Mark Quick, executive vice president of corporate development, Recipharm, goes into detail about the opportunities his company has faced this year as well as the challenges.
2017
1. What has been the biggest opportunity of 2017 for your company/organisation?
Perhaps the most significant development for Recipharm in 2017 was the completion of our strategic acquisition of Kemwell’s pharmaceutical business located in Bengaluru, India. The acquisition expanded our position in emerging markets significantly, taking sales in these markets to more than SEK 800 million. As well as growing our team from around 3,500 to more than 5,000 employees, the addition of Kemwell has hugely increased our development operation both in terms of scale and breadth of capabilities. Our Bengaluru facility is now our centre of excellence for stability studies, as well as adding US FDA and EU approved efficient manufacturing options to our business.
Another major milestone in the strengthening of our development offering was the launch of Pathway to Clinic®. Together with our partner, the Clinical Trial Consultants (CTC), we can now take our customers seamlessly from formulation development to clinical supply manufacture and trial management, achieving first in human milestones in the most efficient way possible.
Serialisation has also presented a huge opportunity to us. In 2016, we committed to invest €40 million in our serialisation programme, and this has allowed us to position ourselves well against our competition in terms of readiness for the European Falsified Medicines Directive (EU-FMD).
2. In your opinion, what has been the most important innovation for the year?
For Recipharm, one of our most significant innovations during 2017 has been the development of our high-throughput screen (HTS) platform for solubility testing to help achieve optimum drug formulations faster than ever. Low aqueous solubility of drug molecules is a major challenge in the development of liquid formulations, which has driven the need for more efficient methods in selecting solubilising excipients. Our HTS platform provides an automated approach to rapidly identify the solubilisation capacity and stability of a compound in a range of excipients, reducing timelines to just 3 – 5 days per set of compounds, as well as being cost efficient and material sparing.
3. Which factors have driven the biggest changes to the industry in 2017?
The new serialisation requirements in the US and Europe are the biggest regulatory change currently affecting our industry. As such, they have been a key focus for pharmaceutical manufacturers throughout 2017 and are shaping the sector. We have already seen the FDA delay the active enforcement of the Drug Supply Chain Security Act (DSCSA) to November 2018 due to a lack of industry readiness and we can expect many smaller players to be unable to supply to key markets come the regulatory deadlines. As a consequence, we are already beginning to see consolidation among contract manufacturers, and can expect sponsors to make changes to their supply chain if their existing partners are underprepared.
4. What market trends have been influential for 2017?
The outsourcing trend continues to grow, with the world market for contract manufacturing expected to reach $79.24 billion in 2019, rising from $54.54 billion in 2013. In my view, contract manufacturing has become a strategic part of most companies’ supply chains, driven by a number of factors including the need to access external expertise and technologies, as well as the financial pressures that the pharmaceutical industry has come under, creating a need to drive down internal investment and costs.
In addition, the trend towards consolidation in the contract manufacturing space is changing the way that services are delivered. Small, niche players are struggling to compete with larger CDMOs that can offer customers a more complete development and manufacturing service that simplifies their supply chain. In addition, customers are also looking for a more global solution from their partners. CMOs that can provide solutions across the globe, including supporting market access restrictions such as those in Russia and Turkey, are well positioned for growth.
5. What have been the biggest challenges of the year?
I think the industry as a whole is working well, but in the short term, being ready for serialisation is an issue for many. The large pharma companies are on the whole prepared and have ensured that their CDMO partners are ready. However, there are many companies, including small and mid-sized contract manufacturers, that have not really understood the implications, and for them, it has become a race against time to comply with the EU-FMD.
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