A&M Perspectives: How asset light pharmaceutical companies can augment value creation in a disrupted market environment

Over the past two decades, originator pharmaceutical businesses have increasingly disposed of late-stage drug portfolios to third parties. This has spurred the growth of asset-light pharmaceutical companies with radically different operating models. Operating through networks of Contract Development and Manufacturing Organisations (CDMOs), these businesses avoid major capital expenditure, have greater flexibility, and can therefore focus on critical capabilities such as supply chain excellence, market authorisation and technical transfers.

While there are advantages, asset-light models are complex. Many different partners are involved, comprising of specialised CDMOs, distribution partners and a mix of in-house sales and country distributors. This leads to challenges related to demand planning, inventory control and cost control.

At the same time, asset-light pharma businesses are having to respond to global challenges including rising inflation, supply chain disruptions, Covid-19 outbreaks and growing geopolitical tensions.

Based on our experiences of delivering change for a range of asset-light pharmaceutical companies across Europe, we recommend five levers of value creation.

Five value levers for asset-light pharmaceutical businesses

1. CDMO rationalisation and technical transfer excellence
2. S&OP/ IBP upgrades
3. Inventory and working capital optimisation
4. Logistics simplification
5. Digital tools deployment (commercial focus)

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