During the COVID crisis, we invested around $2 billion,
and we’ve completed our pandemic facility, and that’s what’s doubled our capacity.
Adar Poonawalla is the CEO of Serum Institute of India, the world’s largest vaccine manufacturer.
We produced 1.9 billion doses in just 2021 after having committed only a billion doses,
so we did double of what we had committed.
The company was established in 1966 after horse breeder Cyrus Poonawalla
began to extract serum from his retired animals.
Controlling the extraction of serum, which is used to create vaccines for diseases
like tetanus and scarlet fever, allowed him to produce cheaper vaccines locally.
In our country, we were dependent on foreign medicines and drugs and vaccines;
they were very expensive.
And he saw that as an opportunity.
But the company’s entry into the local market wasn’t entirely smooth sailing.
In those days, getting permissions and licenses was a huge hurdle.
My father, he had no track record, no brand name, people didn’t know him.
Even talent at that time, trained scientists, 40 years ago, 50 years ago was in a huge shortage.
Today, the Serum Institute’s sprawling campus spans 42 acres, or around 25 soccer fields,
in the western Indian city of Pune, a far cry from the early days when Cyrus
operated out of a small laboratory in the corner of his stud farm.
In the future, if there is another pandemic or major outbreaks,
we can rapidly produce a lot of vaccine doses in three months,
a billion doses across different technologies, viral vector vaccines, messenger RNA vaccines.
So how exactly did the Serum Institute of India grow into
the world's largest vaccine manufacturer?
There were criticisms at the start of the pandemic
that vaccine manufacturers were profiteering from the pandemic, and the Serum Institute,
fully owned by the Poonawalla family, wasn’t immune from the backlash.
It was far easier to get into, compared to listed entities and
others who have accountability to their stakeholders and shareholders.
For me, it was easier to make a vaccine $3 and offer it at a very affordable price,
for example, compared to others who have to charge higher prices.
And they made billions of dollars in profits, and I think they had every right to do so.
I think it was a fine line between profiteering
and making a profit. It’s important to have that distinction between the two.
There will always be criticism, you know, why did someone charge so much or whatever,
but, you know, you have different cost points.
We could have charged higher prices also. But we didn’t.
We didn’t want to sort of take advantage beyond the point.
We just wanted to make a product which is as accessible and affordable.
Even before the pandemic, the Serum Institute made a name for itself with its affordable vaccines.
The tetanus vaccine was the company’s first product in 1967.
This was followed by antidotes for snake bites, tuberculosis, measles, polio and the flu.
A breakthrough came in the mid-1980s after it was accredited by the
World Health Organization to supply vaccines to United Nations agencies.
With the WHO prequalifying and approving you, that was an opening up of sorts,
for us as an opportunity to go to all these countries.
Towards the end of the 20th century,
the Serum Institute was the world’s largest producer of the measles vaccine,
and more than half of the world’s children were vaccinated with at least one of its shots.
In 2012, the business expanded its vaccine portfolio and manufacturing
prowess with its first international acquisition in the Netherlands.
By then, it was the world’s fifth-largest vaccines maker by volume, and it became
the market leader a few years later, accounting for 28% of global volume in 2019.
But the pandemic presented several challenges for the quickly growing company.
Several factors led to delays in Serum Institute of India’s production pledges,
including a fire at its Pune facility.
As a deadly second wave of the pandemic swept through India in March of 2021,
the government restricted its Covid-19 vaccine exports,
and the Serum Institute was blamed for the global vaccine shortage.
The crisis abated as the Serum Institute ramped up its production capacity in the months ahead.
But for Adar, the flak he received convinced him that this,
and any subsequent health crises, cannot be solved by the pharmaceutical companies alone.
Perhaps I'm being naive, where I'm expecting countries and leaders to come forward to sign
a sort of treaty, which would at least compel them to politically explain to their constituents why
it is so important to share raw materials, vaccine doses, have a harmonized regulatory platform.
It's more of a political commitment like you've done on climate change and other areas.
While the pandemic may have been Adar’s biggest challenge as chief
executive officer of the company, he had two decades of experience to lean on.
Even though his father founded the company, Adar wasn’t handed the top role on a silver platter.
In his first decade at the company,
Adar worked in numerous departments before finally taking over the reins as CEO in 2011.
When I joined also 22 years ago, getting access to capital was a major challenge.
I worked in every department and particularly in marketing and sales
and in exports because I wanted to build the exports. And the company
at that time was perhaps in 20 to 30 countries. Today, we're in 172 countries.
Fortunately, one of Adar’s priorities as CEO was to boost its vaccine manufacturing capabilities.
As CEO, I concentrated more on the science and the manufacturing part
I was able to understand where the global demand was going.
That gave me the confidence to really invest in capacity ahead of demand.
Adar says working his way up also allowed him to refine his leadership style.
Initially, I think I was a sort of micromanager. I
wanted to do everything myself, I still do to a certain extent.
But when I realized that it wasn't possible to grow beyond a certain point,
including having multiple facilities globally, I sort of changed my style to being more of a
delegator and getting people that I could trust to make decisions was challenging initially.
Decentralizing decision-making was key if we were to expand in all these areas.
As the demand for Covid vaccines wanes,
Adar has set his sights on growing the company beyond its traditional markets.
We've been in these 170 countries,
South America, the developing world countries, African continent, Asia.
I'm looking at now expanding more with
my portfolio of vaccines in Europe and the United States.
This includes partnerships with pharmaceutical and biotechnology companies, such as Britain and
Sweden’s AstraZeneca, America's Novavax, and South Africa's Aspen Pharmacare.
For the first time, the African continent will set up a manufacturing site.
So they have their own vaccines in the case of a pandemic,
and they don't have to rely so much on other countries.
Before the pandemic, the WHO estimated the global market value of vaccines was
worth around $33 billion, or just 2% of the overall pharmaceutical market.
And global consulting firm PwC says vaccine demand will remain high as
Covid-19 becomes endemic and new variants emerge.
We are looking at expanding our vaccine portfolio including in the messenger RNA space.
We're building a capacity specifically for handling these new technologies.
We have a partnership with the Greenlight, a U.S. firm, which has got this technology platform, and
we'll look at some of the new vaccines that might be needed to be developed with that technology.
Adar says he’s also been thinking proactively about the global supply chain crisis.
We've made small acquisitions
to strengthen our supply chain. We haven't been importing a lot from China at all, in fact.
We import a lot of our raw materials from Europe and the U.S. We're developing in India,
suppliers who can now substitute what we're importing from other parts of the world.
These acquisitions include a 50% stake in the local subsidiary of German specialty glass
maker Schott to better manage its supplies of packaging products such as vials and syringes.
I’m quite frankly quite relieved that the COVID pandemic is nearing the end because
I can get back to vaccines in my pipeline that I had been developing for the last few years.
Like HPV, malaria and some other meningitis vaccines.