ACQUISITIONS ADDRESS SUPPLY ISSUES 28th March 2022
Worldwide supplier of critical raw materials expands manufacturing, R&D and portfolio offerings to fulfill need for customised solutions.
A reliable supply chain is vital for commercial-stage pharmaceutical and biotech companies to ensure the uninterrupted and smooth manufacturing of their products. Nothing has highlighted this more than the past two years of the COVID-19 pandemic, which has been marked by both raw materials and finished product shortages, along with import delays and other logistical challenges.
As a result, the prevalent just-in-time supply model has often teetered and broken as once-reliable suppliers have found their inventories depleted and fulfillment timelines expanded from days to weeks or months. Experts have tried, and often failed, to predict when the current supply chain issues will be resolved. While predictions in 2021 seemed to point to these issues resolving themselves in Q1 of this year, consensus opinion now suggests that it may be another full year, to the beginning of 2023, before the issues of tight and unavailable supplies wane.
A recent poll conducted by Aceto via LinkedIn highlights the topsy-turvy world of the past two years. According to the respondents, 40% of businesses reported having too much of the wrong inventory on hand, while an additional 40% reported too little of the right inventory. In other words, a stunning 80% of companies surveyed suffer from unbalanced inventory.
While COVID-19 exposed the fragility and flaws within the global supply chain, it seems that a return to normal, i.e. the way things were before the pandemic, is not likely. Instead, forward-looking companies need to anticipate broader events that could again disrupt the balance. Worsening impacts of global warming and increased barriers to trade already exert influence on logistics, as could another global pandemic or a further wave of COVID-19.
In the pharmaceutical and biotech industries, the challenges are more acute. In other businesses, a shortage of a preferred filter could simply be fulfilled by swapping out for a similar product – a luxury not available in the highly-regulated pharma industry that requires exacting production processes and supplies.
Forging a new path
While many global suppliers have put their efforts into simply managing through the great supply chain disruption, Aceto, a manufacturer and supplier of more than 3,000 chemical compounds with operations in ten countries, has taken a strategic approach to not only meet the current challenges, but to emerge from the disruption more nimble and better able to meet the demands of its customers around the world.
Internal changes have included improving workflows, hiring new staff, consolidating distribution networks and completing extensive training to become Certified in Logistics, Transportation and Distribution (CLTD).
Perhaps more importantly, the company has consummated half a dozen strategic acquisitions over the past two years that have both expanded the geographic reach of Aceto and provided manufacturing facilities that allow it to better manage the supplies needed by its pharma customers, while adding bespoke services to meet the exacting needs of its customers. All of this builds on the strong, 75-year track record of the company.
Companies acquired since the end of 2020 include:
- US-based IsleChem, which has expertise in chemical manufacturing, contract R&D, analytical services, and technical and support services.
- A&C, a global GMP manufacturer of custom excipients, buffers and process solutions, which increased Aceto’s GMP manufacturing, packaging and ingredients offerings for the cell culture, vaccine, and biopharmaceutical industries, while also expanding its North American footprint.
- India-based Finar Ltd, a manufacturer of chemical products, including pharmaceutical excipients and solvents.
- Oregon-based Cascade Chemistry, a manufacturer of active pharmaceutical ingredients (APIs), regulatory starting materials and advanced intermediates.
- A&C Bio Buffer, based in Limerick, Ireland, a GMP manufacturer of custom buffer and chemical blend products and Water For Injection (WFI) used in the manufacturing of biopharmaceutical drug products.
- Syntor Fine Chemicals, a fine chemical manufacturer offering process development and R&D services.
In sum, the acquisitions broadened Aceto’s product portfolio and brought in-house GMP manufacturing capabilities to complement its existing roster of rigorously-selected suppliers. These additions allow the company to better serve its core North American, European and Asian clients not just in biotech and pharma, but also nutritional, agriculture, cosmetics and specialty chemicals.
According to Gearoid O’Rourke, VP of global marketing for Aceto, these broad capabilities allow the company to be nimble and address its clients’ challenges of bringing new drugs and new drug delivery methods to market.
“The market is growing and there is demand for specialised, customised products,” O’Rourke said. “I think that the market is looking for customised and consultative services.”
This has clearly been the focus of the company as it beefed up its sales and procurement teams. “The sales teams that have been hired and we continue to hire, are mainly chemists, with PhDs, Master’s degrees or degrees reflecting many years’ experience,” he noted. “The idea is we are trying to understand where the pain points for the customers are, so that we can decide what the best option is: sourced or through one of our GMP manufacturing routes.”
However, the custom, consultative approach for customers can only go so far; you must be able to supply the products needed by clients. According to Gilles Cottier, CEO of Aceto, the spate of acquisitions also addresses supply issues.
“Our hybrid model and broad competencies provide agility and choice to our customers. This allows them to more rapidly develop and commercialise innovative products, while assuring a diversified, flexible and dependable supply chain, whose critical importance has been so dramatically highlighted by the ongoing pandemic,” stated Cottier. “In this regard, we are especially proud of our industry-leading on-time in-full rate.”