Major initiatives in the reporting year included ongoing development and adaptation of our business models to offer innovative solutions. The key factor here is responding to customers’ needs, such as an increased focus on added value to strengthen market presence. Three examples of this innovation are listed below:
1. During 2017 we invested in constant innovation in manufacturing processes to ensure flexibility at all times in order to deliver products to our customers faster and to meet demand increases. In our collaboration with Clovis, we are moving toward real-time release testing of APIs, a first in the CMO pharmaceutical industry, which requires close collaboration with customers and with regulators.
2. Additionally, Lonza leveraged our unique capabilities to develop an innovative “Fix and Flex” business model to enable our customers to achieve ambitious growth targets. “Fix and Flex” allows our customers to ensure the security of supply and guaranteed access to assets they need. The business model allows them to fix a certain component of their supply needs while retaining their flexibility to adjust the capacity according to the changing needs of their product. We have received positive feedback and already have several examples of "Fix and Flex " set-ups in our portfolio.
3. Our initiative on early intermediates enabled us to back-integrate to cover products previously sourced from Asia, which addressed compliance and risk management issues. This initiative is driven by innovation into process design, leveraging the strength in depth we have in chemistry at the Visp site (CH).
In January 2018 Pharma&Biotech was reorganized into a Biologics Division and a Chemical Division. During the restructuring Lonza CMM became the new Chemical Division with two business units: API Development and Manufacturing, and Dosage Forms and Delivery Systems. Lonza's microbial manufacturing business transitioned from the Chemical Division to the Biologics Division.
Furthermore, the integration of our small-molecule API business with Capsugel’s drug formulation development capabilities aims to overcome our customers' key challenges of complexity, bioavailability, solubility and high potency, while helping shorten lead times for drug launches. Capsugel's pharma capsules business will remain a separate unit within Lonza's Pharma&Biotech segment, and all teams are working closely together to ensure we best serve our customers.