Episode 7: The Capital Allocation Crisis

Indian pharma’s R&D intensity has been structurally stagnant for years, sitting at roughly half of global large pharma’s spend as a share of revenue and less than a third of China’s. This is not simply a function of India being a generics-focused industry, it is a capital allocation choice, made repeatedly, by boards that have other options. Sun Pharma’s $355-416 million acquisition of Checkpoint Therapeutics shows what disciplined innovation capital allocation looks like. A single, sizeable, strategically coherent bet on a commercial-stage specialty asset, rather than either no investment at all or a scattering of small, low-conviction bets that read well in an annual report but change nothing structurally.• Hard benchmark numbers: Alphabet’s $61 billion annual R&D spend vs. the combined R&D spend of India’s top 10 listed pharma companies• R&D intensity comparison: global large pharma at ~23.5% of sales, China at ~17.5%, India at ~4.4-7.5%, essentially flat for years• The Sun Pharma-Checkpoint Therapeutics deal as a worked case study in disciplined, sizeable, strategically coherent innovation capital allocation• What boards should be asking and typically are not, connecting back to the Ternus Test introduced in Episode 2Listen in to Episode 7 of the Bio-Health Supercycle. “My Pharma Reviews - The Podcast” is now available for you to listen on your favourite podcasting apps like Spotify and Apple. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mypharmareviews.substack.com