Strengths and competitive advantages
A leading position in a large number of API categories
In terms of revenue, EUROAPI considers it is the world's leading manufacturer of small molecules, the second largest manufacturer of APIs (including small and large molecules) and the seventh largest in the global CDMO market¹.
This leading position in many API families allows EUROAPI to benefit from important economies of scale, giving the Group a strong competitive advantage and manufacturing capacity that is immediately available to its customers. EUROAPI’s Frankfurt site in Germany is the largest API manufacturing site in Europe².
Due to continued investments, the Group has a prime position in the API market and is well positioned compared to its competitors in terms of product quality and diversity, regulatory compliance, supply reliability and technical support, resulting in lower price sensitivity of the Group's products compared to those of its competitors.
A diversified portfolio of APIs
EUROAPI has one of the largest portfolios in the industry, covering all types of molecules in the API market.
EUROAPI's portfolio of APIs is broad and diverse. For the year ending 31 December 2021, the Group's top 10 APIs accounted for 35% of its consolidated revenue, while the top 53 APIs accounted for 80% of its consolidated revenue.
EUROAPI is positioned on differentiated categories of APIs. Approximately 55% of the Group's sales are generated from highly differentiated APIs.
The Group has a portfolio of APIs which is well balanced between niche and/or complex-to-manufacture substances and high-volume APIs, allowing to partially absorb the fixed costs of production sites.
A strong positioning in the CDMO market with higher potential margins
EUROAPI is the seventh largest CDMO company in the world in 2020³ and aims to be in the top 5 worldwide by 2025.
EUROAPI can rely on promising partnerships: in 2021, the Group's CDMO activities have accelerated, with 23 contracts signed⁴, 35% of which are with new clients.
The Group is increasingly moving toward CDMO partnerships in the early phases of the drug development cycle in order to benefit from greater customer loyalty.
EUROAPI also seeks to generate a significant number of contracts for drugs in commercial phases to mitigate the risk of attrition from the molecules development cycles that may not reach the commercial phase.
Strong vertical integration offering greater autonomy and security of supply
The Group owns, controls and integrates almost all of the main chemical technologies used for the manufacturing of APIs, which provides it with greater reliability of supply and manufacturing and makes it less dependent on countries with low production costs.
This level of vertical integration ensures that the Group manufactures products of prime quality, as it applies its good manufacturing practices to the production of most of the raw materials and basic and advanced intermediates it uses.
This integration also positions EUROAPI as a leading candidate in the event of the relocation of the production of certain APIs to Europe. The Group's teams have already established several projects to respond to European relocation initiatives to relocate the API industry in Europe.
A manufacturing excellence and an innovation platform
EUROAPI's production capacities have benefited from regular investments to support the Group's growth plan. EUROAPI is responding to the increase in the CDMO activities and the development of additional volumes in its API Solutions business, while investing in certain families of APIs for which world demand exceeds production capacity. With the approval of its Board of Directors, EUROAPI's future investments will be focused on the development of new production capacities dedicated to these key API families.
EUROAPI's manufacturing excellence is also supported by an experienced scientific development team that continuously improves API manufacturing processes to increase industrial yields and reduce production costs at all six EUROAPI sites. The Group aims to increase the number of employees in its Research and Development team from around 350 in 2021 to around 575 in 2025, of which more than 250 will be dedicated to the CDMO activities.
An exemplary track record of regulatory and quality performance
EUROAPI has an exemplary track record of regulatory compliance, particularly with respect to good manufacturing practices and quality. The Group’s production sites are regularly inspected by several health regulatory authorities, such as the Food and Drug Administration (“FDA”) in the United States, the European Medicines Agency (“EMA”) or European national agencies such as the French National Agency for the Safety of Medicines and Health Products (Agence Nationale de Sécurité du Médicament et des produits de santé–“ANSM”). The most recent regulatory inspections carried out on each of the Group’s sites by the FDA and the EMA did not reveal any critical observations.
Between 2018 and 2021, more than 150 audits conducted by customers have confirmed the quality level of the Group’s sites⁵.
A balanced and diversified customer base
EUROAPI benefits from a well-balanced customer portfolio, with a diversified group of loyal customers offering growth opportunities on the one hand, and the presence of Sanofi providing stability and visibility on the level of its sales on the other.
EUROAPI projects that revenue drawn from its sales to customers other than Sanofi will represent 65% to 70% of its consolidated revenue by 2025. EUROAPI sells its products to a diversified base of more than 530 longstanding customers including the largest pharmaceutical companies. EUROAPI has a strong competitive advantage since its major customers are experiencing very dynamic growth in their respective markets.
EUROAPI and Sanofi are two key strategic partners. By 2025, the Group expects sales to Sanofi to represent 30% to 35% of its consolidated revenue, and EUROAPI supplied, in terms of revenue, about 30% of the APIs purchased by Sanofi in 2020.
¹ Source: Company’s estimate based on third-party market research conducted using the annual reports published by the main industrial players in the APIs sector, public databases (including Capital IQ and Orbis) as well as interviews with market experts.
² Source: Company’s estimate based on third-party market research as well as interviews with market experts.
³ Source: Company’s estimate based on third-party market research conducted using the annual reports published by the main industrial players in the APIs sector, public databases (including Capital IQ and Orbis) as well as interviews with market experts.
⁴ 26 to the end of January 2022.
⁵ The Group considers an audit to be successful when it does not result in the loss of a client.