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India’s Aragen sees rising demand for CRDMO services amid changes in geopolitical landscapeAragen Life Sciences stands to benefit as the biopharma industry looks to derisk its supply chains and shift outsourcing away from China to Indian service providers.

As an India-based contract research, development, and manufacturing organization (CRDMO), Aragen Life Sciences stands to benefit as the biopharma industry looks to derisk its supply chains and shift outsourcing away from China to Indian service providers.

Chief Commercial Officer Ashu Tandon told Pharma Manufacturing that that the “post-COVID slump” over the past two years or so has been tough on the biopharma industry and service providers. However, he has seen the market improve for Aragen with the changes in the geopolitical landscape.

“We did better last year versus the year before,” Tandon said, who credited the proposed BIOSECURE Act in 2024 — which seeks to limit U.S. supply chain reliance on China — as a catalyst for biopharma customers to look for alternative options to Chinese contract manufacturers.

Last year, Tandon observed that Aragen started to “establish a beachhead” with several companies that had not worked previously with Indian service providers. “We had a lot of customers coming to us and saying we want to do a pilot project and test the waters,” he said. “For a lot of those pilot projects that we did, we’re starting to get follow-on work.”

While the looming potential of the BIOSECURE Act becoming law in the U.S. benefitted Aragen, Tandon also pointed to the drug pricing pressures of the Inflation Reduction Act as another driver of offshoring and outsourcing by large pharma companies to save money.

Aragen, with a workforce of more than 4,500 employees and over 450 PhDs, offers a range of services from early drug discovery to commercial manufacturing for biologics and small molecules. The company’s infrastructure includes six research and development laboratories and manufacturing facilities, five sites are in India with one in Morgan Hill, California is devoted to discovery biologics manufacturing and R&D.

Tandon describes Aragen’s pipeline as a “good mix of biotech and large pharma” companies. On the small molecule side, he said the company “mostly” does Phase 1 and Phase 2 work and then more “opportunistically” Phase 3 and commercial business. “Small batch commercial we do but we’re not really geared up as a large-scale CMO,” Tandon added.

Sustainability is becoming more important, among other criteria, for large pharma companies to select suppliers. Earlier this year, Aragen received a Platinum Medal from business sustainability ratings firm EcoVadis, putting it in the top 1% of companies worldwide for its sustainability practices and making it the first Indian company to receive this recognition, according to the CRDMO.

In 2024, Aragen received approval from the Science Based Targets initiative (SBTi) for its near-term and net-zero sustainability targets, claiming to be the first Indian CRDMO to reach that milestone.

Funding and macro trends

Looking to tap the demand for outsourcing services in the U.S. and Europe, Aragen in January 2025 announced a $100 million investment from Quadria Capital — an Asia-focused healthcare private equity firm — as the CRDMO aims to scale its research and manufacturing capabilities. The deal gave Quadria a minority stake in Aragen.

With more than 400 customers, including 15 of the top 20 large pharma, Quadria contends that Aragen is “well-positioned to benefit from macro trends in the outsourcing market, with Western innovator companies increasingly seeking to diversify and secure their supply chain as a hedge against operational disruptions due to global factors.”

The overall Indian CRDMO sector stands to benefit from this outsourcing trend and recent geopolitical dynamics, with the potential to grow from an industry currently valued at $3 billion to $3.5 billion — an approximate 2% to 3% share of the $140 billion to $145 billion global CRDMO market — to between $22 billion to $25 billion by 2035.

That’s the finding of a February 2025 report from the Boston Consulting Group and the Innovative Pharmaceutical Services Organization (IPSO), a new consortium of 11 India-based CRDMOs including Aragen.

Manni Kantipudi, Whole-Time Director and CEO at Aragen, wrote in the report that while India’s CRDMOs are in a position of strength, realizing their potential “requires more than just opportunity — it demands bold action” such as building a “self-reliant” supplier ecosystem and accelerating access to capital to invest “aggressively” in talent and technology.

When it comes to Phase 3 and commercial business, Tandon noted that “you can’t just change supply chain overnight” and it will take several years to gain momentum. However, he contends that the biopharma industry is “now starting to look at India much more strategically.”

At the same time, Tandon said that President Donald Trump’s trade policy has created uncertainty for the industry, including the potential for tariffs on India and pharmaceuticals.

“The only certainty is uncertainty,” Tandon concluded, emphasizing that while Aragen can’t control external geopolitical dynamics, the company is laser-focused on meeting the needs of its customers — which is ultimately the only thing it controls.

Source: Pharma Manufacturing