Fujifilm FY22: CDMO biz robust but COVID demand runs its course

Fujifilm has cited strong demand for process development and manufacturing work at its Denmark site as a key driver in its fiscal year 2022 results.

For the full year ending 31 March 2023, Fujifilm Corporation reported sales in its healthcare division of ¥918 billion ($6.7 billion), up 14.5% on the year prior. Within the segment, the firm’s bio contract development and manufacturing organization (CDMO) businesses grew 29.2% year-on-year, pulling in ¥194 billion ($1.43 billion).

“Revenue rose due mainly to strong growth in process development and contract manufacturing of biopharmaceuticals at the Denmark site and the impact of exchange rates,” the firm said in its results.

The facility in Denmark was cited as a key driver for Fujifilm’s CDMO business. Image c/o Google

Fujifilm’s CDMO subsidiary Fujifilm Diosynth Biotechnologies (FDB) acquired the site in Hillerød, Denmark from Biogen for $890 million back in 2019, and the following year invested a similar amount to double bioreactor capacity. The 240,000 L of capacity is being further augmented through a $1.6 billion global capital expenditure project that will add another 8 x 20,000 L bioreactors by 2026.

However, despite the revenue hike in FY2022, Fujifilm expects the CDMO business to grow by less than 1% in FY2023 to ¥195 billion.

Like others in the industry, this flatness – which was also seen in the FY2022 operating income acoss Fujifilm’s healthcare segment – can be attributed to a rapid decline in demand for COVID-19 related products.

The Denmark facility, along with other sites in its global network, were used to manufacture a number of COVID vaccines and therapies during the pandemic. One of the largest contracts won was with Novavax, which inked a deal with Fujifilm in June 2020 for space at a site in North Carolina. In October 2022, Novavax terminated the contract and paid Fujifilm $185 million in a settlement.

Multi-subsidiaries

In related news, Fujifilm announced in March it has turned its two US- and one UK-based CDMO businesses – FDBU, FDBT, and FDBK – into wholly owned subsidiaries.

“We will strengthen the business foundation of the Bio CDMO business to further accelerate growth of the biopharmaceutical contract development and manufacturing business,” the firm said.