Start-up to International
Business
POSAT Seminar 18-19 May 2015
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Outline
• Company background
• Dealing with growth
• The importance of strategy
The story….
The message….
• How companies face different challenges as they grow
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Peptides at Almac
1994 Albachem founded. Professor Bob Ramage, University of Edinburgh 2002 Private money raised for spin-out 2004 Acquisition by Almac (CSS) 2007 Open GMP manufacture facilities 2015 Edinburgh site moves facilities Timeline Changes in business practices, aims and culture
Specialist services for the pharmaceutical industry
Founded in 1968Global Headquarters in Craigavon, N.Ireland
Turnover $½ billion
~ 3,600+ Personnel Globally
Unique ownership – charitable foundation
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Specialist services for your needs
PHARMA SERVICES
Pharmaceutical development and drug product
Commercial services
CLINICAL TECHNOLOGIES
Clinical trials data capture using voice recognition
sofware.
DIAGNOSTICS & BIOMARKERS
Biomarker discovery and development
CLINICAL SERVICES
Clinical trials packaging and distribution
SCIENCES
Peptide and small molecule APIs.
Analytical development. Physical sciences
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Peptides at Almac
What do we do?
Non-GMP Custom Synthesis
• High throughput parallel manufacture
• Long sequences – routinely >100 amino acids (longest 276 amino acids) • Complex products, route investigation
Process Development
• Synthetic route design and improvement
• Small scale models representative of manufacturing equipment • Physical and chemical property determination
cGMP Manufacture (current Good Manufacturing Practice)
• Parallel manufacturing streams
• Full analytical support and stability testing • Very strong project management
Product Catalogue
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Peptides at Almac
• Generation of peptides and small proteins by chemical synthesis
• Typical, peptides are produced by Solid Phase Synthesis (SPPS)
whereby the first amino acid is chemically bound to an insoluble solid support. The peptide sequence is built up one at a time by a series of coupling and deprotection cycles.
• Completed peptide chain is cleaved and deprotected from the solid support to form crude peptide.
• Crude peptide is purified by reverse phase HPLC.
• Typically works well for 20 amino acids.
• Modern methods make up to 40-50 “routine”.
• Almac routinely synthesise >100 amino acid peptides.
• More detail in next talk!
Peptides at Almac
Our journey 2002 – 2004: On our own two feet • Raised ca. £1M of private money. • Moved out of Edinburgh Uni to custom built labs. • Recruitment raised headcount to 8. • Initiated R&D programmes 2010 – present: Focussed strategy • Key strategy exercise to segment the market and focus on key segments. • Some business areas dropped. • Others invested in significantly • More focussed sales effort 2004 – 2010: Acquisition and growth • Acquisition by CSS in 2004. • Step change in service business. • Identified and implemented R&D programme focus. • Brought GMP on-line (2007). • Proper sales effort. 1994 – 2002: The early years • 1-3 employees • Based in labs at Edinburgh Uni • Making peptidesfor uni and industry contacts
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Key themes
• What challenges did we face?
• How did we approach them?
Dealing with growth
Early struggles, our game changers, revenue vs R&D, recruitment and culture
Early struggles
• May 2002, I left a reasonably well paid job as a process development chemist with decent prospects in a blue-chip company to join
Albachem as Senior Scientist
• The dream
– Bought into the plans of the company.
– Academic founder brought in a commercial MD to drive forward commercial focus
– The idea of helping to build a successful company from scratch was very appealing
• The reality
– Day 4, the MD resigned
– First jump in culture with 6 new staff
– Very little effort on sales – almost all word of mouth
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Early Struggles
• Move from the uni brought 2 existing and 3 new uni-based staff.
• Recruited 3 external staff (I was one).
• Previously relied on support services from uni – no longer available.
• Didn’t have the weight of support of uni infrastructure.
• Three new staff from different organisational backgrounds.
• Lacked structure – but flexibility an advantage.
Early stages
• Company relied on income from selling peptides in order to survive.
• Most sales through word of mouth.
• No sales team.
• Relatively slow to respond to enquiries.
• Hadn’t embraced web technology to potential.
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Balancing income generation with R&D
• Academic routes in research meant that there was always conflict between operational, revenue generating activities.
• Team make-up
– 4 operational – custom peptide synthesis
– 1 chemistry R&D (me)
– 1 biology R&D (protein engineering)
– 1 admin, 1 owner.
• Trying to build patent portfolio for future growth.
• Not enough cash to do R&D properly
– Organic through sales
– External investment
• “stuck in the middle” – neither one thing or the other
Game changers
• Acquisition by Almac (Chemical Synthesis Services, CSS, as was) April 2004
• For a year, focus was on building on service offering.
– I moved from R&D role to Operations Manager
– R&D biology continued, but slow without further investment
• As a small company, always the perceived threat of “Big Brother”
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Game changers
• Engaged in discussions with a company requiring peptides in order to raise polyclonal antibodies.
• Our initial price was £1,500 per peptide, 10 peptides per month.
• Challenged to get price to <£600 per peptide, 20 per month.
• Trial contract for 2 lots of 20 peptides.
• Trial as success and relationship began to form.
Game changers
• Offering grew steadily to 40, then 80, then 120 peptides per month.
• Peaked at 200 peptides per month
• Capital investment in new equipment to meet demand
• Lean operations across all aspects:
– Lab work
– Documentation
– Tracking
• Revenue increased 6 fold in 2 years
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Game changers
• ………….but, nothing is forever
– Change in management at customer
– Demand for higher quality at lower price
• Decision to make – do we try and meet demands, or focus elsewhere?
• Come back to this later….
R&D vs revenue
• Almac interested in both short and long term revenue streams.
• Interested in Albachem’s toe-hold in peptide business and in R&D programmes.
• Came up with 19 ideas for R&D, so how to focus?
• Structured assessment exercise
– Technical and commercial
– Likelihood of success, impact of success. • Whittled 19 ideas to 4 main programmes
– Synthetic methodology
– Protein engineering
– Protein therapeutics
– Fluorescence Lifetime Technology
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R&D vs Revenue
• All programmes generated successful outcomes (not always the ones intended!).
• All are still going in some shape or form:
– Embedded in our service offering (synthetic methodology, protein engineering)
– Generated other research programmes (protein engineering)
– Original concept still live (FLT instrument launch 2016) • You need a lot of cash to invest properly in research.
• Need regular review to make sure priorities are understood
Cultural change
2002 -
2004
2004 -
2007
2007-
2010
present
2010 -
Acquisition and recruitment changes culture
“One-man band” grows to 8 people. Different experiences and ways of working Steady recruitment after Almac acquisition, growth of service business and R&D. Peaks at 22 people. Investment in training, Growth into GMP (NI). Cross site working. required. New, but remote, co-workers. New analytical group increased Strategy reviews performed on both service business and R&D activities. Some R&D concluded. Team reduces to 17, but growing again.
The importance of strategy
What is strategy?
• Strategy looks forward
• Defines where you want to be
• Creates a plan of how to get there
• Balances what’s going on out there….
– competition
– customer trends
– political landscape
• ………..with what’s going on in your organisation
– resources
– kills
– Expertise
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Almac PPT strategy exercise
• Management team of 8
• Three sessions of 2 days each
• Defined what we should be doing, and how we should do it.
• Importantly, included also what we should not be doing.
• Looked at customers, competitors, our own capabilities.
• Decided what areas of the market to target, and how to go about it.
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Who are our customers?
Market segmentation The peptide market Peptides as tools (non-GMP) Peptides as therapeutics (GMP) 1. Raising antibodies 2. Resale 3. Raw materials / components
4. (a) Knowledge generation (b) FLT
5. Late pre-clinical – early phase clinical
6. Late phase clinical
What do we do?
Scored ourselves on our operational performance, customer satisfaction and market understanding
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
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Where do we sit relative to our competitors?
Quantitative assessment of competitors
A B C D E F Happily operate in the “long grass” “Big enough to matter, small enough to care”
What makes us different?
Areas where we feel we can make a difference
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What should we focus on?
The peptide market Peptides as tools (non-GMP) Peptides as therapeutic (GMP) 1. Raising antibodies 2. Resale 3. Raw materials / components 4. (a) Knowledge generation (b) FLT
5. Late pre-clinical – Phase I 6. Late phase clinical
High level objectives
Target segments how we will approach them
HIGH LEVEL OBJECTIVES 2010 – 2013
Segment 2 & 3 We will conclude deals and operate partnerships with at least two catalogue and two diagnostic companies which yield sales revenues of approximately £1M.
Segment 4a We will grow revenue by 50%, and use our relationships to enhance our technical reputation and internal technical expertise aligned with market trends.
Segment 4b We will establish FLT as a core screening platform through the
provision of FLEXYTE products and customized services, achieving >5% penetration of the current screening market.
Segment 5 We will win at least 5 EP Projects per year and improve our operational delivery
Segment 6 We will secure at least 2 LP projects by 2012
R&D We will develop evolutionary and revolutionary options and
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Identifying critical success factors
Turning plans into actions
CSF Action Owner Timeline
SEGMENT 2
Increase market knowledge, identify and select suitable potential partners
Identify options and workarounds for any constraints from Invitrogen license
Build momentum in NEP discussions SEGMENT 3
Increase market knowledge, identify and select suitable potential partners
Quantify value of market
Identify top 5-10 players
Generate selection criteria for assessing potential partners (include geographic factors)
Select target partners
Generate proactive technology based pitch for use in partnership discussions
Generate view on preferred commercial stance and draft high level heads of agreement terms for introductory discussions with target partners (include consideration of brand building)
Review contract details, adopt path of least resistance / highest likelihood of success – ie Invitrogen contract renegotiation or work around on current constraints
Negotiate and agree heads of terms for partnership approach with NEP, establish full potential scope – ie Chemokines only or new compound classes
Quantify value of market
Identify top 5-10 players, tap into in-house knowledge in Almac Diagnostics and Discovery
Generate proactive technology based pitch and proactively approach top players (include capabilities in synthesis of long peptides, site specific protein ligation)
Review options for streamlined quality system approach if GMP is seen as unnecessary and a source of excessive cost
AH/SH AH/SH AH/SH AH/SH AH CJS/AH/SH CJS/DG SH AH/SH AH/SH AH Complete by end: Mar 2011 Mar 2011 Mar 2011 Mar 2011 Mar 2011 Mar 2011 Mar 2011 Dec 2010 Mar 2011 Mar 2011 Mar 2011
Making it happen
• Based on our targets, how will we know we have succeeded?
• Communicate objectives to team.
• Agree measures, put in place suitable monitoring systems, and actually monitor them.
• Assign resources to implement the plan.
• Bi-monthly management meetings with updates on progress.
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How did we do?
HLOs 2010 – 2013 2014 Assessment of Delivery
Segment 2&3 We will conclude deals and operate
partnerships with at least two catalogue and two diagnostic companies which yield sales revenues of approximately £1M.
Segment 4a We will grow revenue by 50%, and use
our relationships to enhance our technical reputation and internal
technical expertise aligned with market trends.
Segment 4b We will establish FLT as a core screening
platform through the provision of FLEXYTE products and customized services, achieving >5% penetration of the current screening market.
Segment 5 We will win at least 5 EP Projects per
year and improve our operational
delivery
Segment 6 We will secure at least 2 LP projects by
How did we do?
HLOs 2010 – 2013 2014 Assessment of Delivery
Segment 2&3 We will conclude deals and operate
partnerships with at least two catalogue and two diagnostic companies which yield sales revenues of approximately £1M.
Segment 4a We will grow revenue by 50%, and use
our relationships to enhance our technical reputation and internal
technical expertise aligned with market trends.
Segment 4b We will establish FLT as a core screening
platform through the provision of FLEXYTE products and customized services, achieving >5% penetration of the current screening market.
Segment 5 We will win at least 5 EP Projects per
year and improve our operational
delivery
Segment 6 We will secure at least 2 LP projects by
Wrap up
Reflection
• Strategy is vital
– Can’t do everything
– Important to use as a “living” experience that is revisited and updated. • Income and R&D don’t always work together
– Research is risky
– Conflicts with mindset of service business
– But we need innovation to adapt and grow
– FLT is a case in point – could have been buried 5 years ago • Culture is proactive, can be tricky if you just let it happen
– Tipping point at 20-30 people
– Cross-site / remote interaction increasingly important
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Thank you
for
Your attention
Account Manager - Peptides Phone: +44 28 38 39 5877
