‣ “ The reason , at least in Switzerland , is that we are full and we have been full for the last four or five years ,” Griffiths says . “ We have worked at the edges to debottleneck and boost our efficiency but now we have a pretty full pipeline of late-phase projects with our current customers – and now we need to serve them through validation into commercial . We are way beyond building extra capacity speculatively for large pharma to decide whether it wants it or not .” The capacity and capability the company is adding are specific to what existing customers need . Location is part of that , because many of its customers are simply not willing to go to China or India – though , for those that do , the parent company ’ s facilities are available in India .
Biotechs the key
The customer base now splits about 50-35-15 between the US , Europe and Japan . Carbogen Amcis traditionally had a strong reliance on North America but the European market has strengthened significantly in the last ten years , creating a lot of small biotechs making inroads into key therapies . These companies have also been more productive in R & D than large pharma , making them attractive purchases for large pharma , Griffiths note . Generally around 10-15 % of its customer base goes that way and some business is lost where the buyer wants to bring manufacture in-house but much still stays , because the cost of moving is prohibitive . “ That ’ s why having a very diverse pipeline is critical ,” he explains . “ Thus if you lose a customer or a molecule dies in the clinic , you are not massively exposed . That was the philosophy behind our migrating so much of our business away from large pharma .”
Of course , the CDMO sector has generally been upbeat ever since the CDMO concept became common four to five years ago . The COVID-19 pandemic that has hurt so many chemicalconsuming industries has raised the industry ’ s public profile , attracted investors and created opportunities that companies have taken advantage of . “ Customers are worried about supply chain , particularly if there is going to be another lockdown ,” says Griffiths . “ The industry is doing well at the moment because people are building stock .” If there any clouds on the horizon , they stem from geopolitical factors , notably the rise in nationalism driving different behaviours – most obviously in the US but also in some European markets . This will only encourage further onshoring , Griffiths believes . “ When your pipeline is diverse , you ’ ve got to be brave and make some decisions ,” he says . “ After three years of debottlenecking and nearly 20 years since the last time serious money was put into the business , we got to a point where we could not make any more material increases . This is going to be a step change for us and we think we ’ re ready .” •
“ The industry is doing well at the moment because people are building stock .”
MARK GRIFFITHS
Mark Griffiths
CEO
CARBOGEN AMCIS
24 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981