The medical technology company Ypsomed is now recruiting its programmers in Spain instead of in Solothurn. The internationalization of the company is also being promoted in East German Schwerin and in China.
Ypsomed is experiencing high growth with injection systems (pens) for administering medication.
The Burgdorf-based medical technology company Ypsomed still believes in Switzerland as a workplace. Nevertheless, it has become too cramped for her in the Mittelland.
New factory in China
Within just a few years, the manufacturer of injection systems for the administration of liquid medicines and insulin pumps has created around 150 jobs in a greenfield factory in the eastern German town of Schwerin. 40 programming and other software specialist positions have recently been added abroad in Barcelona, and later this year the company intends to start building its first production facility in China.
In the past two years, however, the two Swiss locations at the headquarters in Burgdorf and in Solothurn have not been neglected when it comes to investments. A total of around 160 jobs were created there. Ypsomed now employs more than 1350 people in Germany. There are a good 1900 worldwide.
Son contradicts the father
The company would also have liked to have chosen Switzerland as the location of their center, which is currently being set up, for the development of innovative offers in the field of digitally supported medicine. His father Willy Michel still followed the principle that everything at Ypsomed had to be developed in Switzerland, said CEO Simon Michel at the media conference for the past financial year (as of March 31, 2022). And added: “It’s just not possible today.”
As announced last week, the now 75-year-old company founder, Willy Michel, has now also decided to resign as Chairman of the Board of Directors. He handed over the management to his son eight years ago.
According to Simon Michel, it is simply impossible to attract 100 software specialists to Solothurn, as the company is now planning to do in Barcelona. In Spain, on the other hand, where Ypsomed intends to double the workforce to eighty people by the end of the year, there are still comparatively many jobs to be found. However, programmers are not on the streets there either. “We will have to be aggressive in recruiting,” said Michel.
Digitization costs a lot of money
The trend towards measurable data is also moving in the administration of medication. Health insurers want to know how well a therapy works. Otherwise, they increasingly refuse to reimburse the costs. The company Ypsomed, which is recording impressive growth in the business with its injection systems and meanwhile has hardly any major supplier of biotech drugs on its list of customers, also wants to make a presence in this new ecosystem.
However, the development of the corresponding activities is associated with high investments. In addition to intangible assets, additional buildings and facilities in the production area consume a lot of money. In the past three years, the company has invested a total of over 370 million Swiss francs.
Due to the planned expansion into China and further expansion steps in Schwerin and Barcelona, the financial requirement remains high. Apart from the operative cash flow, Ypsomed also wants to finance the investments from a capital increase in the amount of a maximum of one million new shares. It is to be carried out in a fast-track procedure before the upcoming general meeting at the end of June and also enable the redemption of loans that Willy Michel granted the company from his own assets on various occasions. This will not change the ownership structure, since Michel, who together with other family members holds 73.6 percent of the capital, has announced that he will exercise his subscription rights in full.
Losing insulin pump
Ypsomed’s share price fell by more than 3 percent to just under 138 francs by early afternoon on Wednesday. Investors were disappointed that the company needed more time to reach the medium-term operating result (EBIT) of CHF 100 million. According to the latest management forecasts, the coming period, i.e. in the 2023/24 financial year, should only result in just under CHF 90 million.
Ongoing losses in the business with an insulin pump, which Ypsomed has been trying to push into a highly competitive market for several years with moderate success, are weighing on the company’s profitability. In the past financial year, the company suffered a deficit of 51 million francs.