How did 2022 unfold for Dipharma?

AC: In Q1 2022, the Russia-Ukraine war drastically affected the European business environment. There was a significant increase in energy and raw material costs which affected the economics of companies operating in our sector in Europe. Additionally, the supply of raw materials is still significantly dependent on the Chinese market and there were several events, mostly related to the pandemic, which affected the supply chain and resulted in supply and logistic delays. Yet, in 2022 Dipharma was still able to deliver the forecasted revenue for our consolidated products and services, and we also managed to acquire new businesses creating a pipeline able to take over the maturity of some other products and projects.

Can you speak to Dipharma’s product portfolio and the demand dynamics the company experiences?

RF: Dipharma has a historical portfolio of APIs and CDMO services developed based on identified market trends and our innovative technical and operational capabilities. The US market is one of the most significant for Dipharma: North American sales contribute approximately 40% of the company’s overall turnover. We sell our generic APIs worldwide depending on the patent situation and our market positioning in a given country or region. One important element in selecting new generic APIs is the PIV strategy, which helps enhance readiness to be the first filer or supplier in the market. Our experience in developing proprietary chemical processes and alternative solutions to support the generic API industry has been instrumental in rapidly expanding our CDMO activities in particular in the US and European markets.

What investments has Dipharma recently made in the R&D, innovation, and technology space?

RF: A relevant example of our recent investments is the completion of the second phase of expansion at our Kalamazoo facility, in Michigan. It consists of an additional 2,000 sqft, mostly dedicated to the Quality Control laboratory and the warehouse supporting our new CGMP kilo lab line completed in 2020.

We recently expanded our Research and Development Center for small molecules at our Headquarters located in Baranzate, close to Milan, Italy. We have an R&D team of approximately 80 researchers, employed in Italy and the US, where nearly 50% have a Ph.D.

Another important achievement has been the approval by the Italian Medicines Agency (AIFA) in 2022 of a second line of production in our state-of-the-art CGMP pilot plant located in Mereto di Tomba (IT). We doubled our capacity to process projects for customers, both in the generics and CDMO arena, while enhancing operational safety and isolation technologies. This new line includes four reactors for a total of 2.4 m3 capacity and a filter-dryer equipped with a continuous liner discharge, allowing for a full closed-system handling approach from beginning to end.

What are the main challenges and opportunities for CDMOs heading into 2023?

AC: Increasingly, customers want to minimize the number of players involved in their development-to-commercialization process, as project transfer takes significant time, investment, and resources. Dipharma’s ability to cover the whole lifecycle of a molecule is a key value add for our customers and we support them from pre-clinical to commercialization. Regulatory agencies are becoming more stringent.

Sometimes customers acquire innovative molecules from other partners and then require our experience to come up with proposals on new or more efficient chemical processes often generating novelty and intellectual property protection. Finally, more pharmaceutical companies are focused on sustainability, not only their own but also that of their partners. Dipharma is proud to have obtained a silver medal from EcoVadis, which means being in the top 25% of all the organizations they survey.

What will be Dipharma’s main goals for 2023?

AC: To continue growing our CDMO business, we are reinforcing our position both in the European and North American markets, using our wider technological platform, state-of-the-art capabilities, and our proximity to clients.

RF: We are continuously investing and upgrading to maintain a certain level of sustainability and quality of all our services. Our strategy is to grow our API portfolio and make products available to all the markets we operate in.