Recipharm eyeing dominant CDMO spot

By Kirsty Barnes

- Last updated on GMT

Swedish firm Recipharm is concentrating its efforts on becoming one
of the leading contract development and manufacturing organisations
(CDMOs).

The firm already sits within the top 10 contract manufacturers in the world, although they are pushing for a top three spot, alongside the dominant figures, Patheon and Catalent. In the immediate term Recipharm is looking to grow in the region of 20 per cent a year through a combination of organic growth and acquisitions, Thomas Eldered, CEO of Recipharm told Outsourcing-Pharma.com in a recent interview. The firm also believes there are "good opportunities​" in strategic partnerships, which are "sometimes more attractive​" than acquisitions, especially when dealing in emerging markets. In order to throw all its weight into its contract manufacturing and services division, Recipharm sold its own products division in December 2007 to Swedish speciality pharma firm Meda. "Both my business partner and I wanted to take the company to the next step in its development... however, we knew that to excel we would need to focus and commit significant resource to one part​," said Eldered. This meant choosing to sacrifice either its contract services or its own products division. Eldered said Recipharm analysed its position and found that its own products division was likely to come under more pressure with the changing regulatory environment for drug reimbursement. Moreover, to grow this part of the business either through acquisition or development of its own intellectual properties "was going to take a lot of financial resources compared to the CDMO part of the business​." In addition, the firm cncluded that there appeared to be a lot of opportunities in the CDMO sector, not only to acquire facilities but also work with companies who are deliberately outsourcing. "Outsourcing is here to stay and growing​," said Eldered. The company now has six main manufacturing facilities, of which two supply the US. Four are located in Sweden which manufacture solid dose, semi solids, granulates and a dedicated beta lactam plant. The other two facilities are located in France and the UK giving the firm additional solid dose capability as well as capabilities in aseptic sterile manufacturing in ampoules, vials and cartridges and dry powder inhalation. Recipharm acquired these two facilities within the past year through acquisitions. In regards to Inyx, Eldered said that unfortunately the site had suffered from "some neglect​" when Inyx owned it. "We have now been in control of the business for four months and during this time we have been working very hard to regain the confidence of all the stakeholders and in particular customers, suppliers and the employees​," he said. "Whilst this process is not complete, I am very happy with the progress we have made so far. We always recognised we were not going to turn things around overnight, but we have started a capital expenditure program which has been perceived as very positive by all concerned​." Meanwhile, in a bid to take its business into the CDMO space, Reipharm opened a new development centre in Stockholm a year ago which was viewed as an important in helping the firm to win new business and help companies improve their products and/or take cost out of the manufacturing process. The 3000 sq. mtr laboratory can cater for a range of pharmaceutical and analytical development services, including formulation studies and good manufacturing practice (GMP) laboratories for pilot scale manufacturing and manufacture of clinical materials. "We work with the technologies and pharmaceutical forms that we have in larger scale in our production facilities, enabling us to do a smooth transfer to commercial manufacture​," said Eldered. "We also actually see ourselves as problem solvers or enablers for our customers. Ideally we would like our customers to see us a 'one stop shop' where we are their first port of call when they have an outsourcing opportunity​." He added that the compay now has a "significant element" based on pharmaceutical development and formulation. "In fact this aspect of our business has seen tremendous growth in recent years, so much so that we moved in new premises last year... This now gives us far greater resources to expand in this area​," said Eldered. "We really see this as an important aspect in our offering as there are only a few companies that can offer an end to end service from development through to full scale commercial manufacture​." Now, with the sale of its our own products business, Recipharm is also in position of having resources to fund future acquisitions, something that Eldered said is "quite rare amongst our competitors​." "We are continuously evaluating acquisition possibilities, most of which we eventually decide not to proceed with. However, we hope to make one acquisition this year​," said Eldered. As far as Recipharm´s acquisition strategy is concerned, the company is following a three pronged approach involving relationships, technology and markets. With the first route, the firm uses a facility acquisition to gain a good relationship with a large new customer whom it may never have otherwise been able to do business with, Eldered explained. The second approach involves the acquisition of a specific dose form or technology, in order to create certain technology niche capabilities. Ideally the company would eventually begin offering the manufacturing of pre-filled syringes, lyophilisation and cytotoxics through this avenue. The third angle involves targeting specific markets. "I believe much of the growth in our business will come from smaller virtual companies, many of which tend to operate on a fairly local basis​," said Eldered. "We have discovered that by having a facility in a local market gives us a head start in accessing these customers​." In addition, Recipharm is looking to obtain a facility in a lower cost country in order to service customer products which are price sensitive. Meanwhile, the lucrative US market is a particular target of this new growth strategy. Eldered said that given the sheer size of the market, the current weak US dollar, "we also feel that there may be an opportunity in North America​" and some potential US acquisition candidates begin to appear very attractively priced.

Related news

Show more

Related products

Efficient Freezing & Storage of Biopharmaceuticals

Efficient Freezing & Storage of Biopharmaceuticals

Content provided by Single Use Support | 06-Nov-2023 | White Paper

Various options exist for freezing biopharmaceutical bulk material, but selecting the most effective and efficient approach for each cold chain can be...

Follow us

Products

View more

Webinars