In 2006, Fujifilm faced an existential crisis when people stopped buying camera film in favor of digital cameras. Almost overnight sales crumbled. The company made the decision to do a massive pivot to become a healthcare company. Other company’s like Kodak went bankrupt, but today Fujifilm is a contract development manufacturing organization to the life sciences industry and also sells medical equipment.
In this episode, Lars Petersen, president and CEO of Fulfilm Biotechnologies, discusses that pivot and the company’s capabilities today.
Here’s the video of our chat:
Here’s the audio:
And here’s an AI-generated transcript of the conversation.
Arundhati Parmar: Hello, and welcome to Met City’s Pivot Podcast. I’m your host, Arundhati Parmar I’m recovering from a cold, so please excuse my voice in this episode. Once in a while we give a slight nod to the name of this podcast, which was created during the Covid-19 pandemic when businesses were pivoting left and right.
Now, some of those pivots proved to be temporary, but today we are talking to an executive from a company where the pivot meant the difference between staying in business and shuttering. I’m referring to Fujifilm that faced an existential crisis back in 2000 when almost overnight people stopped buying camera film because they were switching to digital cameras.
So what did Fujifilm do? It did a massive pivot to become a healthcare company. Today, the company is a legitimate contract development manufacturing organization for the life sciences industry with customers like Regeneron and Johnson & Johnson. It also makes medical equipment. Our guest is Lars Peterson, president and Chief Executive Officer of Fujifilm Biotechnologies.
Arundhati Parmar: Hello and welcome, Lars, to the Med City Pivot Podcast.
Lars Petersen: Thank you so much for inviting me. I’m, uh, absolutely curious about the questions and, and, and where you wanna take this. So, so thank you so much for the invitation.
Arundhati Parmar: Absolutely. I mean, the name of the, uh, podcast Pivot should give you a clue given you sort of fit into that discussion.
Arundhati Parmar: So let’s actually start there. You know, I grew up in India, Fuji Film, you know, Kodak, all these were a large part of my life, um, you know, in the eighties and nineties. So tell me a little bit about when you decided that, okay, the film needs to be history and we need to evolve into something else.
Lars Petersen: Yeah. Thank you so much for that question and, and to your story. Right. I, I still get the. You can say emails and, and, and texts from people who meet the name Fujifilm in the rural is the places of the world. Right. ’cause Fujifilm is such a strong brand. It’s approaching Coca-Cola status in every country.
They would know the little film that was so important in Fujifilm’s history. Right,
Arundhati Parmar: right.
Lars Petersen: Which is a, a very, very strong thing for us to have a brand like, uh, like, like Fujifilm. So I would say the entire story for. For the, you can say the modernization or where Fujifilm is heading now, really start in the middle of the two thousands.
Basically, 2006 was a really. Pivot year because this year you can say after some years with a digital camera, suddenly people started changing rapidly into a digital camera. Mm-hmm. And at that point, it, uh, it hurt the film, the traditional film industry, quite significant. Mm-hmm. And, uh, and, and some companies, uh, went bankrupt, as you may know or may remember.
And it’s actually a pretty known business story that Fujifilm went into. You can say. Into a meeting room and say, Hey, how do we, how do we not see this happening again? We lost about, I think I hear the number, 60% of the revenue basically in one year. Wow. After just becoming number one. In, in making film in the entire world, right?
Arundhati Parmar: Mm-hmm.
Lars Petersen: And therefore, they, they sit down. They decided we need to diversify. We need to create a strategy that are much more long term. And this really gave birth to, you can say, the vision of Fuji Film becoming a healthcare company. Mm-hmm. That started that year in 2006.
Arundhati Parmar: So let’s break that down a little bit because there were other companies in the same, um, place or in the same boat that Fujifilm was, right? Like Agfa, like Kodak. Um, how would you compare. Uh, the way Fujifilm ha handled that pivot given like could act went bankrupt in 2012, if I’m not mistaken. So,
Lars Petersen: right.
Arundhati Parmar: Sort of compare and contrast sort of the different approaches. I know you, you probably not in those firms, but, um, just, just give us a flavor of what went right with Fujifilm compared to the others.
Lars Petersen: I’m, I’m sure that people who knows the story better than I, but what I’m told is simply you. You sit down and you say, we need to diversify. Fujifilm created a research center that allowed for quite some significant diversity of, of, of, uh, looking into new businesses and, and started, uh, a whole, uh, whole of new businesses where we ended up in 2011 starting A-C-D-M-O, uh, business, which is I’m part of. So there, so there is, there is a number of other businesses that makes us much more, you can say diversified as, as a company. Of course I’m not, I’m not really sure what other companies have done. But, but, but for Fujifilm to sit down and take it very seriously and say, we need to change. This is, this is very serious.
Uh, uh, worked, uh, absolutely. Well, and then that journey has, from, from then, just, just grown from there on. Right.
Arundhati Parmar: So help me understand a little bit. One, it’s one thing to say we need to become something else and it’s quite another to actually achieve it, and generally there is investment behind this. So can you talk about some of the investments that the company has made to sort of certify that pivot into being a healthcare company?
Lars Petersen: Yeah, of course. Uh, the, the investment part, uh, specific to the company that I’m leading, uh, which is the, uh, today called Fin Biotechnologies is, uh. CDMO arm, a contract manufacturing arm. In 2011, a decision was to start this company by acquiring two, uh, two facilities from, from actually a workshop and dome at the time and, and all the way up to 2019.
That was actually still considered a good investment, but not a significant growth investment. Mm-hmm. In 2009. Uh, decision was made to acquire, uh, a, a much bigger investment. So, uh, investing in, you can say more, uh, large scale manufacturing capabilities. Uh, and this is actually the way I came into the picture because I was part of that acquisition.
On the, I was part of being sold and or bought, if you will. Uh, because we, uh, we basically took the entire organization from, from, from the company we bought it from, which was, uh, the company Biogen. And that really started the launch into a much larger investment. And since then, uh, we actually continued that investment portfolio at a, at a rapid pace.
Arundhati Parmar: Mm-hmm.
Lars Petersen: And why could you do that, and why could that be successful? Because you are. You are in the manufacturing of medicine market, which is maybe one of the most stable growth engines you would have. Uh, not necessarily do you, do you just see somebody coming in and say, oh, uh, LAR, you don’t need, uh, medicine.
If you get sick, you can actually live without it. Maybe this is one of the most stable, uh, and, and, and forward looking industries that only are getting. More and more are diversified, more and more complicated. More and more, uh, you can say, uh, uh, bigger and bigger as an industry because generally we need more and more medicine.
We get older and older and more and more right? People have access to medicine. So, so we are not the only company. There has actually been other companies in the, in the history who has diversified into, into, uh, healthcare. Mm.
Arundhati Parmar: Mm-hmm. So you talked about your particular division as being a CDMO. Are there other parts of Fujifilm that do other healthcare related activities or is it largely this?
Lars Petersen: No, we have a pretty strong medical division who makes equipment for especially, uh, surgeries. Okay. So, utilizing that, there is a long history of Fuji film, of making cameras and making, uh, making materials. So, uh, for example, very strong presence in colonoscopy. Mm-hmm. In, in, in mi scanning in, in different other places where the very strong innovation engine of the company that has a history of, of making patents and innovation and just utilizing that platform into other industries because in, in many ways the technologies.
To make film, to make materials are needed for in many other industries. And the more we target them and the more we target them into, into, uh, life science and. And related, uh, industries, uh, the more we, we, you can say we grow the business to something we know has a long future, but we also are using similar technologies into semiconductor materials, you know, screens for iPhones as part of a technology invented by, by Fujifilm, uh, face recognition, uh, AI related, uh, Fujifilm invented the, uh, red eye recognition.
All the way back before we called technology ai, but it’s basically AI technology that, that was used for that. So of course now we try to, you can say, uh, use those, uh, those backgrounds, those DNAs, that innovation to grow. Uh, uh. Even the business that I’m leading the CDMO business into a new world. So we have a research center coming out of a Tokyo that, that supports and, and work with my team of how can we actually create new technologies that can help the business, can help patients in the end.
Lars Petersen: And
Arundhati Parmar: mm-hmm.
Lars Petersen: That’s, that’s a, that’s a very strong, uh, you know, you can say DNA to have in a company.
Arundhati Parmar: And can you talk a little bit about. The types of, um, therapeutic areas in which you operate. Are there, you know, are you more in vaccines? Are you more, more in cell and gene therapy? Can you just talk about some of the strengths in terms of therapeutic areas where you help to, you know, manufacture medicines?
Lars Petersen: Yeah, we, we have early on, uh. Sort of like limit the scope. Uh, not saying that we wouldn’t expand the scope over time, but to, to form modalities, which is, uh, which is, uh, biologics really mainly. Uh, monoclonal antibodies. Mm-hmm. Uh, so the biologics medicine that we all know is growing very fast and rapidly becoming the, uh, main driver of medicines for, for basically majority of diseases.
Uh, the microbial, uh, which is related. You could also express different molecules in different way by, by using microbial expresses. So that’s the second one. And then while gene therapy, which we also use for vaccines for example, uh mm-hmm. Which often are used and was used, uh, during COVID for, for, for different medicines.
Lars Petersen: And then cell therapy, which is maybe the newest modality you can say, where we all, we all know from very personalized, uh, medicine right. Or rare diseases, uh, that has a significant cure. Uh, but we did early on stay away from, you can say small molecule or what traditional we will call. Pills, uh, industry, which, which, uh, of course have a very significant presence for, for example, in India and, and, and other places.
But, but we have not focused on that part of, of the industry. Then you can talk about, there’s of course, a, a heavy evolution and, and. Development going on into new areas. Uh, and we try to be very focused on something that adjacent to what our partners they like and, and, and, and, and what they focus on. For example, biologics medicine are now diversifying into a combination of, for example, antibodies and, and and conjugation of ide. So, so we call them a DC. So this is an area that we begin to focus on. We’ve just, we’ve just, uh, uh, started a facility in Japan that actually will open next year, uh, for, for making clinical, uh. End to end for, for anti antidrug conjugates antibody drug conjugates. And then we also, we also of course, are watching what is coming.
Uh, maps are becoming bispecifics. They become TriSpecific, they become more complicated as long as we re relate them to these four modalities. I, I started by mentioning. Yeah. Uh, we are, we are following that very closely. Uh, yeah.
Arundhati Parmar: Makes sense.
Lars Petersen: That’s what we do.
Arundhati Parmar: And can you talk to me a little bit about who some of your customers are? I know Regeneron, I think last year was it that you, you know, established a 10 year sort of manufacturing relationship with them. Um, talk to me about the types of companies that come to you. Um,
Lars Petersen: Yeah, there’s not so much a limitation. It, it’s, it’s. Mostly all innovator companies.
Arundhati Parmar: Mm-hmm.
Lars Petersen: Who is not, if they are fully dedicated to, to small molecule, uh, they wouldn’t necessarily not talk to us, but they can be any, anything from, from a company that, that is a startup that has very, very few people that, uh, mm-hmm.
Need, uh, need support, uh, very early on to basically everything they have. Maybe they could come with a CRISPR platform, they could come with a DNA, uh, and say, Hey, we need a, we need support in every aspect of what we do. That’s from that end. To all the other end where you have the largest pharma companies in the world who, uh, either seek new, uh, uh, you can say innovation, inspiration, or new technologies, or they seek an extension of their own network or basically don’t have time to do what they do. So, uh, mm-hmm. So they of course, very often have a lot of the, uh, knowledge and, and the, and the manpower behind what we do. Mm-hmm. But very often it makes more sense for them to focus in other areas. So, so it’s all over the spectrum. And I would say today we maybe work with, uh, last time I counted 22, 23 of the top 30 pharma companies in the world.
And then, uh. I don’t know, 30, 40, 50, 60, uh, companies that are startup companies from all over the world. So there’s really no limitations. If they, if they sort of like make research and innovation within some of these, uh, platforms that I talked about,
Arundhati Parmar: right?
Lars Petersen: They would normally reach out to us once or later. Uh, that’s, that’s always been, uh, what, what we have seen.
Arundhati Parmar: So let me ask you this. You have larger competitors like Samsung Biologics, Lonza, biologics. How do you sort of distinguish yourself from these larger competitors and how would you catch up, um, to these companies?
Lars Petersen: Yeah, there’s a, I would say there’s a number of thing that differentiate us. We are, we are Fuji Field, so we are part of a Japanese company with a very, uh, you can say well-known quality. Um, mark a very, a very long history from always being there with, for customers. So we call ourself partners for life. And, uh, and when companies come to us, they can clearly see, we may not, uh, necessarily always be the fastest tomorrow, but we are the company you can rely on for the next 5, 10, 15, 20, 25 years. We will always be there for you.
Of course, there’s a lot of competition about having the right technology at the right time, and of course we are very focused on making sure we are, uh, if, if not better than anyone else, at least at par, but we are very focused on building a network that we in-house both design,construct and operate ourselves. So we differentiate ourselves by, we are building everything in-house. The, the, the, the best comparison you can make is maybe in the, the difference between PC companies and, and, and, uh, and Apple, for example, able develop and. Design everything on their own so everything fits.
Whereas, you know, if you, if you buy a PC and you try to connect it to, to other mechanics, it doesn’t always work. You need to do a couple of things to figure it out. Mm-hmm. But if you buy, if you buy a new iPhone, you know, it, it, it adds to your iPad immediately. Right. So that’s sort of mindset is what we, what we have, which, which is completely different from other companies who, who may build their own network, but they also buy companies from, uh, or buy sites from other companies. And then suddenly you have more of a diverse set of, uh, of sites that doesn’t necessarily talk to each other. Uh, for us, when you come in, clients know if they start on one side, it connects. People know the other side. Everything is the same quality system, the same computer systems, the same, you can say planning systems, et cetera.
So it’s all part of an integral system. You can call our Fuji film ecosystem that we have given the name code your X, and we clearly can see people now begin to say, oh, can you, can you code you X this into your Yes, you, we can code your X. So, so that’s a big differentiation. And lastly, I would say, uh, that, uh, the last differentiation is really that, uh, we are diversified all over the world in both in development, small scale and large scale. So we are not in one location. We are not in one scale. We basically can meet all scale. Meaning if, if companies start with us, they don’t have to go anywhere else. They can start with us and they can in with us. They, they don’t have to transfer to another company because now they need another scale or another location.
So that’s why we call ourselves partners for Life. You get into an ecosystem, you get into, into a comprehensive system.
Arundhati Parmar: Got it. Um, and then one last question. How are you in the CDMO world looking as looking at artificial intelligence? How is AI changing what you’ve done?
Lars Petersen: Yeah, so AI is of course a, a very interesting technology that we all are now.
Uh, being brought into it comes with a lot of technologies you put in. The, the way we look at it is we are putting in a co egg system that we know is comprehensive across our sites. Mm-hmm. And because of that, we are much more ready to enable that all these, uh, facilities. Can be applied to AI because AI will now help.
If we want to compare data from one side to another, we have the same foundation, the same design. That means that AI can much easier compare between the sites. Mm-hmm. So we basically are calling it, we are using code two X to enable AI for our, for our partners.
Arundhati Parmar: Any final thoughts you want people to take away?
Lars Petersen: I think, uh, maybe a final thoughts for, for people listening is, uh, there there’s no question that we are in an industry where transformation and, and, and. Bringing medicine to patients is in rapid change. Mm-hmm. So we are out there with the message. We don’t have to make medicines like we used to do, where every company think for themself and have to build their own supply chain.
You can actually go out and find partners like us who has thought about an ecosystem where most companies can use the same assets, the same platform, the same ecosystem. They can even be part of our ecosystem. That is what we believe is the. Best service we can give for patients instead of being isolated.
We look at this as a comprehensive ecosystem. That’s the maybe the most important message for me.
Arundhati Parmar: Wonderful. Thank you so much for your time, Lars.
Lars Petersen: Absolutely. Thank you to you too.