Betting beyond the pill

Summary: With growth slowing in its core generics business, this pharma company is now eyeing biologics and orthopaedic implants. This story breaks down why the pivot makes sense, what’s at stake and what could go wrong. For decades, Alkem Laboratories has been a reliable name in Indian pharmaceuticals. Its forte? Branded generics, spanning anti-infectives, gastrointestinal treatments, pain management and vitamins. In fact, Alkem is the market leader in anti-infectives, a therapeutic segment that has long been a cornerstone of its domestic business. Brands like Clavam, Pan-D and Taxim-O enjoy strong recall and remain prescription staples. This domestic formulations engine, which contributes around 70 per cent of the company’s revenue, continues to generate steady cash flows. It has enabled Alkem to maintain a strong balance sheet and a conservative financial profile. But even this solid foundation isn’t immune to change. A robust core but with signs of strain In recent years, Alkem’s India growth has sometimes lagged behind the broader pharma market, especially as demand for acute therapies softened and chronic segments like cardiac and diabetes, where Alkem has limited presence, took the lead. The US business, which forms about 19 per cent of revenue, declined 10 per cent in FY25 due to price erosion. Meanwhile, trade generics, a price-sensitive domestic subsegment that makes up 20 per cent of domestic revenue, require aggressive discounting to sustain volumes. So, while the core remains stron