Changes in the CDMO/CLIENT relationship model post the CoVid era

👉 With respect to the small molecule CDMO market was there any significant affect from the CoVid pandemic, specifically with the client relationship?

"In short YES. As we all know F2F meetings on both a personal and business level were all but eliminated for about 2 years. Prior to Covid as a service provider such as Angelini, one most important tools to identify new business opportunities was through F2F meetings via office visits , trade show attendance or client visits to our sites. During the CoVid period we had to rely only on “virtual” tools for communications which early on were not as efficient as they are today. Ultimately this made contacting new companies and establishing new relationships very difficult, if not impossible. Especially since the clients could not visit new CDMOs as part of their necessary DD process. The result was they ultimately just continued to use their preexisting supplier portfolio for new projects since these companies had already been vetted. This became a boon for those CDMOs with a large client portfolio but problematic for smallar ones or those that were fairly new to the CDMO space."

👉 Have these affects changed in any way in the post pandemic era?

"Yes but not to extent that many people may have thought. While the return to normalcy for possible F2F meetings and the elimination of travel restrictions brings us back to pre preCovid conditions, the work from home phenomena has not disappeared in most industries including ours. Therefor the ability to visit clients especially those that are “new” is much more difficult which ultimately affects the ability to develop new business. Virtual tools , and business websites have grown in popularity but, in my opinion the ability to proactively solicit new relationships is still compromised."

👉 How do see the future of the CDMO/CLIENT relationship as a result of the pandemic era as well as the current market conditions?

"I believe the current dynamics of CDMO/Client interaction will remain very similar to where we are now regardless of market conditions. However, as the CDMO industry is extremely competitive, during cyclical periods when opportunities are fewer (as now with the Biotech sector under financial pressure), CDMOs without a large client portfolio will be more limited in bringing in new opportunities. That is, as the remote working aspect will be with us for the foreseeable future , so, consequently client visits will remain more limited. Plant site visits have returned to pre pandemic strategies and should remain this way as they are a necessary part of the DD process but in most cases they occur once an RFP is issued. Based on this rational the importance of other external meeting opportunities such as conferences, for example, could become even more valuable than they have been previously as they still provide a F2F interface that has been comprised for the reason mentioned."

GARY CONTE

Sales & Custom Synthesis Senior BD Manager US

Angelini Pharma | Fine Chemicals Business Unit