Fareva

CDMO

Innovation

Investment

Q1 2019

<h3><span style="color: #5f605e;">As objectives and capacity become increasingly complex, many pharmaceutical companies are turning to outsourcing partners to provide innovation in manufacturing. A CDMO that provides products as well as services, from development to commercialization, and that possesses the agility to quickly adapt and invest in innovative technology, can serve as a single-source provider capable of meeting an array of client needs.</span></h3>
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<h4><span style="color: #861621;">Our Company History</span></h4>
<p>Fareva was founded 31 years ago by my father, Bernard Fraisse. A salesman who dealt in household cleaning products, he became frustrated by the limitations of his suppliers and started his own manufacturing company focused on cleaning products packaged in aerosols and bottles. The company soon expanded into contract manufacturing with aerosol as a core technology, acquiring additional technologies, branching out into beauty products, and adding capabilities as appropriate.</p>
<p>Through a series of strategic acquisitions to amass the appropriate innovative technology, technical and regulatory knowledge, resources and people, the company entered the pharma marketplace. Beginning with a focus on ophthalmic therapies, we steadily introduced new technologies and capabilities, becoming a one-stop original equipment manufacturer (OEM) in Europe. This collection of acquired facilities operating under different names needed to be united under a single identity, so we chose the name <em>Fareva</em>, which means “makes you dream” in the Occitan dialect spoken in our French hometown.</p>
<p>Today, Fareva remains a 100% family-owned company, but, in spite of its local roots, it has grown into an international player, with 40 factories serving a number of business categories, linking beauty, makeup, pharmaceutical contract manufacturing, active pharmaceutical ingredients (APIs) and generics, with over $1.8 billion in annual turnover. Having established a strong foothold in Europe, Fareva is expanding operations in the Americas, with a growing presence in the United States, Mexico and Brazil — with plans to expand throughout North and Latin America.</p>
<h4><span style="color: #861621;">Our Growth Strategy </span></h4>
<p>Fareva’s overall objective is to be a one-stop manufacturer across our various manufacturing sectors, and to transition from an OEM to an original design manufacturer (ODM) whenever possible. We accomplish this by building factories with multiple critical and efficient technologies, allowing companies that partner with us to reduce their number of suppliers, as well as corresponding liability issues and audits. On <span style="color: #861621;">the</span> one hand, we primarily work as an ODM in our beauty business, and are looking to take that evolution further to operate as an original brand manufacturer (OBM). On the other hand, we are in the middle of an ODM adventure in our pharmaceutical business.</p>
<p>With our large network of multi-technology sites, we can leverage the experience and expertise from one site to support the others. One of our strengths is technology transfer — from the first developmental stages to transposition/scale-up — which we perform with the highest assurances of reliability, security and confidentiality.</p>
<p>Although we have expanded globally, we have continued to follow our original model. We typically enter a new country with a single technology (e.g., aerosol) for our beauty business. In some cases, this first expansion step is driven by an alignment between our strategic goals and those of a customer; we began our Brazil business because an existing client was seeking a reliable supplier in the region, and we built our first facilities to meet that need. We continue to add technologies to the beauty operations at that site, then add pharmaceutical technology and operations until we build up a full Fareva footprint, with &gt; 200 million units in capacity and many different technologies. Only once that footprint is fully built and we have become a leader in that country do we look to the next expansion. Presently, we are aiming to complete our U.S. and Brazilian footprints and looking to subsequently expand across the Americas.</p>
<h4><span style="color: #861621;">Investing in Innovation</span></h4>
<p>To that end, we continue to invest in new technologies to meet the evolving needs of our customers, which typically involves specific new equipment — and the entire infrastructure to support it. One recent example would be roller compaction; while we already have this capability at the Excella site, we are currently installing a new roller compactor that can process high-potency compounds and are already engaged in discussions for projects to utilize this capability.</p>
<p>Other recent technological investments include that capability for prefilled syringes, processing equipment for high-viscosity injectables (primarily for ophthalmics), high-potency API (HPAPI) production at our La Vallee site, and a new, $7 million analytical building at the Excella facility. In all, we invest €80–100 million each year in GMP/capacity upgrades, in some cases with client co-investment.</p>
<p>Serialization is another area in which our agility in investing demonstrates the additional value that we provide to clients. These clients want to partner with CDMOs that are well prepared for changing regulations. With a significant investment, we are already past the requirements and provide serialization up to the pallet stage, demonstrating our ability to stay at the forefront ahead of regulations at a time when many companies are struggling to meet the basic mandate. Recently, Fareva has begun looking into biotech and investing in emerging technologies to maintain a strong and influential presence in an increasingly dynamic market.</p>
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<h4 class="callout-title"><span style="color: #861621;">Our continued growth and our willingness to invest in innovation set us apart in the marketplace.</span></h4>
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<h4><span style="color: #861621;">Differentiating Fareva</span></h4>
<p>Our continued growth and our willingness to invest in innovation set us apart in the marketplace. We are not limited to seeking partnerships on the basis of our available capacity; if a client presents an opportunity that requires additional capacity or capabilities, we are sufficiently agile to act quickly to invest to acquire the necessary operations. Our recent investments in roller compaction and lyophilizers reflect this kind of investment to meet customer demand. While other companies are slow to invest, we offer all of these extended capabilities to our clients on a continuous basis.</p>
<p>Increasingly, clients are looking for full turnkey solutions, particularly because of the growth in products that require highly specialized technology, like steriles and HPAPIs. We can take a partner’s drug from early development through commercialization. Turnkey solutions can save clients time, money, resources, liability and responsibility. While we currently offer turnkey services in Europe, we plan to begin offering them in the United States by early 2019.</p>
<p>Ultimately, clients come to Fareva because of our commitment to quality, our regulatory experience, our ongoing investments, our agility in responding to clients and our willingness to co-invest on the basis of project requirements and shared strategic goals. We are continuing to grow by offering our clients more options in a variety of technologies, as well as product ideas.</p>

How Agile Investment Drives Innovation