UK-based CMOs benefitting from currency exchange post-Brexit vote

This time last year, one British pound bought over one-and-a-half US dollars. Then in June, the UK voted to leave the European Union (EU) and the single-market in an historic referendum driving the exchange rate to plummet.

Three months on and the pound hit a 30-year low this week, trading at around $1.23​. However, this is a boon for UK-based contract development and manufacturing organisations (CDMOs) according to a number we spoke with at this year’s CPhI Worldwide in Barcelona.

US clients are 'lovin' it'​

“No one really knows what Brexit is or how it’s going to pan out,”​ Nikin Patel, president of Juniper Pharma Services told in-Pharmatechnologist.com. “But from our US clients’ standpoint, they are loving it, with the exchange rate the way it is.”​

This was echoed by Kevin Cook, the CEO of Sterling Pharma Solutions – a manufacturer created earlier this month through a manager buyout of Shasun Pharma Solutions with a historic API facility based in north-east England.

“The immediate feedback is our American customers like the exchange rate movement, so we suddenly become very competitive on a global basis,”​ he told us.

Around 85% of what his firm manufactures is exported to the US, Europe and Japanese markets, and while he said he is seeing a bonus from the Brexit decision, he added it is only one factor that can influence the pharma industry

“We try and do the right thing from a regulatory point of view whether safety or environmental and so whether we are in or out of Europe we will continue to do all the right things.”​

Symbiosis Pharmaceutical Services is also seeing a boost from the US on the back of the referendum, as customers look to the firm to support their trials through clinical scale sterile fill/finish.

However, business development director Joanne Anderson told us there could be some negative impact once the two-years of negotiations to leave the EU begin (according to the UK government​ by the end of March 2017).

“It will be interesting to see how the taxation and import/export duties are unravelled but I would hope that the Government’s priority will be to ensure business is continued and there are no blocks from a trade perspective in the manufacturing sector that really underpins UK growth.”​

Business as usual​

But for now, it’s business as usual for all three firms.

“We haven’t seen any companies holding back at all because our services are so niche, price is not usually the determining factor, it’s about capability,”​ said Anderson.

Patel added: “Until there is a bit more clarity as to where it’s all heading then people are just getting on with life. We haven’t had a single negative scenario over the projects that we currently have ongoing, and from a business point of view it has done no harm at all as we’re still seeing leads and enquiries.”​