Everyone's Watching the War — But China's Biologics Push Is the Bigger Threat to Indian Pharma

Everyone's Watching the War — But China's Biologics Push Is the Bigger Threat to Indian Pharma

Markets are fixated on the West Asia conflict and its impact on crude oil prices and shipping costs. But buried in the latest industry reports is a development with far larger long-term consequences for Indian pharmaceutical companies: China is rapidly pulling ahead in the biologics race.

Biologics — large-molecule drugs like monoclonal antibodies and biosimilars — represent the fastest-growing segment in global pharma. Per Gland Pharma's FY2023 annual report, approximately US$112 billion worth of biologic medicines are expected to lose patent exclusivity by 2025, creating a massive opportunity for biosimilar manufacturers. The question is: will Indian companies capture that wave, or will China get there first?

The Indian Companies Betting Big on Biologics

Biocon (BIOCON) is India's most committed biosimilar player. The company acquired Viatris' global biosimilar business in November 2022 for a total consideration of US$3.335 billion (US$2.335 billion in cash plus US$1 billion in convertible preference shares), per their Q4 FY2023 quarterly results. The biosimilar segment generated Rs 42,650 million in revenue for the first nine months of FY2025, up from Rs 39,835 million in the same period of FY2024, per their Q3 FY2025 quarterly results. That is roughly 7% growth — respectable, but hardly the pace needed to outrun Chinese competitors scaling biologics manufacturing at breakneck speed. Zydus Lifesciences (ZYDUSLIFE) has commercialized 13 biologic products including one novel biologic, per their FY2024 annual report. The company received marketing authorization for a Pertuzumab biosimilar (a breast cancer drug), has Rituximab under DCGI review, and completed Phase III clinical trials for another monoclonal antibody. Zydus has over 700 scientists across three Pharmaceutical Technology Centres in Ahmedabad focused on development. Their pipeline is deep, but bringing biologics from trial to commercial scale is where Chinese firms have the cost and speed advantage. Alkem Laboratories (ALKEM), through its subsidiary Enzene Biosciences, is building a dual-continent biologics manufacturing footprint spanning India and the United States, per their FY2025 annual report. Enzene's facility is equipped with advanced monoclonal antibody and therapeutic protein manufacturing, including single-use technology. The company notes that "key challenges remain, including the complexity of biologics manufacturing, long development cycles, and the need for extensive pharmacovigilance data" — an honest admission that this is not a market where small players can easily compete.

The CDMO Play: Piramal Pharma's Bet on Complexity

Piramal Pharma (PPLPHARMA) is taking a different approach — rather than making its own biosimilars, it is positioning as a contract manufacturer (CDMO) for global innovator companies developing biologics. Per their FY2025 annual report, the company invested GBP 45 million in its antibody-drug conjugate (ADC) facility in Grangemouth, Scotland, and announced a US$90 million investment to more than double capacity at its sterile fill-finish facility in Lexington, Kentucky by 2027. Commercial manufacturing of on-patent molecules reached US$179 million in revenue in FY2025, up from US$116 million in FY2024 and just US$52 million in FY2023 — a 3.4x increase in two years. With 85% of CDMO revenue coming from the US, Europe, and Japan, Piramal is essentially betting that global innovators will outsource biologics manufacturing to India rather than China.

Why China's Advantage Matters

Sun Pharma (SUNPHARMA), India's largest pharma company by market cap, noted in their FY2024 annual report that "generics and biosimilars are expected to contribute US$18 billion to growth in WE5 markets" (Western Europe's five largest economies). But Sun Pharma's own emerging markets revenue was US$1,041 million in FY2024 — just 18% of total revenue. The company has a Sunpharma Middle East FZ LLC subsidiary and local manufacturing in Egypt, Nigeria, and other emerging markets, but its biologics pipeline remains less disclosed than peers. Gland Pharma (GLAND), which is majority-owned by China's Fosun Pharma, is an interesting bridge between the two countries. The company's FY2023 annual report highlighted the massive biosimilar opportunity from patent cliffs, but Gland remains primarily a US-focused injectables company with 54-74% of revenue from the US market across recent quarters. Its Chinese parentage could theoretically provide access to China's biologics manufacturing ecosystem, but that advantage has not visibly translated into biosimilar revenue yet.

What Retail Investors Should Do

The biologics race is a multi-year structural trend, not a quarterly earnings story. For investors in Indian pharma, the key question is not whether West Asia will disrupt supply chains this quarter — it is whether your portfolio companies are investing enough in biologics capabilities to compete when US$112 billion in biologic patents expire. Biocon and Zydus are the most committed pure-play bets on Indian biosimilars. Piramal Pharma offers a differentiated CDMO angle with impressive revenue ramp. Alkem's Enzene is a credible early-stage entrant. Watch for biologics revenue as a percentage of total sales in upcoming Q4 results — it is the best leading indicator of who is winning this race.

Data sourced from company filings on NSE via Xaro.