Joerg Ahlgrimm, CEO of SK pharmteco, believes the CDMO industry is heading for significant consolidation: “If you fast forward 10 years, there will probably be 10-15 large, multi-modality CDMOs, with many smaller and specialised ones being bought.”
Joerg Ahlgrimm brings over two decades of experience in pharmaceutical manufacturing and operations to his role as Chief Executive Officer at SK pharmteco. His distinguished career includes leadership positions at Schering, Baxter, and Lonza, where he managed 35 facilities during a period of unprecedented growth. He was one of the founding members of the Center for Breakthrough Medicines (CBM), where he served as employee number four and helped build the operation from scratch before the CDMO was acquired by SK pharmteco.
In this exclusive interview, Joerg shares insights into SK pharmteco’s strategic vision, the future of pharmaceutical outsourcing, and why making outsourcing “easy” is crucial for success in the evolving CDMO landscape. His unique perspective comes from having experienced both sides of a major acquisition, overseeing the integration of CDM into SK pharmteco.
Building a Next-Generation CDMO
SK pharmteco’s approach to becoming a leading CDMO focuses on making outsourcing the preferred choice for pharmaceutical companies. “Outsourcing should not be your second-best option. It should be your first-best option,” emphasises Joerg. The company is building its processes and systems specifically to simplify collaboration with clients.
Their strategy encompasses both organic growth and strategic acquisitions, with a focus on multiple modalities including small molecules, cell and gene therapy, oligonucleotides, and peptides. “We want to fill out the white space between small molecules and cell and gene therapy, creating significant value and benefits for our clients as an end-to-end supplier,” explains Joerg.
The company’s growth strategy is primarily focused on organic expansion within existing facilities. SK Pharmteco recently invested $260M in new Sejong facility expansion.
“We have a very strong balance sheet for financing and funding our organic growth,” Joerg notes. “All our facilities have space to grow, and we believe we can achieve our five-year predictions to grow the company by two to three fold within the existing four walls.”
Creating a Seamless Customer Experience
One of the key challenges in building a global CDMO through acquisitions is ensuring consistency across facilities. Joerg outlines their approach:
“It has to start with one common global quality system, not just on paper, but also in terms of culture and philosophy. The organization must be joined under one vision, one mission, and shared values as a foundation for everything we do.”
The company takes a practical approach to harmonization, implementing unified systems where beneficial while maintaining flexibility where needed. “What works for cell and gene therapy may not work for small molecule API manufacturing. You have to do this with good thinking and practical approaches,” Joerg notes.
A key differentiator in their approach is the focus on bringing expertise to client relationships. “We want to be known as a CDMO who is not just executing a Statement of Work (SOW),” Joerg emphasizes. “Given the amount of programs we see, we typically have more expertise than many clients. We should always be able to bring something to the table.”
Strategic Growth and M&A
While SK pharmteco maintains a strong focus on organic growth, they remain open to strategic acquisitions that complement their capabilities. Joerg explains their M&A strategy:
“We will go for M&A, but primarily to augment our capabilities with things we don’t have. For example, we’re looking at early-stage development areas for small molecules. We are very much a phase two, phase three commercialization shop currently, but we believe we must offer early-stage capabilities for our clients who don’t want to do transfers anymore.”
BioSecure and Industry Trends
The company is not currently planning any larger, transformational acquisitions, preferring to focus on utilizing their existing infrastructure and capabilities effectively.
Looking ahead to 2025, SK pharmteco maintains a bullish outlook despite recent industry challenges. Joerg observes increasing momentum in both small molecule and cell and gene therapy sectors:
“2023 was the post-COVID year with some challenges. 2024 brings us back to growth, and in 2025, we expect growth to accelerate. On the cell and gene side, we expect every year to see at least a 50% increase in new approvals.”
The impact of the BioSecure Act and geopolitical tensions is driving a shift towards regional manufacturing. “We will witness a reorientation towards home markets – European companies wanting to be more in Europe, US companies more in the US,” predicts Joerg.
Regarding the cell and gene therapy sector, Joerg notes an interesting trend: “What happened during COVID and during the financial challenges will help cell and gene therapy in the long run, because most companies had to focus on their most promising programs. This means we should see a higher clinical success rate and potentially a higher commercial success rate in the coming years.”
Joerg sees a clear trend toward consolidation in the CDMO sector, driven by changing customer preferences. “The majority of customer base, especially the mid and large-size pharma and biopharma companies, don’t want to manage networks of 15-20 or 30-50 CDMOs anymore,” he explains. “They want to consolidate with partners who know how to work on ESG, help them reduce their carbon footprint, and know how to digitalize and make outsourcing easy.”
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