Across the global Lonza business, we have consistently embraced change for more than a century. This has helped us to remain relevant to our customers and drive long-term success. Here, we explore some of the current changes and challenges, both in the wider world, and within our own industry. For us, they are all opportunities to apply our innovation and initiative, and find new ways to fulfil our purpose of enabling a healthier world.
A changing world
Population Growth and Globalization
There is a convergence of change as the world’s population continues to grow and concurrently experiences higher levels of global mobility. This can deliver many benefits, ranging from improved life quality to accelerated economic development. However, it can also leads to serious health challenges, most recently seen in the speed and scale at which the COVID-19 pandemic spread across markets and regions. These new and heightened levels of vulnerability to population-level infections must be met with a new focus on the speed of commercialization and the scale of manufacturing, both of which are strategic priorities for our business.
Aging world population
There is a complex dynamic between health, nutrition and aging across many developed and emerging markets. The increased focus on health and nutrition means that many people are living longer, but this itself creates news challenges for the global healthcare industry. The rapid growth in elderly populations is tied to the growing prevalence of cancer, heart disease, diabetes and many other age-related illnesses. There is an increasingly pressing need to actively address the impacts of age-related illnesses, as well as ensuring access to nutritional support to mitigate their prevalence in aging populations. In this space, our innovative Cell and Gene Therapies are playing an active role, alongside the nutritional supplements developed by our health ingredients business.
Growth of the emerging markets and affordable therapies
The growing middle classes around the world, especially in BRIC and VISTA countries, will generate increasing demand for affordable medicines and access to innovative therapies. In response to these increasing needs, we will continue to focus on China and the Far East as an area of long-term strategic focus for our business.
A changing industry
Focus Drives Industry Innovation
The healthcare industry has experienced tectonic shifts in recent decades, which has made the role of the CDMO manufacturer more integral and important than ever before. Large, traditional pharma companies are commencing the divestment of their manufacturing capabilities in recent years to focus on the high returns – and risks – of drug discovery and development. At the same time, we see the meteoric rise of the small biotech companies across both developing and emerging markets. Their rapid success is often driven by access to innovative funding and investment models, offered by both financial institutions and venture capitalist funding.
The Rise in Demand for CDMO Services
The rate of drugs being launched by companies that have never had a product on the market has tripled in the last decade. With funding for biotechnology companies surpassing an unprecedented $88 billion in 2020, the position of CDMOs as strategic partners has never been stronger. In this context, Lonza plays a critical role in the value chain for large pharma, small start-ups and everything in between. Innovation in manufacturing, upscaling production and providing a rapid and reliable route to commercialization means the services of CDMOs like Lonza are in demand like never before. By focusing expertise and having the confidence to make ambitious strategic growth investments, we are positioned to capitalize on these industry developments and secure our long-term growth and success.
Sustainability – an ethical imperative
While politicians continue to debate KPIs and targets for reducing environmental impacts at a country level, it is becoming increasingly clear that the corporate community must act as a driving force in creating a sustainable world. At Lonza, sustainable practices and behaviours are integral to the way we think and operate. We are aware that our purpose of enabling a healthier world extends beyond our customers treatments and therapies; it must also be reflected in how we manage our operations and run our business. We have set ourselves ambitious targets, which will deliver the advantage of efficiency back to our business, while ensuring that our business can deliver long-term value environmentally, economically and socially.
 Jeffries Equity Research: Biotech Funding December: Last 3 Quarters are the Best Three, by a lot, (January 8, 2021)