Ricardo Spíndola
CEO and Founder
Farmapiel
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View from the Top

Capital Cooperation Is Key to Expansion

Wed, 09/07/2016 - 11:49

Q: What are the latest trends in the dermatological segment and how does Farmapiel capitalize on them?

A: Mexico has an aging population, more effective medicines to treat chronic diseases and a population that wants to look young and healthy. Beauty is becoming a relevant topic and today we see people in their 60s or 70s looking like 50-year-olds thanks to the growing trends in esthetic medicine, such as plastic surgery and corrective medicine. People are interested in taking care of their skin, which is driving the growth of skin protection products and raw ingredients, such as emollients, vitamins, clarifying agents for spots and active compounds for conditions like acne. Ten years ago, it was uncommon for adolescents or the general population to attribute much importance to acne whereas today treatment is a priority. Moreover, there are many patients living with cancer who require more skincare products to counteract the side effects of chemotherapy and conditions like diabetes serve as another driver for specialized skin products. We are focusing on product development to create differentiated products through specialized technology to capitalize on these trends. New formulations are developed within the company, and we have a laboratory in San Juan del Rio where we carry out this activity. We are constantly seeking new ingredients and materials that provide differentiation not only for our own production but also for third-party manufacturing where we offer high-quality raw materials.

Q: Last year, you invested in the manufacturing site in San Juan del Rio in an attempt to reach new markets like the US and Latin America. To what capacity is the plant operating?

A: We received COFEPRIS’ approval last July to manufacture semi-solids, oral solids and liquids including dermatological liquids, creams, ointments and gels. In addition, we obtained a Good Manufacturing Practices (GMP) certificate and we are already carrying out third-party manufacturing. Farmapiel is about to obtain registration for semi-solid products and we are starting to manufacture dermocosmetics in the plant

We received funding from EMX Capital for the overall project including the expansion of our operations and establishing the manufacturing site and so far the results of this venture have been positive. We have been able to take some opportunities that would otherwise have been out of reach such as product acquisition, technologies, the manufacturing plant, brands, trademarks, product registrations and company investment. Last year we launched 18 products and this year we will launch 13 more. We expect to maintain this aggressive strategy to continue growing mainly in the prescription market. Some of the new products were in the market before and we will relaunch them. Others are new formulas we released in the US and Europe and we are now bringing to Mexico.

Exports certainly take time but we are moving ahead and the regulatory process requires patience. When looking at Latin America, Mexico is one of the biggest established productive markets and is also economically and socially stable, which is not the case for other major countries in the region. This represents a competitive advantage for Mexico so it is just a matter of seizing the opportunity. Our plant in San Juan del Rio has the installed capacity and expertise to participate in other markets. At the moment we have not explored options such as support from ProMéxico because we are still focusing on consolidating the business in the country but we are aiming to grow into other markets this year.

Q: To what extent will funding from EMX Capital pave the way for other companies looking for this kind of opportunities in Mexico?

A: I truly believe this is setting a precedent for companies willing to raise funding. This is a matter of learning how to work together. We are experts in launching products and acquiring technology while the capital was provided by EMX Capital along with their knowledge on corporate governance and their business and banking contacts at the international level. It is important for us to always see the big picture and realize that increasing our capabilities with the support of someone else enables us to expand more easily together. This is a promising path to follow not only for dermatological and pharmaceutical companies, but EMX Capital covers many other industries. EMX Capital stands out due to its corporate governance, formal organizational structure and relationship with capital markets.