The Canada-based company can boast relationships with all of the top 20 pharmaceutical companies, 10 of the 20 major biotechs and nine of the top 20 specialty pharma firms. Discussing the company's operational strategies, Liberty said it has identified the services that are of "high value" and is placing a focus on trying to attract new business in these areas, which include development services, specialised technologies and the manufacture of sterile, lyophilised and high-potency compounds. As part of this effort, the company has been expanding its specialised capabilities at existing facilities across the globe, having built up controlled release and liquid-filled hard capsule technologies at its Toronto, Canada and Cincinnati, US site; nasal spray capabilities at its plants in Swindon, UK and Toronto; high potency manufacturing at Swindon and Bourgoin, France; and sterile/lyophilised production at Swindon and Monza & Ferentino, Italy. Liberty added that the firm is currently on the look out for opportunities to gain sterile manufacturing capabilities in the US. Meanwhile, in the mid-range of value lies the newly-released therapies, trailed by the more mature products on the market, and at the lower end of the value chain sits generic drugs and over-the-counter (OTC) medications. "Although we are targeting the high value end of the chain we are still maintaining a large presence in the other areas such as manufacturing of newly launched products as these areas still present a large market opportunity," said Liberty. Areas of new opportunity that Patheon is now evaluating in order to grow its business include expanding into new emerging market regions of Latin America, India, China, Eastern Europe, as well as the lucrative Japanese pharmaceutical market, and if so, how best to go about this. Other considerations are whether to develop new capabilities in the areas of active pharmaceutical ingredient (API) manufacturing - both small molecule and biopharmaceuticals - as well as starting to offer regulatory affairs, contract research and distribution services. Moreover, Liberty said that Patheon is also evaluating whether to obtain, invest in and/or collaborate in the development of new manufacturing technologies that will help lure new business. "The more technologies we can make available, the more we can assist our clients," said Liberty. "However, at this point, these are all just future strategic considerations that the company is looking into," he said. In terms of the contract arrangements that Patheon has in place with its customers, Liberty said that the vast majority of these are "traditional arrangements," but he said that "we are dealing with a shifting paradigm in the contract manufacturing industry" and so it is starting to look more and more at relationships that fall outside the sphere of tradition. "We are starting to forge more strategic, mutually beneficial, long-term business relationships, which involve the development of customised solutions to meet needs of both us and our partners," said Liberty. One example of this is the firm's five-year master supply agreement with Merck & Co, which formally designates Patheon as a multi-product, multi-site strategic partner. Patheon has partnership relationships at all levels of the organisation and Merck shares its long term manufacturing forecasts and identifies any potential sourcing opportunities, which according to Liberty, creates "improved decision making and sourcing strategies to benefit both partners." Facility "carve outs" is a second example of an innovative arrangement with clients - two of the company's European clients wanted to consolidate their networks by closing plants. In this case, they transferred production of some of their drugs into Patheon's facilities in Italy and France. This involved the transfer of the firm' process trains and equipment and affected 25 products and 900 dosage and packaging formats in total, said Liberty, who added that it was a "complex, multi-year process that took three and a half years to complete." One more example of an innovative arrangement with a customer is that of a shared investment in the expansion of a UK facility that Patheon undertook with Johnson & Johnson unit Janssen-Cilag. Under this arrangement, a production facility for a new and very specialised lyophilised cephalosporin product (ceftobiprole) of Janssen's was built with a €31m investment shared between the two firms. Launching a product like this on the market is not without risk and many companies, after witnessing numerous market failures, are reluctant to invest in expensive facilities without knowing how their product is going to sell. "The way we approached this situation is a great example of a CMO and a customer working together to mitigate risk," said Liberty. "The relationship is mutually beneficial, Janssen gained access to specialised capacity, with limited operating costs, while we gained an added capability with shared capital investment and a long-term (seven year) manufacturing contract for the product."