The Critical Need for Digital Transformation in the Peptide and API Sectors

PharmTech recently spoke with Saharsh Davuluri, Vice Chairman and Managing Director, Neuland Labs, to get his perspective on trends that shaped pharmaceutical development and manufacturing in 2025 and where things are headed in 2026. In this part 2 of our three-part interview, Davuluri explores the critical necessity of modernizing global manufacturing infrastructure to support the rapidly expanding peptide and API segments. He identifies a continuing trend in which peptides are becoming a vital modality in drug development, extending far beyond popular weight-loss analogs to encompass diverse therapeutic indications, such as cardiovascular health, dermatology, and central nervous system-related conditions. Davuluri notes that as these candidates move through the pipeline, the industry must diversify its manufacturing base. "There is a need, from a development point of view, to have destinations outside China and Europe for peptide manufacturing," he explains.

A central theme of the discussion is the urgent requirement for technological evolution within API manufacturing, which Davuluri argues has not kept pace with the times. He points out that the sector has been slow to adopt modern concepts—such as flow chemistry, electronic batch records, and completely automated manufacturing execution systems—which has led to the industry being characterized as "primitive" compared with other sectors. He envisions 2026 as a pivotal year for a "catch up" in infrastructure, especially as the world maintains a strong interest in small molecules and synthetic peptides rather than moving exclusively toward biologics.

To meet this future demand, Davuluri suggests that regions like India will be essential due to their capacity for large-scale manufacturing and their status as a geopolitically neutral option. Ultimately, he stresses that drug manufacturers must prioritize digital transformation to bridge the gap with other high-tech medical fields. "I would think that drug manufacturers need to think about their infrastructure, think about how they would like to invest in automation, modernization, and digitization, so that our sector can really catch up and be on par with what you would see in modern biologics or vaccine manufacturing today in the world," Davuluri concludes.

Access Part 1 and Part 2 of this interview!

Transcript

Editor's note: This transcript is a lightly edited rendering of the original audio/video content. It may contain errors, informal language, or omissions as spoken in the original recording.

We've talked a lot about peptides in the past. I see that as a continuing trend. There is a need, from a development point of view to have destinations outside China and Europe for peptide manufacturing. There is an increasing number of candidates from the peptide segment entering into drug development.

Yes, there've been a lot of GLP-1 analogs, but there are also a lot of amylin analogs. There are different kinds of peptides, not just for weight loss, but for different kinds of therapeutic indications: dermatology, cardiovascular, CNS, and therefore, we see that peptides will become a very important modality going forward.

And I think 2026 will be a year where we will see a stronger need for peptide scale up and commercial manufacturing, particularly from a region like India, which tends to be favorable for large-scale manufacturing like peptides and also at the same time is maybe geopolitical more neutral. I see a lot of investment potential for peptides in 2026.

I think API manufacturing, again, that's the perspective I speak from, has for a very long period, not modernized with the times… you know, concepts like flow chemistry, electronic batch records, completely automated MES systems, the adaptation of these concepts in API manufacturing has been very slow and has kind of put us together as in a category which you might even call as primitive; there hasn't been a lot of evolution in that area.

I think 2026 should be a year where a lot of catch up should happen because there is an increasing reemphasis on small molecules and synthetic peptides, and the world is not completely moving lock, stock, and barrel to biologics. And, therefore the need for having modern, synthetic, small molecule peptide manufacturing facilities is very important.

And, therefore, I would think that drug manufacturers need to think about their infrastructure, think about how they would like to invest in automation, modernization, and digitization, so that our sector can really catch up and be on par with what you would see in modern biologics or vaccine manufacturing today in the world.