Can you provide an overview of Frontage Laboratories’ business model and the key services you offer?

We have five business units covering the entire product development area from pre-clinical to clinical. We offer drug candidate evaluation services where we aim to solve complex scientific challenges in areas such as drug formulation, data interpretation and bioanalysis. Our product development and CMC solutions include formulation, clinical trial material manufacturing, and analysis from preclinical stages to phase 2 clinical trials. We use high quality analytical instrumentation for a full range of testing, including API/Product release, stability and dissolution. We also have a clinical services team which works closely with clients to develop a unique approach to overcome the challenges of each study, while maximizing efficiency and mitigating risk. This past year we also built out our capabilities in the area of discovery and medicinal chemistry. Frontage is now a one-stop shop for product development from discovery to the clinic.

What is the advantage of being a full service CRO?

In the US, many companies do the drug discovery phases themselves and would enter into a relationship with a company like Frontage when they have a product they want to develop. However, we have experienced that China and emerging markets do not have the same discovery capabilities and these markets find great benefit in a full service CRO. We have enabled many innovator, generic and consumer health companies of all sizes to file submissions in global markets allowing for successful development of important therapies and products for patients and have successfully assisted clients to advance hundreds of molecules through development to commercial launch. We benefit greatly from having operations in the two largest markets for CRO services, North America and China, and we are well placed to capture growth opportunities in both markets.

What drove the expansion of Frontage’s bioanalytical labs in Exton?

Frontage has been developing methods and analyz­ing bioanalytical samples for more than 15 years. We started with very small labs, but the need for expansion soon emerged.  Today, we have over 350 scientists in three facilities located in the US and China. Now nine of the top 10 big pharma companies are our clients and in the last couple of years we almost doubled our lab space, and it was still not enough. We are also in the process of expanding our operation in the San Francisco Bay area and have leased 25,000 square feet lab space to continue on our growth path.

In terms of acquisitions, what is Frontage’s strategy?

Frontage currently has four acquisition opportunities ongoing that we are hoping to close in the first half of 2021 and we continue to actively look for more. We are particularly focused on expanding our capabilities in our CMO business and in areas we are new to such as discovery and biologics. We are expanding our capabilities and operations inorganically in both the US and China. Our strategy is to expand our capacity and capabilities to offer more integrated solutions.

How has China boosted the growth rate of Frontage’s business and how does Frontage assist clients in gaining approvals in both the US and Chinese markets?

Frontage set up its first lab in Shanghai in 2006, but at that time 90% of our business came from outside of China. Since 2015 however, Chinese FDA changed its policies, which in turn incentivized innovation and investment in new drug development. From 2006 to 2015 Frontage did US$2-3 million in revenue from China per year. Since 2015 we have grown to US$38 million revenue. That is almost 15x growth in three years and it is coming from Chinese pharma companies. Now 90% of our business comes from Chinese pharma companies.

Companies conducting their studies in China, mostly do so to have access to Chinese markets, so having facilities in both North America and China is a great benefit, as it positions us to capture more growth opportunities.