German CMO looks to grow US biz through rise in SMEs and virtual pharma

By Dan Stanton contact

- Last updated on GMT

Rottendorf is looking to grow its share of US clients
Rottendorf is looking to grow its share of US clients
Rottendorf is looking to break from being “the best kept secret in the CMO world” by targeting the thousands of virtual and SME pharma firms in the US, according to its CEO.

German contract manufacturing organisation (CMO) Rottendorf has been described as “the best kept secret in the world of CMOs” ​by a SVP for outsourcing from a top 5 pharma company, but the firm is looking to break this cast by targeting the thousands of SME (small and medium-sized enterprises) and virtual pharma firms across the Atlantic, according to US CEO Gordon Haines.

Haines spoke to Outsourcing-Pharma.com at the recent AAPS Conference in San Diego, and said five years ago a minimal amount of the firm’s business came from the US but this had grown to 20% after targeting virtual, small and mid-sized pharma companies, to which Rottendorf is “a real good fit.”

“Our business philosophy is that of ‘total process ownership,’ acting as if we’re part of each of our customer’s companies,”​ he explained. “We have a lot of expertise that we bring to the table and will question what [a client] wants to do, particularly when we see opportunities to improve cost or robustness of the product.”

The top players in the CMO industry have been getting larger through acquisitions and investments, so we asked Haines how Rottendorf would compete in an increasingly consolidated market.

“Bigger is not always better. Bigger companies hunt in a specific marketplace, but I don’t have to necessarily hunt in the same place,”​ he told us. “There are thousands of small and virtual pharmaceutical companies that the big players would never pay attention to but they still need services.

“They’re looking for that supplier who will take good care of them, as they don’t have the infrastructure and we play very well with those sorts of customers as we provide them technical operations capability that they would have no access to.”

Manufacturing: Big Pharma's necessary evil

Rottendorf has been a manufacturer of solid oral dose forms since 1928, with facilities in Germany and France. The company currently makes 600 different products for 200 customers, including a number of Big Pharma companies which Haines said are continuing to outsource their manufacturing needs.

“For Big Pharma firm, manufacturing is not necessarily their strength nor does it suit the need to be part of their core process,”​ he explained, as the end consumer does not care where or how the product was made, just as long as it works and is safe when taken.

“Manufacturing operations are fairly people intensive, capital intensive etc., so if you didn’t have to have all those costs on the books and you can focus all your money on finding new science and developing the next drug, where would you rather spend it?

“They don’t make their money manufacturing, it has been a necessary evil in the past,”​ he continued. “Where pharma makes its money is in the science and creating the right medicine, so if they can find someone who is competent and can make do the physical tech ops for them that’s actually a better business model for pharma.”

Related topics: AAPS 2014 San Diego

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