Patheon Tightens The Supply Chain To Transform Pharma Outsource Manufacturing

Opportunities to transform an industry are rare, but often they develop from unexpected sources. Long considered an essential yet largely commodity-output business, biopharmaceutical supply chain management may emerge as a hidden transformational force for the industry. That has been James Mullen’s bet since he took over as CEO of Patheon NV in 2011. With the contract drug development and manufacturing organization (CDMO)’s revenues tripling since Mullen's arrival, Patheon is now the largest provider of contract drug manufacturing services and one of the top three outsourced manufacturers of biological drug substances, the industry’s fastest growing segment. Patheon is also the number one global provider of formulation services with offerings across about 40 dosage forms, as well as analytical services and life-cycle management. In July 2016, Patheon, which had gone private, returned to the public markets, raising $640 million on the New York Stock Exchange. [See Deal]That has given the company both cash flow and equity to grow its business.

The firm is now looking to shake up the contract manufacturing business. Patheon intends to serve as a single-source for...