Specialist
Former VP at Albany Molecular Research Inc (AMRI)
Agenda
- Significant developments taking place within the CDMO (contract development and manufacturing organisation) sector, focusing on Curia and highlighting outsourcing trends
- Curia’s biologics service offerings across drug discovery, development and manufacturing capabilities, breaking down strengths and weaknesses
- Expansion strategy into niche service areas and high-potency compound manufacturing, as well as resulting pricing strategies
- Curia’s competitive positioning relative to other key players such as Catalent (NYSE: CTLT), Patheon and Lonza (VTX: LONN)
- 2023 outlook, including potential consolidation activity
Questions
1.
What are 2-3 key developments worth highlighting within smaller, privately held CDMOs [contract development and manufacturing organisations] such as Curia? Could you comment on these players’ positionings relative to some of the larger manufacturers? How conducive has the operating environment been?
2.
Given your expertise in the drug discovery space, would you highlight any specific trends within that segment, pertaining to the smaller CDMOs? You mentioned some of the niche areas that Curia has been trying to enter.
3.
What are your thoughts on AMRI’s [Albany Molecular Research Inc’s] decision to rebrand as Curia? What is the story here and what was the rationale behind this choice? Will it help with client uptake? Was it a good decision?
4.
How do you expect the Curia rebranding to play out over the next year or so? Perhaps it doesn’t help customer decisions, but could you share some more depth on this?
5.
Can you speak to the geographical distribution of Curia’s drug discovery sites, namely across Buffalo, Albany as well as India, as you mentioned, for various service offerings? Do you think the company is focused sufficiently on site expansion or is this something it needs to work on?
6.
You mentioned the internal transfers not being too smooth. Why do you think this is happening, and what kind of improvements can be made?
7.
Curia has three business units – biologics, R&D and manufacturing, which consists of a broad range of things. Do you believe the company is stretched out too thin, and what are your expected growth rates for the respective business lines of perhaps the small vs large molecule manufacturing? Is there a specific business segment slowing down growth for Curia?
8.
Could you elaborate on the synergies that could potentially be realised post Curia’s September 2021 acquisition of LakePharma for the biologics segment?
9.
What is Curia’s ability to replace lost COVID-19 revenue going forwards, appreciating this is speculative?
10.
Prior to the Interview, you mentioned the trend of the return of manufacturing outsourcing to the US and EU from Asia. That had a slight uptick in 2020, as you said. Could you elaborate on this trend and the trickle-down impact on Curia? What is your outlook for outsourcing pace?
11.
Manufacturing in general is still pretty low-margin, while drug discovery is pretty high-margin. Do you think AMRI, as well as Curia, have been able to maximise margin effectively, and what are some core strategies the company has implemented to do so, including the entrance into niche markets with less competition?
12.
Can you comment on AMRI and Curia’s pricing strategy, especially with the company’s ability to charge premiums and particularly with this high-potency compound manufacturing? Could high prices be a deterring factor when it comes to customer uptake? How has Curia been able to pass these high costs to customers?
13.
What is your assessment of Curia’s clientele mix? Do you think the company is overexposed to smaller mid-tech biotech companies which, due to the biotech funding slowdown, could potentially pose a risk? What are the potential side effects of that segment?
14.
How would you assess the labour market for smaller CDMOs? Has a shortage of staff hit Curia and AMRI pretty hard? How has the company dealt with it? Should we expect this to continue over subsequent quarters?
15.
In terms of some of the costs you mentioned – heat, light, all these that are assessed annually – what is your assessment of AMRI and Curia’s ability to weather a difficult operating environment for costs, especially within the increase in energy costs? What other costs should we be incorporating? How would you delineate the OPEX and CAPEX in terms of running a site with all these costs to consider?
16.
How should we be thinking about Curia’s approach to building out biotech and pharma partnerships as well as collaboration efforts? Collaborations worth noting include Replicate Bioscience and Integrity Bio, or even the add-on or bolt-on acquisitions. How would you delineate the company’s strategy going forwards in terms of aggressiveness or risk-averseness?
17.
What’s your outlook for Curia, especially in terms of an exit strategy? Would you expect the company to IPO over the next couple of years? Now isn’t a great time to go public, of course, but over time, is that a potential outlook for it or would you expect it to be acquired by another larger conglomerate? Which of these avenues might you expect Curia to venture into?
18.
Where is Curia competitively positioned relative to other CDMO players at its scale, rather than relative to players such as Catalent and Patheon? Who would you think is a particular thorn in the company’s side in terms of quality, manufacturing capabilities and market share?
19.
How would you describe the quality of Curia’s existing management team, especially with the recent appointment of Niall Condon to lead manufacturing? That’s just one example of turnover, but can you highlight a couple of strengths and weaknesses of the leadership team?
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