In a significant move signaling the evolution and demands of the Life Science industry, California-based eMolecules, Inc. has announced its acquisition of Netherlands-based Specs Compound Handling, B.V., which operates a location in Cumberland, MD. This acquisition is not just a merger of two entities but underscores the shifting dynamics in compound management.
Established in 1987, Specs Chemical has emerged as the world's foremost provider of compound management services, supporting industry giants like Merck and Johnson & Johnson. They now specialize in the storage and distribution of specialty chemicals that play a pivotal role in drug discovery. Their transition over the past decade from primarily selling compounds to emphasizing their storage showcases their ability to adapt and align with industry demands.
“Pharmaceutical companies will literally have millions of these chemicals that they have accumulated over the course of many years,” explains David A. Hayes, Vice President of Sales for Specs. “The companies don’t throw these chemicals out if they fail testing. Instead, they keep them to use for future testing. Outsourcing the storage to companies like Specs allows these companies to free up space to do their research. Then, when the chemicals are needed for testing, the companies simply send us an order. If you’ve ever heard of seed banks or biological store rooms, then this is the same thing but for chemicals.”
The significant shift in Specs Chemical's business model became an attractive prospect for eMolecules, Inc. As more companies in the Life Science sector saw the benefits of outsourcing compound storage due to safety, accuracy, and cost-efficiency, Specs's growth trajectory and emphasis on storage made it a lucrative asset for acquisition.
“Cumberland is a safe area; we are 250 miles from the Atlantic Ocean and 600 feet above sea level. That’s a big advantage when discussing outsourcing with a company’s risk management team"
Outsourcing was a bad word for a while because that meant going to another country,” says Hayes. “And while these are multinational companies, those based here don’t want these compounds to be overseas. That’s one of the great things about outsourcing with us is that, while we ship internationally, companies that are based in the States will have their compounds stored here, and having their main collection stored in the States is important to them.”
Specs Chemical’s location in Allegany County, particularly Cumberland, contributed to its appeal. With its strategic positioning far from disaster-prone zones, companies found added reassurance in outsourcing compound management to Specs.
“Cumberland is a safe area; we are 250 miles from the Atlantic Ocean and 600 feet above sea level. That’s a big advantage when discussing outsourcing with a company’s risk management team,” says Hayes. “Also, FEMA [Federal Emergency Management Agency] is literally within sight, and there are numerous military cloud backups in the area.”
Specs' dedication to safety, exemplified by their temperature-controlled storage systems and dual fireproof vaults, cements their industry-leading position. Their facility houses an estimated five million compounds, and they employ state-of-the-art weighing systems, automated liquid handlers, and quality control devices for precision processing.
Hayes indicates that Specs’s Cumberland facility, currently leased by Allegany County Economic & Community Development, operates at approximately 75% capacity. Spanning over 20,000 square feet, the facility employs seven individuals. With rising demand for their services, expansion plans for both infrastructure and workforce are on the horizon.
“There are nice synergies between eMolecules and Specs, and they are looking to invest in this location,” says Hayes. “We also now have a sister company — Frontier Scientific — that does a lot of similar work. Among our three companies, there is a great opportunity to grow business,” says Hayes. “We are discussing expansion of the building and are likely to bring on five more people in the next six months. We have a lot going on in terms of new contracts, and then we’ll be expanding in order to bring in even more new contracts.”
“We would not still be in this area or maybe not even in business if we did not have help from Allegany County"
Looking ahead, Specs is on a path to success, and the company is very grateful for the support that it has received over the years.
“We would not still be in this area or maybe not even in business if we did not have help from Allegany County,” says Hayes. “They have been invaluable. They are more of a partner than a landlord. They have been accommodating, helpful, and I can’t say more about them and their willingness to help us grow. They really are doing their best to bring in new companies and help the companies that are here survive and thrive. I, for one, am very thankful for this area and Allegany County Economic & Community Development.”
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