SHS Gesellschaft für Beteiligungsmanagement mbH
26. April 2021 - Newsletter, Portfolio News

The Portfolio Interview: Dr Martin Renner, CEO Develco Pharma

The German Pain Society estimates the number of chronic pain patients in Germany alone at around 23 million people. These include, for example, cancer patients who suffer from severe, chronic pain that can usually only be treated with opioid analgesics. For these patients, among others, the SHS portfolio company Develco Pharma develops and produces orally administered painkillers with a special retarding formulation that allows them to be taken less frequently (e.g. once or twice a day).

SHS acquired a stake in Develco Pharma a few months ago. We spoke to Develco CEO Dr. Martin Renner, who has led the medium-sized group of companies since January 2020. Dr Renner is a pharmacist and holds a PhD in pharmaceutical technology. He held management positions at international pharmaceutical companies for many years.

Editor: Dr. Renner, what exactly does Develco Pharma do?
Dr. Martin Renner: Since 2006, Develco Pharma has been developing and producing innovative formulations for drugs with already known active ingredients. The focus is currently on the therapy of severe pain and ADHD (attention deficit hyperactivity disorder). Develco employs 130 people at sites in Switzerland and at our state-of-the-art production site in Schopfheim, Baden. We currently have more than 220 marketing authorisations and have produced more than 1 billion tablets to date.

Who are Develco’s customers?
We focus on the development of better drug formulations, the clinical trials and the approval of the drugs and subsequently on the economic series production for our customers on a B2B basis. You won’t find the Develco logo on any of the drug boxes, as we out-license our products to internationally operating pharmaceutical companies who market the drugs under their own name. In our customer list you will find pretty much all the big names in the generics industry.

How exactly do Develco formulations help patients who take your painkillers orally?
A patient suffering from very severe, chronic pain must take a conventional, i.e. non-retardant painkiller several times a day at precise intervals if his pain is to be bearable. We process these known active substances by means of special Develco formulations so that a modified, delayed release of active substance occurs after oral intake, or an effect is achieved that active substance concentrations in the body are optimised, i.e. a first part is released quickly, then the remaining active substance is released slowly. These special formulations therefore allow the active ingredient to be released gradually over a certain period of time. Pain peaks are thus avoided and the overall pain level is lowered. For patients, this means a noticeable gain in quality of life! In addition, this allows the patient to remember to take their painkillers only once or twice a day, e.g. in the morning and/or evening. Handling (compliance) is therefore easier and the medication works more evenly and better throughout the day.

Where do you see Develco’s strengths?
We all know about generics. These are drugs for which the patent protection has expired and which are then imitated by other manufacturers. What Develco does is much more sophisticated. We take the known active ingredient and don’t just copy the formulation, but process it with our special technology so that it is delivered in a delayed or modified form. This is real high-tech work, and we have built up a great deal of expertise in this area over the past 15 years, which is now valued worldwide. We are very well positioned in this very special field of drug delivery systems and are leaders in the active substances we process. We always say: where it gets difficult for others, it starts for us. We gladly accept the challenges, we can do that and we are proud of it.

What are your plans and what is the Develco pipeline like?
Our pipeline is well filled and is being continuously developed. We expect that with our know-how and many years of experience we can now successfully move into new therapeutic areas. In areas such as pain and ADHD, we have a strong customer base and a high market share, which we are continuing to expand. In parallel, we are starting with new active ingredients in order to create added value for patients with Develco formulations in other indication areas as well. There are initial collaborations and successes in development here, but we continue to look for new opportunities to bring an idea to market together with partners.

Since the end of 2016, you have been producing in a state-of-the-art production facility in Schopfheim, Baden. What advantages has this brought?
With the new building in Schopfheim, we were able to set up a state-of-the-art production facility that meets the highest technical and pharmaceutical standards. We did not want to make any compromises. The entire production and packaging is automated, with digital monitoring and documentation, so we meet the highest international quality standards. We have great employees there and have mastered important technologies that are needed for the production of solid dosage forms. These include simple mixing, pressing, encapsulation and filming processes as well as the production of highly complex pellets and sustained release solid dosage forms. Over the last few years, we have transferred many of our products from the previous contract manufacturer to our own site, where production has grown accordingly and is now well utilised. The readiness to deliver to our customers has also improved significantly.
We deliberately chose a location in Germany because we consider it essential to produce locally. In addition to very good employees in the region, we also have an advantage in the supply chain, especially for Europe. This applies both to us as a supplier and to our customers, to whose orders we can respond more flexibly.

Especially in these times, politics and business emphasise the importance of vocational training. How does Develco live up to this responsibility?
This pandemic is a great burden – for all people in our society. It is important for us to set an example for young people, especially in this time of uncertainty. That is why we decided at the end of last year to start training curious young people. With our apprenticeships, we offer them a firm place in society, continuity and an attractive professional future. In a few weeks, the first two pharmacists will begin their training with us. Further apprenticeships, for example in the laboratory area, are being planned. We are very much looking forward to this joint journey.

What key challenges do you see for your industry in the coming years?
The ageing society will mean that more and more people will need to be treated for severe, chronic pain. Other clinical pictures such as ADHD will also increase. For these patients, it is important to develop medicines that have a safe and consistent effect over a longer period of time. At the same time, any side effects or the risk of addiction must be reduced to an absolute minimum. For new indications, we want to apply precisely this advantage and will concentrate on products where precisely this is important – rather in niches, not with mass drugs.

You spent many years in responsible positions at global pharmaceutical companies. What attracted you to the task at a medium-sized company?
A global pharmaceutical company is like a huge container ship. You sail on a relatively safe course, but this hardly allows for deviations, and changes happen rather slowly. At Develco it is different. We see ourselves as a nimble, innovative unit – the speedboat, to use the comparison with the container ship. When we see an opportunity, for example in a new therapeutic field, we can react quickly and try things out. It’s similar with our approach in development up to approval – there we try to reach our goal much more pragmatically and quickly. It is no coincidence that the Corona vaccines were also developed almost exclusively by smaller companies such as BioNTech, Moderna or CureVac.

What made Develco choose SHS as its growth investor?
As an industry investor, SHS has many years of experience with investments in the healthcare sector. They know what makes our industry tick. This distinguishes SHS from other investors. In addition, SHS has a large network of experts that we now have access to. In this way, we want to jointly approach and optimally exploit our growth potential.

Thank you for this interview, Dr. Renner.