Optimising drug and delivery services in a single Group streamlines and accelerates our customers' drugs' route to market.
Our Strategy for Sustainable Growth
The Group defines its Strategy for Sustainable Growth in four key elements:
1 Sustained Organic Revenue Growth
- Leveraging the Group's core strengths to win new business from existing and new customers
- Broadening and integrating the Group's services offering to capture business in adjacent markets and territories, and
- Deepening the offering to capture more of the value chain
2 Operating Leverage
- Margin expansion from volume growth and ongoing cost efficiency at both Aesica and Bespak
- Drive innovation to develop new device and formulation technologies
- Selective acquisition of, and investments in, adjacent / complementary technologies / markets
Sustained organic revenue growth
Leverage core strengths/business with existing and new customers
- Award of two new development contracts
- Significant new development and supply agreement for proprietary pMDI valve and actuator technology for Aeropharm
Broaden offering into adjacent markets and territories
- Following commercial unveiling of Syrina®, Lila® and Lapas®, continued to generate widespread interest from several pharma companies with injectable drug portfolios
Deepen offering capturing more of the value chain
- New strategic development manufacturing agreement in retinal therapeutics for Oxular - the Group’s first drug and device development and manufacturing contract
- Working with a leading Japanese pharma customer, Aesica has provided the active ingredient for a new anti-inflammatory formulation containing S+flurbiprofen for osteoarthritis
Margin expansion from volume growth and cost efficiency
- Delivery of organic revenue growth in the Group through leveraging core infrastructure and delivering productivity
- Operating leverage from increased volume and further benefits driven from continuous improvement initiatives
- Elimination of low margin business and improvements in operational performance at Aesica
Develop new device and formulation technologies
- Unveiled new Syrina® 2.25, one of the most compact versions of auto-injector available today
- In collaboration with a key strategic customer, Aesica brought to market readiness a product manufactured using the first semi-continuous processing line and technology installed at a CDMO
Selective acquisitions and investments
- Aesica successfully integrated within budget
- Equity investment in Oxular
- Evaluation of multiple further opportunities
Measured against all four elements, we continue to deliver on our strategy:
1 Sustained Organic Revenue Growth
- Continued progress in existing development pipelines of both Bespak and Aesica.
- In injectables, we signed a significant new master development agreement for our proprietary Vapoursoft®Syrina® auto-injector technology with a leading global biopharmaceutical company.
- Bespak's second injectable device, UCB's Cimzia® AutoClicks® pre-filled pen, was successfully launched in the UK and other European markets.
- In respiratory, AstraZeneca's Bevespi Aerosphere® was launched in the USA. Bespak has been awarded a significant new multi-year agreement for the scale-up and supply of its proprietary pMDI valves and actuators.
- Aesica has been routinely supplying commercial product using the first semi-continuous processing line and technology installed at the Queenborough site and we anticipate using this line for additional third party development work in the future.
- Aesica has been working with a leading Japanese pharmaceutical company to provide the active ingredient for an anti-inflammatory formulation containing S+ flurbiprofen. The patch received market approval with the Ministry of Health, Labour and Welfare in Japan for the indication of osteoarthritis. During FY2017 Aesica moved from validation to routine commercial supply of S+ flurbiprofen to this customer.
2 Operating Leverage
- Bespak revenue growth of 3.3%, with significant operating leverage delivering 3.9% EBIT growth and 10bps EBIT margin growth to 21.6%.
- Aesica recorded a significant improvement in operational performance with EBIT increasing by 17.7% and a further 60bps improvement in EBIT margin to 8.0%.
- The commercial and innovation teams continue to generate very strong interest in our new technology platforms on a range of opportunities. The innovation funnel has progressed broadly during the period across a number of therapeutic areas and technologies
- Vapoursoft® powered Syrina® and Lapas® auto-injectors, and our Lila MixTM and DuoTM technologies have continued to generate widespread interest as innovative and novel drug delivery systems and devices, with several biotech and pharmaceutical companies initiating feasibility and development programmes for their injectable drug portfolios
- This rapidly expanding innovation funnel includes an active schedule of early stage development programmes, feasibility programmes, and programmes awaiting initiation
- In October 2016, Bespak unveiled its latest addition to the Syrina® range of auto-injectors: The new Syrina® AR 2.25 auto-injector, suitable for delivering volumes of up to 2.0ml using a standard 2.25ml pre-filled syringe. Syrina® AR 2.25 provides patients with a fully-automatic two-step, compact device for the self-administration of viscous drug formulations smoothly and safely in less than 15 seconds. Syrina® AR 2.25 has been tailored specifically for higher viscosities while still enabling the safe use of glass syringes
- A changing regulatory requirement within the pharmaceutical industry is for product to be uniquely identified to the individual pack level. This process is known in the industry as serialisation. Aesica has been an early provider of serialisation services to the industry including China and Latin America that have adopted this process. It is also well advanced in developing the service for the next wave of territories adopting serialisation including the EU. We believe Aesica is in a strong position relative to the sector in general and we have been actively promoting this offering with marketing and industry events such as a recent webinar series. Further capital expenditure is being committed to enhance our capabilities in this area
- Successful integration of Aesica
- The acquisition, and subsequent successful integration, of Aesica allows the Group to offer pharmaceutical and Life Sciences customers a single source for drug and device development, formulation, manufacturing and fill/finish – a highly differentiated offering compared to our competitors
- A core objective of the acquisition of Aesica was to harness, over time, significant cross-selling opportunities, and to secure development and manufacturing opportunities for combined formulation and device services. The Bespak and Aesica commercial teams are working closely together, enhancing each other's capabilities and strengths. They have a joint mission to support their core divisional activities, to facilitate introductions for their sister division's commercial teams to access their core customer relationships, and to work together jointly to secure combined formulation and device contracts
- Since the acquisition, a number of joint Bespak and Aesica meetings have been held with customers, and the consequent reaction has been encouraging. In addition, cross-selling introductions have led to firm enquiries in a variety of device opportunities for Bespak, for both customer and Bespak IP platforms
- In FY2016, the Group was awarded a new strategic development and manufacturing agreement with retinal therapeutics company, Oxular. The contract is related to novel ocular device and drug applications designed to access specific small spaces in the eye and to provide unique drug distribution to treat retinal diseases. This is the Group's first drug and device development and manufacturing contract and will leverage both Bespak's device development and manufacturing, as well as Aesica's manufacturing and filling, capabilities
- This contract is an important demonstration of the value of Consort Medical's single solution for device and drug combinations. A significant attraction for Oxular was Consort's ability to offer a "one stop shop" for development and eventual commercial manufacture of the final filled, finished and packaged product
- The Group continues to pursue new opportunities that will leverage both Bespak's device development and manufacturing, as well as Aesica's formulation, manufacturing and filling, capabilities
The global pharmaceutical contract manufacturing market is forecast to reach US$79 billion in 2019, growing at an estimated compound annual growth rate (CAGR) of 7.5% between 2013 and 2019. If the trend towards outsourcing in the pharmaceutical market continues as expected, we believe that the demand for an integrated service offering from a single provider will increase.
Bringing Aesica's drug formulation, manufacturing and packaging capabilities into the same group as Bespak's delivery device development and manufacturing has created a leading, global, single source drug and device contract manufacturing partner for pharmaceutical customers.
The Group can now provide a significantly broader, deeper and more integrated drug/device contract manufacturing and supply chain solution to our customers in this growing market. The Group's strategy is to continue building on, and strengthening, our core Aesica and Bespak divisions through increased market reach; innovation in new products, processes and technologies; and by capturing more of the drug/device value chain. In addition, as a larger pharmaceutical services company, we will offer existing and prospective new customers a single source supply chain solution for drug and delivery device development, formulation, manufacturing and packaging.
Optimising drug and device services in a single group will streamline and accelerate the route of drugs to market and reduce the cost and complexity of drug/device development for the Group's pharmaceutical partners. We believe that such an offering is highly differentiated from Consort Medical's current competitors.