Steven Klosk, CEO of Cambrex, tells Speciality Chemicals Magazine about the strategies underlying the company’s success, this vision for the future, and the importance of DCAT Week, where he’ll be catching up with many other industry leaders this week.
Cambrex is a global market leader in small molecule APIs, advanced intermediates, custom development and manufacturing, and controlled substances. Headquartered in New Jersey, USA, the company has cGMP manufacturing facilities in the US and Europe. Steven Klosk has been with Cambrex since 1992 (President, CEO and a Director since 2008), giving him a 25-year history with the
SH: Welcome to DCAT Week ‘17! I understand Cambrex is making this a main event for them this year. What do you think makes DCAT so special?
SK: DCAT is unique in that it is truly a meetings-orientated event which provides the opportunity to talk to many customers about specific business opportunities. Because we host so many face to face discussions, it is always a very valuable event for Cambrex.
SH: You have a very impressive history with Cambrex – 25 years shows considerable dedication. What do you think the company’s main strengths are, in this competitive market?
SK: Cambrex is almost unique within the leading global CMOs in that our approach is to focus solely upon small molecule chemical development and manufacture. By researching the needs of the small molecule market and making investments in key technologies and the right assets to match the demands and current shortages, this strategy has afforded double digit growth year on year, and this trend is expected to continue in 2017. We are also unusual among CMOs in that we are able to supply New Chemical Entity (NCE) APIs to innovator customers as well as supplying APIs for generic and reformulated products.
Our strengths lie very much within the wealth of expertise and the ability of our employees, and their dedication to the projects and customers who they work with. Customers can rely on us to do quality work. We have a team of exceptional scientists and engineers, supported by excellent management, and backed by a Board committed to investing in the infrastructure of our facilities to make them truly world leading. We believe, because our customers tell us, that we are the experts they enjoy working with.
SH: Small molecule innovation was overshadowed by developments in biological drugs for a while, but they seem to be making a comeback. Why do you think that is?
SK: I would argue that there is no comeback, the small molecule market has always been very strong! There are around 4,000 launched small molecules on the market and someone has to make the API and GMP intermediates for these drugs. Demand for small molecules has continued to grow. The FDA approved the highest number of NCEs in 2015 since 1999, and there now exists the fastest growing small molecule clinical pipeline reported in the last 20 years – with more small molecules in Phases I, II and III than ever before.
Also, the perception that chemical manufacturing was going to low-cost countries, never to return has proven to be wrong, and we are witnessing pharmaceutical companies looking for Western, reliable manufacturing partners, where the driving factor is not just the cost of goods.
The challenge for Cambrex – and other manufacturers looking to capitalize on this opportunity – is having the capacity to meet the demands of the market. Cambrex has a very proactive approach to investment and matching it to forecasted future market needs, and since 2012 we have invested over $200m in facility expansions, equipment, technology and EHS upgrades to ensure that these demands can be met, and standards in quality, customer service, flexibility and reliability are not only maintained but enhanced. As CEO, I am very proud of this strategy, and I believe it sets us apart from others in the industry, and we have the support of clients who see our philosophy as innovative and forward looking, so that we are investing in ‘the right’ capacity.
SH: Cambrex quite recently acquired PharmaCore, a North Carolina-based company that specializes in developing and up-scaling small molecule APIs for clinical phase projects. What was the strategy behind that acquisition?
SK: PharmaCore, now Cambrex High Point, was a great fit for the Cambrex business, as there were similarities between the companies in core strengths and business practices, also complementary technologies that expanded our reach into earlier phases of the development pipeline. Like Cambrex, PharmaCore focused on small molecules and had expertise in handling and manufacturing controlled substances, and had an excellent quality and regulatory audit track record, as well as a business model that was committed to investment and its workforce. Where Cambrex serves customers for late-stage development and processes requiring scale-up for Phase III and launch as well as in-market supply, PharmaCore serves customers through early-stage research including toxicology and IND submission to Phase I-III clinical trials.
SH: The new administration gave the US Pharma industry quite a shaky start to 2017 but, as we near the end of the first quarter, how is the general mood in US Pharma?
SK: Early signs are that the new administration is looking to reduce costs while increasing manufacturing in the US. They may seem mutually exclusive but the API contribution to overall cost is low, so if the macro drivers and the overall picture are taken into account, the future for US CMOs is good. In addition, if lower drug prices lead to more prescriptions, then this is likely to drive higher volumes of APIs.
SH: Where do you think the greatest opportunities lie, both in the US and beyond?
SK: The US market is a major growth area, and it is strange to think that after years of manufacturing site closures and consolidations within the industry as a whole, we now face shortages of US CMO capacity, especially at critical volumes. For Cambrex, we will continue with the strategy of investment in capacity where it is relevant for the needs of the market and also in technologies that differentiate us, for example, in the manufacture and handling of controlled substances and highly-potent compounds. Controlled substances is an area Cambrex has been traditionally very strong in and as a company, we routinely manufacture and distribute commercial quantities of Schedule II-V controlled substances and hold Drug Master Files for more than 20 controlled substances. Our portfolio is one of the largest globally and is built on more than 15 years of experience and expertise in this highly challenging field.
As an organization, we have implemented a strategic five-year plan to become the leading supplier of small molecule APIs to both the innovator and generic pharmaceutical markets focusing on quality, customer focus, capacity generated by both investment and operational excellence and reliability of supply, while also adding innovative technologies and capabilities.
Our investment continues in all our global sites to meet the international and local needs of the industry and our business model, and as shown by the acquisition of PharmaCore, where there may be opportunities to expand our capabilities and increase our reach to customers, we will react to these. So continue to watch this space!