ChemCon's 25th company anniversary - from Start-up to pharmaceutical and chemical Service Provider
The Freiburg-based company ChemCon, contract developer and contract manufacturer of active pharmaceutical ingredients and fine chemicals, is celebrating its 25th business anniversary. Its founder and CEO Dr. Raphael Vogler reviews the company's history and talks about important milestones.
As a young chemist you had the idea of starting your own business. How did that happen?
It all started when I was working on my diploma thesis in 1994. I produced amino acid derivatives from which small peptides were synthesized. The aim of this work was the production of zinc peptide complexes. These are metal-containing molecules that should ultimately mimic natural biomolecules found in living nature. You could have bought some of the amino acid derivatives that we produced ourselves as starting blocks. At that time I made 20 grams of a certain substance. Out of sheer curiosity I had looked up what a relevant chemical catalog indicated as a price: 1 gram was supposed to cost 400 Deutschmarks at that time. I showed the flask with the colorless powder to my fellow student and lab neighbor at the time, Peter Gockel, and said: look, there are 8,000 Deutschmarks in there! That gave me the idea of starting a company. In the beginning this idea was rather a naïve thought, I was still a student at the time, but we could not let it go.
On January 29, 1997 we finally decided to sign a contract to found the company in my student’s apartment. The first company headquarter was in the rented basement rooms of an apartment building where Peter Gockel lived. In the beginning we had the idea that we would offer chemical consulting – with the name ChemCon for “Chemistry with Consulting”. Because we didn't have our own laboratory back then, of course.
How has the business idea changed?
We turned from a consulting company into a production company relatively quickly. The first project, which was carried out at the university, resulted from a cooperation between Prof. Dr. Vahrenkamp's department and a US company. The subject was the expansion of a synthesis from a few hundred grams of substance to several kilograms. In addition, the regulations of the pharmaceutical world had to be introduced, the so-called guidelines for good manufacturing practice (GMP) for medicinal products for human use. Around the same time, the city of Freiburg founded the Biotech Park. We rented rooms there and built our first clean room for around one million DM. On July 6, 1998, the first synthesis was carried out in the clean room. The US entrepreneur had employees flown in for this purpose. With them, Peter Gockel and I actually made about ten kilograms of the compound in a processing time of several weeks. Those were the successes of the early days.
How did you finance the clean room?
In addition to the support from our local banks in Freiburg, there was also support from the Bürgschaftsbank Baden-Württemberg and the Mittelständische Beteiligungsgesellschaft (MBG) for financing. We received the funding because the state of Baden-Württemberg supported people who wanted to set up a company, and it still does today. The written promise of the US entrepreneur - that he would commission us with the synthesis and what great potential the project had - persuaded our first local bank to grant us the loan.
What do you offer your customers? What are the strengths of your company today?
The business model includes custom synthesis and our own products, which we market. The active ingredients that we manufacture are used in areas such as emergency medicine, cancer therapy, substances for conducting clinical studies, i.e. substances that are still being tested. Active ingredients for the treatment of rare diseases are also of interest to us, since our focus is generally on the production of comparatively small quantities. ChemCon focuses on niche projects. Customers in the pharmaceutical and biotechnology industries are looking for manufacturers of small quantities of highly effective special active ingredients. These are amounts of less than 100 grams up to several 100 kilograms per year, no more.
The custom synthesis of the drug active ingredients in GMP quality, sometimes novel or generic active ingredients, represents the main part of the projects at ChemCon. One focus is on inorganic salts and complexes, another on organic molecules and one on the production of synthetic polymers for pharmaceutical applications. Another major part of the projects has to do with the products that ChemCon markets. These include trace element salts, methylene blue, fenoldopam, arsenic oxide and many more. ChemCon also offers chemical analyses. Our offers are not only about production, but also about documentation and communication. Our aim is to be the best custom synthesis company in the world.
When you review the last 25 years as CEO, what are the most important milestones?
After the foundation and the first order, ChemCon hired its first employees between 1998 and 2001. I visited the first international pharmaceutical fair in 1999 in Seattle, USA. Another important milestone was the inspection by the US Food and Drug Administration (FDA) in 2000. ChemCon passed this first inspection on the subject of GMP pharmaceutical quality by the FDA health authority without any objections. The inspection is considered one of the most demanding audits in the world. After that, the company was inspected several more times by the FDA as well as by the regional council of Tübingen, which is responsible for this inspection in Germany. In 2003, ChemCon received approval to operate its own S2 microbiology laboratory. In 2004, ChemCon received an award from the state of Baden-Württemberg as the “best start-up” in the state. In 2010 the decision was made to market our own products. The milestones also include the massive expansion in the area of research and development. More laboratories and clean rooms have been created in which the active pharmaceutical ingredients and fine chemicals are synthesized. We are currently planning a further expansion of the company.
What were the big challenges?
In the early 2000s there was a bit of a collapse in the biotech boom in Europe. In 2008, there was the economic crisis and in 2020 the Covid crisis began. As an entrepreneur you have to make sure that the company remains on the side of success despite these setbacks. One of the many challenges is always finding enough exciting projects with customers. Another challenge is finding and inspiring good employees.
The company has grown steadily, right?
That was hard work. Whether you are a musician, a marathon runner or a business founder, everyone needs to push their cause with their full energy. Only then do they have a chance.
What are your goals?
I would like to apply my scientific knowledge in the medical field. I care about the patient. I think it is nice that my knowledge of chemistry flows into a company that brings active pharmaceutical ingredients onto the market. I am a scientist at the heart of my soul. My interest in science began when I was about 15. Incidentally, one of the first books I read in this area was “In the Beginning there was Hydrogen” by Hoimar von Ditfurth.
What future prospects does ChemCon have?
I believe that the chemical-synthetic active ingredients that we produce, in addition to those of pure biotechnology, are the backbone of modern medicine. I'm convinced that the company still has great potential in many directions, be it new customers, new projects, new markets or new business models.
You founded ChemCon together with Dr. Raphael Vogler (CEO) on January 29, 1997 with a partner contract. How did that happen?
Raphael Vogler and I got to know each other while I was doing my PhD at the Albert-Ludwigs-University of Freiburg. We both wanted to start our own business after studying chemistry. During our scientific work, we met time and again for two or three years and discussed this topic. Finally, we put our ideas into actions. We started with a consulting start-up. Hence the name ChemCon - "Chem" for chemistry and "Con" for consulting. However, we quickly realized that we needed our own laboratory for our elaborations. In addition, a cooperation with an American company emerged. This was the initial spark for the idea of using the project as an impetus for their own production. We then set up our own production laboratory as the foundation for ChemCon.
How has the company developed over the past 25 years?
We started with a two men company – Raphael Vogler and I. Now we have almost 130 employees. In terms of employees, we have developed very well. It has always been our declared goal to have a healthy company and to offer jobs - but not growth at any price. I am very satisfied with the number of employees. The development of technical nature is fantastic. The path from the first three-necked glass flask to today's professional equipment was a long and very interesting one. Today we have a large number of devices, machines and systems. With our equipment, we play an important role in the global business of drug synthesis. In the beginning, Raphael Vogler and I did everything ourselves – standing in the lab and synthesizing ourselves. We only had our first employees a year and a half after the company was founded. Our company has also expanded spatially. We have expanded to 6000 m2 from an initial 240 m2 area. A lot has happened there, although we are currently limited by the building in the Freiburg Innovation Park North. Further investments regarding the spatial expansion of ChemCon are planned. We need space – storage space above all. We definitely need to expand there. The company has been around for 25 years. It makes good sales and has already created many innovative jobs. One can only be satisfied. Starting a company is one thing. Getting the whole thing to grow and then maintaining constant growth or offering stable jobs is a completely different matter.
What does ChemCon specialize in?
We manufacture active pharmaceutical ingredients (APIs) and specialty chemicals in rather small quantities. Small projects are often not interesting for large-scale chemical firms because of their large plants. Not many companies manufacture small quantities under GMP, the so-called Good Manufacturing Practice (GMP) guidelines for medicinal products for human use. We started with bio-inorganic substances - organic substances with metals. That was the focus of Raphael Vogler and me at the university. Inorganics and bio-inorganics are still the focus of the company. We have been specializing more and more lately. We are also discovering other interesting niches – pharmaceutically usable polymers, for example – which I also find exciting, from a chemist's point of view. Special niches are also of great commercial interest to us.
ChemCon invests in cleanrooms and laboratories, right.
Exactly! Cleanrooms are essential for the production of active pharmaceutical ingredients (APIs). The first cleanroom was the first big investment for ChemCon - with a bank financing. Today we have four cleanrooms where our production is carried out. Of course, the quality control (QC) department also expanded. Quality is a central topic in ChemCon's business model. In addition, we have established a microbiology laboratory. Very few companies have their own microbiological department. Further investments for the implementation of exciting projects are planned.
What does the equipment include?
We started with 6-liter glass flasks in a cleanroom. Hence the ChemCon logo - a 6-liter flask through which a beam of light passes, which is intended to indicate constant quality monitoring. The first important devices next to the production devices were analysis devices - a melting point determination device, for example. Then more equipment was added, everything you need as laboratory equipment, e.g. rotary evaporators, the infrared spectrometer (IR). HPLC devices, gas chromatographs (GC), polarimeters and UV-VIS spectrometers followed. In 2000 the NMR spectrometer, one of the most expensive analysis devices. We then invested in other high-quality analysis devices such as ICP-OES and ICP-MS devices - for element detection via inductively coupled plasma. Today we are so well equipped that we offer analytics for active pharmaceutical ingredients as a service triggered by production projects.
What is ChemCon doing in terms of environmental protection?
ChemCon received approval for its systems in accordance with the Federal Immission Control Act (BImSchG). The Federal Immission Control Act serves to keep the air, water and soil clean. The aim is to limit immissions – emissions to the outside, emissions to the inside. All manufacturers of active pharmaceutical ingredients are automatically subject to the Federal Immission Control Act, which regulates the emission levels. This also regulates occupational safety, occupational safety measures and employee health protection. The regional council of Freiburg controls and ispects our production facilities regularly, including through emission measurements by a technical monitoring agency. In order to be able to comply with the strict limit values, gas scrubbers are used to eliminate the pollutants from the exhaust air.
The inspections referred to above take place every two years. The Federal Immission Control Act is a good thing because it serves to protect the environment and work safety. The regional council makes sure that you work sensibly and carefully.
Sustainability is an important goal for ChemCon. The small amounts that we use are advantageous for our sustainability efforts. Of course, small amounts also generate smaller amounts of waste. Recycling processes, such as those used in large-scale chemistry, should also be used by us if it makes ecological sense.
Looking back over the years, what are the milestones at ChemCon?
The foundation and the cleanroom inauguration in July 1998 were definitely two of the biggest milestones. Then the first inspection by the American Food and Drug Administration (FDA) in 2000. ChemCon then continued to develop: more employees, more customers, larger premises, extensions, the BImschG approval, the inspections by the regional council.
You are the Chief Scientific Officer (CSO) of the company ChemCon. What are your responsibilities?
In the beginning, my job was to take care of the chemical issues of the projects. To develop new chemical syntheses and the practical implementation for the synthesis of the desired products. Now I am an attorney. My tasks now also include technology and process engineering. This relates to the technical implementation of production processes worked out in the laboratory. Regarding the ChemCon strategy, I exchange ideas with Raphael Vogler.
Then I take care of compliance with the BImschG. I am also responsible for necessary building applications and approval procedures. The organization of waste disposal and building services are also part of my area of responsibility.
In 2003, ChemCon founded its first US subsidiary, which you look after ...
Raphael Vogler and I own the US branch. In order to sell active pharmaceutical ingredients in the United States, we need approval from the US Food and Drug Administration. For this approval, we must have either our own branch or an agent. With the branch, we can register our own Drug Master Files (DMFs). An FDA-approved Drug Master File is a prerequisite for a license to sell in the United States. Everything is included in a DMF, from the manufacturing to the specifications of the drug substance. FDA checks that and gives the so-called FDA approval if all requirements are fulfilled. Only then can you sell it in the USA. I'm involved in the approval process because I'm still the contact person responsible for the FDA.