Can you introduce Formulated Solutions and share your latest updates?

This year has been highlighted by several key achievements, most notably the acquisition of our 440,000-square-foot GMP Pharma production site in Cleveland, Tennessee. This facility has significantly enhanced our production capacity and capabilities across regulated topicals, nasal sprays, aerosols, and more. We consider it a sister plant to Largo.

Additionally, we have implemented a robust C-level structure, bringing in great leaders who can manage the scale of the growth we are experiencing. Overall, 2023 was characterized by the onboarding of new customers and achieving over 25% growth.

Are there any trends in demand you are witnessing for Formulated Solutions’ services?

At Formulated Solutions, we cater to an extensive and diverse clientele within the Consumer Healthcare sector, including partnerships with eight of the world’s top twelve consumer healthcare companies. This broad client base relies on us to manufacture a wide range of products, from OTC medications to those requiring New Drug Applications, as well as medical devices and cosmetic products. Our expertise spans across various product categories, including topicals, nasal sprays, oral dose liquids, and more, allowing us to meet the needs of both retail and physician-dispensed markets.

As for current trends, in 2024, we are observing a significant inventory overhang. Additionally, there is a heightened emphasis from key customers on quality standards.

As an “onshoring trendsetter”, what is your take on the onshoring manufacturing conversation in the US?

The COVID-19 pandemic has exposed the fragility of global supply chains. Amidst ongoing trade wars, uncertainty surrounding the security of supply persists. Fortunately, our company possesses the necessary scale and expertise to manage intricate and complex technology transfers from various regions worldwide. As part of our strategic response, we have successfully repatriated most of our supply chain operations back into the country, with up to 99.9% of it now domestically managed.

Looking ahead, the cost implications of domestic production pose a significant challenge for the industry as a whole.

Could you discuss any innovation-related investments?

With a dedicated team of 40 professionals focused on development, we have made a significant commitment to research and innovation within the cost-conscious CDMO landscape. Recognizing the demand for a discreet, no-touch, no-drip, on-the-go hemorrhoidal treatment, our Innovation and Development team embarked on a mission to create a novel approach to hemorrhoid care. Our goal was to enhance ease of use and expand the range of situations in which individuals could comfortably manage this condition, which can arise unexpectedly.

In today's pharmaceutical landscape, large pharma and biotech companies are increasingly outsourcing their needs, highlighting the growing importance of innovative CDMO partners. Rather than merely facilitating tech transfers, we aspire to lead the innovation charge for our clients. Pharmaceutical firms are seeking agile partners capable of swiftly responding to market demands.

How do you assess the health of the CDMO segment in 2024?

I've noticed two significant trends recently. Firstly, there is an inventory overhang in the market, leading me to be more optimistic about the second half of the year compared to the first. I anticipate that innovation will be a key driver of growth opportunities for CDMOs during this period. Secondly, supply chain resilience has become increasingly important, reflecting our unwavering commitment to quality. The recent fluctuations in global supply networks have underscored the necessity for robust strategies to mitigate disruptions. We are dedicated to carefully managing our supplier relationships and have made investments in flexible GMP warehousing spaces to ensure the resilience of our operations.

What makes Formulated Solutions unique in the CDMO space, and what will be the key priorities in 2024?

We are anticipating aggressive growth this year. Our investments have opened numerous opportunities and expanded the company's capacity significantly, giving us confidence in sustaining double-digit growth for years to come. When assessing the capabilities of our two plants, we see ample room for expansion in various areas.

We are dedicated to ensuring that our values remain at the forefront of the company. Quality is our top priority, and we are committed to doing things the right way. Our focus is on bringing innovation to our customers to enhance their success, highlighting our dedication to customer-focused innovation. Our mission is to contribute to making the world a better place, and our vision is to become a world-class CDMO.