Drugdu.com expert's response:

I agree that the success of a veterinary API (Active Pharmaceutical Ingredient) company's transition to CDMO (Contract Development and Manufacturing Organization) hinges on both the potential for success and the crucial factors that contribute to it. Here's a translation of your points into English:

I. Potential for Successful Transition

Market Demand: With the rapid development of the global pharmaceutical industry, the veterinary drug market has also shown a steady growth trend. The transition of veterinary API companies to CDMO can cater to the outsourcing needs in veterinary drug R&D and production, particularly for those lacking in-house R&D and manufacturing capabilities, making CDMO services all the more crucial.

Technical Accumulation: Veterinary API companies have accumulated substantial technical experience and production capabilities through their manufacturing processes, which can be effectively leveraged during the transition to CDMO. By enhancing their R&D capabilities and service standards, these companies can offer higher-quality, more professional CDMO services to clients.

Cost Control: Compared to building in-house R&D teams and manufacturing facilities, veterinary drug enterprises opting for CDMO services can significantly reduce R&D and production costs. This enables them to adjust market strategies more flexibly and respond rapidly to market demand changes.

Policy Support: As governments worldwide continue to increase their support for the pharmaceutical industry, the transition of veterinary API companies to CDMO has also received policy encouragement and support. This provides additional development opportunities and market space for these enterprises.

II. Crucial Factors for Successful Transition

Technical R&D Capabilities: CDMO enterprises must possess robust technical R&D capabilities to meet clients' demands for innovative and generic drug development. During the transition, veterinary API companies need to increase R&D investments and enhance their technical levels to compete in the intense market.

Production Capabilities: CDMO enterprises require large-scale, specialized production capabilities to ensure product quality and supply stability. Veterinary API companies transitioning to CDMO must optimize production processes, increase efficiency, and meet clients' production capacity requirements.

Quality Management System: CDMO enterprises must establish comprehensive quality management systems to guarantee product quality and safety. Veterinary API companies undergoing the transition need to prioritize the development and improvement of their quality management systems to comply with domestic and international regulations and standards.

Market Expansion Capabilities: CDMO enterprises must possess strong market expansion capabilities to attract more clients and maintain stable partnerships. Veterinary API companies transitioning to CDMO should enhance market research and analysis, formulate appropriate market strategies and promotion plans, and expand market share and brand influence.

III. Case Studies

Taking Jiuzhou Pharmaceutical and Menovo as examples, both companies have achieved remarkable success in transitioning from API to CDMO. Jiuzhou Pharmaceutical rapidly expanded its CDMO business scale and capacity through a combination of self-construction and mergers and acquisitions, establishing long-term partnerships with multiple multinational pharmaceutical companies. Menovo, on the other hand, achieved rapid CDMO business growth through deep collaboration and resource integration with generic drug manufacturer KRKA. These success stories demonstrate that veterinary API companies can indeed succeed through the CDMO transition.

IV. Conclusion

In conclusion, veterinary API companies can succeed through the CDMO transition, but the key lies in their possession of robust technical R&D capabilities, production capabilities, quality management systems, and market expansion capabilities. Additionally, they need to closely monitor market demand changes and policy dynamics, adjusting market strategies and promotion plans promptly to navigate intense market competition and evolving market environments.