Recipharm, a commercial organisation founded by Lars Backsell and Thomas Eldered back in 1995, has emerged as one of Europe’s leading CDMOs. It is the No1 such company headquartered in Sweden and the first CDMO to be listed on the NASDAQ OMX main market in Stockholm (March 2014). It has 1,500 full time employees and is a full service international contract manufacturing provider. The company operates development and manufacturing facilities in Sweden, France, the UK, Germany and Spain and is headquartered near Stockholm.
Recipharm manufactures and supplies the global pharmaceutical market with hundreds of different products in multiple dosage forms including granulates and powder, solid dose, semi solids, beta-lactams, hormones, oral liquids, sprays, dry powder inhalers, sterile liquids and lyophilisates. Specifically, the company already has four manufacturing sites located at Stockholm, Strängnäs, Karlskoga, Höganäs in Sweden, one in Ashton, UK, one in Wasserburg, Germany, one in Monts, France and another in Parets, Spain. The company has invested heavily in its manufacturing facilities and in 2012 – 2013 alone installed new filling lines at Monts and a new filling and packaging line in Höganäs. Moreover, In terms of EU import services, the company provides regulatory compliance support, stability studies, product life cycle optimisation and logistics solutions including VMI.
The company’s goal is to cement itself as a world leading supplier of CDMO services, to continue to optimise its service offering and to be acknowledged by multiple stakeholders, including customers and employees, as the best-in-class provider of contract development and manufacturing solutions to the pharmaceutical industry. Consequently, the company offers expertise and facilities in the development, production and supply of pharmaceuticals to demanding customers for global use. Furthermore, its business model offers clients flexibility, local adaptability, a committed customer focus across its contract manufacturing services and strong corporate leadership, manifested in the authority and expertise of its Group Management and Board of Directors. This is reflected in the loyal, well established and stable customer base that the organisation has built up over 19 years.
The company has achieved strong top-line growth, expanding revenues from 222 million SEK in 1995 to 2, 125 million SEK by 2013. In terms of business segments, 41% of sales are currently generated through manufacturing in Sweden, 51% manufacturing in Europe and 8% through the growing development and technology market. Recipharm is recognised as a stable, non-cyclical, cash generative business consistently achieving a strong financial performance.
To date, the company has secured a number of its largest customers through new production agreements with prominent pharmaceutical companies such as Meda, AstraZeneca and Abbott. In terms of overall numbers, the company has developed strong relationships with over 100 customers. There is significant client diversification with big pharma accounting for 53%, small and medium sized speciality pharma 41%, generics 5% and Research and Development 1% of current revenues. Each of the company’s three largest customers has 20 – 58 products being manufactured in four to six of Recipharm’s facilities. Indeed, the company’s pan-European manufacturing platform, provides such a wide wide range of technologies, competencies and services that the company currently has over 200 products in production.
Recipharm is well positioned to take advantage of the strong and rapid growth potential within the global CDMO market. Indeed, Europe and the US alone account for more than 75% of this rapidly expanding market which is predicted to display strong double-digit growth going forward, achieving (CAGR)1: 12% for the period 2011 – 2015. The company possesses an ideal platform from which to execute its multi-faceted growth strategy. This includes leveraging a strong sales organisation to grow business organically from existing customers and expanding its manufacturing business by driving new product volumes through new and strategically important clients. It also includes, maximising use of existing development capabilities to build a broad portfolio of niche proprietary products for out-licensing investment in in-house specialist capabilities and technologies including lyophilisation. Finally, and with equal significance, it includes continuing previous successes in consolidating the industry through targeted acquisitions in high growth areas within the CDMO market.
The company has strategically set in place a high growth D&T division, aligned to its broad manufacturing capabilities but operationally separate. All the company’s manufacturing facilities operate as profit centers.
Recipharm has a portfolio of 22 products which are sold via partner organisations. This has been identified as a powerful growth driver and Recipharm has established a pipeline of development products. This is supported by 35 skilled employees.
Looking to the immediate future, the company’s acquisition strategy will continue to play an important role in Recipharm’s planned expansion. Indeed, the company is currently eyeing the geographic markets of North America, India and Europe for acquiring new facilities. Notably, Recipharm is looking to further expand its capabilities in the manufacture and handling of potent pharmaceuticals (cytostatics) and the provision of prefilled syringe products and services.
Thomas Eldered, the CEO of Recipharm: “As a full service international CDMO, with a strong track record and a strong financial base, we are well placed to build on our success to date. We will, expand our global footprint further, whilst growing our business and customer base to ever higher levels. We anticipate adding business both organically and by acquisition. Indeed, from the combined mix of extensive manufacturing capabilities and development and technology services, we planto double our sales within five years, achieving a return on operating capital greater than 15%. Our shareholders will be rewarded with dividends 30 – 50% of net profit”.