The only way Simcro could grow in the animal pharmaceuticalsdelivery space was to be innovative Will Rouse decided when buying the Hamilton-based company threeyears ago.
As one of only a handful of worldwide companies making animal injectors and drench guns, andgiven the competition for a global US$100 million market in a world animal health pharmaceuticalmarket of $20-$25 billion, without innovation all that would happen is margins would be increasinglysqueezed he says.
The company, established in 1993, had a small R&D component upuntil Rouse and three other private investors bought the company following a successful salestender. Since that time Simcro has expanded to 12, soon to be 13 fulltime specialist productdevelopers.
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 reactwith 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-dimensionalchallenges. Given that R&D represents 10-12% of Simcro’s turnover, and all paid for out ofcompany 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 thewhole R&D side of things,” says Rouse, who has an investment banking background here andoverseas before coming back to New Zealand in 2000 just before his eldest daughter was about tostart school. “Now we’re swamped with inquiries.”
Rouse describes Simcro as now having a “circle of competence” in inventing delivery solutionsfor animal health. The company has 80 staff, and it was a recent ‘Best use of R&D inInternational Business’ award winner in the $10-$50 million annual turnover category winner at therecent NZ International Business Awards. This was for the
The development of new animal health products, often with different formulations has requiredSimcro 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 ananimal,” 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 inapplicators – changes brought about because not everyone is a (comparatively) big New Zealand malewho is using the device.
More traditional farming locations are seeing more female farmers; who in turn usually have asmaller hand. Conversely, because many of the farm labourers in America are Mexican, operatinginstructions are printed in Spanish as well as English. Other changes, such as formerly tropicalanimal diseases now occurring in traditionally cooler climates is also a challenge for deliverysystems.
The company’s market knowledge and now-proven ability to deliver innovative products sees itincreasingly collaborating with major European and American pharmaceutical companies who bringSimcro, confidentially, into the picture very early their product development.
The same companies pack Simcro delivery devices with their own formulations, selling throughtheir distribution networks. Over 90% of Simcro’s business is such business-to-businessdealings.
Rouse says Simcro has about 70 different projects under development present – though thestart/stop, approve, test and modify nature of the development means there’s usually only 10-12 onthe go at one time. As a result, some projects take several years to complete, with one in forexample due for delivery in 2014.
Having shown their worth in farm animals, the pharma companies are looking to Simcro for deliverysolutions around companion animals, and human health.
These markets are a much bigger potential market, and though developing products for them havetheir own challenges Rouse considers them to be the company’s future.
“Our circle of excellence in animal delivery technologies can definitely be migrated to thehuman space,” he says. “Our development guys can see solutions screaming at them for these othermarkets”