Chiral and specialty building blocks: Cycles

How Covid drugs boomed, then busted, chiral suppliers

Prices for chiral building blocks are negotiated per project and not published. The cycle shows in revenue and margins of CDMOs, enzyme suppliers and API makers. Covid drug programmes in 2020-2022 created a boom; 2023 brought a sharp fall as orders ended and customers destocked; 2024-2026 saw recovery driven by new drug launches, GLP-1 and peptide demand, and Western buyers shifting work from China to India. Floors are set by Chinese pricing on established blocks; ceilings by the cost of a drug's delay.

No published spread; track CDMO revenue, order books and margins (Divi's, Laurus, Syngene, Lonza, WuXi AppTec).

Booms and busts

1. 2020-2022

   Covid antivirals (nirmatrelvir, molnupiravir) and vaccines needed chiral intermediates and enzymes at scale; CDMOs and enzyme makers boomed.

   Codexis revenue about $139 million in 2022 (indicative); Divi's revenue about Rs 8,900 crore FY2022 (indicative)

2. 2023

   Covid orders ended and customers destocked; generic API price pressure from China.

   Codexis revenue about $70 million (indicative); Divi's revenue about Rs 7,770 crore FY2023 (indicative)

3. 2024-2026

   New launches and supply diversification from China helped Indian CDMOs and API makers recover.

   Divi's revenue about Rs 9,360 crore FY2025 (indicative)

What drives the cycle

• Drug pipeline and launches. Each new chiral drug creates demand for specific blocks.
• Patent expiries. Generic launches move volume to Indian and Chinese makers at lower prices.
• Supply-chain policy. US and EU moves away from Chinese suppliers shift contracts to India and Europe.
• Technology. Better enzymes and catalysts cut steps and cost, changing who is competitive.

Metrics to track