The Siegfried Group is a world leader in drug manufacturing
According to Marianne Späne, Executive Vice President for Global Business Development at the Siegfried Group, a worldwide player in the field of drug substance and drug product manufacturing, the enterprise began in 1873, when it was founded as a “family company” by pharmacist Samuel Benoni Siegfried in Zofingen, Switzerland, the city which, to this day, remains the company’s world headquarters. The original firm had only 12 employees; now, there are over 2,400 of them spread across the globe from the United States to Europe and China. Clearly, the Siegfried family has expanded considerably over the years.
Späne explains that Siegfried has always been a company interested in growing both organically and by acquisition. “In 1927, the family saw the U.S. as a growing market and they acquired a company called Ganes Chemical Works in Pennsville, New Jersey,” she says. In the early 1990s, Siegfried changed its business model from that of a typical pharmaceutical company, creating and selling medicines under its own Sidroga brand, into more of a development and custom manufacturer of drug substances and drug products for other companies.
In 2005, Siegfried bought the Penick Corporation, another New Jersey drug manufacturing concern. Späne says it was acquired so that Siegfried could strengthen its position in the U.S. market for controlled substances. “At that time, there were only five licensed U.S. companies, and one of them was held by Penick,” she says. “That’s why Siegfried decided to buy it – in order to play an important role in the opiate market.”
In 2007, Siegfried built its own manufacturing facility on the island of Malta, in order to complement the production of high value-added generic pharmaceuticals at its Zofingen site. Späne explains that the Maltese facility helped make Siegfried more competitive in the oral drug products market – tablets and capsules. In fact, Siegfried was the eleventh pharmaceutical plant to have set up shop in Malta in the span of the preceding four or five years. One great advantage to begin operations on the Mediterranean archipelago was the fact that very few drug companies have registered their patents there. That means that, unlike in other EU countries, where companies are prohibited from developing generic versions until their original patents have expired, Maltese firms can work on their generic formulations, unhindered; so finished products can be available for delivery on the first day after a patent expiration and not months, or even years, later.
Much of Siegfried’s more recent growth has taken place via the company’s “Transform” strategy, an initiative put in place by its CEO, Dr. Rudolf Hanko, in 2010. It was Hanko’s aim to combine the firm’s two divisions – drug product and drug substance – into one, in order to leverage its combined services and become a hundred percent service provider to its customers in the chemical and pharmaceutical industries. (Drug substances are the chemical syntheses of an active pharmaceutical ingredient, or API; drug substances are not ready to be used in human body. Drug product is the finished formulation; the tablets, capsules, injections, etc., ready for safe human or animal use.) So a string of acquisitions ensued.
“In 2012, in order to offer a broader range in drug product, we also invested in injectables by buying a small unit in Irvine CA, called AMP (Alliance Medical Products),” says Späne. In 2014, Siegfried bought the German company, Hameln Pharmaceuticals Ltd., another supplier of quality injectable solutions. “And to become a player in China, we decided to invest in Nantong,” she says. “We see the Asian market as the most important emerging pharma market and proximity in Asia will be important in the future.” The company’s pilot plant opened in Nantong, China in October 2015. By January of next year, the commercial plant will be operational, as well.
Complementing its acquisitions, Siegfried continued to shed any of its divisions that were not in line with the company’s increased focus on moving away from manufacturing its own products to become a full service provider to others. Sidroga and the biotechnology division had already been sold in 2007; the pharmaceutical production site at Zofingen was sold to Arena Pharmaceuticals in 2008; and its PulmoJet subsidiary in Munich, Germany, a maker of a dry powder inhaler, was sold in 2010 to Sanofi-Aventis. “So, it was a clear strategy to transform Siegfried from a mixed provider of services under its own brand into a clear service provider,” Späne affirms.
But there was one more major acquisition left to make. This past fall, the Siegfried Group acquired significant segments of BASF’s pharmaceutical supply business by purchasing three production units: Minden, Germany; Saint-Vulbas, France; and Evionnaz, Switzerland. This acquisition represented the final step in Siegfried’s transformation policy implemented over the last five years. The company now has six drug product sites and three drug substance sites across three continents. “This gives us the leverage, now, to have enough critical sites to offer, and to be a very strategic partner to, some of our big pharma clients,” says Späne.
Today, Siegfried serves a diversified customer landscape with clients in mid-sized and emerging pharma companies, as well as its major pharmaceutical partners. It develops and manufactures APIs for the research-based pharmaceutical industry, as well as providing development and production services for drugs in finished dosage forms. Siegfried works with many partner companies that assist with its manufacturing processes. One such partner is Proconex, a leading provider of automation, integration, and instrument services in the Mid-Atlantic region. Some of Siegfried’s customers are exclusive, with the company fulfilling all of their chemical synthesis, formulation, and drug product needs. “Whatever they want us to do,” says Späne. “On the other hand, we have an opiate portfolio. We have ownership of 80 products and we sell these APIs to a very broad customer base – pharmaceutical and innovative engineering companies.”
In a very competitive sector, Späne believes that Siegfried has significant advantages, not the least of which is the company’s inherited knowhow. “That’s the big benefit of Siegfried,” she states. “If you want to be a service provider you are in a better position if you have a broader portfolio. We didn’t need to build up or to acquire a culture of how to do formulations or drug product manufacturing; we had both inherited knowhow. And now, when we acquire companies, we already have the two cultures in our company. Therefore it is much easier to integrate all our acquisitions that fit either in drug substance or drug product. Our big advantage is that we already have this integrated knowhow that helps us link both businesses together.”
Sandy Cerrick is Siegfried’s Vice President of Marketing and Communication. She both confirms and broadens Späne’s account: “We have transformed ourselves into a full-fledged, fully-integrated drug substance and drug product partner,” she says. “We can provide not only the inherited knowledge that we have in both of those components of the pharmaceutical industry, but in addition, there are many niche technologies that we have many years of experience in, as well. I hate to use the term ‘one-stop-shop,’ but we truly can completely support a partner from optimization to synthesis, to scaling up a particular compound for a customer, to taking them all the way into commercial manufacturing. It’s been a big step for Siegfried over the last five years.”
Späne adds that although there will surely be a new growth strategy sometime in the future – most likely including further acquisitions – for now, Siegfried’s focus is to get all of its newly acquired sites integrated into the Group – a process that should be completed within the next 12 months. Its marketing strategy includes making its value proposition to new potential new customers who it thinks would benefit from the company’s services, while simultaneously expanding the portfolio of existing customers that, as Späne, remarks, “have already seen the value of working together with Siegfried.”
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AT A GLANCE
WHO: The Siegfried Group
WHAT: A worldwide player in the field of drug substance and drug product manufacturing
WHERE: Headquarters in Zofingen, Switzerland
WEBSITE: www.siegfried.ch
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