(AOF) – Euroapi announces an investment of 50 million euros for the installation of a new state-of-the-art production unit on its site in Budapest (Hungary). The active ingredients specialist for the pharmaceutical industry specifies that the project will focus on the “debottlenecking” of the current capacity and the construction of new multi-purpose manufacturing equipment which will more than double the overall prostaglandin capacity of the Hungarian site by 2027, in two phases: approximately 2/3 of the total investment will be concentrated over the period 2023-2025.
Euroapi points out that prostaglandins are one of the most dynamic segments of the active pharmaceutical ingredients market, representing annual drug sales of approximately €5 billion, a market that is expected to grow by 5-7% per year between 2022 and 2027.
Euroapi claims to be the only Western supplier with a comprehensive prostaglandin portfolio and a fully integrated production site located in Europe.
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Key points
– One of the world leaders in active pharmaceutical ingredients (No. 1 in small molecules, 2nd in APIs combining small and large molecules and 7th in innovative molecules), created in December 2021 by separation from Sanofi;
– Revenues of €977m, split between API Solutions for 73% and CDMO.
– Business model based on a clear commercial strategy of expansion into new markets and aiming to become a benchmark partner for pharmaceuticals and biotechs;
– Capital held 30.1% by Sanofi, 12% by bpiFrance and 5.5% by L’Oréal, Viviane Monges chairing the 12-member board of directors, Karl Rotthier being managing director;
– Very healthy balance sheet with €1 billion in equity and €19.8 million in net debt.
Challenges
– Strategy 2026:
– revenue growth of +7% to +8%, including double-digit growth in revenue from activities other than Sanofi,
– operating margin of +20% in 2026 and above 18% in 2025
-€510m of investments over 2022-25
– Innovation strategy focused on:
– industrial and logistics optimization,
– innovative molecules developed in the CDMO (Contract Development and Manufacturing) with 30 ongoing projects,
– the combined supply of oligonucleotides and peptides from 2025;
– Environmental strategy aiming for carbon neutrality in 2050:
– 2 stages: 100% of sites powered by renewable energies by 2025, 30% reduction in CO2 emissions by 2035 (vs 2020),
– footprint reduction technologies and biomass investments;
-Ramp up of the production of vitamin B12, prostaglandin, peptides, hormones and oligonucleotides with an investment ratio increased to +14% of turnover;
– Extensive portfolio of 200 references, 55% of which are differential and complex, produced at 6 industrial sites in Europe, an asset in the face of Asian competition penalized by costs and supply chain disruptions.
Challenges
– Evolution of the capital, Sanofi and Bpifrance having to keep their shares until May 2024 and L’Oréal until the end of 2023;
– Increase in operating margin, less than half that of its European competitors –Lonza, Siegried, Bache and PolyPeptide- via an industrial transformation aimed at creating additional value of €50 million;
– Continued reduction of dependence on Sanofi by obtaining new contracts.
– After a loss in 2022, due to impairments on Brindisi assets, downward revision of the 2023 objective: turnover of €980 million and operating margin between 12 and 13%;
– No dividend for 2022,23 and 24.
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Loss of speed in European research
European research is losing ground to American and Chinese research. In twenty years, Europe’s share has fallen from 41% to 31% in global R&D. China’s share jumped from 1% to 8%. As for the United States, which supplanted Europe, in 2001 it devoted only 2 billion euros per year more than Europe to R&D, whereas now this gap has reached 25 billion! Some experts accuse the European authorities of not having deployed effective policies. The financing of pharmaceutical research should therefore have been better targeted via the “Horizon 2020” programme. France only comes in eighteenth position in European funding despite the quality of its research. Conversely, the United States concentrates funding on Boston and a few centers of excellence.