From The Editor | November 13, 2018

Service Provider Establishes U.S. Home For Smaller Drug Sponsors

Louis Garguilo

By Louis Garguilo, Chief Editor, Outsourced Pharma
Follow Me On Twitter @Louis_Garguilo

experic-building-exterior FINAL1

Smaller drug developers have experienced – or fear future – deprioritizing as a result of the M&A activity creating bigger service providers. Now there’s at least one new option in town – specifically, in Cranbury, New Jersey.

“Our business model is to target the unmet needs of the small and mid-sized drug-sponsor customer base,” says newly formed Experic’s co-founder and President, Eric Bergmann.

The establishment of this business is of interest to Outsourced Pharma readers for at least four, broad-based reasons.

  • First is the simple fact of new company formation in the provider space. As CROs, CDMOs, packaging-service companies, and others gobble each other up via M&A, there are serious concerns about whether new entities would replenish the landscape.
  • Second is the location. These pages certainly included, there’s abundant discussion over the amount of outsourcing being driven outside the U.S.
  • Third, Experic is leasing space originally built for a pharmaceutical company. The downsizing of U.S.-based pharma provides opportunities for service providers. We’ve seen this specifically with pharma manufacturing facilities landing in the hands of expanding CDMOs.  
  • Fourth, the company plans on much of its competitive differentiation to be with new technologies and equipment. (More about this specifically in a moment.)

To varying degrees, all four of these industrywide and market-driven elements play a part in the establishment of Experic, and its target customer. “It’s difficult for smaller drug sponsors to access top technologies, personnel and talent, for instance at larger contract clinical-supply packagers,” says Bergmann. “The bigger pharma companies take the lion share of, if you will, the ‘A-teams.’”

Bergman knows of too many situations where “these start-up biotechs on the West Coast, or up in Boston, are deemed too small or too novel in their packaging or manufacturing needs, so they typically lose out with the existing incumbent providers. They have to get in a long line just to access new technologies and equipment.”

He says this isn’t meant as a knock on the bigger organizations, but “we want to ensure we create a home for these smaller, niche biotech and pharma innovators. To me, they represent the majority of the new development and discovery of new molecular entities.”

So what’s the new home going to look like to customers?

Services For The Needy

Bergmann describes Experic as a “specialty CMO and contract packager,” handling manufacturing and packaging for small molecule, but also secondary packaging for all molecules. Development and manufacturing services will start with a focus on newer powder-filling and encapsulation technologies, particularly those complemented by German equipment-supplier Harro Höfliger, an early investor in Experic, and who has outfitted the initial, all-cGMP space Experic has leased in the Cedar Brook Corporate Center. (The center is also home to a number of other bio/pharma and service-providers.)

Specifically, Experic will bring differentiation for low-dose powder filling below 50 milligrams. “We are talking about 2.5 milligram capsule fills, and powder for inhalation, for instance, a niche area for Hofliger’s equipment and advanced technologies,” says Bergmann.

Experic plans to serve customers through clinical trials, as well as manufacture and package their commercial products. The company has initially leased 45,000 square feet, but says Bergmann, he can “expand into almost the entirety of the building – over 250,000 square feet.”

“The goal is to grow in the one footprint,” he explains. “Also, the equipment we are running on, the IT platform we have developed and the automation built in, provides us so many efficiencies that we do not need the bottom lines to be driven by revenue alone. Our bottom line will be driven by margins and efficiencies, and ultimately, customer success. Our management team and my business partners have always been focused on small and mid-sized customers. This is driving healthcare, and driving new therapeutic breakthroughs. We want to be on that forefront, and it’s always been part of the vision.”

Technology For Profitability

During my conversation with Bergmann, I press him more than once on his ability to maintain a small-customer focus, particularly should the company grow as a result of its early success. He stays steadfast, finally saying: “It would be a departure from our vision if we were to do otherwise.”

So it appears, based on a consistent model of advanced-technology-drives-productivity (itself based on Hofliger’s technologies), Experic offers start-ups in the U.S. a domestic option with reasonable pricing for goods and services, and the care and quality they need to be successful. I ask Bergmann specifically about the technology involved.

“All our equipment will be ‘speaking’ directly into our IT system, and directly into our paperless batch-records system. We are going to be as paperless as we possibly can be across our quality management, and our inventory and warehousing management. Everything will be fed automatically from the equipment into our batch records. Of course full integration with customers will depend on the sophistication of their IT system, but together we’ll strive to be as technologically advanced as we can.”

What about AI, machine learning, continuous manufacturing, single-use equipment – are any of these a part of facility planning?

“Many of those facets are in our future tech plans,” he says. “For now, we’ll start by doing such things as in-house clinical-supplies labeling on our advanced IT platform; all the typical clinical packaging on new Uhlmann packaging equipment with serialization technologies built in, even at the primary pack level. So we will do many things for a single customer in-house, it’s just that we are not enormous, and we are not spread across multiple sites.” He adds: “I like to say we are this little powerhouse with an important niche focus.”

I look forward to talking with some of Experic’s initial customers, and following the company’s progress. And at some point, when both Experic and its small-customer base become successful, let’s see if the urge and the economics of growth allows this new service provider to stay small-customer focused.