"In 2020, we modified our business model by creating two distinct business units. One is fully dedicated to APIs for generics, the other is exclusively focused on CDMO activities."

Jorge Nogueira

CEO, DIPHARMA FRANCIS

April 22, 2021

How has Dipharma evolved from its origins to today?

Dipharma was founded in 1949 by Mario Biazzi, who created an innovative concept to manufacture nitroglycerin using a continuous process. His major concern back then was safety, because nitroglycerin was produced with a batch process, often resulting in severe accidents. He came up with the idea of a reliable and safe continuous process, and for many years that was our main product. In the sixties we found ourselves getting requests for nitroglycerin in medical applications, and by the seventies we had become a major player in the generic API market. We also received our first FDA GMP audit, which means we have five decades of proven experience in this field. From then on, our business model centered around building a successful pipeline of new generic APIs and select contract manufacturing services for pharmaceutical companies worldwide.

About three and a half years ago we began considering expanding our CDMO business because we saw an attractive potential for our broad scope of capabilities and resources. In 2020, we modified our business model by creating two distinct business units. One is fully dedicated to APIs for generics, the other is exclusively focused on CDMO activities. In anticipation of this move, in 2018 we acquired Kalexsyn, a CRO that is based in Michigan. It offered well-established CRO services which we rapidly expanded, including a brand-new state-of-the-art GMP suite which has been fully operational since early 2020.

How does the Kalexsyn acquisition fit with Dipharma’s broader global strategy?

Our investment in Kalexsyn was the starting point to reinforce our global presence through a stronger platform in the U.S. A key element for us is to anticipate where the market is going and position our business accordingly. The ability to have marketing activities and eventually manufacturing facilities in different places around the world always brings a more realistic perspective of how the market is evolving. This is essential to ensure the proper positioning for our company when it comes to technological trends, resource allocation and capital investment.

How does Dipharma strategize where it locates its facilities?

For us, overall competitiveness is a primary focus. This means not only the process technology involving a given product, but also whether we focus on reaching best practices on everything else revolving around that product, like process safety, quality, and many others seeking overall operational excellence. All these factors are critical to provide the flexibility and the sustainable reliability our customers require.

Perhaps sometimes we jump to the conclusion that it is better for us to manufacture in one place over another. I believe the current pandemic has taught us about the inherent risk of over-dependence on certain regions under the assumption of lower costs only, until discovering that the whole value proposition was not properly evaluated.

Our most recent capital investment, for instance, involved the duplication of our pilot plant at our Mereto facility in Italy.

How are advances in technology influencing Dipharma’s business?

Dipharma was born from an innovative idea and technology has been our backbone ever since.

We approach technology from different fronts to maximize its critical mass. We have, for instance, been investing considerably in continuous processing which will revolutionize production practices in the foreseeable future. We have the advantage of counting within our group the leading company in reaction technology (Biazzi SA) and we have therefore been co-developing new projects to support continuous production that we will implement in the future.

We are also building additional R&D capabilities since we want to be able to propose creative ideas to substantiate our customers’ projects and ambitions. But our focus is not solely about yields, and it is not down to the chemistry alone. If you focus only on the chemistry, you might find some success, but the full picture tells you that customers equally value flexibility to adjust to their needs and timelines along with spotless reliability. That is why those factors are at the top of our priority list.

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