Clinigen CEO, Shaun Chilton, discusses the Group’s performance in 2021 and addresses some common questions received from investors over the past year.
Clinigen this year has seen financial performance impacted by COVID-19, particularly in our Products division across On-Demand and Proleukin. This has been due to hospitals globally focusing their efforts on dealing with the pandemic, significantly reducing usual activities, which we provide solutions for, and patients understandably not being willing or able to get into hospitals.
However, despite the challenges brought about by the global pandemic, we demonstrated our ability to refine our services to make them relevant and helpful in this scenario. We have continued to demonstrate the strength of our platform with a record number of business wins across the Services division, the roll-out of Erwinase and continued strong performance across the AAA region.
Due to the strength of the underlying business we anticipate EBITDA growth between five and ten percent in the next financial year. We also remain focused on reducing the net debt position.
COVID-19 has been a major global crisis, not just for those directly impacted but also for patients suffering from other diseases that have been deprioritised during the pandemic. Over the past 12-18 months our business has been able to assist many patients around the world and we have been proud to play a role at this very challenging time.
Clinigen has supported more than 50 COVID-19 related projects and has continued to provide access to critical medicines for hundreds of thousands of patients during the pandemic. We, like most businesses, have had to adapt to a more virtual way of working and our employees have been steadfast in the way they have continued to focus on doing what needs to be done to get the right medicine to the right patient at the right time.
Our direct-to-patient clinical support services have been utilised more widely during the pandemic as we see a shift to clinical trials being managed in a more decentralised way which could be a long-term trend we are well placed to support.
The Clinigen platform has been built to provide access to difficult to find medicines globally and provides tangible benefits to both pharmaceutical and biotechnology companies and healthcare professionals. We enable companies to provide access to their medicines in a way that maximises their value and minimises risks, protecting critical relationships with their customers. These customers depend upon us to save them valuable time and provide these medicines quickly and safely. These services will continue to be in high demand in the post-pandemic world.
We recognise that in order to continue to deliver good growth, we need to focus the business on those areas we feel we make a difference and have competitive advantage – a major reason why during the past 12 months we have worked hard to simplify the business. Moving from three divisions to two was a natural step for us and helps us better position the business to stakeholders as well as realise synergies across the organisation. The divestment of the UK Specials and Aseptics business was also important to ensure that we are focused on those services and products we believe can deliver most value for our stakeholders.
We have also continued to strengthen our team, which is integral to strong future growth. We brought in a Chief Operating Officer, Sam Herbert, to ensure operationally we have the right capabilities and capacity for future growth. Our Board has also been strengthened and further internationalised over the period. Elmar Schnee has succeeded Peter Allen as Group Chairman, bringing strong experience from the international pharmaceutical industry. Sharon Curran and Ian Johnson also joined, adding significant listed UK healthcare experience.
Looking forward, in response to the growing demand for services such as our Managed Access Programs, we will seek to accelerate our focus on those areas of the Group where we have growing and sustainable competitive advantage and, as we do so, continue to drive revenue and cost synergies. Clinigen’s most differentiated offerings are from the Services division and the Partnering segment of the Products division where our platform provides market-leading solutions from the clinical phase through the commercial lifecycle phases of a drug product. In addition, we are focused on streamlining and simplifying the Products division and optimising our core business, which we believe will strengthen our offering whilst creating greater shareholder value.
We also continue to focus on developing our people and building the right culture to ensure we have a thriving work force. And we will continue with our digital roll-out with key milestones approaching in FY 2022 which we believe are central to Clinigen’s future growth plans.
Firstly, we are in a position where the markets we operate in are growing, which is clearly important. For example, there are more clinical trials being conducted year-on-year, more being spent on R&D, more innovative drugs being approved-all of which are real drivers in the first instance for the Services part of the business, an area where our pipeline remains strong, and where we are engaging with pharma companies as early as phase II research.
Secondly, a growing proportion of these pharma and biotech companies will need a partner to supply of their medicines into both unlicensed and licensed markets.
It is because of this that we recognise a key growth driver moving forward is partnering. Our ability to manage the licensed and unlicensed markets of a product through one platform is a key differentiator and makes us an attractive partner for a pharmaceutical or biotechnology company.
The ability to really drive the synergy (or handover) between the two divisions and realise long-term and more predictable revenue and profit – what we call ‘Join The Dots’ is a key driver of growth. In the short-term, licensing agreements such as Erwinase and Hunterase are good potential growth drivers and in the medium-term, Proleukin with the successful launch of TIL therapies and also low dose use in additional indications.
The acquisitions we have made have all been focused on expanding and enhancing the offerings across the platform or bringing in products which we can maximise the value of through the platform. CSM and iQone are good recent examples of acquisitions that have enabled us to broaden our offering to pharma clients and ultimately led to us winning business in other parts of the business we would not otherwise have won.
From a product perspective, Proleukin is a product we believe we can maximise the value of given our ability to supply into clinical, unlicensed and commercial markets, something that may be key as it goes through development for new indications. Products like Proleukin continue to allow us to build out our technical capabilities as well expand geographically.
There are a number of synergies we see across the two divisions. Firstly, with the number of pharmaceutical and biotech companies we now interact with across the two divisions, we have the ability to leverage these relationships and cross-sell across our offerings so Clinical Services leading to Managed Access Programs to product Partnering opportunities.
There are capability synergies even within a Division where offerings in one part of the business are being positioned through another part of the platform. A good example of this is where the Clinical packaging business supports work for Managed Access Programs. There are customer synergies since often the physician or pharmacist coming to us for a managed access product is also an investigator in a clinical trial benefitting from our Clinical Services and at the hospital that needs a number of products not available in their country.
And there are also cost synergies for our clients where they are able to store medication in a single location that can then be utilised to supply out to unlicensed markets, commercial markets or clinical trials reducing the needs for multiple partners.
The operational elements underpinning the platform such as Logistics, Customer Services, Quality Assurance, Regulatory, Finance, Legal amongst others are deployed across the two divisions rather than having two separate operating platforms by division. This provides cost synergies as well as making it a more diverse and therefore attractive career for those involved.
A key measure of success here is how many pharmaceutical and biotech companies we work with across multiple parts of the business over a twelve month period. We have seen progress this year with that number increasing by six to forty-three in total and we will have continued focus in this area.
This year we have made good progress against our strategic objectives. Despite the challenges of working remotely for most of our people, we continue to invest a huge amount in them, for example we have had an additional 110 people that have completed our Management Academy, a module that not only impacts managers but the teams that they lead.
We also assess progress through Peakon, an anonymous employee feedback platform we have embedded in Clinigen. We continued to score well on employee engagement through the year with an engagement score of 7.5 which is above industry average.
Operationally we have achieved a huge amount, with the simplification of the business model, the successful implementation of our Brexit solution and the continued development of capabilities such as cold chain expansion. Of course, bringing in a Chief Operating Officer has been and will be key to ensuring operational excellence in the future.
We continue to grow the number of relationships we have with pharmaceutical companies across the Group and we continue to see growth in business wins in both Services and Products.
Digital is a key strategic objective and driver of future growth. There have been further roll outs of our digital platform – to expand and extend our relationships with Clients and Customers – as well as the implementation of a new global CRM platform to further drive ‘Joining The Dots’.
Alongside this we have been able to roll out a new ESG framework and within that framework initiatives like the Early Access Fellowship which is key to both thought leadership and patient focus.
Looking forward, we will continue to pursue our goal to deliver solutions to long-term unmet and underserved needs for pharma and biotech companies and HCPs around facilitating access to medicines. To that end, we will seek to accelerate our focus on those areas of the Group where we have growing and sustainable competitive advantage and, as we do so, continue to drive revenue and cost synergies.
Access to medicines is a long-term unmet need for both pharmaceutical and biotech companies and healthcare professionals. A significant proportion of the world’s population still don’t have access to the medicines they need.
The majority of research and development being done is by smaller companies who need to partner around the world as they don’t have the capabilities to manage their medicines globally. Whilst we have focused on growing the amount of pharmaceutical clients that utilise multiple parts of the Clinigen platform there is clearly an opportunity to increase this number. In fact, increasing it by just 5% or 10% could have significant impact on the business.
Pressures on global supply chains and the presence of counterfeit and substandard medicines means pharmaceutical companies and healthcare professionals need a partner they can rely on and that can deliver a quality assured service global solution.
With a platform that now spans over 570 pharmaceutical and biotech clients and thousands of healthcare professionals that have utilised our platform over the past twelve months, we have the ability to embed ourselves between these two stakeholders and maximise the value of these relationships.
The work we do at Clinigen is an important part of our pharmaceutical clients’ ESG strategies. For example, helping to facilitate better access to medicines on a global basis is directly aligned with some of the UN sustainable development goals – something we ourselves have signed up to.
Whilst ESG is something we have had to get better at communicating about to our stakeholders, a lot of the key principles have always been core to the business and not necessarily new. Driving a diverse, responsible, thriving culture has been aligned to our values for some years it just has not necessarily been something we have communicated as well as we could.
Our new ESG model helps us better outline our approach to these principles and ensure we have continued and consistent focus on the right areas. For example, a key area of focus for us over the last twenty-four months has been employee engagement and we have worked hard to improve on this through management training and the employee engagement platform. Another area we are focused on is our impact on the environment and we are already taking steps to put together a more global picture so that we can put in place a sensible action plan. Certainly ESG is here to stay and given the global nature and size of the pharmaceutical industry we can make a hugely positive difference if we get it right.
FY2021 saw a record number of signings across the Services division, so we are very focused on turning this order book into completed projects. Doing this and doing it well is key in FY2022. Some of the projects secured could also be very large in their own right so we will be looking at how they progress in the first half of the year.
Alongside this, the continued global rollout of Erwinase will, of course, also be very important for the Products division and we will of course be providing updates through the year.
Clearly we are focused on business performance and continuing to reduce our debt levels – we know this will be critical to the market and we are confident we will do so.
Clinigen is the ‘go to’ partner for managing niche hospital medicines globally.
Clinigen is the ‘go to’ digital marketplace for companies needing truly global access for their medicines and for Healthcare Professionals to quickly, easily and safely get the medicines they need.
Complementing the global digital platform, we will have distribution hubs in each major pharmaceutical region in the world.
The platform will continue to support hundreds of thousands of patients around the globe gain access to critical medicines every day.