Press Room

Article / Sep 23, 2003

Sticking to your knitting...

CPhI 2003, 23 September 2003

Hovione for CPhI 2003

Sticking to your knitting... When the going gets tough, Guy Villax, CEO of Hovione, argues the importance of keeping your business focused

Business conditions are tough. The pharmaceutical fine chemicals sector is now heading South, the largest players -even the Rolls-Royces of the industry- have announced lay-offs and issued profit warnings. Two years have not elapsed since CPhI was throbbing with the excitement of billion dollar acquisitions: BTP, Catalytica, Chirex... A time when the exuberant optimism of the stock-markets made anything possible. This was a period of major re-structuring not just for the fine chemical sector but also of the pharma sectors.

Relentless focus on their core-business of prescription medicines led Pharma Giants to spin-off a number of big businesses: non-prescription medicines, chemicals, fragrances, etc… and overnight new multi-billion dollar companies appeared. Large pharma concentration was driven by both a desire to grow sales forces and to address R&D pipeline issues (whether for lack of innovation or to address a block-buster patent expiry calendar). During this time the Biotech sector had a tough time getting funding, the IPO markets dried up and the private equity firms, unfairly, looked at drug development with the biased look of someone who just got burnt by a dot.com. Generics were quietly booming.

As a result for those making APIs the short term horizon looks grim, except for those that serve the generics industry.

Over the past 5 years most fine chemicals company invested in GMP facilities. In addition to billions spent in mergers and acquisitions, there was also a genuine expansion in capacity. If there is now a cycle in this business, then 2003 is clearly in the downward slope. No one talks of growth. Those with empty vessels offer very aggressive, and in my mind unsustainable, prices - this is particularly noticeable of smaller firms that were taken over by chemical giants.

In exclusive manufacturing - is the problem structural or cyclical?

  • There is certainly a structural part to the issue: in the past 7 years the number of compounds in Phase I and II have grown at a CAGR of 9 and 6% respectively - whereas Phase III compounds are unchanged at 500, with zero growth. Approved genuine NCEs numbered only 17 last year, but averaged about 30 in the previous years. Sir Michael Rawlins who chairs the UK government body that monitors the cost-effectiveness of medicines recently told a conference that the cost of development of new medicine was becoming “unsustainable”, and that unless regulators backed-off "by the year 2015 we will not have any new NCEs".
  • There is also a cyclical component - capacity has to adjust. In addition to the lay-offs there will be plant closures. At least one European based multinational is looking to close half its primary plants in its home country. On the other hand we can be sure that capital expenditure will be dramatically cut this year and for the next few years, and we all know that without investment a GMP primary plant goes out of compliance in just a few years. Indeed nothing causes obsolescence faster than GMP design.
    Where does this leave us?

I think that those that are totally dedicated and committed to pharmaceutical APIs will plough through. These are usually private companies, well capitalized and well-entrenched in preferred supplier lists. But especially they are not subjected to the pressure of quarterly reports or stock-markets, as such they will weather the storm better than those that have to tack to short term winds. Customers know only too well that cut-throat pricing is not a good indicator of long-term survival, and although they will take advantage of it, they will not burn bridges with the suppliers that were there over time, solved problems and delivered the occasional miracle.

The other advantage that the private firms have is that they walk on two legs - they serve both the exclusive manufacturing sector as well as the generic sector, and they benefit from the manufacturing synergies offered by the combination. Generics are up - a significant number of products will come off patent from over the next few years. Now to the companies that discovered that getting into exclusive manufacturing was an expensive mistake, I would say they should be just as careful if they think they will find a quick fix in the generic API business.

Hovione's generic development methodology sets as rule Nº1 to start early - this means that from the start of a development program you will have to wait at least 7 years for your first invoice. About the same time as going from Phase I to launch - and in generics there are no development fees!

It is all a question of sticking to your knitting; a question of focus.

Guy Villax
Chief Executive

Also in the Press Room

See All

With more than six decades of experience in pharmaceutical development and manufacturing, Hovione is an international CDMO offering a comprehensive range of services for New Molecular Entities (NMEs), including drug substances, intermediates, and drug products. The company also supplies niche generic APIs and delivers advanced technologies supporting multiple drug delivery platforms, including oral, injectable, inhalation, and topical formulations.  Today, Hovione employs 2,500 people worldwide and operates 900 m3 of manufacturing capacity across four sites in Europe, the U.S. and Asia. Japan has played an important role in the company’s global strategy since its early years. Initial export activities were followed in 2017 by the establishment of a Japanese subsidiary in Osaka.   Read the full article in Japanese at Yakuji.co.jp Read the article translated in English  

Press Clipping
Yakuji Nippo Magazine, 13 March 2026

International CDMO strengthens its presence in Japan: from active pharmaceutical ingredients to formulations, all at the same location

Mar 13, 2026

In an interview with Executiva, a portuguese media outlet focused on women´s leadership, Diane Villax, co-founder and long-standing leader of Hovione, reflects on her journey and the company’s development over more than six decades. Diane Villax’s career began at a time when few women worked outside the home. At 19, she joined a trading company as a foreign languages correspondent, where she developed essential business skills — including commercial correspondence, banking and export procedures — that later proved instrumental in helping her husband, Ivan Villax, establish Hovione in 1959. From its earliest days operating in the family home in Lisbon, Hovione adopted an international outlook. The company’s first major customers were in Japan, setting demanding quality standards that helped shape its long-term position in global markets. Over the following decades, Hovione expanded its footprint with the construction of its first manufacturing site in Loures (1969), followed by expansion to Macau (1986), the United States (New Jersey, early 2000s) and Ireland (Cork). The company grew into a global organization with more than 2,500 employees — including over 300 scientists — and a reputation as a preferred supplier to leading pharmaceutical companies worldwide. Throughout the interview, Diane highlights the values that have guided the company’s development: a commitment to excellence, a strong work ethic, and a focus on quality and long-term relationships. Although she did not have formal business training, she learned “on the job” and brought discipline, precision and structure to her role — particularly in the company’s early financial and administrative leadership. Now in her nineties and an active member of Hovione’s Board of Directors, Diane Villax remains engaged with the company’s evolution and governance, reflecting a continued commitment to its long-term development. Her story reflects entrepreneurial drive, resilience and long-term leadership — and offers insight into the values that have shaped Hovione’s trajectory for more than six decades. Read the full interview at Executiva.pt (in portuguese).    

Article
Executiva, 23 February 2026

Hovione’s Diane Villax: “I was not brought up to be a business woman”

Feb 23, 2026

Márcio Temtem, vice president, Strategic Business Management, Hovione, addresses molecule complexity, speed, and regionalization via integrated manufacturing. The landscape of small molecule manufacturing is rapidly evolving, according to Márcio Temtem, vice president, Strategic Business Development, Hovione, who provides an expert look into how his firm is evolving their approach as the industry changes. With 17 years of experience at Hovione, a family-owned CDMO with a 66-year legacy, Temtem identifies three pivotal trends currently shaping the industry: increased complexity, accelerated development speed, and the regionalization of supply chains. Temtem observes that small molecules have grown significantly in size and complexity, often requiring multiple chemical steps and high-potency handling. This shift necessitates a specialized "toolbox" to overcome modern bioavailability challenges. Highlighting Hovione's technical approach to these hurdles, Temtem states, "We use a platform called amorphous solid dispersions, produced by spray drying to address this challenge of bioavailability.” This platform represents a core area in which Hovione maintains global leadership, utilizing innovative tools to scale processes efficiently while minimizing the use of APIs. Temtem also mentions the increased influence of AI in drug discovery and deployment, which requires CDMOs to bridge the gap from grams to tons at a much faster pace than in previous years. He further addresses the trend of regionalization, noting the rise of countries such as the US and China prioritizing regional supply chain strategies. He explains that Hovione is uniquely positioned to navigate these new challenges with supply chains through its FDA-inspected sites across three continents. Central to Hovione’s competitive advantage is their integrated manufacturing offer, which combines drug substance and drug product expertise at a single location. Temtem emphasizes the value of this model, stating, “The company… has been investing in an integrated offer, bridging the problems of chemists and formulators all at the same shop.” To support this integration, the company continues to pioneer advanced manufacturing avenues, including continuous flow for drug substances and continuous tableting for drug products. Watch the full video interview or read the transcript at PharmTech.com  

Article
PharmTech, 6 February 2026

Hovione’s Strategy for Complexity, Speed, and Regional Supply Chains

Feb 06, 2026

Also in Events

See All