Our Strategic Focus

Throughout our 123-year history, the Lonza business strategy has been to respond dynamically to the demands and opportunities of the external environment. This has been a key factor in our growth and success. 2020 provided a unique operating environment, as the business world absorbed and learned to manage the impacts of the COVID-19 pandemic. True to our heritage, we remained agile to these developments by maintaining a strategic focus on internal evolution and external adaptation.

Internally, the decision to divest the Lonza Specialty Ingredients (LSI) segment provided an opportunity for us to refocus on our objective to consolidate our position as a leading partner to the healthcare industry. Concurrently, we remained responsive to the demands of the pandemic, and the developments of the industry. This strategic approach has enabled us to deliver a strong set of financial results while ensuring that the business is set up for long-term success. Importantly, it has also allowed us to make an active and decisive contribution to controlling the pandemic.

Structural Design

The decision to divest the LSI segment has allowed us to focus our energy and attention as a pure-play partner to the healthcare industry. In this context, we have redesigned the Lonza company structure to meet customer needs and expectations, as well as delivering optimal levels of productivity and efficiency. From 1 January 2021, our businesses have been placed into four divisions, each of which are set out below. From 2021, we will report the financial performance for each division.

Small Molecules

  • Active Pharmaceutical Ingredients
  • Drug Product Formulation

Biologics

  • Mammalian
  • Microbial
  • Licensing
  • Bioconjugates
  • Parenteral Drug Product Services
  • mRNA

Cell & Gene 

  • Cell & Gene Technologies
  • Personalized Medicine
  • Bioscience

Capsules & Health Ingredients

  • Capsules
  • Health Ingredients

Business Performance

In the context of the COVID-19 pandemic, we have redoubled our focus on ensuring business continuity and maintaining resilience. We have worked to strengthen our supply chain and increase our free cash flows, while implementing new safety measures to ensure that employees can still safely attend our manufacturing plants and laboratories. We have been impressed by our people’s resolve, dedication and energy throughout the pandemic, as they have adapted to their new working conditions.

To further improve margins during a time of high CAPEX investment, we have redoubled our efforts to deliver lean operations, while maintaining our focus on quality. Although speed has always been an important consideration for our customers, it has become a critical necessity in the context of the COVID-19 pandemic. Our agreement to manufacture the drug substance for Moderna’s COVID-19 Vaccine progressed from contract negotiations to production in eight months at our site in Visp (CH), and even more rapidly in Portsmouth (USA). The pre-built capacity provided by our Ibex® Solutions offering has been instrumental in accelerating delivery timelines, and has provided advantages to our customer’s business, as well as wider societal benefits.

Innovation

We understand that innovation provides a point of differentiation for our business. We drive innovation with new manufacturing processes, as demonstrated by our work to deliver the mRNA platform in the Moderna COVID-19 Vaccine drug substance. We are also working on process innovation by increasing automation to streamline human intervention. This can be seen in our Cocoon® Platform, which improves efficiency in cell therapy manufacturing by providing an automated, closed production platform.

Our approach to innovation further extends across the entire breadth of our divisional offerings from small molecules to biologics. Our Ibex® Solutions offering provides pre-built capacity that can deliver drug product for clinical trials, and expedite clinical and commercial production. We are also extending our capabilities in meeting our customers’ complex manufacturing needs, across a wide variety of products and services.

Sustainability

Sustainability is a strategic priority for our business. We have an ethical responsibility to protect the environment, promote diversity and invest in our local communities. It is also an increasing priority for our customers, investors and employees.

We have an established track record in delivering improved levels of environmental stewardship. We are reducing our energy consumption and carbon footprint, while refocusing on renewable energy resources. We are also continuing to decrease our industrial water intensity.

Alongside these important measures, we are taking steps to become a more inclusive and purpose-led organization. In 2020, we established a global Diversity and Inclusion Taskforce to ensure that we provide a welcoming environment in which colleagues are valued for their differences of characteristic, preference, perspective and belief.

We have also worked on multiple community investment projects across the locations and markets in which we operate. Among other projects, in response to the COVID-19 pandemic, we provided disinfectant solutions and personal protective equipment to hospitals in Switzerland and the US, while supporting critical hygiene projects in India.

Long-term Focus

All four of our business divisions operate in growing markets, and our long-term demand forecasts have left us confident to make significant and sustained investments in capacity expansion. We plan to maintain existing levels of CAPEX expenditure for the next two years, to ensure that we fully capitalize on market growth opportunities. In the short term, we are working to improve margins by managing our OPEX, when facilities and operations come online and commence ramp-up. Looking to the longer term, these investments are set to deliver sustained growth while differentiating the scope and scale of our offerings.