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Funding ChallengesFunding biotechnology ventures is becoming more chal-lenging for companies with early phase pipelines and unproven technological innovations that have question-able returns and present no clear exit possibilities for investors. Hence, although preclinical work and product safety trials abound, it takes a very compelling proposi-tion to acquire funding of efficacy studies.

Venture Capital has somewhat deemphasized biotech-nology due to the costly trials imposed by regulatory bodies, the uncertainty that accompany these trials, and the amount of time it takes to either find a pharmaceuti-cal partner to carry the product into the marketplace or to do an Initial Public Offering at compelling valuations.

That said, there still are a good number of compelling products that advance swiftly through the process. They are often products to treat orphan diseases for which no treatment alternatives currently exist, or generic drugs that benefit from improved delivery systems. Bachem has several such products in its pipeline.

Large Volume RequirementsInnovative technologies to make peptides orally avail-able are gaining broad appeal. Peptides tend to be inject-ed but the customers prefer a pill. The bioavailability of ingested peptides is only 1 to 2%. This drives up the volume requirements massively.

Although funding challenges are holding back some promising peptide drug candidates, advanced projects are gaining approval rather quickly. New formulations of existing drugs are driving up the volume requirements. Adjacent fields are also enhancing the popularity of peptides. It takes an optimal infrastructure and equipment base to satisfy the requirements.

International Presence

Bachem’s booth at the CPhI 2012

Markets & Customers

Bachem

Annual Report 2012

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SOUTHAMERICA

NORTHAMERICA

U SA

Organisation and Locations

Bachem operates threecenters of excellencein Switzerland, the UK,and the USA that arefocused on the produc-tion of Active Pharma-ceutical Ingredients,custom synthesisproducts and catalogpeptides.

Bachem Holding AGBubendorf,Switzerland

Bachem AGBubendorf,Switzerland

Bachem Americas, Inc.Torrance,

USA

Bachem DistributionServices GmbH

Weil am Rhein, Germany

Bachem SASuccursale VionnazVionnaz, Switzerland

Peninsula Laboratories,LLC

San Carlos, USA

Bachem (UK) Ltd.St. Helens,

Great Britain

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EUROPE ASIA

AFRICA

AUSTRALIA

KEY MARKETS

HeadquartersAffiliates

NEW MARKETS

GROWTH MARKETS

RU S S I A

J A PAN

I ND IA

CH I NA

S OUTHAF R I CA

I NDONE S I A

P OLANDSW I TZ E R LAND

UK

GE RMANY

F R ANC E

S PA I N I TALY

Bachem

Annual Report 2012

Markets&Customers

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Bachem

Annual Report 2012

To stay competitive as a manufacturer in this case re-quires specialized equipment, maximal automation and facilities compatible with such needs. The price pressure for the peptide manufacturer increases so as to make the pill competitive to the injected dosage form.

Bachem has adjusted to this market dynamic by devel-oping in house engineering solutions and transforming the plants to accommodate large scale manufacture competitively. Scale up development work is being ac-companied by negotiations for long term supply of such potential high volume products.

Adjacent FieldsIn cosmetics, several customers are finding solutions to treat wrinkles or remove spots that accumulate on aging skin. Products undergo extensive toxicological tests prior to approval. Once marketed, it is expected that volume requirements increase dramatically as well.

Several Bachem products are undergoing the approval process in the veterinary field. The filing requirements are comparable to human medicine and approvals take years as well.

Peptides are also being explored to lengthen the shelf life of food. There is considerable research being done in the field and it is only a matter of time before com-mercialization of one or the other peptide combination will occur in this area.

Unmet Medical Needs Infectious diseases continue to plague mankind. Patho-gens are becoming resistant to drugs that were hitherto effective. Much research to find peptide-based antibiotics has been conducted. Breakthroughs may be just around the corner.

Alzheimer’s disease is also in need of better treatment options. Here, again, peptide research plays a prominent role in finding a cure.

Markets & Customers

Wide Range of Customers

Customer Segmentation in Percent (Sales related)

69 Pharma

13 Biotech 10 Distributors 3 Academia 2 Cosmetics 1 Veterinary 2 Other