Strategy

Cosmo’s business goal is to become or be part, directly or indirectly, of a fully integrated specialty pharmaceutical company, recognized for its excellence in treating selected Gastrointestinal Disorders.

The blend of our knowledge of the colon and the unique characteristics of the MMX® technology gives us a strong competitive edge in developing new applications for the colon without having to resort to the expensive and risky pure research process for new chemical entities. The Company’s strategy has evolved accordingly. Cosmo now has a separate product portfolio strategy, a distribution strategy and a manufacturing strategy.

Product portfolio strategy

Cosmo’s product portfolio strategy is focused on diseases of the colon, primarily on Inflammatory Bowel Diseases (IBD). To date, the majority of gastroenterologists treating IBD have followed a step-up strategy, first prescribing 5-ASA-based drugs to their patients, then moving on to corticosteroids, then on to immunosuppressants and finally to biologic products. So after developing the 5-ASA product, the Company set about to identify corticosteroids, immunosuppressants and biologics whose efficacy or safety profile could be improved by the MMX® technology. This led to the Company's pipeline: Cosmo now has products on the market or in development for patients of all levels of severity, as shown on the image below.

Distribution strategy

Cosmo's products are generally prescribed by gastroenterologists and selected general practitioners. This makes a targeted marketing by a relatively small sales force possible. After carefully considering the option of establishing its own sales force in the USA, the Company, however, decided to license its two next products scheduled to come to the market in the USA to Santarus and to get a 10% stake in Santarus. This stake may increase, at the Company's option, when next milestone payments become due.

Manufacturing strategy

The experience gained by years of manufacturing was the basis for the establishment of the MMX® technology. It allows the delivery of active pharmaceutical ingredients into the lumen of the colon through tablets in a delayed and controlled extent with the effect that the drugs can be applied to the full length of the colon. Cosmo wants to retain and continuously expand this expertise and strives to manufacture as much of its own products as possible. The Company is increasingly moving its production capacity to products of higher complexity for which it can retain a greater part of the value added. Classical low-volatility contract drug manufacturing is the least profitable segment, the manufacturing of generics, where the Company provides services that go beyond the sole manufacturing, are considerably more lucrative and the highest profits can be achieved in the manufacturing of its own products. It is the Company’s strategy to identify opportunities within each segment, thus not only increasing manufacturing profitability but also continuously expanding its excellence in manufacturing.