At the end of September 2024, a new CDMO emerged on the global market when Doppel Farmaceutici and Mipharm completed their previously announced merger. The new firm, which also includes the former AlfaOmega, is named Domixtar Pharmaceutical, or DMX Pharma for short. As well as pharmaceuticals, it is active in homeopathic drugs, food supplements, medical devices, cosmetics, and related packaging.
Both of DMX Pharma’s predecessors, says Maurizio Silvestri, executive president, were among the first independent companies in Italy to invest in the CDMO business and they had both grown steadily since the 1990s. However, their size constrained further growth, which limited their ability to attract large customers who mainly want to work with large suppliers.
“We did a very deep analysis of potential synergies from putting together the two companies,” Silvestri says. “We have had some immediate advantages: the increase in production capacity, expanding the number of technologies available, as well as optimizing the capex of the investments, giving us the ability to negotiate better with our suppliers, and expanding the commercial footprint to give it more visibility.”
The Power Of Two
He continues that the product offering also grew in that there was title overlap among the largest customers in the respective client bases of Doppel and Mipharm. This has enabled DMX Pharma to cross-sell different products and technologies to customers. “This is really a big advantage because we at Mipharm are currently receiving a lot of inquiries for products that we were unable to make before – and the same has happened at Doppel.”
In addition, having a combined entity means that manufacturing campaigns can be allocated across the network where before it might have been necessary to invest to win the business. Another advantage is being able to offer clients internal backup in case they want to dual-source critical products. Finally, it has enabled DMX to centralize some services and thus improve its organizational efficiency.
Capabilities Expanding
DMX Pharma, says Andrea Fulvi, executive vice-president and managing director, comprises four production plans in Italy, at Milan, Rozzano, Cortemaggiore, and Copparo, with a total of about 1,000 employees and turnover of around €180 million/year. These assets bring together “considerable production capacity and different technologies”.
Key capabilities include:
- Soft and hard gelatine capsules filled with liquids, powders, granules, or pellets
- Traditional tablets, both film- and sugar-coated
- Powder and granulates in sachets
- Cream, gels and ointments
- Suppositories and Ovules
- Nasal sprays
The latter is an area of strength, and DMX Pharma is currently developing some new products in cooperation with customers for the U.S. market. Other key areas of expertise include liquids in general, such as drops and single-dose solutions, and injectables in ampoules. The company believes it can manage almost all existing pharmaceutical forms with the most advanced production equipment and in line with high product quality standards.
As regards new investments, DMX Pharma is focused on understanding new market trends, creating highly customized projects in symbiosis with customers, and allocating specific and dedicated production areas to them. “This will lead us to create strong and long-term partnerships with every single partner – putting them and their needs at the center of our future expansion strategy,” Fulvi says.
An Obsession With Customers
DMX Pharma is stressing customer-centricity as key to its strategy. That, of course, is not unusual, but Silvestri goes so far as to describe it as “an obsessive mantra”. For Fulvi, this is “the first pillar in our strategy ... Every single customer is unique, with unique needs and requirements. For this reason, we cannot have a standard formula to handle all requirements.”
DMX Pharma, therefore, seeks to stay close to customers, understanding and taking care of every need by using a flexible and tailored approach. It will allocate specific production areas to their campaigns and develop new products in cooperation with them. One good example of this is the aforementioned nasal spray on which it worked with the customer from development right through to commercialization, with all the machines and equipment in a dedicated area to cover all the market and regulatory needs.
Supply Chain Challenges
Even before the merger, the companies making up DMX Pharma paid increasing interest to supply chain support. With all the geopolitical disruptions of recent years – COVID, the war in Ukraine, the Suez Canal blockage, and the hold-ups affecting shipments from China – the pressures on the supply chain have been acute. In some instances, raw materials have seen up to 400% delays in delivery times, while inflation has led to increases in both raw material and shipping costs.
“We always give maximum attention to this, and we are trying to minimize the impact as much as possible for all customers involved,” Fulvi says. “The situation has reminded us that, although we are an important part of the chain, we are just one link in a much larger, more complex entity. For this reason, we are working closely with all our suppliers, regarding them as our partners as much as our customers, trying to find the right phase in our pickup plans, and creating safety stock and back-up programs for all critical components.”
In addition, he notes that the synergies created by the union between the companies allow DMX Pharma to create an internal plan that can help it to better handle the scheduling and better manage production peaks. Via integrated planning and scheduling in close cooperation with suppliers and customers, the four plants in Italy are being organized to reduce lead times from the seven to nine months that became common in the past two to three years. Today, the firm is working to reduce standard delivery times to no more than two to three months.
Meeting Regulatory Needs
Regulatory support is another important aspect of the services DMX Pharma offers to customers. Silvestri regards this as essential for the same reason as R&D services: not all customers are the same and have different levels of needs. Small to medium-sized companies need both R&D and regulatory support to bring their markets from concept to market, and they need a partner at least for the CMC section of their journey.
“It is extremely important that we are very professional, we avoid any mistake for our customers, and they are faster with our support,” he says. “Why? Because any mistake or anything that is not precise in the lifecycle of any product from development to market can extend time-to-market or even lead to product failure, which can have huge financial implications for our customers.”
The combination of Doppel, Mipharm, and AlfaOmega has brought together extensive regulatory experience that can be used at any stage of a product’s development and commercialization. Silvestri regards this as a competitive advantage in serving small and medium-sized companies.
American Ambitions
At present, DMX Pharma manufactures only in Europe. North America, which it serves remotely, is obviously of great interest because it is the world’s largest unique and where most new products start their journeys. “We would like to stay close in the early stages of any product because our aim is not only to stay with mature products, but also to support the small and medium-sized companies developing new chemical entities,” says Silvestri.
Right now, the company is working to increase its visibility. Still, its goal is to have a physical presence in the U.S., and it is now working with investment banks to find a manufacturing asset that fits with its strategy. This will have to be of a suitable size to be merged into the company platform and not too complex to manage – possibly with a slightly different product offer. However DMX is not looking for specific technologies. The company will not, however, look for a biotech. Its expertise is and will remain in small molecules.
Addressing Environmental Challenges
The pharmaceutical industry is under increasing pressure to improve its less than stellar environmental performance – and it wants its suppliers to do some of the heavy lifting needed to get there. DMX is addressing this in many ways. It has installed a photovoltaic plant that satisfies more than 50% of the energy requirements at the Copparo site. All of the sites have cogeneration plants, with the Mipharm site having a Trigeneration system that saves at least 30% of the energy in the cooling systems.
“We are also looking at water consumption, and we work closely with our customers because they, especially the big customers, are very sensitive to ESG requirements,” says Silvestri. “To stay in their supplier portfolios, we pay attention to all aspects of ESG: environment, social, and governance.”
A recent landmark, in May 2024, was Mipharm achieving certification for gender equality because there is no pay gap and opportunities between male and female workers. This is now being expanded to Doppel. The company is also working with Italian social organizations that seek to provide working opportunities for disadvantaged people. All this will become increasingly important as DMX Pharma strives to become one of the big players in the CDMO market.