Delivering growth with
a diversified portfolio

Bespak delivered strong results and made excellent progress in developing a range of new products to drive sustainable medium-term growth

Review of the year

Bespak is a leading global drug delivery device manufacturer which manufactures 500 million devices per year, mainly for the respiratory segment. The business strategy is to leverage its unique competencies of design for manufacture and high volume manufacture in regulated markets into new market segments, broadening and diversifying the number of growth opportunities and where possible expanding up the value chain, for example through drug handling.

Bespak delivered a strong performance in the year to 30 April 2011. Revenues from products and services increased by 8% to £83.8m and operating profits by 11% to £15.6m. Operating margins increased for the third successive year to 18.7% (2010: 18.1%). The further growth in operating margins was particularly satisfying in the face of a second year of reduced revenues in a major device services contract that was announced in February 2009. This was due not only to the success of cost reduction actions completed at the start of the year, which totalled £4m, but also as a consequence of the ongoing success of the continuous improvement programme that has saved an average of £1m per annum for the last five years. The Integrated Aluminium Components (IAC) subsidiary that manufactures aluminium ferrules for the Bespak valves as well as other metal healthcare and cosmetic products’ continued to recover well, with a 14% increase in revenues and a 59% increase in operating profit.

Joe Barry, Division Managing Director, was pleased to welcome Ian Campbell to his executive team as Commercial Director.

Bespak Respiratory

The core respiratory business performed very well in the last year. Revenues increased by 7% to £82.3m. Valve volumes were particularly strong and grew by 27% over the prior year. This was driven by strong emerging market revenues, customer restocking, customer business wins and the launch of a new valve ahead of expectations. Towards the end of the year, the business celebrated manufacturing its 1 billionth HFA valve for metered dose inhalers, underlining Bespak’s position as a leading supplier to the world’s largest pharmaceutical companies.

Good progress was also made with the next generation of new products which is expected to drive medium-term growth. We commenced a £7.5m investment programme to install capacity to manufacture our patented integrated dose counter for a lead customer. The FDA has provided guidance that new drugs delivered by an inhaler should have a dose counter and has recommended the retro-fitting of dose counters to existing products. The capacity will be commissioned, on schedule, for volume manufacture from mid 2012. The Easifill primeless valve successfully completed its stability trials and has been filed with the FDA, on track for a 2012 launch. The primeless valve’s open metering chamber delivers a full dose of drug regardless of which way up the patient has been storing the device, addressing a longstanding compliance challenge for pharmaceutical customers. The initial indication on which trials are complete is for a high value systemic treatment. The VAL020 valve programme also completed stability trials on schedule and is undergoing acceptance testing with the customer, remaining on schedule for a 2012 launch.

Bespak’s device services business offers unique design for manufacture and manufacturing capabilities to customers who own their own device technologies. Revenues on marketed products in this segment include the GlaxoSmithKline Diskus® device and the GlaxoSmithKline dose counter, Vectura’s Clickhaler and a few smaller programmes. The device services business performed as expected over the past year, with revenues down slightly as expected as a result of the change in contract terms referred to above. However, we were pleased be awarded a further dose counter manufacturing line which will be fully commissioned by the end of the summer, doubling capacity. We also continued to make good progress in industrialising two dry powder inhalers for our customers. The first of these is due to launch in 2012 and the second, a platform device for a range of therapies, from 2014.

Bespak Injectables

Bespak Injectables was created a year ago by the combination of the ASITM autoinjector technology acquired with The Medical House plc in 2009 with the manufacturing capabilities of Bespak. The business addresses the fast growing autoinjector drug delivery segment. Autoinjectors are used by patients to self-inject medicines, normally to treat chronic diseases, such as multiple sclerosis or rheumatoid arthritis, or for emergency situations, such as epinephrine to treat anaphylactic shock reactions. This market segment is expected to grow rapidly due to the need to inject most biologic drugs, which make up a significant proportion of the current drug development pipeline.

Bespak Injectables has three programmes in development, two of which have been filed for approval with the FDA. Until these or other new programmes are launched, the business will have modest revenues and will incur a small operating loss. Revenues rose by 33% in the year to 30 April 2011 to £1m, reflecting a full year of ownership. Like-for-like revenues fell, reflecting reduced service income as completed programmes await regulatory approval. Revenues from the one marketed product, the Cool.clickTM2 needle-free injector for Merck Serono, continued to grow steadily, although it remains a niche product. The INJ300 for Dr Reddy’s Laboratories is expected to be approved for launch in the second half of 2011, following a short delay. The INJ570 autoinjector for a major pharmaceutical customer is now expected to be approved for launch in 2012, slightly behind timelines previously indicated. The third programme, INJ200 for Catalent is on hold pending a review of progress with key partners.

During the year, Bespak Injectables made progress in developing its business offering. In addition to the existing model of delivering customised bespoke device solutions based on the patented ASITM autoinjector technology platform, Bespak has developed and launched OTSTM Autoinjector, a product that is available off-the-shelf for customers who want a market-ready autoinjector solution without the cost and time associated with device customisation programmes. The OTSTM Autoinjector additionally allows Bespak to engage earlier in the development process with its pharmaceutical company customers. Bespak is also looking to identify injectable opportunities where it might choose to enter into a strategic collaboration with partners in order to secure a greater part of the business value and upside. We expect that these new product offerings will deliver new customer contracts in the next 12 months.

Innovations and Atlas Genetics

The establishment of an innovations centre in Cambridge has been a key part of our diversification strategy. The team has been exploring a broad range of opportunities to expand Bespak into related market areas where it can add value with its unique skills.

One such market area identified was the Point-of-Care diagnostics market. Point-of-Care diagnostics systems deliver rapid patient testing into the clinician’s surgery, avoiding the cost and delay of referral of samples to central laboratories. These systems generally use a relatively sophisticated disposable card within which the patient sample is tested without risk of cross-contamination to other samples. Bespak identified a company, Atlas Genetics Ltd (‘Atlas’), which has a particularly interesting technology which appears to offer highly selective and specific performance in a very short 30 minute time period. The system is potentially applicable to detect a wide range of diseases, but is currently being focused on the important and fast growing market for the diagnosis of sexually transmitted diseases. Bespak has been awarded a development contract to design for manufacture and scale up the disposable cartridge used in the system, and has secured long-term manufacturing rights for when the system enters volume production. At the same time, Consort Medical invested £1.1m to acquire 19.3% of the equity of Atlas. The Atlas system is expected to launch by the end of the 2012/13 year.

Key products

MDI valves

MDI valves The valve on a metered dose inhaler ensures that the patient receives an identical and precisely metered dose of drug every time over the multi-year life of the product.

Medical check valves

Medical check valves Widely used in a broad range of devices, from masks and airway devices to catheters. They allow the controlled inflation and deflation of medical devices.


Autoinjectors Pre-loaded single use devices. When pressed against the skin they insert the needle, deliver the drug and retract the needle into the used device.

Needle-free injectors These devices inject small quantities of drug by forcing droplets through the skin rather than using a needle.

Medical check valves

Integrated dose counters Increasingly required on metered dose inhalers so that patients can be aware of the number of doses remaining in their device.

Medical check valves

Dry powder inhalers Breath actuated inhaler devices whereby the patient directly inhales the medication into the lung.


2010/11 in brief

Strong growth in valve sales, including the manufacture of the one billionth HFA valve for asthma treatment and launch of a new MDI valve
Solid performance in Device Services, which celebrated manufacture of the 500 millionth Diskus device for GSK
Double digit operating profit growth with increased margins
Two autoinjector products now awaiting approval from the FDA
Investment in Atlas Genetics gives access to fast growing Point of Care diagnostics market

Key facts

1bnth HFA valve manufactured
27% growth in MDI inhaler valve volumes

Market position

Global leader in MDI inhaler valves, producing c200m per annum
Global leader in dry powder inhaler device manufacture – produced 500 millionth Diskus in 2011
Global leader in medical check valve manufacture, producing c150m per annum
Competitive position in growing autoinjector market worth >£100m per annum

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