Torrent Pharmaceuticals Evaluating Return to Drug Discovery as Scale Increases, Says MD Aman Mehta

Torrent Pharmaceuticals is evaluating a potential return to drug discovery as the company achieves a scale that allows it to absorb the financial risks involved in developing new medicines, according to Managing Director Aman Mehta. Speaking at the third edition of the IIMA Healthcare Summit 2026 on Saturday, Mehta noted that the company had previously stepped back from the field.

"There are some companies like us — Torrent — who are almost retired-hurt from drug discovery. But not-out yet," Mehta said. He explained that a certain level of financial scale is necessary to sustain investments in drug discovery, where a single failure cannot be existential and multiple failures are typically required to achieve success. He added that the company is now approaching a scale where it can consider getting back into the space.

Mehta also highlighted the broader Indian pharmaceutical sector, observing that several domestic companies are increasing their efforts to gain exposure to innovation. He pointed to Sun Pharma, Glenmark, and Zydus as notable trail blazers that have moved ahead significantly in the innovation space.

Addressing the company's capital allocation strategy, Mehta discussed Torrent's track record with mergers and acquisitions over the past decade. During this period, the company completed six acquisitions of meaningful size, out of which four successfully achieved their objectives while two did not.

According to Mehta, a primary differentiator between the successful and unsuccessful deals was the level of familiarity Torrent had with the target asset. In the four successful transactions, the company spent considerable time—ranging from two to seven years—deeply understanding the product, company, people, and geographical market involved before proceeding.

Conversely, the two unsuccessful acquisitions involved businesses that were relatively new to the company. While Torrent understood the broader external ecosystem, it lacked an inside-out understanding of those specific operations. This experience has directly shaped how the firm evaluates major investment decisions moving forward.

Mehta outlined three essential steps to building investment conviction: conducting the analysis, securing the capital, and ensuring execution through a capable team. He noted that while analysis has become relatively straightforward, deep asset familiarity is critical for understanding and managing downside risks. Successful acquisitions, he stated, were characterized by a clear assessment of how the company would handle potential downsides if operations did not go according to plan.

Even with strict criteria, Mehta acknowledged that the company still encounters attractive opportunities that present temptation. However, the lessons learned over the past decade continue to guide their disciplined approach to assessing unfamiliar markets and assets.

"Aman Mehta's insights highlight a vital reality in business expansion: financial scale must be paired with deep operational familiarity. Whether entering high-risk sectors like drug discovery or executing mergers and acquisitions, long-term success depends on a company's ability to thoroughly understand target assets and manage downside risks. Torrent Pharma's experience underscores that disciplined capital allocation and patience are essential when navigating complex industry landscapes." — Dr. Shishir Gupta, Founder & CEO, StartupLanes