ANNUAL REPORT 2016
ANNUAL REPORT 2016
Contents
Our Mission................. 4
Enersens.................... 19
PCAS’s Values............... 6
Protéus ..................... 20
An active policy
across all regions ............. 7
R&D: Strategic Expertise
Driving Profitable Growth.... 22
Gouvernance................. 7
Industrial performance
the driving force behind
PCAS’s success............. 24
Interview
with Christian Moretti,
Chairman of the
Board of Directors,
and Vincent Touraille,
Chief Executive Officer........... 8
Highlights 2016............ 10
Safety & Quality............. 26
Human Resources............ 27
Finance and investor
relations................... 28
A new leading
R&D center................. 12
Employee Life.............. 30
Division Life
Glossary.................... 36
Pharma Synthesis
Generic APIs
Fine specialty chemicals
Advanced Specialties ..................... 14
Contact..................... 38
Our mission
Provide safe, innovative,
competitive and sustainable
industrial solutions to turn its
customers’ needs into industrial
reality and thereby create value
“PCAS has set itself the goal of being a
recognized, irreproachable player on
its markets ten years from now, via its
performance, innovation and long-term
responsibility”.
Vincent Touraille
Chief Executive Officer
4
A range designed to meet the highest quality standards
in the fields of pharmaceuticals and innovative chemistry
PCAS specializes in complex molecules for Life Sciences and Innovative
Technologies. The group channels its cutting-edge expertise into the development
and production of active pharmaceutical. In order to address the fundamental
challenges specific to its markets, PCAS is dedicated to providing safe, innovative,
competitive and sustainable industrial solutions to turn its customers’ needs into
industrial reality and thereby create value.
A vast portfolio of products adapted to the demand for the
most complex molecules
Be it in the field of pharmaceutical synthesis (production of active ingredients and
generics, biomaterials, etc.), or fine specialty chemicals (polymers, super-insulating
materials, organic and printed electronics, etc.), PCAS provides comprehensive
ranges of innovative solutions. The health product portfolio includes active
pharmaceutical ingredients (APIs), patented drugs and their advanced intermediates.
It also covers proprietary products for generic drugs. Ultimately, this variety enables
industrial companies to optimize their product development by outsourcing some
or all of their molecule development and production activities. PCAS’s global offer,
which covers a broad spectrum of industrialization and production processes, is
supported by a permanent focus on performance and quality, essential to address
the growing complexity of molecules.
Flexible industrial facilities serving the world’s leading
groups
One of PCAS’s major commitments to the world’s leading industrial groups is
its capacity to deliver large quantities of products meeting the highest possible
standards at a competitive price. This capacity hinges around a policy targeting
the constant optimization of industrial facilities to ensure they are capable
of adapting to evolving global demand in the different markets as well as the
production deadlines imposed by customers. PCAS is committed to mobilizing
considerable production capacity within tight deadlines on behalf of leading
global groups, meeting any increased demand for their products quickly and
ensuring the continuity of the production cycle for industrial customers.
An entrepreneurial spirit
PCAS was established more than 50 years ago by two entrepreneurs. We are
determined to perpetuate this spirit within our teams, irrespective of roles and
responsibilities.
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PCAS’s values
A constant will to go further
and to improve ourselves, in
strict accordance with our four
fundamental values: ambition,
innovation, engagement and
integrity.
Ambition
Innovation
The PCAS Group has a resolutely
international outlook and capitalizes on
the most up-to-date knowledge in its
key areas of expertise. Our ambition is
sustained by the constant will to increase
customer satisfaction and added value
for our partners, through large-scale and
increasingly global projects that succeed
by mobilizing all our teams.
Our constant aim of improving our
technological expertise leads our
organization to go beyond conventional
production and management processes.
To achieve this goal, the group endeavors
to foster the open-mindedness and
innovation capacity of its staff, whose
experience and practical sense are the real
driving force behind PCAS’s development.
Engagement
Integrity
Joining PCAS involves mobilizing
all one’s capacities and sense of
responsibility to achieve a common goal:
the best quality of service for customers.
Teamwork and pooled talents enable
our organization to meet our customers’
requirements while at the same time
leading all our staff forward towards this
same goal.
Our international ambition, underpinned
by our need to innovate and our
commitment to customer satisfaction,
cannot be legitimate without the spirit of
integrity that characterizes PCAS. Our
staff act in accordance with the most basic
rules of accountability and uprightness
expected of a group committed to quality
of service for its customers.
6
An active policy across all strategic regions
2
1
New York
7
Frankfurt
2
Québec
8
Longjumeau
3
Turku
9
Isère
4
Orne
10 Bourgoin-Jallieu
5
Yvelines
11 Gard
3
13
1
4 5
6
7
8 9, 10
11
Office
Production site
12
6
PCAS America
PCAS Canada
PCAS Finland
PCAS Couterne
PCAS Limay
Centre R&D
Porcheville
Hauts-de-Seine
PCAS Villeneuvela-Garenne
PCAS GmbH
PCAS France
PCAS Bourgoin
Enersens
PCAS Aramon
12 Nîmes
Protéus
13 Shanghai
PCAS China
PCAS : a strategic network to satisfy a global and heterogeneous demand
An industrial presence in Europe and America and sales offices on the 3 key continents
The unique industrial dynamism of Germany in Europe explains PCAS’s choice to have a specific commercial
site there.
As part of its development strategy in the healthcare industry, PCAS launched with success its new industrial
workshop at its site in Couterne to meet, in particular, the global demand for pharmaceutical intermediates.
The Porcheville Research and Development Center pools all the skills and tools needed to support the development
of PCAS’s complex molecules for its various markets. Its close proximity to the industrial plant of Limay will support
significantly the innovative strategy aimed at reducing delays in development time and introducing powerful synergies.
PCAS reinforced in 2016 the operating excellence of its Canadian site at St Jean sur Richelieu; located in the
south of Montreal (Quebec). As a long standing specialist in microelectronics, PCAS can now capitalize on
its advanced technological expertise to meet the needs of pharmaceutical businesses, and notably the high
demands of Biotechs in North America.
In Asia, the dynamism of the sales team in Shanghai, in continental China, has helped to strengthen close
ties with the Asian market players, who continue in 2016 to be the driving force behind the world growth,
particularly in the specialty chemical sector.
Governance
“Complementary
talents and
experiences”
Thanks to a wealth of complementary experience and talent between them,
the senior executive managers are proactive and diligent contributors to the
work of the Board and the Review Committees reporting to it. The directors,
independent in their thinking, maintain the highest quality standards and are
convinced that diligent governance represents a source of value. Discussion
and debate are essential ingredients in any constructive, collective reflection
process. The deliberations of the board of directors are governed by long-term
thinking, which is key to the effective implementation of the group’s strategy
and the policy directions stemming from it.
The board of directors meets whenever it is deemed necessary, but at the very
least, three times a year.
Christian Moretti
Chairman of the Board
of Directors
The Executive Committee defines the strategic targets of the group and
prepares the decisions that will then be submitted to the Board of Directors
which is the ultimate decision maker. Its core mission is to evaluate the
human, industrial and financial resources required to pursue organic and/or
external growth. The Executive Committee meets three times per month.
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Christian Moretti
Chairman of the Board of Directors
Interview
+
Vincent Touraille
CEO
“The increases in our quantitative and qualitative production
capacities, as well as the further growth in our activity,
particularly health, are the highlights of 2016.”
“How would you describe 2016?”
Christian Moretti: It was a good
year in terms of sales. We could have
done better still had it been possible
to invest in the structuring of our
equipment in phases and strengthen
our teams faster. We opted for a
well-thought-out structuring process
geared towards quality, as demanded
by our customers.
8
Vincent Touraille: In the end, we
recorded strong growth in the field
of Pharmaceutical Synthesis, i.e.
7.6%. In Fine Specialty Chemicals,
up 6.4% in 2016 despite a market
that was globally more sluggish, we
were able to take advantage of our
much-sought-after expertise in the
microelectronics sector, which fueled
growth.
“What were the other highlights of 2016?”
development processes between all our sites and for
all our customers. This represents a major strategic
step for PCAS, perfectly complementing the
optimization of our industrial production capacities
conducted at our sites in 2016, a process that is set
to continue for a further 2 to 3 years.
C. M: We pursued the structuring of our industrial
network and the development of the supply chain
across the entire group. The creation of dedicated
logistics teams at each of our sites is a very
important step aimed at achieving greater fluidity
and flexibility in the production of increasingly
complex molecules. As well as the structuring
process, the improvement in our production
capacities enabled us to get rid of bottlenecks
throughout a varied chain that includes multiple
batch reaction, separation and product drying
steps. Product finishing represents one of the many
crucial challenges in terms of meeting customers’
increasingly demanding quality requirements. Finally,
as scheduled, we replaced the smaller reactors with
bigger ones to cope with our customers’ expanding
volumes.
V. T: International activities are a vital component
for groups in our industry, to support customers
on 3 continents and offer the most innovative
technologies. In 2016, the international share of net
sales grew once again. The export market generated
around 70% of income, in line with growth in the
major pharmaceutical group market in North
America and Asia. Both North America and Asia
remain our priorities for export market development.
V. T: These industrial structuring efforts were also
associated with further training for our teams,
combined with new organizational methods to
integrate workflow management, as well as the
recruitment of new profiles, particularly in the field
of analytical development to reinforce R&D teams.
These efforts are designed to optimize the control
process for complex molecules, the compliance
of which must systematically be verified at every
stage, from manufacture through to delivery to the
customer.
C. M: We plan to establish an active presence in
the USA in 2017, but not any old how. We have
identified numerous acquisition opportunities in
the country, but, so far, we have not been impressed
by either the prices or the degree of obsolescence
of the infrastructure. We will continue to study
the opportunities in this key country for our
continued development and leadership, all the
while considering the priorities of value creation for
our shareholders and synergies with our now solid
industrial bases in Europe.
“In terms of structuring strategic initiatives, can
you tell us more about the acquisition of the
Porcheville site?”
C. M: The acquisition of the Porcheville site, which
is located close to our Limay industrial site, is a
unique opportunity, both in terms of the additional
capacity - a surface area of more than 10,000 m² -,
and its cutting-edge equipment that is vital to the
development of complex molecules. Of particular
interest are the kilo-lab and industrial pilot facilities.
Crucially, Porcheville has expert units specializing in
crystallography and analytical methods.
V. T: This is a structuring initiative for the Group
insofar as Porcheville will become the new center
for all R&D projects with a view to targeting the
expansion of our customer and product portfolios
and the development of proprietary solutions.
Moreover, these capacities strengthen PCAS’
upstream positioning in the drug manufacturing
chain, enabling us to offer our customers
complete solutions, from development through to
production in kilo labs and pilot units, guarantees of
commercial and logistical synergies. We are going
to assemble all of our R&D teams at a single site
to roll out our innovation strategy. It is aimed at
reducing production launch times and introducing
“Have you continued to develop on international
markets?”
“What is the outlook for the current year?”
V. T: Markets appear to be reasonably strong in our
industry, particularly in the health sector where
demand from start-ups and major pharmaceutical
groups is strong: the areas with the strongest growth
remain oncology, along with all the diseases of
the central nervous system or linked to population
aging around the world. Generics continue to
represent one of the major challenges for the future
of the pharmaceutical industry. The acquisition of
Porcheville and the optimization of our industrial
facilities provide us with the opportunity to pursue
our development to add to our international market
share this year.
C. M: The market opportunities are even more
accessible to PCAS since barriers to entry to
our industry continue to grow and many players,
particularly in Asia, have been denied access to
the market by the American regulatory authorities
for reasons of quality or production reliability over
time, or on the basis of health and environmental
criteria. Hence we anticipate that we will be able to
comfortably pursue growth in our various sectors
and, despite continued investments to improve our
productivity; our margins should also continue to
grow.
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Highlights 2016
Q1’16
Q2’16
Q3’16
Q4’16
1ST JANUARY 2016
Cession de l’activité Matières
Premières aromatiques à Nactis.
12 APRIL 2016
Us patent granted for pcas
new cinacalcet production
process
25 APRIL 2016
PCAS enters into a
manufacturing agreement
with ABIVAX for ABX464 thus
ensuring drug candidate supply
for upcoming clinical trials
12 JULY 2016
PCAS signs a global
distribution agreement
with MilliporeSigma,
enabling a better access
to its polymers line
expansorb® for Sustained
Release Injectables
PCAS at CPHI
Barcelona 2016
21 OCTOBER 2016
FDA Inspection at
Villeneuve la Garenne
(no comments)
27 APRIL 2016
The company Produits
Chimiques et Auxiliaires de
Synthèse decides to change
its corporate name to PCAS.
4 NOVEMBER 2016
PCAS at China
INTER LUBRIC 2016
29 APRIL 2016
Positive FDA inspection
at Limay
Inspection positive
ANSM Couterne
21 NOVEMBER 2016
Acquisition of the R&D
site at Porcheville
6 JUNE 2016
A new collaboration for
enzyme optimization between
syngenta and Protéus SA
SEPTEMBER
Finishing Investment
in Limay plant
JUIN
Positive ANSM
inspection at Limay
20 JUNE 2016
Inauguration of
a new workshop
at the couterne site
10
23 SEPTEMBER 2016
FDA Inspection at Aramon
(no comments)
Highlights 2016
7
Key Figures
Net sales
7+93+H 7%
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production
facilities
€192m
Sales Breakdown
69% 69+31+H
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of net sales
dedicated
to R&D
outside of
France
982 €27.3m
employees
EBITDA
2015
2015
restated**
2016
179.1
179.1
192.0
Pharmaceutical synthesis
120.8
120.8
130.0
Fine Specialty Chemicals
58.3
58.3
62.0
All figures in €m
Net sales
EBITDA*
27.0
27.0
27.3
EBITDA margin
15.1%
15.1%
14.2%
Current Operating Income*
15.6
15.6
16.2
Other operating income & expenses
0.4
–3.1
–2.3
Financial result
–5.1
–5.1
–6.4
–2.1
–1.5
–0.9
–
–
–
8.8
5.9
6.6
Taxes
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Share of profit/loss of associates
Net income
Equity
Net debt
Gearing
Net assets attributable to the Group
per share
* Including Research tax credit
(€3.1M in 2015 and €3.3M in 2016)
89.1
97.0
34.7
48.7
0.39
0.50
6.41
6.85
By region
31%
France
15%
North America
37%
Other
Europe
14%
Asia Pacific
3%
Other
���
By market
43%
Pharma Synthesis Exclusive
& Pharma Chemicals
25%
Pharma Synthesis
Generic APls
16%
Performance Chemicals
16%
Advanced Specialties
** Excluding the effect of non-recurring insurance
revenue net of tax
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A new leading
R&D center
Porcheville’s Research and Development
Center brings together the range of skills and
necessary tools to support the development
of PCAS’s complex molecules for its different
markets (Pharma, Advanced Specialties
and Performance).
The site includes a 2000m2 lab surface
area, 6 kilo-labs and a 1000m2 of pilot units
(12m3 of reaction volume) enabling PCAS
to produce from a few milligrams to a
100 kg per batch.
12
Recherche & Innovation
The Center is organized by areas of expertise
(PhD, Engineers, Technicians)
Organic Synthesis
Crystallization/Solid state characterization
• GMP Pharma Synthesis Team
Kilo/lab
• Intermediate Pharma Synthesis Team
Pilot
• Generic Pharma Synthesis Team
• Advanced Specialties Synthesis Team
• Perfomance Synthesis Team
Analytical Science
• Analytical development team
• Analytical validation team (in a
GMP context) and quality control
For the small molecules market targeted for
pharmaceutical companies with EHS and
GMP regulations
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Division life
International growth driven by
innovation and an active quality
strategy throughout the group
“PCAS’s international positioning and its
focus on technological innovation within a
framework of outstanding quality standards
support the group’s growth in the development of complex molecules.”
Vincent Touraille
Chief Operating Officer
14
Pharmaceutical Synthesis
PCAS has continued to
consolidate and strengthen
its positioning on the API
production value chain, taking
on major strategic development
projects in key therapeutic areas
In 2016, we further reinforced our partnerships with
pharmaceutical and biotech companies to support and
accelerate their development programs, either for drug
substances or for critical intermediates. PCAS enables its
customers at every development stage, from early clinical
development through to commercialization, via an integrated
offer that is perfectly structured to meet ever-changing
industrial needs.
The growing outsourcing of pharmaceutical R&D and
production (now being observed at earlier stages in the active
ingredient development process) and increasingly rigorous
quality demands are structural trends that will continue to
prevail in the coming years.
In both the biotech/ emerging pharma segment an important
growth reservoir for PCAS or with large pharmaceutical
companies, the group is perfectly placed to meet the challenges
associated with the complexity of molecules and production
deadlines, which is essential to guarantee that the clinical
development schedules specified by customers are adhered
to. PCAS, which provides comprehensive drug substance
services and also drug delivery solutions, has the capabilities
to accommodate flexible production, meaning it can ramp up
output as required over the course of the various clinical phases.
This year, PCAS has contributed to the development of a diverse
range of therapeutic solutions targeting major global health
problems, such as hepatitis C, non-alcoholic steatohepatitis
(NASH) and cancer.”
Didier Combis
Pharmaceutical Synthesis
“Our expansion in
the development
and production
of new chemical
entities has
established PCAS
as a reference
partner for
pharmaceutical
and biotech
players.”
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Generic APIs
Laurent Alexandre
Generic APIs
“A leading producer of generic drugs,
PCAS supports their strategic development
via a unique positioning serving both major
manufacturers and intermediate-sized
players.”
Our capacity of innovation and the
excellence of our quality standards
represent major competitive
advantages in this strategic market.
Generic drugs are one of the fundamental pillars of public health policies
around the world since they pave the way for reduced healthcare spending
without compromising treatment quality. Supported by this structural trend,
PCAS has continued its development in strategic markets while strengthening
its offer.
In Asia and the USA, the group has demonstrated its capacity to offer generic
drug manufacturers production solutions that have been validated and certified
by the regulatory authorities, such as the FDA, whose requirements and control
capacities are increasing each year. This policy of heightened control is reflected
in the return of generic drug manufacturing to Europe, a phenomenon that has
been observed over the past few years. The trend, which is unlikely to be reversed
given the production volumes currently outsourced to “low-cost” countries,
represents another opportunity for PCAS to further strengthen its positioning
in this value-creating sector. In 2016, 16 drugs received GDUFA accreditation,
which is vital in order to validate a marketing authorization. PCAS’ excellence reaffirmed each year - in terms of the certification of production sites in Europe is
a key advantage for its customers and its range of proprietary products.
As an innovation partner of its major customers, PCAS has clearly responded
to the pharmaceutical development and production needs of tomorrow.
For example, the group has successfully supported players in the field of
pleotherapy. This new paradigm refers to therapies based on combinations of
drugs that already have marketing authorizations to treat other diseases. Finally,
the acquisition of the Porcheville R&D site considerably increases its innovation
capacity on the generic API segment due to the creation of a dedicated team.
16
Fine specialty chemicals
Development of market share
on the micro-electronic market
In 2016, PCAS contributed to numerous projects in the field of
micro-electronics - one of the group’s long-standing segment -,
particularly relating to the manufacture of silicon-based
integrated circuits. The group gained market share with major
global players present in the USA and Asia, especially Japan and
South Korea. The latter zone presents considerable development
potential for PCAS. The group also performed well in the
organic electronics segment, replacing silicon with polymers or
other organic molecules in order to obtain materials with new
functionalities.
Across all electronic segments, PCAS has taken advantage
of its capacity to offer solutions with very low metal content,
an area in which its cutting-edge technological expertise is
recognized around the world by the most demanding industrial
players. This growing demand stems from the phenomenon of
the increasing miniaturization of electronic components, which
in turn requires higher purity levels.
In the toll production segment, which covers diverse sectors
such as cosmetics, aviation, defense, inks and paints, PCAS
meets the needs of the different industries via its capacity to
produce high-performance polymers and complex molecules.
2016 was a growth year in this segment, buoyed by an increase
in sales to numerous existing customers, satisfied with the
outstanding quality PCAS is able to provide.
In the field of Performance Chemicals, PCAS benefited from the
dynamic nature of its range of proprietary products for industrial
lubricants, particularly a new range of “extreme pressure”
additives, supported by investments to reinforce production
capacities and the technological performance of products.
Sébastien Taillemite
Specialty chemicals
“Our numerous
electronics
projects and
our range of
proprietary
additives for
performance
chemicals drove
growth in 2016.”
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Advanced specialties
Gerard Guillamot
Group Scientific Director
“In a context of increasing outsourcing
of development projects in the fields of
Health and Fine Specialty Chemicals,
PCAS continued with its technological
investments in order to capture strong
demand.”
Innovation serving growth
The group continued to consolidate and strengthen its cutting-edge
technological expertise in 2016. PCAS has significantly increased
its analytical development capacities in order to meet the analysis
requirements of pharmaceutical companies associated with the growing
complexity of molecules. For example, the group strengthened its GMP
analytical development team and invested in the latest generation
chromatography equipment. In parallel, PCAS gained new expertise
thanks to the acquisition of the Porcheville site and specific tools
dedicated to the exploration of solid forms. Finally, the acquisition of the
Porcheville site gives PCAS increased kilo-lab and pilot unit capacities,
the latter of which are now equipped with high-throughput reactors.
This acquisition makes it possible to structure and enhance PCAS’
service provision in the support of complex molecule development
projects; R&D services recorded solid growth in 2016. As part of his new
responsibilities as Director of R&D at PCAS, Christophe Eychenne Baron
successfully oversaw the operational deployment of the new Porcheville
site. He is replacing Gérard Guillamot, who has been promoted to Group
Scientific Director.
PCAS thus saw sustained demand from outside the health sector,
particularly for projects requiring the group’s expertise in the field of fine
specialty chemicals applied to new technologies: photosensitive films for
screens, polarizing films, integrated microcircuits, etc.
PCAS’ expertise in the analysis and development of complex molecules
for the health sector represents a prestigious showcase as far as
electronic hardware and equipment sector players are concerned.
18
The innovative
entity dedicated
to superinsulating
materials
In the favorable context established by reinforced government
initiatives, facilitating the energy transition, PCAS is positioned
in the high-potential superinsulating materials market, via its
subsidiary ENERSENS. As a reminder, the acquisition by ADEME (the
French Environment and Energy Management Agency) of a stake
in the company in 2015 reflected the recognition of ENERSENS’
technological expertise in the manufacture and integration of silica
aerogels in construction materials, while validating the strong
market growth observed on these superinsulating components. A
true breakthrough technology, ENERSENS’ silica aerogels will be
marketed under the Kwark® brand to the construction sector starting
from 2017. PCAS is expecting demand to be strong and sustained
given the major challenges surrounding thermal insulation.
Pierre-André Marchal
Executive Director of Enersens
“In 2017,
Enersens will be
overseeing its
first commercial
launches”.
In order to raise the profile and universality of its product further, in
2016, ENERSENS laid the groundwork for its future development
and marketing phases, highlighting its expertise in several projects.
Among them is the flagship project Wall-Ace,
which brings together an ecosystem of European
players with the aim of developing sustainable
insulation systems through insulating renovation
plaster and promoting them to the construction
sector. As well as playing a decisive role in this
project, ENERSENS has continued to develop its
production facilities - and investing in additional
equipment. These facilities are a welcome
addition to the pilot unit, which has already
been operating for several years. Finally, the
Didier Schneider
acquisition, among others, of a patent in the USA
Chairman of Enersens
reinforces PCAS subsidiary’s patent portfolio.
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The technological
R&D platform dedicated
to biotechnological
solutions for industrial
applications
“Protéus will continue its proprietary
developments offering solutions to
industrial, energy and environmental
issues from biological systems”.
Juliette Martin
Chief Executive Officer,
Protéus
20
“Enersens and Protéus are powerful levers for
innovation capable of generating growth levers for
PCAS. In 2017, Enersens will be overseeing its first
commercial launches while Protéus will continue
its proprietary developments offering solutions to
industrial, energy and environmental issues from
biological systems”.
In 2016, Protéus, PCAS’ other subsidiary, focused on living systems
technological innovation, enhanced its expertise based on biocatalysis.
Protéus, involved with health players as an organization selling
contractual research, enjoyed a successful year through its solutions
that are relevant alternatives to traditional synthesis, from the chemical
and economical gain or environmental points of view. Biocatalysis
makes it possible to simultaneously reduce the number of synthesis
steps and increase the purity yield of the obtained molecules, while
operating in mild pressure conditions and temperatures with a
minimum of organic solvents (often even without any solvents). The
industrial pharmaceutical actors reckon that in the very near future,
more than 30% of API synthesis operations will incorporate this enzyme
technology. In this highly favorable market context, PCAS and Protéus
have been able to develop numerous synergies with a view to promoting
this unique expertise to major companies. In this respect, the acquisition
of the Porcheville site represents a crucial strategic link, with human and
technological resources channeled into the development of proprietary
products in the field.
Didier Schneider
Chairman of Enersens
Finally in the Fine Specialty Chemicals segment, biocatalysis technologies
also benefit from considerable development potential. This movement
stems from a need to substitute fossil resource with a sustainable
resource while reducing the carbon and environmental footprint thanks to
procedures based on biological processes.
In the continuation of its historical activity in selling contractual Research,
Protéus continues to offer exclusive services to major industrial actors
covering all fields, such as Food & Feed, Agrobusiness, Chemical industry,
or in the Environment.
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R&D
Strategic expertise driving
profitable growth
“The Porcheville R&D center is becoming
our global complex molecule research
and development platform, in order to
support PCAS’ expansion on the health and
advanced technologies markets.”
Christophe Eychenne Baron
Director of R&D
22
PCAS is strengthening its complex molecule development
capacity via improved yields and the advanced control of
cutting-edge chemical processes.
The acquisition of the Porcheville site represents a unique lever for increasing R&D
capacity and supporting the group’s future growth. Research teams have been
beefed up and given the latest generation technological equipment to reinforce
PCAS’ expertise in key fields such as crystallographic analysis. Since the efficacy of
molecules is directly related to their crystalline form, possessing such expertise - a
rarity among CROs/CDOs - represents a unique asset for health players. Moreover,
the acquisition provides PCAS with significant additional pilot unit capacity - an
increase of 13m3 - as well as 6 new kilo-labs: these facilities reinforce the group’s
capacity to produce intermediate quantities, against a background in which players
are trying to outdo each other in terms of greater flexibility. It will also be possible
to use the kilo-lab to develop generic drugs, in line with the group’s policy of pooling
R&D resources. More generally, as far as customers are concerned, this additional
technological capacity and the excellence of PCAS’ operators constitute a further
guarantee of quality and safety.
While this international platform underpins the major reinforcement of the group’s
R&D service provision - the department enjoyed strong growth in 2016 -, it also acts
as a showcase for PCAS’ technological expertise and will contribute to the promotion
of commercial synergies between development and production activities.
Synergies in terms of logistics will also be rapidly implemented thanks to
Porcheville’s geographic proximity to the Limay plant and, more generally, the fact
that the site is located close to Paris and the transport networks, in the heart of
chemical valley.
The trend towards increasingly exacting and efficient development standards
is emerging as one of the principal challenges facing the health industry. PCAS
is extremely well placed to meet the challenge thanks to its quality strategy
founded on this new R&D platform, serving the development and validation of drug
manufacturing processes prior to any production launch in the group’s plants.
In the field of Fine Specialty Chemicals, particularly in new technologies, the
need to develop complex compounds, with a very low level of impurities, has
become the norm. As a result, the major industrial players are inclined to turn
to renowned subcontractors, such as PCAS, with advanced expertise in some of
the critical development and production phases. One such example is low metal,
whose advantage is the generation of minimal levels of metal impurities. This
expertise is currently present at the Quebec site in Canada where cutting-edge
equipment enables PCAS to meet the very high level of associated demand from
the microelectronics industry.
PCAS Annual Report
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23
Industrial
performance
the driving force
behind PCAS’s success
“Beyond industrial assets, people lie at the
heart of PCAS’ industrial strategy. In order to
optimize its industrial organization, the group
supports its employees via an empowerment
policy, aimed at reinforcing their skills in
terms of autonomy, management and
operational excellence”.
24
Pierre Schreiner
Chief Operating Officer
Lean management and employee empowerment:
key priorities
In 2016, the group continued to roll out and reinforce the organizational methods that
have proved so effective in the car industry. Founded on workflow management, this
policy resulted in the creation of the post of supply chain manager at each production site.
The measure provides the group with greater visibility - up to 24 months - with respect
to its production capacities. In parallel, a paradigm shift has been performed in terms of
the management system, which is now governed on the basis of a bottom-up approach,
i.e. a reversal of information flows, which now flow from operators on the ground up to
managers. From this point of view, individual aptitudes for autonomy and responsibility
are valued as the principal lever for quality excellence and organizational fluidity. Starting
from the premise that the operator is the person best placed to have an effective impact on
product quality and performance, and consequently to satisfy customers’ needs, decisions
are taken by the production team, since they are the ones who are best placed to manage
everyday operations and incidents.
Reduced bottlenecks
As a result of all these measures, particularly those giving greater responsibility to
employees, bottlenecks will be reduced automatically. This issue is a major priority for
PCAS as it seeks to reinforce flexibility in its production capabilities in order to meet its
customers’ requirements, i.e. increasingly tight production deadlines for increasingly
variable quantities.
Better allocation of industrial facilities
Industrial capacity optimization has also been
supported by the introduction of a shift system
based on five 8-hour shifts, making it possible
to ensure continuous production, 24 hours a day,
7 days a week. A major component in the strategy
to increase production flexibility, this measure has
been successfully rolled out, thanks to the support of
employees.
The acquisition of the Porcheville R&D site also adds
to our production capacities. As a result, CDO/CRO
projects, traditionally handled by the group’s longstanding sites, will now be developed at Porcheville.
These developments were the initial and intermediate
steps required to validate the configuration of the
production process prior to the industrial phases, and
necessitated improvements to infrastructure that,
by their very nature, reduced the utilization rate of
industrial facilities.
Organization designed
to optimize production
costs without
compromising quality
The purchasing function at
production centers has been
significantly reinforced with a
view to optimizing supply costs.
And the first benefits of this were
seen in 2016, with a reduction in
the average cost of raw materials.
These efforts have not been to the
detriment of quality investments
in production facilities, far from
it. Several upgrading projects
took place in 2016, including
the finishing workshop at the
Limay site for API production
and another project associated
with the installation of “light
sulfur” production capacity for
performance chemicals.
PCAS Annual Report
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Safety & quality
Safety:
Surpassing standards to minimize
the risks associated with industrial
activities
HSE (Health, safety and
Environment) policy is a major
priority for PCAS. Audit procedures
designed to ensure compliance
of group practices with the
highest standards of individual and
environmental protection continued in
2016. In addition to this audit program,
and conscious of the strategic importance
of being ahead of the game in this field,
PCAS aims to position itself as the industry
benchmark in terms of reducing negative
external factors. Moreover, procedures were
reinforced following the events of 2015, in
line with the safety measures and regulatory
requirements imposed on sensitive
industrial sites.
Concerning PCAS’ environmental
commitments in particular, in 2016, the
group ramped up its investments in VOCs
(Volatile Organic Compounds). The objective
is to minimize the impact (whether direct or
indirect) of substances generated by PCAS’
industrial activities on the environment
and health. This investment program
consists in optimizing emission capture
and condensation systems with a view to
processing waste emissions in accordance
with regulatory requirements.
Quality:
A constant commitment and a permanent
drive for improvement
In 2016, PCAS pursued the investment
program aimed to improve its
pharmaceutical chemical workshops,
particularly finishing areas housing the
active ingredients. For example, the drying
26
workshop at the Limay site was completely
renovated and the facility is fully operational
again since November 2016.
The organization of the project quality
function, created in 2015, continued to take
shape. PCAS is currently supporting several
pharmaceutical customers through phase III
clinical studies. These clinical studies require
optimal performance in terms of the quality
process, as well as advanced expertise in the
fields of Quality Assurance, Quality Control
and Regulatory Affairs. Like the other group
functions, the project quality function will
be based at the Porcheville site, recently
acquired by the group.
Lastly, 2016 was a busy year in terms of
inspections conducted by the regulatory
authorities. Sites were inspected on 6
occasions, with no major observations: twice
by the French National Health Authority
(ANSM), 3 times by the American FDA and
once by Brazil’s health surveillance agency
(ANVISA). These routine inspections were
to ensure activities complied with legallybinding Good Manufacturing Practices
applicable to the pharmaceutical chemical
sector. PCAS also successfully navigated the
transition to the new ISO 9001 standard.
Human Resources
Operating in a rapidly evolving world and in a growth sector,
PCAS is in the midst of its own transformation via the overhaul
of its business processes, sustained support for the development
of its employees’ skills and the reorganization of its businesses
structured around smoother flow management.
2016 was a year marked by a wealth of structuring initiatives
designed to support all our employees in a context of change.
The awarding of Vocational Qualification Certificates has
been an effective means of reinforcing and promoting our
employees’ skills and expertise, initially covering management
and production activities. These skills training programs
were a highlight of 2016, particularly at the Aramon site
where the commitment and professionalism of employees
led to a success rate of 100%. In 2017, we will be pursuing
these professionalization initiatives by extending them to
maintenance and supply chain activities.
At the same time, we have stepped up our training efforts for
personnel responsible for change management. These training
programs are crucial during this period of transformation,
made necessary by the increased production capacities and
workforce, as well as the geographic redeployment of teams.
Our brainstorming on change management was conducted in
partnership with our managers, via innovative educational tools
such as the business theater.
Potential issues relating to the effective integration of teams
at the Porcheville site, which now houses most of PCAS’
R&D staff, were handled upstream via social dialog and the
implementation of an ad hoc support project called Nova.
This positive initiative augurs well for the success of the
redeployment operation and the satisfaction of the majority
of our employees.
We pursued our structuring policy targeting function networks
together with the Operations Department. For example,
the supply chain function, in the spotlight in 2016, will be
contributing to the continued increase in production rates.
The first step in the ramp-up has already been taken, following
the successful introduction of the five 8-hour shift system,
optimizing the use of our industrial facilities.
Corinne Fischer-Gode,
Director of Human Resources
“Our human
resources
policy has been
rolled out on
the ground
via numerous
initiatives aimed
at promoting
the individual
commitment
and autonomy of
our employees.”
PCAS Annual Report
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27
Finance and investor relations
Pursuing value creation by delivering a profitable growth
in all activities
activity levels in the first few months of the
2017 financial year.
Net sales increased in 2016, both in
Pharmaceutical Synthesis and Fine Specialty
Chemicals. The Group’s Current Operating
Income was slightly higher than in 2015
(€16.2 million compared to €15.6 million),
bearing, as expected, additional expenses
incurred by the introduction of a new
industrial organization to cope with a
sustained increase in activity. At €6.6 million,
net income was up compared to that of 2015,
i.e. €5.9 million following pre-consolidation
adjustment for the impact of a net insurance
payment of €2.9 million (published net
income of €8.8 million).
The Group’s transformation is under way
and, thanks to its solid financial foundations,
PCAS is well equipped to pursue its
ambitious development plan, while remaining
attentive to external growth opportunities.
The Group’s net debt was €48.7 million,
compared to €34.7 million on December 31,
2015, partially due to strong sales in the last
two months of the 2016 financial year, as well
as higher stock levels associated with high
Finally, PCAS’ stock market performance was
commendable once again, with the share
price rising 88% in 2016, following the 109%
increase recorded in 2015, reflecting investors’
confidence in the Group’s development strategy.
2016 was also marked by the implementation
of an ambitious investment program across all
of the Group’s sites, as well as the purchase
of the Porcheville R&D site, representing a
combined investment of €17.2 million in 2016,
compared to €15.7 million in 2015.
PCAS and the stock market
(Adjusted figures by share, in Euros)
2015
2016
Highest price
8.00
14.06
Lowest price
3.60
6.75
Price at the end of December
7.97
14.02
11.83
12.68
Current Operating Income
1.03
1.07
Net profit attributable to the Group
0.59
0.45
Net Sales
PCAS’ shares are listed on
Euronext Paris—C Segment.
The share is listed since
October 17, 1996 and a
market-making contract
has been signed with
Kepler Cheuvreux.
“Managing the significant development
of our activities in order to ensure
our results progress and that we seize
external growth opportunities”
Eric Moissenot
Senior Vice-President,
Finance and Administration
28
PCAS’s share value
(100-point basis evolution/vs. SBF 120)
PCAS
SBF 120
200
160
120
80
15 Feb
15 Apr
15 Jun
15 Aug
15 Oct
15 Dec
2016
���
Breakdown of PCAS capital
44.7%
Public
8.7%
Treasury Shares
29.5%
Eximium
2.4%
Management
2017
Key Numbers
Code ISIN
FR 0000053514 – PCA
At Wednesday, February 15, 2017:
Number of shares
15,141,725
Excluding treasury shares
13,820,874
Compartment
Euronext C market
Share price
€13.50
Net assets per share
in 2016
€6.85
Market capitalization
€204.4 million
Analysts coverage
Kepler Chevreux,
Portzamparc and
Midcap Partners
14.7%
Christian Moretti / Anblan
PCAS Annual Report
|
29
Employee
testimonials
The main driving force for PCAS
‘success, their commitment is
our most precious asset
30
The management culture established by
PCAS is based on knowledge transfer, support
and empowerment to allow employees to
express their skills, and to instill a meaning
to their actions.
PCAS Annual Report
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31
“The passing on of knowledge
and capacity for autonomy
are the pillars of innovation
at PAS.”
The trust placed in employees at
PCAS creates a stimulating and
empowering work environment.
When I was doing my work-study program, as a
chemical engineer, I was lucky enough to join a
talented team passionate about what they were
doing. During my time with them, I contributed
to the development of a ready-to-use solution for
the lubricant industry. I also helped design the
packaging for this innovative new product that
we promoted ourselves directly to our customers.
32
At PCAS, I discovered that a company’s expertise
and reputation for excellence are a work in
progress, built up day by day via the commitment
of the employees on the ground. But establishing
such a dynamic can only ever be possible if people
are given the opportunity to exercise their talent
via an empowerment policy, whereby the employee
is placed at the heart of the decision-making
system. Having witnessed for myself the progress
made in this area, I’m proud to have carried out my
internship at PCAS, where the concrete application
of this philosophy gives meaning to the idea of the
constant commitment of all operators.
PCAS Annual Report
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33
“The sole
purpose of
technology
is to serve
employees
and boost
their
expertise,
providing
maximum
support
as they go
about their
day-to-day
tasks.”
José Munoz,
Information Systems Director
34
“Forecasting and
understanding PCAS’
growth in order to allocate
resources effectively
in line with profit
improvement objectives”
Eric Cheype
Director of
Management
Control
Support functions such as management
control and information systems play
a pivotal role in growth strategy.
Accordingly, a far-reaching policy was rolled out in 2016
to reinforce business monitoring tools and increase
information exchange between the various entities. The
growth in commercial momentum within a context of
tightened flow management demanded the introduction
of new, more relevant activity indicators, as well as
closer collaboration between management control and
business units. These measures will provide greater
short- and medium-term visibility with respect to the
group’s activities and ensure the optimized allocation of
resources. Hinged around three major priorities - support
for growth, customer satisfaction and productivity -, the
roll-out of the new technological platform, the PCAS
information system nerve center, is really set to pay
dividends in 2017. Benefiting from the latest standards
in terms of safety, accessibility via cloud and interactivity,
this new tool will represent a major technological lever
serving PCAS’ employees and growth.
PCAS Annual Report
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Glossary
A
Active pharmaceutical ingredient: the active
substance in a drug.
Additives: chemicals which impart specific
properties to the fuels, lubricants, paints etc. to
which they are added.
Clinical trial: any systematic drug trial conducted in
humans in order to demonstrate or verify the effects,
identify all the adverse effects, study the absorption,
distribution, metabolism and excretion to establish
the efficacy and safety of use of the drug in question.
E
B
BARC (Bottom Anti-reflective Coating): the antireflective coating improves the photolithography
process by suppressing, during exposure,
deterioration caused by light diffusion and reflection.
Biocatalysis: synthesis of a chemical substance
using an enzyme as a catalyst*.
Biotechnology: the use of life sciences for industrial
applications.
Enzyme: protein with a catalytic activity. Enzymes
are usually characterized by the very high specificity
of their catalytic power (substrate or transformation
specificity).
F
FDA (Food and Drug Administration): US state
organization which issues authorizations for
launching new drugs.
BPF: Good Manufacturing Practice (see cGMP).
Building Block: basic element for the development
of more complex substances.
C
Catalysis: action of increasing the speed of a
chemical reaction and reducing the level of energy
required to complete it.
cGMP (current Good Manufacturing Practices):
production standard in accordance with prevailing
US standards, published by the FDA. These are
mandatory in order to be able to export active
pharmaceutical ingredients (and some synthesis
intermediates) to the USA.
Clinical development: set of medical investigations
defining the therapeutic activity of an active
ingredient, delivery method, dosage, side effects, etc.
36
G
Generic: a drug for which the patent(s) protecting
it has/have fallen into the public domain and for
which the data protection period attached to its
marketing authorization has expired. GMP: Good
Manufacturing Practices (see cGMP).
I
IDL (Import Drug License): drug import
authorization.
N
NDA (New Drug Application): marketing
authorization application for a new drug in the
United States.
Precursors (of advanced materials): molecular
entity generally containing a metal which may be
applied by various techniques to form a film or thin
layer imparting functional properties to a material so
that it may be used in high-tech applications.
O
Proprietary: used to describe a product whose
manufacturing process was independently
developed by PCAS which can therefore freely
manage its marketing, production and any
associated intellectual property rights.
OLED (Organic Light Emitting Diodes): new flatscreen technology using organic molecules which,
subject to an electric field, are able to emit light
directly.
OPV (Organic PhotoVoltaic): third generation of
photovoltaic panels manufactured using printing
processes on plastic media.
P
Peptide: polymer of amino acids linked together by
peptide bonds.
Photosensitive materials: materials that react
on a molecular level with light or part of the light
spectrum, or with other types of radiation.
Photoresist: photosensitive formulation for use in
the process of transferring an image or pattern onto
a substrate.
Protein: biological macromolecule composed of
one or more polypeptide chains in a defined threedimensional organization.
R
RFID (Radio Frequency Identification): radioidentification is used to store and recover data
remotely using RFID tags.
S
Synthesis intermediate: defined chemical
substance used as a raw material in a subsequent
synthesis step.
Photovoltaics: technology converting the energy
from sunlight into electrical power.
Pilot: intermediate plant between the laboratory
and industrial-scale production unit consisting of
medium-sized equipment which is required for
industrial testing of new syntheses before scaling up
to real production.
V
VOC: Volatile organic compounds that may be
directly or indirectly harmful to health.
PLGA/PLA: poly (D, L-lactide-coglycolide) from the
EXPANSORB® range are copolymers of lactide and
glycolide.
Potentiate: for a drug, its «potentiation» by another
substance refers to the fact that its effect is
enhanced by the substance in question to such an
extent that this effect is far superior to the ordinary
combined respective effects of the two products.
Princeps: Latin word meaning «occupying the
first place». This term is used for an original drug,
invented by an innovative pharmaceutical company
which has exclusive rights to it throughout the
period of its patent protection. The term is used in
contrast with «generic» drugs.
PCAS Annual Report
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37
Contact
PCAS
Expansia
Protéus
PCAS BioMatrix Inc.
Head Office
Head Office
Head Office
BP 181
23 rue Bossuet
PA de la Vigne-aux-Loups
91160 Longumeau
France
23 rue Bossuet
PA de la Vigne-aux-Loups
91160 Longjumeau
France
23 rue Bossuet
PA de la Vigne aux Loups
91160 Longjumeau
France
725 Trotter
St-Jean sur Richelieu
QC J3B 8J8
Canada
33 (0) 1 69 09 77 85
33 (0) 1 69 09 77 85
33 (0) 1 69 09 77 85
pcas.com
Plant
Plants
Route d’Avignon
30390 Aramon
France
Bourgoin Plant
33 (0) 4 66 57 01 01
15 avenue des Frères
Lumière
cs 52009
38307 Bourgoin-Jallieu
Cedex
France
33 (0) 4 74 93 63 33
Couterne Plant
Head Office
33 (0) 1 69 79 60 48
Messukentänkatu 8
20210 Turku
Finland
PCAS Canada
Plant
725 Trotter
St-Jean sur Richelieu
QC J3B 8J8
Canada
00 1 450 348 09 01
15 avenue des Frères
Lumière
cs 52009
38307 Bourgoin-Jallieu
Cedex
France
sjpc.com
33 (0) 4 74 93 63 33
00 358 2 330 51
pcasfinland.com
Limay Plant
35 avenue Jean-Jaurès
92390 Villeneuve-La-Garenne
France
33 (0) 1 46 85 91 91
33 (0) 1 34 78 87 87
00 33 1 34 79 50 00
70 allée Graham Bell
Parc Georges Besse
30000 Nîmes
France
Enersens
proteus.fr
Head Office and Plant
ZI de Limay
2-8 Rue de Rouen
78440 Porcheville
France
Plant
PCAS Finland Oy
33 (0) 2 33 37 50 20
R & D Centre
proteus.fr
33 (0) 4 66 70 64 64
VLG Chem
Porcheville
pcasbiomatrix.com
23 rue Bossuet
PA de la Vigne-aux-Loups
91160 Longumeau
France
PCAS, Usine de Couterne,
Haleine
61410 Rives d’Andaine
France
19 route de Meulan
78520 Limay
France
00 1 450 348 09 01
PCAS Biosolution
enersens.fr
enersens.fr
PCAS America Inc.
315 Madison Avenue
3rd Floor, Suite 3007
New York, NY 10017
USA
00 1 201 633-0290
Head Office
23 rue Bossuet
PA de la Vigne-aux-Loups
91160 Longumeau
France
PCAS GmbH
PCAS China
Baohua City
Jingdian Building
Room 806
No. 518, Anyuan Road
Putuo District
200060 Shanghai
People’s Republic of China
33 (0) 1 69 09 77 85
De-Saint-Exupéry-Straße 8
60549 Frankfurt am Main
Germany
上海普陀区安远路 518号
宝华城市晶典大厦 806室
200060 上海
中国
pcas-bio.com
33 (0) 1 69 79 60 33
00 86 21 52 53 00 16
[email protected]
38
Z.I. de la Vigne aux Loups
23, rue Bossuet
91160 Longjumeau — France
pcas.com