About Bespak
Bespak is a drug delivery device business with a strong focus and leadership position in the respiratory market. Its core markets benefit from excellent product longevity and customer loyalty combined with high technical and regulatory barriers to entry.
It has many of the world’s top pharmaceutical companies as its customers and is the largest world-wide supplier of devices to the 300m global sufferers of asthma and Chronic Obstructive Pulmonary Disease (COPD).
With a strong track record in FDA approved product supply, the company manufactures around 500m devices per annum at its facility in Kings Lynn, Norfolk, UK. Incredibly, 1,000 patients are using a Bespak device every second of every day of every year.
Bespak is a highly stable business which continues to generate significant cash-flows whilst working on new long term organic growth opportunities.
Market Overview
Bespak develops and manufactures devices to deliver drugs to sufferers of asthma and COPD. There are around 300m sufferers of these diseases globally and the market is growing steadily due to increased incidence of the diseases, increasing wealth in the developing world and improved diagnosis. The pharmaceutical product market for treatment of these diseases is worth around $25bn per annum.
Most commonly, treatment is provided by using either a Metered Dose Inhaler (MDI) or a Dry Powder Inhaler (DPI) device: both technologies provide a portable, convenient and easy to use way for patients to take their medication. An MDI is a device often informally referred to as a “puffer” that delivers a precise dose of drug by activating a pressurised canister of drug. This creates a plume of drug for the patient to inhale. Alternatively a Dry Powder Inhaler (DPI) relies on the patients own inspiratory flow to inhale a predetermined amount of drug from within the device. Around 70% by volume of the market is met by MDIs (around 500m units per annum) although DPIs are benefiting from renewed focus from big Pharma companies who see bespoke DPI devices as a key product differentiator.
Barriers to entry in the device market are high as the device is linked to the drug and must pass through complex regulatory and clinical trial processes in order to be FDA approved. Therefore once a device completes a successful clinical trial and approval process with a customer’s formulation it is normal to secure early product launch revenue streams. Following market launch Bespak’s focus moves from securing regulatory approval to improving competitive position for its customer’s and itself through exceptional product quality, high service levels, continuous improvement and cost reduction. This approach has proved invaluable in building Bespak’s market positions and has been rewarded by excellent customer retention. On the other hand this means that it is hard to deliver short term changes to revenue from new inhalation products as future projects may be some time from commercial launch. The Bespak division manages this wherever possible through a portfolio of development projects at various stages of clinical development.
Bespak is unique amongst its competition and peer group in that it holds strong market positions in both MDI and DPI technologies. Other suppliers tend to focus more heavily on one or other of the technologies
Bespak’s Key Products
MDI and DPI products.
In the MDI market, Bespak owns the Intellectual Property (IP) of almost everything it sells. Generally customers purchase components of the MDI and assemble and fill them themselves. The key components are:
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The heart of the MDI is the metering valve which delivers a precisely metered dose which is identical from first dose to last over the life of the product (up to 200 doses). The valve technology is complex and well protected by IP and extensive know-how. Bespak is a world leader in valve technology.
A new technology for MDIs is the dose counter, which allows patients and practitioners to see how many doses remain in the MDI pack. This is important to ensure patients do not run out of their life saving therapy and also enables them to plan their re-prescription. The FDA has advised that new MDI’s should have a dose counter and has recommended that existing products should be retro-fitted with them. Dose counters may be proprietary customer technology, but Bespak also has its own dose counter that has just entered into clinical trials with a major customer.
Other components that make up the MDI include the can, a pressed aluminium container into which the drug is filled and the metering valve is fitted, and the actuator, the moulded plastic “boot” into which the canister is inserted to enable drug to be accessed. These complementary products are lower value, but highly important and Bespak does manufacture a large number of actuators for its customers.
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In the DPI market, Bespak acts mainly as a high end contract manufacturer for the high volume production of devices where the IP remains with the Pharma customer. Nevertheless, Bespak is able to offer significant value in the design for manufacture phase of development as well as having exceptional capabilities at high volume manufacture to the exacting standards of the FDA. As a result its relationships and contracts with customers tend to be long term.
Bespak is additionally the world’s largest manufacturer of Medical Check Valves. These safety critical one way valves are used extensively in a variety of medical devices such as urology catheters, endo-tracheal breathing tubes and face masks etc. to allow the inflation/deflation of cushions and cuffs critical to the function of these devices.