DSM Pharmaceuticals: Xander Wessels explains how DSM has adapted to changes in pharma industry




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Video title: DSM Pharmaceuticals: Xander Wessels explains how DSM has adapted to changes in pharma industry
Released on: August 24, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed at BIO 2011, Fintan Walton talks to Xander Wessels, CEO of DSM Pharmaceuticals.
How does DSM adapt to changes in the pharma industry?
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO 2011 in Washington DC. On this show I have Alexander Wessels, who is CEO of DSM Pharmaceutical Products, welcome to the show.
JAlexander Wessels:
Thank you. Nice to meet you.
Fintan Walton:
Nice to meet you too. Alexander, DSM is a company that is a contract manufacturer known mainly as a contract manufacturing company its position within the pharmaceutical industry that pharmaceutical industry has undergone a lot of change recently, could you tell us a little bit how DSM operates within the pharmaceutical industry and how you've changed as the industry is changed.
JAlexander Wessels:
Yes, well first of all the DSM is more than just contract manufacturing, so we have an active pharmaceutical ingredient division, we have the anti-infectives division, we are building a biomedical material division and then we have contract manufacturing and in that contract manufacturing ends we of course see more outsourcing taking place and if you then look to like bigger trends we likely see that the customers go for like deeper partnerships where it's not all about outsourcing products but almost about outsourcing portfolios really where you become like the total manufacturing arm of over customer and there is really long-term ties that tie the supplier and the customer together into like one flawless supply chain.
DSM's new logo and business model
Fintan Walton:
Okay, now one of the noticeable things about DSM you've changed your logo, but that's reflects the change in your business, could you tell us what that change has been?
JAlexander Wessels:
Yes I think DSM happens to be a company that's more than 130-years old, has gone through a number of transformations continually adopting to the change of tide and in the last five-years we worked very hard to transform our portfolio as DSM so we used to be a little bit more in petrochemicals, in basic chemicals it's almost the specialty chemicals in the last five-years we transformed our portfolio completely to material science, life science and with the announcement of the new strategic plan that all mission has been completed now it's all about growth in life science and material science and we thought that this was also an important moment to mark lets say the new DSM and that's why we launched the new brand, the new logo.
DSM's focus on innovation and sustainability
Fintan Walton:
Right, so going down to some level of detail here what things have you changed to reflect those changes that are going on in the pharmaceutical industry? What are you doing different to where you were before?
JAlexander Wessels:
Well first of all we run a number of different platforms in CMO and we are probably one of the few supplying bows on the microbial fermentation and mammalian cell full finish, finished dosage as well as APIs and what we are changing and the process of changing to bring that much more as one integrated offering to our customer, so rather than having selected separately we do it as one offering also because our customers move in that direction. Secondly I think what's certainly has come in to the mix is more focus on innovation and particularly also more focus on sustainability, we see that sustainability as a driver in most industries but also including the pharmaceutical industry becomes more important then we think that with our biotechnology background we are very, very well positioned to take advantage of that, we also in our a new strategic plan move to sustainability as a driver rather than just corporates social responsibility. So really building businesses on reducing footprints and if you then specifically look to the pharma segment we have developed a number of technologies that helped to do so both on the biologic side as well as on our chemical API side.
Fintan Walton:
So what you are responding to when you talk about the sustainability, what are the drivers there?
JAlexander Wessels:
The drivers is that essentially we cannot allow a world or to leave a world for next generation that is actually not livable at the end of the day more and more we are beyond the era or start to get beyond the era overall, we start to get beyond lets say the era of pollution and we move into an area where things as carbon footprint become very, very important now while still being able to deliver the right medicine you can with the new technologies do that with a much lower imprint on the globe and that's where we are moving.
Fintan Walton:
Right, so social ethics basically responsibility?
JAlexander Wessels:
It is more than that it is responsibility, but it also almost mandatory if you look to some of the other industries they then actually be ahead of pharma there it is almost like a crucial element doing business.
JAlexander Wessels's perspective on future growth of outsourcing industry
Fintan Walton:
Right, so your customers the client's, the big pharmaceutical companies want to work with companies like you because you have that capability?
JAlexander Wessels:
Yes.
Fintan Walton:
So where do you see outsource going, I mean we are seeing a changing world, we are seeing a world of pharmaceutical companies merging, we are absorbing companies divesting parts of their businesses particularly manufacturing, so as the CEO of DSM Pharmaceutical Products where do you see the outsourcing industry a part of the industry going?
JAlexander Wessels:
Well I think some of the mechanics in our industry are no different then other industries have gone through, clearly lets say on the pharma sides a lot of consolidation large pharma lot of consolidation is happening for sure we will see some consolidation on the CMO level as well so that is about industry structure. If you look at the industry where it's going in as part of the value chain it's more and more investing in technologies and making lets say become like the extended arm of large pharma become truly let's say more than just the risk capacity become truly an extended arm of some of the large pharma companies and therefore yes if you look at growth rates in outsourcing or CMO it's still in a direction of double digit and of course very healthy for the players in there, now having said that there is also a slight over capacity so we will see some industry restructuring to my view moving forward.
Fintan Walton:
So how does DSM fix into that restructuring?
JAlexander Wessels:
Yes it's clear that we are set out to state as a significant player in this market, so that automatically gives you answer.
Fintan Walton:
Alexander Wessels, thank you very much indeed for coming on the show.
JAlexander Wessels:
Thank you for the interview. Thanks.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Alexander R Wessels
President
Alexander R. Wessels MSc, MBA is President and Chief Executive Officer of DSM Pharmaceutical Products business group. He has worked in the nutrition and life sciences industries for 20 years, including 4 years at DSM , most recently as Business Group President of DSM Food Specialties.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
DSM Pharmaceutical Products
DSM Pharmaceutical Products is the custom manufacturing and technology resource within Royal DSM NV a global life sciences and materials sciences company that delivers innovative products and services to create solutions that nourish, protect and improve performance. DSM offers services across the pharma value chain, combining the corporate strength of DSM with the focus and flexibility needed in partnerships with pharmaceutical and biopharmaceutical customers.