In a re­cent End­points News we­bi­nar, spon­sored by Fu­ji­film, End­points’ CEO Ar­salan Arif spoke with Toshi Ii­da, Di­rec­tor, FU­JI­FILM Cor­po­ra­tion and Chair­man FU­JI­FILM Biotech­nolo­gies and Bran­don Pence, Pres­i­dent and COO of FU­JI­FILM Bio­sciences, to dis­cuss the com­pa­ny’s ex­pand­ing role in the bio­phar­ma­ceu­ti­cal in­dus­try. Wide­ly known for pho­tog­ra­phy and es­tab­lish­ing it­self as a leader in health­care imag­ing for al­most 100 years, since 2011 Fu­ji­film has been in­vest­ing in its life sci­ences of­fer­ings, in­clud­ing the CD­MO space. While ini­tial­ly fo­cus­ing on ac­qui­si­tion-led growth, the com­pa­ny is now deep­en­ing its ex­per­tise through or­gan­ic growth and large-scale man­u­fac­tur­ing in­vest­ments, with am­bi­tions to be­come a ma­jor life sci­ences play­er.

Ii­da said with ris­ing costs of bi­o­log­ics de­vel­op­ment, Big Phar­ma is in­creas­ing­ly pri­or­i­tiz­ing R&D in­vest­ment while turn­ing to CD­MOs for man­u­fac­tur­ing, cre­at­ing a strong de­mand for man­u­fac­tur­ing play­ers with large-scale bio­man­u­fac­tur­ing ca­pac­i­ty. Fu­ji­film’s re­sponse, through its ko­joX frame­work, has been to ex­pand its glob­al sites, in­clud­ing heavy in­vest­ment in US on­shore fa­cil­i­ties that re­main har­mo­nized yet al­low for flex­i­bil­i­ty around com­plex mol­e­cules like an­ti­body-drug con­ju­gates.

Pence al­so dis­cussed FU­JI­FILM Bio­sciences’ role in sup­port­ing bi­o­log­ics man­u­fac­tur­ing through its long-stand­ing ex­per­tise in cell cul­ture me­dia and pro­cess­ing tools. The com­pa­ny has worked hard to har­mo­nize man­u­fac­tur­ing and sup­ply chains across three con­ti­nents and aims to help cus­tomers scale pro­duc­tion while main­tain­ing a high lev­el of con­sis­ten­cy. Both ex­ec­u­tives al­so dis­cussed Fu­ji­film’s use of dig­i­tal tools and AI to im­prove bio­process pre­dictabil­i­ty, while al­so high­light­ing their “Part­ners for Life” strat­e­gy, which fo­cus­es on sup­port­ing de­vel­op­ers across the full life­cy­cle of in­no­v­a­tive ther­a­pies.

Key Take­aways:

• Fu­ji­film is ac­tive­ly pur­su­ing or­gan­ic growth and glob­al CD­MO in­vest­ments, in­clud­ing large-scale US fa­cil­i­ties
• Ko­joX mod­el al­lows for glob­al­ly har­mo­nized yet ful­ly cus­tomiz­able man­u­fac­tur­ing fa­cil­i­ties for com­plex mol­e­cules
• Ad­vanced cell cul­ture me­dia ca­pa­bil­i­ties en­hanced by AI and dig­i­tal tools to sup­port large-scale bi­o­log­ics man­u­fac­tur­ing
• AD­Cs seen as strong strate­gic fit for Fu­ji­film's man­u­fac­tur­ing ex­per­tise

• Ar­salan Arif, CEO and Co-Founder, End­points News (Mod­er­a­tor)
• Toshi Ii­da, Di­rec­tor, FU­JI­FILM Cor­po­ra­tion, Chair­man, FU­JI­FILM Biotech­nolo­gies
• Bran­don Pence, Pres­i­dent and Chief Op­er­at­ing Of­fi­cer, FU­JI­FILM Bio­sciences

This con­ver­sa­tion has been edit­ed for length and clar­i­ty.

Ar­salan Arif: Hi every­body. I'm Ar­salan, our founder and CEO at End­points News. We're here to­day for in­no­va­tion in bio­phar­ma­ceu­ti­cals, a con­ver­sa­tion with Fu­ji­film Life Sci­ences lead­ers. And to that end, it's my plea­sure to in­tro­duce Bran­don Pence and Toshi Ii­da with Fu­ji­film. And Toshi, let's just get right in­to it. I'm so ex­cit­ed to speak with you here to­day. And you over­see Fu­ji­film's en­tire life sci­ences strat­e­gy and you've led some of the com­pa­ny's largest man­u­fac­tur­ing deals. So can you just give us a quick 30-sec­ond ver­sion of why a pho­tog­ra­phy com­pa­ny is now sign­ing these huge phar­ma con­tracts?

Toshi Ii­da: Ar­salan, very nice to meet you. Thanks for in­tro­duc­ing me. 30 sec­onds is very quick. I will ex­plain the back­ground, why Fu­ji­film is in the life sci­ence space. Fu­ji­film is a 92 year old com­pa­ny. We're known as a pho­to­graph­ic com­pa­ny. Many peo­ple think that Fu­ji­film is a cam­era com­pa­ny. But ac­tu­al­ly, our 90-year his­to­ry is al­so about health­care. The first prod­uct we man­u­fac­tured was X-ray film, that is med­ical sys­tems. Dur­ing these 90 years or so our med­ical sys­tems were in the di­ag­nos­tic imag­ing field. It's grow­ing and has be­come one of the largest busi­ness seg­ments. And for 2011, we de­cid­ed to ex­pand our foot­print to more pre­ven­tion and treat­ment ar­eas. So, pre­ven­tion di­ag­nos­tics and treat­ment. Then we are aim­ing to be more of a com­pre­hen­sive health­care com­pa­ny. And in 2011, we start­ed in­vest­ing in the CD­MO space. We ac­quired the UK site and the RTP North Car­oli­na site.

And for the first 10 years, we've grown main­ly through ac­qui­si­tions. Now we are mov­ing to the or­gan­ic growth phase through our ma­jor CapEx project. Our am­bi­tion is to be the ma­jor life sci­ence play­er, not on­ly the CD­MO space, but al­so the so­lu­tion side, like Bran­don's lead­ing our FU­JI­FILM Bio­sciences busi­ness­es. So, cell cul­ture me­dia so­lu­tions, agents, all the so­lu­tion ma­te­ri­als. We are be­com­ing end-to-end life sci­ences group com­pa­nies.

Ar­salan Arif: Won­der­ful. Well, I've seen you've said you be­lieve phar­ma is go­ing to fol­low semi­con­duc­tors and you're go­ing to fol­low them to­wards a hor­i­zon­tal spe­cial­iza­tion, more out­sourc­ing, more re­liance on CD­MOs.

Toshi Ii­da: Yes.

Ar­salan Arif: So just can you tell me what makes you con­fi­dent that's the di­rec­tion?

Toshi Ii­da: I think in the world, all the phar­ma in­no­va­tor com­pa­nies are try­ing to in­vest as much of their re­sources as pos­si­ble in­to new pipelines. And cur­rent­ly bio­phar­ma­ceu­ti­cals are now just grow­ing and ex­ceed­ing small mol­e­cules. How­ev­er, to de­vel­op bio­phar­ma­ceu­ti­cal new mol­e­cules, it's quite ex­pen­sive com­pared to the small mol­e­cules in the past. And, all man­u­fac­tur­ing fa­cil­i­ty se­tups al­so are quite ex­pen­sive, re­quir­ing lots of cash. So nat­u­ral­ly from the phar­ma com­pa­ny's point of view, they re­al­ly like to try to al­lo­cate their re­sources to R&D in­stead of man­u­fac­tur­ing. And for the man­u­fac­tur­ing, more and more is out­sourced. I think that is all a nat­ur­al move, and we clear­ly see the trend is hap­pen­ing now.

Ar­salan Arif: Yeah. Yeah. So you have a fa­cil­i­ty here at Hol­ly Springs. So I see you've booked 75% of it be­fore even this fa­cil­i­ty is ful­ly op­er­a­tional and you've an­nounced over eight bil­lion in new con­tracts. What's dri­ving that ur­gency from your phar­ma part­ners? Are you hav­ing to turn away busi­ness?

Toshi Ii­da: I think we be­lieve, of course, the cur­rent geopo­lit­i­cal top­ics, be­come a tail­wind for our busi­ness in the US. How­ev­er, our de­ci­sion for in­vest­ment in the US fa­cil­i­ties were made well be­fore this cur­rent sit­u­a­tion start­ed. So fun­da­men­tal­ly, in the US there is a gap be­tween the de­mand and the sup­ply. From the de­mand point of view, the US is the largest sin­gle mar­ket. How­ev­er, as for on­shore man­u­fac­tur­ing, the ca­pac­i­ty is­n't enough. As a re­sult, the US is the largest im­port coun­try of bio­phar­ma­ceu­ti­cal drugs. So, it is nat­ur­al that more US on­shore man­u­fac­tur­ing re­sults as the de­mand is grow­ing. And prob­a­bly the pan­dem­ic al­so im­pact­ed and in­flu­enced those de­ci­sions. So, at the cur­rent mo­ment, the US de­mand is very strong.

Biotech takeover spe­cial­ist Kevin Tang is con­sol­i­dat­ing con­trol at Au­rinia Phar­ma­ceu­ti­cals, and has re­placed the CEO and C-suite at the com­pa­ny, ac­cord­ing to a se­cu­ri­ties fil­ing Mon­day.

Tang, who serves as chair­man of the board, named him­self CEO. Ryan Cole and Michael Hearne, ex­ec­u­tives at Tang’s firm Tang Cap­i­tal Man­age­ment, have been named COO and CFO, re­spec­tive­ly. Thomas Wei, a man­ag­ing di­rec­tor at Tang Cap­i­tal, has al­so been named chief sci­en­tif­ic of­fi­cer, ac­cord­ing to the SEC fil­ing and a re­lat­ed press re­lease.

The pre­vi­ous ex­ec­u­tive team, in­clud­ing CEO Pe­ter Green­leaf, COO Matthew Don­ley, CFO Joseph Miller and Chief Med­ical Of­fi­cer Gre­go­ry Keenan, were dis­missed last Fri­day, ac­cord­ing to the fil­ing.