Ahead of the Game
PNP Pharmaceuticals’ state of the art, 74,000-foot facility is buzzing with activity. The Burnaby, British Columbia based business manufactures and packages both pharmaceuticals and nutraceuticals – a rarity in the highly regulated pharmaceutical world.
Since we last featured PNP in July 2013, the company has doubled its business, and we sat back down with President and CEO Glen North this month to learn how the team has managed to stay ahead of the game.
Much of PNP’s growth over the past year is due to the team’s ability to predict where the market is headed. Nutraceutical powders are quickly gaining ground and the company recently took on a large client within that sector. By producing meal replacement / supplement powders, PNP cashes in on the fact that “people want to eat healthy, but with time constraints nowadays, no one has time to shop and eat a balanced meal. People are looking for a healthy alternative to supplement all their nutritional needs, so powders really seem to be growing.”
While the addition certainly made good business sense, adding the manufacture of powders to the company’s long list of capabilities was a complicated affair. “[Powders] are messy and create a lot of dust and that is not a great environment to have in a pharma facility,” Mr. North explains. “But I was convinced and I took it on.” PNP converted a section of its plant into a powder packaging zone, creating an area able to handle the dust and the logistics.
PNP is preparing to manufacture liquids in 2017, which will give the company an even greater competitive edge. “There are not a lot of people in Canada doing liquids, especially sterile liquids, [such as] eye drops and ear drops,” Mr. North points out. A major, 35,000 foot addition to PNP’s current facility is in the works, and it is being specially designed to accommodate the production of liquids. The new addition will also include the latest powder handling equipment to accommodate the large volumes of powders that the company has already taken on.
Adding liquid manufacturing to PNP’s résumé is a “natural evolution,” since the company already packages liquid. The team recently installed a custom designed machine from Spain that puts liquids “in a sachet shaped like a bottle, so you can tear off the top and squeeze it right in your mouth.” Each sachet contains a premeasured, single dose, which prevents an accidental overdose. Because of the increased safety and convenience, this style of packaging is rapidly gaining popularity around the world.
PNP’s new addition will complement an already state of the art facility. “When we built this facility we wanted not only to build one of the finest facilities in Canada but one of the finest facilities in the world,” Mr. North recalls. The facility was purpose built to accommodate both prescription and over the counter products, as well as neutraceuticals, which can be a complicated combination. The team deals with everything from live bacteria to controlled substances, so “cross contamination is a huge concern for us.” To prevent cross contamination, the facility utilizes a sophisticated air sterilization system. “We are the only company I am aware of in Canada, and I believe in North America, that has 100 percent sterile air supplied to our production area,” Mr. North reports. “That allows us to do all these bacteria products/probiotics and things of that nature with no compromising of our air handling system whatsoever.”
The sophisticated system also allows PNP to produce products on WADA’s (World Anti Doping Association) banned substances list. “We are very proud of the fact that we are the only company in the world to be awarded both certification for sport and WADA’s list of banned substances for sport. That is quite an accomplishment and it is due to our sophisticated air handling system which incorporates validated positive/negative air containment zones monitored via computer 24 hrs a day.”
The futuristic facility features UV tunnels (for large scale air sterilization) and computer-controlled doors with infrared sensors. “People refer to our facility as the star trek facility,” Mr. North laughs, and the leading edge design has workers in mind as well as production. “Not only do we want it to be functional for making the products we produce, but we want it to be functional for the employee. No one wants to spend eight hours in a ten by ten room; it is like being in prison. So we have lots and lots of glass.” With over 10,000 square feet of glass in the production area as well as a state of the art gym, ping-pong tables, foosball tables, and a barbecue area for the staff to enjoy, employee morale stays high. “The employees love it. They are very proud to work here.” The high profile facility even helps pull top talent away from competitors. “The building – and the way we conduct business – has attracted many highly skilled employees from other companies that wanted to join PNP.”
PNP’s next generation facility helps the company meet tough regulations, which can pose quite a hurdle. In fact, Mr. North says that meeting regulatory standards is one of the biggest challenges facing the industry as a whole. “We [PNP] are very strong with regulatory, but some of our competitors aren’t as strong – especially in the U.S. with the FDA tightening up with regulatory control on the nutraceutical side.” PNP’s ability to meet regulations gives the company a distinct edge. “We are the most accredited company in North America as far as our certifications and our regulatory licenses. That is another thing that attracts clients to PNP.”
PNP is ahead of the game and the team is working hard to maintain their lead. Often, this means identifying a market trend and risking millions of dollars to pursue it. “It is nothing to spend $1 million on a piece of pharma equipment,” Mr. North reports. “All pharma equipment is very, very expensive. In my early years, I would secure the business, get a contract, and then source the equipment and purchase it. But that doesn’t really work [today], because no one wants to deal with you until you have the equipment in place; they want to deal with a company that has some expertise in using the equipment.”
Now, Mr. North invests millions in new equipment before he has a customer to use it, going on little more than his own intuition. “I go with the direction that I think pharma or nutraceutical will go. I have to buy the equipment now, so I have purchased equipment that I think is leading edge and new to the industry. And then I look for the customers because I feel strongly that my decision will be right.”
So far, the risk has paid off. “There is a little bit of a leap of faith involved to spend that money on equipment and not have a customer for it, but it is the only way,” Mr. North believes. “If you buy it they will come – that is my motto now.” Savvy customers are always looking to gain an edge over their competition, he adds, and they recognize that contracting with a manufacturer that can offer the latest equipment will help them gain that edge. “They might not even be looking for it [a certain type of new equipment], but when they know I have it, it certainly attracts them.”
Mr. North’s confidence in his new equipment is bolstered by the promising state of the industry. “I see unprecedented growth; there is no stop in sight. The baby boomers are getting older and health is on everybody’s mind. Everybody wants to be healthy well into their golden years.” Health is such an important commodity that the industry tends to stay strong regardless of the economy at large, he says. “The disposable income for health seems to be there even through a downturn in the economy. The health industry seems to grow even when the economy is not doing well.”
PNP plans to continue growing along with the industry. “We think we are going to double sales again next year,” Mr. North predicts. “We are adding another 35,000 square feet on our facility and we expect to have over 250 employees by this time next year. The future looks very bright.”