Chief Executive's Review


This year Consort Medical celebrated a number of 'firsts':

the first year Bespak revenues surpassed £100m; the approval and launch of our first auto-injector; the award of our first MHRA commercial drug handling licence; the first development contract award for an Innovation centre-developed product (NAS030); and the unveiling of the first liquid gas powered auto-injector (Syrina®) and the first dual product injector (Lila®).

Photograph inset:Jonathan Glenn


  • Bespak surpasses £100m revenue for the first time
  • Solid organic revenue growth of 5.2%, strong contribution from Chiesi NEXThaler®
  • Growth in adjusted basic EPS by 8.5% to 48.3p per share
  • Regulatory approval and launch of first auto-injector for Dr. Reddy's sumatriptan, a migraine therapy
  • Award of exclusive multi-year commercial supply contract for Bespak's DPI programme DEV610
  • Award of Bespak's first MHRA licence for commercial drug handling for Nicoventures nicotine inhaler (DEV200)
  • Unveiling of Syrina® and Vapoursoft®, delivering the first such liquid gas propelled auto-injector

Financial Performance1

Revenue increased by £5.0m (5.2%) to £100.0m (FY2013: £95.0m), with a strong contribution from growth in the sales of the Chiesi NEXThaler®. Operating profit before special items increased by 4.0% to £18.8m (FY2013: £18.1m), with operating margin at 18.8% (FY2013: 19.0%).

Profit before tax and special items increased by £1.6m (10.1%) to £17.5m (FY2013: £15.9m). Adjusted EPS increased by 8.5% to 48.3p per share (FY2013: 44.5p). Basic EPS increased by 25.1% to 47.4p per share (FY2013: 37.9p).

Cash generated from operations2 decreased by £5.8m to £19.2m (FY2013: £25.0m). EBITDA before special items was up £0.4m (2.0%) at £24.4m (FY2013: £24.0m). Working capital3 increased £4.0m to £24.1m (FY2013: £20.1m) which, after deducting the King Systems contingent consideration, represents 12.9% of sales (FY2013: 8.9%) due to lower capital expenditure creditors relating to the timing of major programme investments. Capital expenditure2 of £16.3m (FY2013: £6.9m) was higher than the previous year, as the business made significant investments in facilities and production capacity to fulfil its development pipeline contracts.

The Group balance sheet closed with a net cash position of £25.8m (FY2013: net cash £37.0m). With headroom of £73.3m under its undrawn banking facility, and a further £25.0m available under the accordion facility, the Group has significant cash resources available.

The Board is proposing an increased final dividend to 13.35p (FY2013: 12.71p), making a total dividend for the year of 20.7p (FY2013: 19.71p). Further commentary on the financial results is contained within the Financial Review.

Customers and Markets

Following the launch of the Chiesi DPI (dry powder inhaler) in March 2013, initially in Germany, the product has been subsequently launched further afield into Austria, Belgium, the Netherlands, Spain and Italy. The product is approved in 14 European countries. The product has been well received in six markets in which it has been launched to date, and further territory launches are anticipated in the near term. In April 2014 we agreed a volume extension to the NEXThaler® supply contract volumes, to facilitate further market penetration of the product.

In November 2013 Bespak was successful in securing the commercial supply contract for its development programme DEV610. This platform device programme will potentially provide material future revenues for Bespak, and further illustrates customer confidence in Bespak's development and industrialisation expertise. With the Chiesi NEXThaler® and now the DEV610 manufacturing contract, Bespak has a growing DPI business, further diversifying its respiratory franchise.

Our pressurised metered dose inhaler (pMDI) valves business continues to grow, with further new drug device formulations launched during the year, alongside significant pipeline programmes within our development portfolio – VAL310 and VAL020 in particular.

In February we celebrated the regulatory approval and launch of INJ300, our first auto-injector on the market. The customer is Dr. Reddy's Laboratories for injected sumatriptan – a migraine therapy. Securing regulatory approval and commercial launch of our first auto-injector is a major milestone for Consort Medical's injectables technology, confirms Bespak's capability in the auto-injector market, and is a significant step in the execution of our diversification strategy.

We were awarded a development contract in July 2013 for NAS030, a nasal device for a pharma company. This device is the first product to have been initiated from our Innovation centre for which a customer development programme has then been secured, and clearly demonstrates the potential of the Innovation team in delivering revenue growth and product diversification opportunities.

Chiesi NEXThaler®

In August 2013 we received our first commercial drug handling licence from the MHRA. This licence grants Bespak authority to assemble the drug into the finished device for DEV200 – our development programme for Nicoventures for the nicotine inhaler. This represents a further significant milestone for Bespak, and further execution of our strategy in harnessing an additional part of the value chain.

Service revenue has continued to grow, increasing 78.7% in the year, as our full development and innovation pipelines deliver development and industrialisation revenues. This continues to be an important feature of our activities, as customers partner with Bespak for its development and regulatory expertise prior to manufacturing supply.

In 2008, when we launched our strategy for sustainable growth, we targeted diversified revenue growth in three areas: our core respiratory franchise, other market segments such as injectables and nasal, and higher value-added business. Our progress in DPIs, auto-injectors, nasal and commercial drug handling represent robust strategic execution in all three areas.


Our business assembles more than 500 million complex devices per year, from more than 3.6 billion components, of which approximately 2.6 billion are manufactured at Bespak. These volumes are expected to grow as the range of new products pass through the development pipeline into volume manufacture. Bespak also has an exceptional quality record and to date has manufactured more than 1 billion HFA MDI valves and 600 million Diskus® devices to exacting standards.

Bespak has over 19,300 square metres of manufacturing space, including over 8,000 square metres of cleanroom space currently installed and operational at its King's Lynn facility. Following the award of commercial supply contracts for both DEV200 (Nicoventures) and DEV610, and the extension of the Chiesi NEXThaler® supply agreement, major facilities' expansion is underway at both the King's Lynn and Milton Keynes sites.

  • At King's Lynn the construction of the assembly facility of 4,200 sq M and cleanroom commissioning for DEV200 is nearing completion, and the installation of the manufacturing equipment is about to commence. The component moulding operations for DEV200 will be housed at the Milton Keynes site's 1,900 sq M; this has been refurbished, the cleanroom commissioned, and the equipping phase is well advanced.
  • For DEV610, a new 5,200 sq M facility will be constructed at King's Lynn to house both the assembly and moulding operations. Construction started in May 2014 and is expected to complete in approximately 12 months' time.
  • The extension of the Chiesi NEXThaler® supply contract requires the expansion of the currently allocated cleanroom capacity which houses the automated manufacturing lines. This will be accommodated by a reconfiguration and refit of current manufacturing facilities at King's Lynn.

Regulatory and Quality

Bespak operates in a highly regulated environment with demanding quality and reliability expectations and requirements. Our quality and regulatory expertise is a key factor in our successful business model.

Our regulatory audit performance demonstrates that we reliably meet regulatory expectations. On our commercial manufacturing we consistently achieve a maximum defect level of 3.4 parts per million – the internationally accepted six sigma level of excellence, and we often exceed this level of performance.

We have well established regulatory competence, a key offering in our business model. We have accreditation under ISO 9001 and, ISO 13485 for medical devices. We hold a licence to make clinical trials supplies, and in August 2013 we extended this competence with our first award of a licence which allows us to manufacture and supply fully completed pharmaceutical products at a commercial scale into the distribution network. This drug handling capability will enable us to produce finished product for Nicoventures as well as one of our nasal programmes currently in the development pipeline.


Our people are key to our current performance and will continue to be so as we seek to develop the business in the future. This year we have continued to develop our people and working environment on a number of fronts.

Growing our skills and management/leadership capabilities are core elements in delivering our planned growth. Training and development has continued in the year with the creation of a management development programme which will be delivered over the next 18 months. We have also expanded our apprenticeship programme, with the recruitment of four additional apprentices, and expect to add further recruits over the next year.

We seek our employees' input and views as to how we develop the Company in a number of ways on an ongoing basis. This year we conducted an Employee Survey, which was well supported with an 80% participation rate. We have identified important initiatives from the feedback which will generate improvements over the coming months.

As the business grows, the importance of strongly embedded and consistent values and behaviours grows as we seek to apply our successful business model in new and diversified products and services on a deeper and broader scale. This year we commissioned a cross functional team within the business to review and refine our Values. A communication and training programme has been launched to roll this out across all employees. The values are Customer Focus, Integrity, Respect, Team Work and Results Driven and will be the focus of how we manage the business.


Consort Medical has delivered solid revenue growth in FY2014, translating to margin and earnings expansion from volume and operating leverage, from our solid core business. This has been driven from both existing and new business streams, in line with our strategy. We have grown our development pipeline and launched new business from it during the year. We have developed and unveiled new products and concepts from our Innovation pipeline. Trading in the current year has started well, and is in line with our expectations.

The Board is confident of further future organic growth arising from existing business, from further conversion of development pipeline programmes and from new opportunities, including the conversion of our innovation pipeline to full development programmes with partners.

  1. Financial performance metrics relate to continuing operations unless stated otherwise.
  2. Cash flow performance metrics relate to continuing operations only and are before any cash paid relating to special items.
  3. Working capital is defined as the total of inventory, trade and other receivables and trade and other payables.

Development Portfolio

Development Portfolio:

Easifill Primeless Valve (VAL310)

  • Pressurised Metered Dose Inhaler Valve
  • Dose chamber is always open and fills simply by inverting the can
  • Traditional pMDIs need to be primed, wasting part/all of a dose
  • Patient compliance improvement as consistent dose every time
  • 10 years in development: undergoing stability trials with first customer

Product Development

We have a strong and diverse core business of products in volume manufacturing. In line with our strategy we have assembled a full and broad product development pipeline of organic growth opportunities, which will add to the strength of this core business going forwards. Successful conversion of these opportunities will provide progressive revenue and profit growth, in both contract manufacturing and products with our own proprietary IP and across a range of therapeutic areas including commercial drug handling.

Development Portfolio

Our published development portfolio provides an update on the key business development projects in the business. We guide that for inclusion in the published portfolio, projects must have a reasonable expectation of success — though timescales are difficult to predict — and be expected to produce peak annual sales of at least £3m per annum.

Within the current portfolio are two programmes which have the potential to be materially more significant in revenue terms if successful: the Nicoventures nicotine inhaler (DEV200) and the DEV610 DPI. These programmes are the object of significant investment currently, and have the potential to provide transformational organic growth beyond that normally expected of development projects.

In July 2013 we announced the award of a new development contract NAS030 for a novel patented nasal drug delivery device. This is the first development contract which has arisen out of an own-IP product innovation which originated in the Innovation Team in Cambridge — which was established just over three years ago.

In February 2014 we celebrated the regulatory approval and launch of Bespak's first auto-injector which confirms Bespak's capabilities in the injectables market.

The current status of the major programmes currently in our development pipeline is listed below:

The manufacturing line to support the assembly of the Atlas IOTM Cartridge (POC010) is complete, and pilot scale manufacture is underway to support the final device validation and regulatory clearance/CE marking phases of the project. The IOTM Cartridge will initially be available for diagnosis of chlamydia, though several other tests and combinations are already under development for the sub-30 minute IOTM System, both for Sexually Transmitted Infections (STIs) and Hospital Acquired Infections (HAIs).

VAL310 is undergoing regulatory approval and launch is now expected in H1 2015. On VAL020, stability trials have been extended by the customer and completion is now expected in H1 2015.

Development Portfolio:

Atlas Genetics io™ Cartridge (POC010)

  • Disposable cartridge for Atlas Genetics io™ System
  • Point of care diagnostic tests in under 30 minutes
  • Initially in Sexually Transmitted Diseases (STDs) and Hospital Acquired Infections (HAIs)
  • Polymerase Chain Reaction (PCR) technology
  • Manufacturing line completed in King's Lynn
  • Awaiting CE Mark approval H2 2014

Development and Industrialisation process

Bespak operates in every phase of a device's development life cycle, from early to late stage clinical trials, as well as post-launch where the business may become a second source of supply. Device suppliers who partner with customers whilst a product is in development invariably become the sole supplier at launch. Bespak's preference is for early involvement where it is possible to apply greatest influence on the product design, not just to assure functional robustness but also to make it suitable for high volume manufacture.

Whilst the overall approval timescales for drug delivery devices are long, the development lead times can be very aggressive in order to achieve clinical and launch deadlines. Bespak recognises that product development is an iterative process and it aspires to reduce the number of iterations required for a product, whilst progressing through each iteration as quickly as possible. In order to achieve this, the business has developed capabilities and competencies internally as well as having established a network of third party specialist suppliers. Internal capabilities include 3D CAD platforms (Unigraphics, ProE, SolidWorks, AutoCAD), mouldflow simulation, 3D printing (suitable for early stage functional evaluation), CT Scanning and an extensive laboratory capable of analytical and physical testing with both placebo and active ingredients. Bespak was an early investor in CT Scanning technology and it has proved pivotal in the diagnosis of discovery during product development. Rapid identification of root cause significantly reduces development iteration and reduces the associated lead times.

Bespak has a proven track record in developing both proprietary products and products owned by others. The Easifill primeless valve is a proprietary product currently pending FDA approval via a lead customer. This product was designed to meet an unmet need in the market. Development increased the breadth of the organisation's Intellectual Property portfolio whilst challenging and helping to evolve internal capabilities and competencies. Development progressed through pilot tooling and hand assembly with extensive laboratory product verification testing to determine iterative requirements to achieve robustness suitable for volume manufacture. The product is currently manufactured using multi-cavitation tooling and automated assembly with capacity in the millions. Variants of the Easifill valve are currently being sampled and evaluated by a range of other customers.

On the Nicoventures programme, Bespak's role is to support the 'Design Authority' not only to achieve the functional specification but to influence design such that the product is suitable for high volume manufacture. Bespak's experience of drug/device interaction is critical to analysis of the root cause and solution generation. The product leverages Bespak's check valve, metered dose inhaler valve technology and medical device product expertise making Bespak the ideal partner of choice.

In order to meet its customers' new product industrialisation needs, Bespak has evolved a framework which is tailored to meet the individual requirements of each programme. A programme manager navigates the journey from entry into the business, through product and process development, to handover into routine operations. The process is risk based and whilst stages exist in series, they are often run in parallel to compress lead times. All activities are undertaken in full compliance with applicable guidelines and regulations.


Of particular note is the commercial unveiling of the Syrina® and Vapoursoft® technologies at the PDA exhibition in Basel.


Lila Logo 2014

Lila Duo ®

Lila Duo 2014 2
  • Lila Duo allows separation and sequential delivery of two or more drugs stored in a single standard primary pack
  • This can be used to deliver multiple vaccines, local anaesthetics, antidote delivery or two separate products insufficiently stable when mixed together

Innovation Pipeline

In July 2013, Bespak was awarded a development contract for a customer programme NAS030. This was particularly significant as this was the first programme to be awarded based on a patent protected device functionality developed entirely by the Innovation Centre in Cambridge. The programme is for a nasal device for an undisclosed drug and pharma customer.

In addition to NAS030, the Innovation team has continued to be highly active on a number of fronts over the past year. The team has now grown to 16 (9 at 30 June 2013), and is in the process of moving into its own facilities which will contain a laboratory and pilot scale manufacturing capability.

Of particular note is the commercial unveiling of the Syrina® and Vapoursoft® technologies at the PDA exhibition in Basel in November 2013. These exciting and breakthrough technologies leverage Bespak's expertise and IP in gas propulsion, and from auto-injector Intellectual Property (IP), and combine them in a family of highly innovative next-generation auto-injectors. The IP for this platform of products has been filed, and product demonstrations have been enthusiastically received by potential customers.

The Innovation team also unveiled the Lila® pre-filled syringe which incorporates a novel valve technology configurable as either a stopper or a drug separation option.

The team is in discussions on a number of early stage opportunities, including potential customer applications for Syrina® and Lila®.

Illustration above:
Innovation Pipeline

Innovation Process

We have developed a range of "service" offerings and business models that are focused on meeting the needs of the market. This has involved building a team, drawn from a variety of backgrounds, and providing appropriate facilities in Cambridge.

With a larger team now in place we are making good progress in identifying unmet or unsatisfied market needs and generating viable concepts that meet the expectations of all parties involved with a drug device, including the patient, clinician and our Life Sciences partner. We are also looking at aspects of the supply chain and the drug as opportunities to innovate. Through this effort, we have a full pipeline of development projects from simple functional elements through to full product developments and clearly identified opportunities that exist for both our "opportunity discovery" and "Innovation on Demand" offerings.


Bespak's innovative range of injection devices

  • Range of innovative injection devices that utilise Bespak's proven valve technology
  • A truly versatile platform technology – ranging from simple assisted syringes to fully functioning auto-injectors
  • Complete flexibility – the same physical device is easily configured to handle different viscosities, formulations, needle gauges, drugs and delivery volumes
  • The range offers a real solution for large volumes and viscous drugs, including biologics

The innovation process starts by investigating potential opportunities and using our four stage-gate process, and results in robust concepts that we know meet unsatisfied need and equally importantly will be reproducible in high volume manufacture. The primary objective of the process is to minimise the overall risk (commercial, user, pharmaceutical and technical) through early targeted mitigation activities, thereby maximising the chances of success once the product is in the market.

We do not offer a one size fits all process; we listen to our clients and have taken the approach of creating a series of proven functional building blocks rather than developing a fixed device that solves a given specific problem. This approach provides the flexibility to meet the needs of our clients in two ways: opportunity discovery and Innovation on Demand.

Opportunity discovery allows us to build device solutions that will satisfy the needs of our clients and identify new needs as well as those that are not met in the current market. For instance there is a trend towards larger volume delivery of more viscous drugs. In response to this we have developed drug delivery techniques that enable these challenges to be overcome. This delivery technology combined with our other functional building blocks has enabled us to develop a range of five injection devices from a simple assisted injector — the Syrina® Micro, through to the sophisticated Syrina® AI which inserts the needle, delivers the drug, waits a short period of time to allow the drug to disperse before retracting and informs the patient that the process is complete and that the needle is safely shielded. Our Vapoursoft® gas propulsion system powers the injector with soft steady pressure, replacing the use of springs and overcoming the shortcomings of spring-powered injection in patient outcomes — such as physical impact, acute pain from rate of injection, and glass breakage. The next step is to work with our partners to embody this into a fully functional device that meets the needs of a specific patient group.

Innovation on Demand is showing its value as a service offering. We can use our increasing range of basic building blocks to solve the very specific challenges encountered by the client. This requires working closely with our clients and discussing those "difficult-to-solve" challenges. As an example, a client has a drug that consists of two viscous, liquid components that need mixing moments before injection but must be kept separate prior to this. The aim was to find a single device solution that was both easy to use and convenient for the clinician and patient alike. Armed with this brief and within four weeks of discussing the problem, the Innovation team was able to produce a working demonstrator of a potential device. This was a combination of proven functional elements and novel elements, and satisfied the basic requirements of our client. We are now working with the client to produce a more robust demonstrator.

Jonathan Glenn
Chief Executive