Frankfurt Almost exactly a year ago, the drug company Dermapharm started producing the mRNA vaccine Comirnaty as a partner of the Mainz-based company Biontech. In the first three months to the end of 2020, Dermapharm produced around 17 million doses. Dermapharm now has the capacity to manufacture up to 500 million cans in the coming year.
Head of the company, Hans-Georg Feldmeier, plans to make the company he runs also committed to vaccine production in the long term: “We are currently assuming that we can establish a long-term business with Biontech,” he said in an interview with Handelsblatt.
In addition to Biontech, Dermapharm has already been included in the group of companies with which certain so-called idle capacities for the production of vaccines are to be kept available in the future. In the event of a new pandemic, vaccine production could then be restarted within a very short time, said Feldmeier. The EU and the German government had pushed these plans forward and launched a corresponding tender.
Dermapharm takes on the formulation of the vaccine doses for Biontech. This means that the mRNA, the messenger substance with the genetic information, is “married” to certain fatty substances (lipids) so that they can be better absorbed by the body cells. Biontech ordered the necessary systems early on, while the clinical studies were still running. At Dermapharm, the Mainz-based company found a facility where these systems could be easily integrated into the existing production processes: “Clean rooms, boilers, sterile infrastructure, all of this was available in our plant in Brehna,” says Feldmeier. In addition to Brehna, Dermapharm set up a second production facility at the Allergopharma subsidiary in Reinbek near Hamburg, which started in the spring. Dermapharm acquired the allergy specialist from Merck in Darmstadt last year.
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The expansion of capacities to now 500 million vaccine doses was “a show of strength” for the medium-sized company, as CEO Feldmeier says, “but also an achievement that makes us all proud in the company”. According to Feldmeier, Dermapharm has invested a significant double-digit million sum in the vaccine production project, in facilities, infrastructure and quality control laboratories. Dermapharm is now also able to fill and pack 250 million doses in the small bottles (vials).
The capacities Pfizer and Biontech want to call up from Dermapharm in the coming months are permanently planned in advance in a rolling process. Dermapharm does not disclose the exact delivery quantities and sales from vaccine production, the content of the contracts is subject to confidentiality.
Focus on skin diseases
Dermapharm, based in Grünwald near Munich, is a broad-based, medium-sized pharmaceutical company that focuses on medicine against skin diseases, but also produces vitamin preparations and corticoids, which are colloquially known as cortisone. The company had sales of around 800 million euros last year, an increase of 13 percent. The group result rose by ten percent to almost 86 million euros.
More than half of the brand portfolio consists of original products for which there is no longer any patent protection and for which there is no or only one competitor in the market, according to the annual report. In addition to the branded products, which account for around 60 percent of sales, Dermapharm is active in parallel imports of pharmaceuticals with its subsidiary Axicorp, which was acquired in 2012; a third business area is herbal extracts. “This broad set-up gives us stability,” says Feldmeier.
The doctor of pharmacy joined the Dermapharm Group in 2003 and has been CEO since 2018. The company was built up by pharmaceutical sales professional Wilhelm Beier, who once started his professional career in the field service of the generics company Ratiopharm. In 2018, Beier floated a minority stake in Dermapharm and raised around 300 million euros. In the fall of last year, Beier – or the family holding Themis – sold another ten percent of the shares, but still holds the majority of the shares with 65 percent and also chairs the company’s supervisory board.
If Dermapharm has grown organically and through acquisitions per year in the low double-digit percentage range on average, vaccine production gives the company an additional boost. Feldmeier expects consolidated sales to grow by between 24 and 26 percent this year. The operating result (Ebitda) should increase between 45 and 50 percent.
According to Berenberg analysts, Dermapharm is likely to generate around 120 million euros in sales with the vaccines business this year. That should give the adjusted Ebitda margin a decent boost. Berenberg analyst Charlotte Friedrichs expects an increase from 24.4 to 31.8 percent of sales.
Space for new projects
This gives Dermapharm space for new projects. Because growth through acquisitions remains on the agenda. “We are always looking for interesting opportunities. We check exactly to what extent an acquisition fits into our portfolio and we can also manage it with the management capacities. In addition, we do not want the net debt to rise significantly above a ratio of three times Ebitda. “
In the course of the Covid-19 vaccine production, CEO Feldmeier identified interesting new topics for the company. In July, for example, Dermapharm acquired a 24.9 percent stake in the biotech start-up Corat Therapeutics, which is currently developing an antibody preparation for the treatment of Covid-19 in clinical studies. “With the participation in Corat, we are entering the group of research-based pharmaceutical manufacturers. We are entering new territory in a certain way, but we are convinced that with our experience we can provide important know-how for drug development and marketing, ”says Feldmeier.
He is currently concerned with the question of how things will go on in the healthcare system under a new federal government – not only as a company leader, but also as President of the Federal Association of the Pharmaceutical Industry (BPI), who Feldmeier has been since last December: “The expenditures for the healthcare sector are in has been very high in the past few months. We very much hope that no savings ideas will be born that will put the European pharmaceutical industry in trouble. The pandemic has shown that you need efficient local pharmaceutical companies. And they should also have a fair chance to compete, for example when tendering discount agreements, ”says Feldmeier.
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