David Freidinger, Vice President Business Management,

BASF PHARMA SOLUTIONS

"Drug molecules, both small and large, continue to become more difficult to formulate. To address these challenges, formulators need new excipients, and BASF has historically been one of the most innovative excipient suppliers in the marketplace."

What was the highlight of 2021 for BASF’s pharma business?

Over the past three years, we invested significantly into upgrades of our equipment and processes, particularly at our world-class ibuprofen plant in Texas. Despite lower demand for ibuprofen due to Covid-19, the company is well positioned to meet customer demands as we shift to a post-pandemic world.

How important is the US pharma segment to the company’s overall operations?

Pharma is a key strategic business unit for BASF, and pharma solutions represents one of the fastest growing market segments with some of the strictest quality and regulatory standards. While traditional pharmaceuticals like oral solid dosage forms continue to grow at a few points above the chemical industry, rapidly emerging market segments like biologics and cell and gene therapy are showcasing double-digit year-over-year growth rates.

The largest growth for the company's pharma segment will continue to come from the US, where the pharma industry is the global leader in innovation, research, and development of new drugs. BASF has significant commercial and technical pharma capabilities in the US that provide local collaboration and support, and we continue to invest in our US production sites to secure reliable supply in our range of APIs, excipients, and other ingredients.

How is the excipient formulation space evolving?

Drug molecules, both small and large, continue to become more difficult to formulate. To address these challenges, formulators need new excipients, and BASF has historically been one of the most innovative excipient suppliers in the marketplace. That said, producing innovative and novel excipients remains challenging and comes with significant business risk. Regulatory agencies historically look at excipients as the sum of the formulation rather than individually, complicating the process. Our hope is that a dedicated excipient registration and qualification process helps overcome risk adversity and enables more innovative investments in the space.

Can you explain the benefits that BASF’s Virtual Pharma Assistants bring to your clients?

We launched our Virtual Pharma Assistants (VPAs) shortly before the pandemic as a digitalization suite of many of the best-in-class services we have historically provided for our customers. ZoomLab saves time during formulation, potentially reducing the number of resources required during the formulation development stage. What is traditionally a time-consuming and costly process is transformed into a digital experience where users input their active ingredients, dosage amount and dosage form to arrive at a first formulation within seconds. Customers can then move onto MyProductWorld to gather more information about the product, order samples and browse through assorted commercial functionality. This service is aimed at procurement managers. Integrated with both is RegXcellence, a comprehensive library of quality and regulatory documents and services that can provide users with global and country-specific compliance support, filing assistance, and the ability to receive alerts when documents are updated. We have seen clients end-to-end formulate a product, organize to select it, and get registration data, all achieved through the use of this robust platform. The concept of end-to-end self-service demand is being created through these digital tools, and the sales generated by these VPA services has been significant over the past two years.

All our VPAs now operate in over 90 countries, and their rollout has been a success story for BASF. They have led to an assortment of partnerships, many of which will be announced publicly throughout 2022

What will drive growth for BASF Pharma Solutions?

We consider end-consumer preferences and behaviors to determine where to drive innovation. Within the excipient space, for example, we design products that help our customers to develop medicines that are more patient-centric, efficient, or easier to administer.

We will continue to expand our footprint in the biopharma industry with portfolio expansions and investments that will increase our capacity and unique capabilities in the market.

Additionally, we will continue to regularly release new modules for our VPA platform. We are also digitalizing our core manufacturing sites and launching virtual auditing experiences at our flagship ibuprofen plant in Texas, offering customers the opportunity to audit the facility even if they are unable to go in person.