How has consolidation in the pharmaceutical outsourcing industry impacted the services and offerings of CDMOs like Flamma?
The continued consolidation of CDMOs into larger conglomerates is definitely bringing new dynamics to the outsourcing market. The one-stop shop is a growth model that is often adopted. Private Equity (PE) backed CDMOs are often driven by the pressure for financial results and constant growth. In the last decade, many drug substance (DS) CDMOs have reached into the drug product (DP) space through mergers and acquisitions. While some have been successful, this model has often shown how consolidated companies operate in silos and ultimately bring little added value to customers.
In fact, many CDMOs have sold their finished dosage DP operations to concentrate on DS manufacturing. Flamma continues to pursue a strategy of organic growth and believes to stay focused on what we do best: organic chemistry for APIs. This means diversifying our services within our core chemistry competences. For example, we have been focusing on hydrogenation, flow processes, high potency, and green chemistry.
While Flamma is considered to be leaders in the amino acid space, we prefer to continue to invest in our know-how, increase our capacity and adopt new processes and technology instead of gambling on acquiring a company in a different market segment. We believe partnerships with specialized companies on adjacent fields is a great option to leverage what each partner brings to the table. By offering a centralized project management approach, this makes it easy for the customer to follow their drug through the different stages of development.
In summary, while many CDMOs experience significant growth due to consolidation, Flamma has continued to evolve by diversifying services, expanding capabilities, and forming strategic alliances.
In what ways does Flamma differentiate itself from other CDMOs in the industry, particularly considering its site in Malvern, PA?
Flamma offers a unique model in the CDMO industry. By having three sites in Italy along with a site in the USA and a site in China, we are able to leverage the capabilities and strategically take advantage of each location to offer speed, commercial supply reliability and back integration where needed. In particular, our Malvern, PA site offers the ability to work on early stage small molecule projects. In addition to R&D and analytical development capabilities, we have 5 kilo labs with reactors up to 100 L, a 300 L (10 bar) hydrogenation unit and a pilot plant with volumes to 500 L that are all operating under cGMP.
We have recently revamped our high potency suite to provide containment to > 0.1 μg/m3 . Flamma USA can deliver materials in the 100s of g to the 10s of kilos thus filling two very strategic customer needs- quick development and scale up. After making a demo batch, we can prepare the necessary cGMP batch or, if necessary, seamlessly transfer this to larger scale manufacturing in Italy. We also develop and manufacture small-niche commercial APIs for small pharma companies that often have difficulty finding the required manufacturing capacity.
What has been the impact of the pandemic on CDMOs, and specifically, how did Flamma navigate through the challenges brought about by the pandemic?
We navigated the pandemic like the rest of the world. Regardless what companies say, nobody had any long-term plans in place. That said, Flamma had a strong will to continue to do our job and to supply the market with the critical lifesaving therapies that we support. Our sites faced the same problems that the entire CDMO industry faced including raw materials shortages, disruption of solvent deliveries and waste pickup, delayed shipments to customers, quarantined employees and other experiences. Some of these challenges still persist today. For example, think about the impact of the great resignation on the workforce yet the majority of issues have stabilized and we have found a new equilibrium.
On the supply side, the pandemic highlighted the vulnerabilities of relying on any one region for essential raw materials and APIs. Despite this, our Chinese site, Flamma Honkai, was able to manufacture with little interruption. Flamma made the decision to increase our capacity by purchasing a large scale European manufacturing site in order to strengthen our own supply chain. With this rational we acquired the Bulciago site. This site is about 40 minutes from our headquarters and is close to Lake Como. We now manufacture APIs along with intermediates for internal use as well as for customers wanting to file a second manufacturing site in the West. Similarly, for our Malvern site, many US based companies can now develop early phase projects close to home. This strategy has proven to be extremely successful with many customers.
Ultimately, I believe the pandemic brought a much needed push to rethink our model. We have not only strengthened our entire business model but also our organization.
How does Flamma determine the right mix of services to offer based on the needs of their clients, and what is your overall strategy in this regard?
Flamma is a very pro-active CDMO. We not only work with our customers but we listen to what they say. Being family run and owned allows us to make decisions much faster than many of our competitors. We are constantly upgrading our facilities with new equipment and technology that has helped bring necessary drugs to market.
One example was the installation of our inverted basket centrifuge. This equipment was critical in solving an issue our customer was having with their other vendor. We were able to decrease the cycle time and provide the material to the customer in order to get to the marketplace sooner. The addition of upgraded reactors and filter dryers continues across the company.
Meanwhile, we have begun to increase our flow chemistry capabilities which helps us to be more green and sustainable. It also allows us to find ways to look at difficult reactions and find a process that solves a variety of issues.
Our long history with amino acid and peptide chemistry is well known across the industry. We have decided to use this expertise and look to provide amidites for oligonucleotide projects. Flamma has developed a wide range of phosphoramidites to aid in early-stage development through commercialization. Using a high quality GMP approach that includes DoE studies, we have been able to provide high quality phosphoramidites to the industry. These are few examples of how Flamma continues to evolve.
Considering the evolving landscape of CDMOs, how does Flamma envision its growth and positioning in the industry moving forward?
The vision for Flamma is to continue to grow as a preferred supplier of commercial APIs and intermediates for innovator companies. In 2025, we will open our second Chinese site at Flamma Honkai. This will double our capacity to 400 m3 and will allow for growth to ultimately 600 m3. This will be leveraged with the Italian sites which have 900 m3 of capacity thus providing the industry with the knowledge that Flamma can secure your supply chain.
We can internally backup our site in China thus taking the risk out of working there. Flamma’s value proposition is far different from our competitors since we have multiple sites in different geographical locations all working under the same quality system with a hands on management style that has proven to be effective.
As Flamma USA continues to become recognized as an option for early-stage development, it can also provide an easy entry into the entire Flamma Group. We are proud to be family owned and run since 1950 and do not intend to rest. We hope to have over 1,000 employees in the next two years but promise to be intimately involved with our customer’s projects. We are fortunate to have many customers be part of the Flamma family and will continue to stay true to who we are- a quality CDMO that works with our customers to provide results.
Learn more about what Flamma USA can do for your early-stage small molecule drug manufacturing needs by visiting FlammaGroup.com