Following the divestment of our former Speciality Ingredients business, Lonza is now a dedicated partner to the healthcare industry, with a clear purpose of enabling a healthier world. Across our four divisions (Biologics, Small Molecules, Cell & Gene, and Capsule & Heath Ingredients), we offer a unique breadth of services that deliver on our Group vision to bring any therapy to life. Underpinning this purpose and vision, we have developed five strategic priorities, each of which is explored in this section.
Alongside this clarity on our strategic priorities, we have also remained responsive to the evolutions in our operating environment. We have continued to anticipate the challenges arising from the COVID-19 pandemic, while monitoring the competitive landscape and the markets in which our divisions operate. We will work to maintain this dual focus of delivering against our strategic framework while remaining agile to our industry context. This will ensure we remain strongly positioned to deliver in the long-term for both our customer and investor communities.
Having consolidated our focus on the healthcare industry, we are already working to create a culture of continuous improvement by supporting our global site network to design and execute a Lean approach to operations. Through the elimination of waste and a focus on improved efficiency, we will be able to improve our service to our customers while delivering benefits back to the business. In 2021, we have laid the groundwork for our future focus on operational excellence by briefing our leadership teams on Lean operations, thereby equipping them to explore how Lean may be at a divisional, functional and site level. Extending and embedding this Lean program is a priority for the business in 2022.
Alongside our work on Lean, we have worked to maintain customer service by strengthening our supply chain. We have remained resilient to supply challenges arising from the pandemic in 2021. Looking to 2022, we have already anticipated supply disruptions and we are working to manage and mitigate potential challenges by confirming contracts with key suppliers and increasing inventories of critical supplies.
We have also continued to focus on employee health and safety, to ensure our people remain protected and able to support our customer communities through the pandemic. We have maintained pandemic-related safety measures to ensure that employees can still safely attend our manufacturing plants and laboratories. We have also worked on a global framework to support hybrid working across our community of office workers. We have been impressed by our people’s resolve, dedication and energy, as they have remained engaged and flexible in their new working practices through a second year of the pandemic.
All four of our business divisions operate in growing markets, and we remain confident to make significant and sustained investments in capacity expansion. In the short term, our increased levels of capital expenditure (CAPEX) will ensure that we fully capitalize on opportunities in areas of dynamic market demand and support customers on their growth journey. Our commitment to deliver a broad range of services for our customers is reflected in our recent acquisitions to expand our exosomes offering as well as our joint venture (JV) with Chr. Hansen, which will include a commercial facility for live biotherapeutics.
In our contract development and manufacturing organization (CDMO) business, we are focused on ensuring that we can meet diverse customer needs by investing in large-scale multi-purpose capacity alongside dedicated suites. This ensures we can adapt our offer to match our customer’s priorities, for example speed to market, flexibility of supply during clinical phases, scaling a specific process or dedicated access to capacity. Within our divisions, we are also working to ensure that we can offer services across the value chainand the lifecycle of a molecule. For instance, in our Biologics division, we are working in many modalities to deliver end-to-end offerings across late discovery, pre-clinical, clinical and commercial, including drug substance and drug product.
Recent landmark organic investments have included an investment of CHF 200 million to construct a new manufacturing complex in Visp (CH), to accommodate future Small Molecules expansions. We have also committed a further CHF 850 million to build two new mammalian facilities. We work to de-risk organic investments by allowing customers to reserve capacity at any early stage in the investment cycle. This ensures anchor customers have access to the capacity and services they need. Our focus on operational excellence means we can offer value to our customers, while driving efficiencies to deliver attractive returns as soon as new facilities are fully operational. True to our Capital Allocation Framework, our primary focus on organic investments is supported by a selective approach to bolt-on acquisitions that support our strategic growth areas.
Delivering long-term economic, environmental and social value is a strategic priority for our business. We have an ethical responsibility to protect the environment, take care of our people and invest in our local communities.
In 2021, we have focused on addressing legacy issues arising from our industrial heritage while working to complete the divestment of our former Specialty Ingredients business. Simultaneously, we have continued to reduce our energy consumption and carbon footprint, while refocusing on renewable energy resources. Combined together, these activities will have a transformative long-term impact on our environmental footprint.
Alongside these important measures, we have also worked on multiple community investment projects across the locations and markets in which we operate. Site-based charitable and fundraising activities have helped assist local causes ranging from youth education programs to charities that support disadvantaged families. At a Group level, we have also invested in multiple charitable endeavours that support our purpose of enabling a healthier world. Our charitable beneficiaries in 2021 include the American Red Cross, the Swiss Red Cross and Mothers in Science.
We understand that our approach to innovation provides a critical point of differentiation for our business and delivers important advantages for our customers. Our work to deliver mRNA drug substance production lines for the Moderna’s Spikevax COVID-19 vaccine was supported by our innovative Ibex® Solutions offering, which provides pre-built capacity to expedite the path to commercialization. Building on the success of our work in 2020, we entered new agreements with Moderna in 2021 for three further production lines at our Visp (CH) site and one further line at our site in Geleen (NL).
Looking more widely at our business, we are also working to deliver an integrated drug substance and drug product offering. We are also improving process efficiency by increasing automation to streamline human intervention in manufacturing. This is demonstrated by our Cocoon® Platform, which improves efficiency in autologous cell therapy manufacturing with an automated, closed production platform. Alongside the Cocoon® technology, we are continuing to invest in the expansion of our innovative space of Cell & Gene Technologies. In 2021, we added the Codiak Biosciences Exosomes manufacturing facility in Lexington (US) and the Exosomics Service Unit in Siena (IT) to our network. These sites have allowed us to extend our Cell & Gene Technologies business with new offerings in exosome assay and process development, analytics and manufacturing services.
Finally, we are continuing our work to pursue the exploration of the microbiome, as an innovative target for new therapies. In 2019, we established a strategic joint venture with Chr. Hansen for the development and manufacturing of live biotherapeutic products under the name Bacthera. In 2021, the collaboration reached a milestone as both of Bacthera’s facilities (in Denmark and Switzerland), were granted manufacturing and GMP licenses by their respective national health authorities. As a result, the business is now able to supply customers with live biotherapeutic products for clinical trials in humans and ultimately develop commercial products. This is an area of high potential that we will continue to support in 2022.
In an industry where the path to commercialization continues to accelerate, we understand that speed can be critical to our customers’ competitive advantage. In this context, our Ibex® Solutions offering provides pre-built capacity that can deliver drug substance and drug product for clinical trials, and expedite clinical and commercial production. We leveraged our pre-built Ibex® Solutions capacity to expedite the manufacture of the drug substance for Moderna’s Spikevax COVID-19 vaccine, progressing from contract negotiations to production in eight months at our site in Visp (CH), and even more rapidly in Portsmouth (US). Our CAPEX investments in 2021 into an additional manufacturing complex 2 will enable us to extend our pre-built capacity offering in future years, so that additional customers gain advantage from accelerated delivery timelines.
Large growth investments may take between three and four years to come online, and additional time is needed to train new colleagues and ramp up operations before a facility can deliver at full capacity. During a facility’s ramp-up phase, we balance the need to improve margins by managing our operational expenditure (OPEX), while recognizing that the success of our new facilities depends on the skill, talent and loyalty of our people. In 2021, key investments reached the ramp-up phase, and we took an active approach to recruitment. This ensured we were able to commence employee training and facility ramp-up in accelerated timeframes to meet our customers’ need for speed.
