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EUROAPI VB RM
EUROAPI
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15 rue Traversière , 75012 Paris
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+33 189206200
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“Euroapi is a growth story based on fast-growing CDMO activity and greater focus on existing portfolio”
More than two years ago, Sanofi had announced the creation of a standalone company that will combine its commercial and development activities in active pharmaceutical ingredients (API) with six of its European production sites in France, Italy, Germany, UK and Hungary. Christened Euroapi and listed on the Euronext Paris stock exchange since May 6, the company seeks to address some of the increasing shortages of medicines in recent times. Euroapi develops, produces and markets APIs and ensures additional capacities for European and non-European countries. This way, the company seeks to help balance the pharmaceutical industry's heavy reliance on APIs sourced from China and India. This week, SpeakPharma interviews Karl Rotthier, Euroapi's Chief Executive Officer, to understand the compelling reasons behind the creation of this company, its strategy and growth plans. Excerpts: Euroapi is a new actor in the API world. How would you describe the company? Euroapi is the leading small molecules API company and the second largest API producer in the world. We already have around 200 APIs in our portfolio that are used in everything — from anti-inflammatory drugs to treatments for Parkinson's disease — and two activities: a wide portfolio of APIs (API Solutions) and custom innovative projects for clients (CDMO). We have six development and manufacturing sites situated in five countries – France, Germany, UK, Italy, and Hungary. Headquartered in Paris (France), Euroapi has a large client base spread over 80 countries worldwide. We have around 3,350 skilled employees on our rolls, including 330 scientists. What were the reasons that led to the creation of the company? There were four compelling reasons behind the creation of Euroapi. First, the sale of APIs in a business to business environment is a much different business model as opposed to the standard large pharma discovery and direct to customer sales model. Since we wanted to focus on APIs, it was logical to create a different company specifically designed for this commercial model. The second reason was to concentrate on growth, both in API Solutions and in CDMO services, as this gives access to attract the large pharma and biotechnology companies previously not accessible because they were competing with Sanofi. Third, we wanted to focus on further developing our industry leading technology toolbox. Fourth, we wanted to expand our commitment to provide supply chain security; Euroapi is backward integrated in more than 85% of its products and does not have a long tail supply chain from China or India. Where do you stand in terms of technologies? We have a broad range of technologies and each of our production sites specializes in different ones. For instance, the Haverhill (UK) facility specializes in flow chemistry and spray drying. The two facilities in France have their own technological focus — Elbeuf specializes in fermentation and vitamin B12, while Vertolaye specializes in corticosteroids and solid chemistry.  Our site in Germany located in Frankfurt focuses mainly on oligonucleotides and peptides. In Hungary, our facility in Budapest specializes in prostaglandins while our facility in Brindisi (Italy) is dedicated to anti-infectives. Can you talk about the size of the market you operate in, and the growth drivers? We are operating in a large, over Euro 70 billion (US$ 79billion) market, which has growth rate of approximately six to seven percent year over year (excluding COVID years where it was approximately 2%). The growth is supported by consistent and sustainable outsourcing trends, favorable demographics due to an aging population, and an increased access to medicine globally. The number of small molecule drug approvals continues to rise, and there is a long pipeline of small molecule drugs in various stages of clinical trials. The production capacities we have in peptides and oligonucleotides also give us an edge in the biologics space. Our CDMO business seeks to partner with these pre-clinical and clinical phase companies and this new growth lever is now unlocked for us going forward. While you have mentioned several growth drivers, we also know that it’s not easy to enter the API business. What are the barriers to entry? We are in a heavy capital and knowledge investment industry. For instance, highly specialized technological expertise and technical know-how is required to get into this field. Along with expertise, you also require important, up-front investment in infrastructure to establish scale in order to win large contracts. In addition to the high infrastructure costs, there is also a long regulatory timeline to bring the validated and approved plants on line.   And last, but not the least, the quality of APIs and reliability of supply is critical. Together, these factors make market entry by new or established entrants quite difficult. Can you tell us the key points of your strategy? We have a compelling strategy focused on clear business and operational levers, combining topline growth, performance improvement initiatives and flexibility. For topline growth, we are increasing our focus on sales to clients other than Sanofi, for our API Solutions business. We are also committing more R&D resources and capacity to innovation and CDMO clients. Moreover, we are expanding our technological platforms and our presence in highly differentiating complex APIs, including a special focus on peptides and oligonucleotides and Highly Potent APIs. To bring about cash efficiencies, we are focusing on our industrial performance, on procurement processes, inventory management and on optimizing our capital expenditures. The API market is highly fragmented, and we are always evaluating actionable opportunities; however, for the near term, our primary focus is on flawless execution of our organic strategy. To sum up, I would say that our strategy is a growth story based on an acceleration of topline growth through fast-growing CDMO activity and greater focus on existing API Solutions portfolio with other clients. Could Euroapi play a role in the repatriation of essential activities for the healthcare sector? Absolutely. Euroapi is well positioned to play a role in the repatriation of essential services for the healthcare sector due to its strengths.  We have a critical APIs and intermediate molecules portfolio. Moreover, we boast of a wide range of technologies and know-how, along with large production capacities and industrial footprint across Europe. In addition, we have the determination to innovate in our industrial processes in order to ensure sustainable production, which is competitive and comes with reduced environmental impact.    

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https://www.pharmacompass.com/speak-pharma/euroapi-is-a-growth-story-based-on-fast-growing-cdmo-activity-and-greater-focus-on-existing-portfolio

#SpeakPharma With EUROAPI
20 Jun 2022
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