NextPharma - Jefferies Group · 2014-12-02 · Global drugs sales are estimated to grow 5% a year,...
Transcript of NextPharma - Jefferies Group · 2014-12-02 · Global drugs sales are estimated to grow 5% a year,...
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Andy Kelley - COO
NextPharma
Jefferies 2014 Global Healthcare Conference19th – 20th November
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Agenda
• Market Overview
• Introduction to NextPharma
• Services, Operational set-up and Markets supplied
• Key Success Factors, Customers and Products
• Strategic Outlook
• Q&A Session
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I. MARKET OVERVIEW
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Development of the Global Pharmaceutical Market
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Global drugs sales are estimated to grow 5% a year, with oncology being the largest category growing
10% a year
14%
19%
2016
423
37%
9%
10%
12%
15%
17%
2014
382
38%
+5%
2018
35%
9%
10%
12%
464
9%
10%
14%
14%
16%
2012
356
42%
8%8%
15%
13%
14%
2010
333
44%
7%7%
17%
12%
13%
Other
Endocrine
Musculoskeletal
Central Nervous System
Systemic Anti-infectives
Oncology & Immunomodulators
7.6%
8.5%
0.3%
6.2%
10.0%
1.6%
CAGR2012-18
Key comments
•Demand for drugs is increasing driven by increases in chronic disease levels and an aging global population
•Oncology is one of the largest and fastest growing therapeutic areas, followed by anti-infectives and endocrine
•Small and medium pharma are playing an important role in the market
Global drugs sales by therapeutic area
(£ bn)
Source: Evaluate Pharma, theoncologist.alphamedpress.org; Expert interviews
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Development of the Global CMO market
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Global CMO market is estimated to grow 7% a year across all geographies, and solid dose form
constitutes 62% of the market
5 5 5 5 6 6 6 7 7
3 3 4 4 4 4 5 554
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45
55
66
+7%
+6%
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2009
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USEuropeROW
CAGR14-1709-14
62% 62% 62% 61%
33% 33% 33% 33%
100%
2011
5%100%
2012
100%
2013
5%5%
2018
6%
100%
Semisolids Liquids Solids
6%
8%
6%
7%
7%6%
Global CMO market by regions
(US$ bn)
Breakdown by dosage forms
(% of total market value)
Source: Frost & Sullivan, BCC Research
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II. INTRODUCTION TO NEXTPHARMA
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NextPharma ‘snapshot’
Double digit growth €143m turnover
Over 150 customers
including 7 out of the top 10
pharmaceutical companies
6 centres of excellence
1,000+ employees
• Capability to produce 4 billion tablets
• 500m finished packs produced
Approximately 100 customer &
authority audits each year
More than 10,000 batch releases
25%+ of employees work
in quality & regulatory roles
Smart
every
time
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With over 150 customers across 6 continents
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Send, UK• Head Office
Limay, France• Liquids
• Suppositories
Bielefeld, Germany• Modified Release/Pellets
• Analytical Services
Göttingen, Germany• Solids
• Clinical Trials Services
Berlin, Germany• Penicillins
Waltrop, Germany• Hormonal solids & semi-solids
• Semi-solids
Göttingen, Germany• Cephalosporin
Our 6 Centres of Excellence
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NextPharma today is a business refocused on a Commercial Core & Niche Capabilities
Today:
• NextPharma is focusing
on its core capabilities
and expertise,
specialising into niche
markets.
• Focus on commercial
scale contract
manufacturing,
supported by product
development services
Acquisition of
NextPharma by
an affiliate of
Sun Capital
Partners LLC
Appointment
of COO and
EVP of Sales
& Marketing
Closure of
unprofitable
Belgium site
Sold US
site to
prevent
ongoing
losses and
shutdown
costs
FDA approval
of the sites in
Bielefeld and
Göttingen
Replacement
of CEO and
consolidation
of growth
2011 2012 2013 2014
Development since SUN’s Acquisition
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III. SERVICES, OPERATIONAL SET-UP AND MARKETS SUPPLIED
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NextPharma positioning as a CMO
Contract Manufacturing
Technology Transfer
AnalyticalServices
DevelopmentServices
Clinical Packaging
Technical expertise and excellent
quality
Flexibility and responsiveness
Commercially competitive
Reliability
Speed in execution
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NextPharma: What do we do in simple terms?
NextPharma provides contract manufacturing services to pharmaceutical companies serving global
markets
NextPharma manufactures, amongst others:
Oral contraceptive for 10+ pharmaceutical companies across Europe
Antibiotics (penicillins and cephalosporins) to treat infections
Controlled drugs (narcotics)
Painkillers (tablets, gels, sprays)
Testosterone gels
Vitamin supplements (pellets)
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SolidsPowders for
SuspensionsPellets Tablets
Film Coated
Tablets
Hard Gelatine
Capsules
• Dry syrups
• Bottles
• Sachets
• Taste masking
• Modified release of API
• Protection of API
• Organic solvents
• Compressed Powder
• Compressed Granules
• Compressed Pellets
• Bi-layer (2 different blends
compressed in one tablet)
• Modified release matrix tablets
• Orodispersible
• Mini-tablets
• Coating for taste
masking
• Coating for modified
release of API
• Coating for
protection of API
• Aqueous/organic
solvents
• Powder blend in
capsules
• Granules in capsules
• Pellets in capsules
• Tablets in capsules
P a e d i a t r i c F o r m u l a t i o n s
M o d i f i e d R e l e a s e
Liquids• Buccal sprays
• Topical sprays
• Nasal sprays
• Oral solutions & Suspensions in bottles or ampoules
Semi Solids• Topical gels & creams
• Ointments
• Suppositories
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Commercial ManufacturingBroad range of dosage forms
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NextPharma’s services: Pharmaceutical development
Pharmaceuticaldevelopment
• Formulation and
process development
• Analytical method
development
• Stability testing
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NextPharma develops and provides the process for transferring
the product formulation to industrial scale manufacturing
Pharmaceutical development services support contract
manufacturing services and include:
• formulation development
• analytical and microbiological testing, manufacturing of clinical batches
as well as clinical trial labelling and
• stability testing
• tech transfer / scale-up
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NextPharma’s services: Clinical supply
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Clinical Manufacturing, Packaging & Labelling
• Blinding/Encapsulation capabilities for all major dosage forms
• Primary and secondary packaging of solids, semi-solids, liquids
Storage & Distribution
Regulatory Support
Clinicalsupply
• Clinical batch
manufacture
• Phase I – IV
clinical trials supply
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NextPharma’s services: Commercial Manufacturing
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NextPharma’s manufacturing centres of excellence provide
customers with reliable product supply in facilities that include
European, US FDA and ANVISA approvals.
Sourcing and testing of materials
Bulk manufacture
Primary packaging
Secondary packaging
Quality Control and market release
Shipment to customer
• Validation batches
• Technology transfer
• Launch and supply
CommercialManufacturing
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Markets we supply
Berlin
Bielefeld
Göttingen
Limay
Waltrop
Europe USA ROW
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NextPharma Group FDA success update:
• Waltrop: successful routine re-inspection January 2014
• Bielefeld: first FDA audit for US market successfully completed August 2014
• Göttingen: first FDA audit for US market successfully completed September 2014
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IV. KEY SUCCESS FACTORS, CUSTOMERS AND PRODUCTS
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Why customers select NextPharma as a partner?
Service
Strong, secure
foundations
Demonstrating innovation
and world-class technical
skills
Modern outlook /
facilities
Competitive
Speed
Recognised by customers
for delivering a fast
response
Ability to react and
deliver the ‘smart’
solution
Passion
Proven excellence
creating client specific
solutions
Depth of understanding
and flexible approach
Application of
enthusiastic scientific
expertise
Proactive communication
s m a r t e v e r y t i m e
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Customer and Products
Revenue split 2013
56%31%
9%4%
Specialty/Midsize
Generics
Big Pharma
Other
30%
22%22%
9%
9%8%
Solids & Cephalosphorins (Göttingen)
Hormones (Waltrop)
Liquids & Semi Solids (Limay)
Healthcare Logistics
Pellets (Bielefeld)
Penicillins (Berlin)
• NextPharma has long-standing relationships
with over 150 international blue chip
customers (incl. 7 out of the Top 10 Big
Pharma) as well as mid-size pharma and
biotech businesses
• The customer base is stable and diversified
and more than 50% of revenue is generated
with speciality/mid pharma
• Top 10 customers contribute c. 56% of
revenue
• The products are well diversified and
generic products make up c. 40% throughout
the portfolio
• There is no over-dependency on single
products
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V. STRATEGIC OUTLOOK
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Strategic Outlook (1/2)
Focus on core expertise
• Further focus on its core expertise in Contract Manufacturing Services, including specialised product
types/technologies (e.g. hormones, antibiotics, pelleting)
Focus on key strategic customers with long-term supply agreements
• Growth is expected to be in line with market average over the period, with growth from existing key
strategic customers. Revenue assumptions from new business wins for CMS are based on known projects
within the sales pipeline.
Strategic or customer-funded capital investment
• Focus on strategic or customer-funded capital investment to support growth and secure future business
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Strategic Outlook (2/2)
FDA approvals to further penetrate the US market
• It is a strategic objective to upgrade the quality level in most of our sites to comply with FDA
regulations, in order to penetrate the US market (the largest Pharma market in the world) and to access
US customers bringing products to Europe.
Cost savings
• Drive cost savings through implementation of the on-going reorganisation programme
Improvement of efficiency and profitability
• Generate efficiency savings and improve profitability through rationalisation of low margin
customers/products/SKUs
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CMO market split by key players
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Contract manufacturing market is highly fragmented, with top five players having only 35% of the
market share
CMO market split by key players
(US$ bn 2012)
Notes: *: 2012 figures since 2013 data not publicly available; DPx incl. Patheon and DSM; Aenova incl. Temmler and Haupt Pharma; Others include Lonza, Quintiles, Camprex, Albany, Rottendorf and other companiesSource: Frost & Sullivan, Capital IQ, Amadeus, Company websites
0.2(1%)
Nex
tPh
arm
a
6.6(46%)
Oth
er
Ho
sp
ira
O
ne
2 O
ne
*
0.3(2%)
Bax
ter
Bio
ph
arm
*
0.3(2%)
Ae
sic
a
0.3(2%)
Rec
iph
arm
0.3(2%)
DP
T
La
bo
rato
rie
s*
0.3(2%)
Fa
reva
*
0.5(4%)
Ve
tte
r P
ha
rma
0.5(4%)
Bo
eh
rin
ge
rIn
ge
lhe
im
0.6(4%)
Fa
ma
r
0.6(4%)
Ae
no
va
1.0(7%)
DP
x
1.0(7%)
Cata
len
t
1.8(13%)
Top 5 cover ~35% of
market, highly
fragmented
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The CMO market is experiencing rapid consolidation
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CMOs are following different M&A strategies. This leads to a significant M&A activity which results
in increasing acquisition multiples.
Key Transaction themes
1. Scale and market Share – selected transactions include:
Acquisition of Meda’s New Jersey facilities to add additional cold storage and a larger analytical laboratory
(Sep 14)
Acquisition of Temmler to establish the groups position as a European market leader and add new dosage form
capabilities/service segments e.g., clinical trial materials, distribution logistics and licensing (Oct 12)
2. New capabilities and service segments – selected transactions include:
Acquisition of Aesica provides horizontal integration in oral delivery and vertical integration in drug
formulation and finished dose manufacturing (Sep 14)
Acquisition of Corvette Group strengthen capabilities in lyophilisation, specifically handling hormones in both
vials and ampoules (Aug 14)
Acquisition of Contract Packaging Resources to enhance its global packaging services (Sep 14) and Haupt
Pharma in line with adding capability to manufacture steriles and other complex products, such as hormones,
antibiotics and cytostatics (Oct 13)
3. Increased focus – selected transactions include:
Divestment of clinical trial supply and packaging services to Bellwyck (Sep 12)
Divestment of commercial pharmaceutical packaging operations to Frazier Healthcare, creating PCI (Jun 12)
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Market trends support NextPharma’s business model
The CMO market is driven by a number of key trends
of the pharma industry, such as:
• Big Pharma outsourcing of mature products
• Health care reforms and price pressure
• Pharma companies focusing on core competencies
• Reduction of complexity of supply chains
• Virtual pharma companies becoming more successful
• These trends support
NextPharma’s business
model
- Mid size CMO focusing
on core business
- Long term relationships
- Focus on specialty
companies
- Solid growth over the
last three years on
revenue and
profitability
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Q&AName of the Presenter
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