David has highly relevant experience from operating in the chemical and pharmaceutical markets, as well as through holding a number of private equity backed non-executive chairmanship positions.  David’s previous executive roles include managing director of Fujifilm Imaging Colorants and COO of Avecia Group.

David’s appointment comes on the back of news that Aesica chief executive Robert Hardy has been named CEO of the Year for the North East region in the BVCA (British Venture Capital Association) Management Team Awards.

David Greensmith

Headquartered in the North East, Aesica exemplifies a UK manufacturing success story. Over the last four years, turnover has quadrupled in size from €25 million in 2005 to a forecast of €180 million this year.  In the last 12 months alone, the business has doubled its employee numbers to approximately 1300.

Adrian Yurkwich, the partner at Silverfleet Capital with responsibility for healthcare who is on the board as a non-executive director, commented: “David joins at an exciting time for the business.  We have recently strengthened links with the US market after the site at Queenborough in Kent passed its first US FDA inspection. This is a particularly significant development for Aesica and will help it to boost credibility in the US market at a time when the company is expanding its presence outside of Europe.

“David has excellent experience as a chairman of private equity backed businesses and understands the dynamics of the pharmaceutical manufacturing sector well.  We look forward to working with him.”

David Greensmith commented: ”Aesica is an excellent business with a first rate management team who have achieved impressive growth.  We expect to continue to deliver strong growth and further strengthen our international footprint.”

Dr Robert Hardy, CEO of Aesica, added: “We’re delighted that David has joined the Aesica team. His insights will put us in an even stronger position to achieve our vision of becoming the number one supplier of Active Pharmaceutical Ingredients and Formulated Products to the pharmaceutical industry. We have already made significant strides towards this goal and will continue our focus on organic growth and strategic acquisitions.”

Aesica has manufacturing and development facilities in the UK, Germany and Italy. The company is able to develop products from the initial clinical stage through to final commercial supply and provides primary and secondary contract manufacturing services to the highest possible regulatory standards.

“More and more, our clients in medium and large pharma are looking to collaborate with us on a greater proportion of the drug development and marketing process to leverage the quality and cost benefits that brings with it”, commented Werner Schick, Director, Aesica Pharmaceutical Support Services. “Historically, pharma companies would come to us for large scale commercial manufacture, to design product artwork or to distribute their finished product. However, our customers are quickly catching on to the benefits of outsourcing multiple steps in the supply chain to a single, stable, trusted supplier.”

“Over the last few years, as many of the major pharma companies grew through M&A activity, it was inevitable their supplier base would increase at first,” adds Aesica CEO Robert Hardy, “but juggling a large number of suppliers is unsustainable and inefficient in the long term. As we face the patent cliff and the market settles down, our customers are looking to their suppliers as a catalyst for innovation. Strategic partnerships are clearly the way to go, as the siloed approach to outsourcing isn’t conducive with lean, value-adding collaborative working.”

Dr. Robert Hardy, CEO

With an integrated portfolio of CMO services, Aesica has seen customers benefit from the increase in efficiency, qualityand innovation that comes from outsourcing complementary steps in the drug development cycle to a handful of key suppliers. The company’s value-adding portfolio includes: secondary packaging, artwork, distribution, import services, analytical services, QP release and guidance on regulatory strategy.

 As one of Europe’s largest CMOs and with a growing presence in North America, Aesica offers customers in the US and Asia  an efficient route with which to access the European market, by providing a fully integrated ‘pick and mix’ portfolio of services ranging from developing materials for clinical trial supplies through to commercial scale manufacturing.

Dr Emma Mickley has been promoted from her role as Director of Business Development into the newly created position of Vice President of Corporate Business Development. Emma will be based in San Diego, California, and will support the company in growing its share of the North American contract manufacturing market.

Speaking about her promotion, she said: “This is an exciting time to be representing Aesica in North America. This region is a key strategic priority for us for the forseeable future and we are 100 per cent committed to shaping and positioning our business to meet the needs of mid-size and emerging pharma in Canada and The States”.

“The fact that genuine pharmaceutical innovation is now increasingly challenging has led big pharma to partner with small and mid size companies in developing NCEs. Taking advantage of the limited window of patent exclusivity has never been more critical, and this is where we come in”.

“Accelerating speed to market is our strength, and as an integrated CMO we offer customers in North America a fast track from development to clinical trials and onwards to market. Where we really excel is in helping emerging and mid size pharma companies get their products to clinical trials fast, before they pass the baton to big pharma, who we work with to drive formulations through to scale-up stage.”

Emma will support the company’s plans to extend its manufacturing base to cater to the North American market and capitalize on its strong core of strategic accounts within mid-sized and emerging pharma companies. Emma’s role will be central to the success of Aesica in the region, as the company expands to become the pharma industry’s partner of choice for the development and manufacture of APIs and formulated products.

Dr. Alan Raymond, Sales and Marketing Director, Aesica Pharmaceuticals, said: “I am delighted to announce Emma’s appointment into this new senior role. Expanding our presence in North America is absolutely vital to our growth on a global scale, and this position is key to us achieving that goal. Emma’s contribution will play no small part in helping us achieve our ambitions to become a trusted partner to the most innovative and respected names in pharma.”

With Emma on board to oversee the needs of the North American market, Aesica will offer the pharma sector a single point of contact across the key stages of drug development. Its integrated service includes API scale up, formulation development, manufacture of CT supplies to commercial scale and final dosage form manufacture.

The success paves the way for the fast growing pharmaceutical manufacturer to transfer production of its US-based client’s solid dosage form product to the Aesica site in Queenborough, Kent. The FDA inspection officer made no specific observations. This audit follows a long history of successful inspections by the FDA for Active Pharmaceutical Ingredients (API) production.

Jeremy Drummond, Sales Director, Formulated Products, said: “This is a particularly significant development for Aesica and will help us gain credibility in the US market. At a time when Aesica is expanding its presence in North America, receiving this positive feedback from the FDA shows we are well positioned to satisfy the manufacturing needs of US-based pharma companies.”

The Aesica site in Queenborough has been FDA approved for the manufacture of APIs for over 20 years, and now offers US pharma companies peace of mind when sourcing either API or dosage forms from the Queenborough facility. The Queenborough site is already transferring in other solid dosage form products for the US market including one based on bi-layer tablet technology with which it has many years’ experience.

The successful audit of the Aesica site in Queenborough follows recent positive repeat audits by the FDA at Aesica’s European sites in Zwickau and Monheim, Germany and Cramlington, UK.

The last 12 months have seen the company achieve significant sales in the US, bolstered by increased demand for both commercial and development scale APIs from large pharma and emerging biotechnology companies across America.

The company’s long-term vision is to be the number one supplier of Active Pharmaceutical Ingredients and Formulated Products to the pharmaceutical industry. Aesica has always believed this vision will be achieved through a combination of organic growth and strategic acquisitions.

Aesica plans to establish sites and assets in North America this year which will enhance its capabilities in API production and Formulation Development in the region. The expansion will enable the company to focus on developing its custom synthesis offering for the North American market and follows a succession of strategic acquisitions in Europe as Aesica bolstered its global manufacturing presence in 2011 with acquisitions in Germany and Italy.

Dr. Robert Hardy, Chief Executive, Aesica, said:

 “Expanding the Aesica brand further into the US market is an integral part of our long-term strategic plan, therefore our strong sales figures for 2011 are extremely encouraging. It lays a solid foundation for the company to establish manufacturing sites this year, which will enable us to build on the successes of our business development teams based in our east and west coast offices and provide a more localized service offering. Since Aesica started business in 2004 we have quadrupled in size. In the last twelve months we doubled the size of our workforce. This is all part of our vision to become the preferred CMO in the industry and a trusted partner in the US.”

Aesica is a leading full-service provider of development and manufacturing services for Formulated Products and Active Pharmaceutical Ingredients. The company develops long-term strategic partnerships with its clients to help them deliver value into the market place.

The upgrade will ensure Aesica can manufacture SafeBridge^® Category 3 API and formulated products from pilot to commercial scale from two of its sites in Europe. The ability to offer high potency manufacturing on a larger scale is particularly important for the company’s further growth in the API arena, as Aesica will be able to offer high containment from the kilo lab to the pilot plant and through to full commercial scale production.

The new facilities will enable Aesica to successfully manage high potency API production at quantities from 1kg to 200kg. Further investment in API manufacturing capability in 2013 will equip Aesica to produce batch sizes up to 600kg.

Dr. Robert Hardy, Chief Executive, Aesica, said:

“The evolution of drug development and the increasing potency of compounds has meant that more customers are looking to outsource high containment drug manufacturing. We predict our new high containment Formulated Product facility and this latest investment in high potency API production will play a pivotal role in increasing our share of the contract manufacturing market. Opening our new high containment facility for the manufacture of formulated products last year showed that we are extremely committed to this increasingly important marketplace and it was a natural progression to broaden our offering around high potency APIs. When it comes to high potency drugs, we are a leader among UK CMOs and the new facility demonstrates our desire to become the name in high containment manufacturing.”

Aesica is a leading full-service provider of development and manufacturing services for Formulated Products and Active Pharmaceutical Ingredients. The company develops long-term strategic partnerships with its clients to help them deliver value into the market place.

Its long-term vision is to be the number one supplier of Active Pharmaceutical Ingredients and Formulated Products to the pharmaceutical industry and Aesica has always believed that this vision will be achieved through a combination of organic growth and strategic acquisitions.

As the contract manufacturing market continues to grow apace and with CMOs’ global revenue predicted to more than double by 2021[1], the challenge for contract manufacturers is to enhance their offering and provide integrated global supply chain solutions.

Since its inception in 2004, Aesica has sought to become the preferred supplier of APIs and formulated products to the global pharmaceutical and biotechnology industry. The firm’s objective to establish itself as a fully integrated CMO was fully realized in 2010 with the introduction of its formulation development team. This enabled Aesica to offer clients its expertise in transitioning lead candidate materials out of medicinal chemistry into GMP development. Now, the parallel approach between API development and formulation development teams at Aesica delivers a more swift and efficient preclinical and clinical development process for its clients.

Dr. Robert Hardy, Chief Executive, Aesica, said

“While there are significant cost savings in working with one single manufacturer, other considerable inherent advantages are derived from an integrated project team approach. We aim to develop strategic partnerships with our clients and our integrated service reassures them we have total familiarity with their API, which leads to reduced timelines and expenditure. During the optimisation process, we can provide non-GMP grade material to our formulation development team so that early preformulation evaluation can occur simultaneously. Once the GMP material has been synthesised, we can then manufacture clinical trial supply while conducting stability testing.”

“In addition, we can manufacture API to SafeBridge^® Category 3, produce controlled drugs and manage the formulation of all dosage forms, which has enabled us to create a niche offering within the marketplace.”

With plans to acquire manufacturing assets in North America later this year, Aesica is predicting a significant increase in its sales for 2012 and plans to develop further strategic alliances with both emerging biotechnology companies and established pharma organisations.

Award winners Susan and Robert with Olympic athlete Kris Akabusi

Dr. Susan Daly was recognised with the Young Achiever Award for the pharmaceutical industry and Dr. Robert Hardy, CEO was presented with the Outstanding Contribution Award.¹
The NEPIC (Northeast of England Process Industry Cluster) Annual Awards are designed to recognise the success and achievements of members operating in the hi-tech manufacturing marketplace including the chemical, pharmaceutical, petrochemical and biotechnology sectors among others. The awards provide a platform from which to celebrate the vital contribution the manufacturing and process industries are making to the regional, national and global economy.

Dr. Robert Hardy was honoured for his contribution to the pharmaceutical industry throughout a career that has spanned three decades and seen him play a pivotal role in the success of BASF before founding Aesica in 2004. With Dr. Hardy’s expertise and leadership, Aesica is now one of the UK’s fastest growing companies and in the last five years has doubled its turnover and its workforce. With 1,300 staff across ten sites in the UK, Europe, Asia and America, the company’s long-term vision is to be the number one supplier of Active Pharmaceutical Ingredients and Formulated Products to the pharmaceutical industry, which is being seen through a combination of organic growth and strategic acquisitions.

Dr. Hardy, Chief Executive, Aesica, commented: “I am extremely proud to have been honoured with the Outstanding Contribution Award. The last eight years since forming Aesica have been the most exhilarating of my career and I am delighted that we are recognised as one of the fastest growing companies in the north east and the UK as a whole. I am accepting the award on behalf of every member of our team around the world as without their dedication, expertise and drive, my initial vision would not have been realised.”

Susan, now a product manager, was acknowledged for her contribution to the sustained growth of Aesica. Susan joined Aesica having graduated in Medicinal Chemistry and completed a Ph.D in Synthetic Organic Chemistry. Her career at Aesica began as a chemist in the development lab, working on process improvement and new product development and later focusing on environmentally-friendly manufacturing. By supporting the company’s community work in the north east, Susan has helped inspire local school children and aspiring chemists to follow her path into the science and technology arena.

Speaking of her award, Susan said: “To have been recognised by NEPIC and my industry peers is a great honour and I am delighted to have received the award. I joined Aesica upon completion of my PhD and have been fortunate to work across a range of areas in the business from the lab through to my current role in the commercial team. It has been this diversity coupled with the dynamic vision and approach Aesica has that has inspired and motivated me to succeed.”

Aesica chose to build the facility at Queenborough as the site already manufactures potent APIs and therefore had extensive formulation expertise and experience in handling controlled drugs.  With the addition of the new facility, Aesica now has the opportunity to manufacture potent formulated products typically classified as SafeBridge ® Category 3. In addition, the new facility’s comprehensive security measures also enable it to manufacture Schedule II controlled drugs such as opiates.

Housed in a purpose built facility, the Potent Manufacturing Facility unit includes suites for blending, compression and blistering along with the appropriate HVAC and cleaning facilities.  It is completely separate from the rest of the company’s facilities to prevent any potential cross-contamination and there is also space for expansion into granulation technology. Aesica is one of only two companies in the UK with such facilities and as the evolution of drug development and the use of more potent compounds has made high containment drug manufacturing a key focus for customers outsourcing their products, Aesica is predicting the new facility will play a pivotal role in increasing its share of the contract manufacturing market.

Speaking at the opening, Simon Clough, Managing Director, Formulated Products Business Unit, Aesica said: “We have a proven record in the development and manufacture of Formulated Products and APIs and so it was a natural progression to broaden our reach into this marketplace. Aesica’s service offering and capability is the most advanced in the UK and the addition of the new facility will be of huge benefit to our current clients and indeed all pharmaceutical companies who require potent drug product production. In fact, one thing we will be looking at is the manufacture of a narcotic analgesic for severe pain relief.”

Mayor of Swale, Cllr Ben Stokes, said after unveiling the plaque to mark the opening: I am delighted to be here to officially open this superb state-of-the-art facility, which really shows the confidence Aesica has in its Queenborough plant and will ensure this area continues to be a major player in the field of pharmaceutical technology.

Gordon Henderson MP said: Aesica’s manufacturing site here at Queenborough is constantly growing and this extensive investment by the company is a real thumbs up to the excellent work being done by the talented team here.

Aesica is a leading full-service provider of contract research, development and manufacturing services for Formulated Products and Active Pharmaceutical Ingredients. The company develops long-term strategic partnerships with its clients, responds quickly and effectively to market demand and develops tailored solutions for specific requirements. Its unique proposition lies in its flexible and bespoke approach to service delivery, coupled with its ability to develop products from the initial clinical stage through to final commercial supply. Furthermore, the long established and proven expertise within Aesica enables it to provide primary and secondary contract manufacturing services to the highest possible regulatory standards. It is this full-service offer, its dedication to exceptional standards of service and its ability to deliver innovation and added value for its clients that truly sets Aesica apart from its counterparts.

Aesica’s Robert Hardy believes his success proves that British manufacturing can thrive, says Chris Tighe.

Being a big company man seemed to Robert Hardy.  He did not even balk when his first employer, Boots, issued strict dress code guidance – grey or blue pinstripes and white shirt – for employees visiting its Nottingham headquarters back in the 1980’s.

Joining Boots after completing his PhD and climbing the management ladder seemed the obvious career path. “I was a chemist, I loved chemistry,” he says.  “I wasn’t a tiger in a cage trying to get out”.

Today, Mr Hardy can make his own rules.  He is founder and chief executive of Aesica Pharmaceuticals, one of Aethe UK’s fastest growing companies.  It is focused on manufacturing and development at a time when the UK is striving to rebalance its economy on such activities.   And it is headquartered in north-east England where a shrinking public sector makes private sector growth all the more urgent.

Aesica is not, however, a name the general public would recognise.  Its business model, like those of big pharmaceutical companies, is to sell its product to customers who then sell under their own brand names.

‘Any idiot can downsize a site and take out cost.  The most difficult thing is actually growing a business’

Its Newcastle headquarters is similarly self-effacing: the third floor of an anonymous office block on a business park on the edge of the city.

Mr Hardy, bespectacled and soberly suited, seems remarkably affable and relaxed for a man spearheading global growth.  “It’s the drugs” he laughs.

Back in 1996, when Boots Pharmaceuticals was sold to BASF, the German chemicals group, the big-company man had simply adapted and ended up running BASF’s UK pharmaceutical operations. He moved to Northumberland to restore a lossmaking fine chemicals plant to strong profitability.  “That was one of the easiest things I’s done in my career”, he says.  “I was expecting a pat on the back from BASF for doing such an excellent job.” Instead, BASF decided to sell the plant.  He found himself, at 44 applying for jobs while, at BASF’s request, showing the revitalised site to potential purchasers.  One was an American entrepreneur.  “He said: “I won’t do it unless your stay,” says Mr Hardy.  A thought struck him: “Why don’t I do it myself?”

Today Aesica, the business that resulted, has plants in the UK, Germany and Italy, is hunting for acquisitions in the US and India, employs 1,300 people and exports globally.  It aims to become the prime supplier to the global pharmaceutical industry of active pharmaceutical ingredients (APIs)- the active chemicals in drugs – and formulated products.  These range from pills and syringes to creams and liquids. Turnover has increased from £25m in 2004 to £90m in 2010.  It is targeted to reach £300m in 2014.  The business is also highly profitable.

Aesica’s name – taken from a Roman fort on Hadrian’s Wall in Northumberland – both honours local roots and works overseas.  The company now supplies most of the world’s top 10 pharma companies with drugs that help treat depression, pain, Aids and arthritis.

Recession does not appear to be an issue for Aesica.  People take medication despite economic difficulties, and its customers place long-term contract, giving Aesica clarity for up to seven years ahead.

The group’s global growth ambitions have just been reinforced financially by a new relationship with Silverfleet Capital, a European private equity firm, replacing LDC, its original partner.  Silverfleet estimates that global outsourcing of pharmaceutical manufacturing was worth $44bn in 2010 and is forecast to grow at 7 per cent a year.  Like LDC before it, Silverfleet owns 60 per cent of Aesica and the management team 40 per cent, half of which is Mr Hardy’s stake.

Astonishingly, all this has been masterminded by a man who, barely eight years ago, had to ring the local authority’s business development manager to ask how to do a management buy-out.

In truth, Mr Hardy, son of a Cumbrian scaffolder, was not an archetypal company man.  “I didn’t like bosses,” he recalls.  “My ideal boss was always 1,000 miles away”.  To reinvent himself as an entrepreneur, he drew on his industry knowledge, international experience and plant turn-round expertise.
But he had no MBO experience.  For example, he says, he had no idea how a multimillion-pound deal would be structured.  He recalls telling PwC, the
professional services firm, at the outset that he had a big problem: “I can’t even pay you.”  BASF however, said, “We don’t do MBOs” Mr Hardy says.  But by now he had discovered his inner tiger.

BASF did eventually relent but, Mr Hardy observes wryly, it “did the best deal of anybody I’ve ever bought from “.  The sale price of about £25m hinged on a
product that took longer to approve than anticipated.  While it took the MBO team, a year to clinch the deal, they realised within six months their strategy of making just generic APIs, was flawed.  “At £25m, [annual sales] we were just too small,” says Mr Hardy.

Aesica wanted to move into contract manufacturing for big pharma companies, but winning them over was tough.  The solution was to buy sites from potential customers and continue to make their products for them while boosting output with other work.  Aesica can sell to everybody. Whereas big pharma competitors rarely sell to each other.

The big pharma trend to out-source manufacturing and, increasingly, development of new products has brought ample opportunities.  In 2006, Aesica bought Mercks’s API manufacturing site in London and moved into making formulated products by acquiring a site from Abbott, another big healthcare company.  The goal of becoming a full-service provider meant it needed to offer early-stage development and clinical trials expertise, so it acquired R5 in Nottingham.  And this year, Aesica made its first overseas acquisition, buying two manufacturing sites in Germany and one in Italy, from UCB, the Belgian group.

Mr Hardy’s acquisition philosophy is clear. “Any idiot can downsize a site and take out cost.  The most difficult thing is actually growing a business.”  Expansion, he says is key; “I can’t shrink Aesica to greatness.”

Mr Hardy admits it has not all been easy.  Aesica closed the former Merck plant in 2010 after volumes dropped.  This brought back echoes of his latter years at BASF, which entailed a lot of rationalisation and plant closures.  “Sometimes you have to make very difficult decisions for the long-term future of the business,” he says.

But people wrongly assume, he says, that costs are too high to make manufacturing feasible in the UK. “Nobody in Germany says we can’t compete because we are too expensive.  We need to start selling ourselves a bit more.”

Four pillars of acquisition

As big pharmaceutical companies outsource manufacturing, it means plenty of potential acquisitions for Aesica.  Rob Hardy requires at least two of “four pillars” to be met.

• Strategic partnerships

Acquire not just plants, but also long-term relationships with big pharma customers and thereby contracts.  “If you aren’t a strategic partner, you are unlikely to be awarded business”.

• New product technology

Aesica wants to be a full-service provider, so is keen to fill gaps in its offerings.

• Global operations

Aesica is focusing on international growth.  It is seeking an Indian site for active pharmaceutical ingredients and a US site for formulated products.

• Organic growth.  “I would never buy anything I didn’t think we could run better than the former incumbent”.

To see the original article on FT.com, click here to register.