Siegfried has been working as a bottler for the German vaccine supplier Biontech for a year and a half. The contract manufacturer from Zofingen would be happy to take on additional volumes, but business with the pandemic seems to have come to a standstill for the time being.
Siegfried not only works as a bottler, but also produces active ingredients for medicines – like here in the main plant in Zofingen.
The Zofinger contract manufacturer Siegfried was not able to position itself as prominently in the business with vaccines against Covid-19 as its Basel competitor Lonza. While Lonza set up six production lines for the supplier Moderna in the main plant in Visp alone, Siegfried only had one line in its business with Biontech. Unlike Lonza, the company did not produce the active ingredient, but “only” took on the bottling and packaging of the finished product.
In the right place at the right time
Nonetheless, Siegfried is proud of what has been achieved. It was shown at a critical time that the pharmaceutical industry could be supported quickly and effectively, said CEO Wolfgang Wienand on Thursday at the presentation of the latest half-year figures. The contract with Biontech was signed in mid-September 2020 – at a time when the vaccine developed jointly by the German company and Pfizer had not yet been approved. At that time, it was only in the advanced clinical development phase (phases 2/3).
Bottling at the Siegfried factory in Hamelin, Germany, started in mid-2021. At the same time, the company also began working for the US company Novavax at the same location, but their vaccine against Covid-19 was only released in the EU at the end of last year and thus came onto the market too late to become a commercial success.
Uncertainty paralyzes business
For Siegfried, however, the calculation seems to have worked out. At the telephone conference on the half-year results, Wienand calculated that the company would receive an amount in the high double-digit million range from Biontech within the one-and-a-half-year contract period (from mid-2021 to the end of 2022). In the case of Novavax, the proceeds make up a “relevant” double-digit million amount. Taken together, the business with vaccines against Sars-CoV-2 Siegfried should bring in over 100 million francs. After all, this corresponds to almost a fifth of the total turnover of not quite 600 million francs, which the group generated in the first half of this year.
In the meantime, however, Siegfried has not concluded any new contracts with vaccine providers. According to the CEO, who has been in office since the beginning of 2019, nobody really knows how the pandemic will continue. “There is uncertainty among governments, regulators and across society.” Nevertheless, Wienand does not seem to have given up hope of follow-up orders. Personally, he expects that certain parts of the population will also receive a vaccination in 2023 and 2024.
Major acquisition in Spain
The installation of the bottling plant in Hamelin cost Siegfried a low two-digit million amount. “The investment made sense,” confirmed Wienand in an interview with the NZZ. He pointed out that the system is not only suitable for vaccines and certainly not only for those that are based on mRNA technology like Biontech’s product. It can be used for a wide variety of types of active pharmaceutical ingredients.
At the beginning of 2021, Siegfried had already spent significantly more money than for the construction of the plant in Hameln for the acquisition of two Spanish factories from the portfolio of the pharmaceutical company Novartis. The cost was at the time of the announcement Not communicated at the end of September 2020. But the company gave up Three months later announced that it had issued two hybrid convertible bonds totaling CHF 80 million to support the financing.
The buyer of the papers was the Zurich investment company EGS-Beteiligungen, which manages the company shares owned by the Ernst Göhner Foundation. The conversion gives her the opportunity to increase her stake in Siegfried’s share capital to up to 6.6 percent by the end of 2025.
1000 additional employees in one fell swoop
According to Wienand, the integration of the two former Novartis factories into Siegfried’s network is now complete. In the course of the acquisition, the number of employees at the traditional Aargau company increased by 1,000 employees or 40 percent in one fell swoop.
Although the plants continue to produce drugs for Novartis under a long-term contract, there is spare capacity. The major challenge for Siegfried’s management will be to land the necessary orders. So far, only small orders have been received, but Wienand expects significant volumes to come in in 2023 and 2024.
Semester figures inspire investors
Investors were euphoric on Thursday. The company’s share price rose by 15.7 percent to 818 francs. The reason for this is likely to have been the business figures, which all significantly exceeded market expectations at the level of sales, operating profit and consolidated profit. Apparently, the investors also trust the company management to quickly utilize the additional capacities (Siegfried is also investing up to 100 million Swiss francs in a new plant for the production of active ingredients at the German site in Minden) with new business.