

[00:32:03] Manish: But this time, but this is also a time in China is becoming a very important pharma market and companies were investing in that today, it is the second largest pharma market in the world, right after United States. It was way behind. And we had started off .

[00:32:15] Akshay: So because of population and because India also has population.

[00:32:18] Akshay: Is there a reason why?

[00:32:19] Manish: No. So I think it’s a combination of many things. They, not so much a population was one of the factors of course but if you see, Japan also is a large market, before China, Japan was the second largest market. There was also because of drug pricing,

[00:32:30] Manish: they allow drug pricing to be there for a couple. While they, obviously, they have various innovative methods to make sure that they can manage distribution to people who can’t afford drugs, while letting pharma price, drugs, new drugs and all that stuff at the right prices to make money, which formed pharma companies to make significant investments in China.

[00:32:48] Manish: So it was an attractive market, but they were investing right heavily into that market.

[00:32:52] Akshay: Like India has more restrictive price control regime. That’s why it’s not such a big market.

[00:32:57] Manish: Yeah, absolutely. The other thing which was happening is that this is just the emergence of digital in pharma iPads had got launched,

[00:33:04] Manish: everybody was talking about what was at that one time called smack social, mobile all that stuff was becoming buzzwords. But more importantly, I think the whole I iPad was a big success in pharma, iPads were given to reps and some traditional detail AID, which used to be a calendar like structure, was replaced by this digital thing.

[00:33:22] Manish: So those conversations around digital, which had started, now it is in this backdrop. We, as a company, were asking the question, where do we go from here? , and we said, you know what? If you really look at companies just serving the pharma industry, there are three big companies servicing the pharma industry.

[00:33:35] Manish: Three big categories of companies, not big companies. One was CROs, contract research organizations, with two clinical trials and bunch of things. Now, most of the clinical trial companies have become end-to-end providers, but I’ll come to that later. But so that was one thing, and that’s the time when, by the way, India was very hot on clinical trials as a destination.

[00:33:52] Manish: Probably would’ve heard of that, it was in 2010 period. There was a big noise around how, because of the large patient pool, India could be a great place for doing clinical trials, easy to find patients, which is the big issue in most of the trials. There are a bunch of companies, domestic Indian companies, CROs, which are funded,

[00:34:08] Manish: probably one of those areas that the trend plays up, so this was one of them.

[00:34:13] Akshay: What are some of those names? CROs? Prominent Indian CROs.

[00:34:16] Manish: SIRO Clinpharm, right? Vida Clinical Services, you do search, you’ll find some of these names.

[00:34:21] Manish: All of them got funded, by the way, by VCs, PES, and all that stuff. So that happened and one of the feed thing we got is that list. So anyway, there was one category, come back to our evaluation later. The second category was ad agencies, network agencies do a lot of business with pharma and developed markets,

[00:34:37] Manish: hundreds of billions of dollars. I’ve also seen billion dollar one company doing billion dollars with one ad agency, type of stuff. All the communication which is reaching out to physicians and patients being developed. So that is the second thing. The third one for call contract sales organizations, CSOs.

[00:34:51] Manish: Essentially when you have a drug, which is gonna be launched. Then you need to have extra bandwidth to be able to communicate to physicians. Or when you have a bunch of products which you think you’re not gonna pay attention to, then instead of you having your people, you outsource it to a CSO, contract sales organization to manage that.

[00:35:06] Manish: And that was a third category.

[00:35:08] Akshay: Medical representatives as a service.

[00:35:11] Manish: Absolutely. Absolutely. And each one of them had billion dollar revenue companies, not valuation revenue companies in each categories. So we, when we stepped back and evaluated this whole space, we said, the CRO thing, while India is hot destination we don’t understand in clinical trials, India is not, is gonna be an, could be a, the number of percentage of population coming from India can increase a bit.

[00:35:32] Manish: If it is 7-8, it can go to 12-15, it’s gonna stop there. FDA is not gonna approve a drug which has 50% Indian patients, it has to be a much more distributed thing. And second is from a differentiation perspective, what do we bring to the table? Anybody? Can I get access to these patients?

[00:35:45] Manish: Very operational intense thing. We are even on the regulatory arbitrage guys, and we have no in, if you don’t see how we could differentiate we have no interest in being the hundred and first clinical trial company in India. Even of that means couple of million dollars of revenue,

[00:36:00] Manish: over the next few years. Going back to the whole theme of we wanna build something which is unique, differentiated, so we rejected that. The second category was agencies,

[00:36:07] Manish: that was very old boys club in US and Europe. While there were pressure, some consolidation happening, we realize that’s coming out of Bangalore. All of a sudden you won’t be credible. And probably we are on agency types over here. CSO looked like an attractive option to us,

[00:36:20] Manish: but we said we are not gonna be a CSO. We will stick to our DNA and instead of CSO we will be a VSO, virtual sales organization. Our bet was that sales and marketing and a lot of the commercialization processes in pharma will change on the back of technology,

[00:36:35] Manish: and we use broadly technology, which as the word, which was now digital, that’s a bet we took in that 2009-10 era.

[00:36:42] Akshay: What would be the difference between a CSO and a VSO?

[00:36:45] Manish: So you you won’t have reps on the ground you’ll reach out to physicians using various digital channels,

[00:36:51] Manish: calls, emails, websites, WeChat, programmatic media buying, and a lot of analytics at the back, profiling of physicians, various ways then reaching out to you with the right message, not one size fits all. US doctor might be more risk covers, and hence, to convert you UI might show more safety data,

[00:37:09] Manish: versus some Dr. X who’s more worried about listening to his peers, over here. Which kind of content, will be more effective. Which content, which channel, there are multiple channels. There is a strong data layer behind that. And then obviously you have develop content which can develop this.

[00:37:26] Manish: It’s a combination of content channels, and data, which is gonna be more relevant. Now, one of the channels could be a rep, still but it’s just one of the channels over here. So that’s what we said we are gonna do, and we build capabilities around that. Started investing in tech and various capabilities to do this effectively,

[00:37:41] Manish: we had some wins more on emerging markets initially, we are not credible in the United States especially. And we realized that it’s a positioning issue.

[00:37:48] Akshay: What kinda deals did you win? Give me an example.

[00:37:51] Manish: For example, in APAC there was a company which was gonna launch a product,

[00:37:55] Manish: in five markets in this region. And they wanted somebody to augment this launch. And the broad model was this. In here are the, there’s almost a pyramid of physicians. Top notch physicians are gonna be the heavy prescribers, medium prescribers, and then probably could be prescribers, but low probability.

[00:38:12] Manish: So we would wanna spend most of our rep money and focus on the top one, probably a little bit of two. How can you augment us on the first, more on the second and cover the third primary, from a reach perspective with the messaging on this truck and the broad disease area, we did this for five countries for one of the top 10 or 20 pharma companies,

[00:38:30] Manish: in this region. So they’re,

[00:38:32] Akshay: And you use like social media performance marketing like these kind of?

[00:38:36] Manish: Yes. So all kinds of channels, we build a website. We’ve had inside sales reps calling out, we put ads problematic buying on websites in each of these regions separately,

[00:38:46] Manish: did a lot of we did physician profiling before that, over here to even suggest what kind of content can be used, developed the content in this case also. So we did all that services, a combination of tech content, which is one of the big differentiators of the firm that you have, medical doctors, technology guys sitting together,

[00:39:00] Manish: and making some of these effective, which by the way, had been done earlier also, when I spoke to about the virtual oncology center, you think about the same thing was required even there, at that point of time. So that was the DNA of the firm. So we did this in these markets, but we’re not winning enough in the US,

[00:39:13] Manish: and we realized it was a more of a positioning issue because we were perceived more as a medical company, not, but this required bunch of more, actually, while we had those capabilities, we are US was a much more sophisticated and market, which puts you in buckets, and we had to break those buckets.

[00:39:26] Manish: As a small firm especially, you get placed in buckets much more easily. So we did by that time we had grown out of our ghost of that acquisition, which was a very torturous and friends, some of our board members, everybody is saying, listen guys, the world has moved on.

[00:39:40] Manish: Why don’t you also forget that let’s get, so we did an, we did a small acquisition in Canada, a company well known in this space, and not done well, but we used that acquired that company in 2012, and made that again in the front. For our offerings in this area, in the United States.

[00:39:55] Akshay: This company was doing this exact same, like virtual sales?

[00:39:58] Manish: Part of that, but it was well known. It was a very strong brand, in that thing in, in the United States. And we added bunch of things on onto this company. They had one or two channels, some capabilities.

[00:40:07] Akshay: What were they doing? Like when you acquired at that stage?

[00:40:10] Manish: You’re talking about in terms of revenues or so they were doing lot of things on basically websites,

[00:40:15] Manish: essentially helping companies leverage physicians visiting websites right at the point of time. And some of the well-known websites, WebMD, bunch of other areas like that MDconsults, so that was one thing. They were doing significant. They also had technology platform, which they were selling to pharma,

[00:40:29] Manish: to able to do all stuff effectively. So some of the remote engagement pieces. So it’s a combination of few of these things. This company was doing, we acquired them. And so we did that. We did a couple of other tech in acquisitions, by the way, on all this to our internal accruals during this period,

[00:40:43] Manish: we had our initial things that taught us that, you know what we don’t wanna be tuck in acquisition. Acquisition is acquisition. We will call it, we’ll do for capabilities, for example, you know what, here’s the problem. I’ve gotta. might be a capability, it might have been a tech platform, but it’s almost your saying, build up my decision.

[00:40:58] Manish: I could build this, but it might take three, four years, I’m gonna build this at x cost instead of 1.5 x or 2 x if I buy it right now, it’s probably worth those two years I save, not an acquisition you do for size, scale, bunch of things, which was again, conventional wisdom, which was been given to us right at the point of time. You raise much more capital into this thing.

[00:41:18] Manish: But we wanted to we weren’t convinced that’s the right thing to do, and for various reasons. Now we did this stuff. Now when, what happened is when pharma was going through all these changes, they started, while we didn’t go after the agencies, they started saying, you know what? We gotta do things more efficiently.

[00:41:32] Manish: Some of the things we are doing on the medical side, internally or in a very fragmented way, can be industrialized. Digital can be bought in, automation can be bought in. A lot of the stuff which we are doing with agencies is very fragmented, to decentralize, we have 500 agencies working with us in some of our key markets.

[00:41:49] Manish: Doesn’t make any sense, we gotta centralize or do three, five, and you know what agencies do a few things well, let them do that, but there are, if they do 10 things, four, five of them are probably not done best by them. We could centralize them across brands, across countries and start moving towards how a digital first organization should be working,

[00:42:06] Manish: When they start looking for partners here, we are doing all these things. While we are much smaller, which is a worry for some of these companies, because if you are 50-70 billion dollar company, you have this small firm, which looks interesting but just because of differentiation, we could get our foot into the door and win contract.

[00:42:23] Manish: And we grew on the back of that between 2010 and 16. 2016- 17 had a pretty steady growth. Some tech and acquisitions here or there.

[00:42:31] Akshay: So in this period you were essentially like the go-to market partner for pharma companies. Like when they would want to take out a new drug, then you would do both content and outreach.

[00:42:43] Manish: It’s not necessarily only a new drug, it’s essentially what, so our theme today, and that’s what we very quickly got down to. We said, we listen, we help you commercialize your products using modern, commercial and medical capabilities and organizations,

[00:42:58] Manish: and essentially modern means digital first, analytics driven commercialization means some of the things on sales and marketing could be for a new drug, it could be for a growth product, could be for a product declining. The strategies you use are different, the channels you use, the strategy you use might be different, but the underlying capabilities remain same,

[00:43:15] Manish: over here, similarly on the medical side of things by this time we had that also pharma has these broad, actually, let me take, if I take a step back. Pharma does discovery in the labs, which is where science happens. You file a patent once you’ve got something in animal going,

[00:43:29] Manish: you have an update. You file for two things. One is you file for a patent and you go to FDA for asking for approvals to do clinical trials. Clinical trials happen. That whole place thing is called clinical development, which has lot of medical, clinical trials happening, which is what the CROs do.

[00:43:42] Manish: That’s the point in time. You also have divisions called regulatory teams, which essentially doing a lot of submissions and all that with FDA lasting with them, at point of time there is a team called Medical Affairs, which starts, which essentially sits between the commercial organizations and some of these clinical organizations, which is responsible for all the scientific interactions and the communication is gonna happen with physicians,

[00:44:04] Manish: so it sits between those. So by the time your drug is in phase two, these card teams come in forth and saying, how will you position network with the medical messaging? They’re the ones interacting with physicians, start going out the market doing multiple things, publications, publishing a results, and some of the re journal, which can then be used as evidence to take out the physicians,

[00:44:21] Manish: answering queries from physicians medical queries. That whole process called medical information management. Any material which you’re putting out to physicians needs to go through a process called Medical Legal Review. In pharma, you just can’t put out anything, it has to be substantiated by claims.

[00:44:33] Manish: Gotta be comfortable whether you’re making the right statement or you are going, you cannot be supered, FDA is gonna come after you in a big way. So this team is the one which vets all this stuff, so we started supporting them. Then there’s a whole process around safety, drug safety,

[00:44:46] Manish: which is a massive process. And this is for actually, I would say while it is there for products being developed, the bigger one is for products in the market, if you have a issue, safety event, adverse event for your drug and your physician, or you or somebody else reports that there is a host of actions which trigger, which include reporting to the regulator.

[00:45:05] Manish: And if there are enough and more signals that this is a common thing, then you gotta to modify your label, which is a regulatory thing, so it’s fairly complex combination of medical and commercial process. So we are supporting all these, for pharma using a digital first approach,

[00:45:18] Manish: , but 2016, 17. While we had grown one of the pharma issues was that we had realized that pharma is still doing digital in a very tactical way. Everybody had to do iPads were there, and you’ll have something on the iPad, everybody had probably, as part of their OKRs whatever you wanna call them, they got something digital, so there’ll be a tick mark type of a thing,

[00:45:37] Manish: it was read article, we were growing on back of that, but 2016, 17, we started seeing that change, in pharma, we were working with a lot of big pharma companies and we started seeing their internal conversations, internal PPTs, which were at a board level, around priorities around digital changing things.

[00:45:53] Manish: And our take is that was happening because at that point in time, the FANG companies were fairly successful, more than successful, I would say. And every board was probably asking a question, not in our industry, probably every industry, what does it mean for my industry? What does it mean for my company as an opportunity and a threat right now?

[00:46:09] Manish: How do I deal with this? And the conversation had got elevated, that level. When we saw that, it was very evident to us that listen, we just gotta focus on this piece. Over here in 2014, we had also gone into healthcare providers and payers as part of our thing on the back of Obamacare,

[00:46:24] Manish: if you remember, 2014 or so, Obamacare 2013 or whatever it is, was year Obamacare had been launched. And we saw an opportunity to get in that area. We had started a business, which in 2016, 17, the new administration came in, was floundering, because the US industry itself changed drastically.

[00:46:40] Manish: Some of our small customers on the healthcare payer side went burst because of the regulatory changes. Nothing from a business model perspective. So on one hand we are seeing pharma in areas which we had vetted long time back becoming more strategic. On the other hand, we had a bunch of other things and we realized this is our time,

[00:46:57] Manish: but we have to get focus. . So we shut down and merged a lot of things, which we had got into at that point of time rehashed them to become more relevant. Those capabilities for the pharma thing, double down on our investments in digital and tech to make this digital first really work,

[00:47:12] Manish: we did a few more acquisitions. 2016, we did a few acquisitions. 2019, we acquired a consulting firm in Europe focused on digital consulting for life sciences as exclusively, because we realize that when companies are working with a company like ours actually when they’re working with anybody to that extent, and they are using a very new operating model,

[00:47:31] Manish: centralization, their internal processes changing, they’re laying our roadmap, what is used to build internally, what to outsource, how a bunch of things like that. And they needed handholding to some extent. We need realize we need a consulting layer, to be having a seat at the table earlier.

[00:47:45] Manish: And the deal sizes are becoming larger. So we had to make a call whether we build or buy a consulting thing, and we are evaluating both. That’s when we came across this firm in 2019 which we acquired 2016. We had done a few acquisitions by the way. We, and all these seven acquisitions between 2012, till 19 were all, as I said, internal accruals,

[00:48:02] Manish: currently just plowing by the cash we were generating into the business through this whole period 2016, 17, we also had contemplated doing a PE round, and it was to raise some bit of primary capital to do acquisitions more strategically because it was not easy to do acquisitions out of your balance sheet when you were still at a small balance sheet,

[00:48:19] Manish: plus the fact is we realized that we had investors, we had no pressure, but it was just from a fiduciary perspective, a little bit of exit helps in this thing. So we had gone onto the market for .

[00:48:30] Akshay: Who were on your capital at that time in 2016, NSR?

[00:48:34] Manish: That’s it. The reality is as founders also, we wanted to generate some of liquidity for us after 16, 17 years being we had started drawing salaries from 2005, but there were always subpar rate and we are running the company very tightly, as you can imagine, if you’re doing acquisitions to cash flow out of your margins,

[00:48:49] Manish: that was the case. But 16, 17.

[00:48:51] Akshay: And what was your ARL in 2016-17? What kind of?

[00:48:55] Manish: 16 I am thinking we are done 52 to be more precise, but somewhere in the process while we had form term sheets and all that stuff we realized when we were, same thing what I told you, on the market was happening,

[00:49:06] Manish: When I say market, the customer side of the equation, we started observing these and was to us that we have to make changes internally, shutting down some of our units, rehashing them, investing in a more, in a few areas, which was not business as usual, some of this stuff will have to be done.

[00:49:19] Manish: And while we got term sheet, we realized it’s not gonna be fair to get a new investor. You told a story and then you realize you gotta do all this stuff and it might slow us down, so we as founders had discussions internally besides that. Should we do this? And everybody was with the opinion,

[00:49:34] Manish: we should not. After working so hard for a long time, for a couple of years now blowing this up and creating more problems for ourselves and somebody else is not a good thing. Luckily, we had investors who supported the view, they said doesn’t make sense. They said we were in no hurry, we had a good run with you guys and like the business, you guys, everyone, so we can stay on.

[00:49:52] Manish: This is no issue, so we pulled outta that whole process, by the way, in that period, we continued to then invest in the business grow it and just double down on our capabilities, market presence. Then 2020 happened, like everybody else we were scared in the beginning.

[00:50:06] Manish: What’s gonna happen? World is come to an end and tracked our business very closely. During that point of time, I remember first thing we did is that drew down cash from everywhere. We had limits and all this stuff, US, India, saying that, that just sit on cash. But then we started seeing that, our customers, after a couple of months we realized they were doing more because they didn’t have an option. The biggest thing when people used to ask me, what is the biggest bottling for you said the thing was that it’s digital adoption in life science companies,

[00:50:32] Manish: now we cannot, we can influence a little bit, by doing thought leadership and all this stuff. But listen, at one and a half trillion dollar industry, you can’t bend the curve, for it. You gotta be prepared. When the curve bends, we realized that the curve is bending right in 2020.

[00:50:47] Manish: And that’s when

[00:50:48] Akshay: yeah, companies were forced to adopt more digital.

[00:50:51] Manish: Do more, and we found ourselves in a unique spot of being probably, the company, as a standalone company with this kind of characteristics and experience of doing this for more than a decade with some of the largest companies on the planet,

[00:51:02] Manish: over here and successfully. So we benefited from that and had a good jump between 2020 and 2022, and somewhere in 2021 actually 2020, we also had thought as part of our initial plan that we will bring in, do the PE process in 2020. The agreement we had between us and our investors is that we will not even try before 2020.

[00:51:22] Manish: We, that time is required to do this thing. But 2020 is, about 2021 is when we will start the process. 2020, late 2020, we started the process and we got two new institutional capital partners in early 2021 onto our capital. So Carlyle, which I’m sure you and your listeners will be aware of,

[00:51:39] Manish: came in as an investor another firm called Brighton Park capital, which is a US firm based route of Connecticut also came in Brighton Park covers a firm B firm, started by a person called Mark Zaga, who understood India very well. He was the Chief investment officer of General Atlantic for a long period of time, and led a lot of the investment he had made in India for a lot of time, right?

[00:51:57] Manish: Bought both of them as investors into the company in 2021. So that’s brought us where we are today. We see the industry condition

[00:52:05] Akshay: You raised about 200 million, like in there?

[00:52:08] Manish: Yeah. Yeah.

[00:52:09] Akshay: This must have been like a unicorn round, I’m guessing.

[00:52:11] Manish: It wasn’t a unicorn round.

[00:52:13] Manish: It was just below a unicorn round at that point of time. Yeah.

[00:52:16] Akshay: And. What did you close last year? What’s your ARL?

[00:52:19] Manish: Last year revenues were two 223 million.

[00:52:22] Akshay: Wow. Amazing. Okay. Okay. I wanna understand that evolution of business a little better. 2016 when you decided that you need to do a little bit of retooling in the organization, build more capabilities.

[00:52:34] Akshay: So in 2016, you were a VSO, or like you told me you had got into other areas.

[00:52:39] Manish: So the business actually even before 26, what had happened, we started a concept of VSO, but really traction we got was after some point in time and the scaling happened in slightly different area, over here, which is essentially the whole agency thing, which I spoke about, essentially what we call is centers of excellence for commercial and medical, as pharma companies started saying, listen, we got to industrialize, we have very fragmented processes on the commercial side and medical side. We’ve got to industrialize them, bring digital and automation to them,

[00:53:09] Manish: which meant that the way we do things internally, the way we outsource, got to change, and we gotta centralize many of these functions. They started looking for partners like us to develop content campaigns, and data analytics, in many cases, on the medical side, manage some of the regulatory safety and medical affairs process and support them at scale,

[00:53:30] Manish: that’s where we got lot of our growth from. So the combination of the commercial and medical side is still our largest.

[00:53:36] Akshay: The medical side would be like a workflow automation, basically.

[00:53:39] Manish: Not workflow automation. I’ll give you an example of a process. This is was 2013 or 12,

[00:53:44] Manish: I forgot the exact thing, but a pharma company came to us and there is this whole process called labeling. There’s a label in every drug you have, the label is a highly regulated document, and you think that label has claims the drug is making, over here, which is, has to be approved by FDA and all this stuff.

[00:53:58] Manish: Now you think about it, there is a document called core data sheet, which you have all the core data of the pharma company. From there, the label is derived and there’s a global label. Now, if you’re a large pharma company, you might be selling in 80 markets across the world, and each of those markets will have their own regulations,

[00:54:14] Manish: you gotta be compliant at a global level with your stuff. You’ve gotta be compliant in each of these 80 markets and regulations in any of these markets could change, and you’ve gotta be complying and making sure you are complying, you are in line with those regulations. One, the second thing is, you might have a safety event,

[00:54:30] Manish: which necessates you to change the label global level, you might have new trials which have come in which cause of which you’re modifying the label after FD approvals and all that stuff that need to reflect in each of these things in context of the regulations. This company, which was a top five pharma company, came to us after they had some inspections and audit findings and issues and they realized that there were 40-45% compliant, which is a big risk for a company like that, so they set up a global labeling hub with us, to manage these labels in 80 countries. That’s example of the medical side of. Medical side of things.

[00:55:01] Akshay: So is it, is this productized like I can imagine label management being as a product in itself.

[00:55:08] Manish: It’s a combination of and that’s broadly our strategy, they are capabilities. Things are done in a certain way today, and most of that are capabilities, human capabilities, And that is paramount. Now, what we have done over time, when I said investments in tech, is that we have been investing in AI-based solutions,

[00:55:23] Manish: with certain conjunction with these capabilities. The reality is none of them are, think about it, none of these are driverless cars today, there are different levels of automation which have been introduced, to reduce the human effort, reduce errors, increase compliance, but the capability needs to sit with this today a combination of regulations and maturity of these algorithms haven’t reached a stage where you could do this thing, but we believe it’s o obviously over years, both these evolved,

[00:55:49] Manish: more and more data, more a maturity of technology, and regulatory frameworks evolving, it’ll get there whether it’s three years, five years, or ten years, that’s anybody’s guess right now, but we replace ourselves.

[00:56:00] Akshay: Right now. It’s a managed service where tech is helping you to deliver better outcomes at lower costs.

[00:56:06] Manish: And that’s what we do for all the things over here. And those are the investments we made, to be able to deliver differentiated outcomes visa is any of the incumbents in this space. The interesting thing is that if you really think about it, one of the things I keep speaking about is that people, especially in India know about the the whole contract manufacturing, CDMO as it’s called, space. There are very successful companies in this space. If you see the spend, sales and marketing is the largest spend area in pharma, and by the way, we can share numbers with you. It’s a pretty large spend area. More than 20% of revenues being spent on sales and marketing for these companies.

[00:56:41] Manish: The reason first of all, and there were large companies in United States, in Europe, in this space, the reason you didn’t hear about it so much is there was a fragmented spend, every country, every brand, as I said, doing their own things. Now, over the last few, actually, I would say decade, which is now accelerating, is companies are realizing that does not work,

[00:56:59] Manish: it’s a combination of many things, more pressure on bottom lines, more risk of non-compliance, you doing something which is not in compliance norms, and the third thing is companies also realizing that if you want to be truly digital, like the digital natives, you can’t have this fragmented stuff.

[00:57:12] Manish: There could be something which are fragmented, or autonomy, but the core infrastructure level, you got to have centralized functions. Otherwise you’ll never know your customers better. You’ll never deploy strategies and that is driving more consolidation and centralization of things.

[00:57:26] Manish: And then that’s where a company like us becomes more relevant and has a large area to play on. And when larger deals, which is also driven a lot of this growth we have seen.

[00:57:35] Akshay: Got it. You were giving me another example in addition to labeling on the medical side.

[00:57:40] Manish: I spoke about the whole area of medical legal review,

[00:57:43] Manish: now if you think about it you develop material. Some of our engagements will be the following, that we would be engaged by the commercial team and the commercial teams will engage us for, let’s say come up to 35 markets right across the world that you know what?

[00:57:54] Manish: Anything, which is going out to physicians, while we have few agencies, we should be doing steps 1, 2, 3, after step one, two, three, they will hand over the stuff to you guys. You will take it all the way to 10, and then that gets deployed in the market, or there. But before it gets deployed in the market,

[00:58:10] Manish: this whole thing needs to go through a medical legal review process in each of these markets, now the company would be doing that. Given our medical capabilities what we started saying is that, listen, this medical legal process is a very intense process, checking is apting at multiple levels, from basic English to claims,

[00:58:26] Manish: references, all this stuff is through medical review and you have only so much teams, which, and you want them to do operational work, so we could support that, so we would’ve a separate contract, and it’s required from regulation perspective, a firewall contract with the medical organizations who support that process.

[00:58:42] Manish: So the material which we have developed goes to a pharma company, get thrown across the world to the medical teams, comes to our team over here in Indegene, which is firewall from this other team gets back and then it goes, and once that is approved, the final signatory is the pharma company.

[00:58:54] Manish: Then it goes to the market, that’s another process, I can go on a bunch of things on the medical and commercial side. Now, what I describe to you on the commercial site, Is a fully end-to-end process, but within that, there are nuances,

[00:59:08] Manish: that one is content. Other is how you deploy campaigns, data and analytics companies are buying platforms, software platforms. Then you gotta use and make, customize those platforms, run them to drive more ROI.

[00:59:20] Akshay: Say someone is deploying Salesforce, then you would customize and make sure.

[00:59:25] Manish: Customize, and then run Salesforce,

[00:59:26] Manish: on a day-to-day basis. And that’s where again, domain layer is required. So wherever is intersection of domain expertise and tech, that’s where we continue to expand as a company, and our filter is not only tech, but it has to be domain. That’s where we can truly stand out as a company.

[00:59:42] Manish: And not necessarily from India perspective, but there are, if you think about there many firms, our size, scale, standalone, across the world, in this domain, and that’s what we choose to, when we think about getting into an adjacency or a new area.

[00:59:56] Akshay: What is the role of data and analytics?

[00:59:58] Akshay: Gimme some examples of how that solves problems.

[01:00:01] Manish: A classic thing is this physician profiling itself, understanding of physician where I spoke to you about that’s a core thing. Now we still do the VSO thing, it’s a small portion of our revenue, but now we have gaining traction that first of all, how do you first of figure out to even get your physician list,

[01:00:16] Manish: identifying which are the physicians to go after one is a very simple thing on prescribing, which is an easy one. But then you also do digital profiling, if a physician is a heavy prescriber, but you know what? He’s digital savvy, or she’s digital savvy, then you could have a strategy where you have some of rep coverage, but you can still have a extensive digital thing.

[01:00:35] Manish: But if it’s not digitally savvy, then you might wanna have more rep coverage, that’s a basic point. So you’re getting your physician list then what we call shortest path to prescription, or influencing behavior, understanding that having algorithms and data essentially to figure out which channels, which content pieces right, will get the most amount of traction for these physicians.

[01:00:54] Manish: Understanding patient journeys in the first place, from real world data there is a plethora of data sources emerge over the last decade, given that electronic medical records now for the exact numbers, but I believe there used to be 6-7% in 2014. In 2006-7, or actually eight before Obama.

[01:01:11] Manish: The Meaningful Use A ct came in the United States. Now it is in that 80 or 90%, over there, which is froze a lot of data, and government is making that more usable. There’s claims data from an insurance perspective, there’s genomic data, so you can use all this stuff to really understand patient journeys much better,

[01:01:26] Manish: and in that context figure out your messaging and bunch of other things. On the marketing side, the same thing is also being used on the clinical trial side, much more effectively.

[01:01:35] Akshay: Are you also doing B2C marketing, like to the end consumers or is it just the marketing to physicians that you do?

[01:01:41] Manish: So it’s not marketing to end consumers and end consumer marketing is allowed only in a few countries. US is one of them. Very few you still see US, most of the TV ads will be but that’s a very kinda thing, so we don’t do that. But what we do is what is called patient adherence,

[01:01:55] Manish: supporting on chronic therapies. How do you engage patients that don’t drop out, be it educating them, reminding them, bunch of other things. More and more. If you see the pipeline of drugs and where the pharma focuses today, it’s on very specialized products. Oncology is a big one. Cause that’s where a lot of the unmet medical needs are and rare diseases,

[01:02:15] Manish: these are complex therapies, very expensive therapies, so bringing patients on board, they interface with the insurance companies, whether the patients authorized to have a drug or not. Then keeping the patient on the therapy. Those are the kind of involved processes. A company like ours will be more involved in.

[01:02:30] Akshay: So this, keeping a patient like this patient adherence would be through like, emails, messages and all is there a patient app for a patient suffering from, let’s say.

[01:02:39] Manish: It’s a combination of everything there are apps, there are patient counselors, nurse counselors, again, by the way, websites so it’s very similar to that whole physician.

[01:02:48] Manish: I think to that extent you have multiple channels to reach out to patients.

[01:02:51] Akshay: So which line of business contributes how much to your revenue? And which country contributes? How much do the revenue?

[01:02:56] Manish: So from a country perspective it’s US, which is the largest,

[01:02:59] Manish: it’s gonna be, I forgot the exact number, but two third of our business. Now, we count this from a contracting perspective, what that means is that we might have contracted in the US but we might still be doing work for Europe or some other parts of the world.

[01:03:11] Akshay: Ok. Okay. Cause the head office is in the US so.

[01:03:14] Manish: Office even, by the way, head office is not US is such as large center of gravity for most of the pharma companies that they might be doing contracting. Europe also might be doing contracting over there, so US tends to be two third or 70% of that piece followed by Europe and China, or Japan and India.

[01:03:30] Manish: So the way we look at our lines of businesses we call it enterprise, commercial enterprise medical, and then our VSO business is what is, we call it omnichannel activation now, so if you take the enterprise commercial and omnichannel activation, that’s more on the commercial side.

[01:03:46] Manish: That will be the largest portion of our business, followed by enterprise medical. And then we have what we call other summit of consulting. We have just four into enterprise clinical, digital clinical trials. That’s almost a startup within Indegene, that will be a few percentage points.

[01:04:01] Akshay: How is digital clinical trials different from the regular clinical trials?

[01:04:05] Manish: So you are, first of all, there are many things. One is they’re using real world data, real world dividend, to in the whole trial design process more effectively, the protocol designs in the first place are much more data driven.

[01:04:16] Manish: In the first place.

[01:04:18] Akshay: This design would include decisions like, who should be my sample size? Which countries should I test this on and so on. Or which.

[01:04:24] Manish: Actually it will much more advance than that, it’ll be, what should be my endpoints? Why should my exclusion criteria? Inclusion criteria?

[01:04:30] Manish: We see a typical trial.

[01:04:31] Akshay: Endpoint means like the hospital hospital or the clinic where the trial happens?

[01:04:35] Manish: No. So what type of patients, when you are coming up with a drug and you are doing trials, you are trying to get a label, as I had explained, that label has exclusion inclusions.

[01:04:43] Manish: You would’ve, at the very simplistic way, it would say, not for pregnant women, not for children, now that’s much more nuanced than what I just explained, based on the data you have generated initially, you were seeing where is the higher probability of success for this drug.

[01:04:56] Manish: So that I positive data and get into the market, over here, using real world data evidence, you can increase that probability of success. But that’s another example of using data analytics in the first place. Then identifying the sites and identifying the investigators,

[01:05:11] Manish: in a much more rigorous way. Using you think about it I just mentioned the real world, your the orphan disease oncology drugs are the most prominent ones in the whole pipeline, how do you get patients onto trials, you don’t have large numbers of patients in this.

[01:05:23] Manish: If you’re using a cholesterol drug, or a Hyper-tension drug, it’s easy to recruit, pretty much everyone has that, but some of these patient recruitment is a problem. So using.

[01:05:32] Akshay: That, there again, you would use like digital campaigns.

[01:05:35] Manish: Digital channels can be used, to again, recruit patients in those areas.

[01:05:38] Manish: So there are a few areas like that, where we are trying to get in Drive more effectiveness in the whole clinical trial process.

[01:05:44] Akshay: Partner with traditional CROs to execute or you partner directly with these components, say a clinic, a hospital?

[01:05:51] Manish: Pretty much all our businesses directly with pharma, we contract directly with pharma.

[01:05:55] Manish: They go and execute.

[01:05:56] Akshay: When you’re executing the clinical trial, do you execute it

[01:05:58] Akshay: in-house?

[01:05:59] Manish: So we are not doing full and for the operational part of the clinical trials, we are still not doing We are taking pieces which, where, which can be made better.

[01:06:08] Manish: So we try to unbundle that process and add efficiency in that, in the pieces where digital law data can play a significant role. Again, we are still staying true to that whole thing of where we believe we can truly add value and stay differentiated over time

[01:06:22] Manish: obviously those pieces increase.

[01:06:23] Manish: And this commercial and omnichannel to together would be like more than half your top line?

[01:06:28] Manish: Yeah. It’s more than half. There will be 60% or so, slightly more than that. Yeah.

[01:06:32] Akshay: Do you see post covid that more pharma are like reducing reliance on in-person visits, going more for omnichannel?

[01:06:39] Akshay: Like what you are offering? Is there a trend?

[01:06:41] Manish: That is definitely happening? That is definitely happening and it’s a function of it worked during Covid, the average cost of a rep in the United States is not upto 50K US dollars, whether it’s fairly expensive.

[01:06:52] Manish: No. There are places where you need a rep, so I’m not saying rep is gonna go away completely. It’s gonna be there, but the use of digital is gonna be more and more prominent because of few reasons. One it’s fairly expensive, whereas digital is much more efficient. It’s much more targeted,

[01:07:06] Manish: you can do much more personalized things. Second thing is more and more doctors are now preferring to have pull rather than push, where in this world of today, that’s just they’re just like you and me, I don’t wanna be called every now and then. I’ll call you if I have something

[01:07:18] Manish: and most of my information I can anyway get through various channels. Last but not least is pharma is also worried about compliance, a rep having a conversation with a physician, there’s only so much you can control it, over here from a compliance perspective, whereas digital, all your messaging is controlled.

[01:07:32] Manish: What you are saying? You have a you have a complete audit trail of all that stuff. And hence from a compliance perspective, it’s much less risky.

[01:07:39] Akshay: Is there such a thing as like influencers in this, like doctor influencer who would make TikTok videos? ?

[01:07:44] Manish: Those some physicians whom the world will, all particular country will listen to. So typically you target them. They’re the ones you would probably even get your remote clinical trials in the first place, if not clinical trials. Those are places where you’ll during your initial marketing process, and that’s where medical affairs plays a role, as I had mentioned,

[01:08:00] Manish: You’re convinced them through science about your drug and if you got them converted becomes definitely it that plays a role.

[01:08:06] Akshay: Advice would you give to yourself when you were starting way back in 2000? Or which is another way of asking. What advice would you give to a young founder?

[01:08:15] Manish: A few things, bill Gates uses a statement but least, at least have, has been attributed to us. We always overestimate what we can do over a two year period and always underestimate what can be done over a 10 year period,

[01:08:24] Manish: that is so true. That’s one piece of advice I would give.

[01:08:27] Akshay: So you’re saying that have a 10 year plan when you’re starting a business?

[01:08:31] Manish: Have a tenure horizon at least, it takes that much of time to build something meaningful. The second thing is think about the mark.

[01:08:37] Manish: There are, in my mind, there are two things entrepreneurs have to do, first of all, identify opportunities, where you can build businesses, but while identifying those opportunities, you’ve gotta be really critical, on thinking about how the market is gonna be shaping up,

[01:08:52] Manish: over here. And there is no way to be a hundred percent sure over there, there will always be probability. But many times we as entrepreneurs have more wishful thinking, about how things are going to change and the pace they’re going change than what reality is. Be more real if you’re building enduring business around that piece, your vision can still be achieved,

[01:09:08] Manish: over a period of time. But don’t depend on just financial cycles and to run this whole thing, be much more rigorous on that. So that’s one part the entrepreneur does. The second part which at least we will, I believe as kept us in stead we said, you know what? We are gonna be entrepreneurial in nature.

[01:09:21] Manish: And but on the other hand, we also will always be prudent and think about institution building, building teams, building processes, which can execute on that opportunity, so you can move on to the next thing, we always focused on that and many times these conflict,

[01:09:35] Manish: looking, being entrepreneurial, thinking about institutions being prudent, they conflict. You gotta find the right balance to strike that many times going in one direction more could be much more could just be detrimental and you can blow up over here.