The only way Simcro could grow in the animal pharmaceuticals delivery space was to be innovative Will Rouse decided when buying the Hamilton-based company three years ago.
As one of only a handful of worldwide companies making animal injectors and drench guns, and given the competition for a global US$100 million market in a world animal health pharmaceutical market of $20-$25 billion, without innovation all that would happen is margins would be increasingly squeezed he says.
The company, established in 1993, had a small R&D component up until Rouse and three other private investors bought the company following a successful sales tender. Since that time Simcro has expanded to 12, soon to be 13 fulltime specialist product developers.
The ideal product developer has an engineering background, preferably mechanical engineering, though Simcro has a three science based developers as well.
“Engineers are about practical delivery solutions,” Rouse says. “How does a chemical react with resins, what hand force is required, what temperature variations do we have to think about?” He says engineers are the best at coming up with answers to what are often multi-dimensional challenges. Given that R&D represents 10-12% of Simcro’s turnover, and all paid for out of company cashflow, good solutions are a must to drive the company forward.
An innovative safety injector development for Pfizer and a drench gun for Novartis (Optiline) “kick started the whole R&D side of things,” says Rouse, who has an investment banking background here and overseas before coming back to New Zealand in 2000 just before his eldest daughter was about to start school. “Now we’re swamped with inquiries.”
Rouse describes Simcro as now having a “circle of competence” in inventing delivery solutions for animal health. The company has 80 staff, and it was a recent ‘Best use of R&D in International Business’ award winner in the $10-$50 million annual turnover category winner at the recent NZ International Business Awards. This was for the Sekurus subcutaneous injector, a self-tenting design with “a patented double over-centre hinge mechanism within the device itself,” he says
The development of new animal health products, often with different formulations has required Simcro to develop new delivery methods, first considered from an animal welfare point of view. “First we ask if a development will improve the life of, be kinder to and less invasive on an animal,” Rouse says.
“Then we look at the operator, can we make it easier, less dangerous, more ergonomic?”
Becoming globally aware of how its products are used and received has also meant changes in applicators – changes brought about because not everyone is a (comparatively) big New Zealand male who is using the device.
More traditional farming locations are seeing more female farmers; who in turn usually have a smaller hand. Conversely, because many of the farm labourers in America are Mexican, operating instructions are printed in Spanish as well as English. Other changes, such as formerly tropical animal diseases now occurring in traditionally cooler climates is also a challenge for delivery systems.
The company’s market knowledge and now-proven ability to deliver innovative products sees it increasingly collaborating with major European and American pharmaceutical companies who bring Simcro, confidentially, into the picture very early their product development.
The same companies pack Simcro delivery devices with their own formulations, selling through their distribution networks. Over 90% of Simcro’s business is such business-to-business dealings.
Rouse says Simcro has about 70 different projects under development present – though the start/stop, approve, test and modify nature of the development means there’s usually only 10-12 on the go at one time. As a result, some projects take several years to complete, with one in for example due for delivery in 2014.
Having shown their worth in farm animals, the pharma companies are looking to Simcro for delivery solutions around companion animals, and human health.
These markets are a much bigger potential market, and though developing products for them have their own challenges Rouse considers them to be the company’s future.
“Our circle of excellence in animal delivery technologies can definitely be migrated to the human space,” he says. “Our development guys can see solutions screaming at them for these other markets”