Press Room

Press Release / May 06, 2002

Hovione signs a $35m credit facility

Lisbon – 6th May, 2002 - Hovione announces that it has completed a $35m 7 year credit facility, involving a loan from the European Investment Bank and a syndicated commercial bank loan that together with the company’s generated cash-flow, will finance Hovione’s $56m investment programme expected to be completed in 2003.

The investment programme addresses a growth strategy directed at strengthening Hovione’s leading world position in the supply of active pharmaceutical ingredients to Pharma Multinationals, the emerging Biotechs and the Generic houses.

Investments will be carried out at the three Hovione sites located in USA, Macau and Portugal, and will include:

- A new Technology Transfer Center in New Jersey, USA. This greenfield project includes a kilo-lab and a pilot plant and provides a permanent presence in the market that already provides over 60% of Hovione Group sales;

- The doubling of the manufacturing capacity of the Taipa faciliy in Macau. This plant has been regularly inspected by the US FDA since 1987 and is geared to address the growing outsourcing needs of the NASDAQ quoted Biotechs that operate under the virtual company business model;

- Adding pilot plant, research facilities and general infrastructure facilities in the Loures site (office space, IT facilities, R&D facilities and the renovations of several manufacturing buildings).

The $20 million EIB loan was guaranteed by Banco Espirito Santo, Banco Comercial Português, Banco BPI and Caixa Geral de Depósitos. The Macau tranche which comprised a $15 million syndicated commercial bank loan was granted by Banco Espírito Santo do Oriente, Banco Nacional Ultramarino and Banco Comercial de Macau.

The company forecasts an average annual sales growth of 16% from 2001 to 2008 through organic growth. Over the past 7 years the company’s sales grew at 13% pa, a growth that was financed by the company’s cashflow and the 1995 $14.5m syndicated loan by Banco Espírito Santo.

Hovione is an international group dedicated to the synthesis of APIs (active pharmaceutical ingredients) serving exclusively the pharmaceutical industry. With FDA inspected plants in Europe and the Far East and sales offices in Hong Kong, Switzerland and New Jersey, Hovione is committed to the highest levels of service and quality. Hovione’s capabilities include process chemistry, worldwide regulatory affairs, kilo to multi-ton manufacture of complex multi-step chemistry of APIs under FDA and ICH cGMP quality standards.

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A mechanical engineering graduate, this Frenchman is the CEO of the Portuguese pharmaceutical contract manufacturer Hovione. Still owned by the founding family, the company was awarded the 2025 ‘Léonardo de Vinci’ Prize, which recognizes the innovative and successful succession planning of family businesses. With an international career behind him, Jean-Luc Herbeaux is almost more fluent in English than in his native language. At 58, this Frenchman with iceberg-blue eyes is the CEO of Hovione. Founded in the late 1950s, this Portuguese group, with 100% family ownership, has just received the ‘Léonardo de Vinci’ Prize, which highlights entrepreneurial successes tinged with family legacy. While this mid-sized company with a turnover of €500 million maintains a low profile, its pharmaceutical contract manufacturing business is just as obscure to the general public. "Yet, the market for contract manufacturers, or 'contract development manufacturing organizations,' is worth $200 billion", emphasizes the CEO, who has been working in this microcosm for two decades. 500 patents Aware of the stakes, he does not deny "the pharma industry's dependence on Indian and Chinese capabilities". "The fact remains that the trend is toward the regionalization of supply chains, with European manufacturers producing for the Old Continent, American manufacturers for their own market, and so on", he says. And to highlight the foresight of Diane and Ivan Villax, the founding couple, "who thought globally from the very beginning". As a result, the group, with its 500 patents, has factories in China, the United States, and Ireland, without neglecting its home territory. This is evident by the site currently under construction on the banks of the Tagus River, following a €200 million investment. "The heavy engineering and compliance aspects are being finalized, "he explains, emphasizing that this highly regulated sector "is under a microscope". He knows this all too well, as Hovione claims to be involved in 5 to 10% of the drugs approved each year by the FDA, the American drug regulatory agency. Professor from Houston to Japan “In this small world, having a good image is important: this is the case with Jean-Luc, passionate about his work, but who knows how to demystify things”, observes Elie Vannier, former chairman of the board of Hovione. He adds that having an international profile is a strength “in this ecosystem where talent and clients are international”. For his part, Jean-Luc retains from his numerous flights “a taste for films of all genres and from all countries”. The son of an administrative employee in secondary schools and an auto insurance expert, the youngest of three children moved around according to his parents' job transfers. He was born in Meaux, grew up in Chartres, and attended the University of Technology of Compiègne, “which already offered programs abroad”. Thus, he left a mechanical engineering internship at a Dior perfume factory to join the University of Houston in Texas, "carrying a 20 kg backpack". Despite his then-limited command of English, he earned a doctorate, became a professor, and met an American woman who would become his wife and the mother of their two children. Next came the University of Kanazawa in Japan. Alas! Disappointed by the academic world, "where you have to fight to get resources", he succumbed to the allure of industry and joined the American chemical company Rohm and Haas, which had fallen under the control of the German company Evonik. 80 million patients He spent twenty years there, in Germany and Singapore, before "accepting the offers from headhunters". He then accepted Hovione's offer, who appointed him Chief Operating Officer in 2020, then CEO two years later, making him the first CEO not from the founding family. The family remains the sole shareholder, which earned the company the ‘Léonardo de Vinci’ Prize, created by the Association Les Hénokiens and the Clos Lucé. Having settled near Lisbon, he substituted walking for combat sports, "having been burned by the injuries of some friends". He also mentioned that Hovione, whose clients include 19 of the world's 20 largest pharmaceutical companies, helps treat more than 80 million patients.   (Translated version)   Read the original and full article in French on LesEchos.fr  

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