Management Report - Strategy

Company profile

PolyPeptide is a focused contract development and manufacturing organization (CDMO) specializing in the development and manufacturing of synthetic peptides and oligonucleotides used as active pharmaceutical ingredients (API) or intermediates in therapeutic products. The Group mainly serves pharmaceutical and biotech companies. It also produces a range of generic peptides and peptides used in cosmetics.

With a history of over 70 years and a strong manufacturing track with over 1,000 distinct therapeutic peptides manufactured for customers, the Group has developed into a full-service drug substance provider with differentiated technologies and capabilities to support complex and innovative drug development projects. In 2021, the Group added oligonucleotides to its offering, given the increasing market relevance of this therapeutic modality and the synergistic business model.

As a CDMO, PolyPeptide is subject to comprehensive regulations, including current Good Manufacturing Practices (cGMP), to assure quality and to ensure the safety of patients. The Group runs a network of six manufacturing sites, in Europe, the United States of America and India, with each of the sites subject to regular inspections by regulatory agencies and audits of its customers. All sites are GMP certified, demonstrating suitable processes, methods, facilities, and controls.

Business model

PolyPeptide provides its offering through its manufacturing sites and with a “start here – stay here” philosophy, covering the entire life cycle of a drug, starting with the customer’s pre-clinical drug development projects, followed by clinical phases through to commercialization. As a result, its customer relationships are often strategic and long-term by nature.

Business modelProviding expert knowledge for peptide- and oligonucleotide-based APIs the entire life cycle

Activities include process and analytical method development and stability studies, as well as the production of API and intermediates. In addition, the Group provides its customers with regulatory documentation and support.

Revenue related to drug development projects results from the Group’s active custom projects pipeline and includes the manufacturing of non-GMP material for pre-clinical studies and GMP material for clinical phases. Once a drug has received regulatory approval, PolyPeptide recognizes product revenue in relation to commercial manufacturing activities.

PolyPeptide maintains a holistic quality system to ensure compliance with GMP and adherence to applicable guidelines, including those from the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH).

Market 

Based on third-party market reports, PolyPeptide estimated the peptide therapeutics market to range between USD 34 billion and USD 39 billion in 2022 with an expected compound annual growth rate of between 7% and 9% until 2030.

PolyPeptide believes that the main growth driver is the increasing number of approved peptide-based therapies for metabolic disorders, in particular GLP-1 receptor agonist drugs for the treatment of diabetes, obesity and other co-morbidities. In addition, therapeutic areas for peptide-based drugs are expected to develop further, including oncology, infectious diseases, orphan diseases, cardiovascular, neurology or gastro-enterology applications.

According to the GlobalData drug database, accessed in December 2023, approximately 1,000 peptide drug projects (synthetic and recombinant) were in development, of which approximately 340 in clinical development, with approximately 70 in phase III or pre-registration. Based on third-party market reports, PolyPeptide estimates that more than 100 peptide-based therapies were approved by the US Food and Drug Administration (FDA) as at the end of 2023.

The addressable market for PolyPeptide is the outsourced market for synthetically manufactured peptide-based APIs, which was estimated by PolyPeptide, based on public company reports from the financial year 2022, to be around USD 1.3 billion in 2022. According to GlobalData drug database, the number of synthetically manufactured peptide drugs in development was approximately 800 in late December 2023, of which approximately 275 projects were in clinical development.

Compared to the market for peptide-based therapeutics, the market for oligonucleotide-based therapeutics is more nascent. According to GlobalData drug database, accessed in December 2023, the estimated market size for marketed oligonucleotide-based therapeutics is USD 4.1 billion in 2022, with an expected compound annual growth rate in the high teens until 2029.

According to the GlobalData drug database, accessed in December 2023, approximately 950 oligonucleotide drugs were in development, of which approximately 190 in clinical development. Based on third-party market reports, PolyPeptide estimates that circa 20 oligonucleotide-based therapies were approved by the FDA as at the end of 2023.

Integrated strategy

The Group’s mission is to help customers develop products, secure regulatory approvals and successfully launch and commercialize their products in the market.

Building on its values of “Innovation”, “Excellence” and “Trust”, PolyPeptide aims to be the preferred long-term partner for its customers, who typically expect their CDMO partners to have deep scientific knowledge, technical expertise and operational experience, demonstrating a relentless focus on quality and a high delivery performance.

PolyPeptide’s values

The Group sees its regional presence in Europe, the United States of America and India, its process development and manufacturing capabilities, and its culture of flexibility and responsiveness as competitive advantages.

As a multinational company with 1,273 employees at the end of 2023, PolyPeptide fosters an agile, open and collaborative work environment. It continuously develops its organization and shares best practices across the Group. Attracting and retaining qualified and engaged talent is essential for PolyPeptide to implement its integrated strategy, which is articulated around three priorities:

• Drive innovation: PolyPeptide seeks to serve with leading-edge capabilities in process development and manufacturing to provide its services effectively, efficiently and responsibly. It implements green chemistry processes to optimize its environmental impact.

• Go for growth: PolyPeptide aims to maintain a strong and diversified API custom projects pipeline. It expands its capacity to meet growing volume requirements. Upcoming patent expiries provide opportunities to develop the peptide generics API business.

• Customers first: PolyPeptide aspires to stay close to its customers and to maintain their high satisfaction across all relevant dimensions. It continuously invests in its processes, systems and its workforce to meet expectations with a high delivery performance.

PolyPeptide follows an integrated approach towards the management of environmental, social and governance (ESG) topics. It follows fundamental principles of business ethics, corporate responsibility and compliance. The integration of relevant criteria into its strategy, operations and enterprise risk management framework is seen as the most effective way to meet business needs and stakeholder expectations.

PolyPeptide’s integrated strategy

The Group maintains a Global Balanced Scorecard, which is annually approved by the Board of Directors, for supporting the implementation of its strategy and operational plans as well as for executive compensation purposes. In addition to the financial targets for a given period, the scorecard includes quantitative targets for non-financial criteria such as delivery performance, quality, employee turnover, EHS, green chemistry and other ESG projects.

For more details, refer to the Profile section, the Corporate Responsibility Report 2023 and the Remuneration Report 2023. For the review of the financial performance, including the guidance for 2024, refer to the Business Review.