Aarti Pharmalabs plans peptide customer pitches in FY28

Aarti Pharmalabs plans to begin pitching peptide and oligonucleotide customers in FY28 after making its peptide laboratory operational by the end of the current financial year, management said. The expansion remains at the equipment, recruitment and customer-engagement stage, while the existing contract development and manufacturing organisation portfolio comprises 59 projects.

When will Aarti Pharmalabs begin peptide customer work?

Aarti Pharmalabs expects to start customer-facing peptide and oligonucleotide activity in FY28, after its peptide laboratory becomes operational by the end of the current financial year. Management said the laboratory would have the required equipment and that it had already started recruiting teams with peptide experience. The planned sequence is laboratory commissioning, specialist hiring, customer pitches and potential customer business.

The FY28 timetable is an initial commercialisation plan, not a revenue forecast. Management said the next calendar year would be used to start making customer business and that it hoped to start getting customer business in the next financial year. It also said it would provide firmer commentary only after it had pitched customers and assessed progress, leaving the speed of conversion into orders undisclosed.

The plan differs from Aarti Pharmalabs' established contract development and manufacturing organisation, or CDMO, work because the new modalities are not identified as material contributors to the 59-project portfolio. Management discussed 39 commercial-stage and 20 development-stage CDMO projects, whereas the peptide initiative requires a laboratory and technical team to be assembled before broader customer engagement begins.

Which complex modalities is Aarti Pharmalabs pursuing?

Aarti Pharmalabs identified peptides and oligonucleotides as the two areas where management sees an opportunity to build capability. Management described both as highly complex chemistries requiring precision in purification and conjugation. It said experienced chemists and scientists were being hired to develop the execution experience needed for those processes.

The call did not separately disclose an antibody-drug conjugate, or ADC, linker programme, a dedicated ADC-linker laboratory or an ADC-linker customer project. Conjugation was mentioned as a technical requirement in the context of peptide and oligonucleotide work, but management did not identify ADC linkers as a product category. The disclosed expansion is therefore limited to the peptide laboratory, recruitment and intended peptide and oligonucleotide customer pitches.

Aarti Pharmalabs also did not disclose a capital-expenditure allocation for peptides, oligonucleotides or any ADC-related activity. Management targeted total capital expenditure of about Rs 350 crore to Rs 400 crore for the year, but did not break that range down by the peptide laboratory or other projects. This means the scale of the dedicated investment cannot be determined from the call.

Does Aarti Pharmalabs already have peptide CDMO projects?

Aarti Pharmalabs does not have a major peptide project in its current development-stage CDMO portfolio, according to management. Among the 20 development-stage projects, management said there were one or two liquid-phase peptide projects but no major solid-phase peptide project. That distinction indicates that the planned laboratory is not being presented as the manufacturing base for a large disclosed solid-phase order.

The broader CDMO portfolio has a more advanced profile than the peptide initiative. Aarti Pharmalabs reported 39 commercial-stage projects and 20 development-stage projects, taking the total to 59. Management said these projects cover antihypertensive medicines, pain management, anti-cancer products and central nervous system, or CNS, treatments, rather than being concentrated in one therapeutic area.

The one or two liquid-phase peptide projects are therefore a small disclosed component of the 20-project development group. By comparison, the 39 commercial-stage projects show that most of Aarti Pharmalabs' reported CDMO base is already beyond development. Management gave no customer names, revenue contribution or timing for the liquid-phase projects.

How does the peptide plan compare with current CDMO operations?

Aarti Pharmalabs' current CDMO business includes 39 commercial-stage projects, while the peptide and oligonucleotide plan is still in laboratory setup and hiring. The company has one or two disclosed liquid-phase peptide development projects and no major solid-phase project, which places the new-modality effort at an earlier maturity stage than the wider commercial portfolio.

Management continues to target CDMO revenue of Rs 1,000 crore, with the timing dependent on customer approvals. It said Aarti Pharmalabs works on almost 59 projects and was confident of reaching the target, although achievement could be one year earlier or later. Management did not assign any peptide or oligonucleotide revenue, customer count or share of that Rs 1,000 crore objective.

The CDMO pipeline covers multiple therapies, including anti-cancer and CNS products, but management said it was not concentrated only in anti-cancer. That diversification contrasts with the new-modality programme, for which management named chemistry capabilities, purification and conjugation rather than a defined therapeutic mix. No commercial-stage peptide or oligonucleotide project was disclosed during the call.

What needs to happen before Aarti Pharmalabs can scale peptides?

Aarti Pharmalabs first needs to complete the peptide laboratory by the end of the current financial year, recruit experienced staff and build execution experience in purification and conjugation. Management said the following calendar year would be used to pitch customers, meaning commercial scale depends on customer interest after the laboratory and team are in place.

Management's comments leave several operating milestones unresolved. It did not disclose a laboratory capacity, an approval timetable, a signed customer mandate or a revenue target for FY28. The company said it would assess how customer pitches progress before giving firm commentary, unlike the existing CDMO business where it disclosed 59 total projects and a Rs 1,000 crore target.

Capital deployment will also remain relevant to the pace of the build-out. Management expects total capitalisation in the second half not to exceed Rs 300 crore, as some projects may shift into the first quarter of the next year, against annual capital-expenditure plans of Rs 350 crore to Rs 400 crore. However, it did not state how much of that spending, if any, relates to the peptide laboratory.

Conclusion

Aarti Pharmalabs is preparing to extend its CDMO capabilities into peptides and oligonucleotides, but the disclosed evidence points to an early technical and commercial preparation phase rather than a material new revenue stream. The company has begun specialist recruitment, plans a laboratory by the current financial year-end and has only one or two liquid-phase peptide projects among 20 development-stage CDMO projects.

The next disclosed milestone is completion of the peptide laboratory by the end of the current financial year, followed by customer pitches in FY28. Management's next updates should clarify whether those pitches yield larger peptide or oligonucleotide projects, how purification and conjugation capability develops, and whether any investment within the Rs 350 crore to Rs 400 crore annual capital-expenditure plan is allocated to the programme.