Manufacturing Capabilites

Following the transactions with AstraZeneca AB and AstraZeneca UK ("AstraZeneca") and GlaxoSmithKline Plc ("GSK") which resulted in the acquisition of our Anaesthetics portfolio, we have transitioned supply from their manufacturing sites into our supply chain network, providing us with a strategic opportunity to pursue synergies. Significant capital projects are in progress at the Port Elizabeth, Notre Dame de Bondeville and Bad Oldesloe sites in order to transfer the manufacture from AstraZeneca, GSK and some external supply contract manufacturing sites. First commercial production of these products at the Port Elizabeth facility is scheduled for September 2020, with production being initiated at the Bad Oldesloe and Notre Dame de Bondeville sites in the 2021 and 2022 financial years, respectively. Full commercial benefit from this strategic investment of R4,6 billion (at project budgeted exchange rates) in total is expected in the 2024 financial year.

Oral solid dose manufacturing
We remain focused on increasing the complex manufacturing capability at the Port Elizabeth site. The Bad Oldesloe site's ability to provide specialised and flexible manufacturing and packing capabilities, as well as its favourable location within Europe, bolsters our ability to deliver competitive and bespoke manufacturing solutions. Capacity expansion and continuous improvement projects in respect of these sites are progressing well and delays due to the COVID-19 pandemic are in the process of being recovered, with key projects being:

Port Elizabeth, South Africa

• Completed the qualification activities and validation batches for the production of Purinethol. Commercial production commenced in the first quarter of FY2020;
• Continued the projects to implement a Manufacturing Execution System and a Laboratory Information System aimed at achieving additional operational efficiencies;
• An organisational redesign was initiated to improve efficiency;
• Increased focus on initiatives to enhance competence at all levels across the site to ensure sustainable performance in the long term;
• Introduced serialisation capability across the facilities to ensure compliance with the various serialisation requirements globally; and
• Introduced projects aimed at self-sufficiency in terms of water and electricity supply.

Bad Oldesloe, Germany

• Introduced aggregation capability to ensure compliance with selected markets;
• Successful first supply after site-to-site transfer of Eltroxin for Canadian market; and
• Significant increase of packaging capacity and efficiency for Eltroxin products to meet increasing market demands.

Semi solid and liquid dose manufacturing

Bad Oldesloe, Germany

The extension of the manufacturing and packing lines to accommodate the transfer of anaesthetic liquids, creams and ointments is in progress. The installation and qualification of the following equipment has been completed:

• A new mixing vessel enhancing efficiency and improving controls;
• An autoclave for terminal sterilisation of anaesthetic products;
• A new filling line enhancing efficiency and improving controls;
• Successful validation of manufacture of the first anaesthetic liquid; and
• Secondary packaging and successful first supply after site-to-site transfer of Xylocaine Spray.

The installation of a second Blow Fill Seal line, which will significantly increase the production capacity by an additional 120 million sterile single dose poly ampoules per annum, has been approved and is currently underway.

Sterile manufacturing
Our facilities at the Port Elizabeth and Notre Dame de Bondeville sites provide us with extensive sterile manufacturing capability. Capacity expansion plans in respect of these sites have progressed well in the past year:

Port Elizabeth, South Africa

• Commenced activities to introduce anaesthetics production, a significant step in the evolution of this site. Phases 1 and 2 of the new infrastructure build component is complete and equipment is in the process of being installed and commissioned. Phase 3 is expected to be complete by February 2021. Equipment already installed is undergoing site acceptance testing. The first commercial batches are planned for registration during FY2021. The introduction of these new products is expected to see the export volume for the total South African Operations business move from 20% to over 50% with more than 700 additional stock keeping units ("SKUs") being added to the existing portfolio over the ramp up phase of some four years.

Notre Dame de Bondeville, France

• Completed the infrastructure build phase of the new suite to manufacture anaesthetic dosage forms comprising polybags and poly ampoules;
• Continued the installation and qualification of another high-speed prefilled syringe filling line with commercialisation expected by the end of CY2020; and
• Initiated a project for the installation of a new automatic visual inspection line for prefilled syringes. Qualification and validation is planned to commence in FY2020 with commercialisation expected by the end of FY2021.

API manufacturing
Our API network comprises seven owned facilities, three located in the Netherlands (two in Oss and one in Boxtel), one in the USA (Sioux City), two in France (Notre Dame de Bondeville) and one in South Africa (Cape Town). In addition, we have two API manufacturing blocks situated at Laurus in India. These sites provide Aspen with specialised API capabilities in respect of both our own as well as third party commercial opportunities. The combination of the Oss and Sioux City sites with the Notre Dame de Bondeville site and Port Elizabeth steriles facility provides a fully integrated biochemical supply chain to support some of our Thrombosis portfolio of products. Initiatives to enhance our capacity and improve sustainability at the API sites have continued to receive focus as follows:

Oss, the Netherlands

• The De Geer site completed the qualification of isolators in the powder handling unit to enable the site to handle high potency APIs;
• Consolidation, redesign and automation of the laboratories which included the closure of the historical Correllistraat laboratories and the integration of all the laboratories into the Moleneind site (including Polymerase chain reaction for Biochem testing and upgraded laboratories to support the chemical unit) and a further investment in laboratory automation/LIMS software;
• The Moleneind site completed the validation of a new solvent recovery unit. This unit will contribute to a reduction in waste and will support the site's circular economy objectives by increasing the reuse of solvents;
• A water circulation unit was installed to improve the site's firefighting capability in line with the site's safety commitments; and
• An active footprint reduction programme aimed at concentrating activities in core buildings is being implemented at the different sites in the Netherlands as part of the transformation plan.

Notre Dame de Bondeville, France

• The new certoparin facility obtained regulatory approval from Bfarm and will commence commercial manufacture in the 2021 financial year.

FCC Cape Town, South Africa

• Commenced full scale commercial manufacture of API in the newly validated high containment/high efficiency production block C2, in support of backward integration projects;
• Final validation of the recently installed high containment milling and micronising process centre;
• Concluded the development and optimisation of an anaesthetic API, which will also support backward integration into the Aspen portfolio of products;
• Concluded phase 1 of product development for strategic backward integration of oncology products;
• Commissioned and validated a water treatment plant for the use of alternate underground water supply during times of drought/constrained local municipal supply;
• Concluded the design and placed orders for a new Hazardous Aqueous waste treatment plant and solvent recovery unit, both of which will be installed and commissioned in 2021 and result in significant long-term cost savings; and
• Continue to upgrade and expand fire prevention and control systems in line with regulatory requirements.

External supply manufacturing network
Our FDF manufacturing network also comprises supply from numerous contract-manufacturing organisations situated globally, several of which are located in Europe. A number of the products manufactured in the external network have been earmarked for transfer to our own manufacturing sites over the next five years. This move will enhance ongoing supply sustainability. We have an internal team of supply chain and quality experts who ensure that all the requisite controls are in place to facilitate supply, on time and in full, and in compliance with our required quality standards.

Reliable supply of quality products
We have commenced a strategic transformational project to create a modern, agile and integrated end-to-end supply chain. The improvement in the links between commercial forecasting and manufacturing, coupled with improved visibility and shared accountability for end-to-end supply chain performance will result in the overall improvement of delivery of quality medicines to patients that need them. This robust process, which will be underpinned by new technology and data tools, improves delivery to patients, reduces service costs, and reduces the risk of stock outs and inventory write-offs.

In response to the global demand for essential medicines during COVID-19 and to manage the various supply and logistics challenges arising, we immediately established a supply chain task force to coordinate our response to ensure the continued supply of products where they were needed most. This included engaging with our many suppliers, contract manufacturers and distribution partners.

Cost containment and increased efficiencies
We have a strong focus on continuous improvement initiatives and savings plans to enhance production efficiencies and optimise economies of scale across the Group. Comprehensive, detailed, multi-year savings plans, covering all aspects of the operations, are progressing to plan and the improvements to the South African operations, Oss and Notre Dame de Bondeville sites are poised to deliver important future cost savings to the Group.

The cost-reduction initiatives fall into two distinct categories namely procurement and organisational design. The savings plans have a phased implementation and should be complete by the end of FY2021.

The progress made in achieving these plans across the Group Operations is monitored on a regular basis. By owning our strategically important manufacturing capital, we are able to better manage our product quality, production efficiencies and cost competitiveness to ensure responsive management of the supply chain. This, in turn, supports the maintenance of Group margins.

Additional information available online:

• Aspen Sustainability Data Supplement
• Aspen Code of Conduct