Where the vials for liquid medicine come from – Economy

There were times when Andreas Reisse had no other topic than that, even when eating with friends vials. How are the glass bottles made? How much does something like that cost? is there enough Or is the fight against the corona pandemic possibly failing because there are not enough of these small glass vials in which the vaccine is filled?

“Sometimes it was a bit annoying,” says Reisse. On the one hand. On the other hand, it also made him proud that suddenly so many people were interested in Schott Pharma. Reisse, 61, is the CEO of the company, which belongs to the Schott Group in Mainz. It manufactures containers for injectable, i.e. liquid, medicines from glass and plastic.

Reisse answered all questions. A vial costs a few cents. He does not want to give the exact price during the conversation at the location in Müllheim im Breisgau. It depends, among other things, on how much a customer orders. Of course, the bottles were scarce at the beginning and increasing production was a challenge. The danger that the fight against the virus would fail because of the vials never existed, assures Reisse. And, that is important to him: Schott Pharma is not a winner of the crisis. According to Reisse, the additional demand from Corona contributed “only” three percent to the sales of 650 million euros in the 2020/21 financial year at the end of September. The share of the vials in the cost of the vaccine is very small.

Maybe Reisse would like to name names now, but customers don’t like that. “We supply the major manufacturers of corona vaccines,” he says. Many people now know what a vial is. And many more know names like Biontech, Pfizer, Moderna, Johnson or Astra Zeneca. They could read the names on the vials at the vaccination center, the doctor’s office, the pharmacy, or wherever they went to get vaccinated. The Schott Pharma name is not on the vials.

13 billion containers: syringes, vials and much more

The first vaccines were approved two years ago. Around 190 million doses were administered in Germany by December 9, 2022. “The hype is over,” says Reisse. But, at least as far as business development is concerned, that doesn’t worry him.

Schott Pharma manufactured around 13 billion containers in 2021: syringes, ampoules, cartridges and vials – at 17 locations, including several joint plants with the Serum Institute of India, the world’s largest vaccine manufacturer. “Our products look simple, but there are many innovations in them,” says Reisse: “We will benefit from the great potential of mRNA technology.” We are the only ones who can offer a plastic syringe that can withstand minus 80 degrees. “The possibilities here are enormous, we can only see the beginning today,” says Reisse.

Schott Pharma manufactures such syringes at its plant in Müllheim near Freiburg. The company has expanded it significantly in recent months and invested a three-digit million amount in the new halls. In addition to the St. Gallen location, it is only the second location for these polymer syringes. They are produced in clean rooms where temperature, humidity and air flow are controlled. “The syringes must not be contaminated by particles,” says site manager Bernhard Langner. So far two lines are running. “Further production lines for tens of millions of syringes are to be added by 2026,” he says. They are then packed in so-called nests, around 100 pieces per plastic box, and sent to the pharmaceutical companies.

Open detailed view

Vials are made in the building next door, a seven-digit number every day, including those for vaccines. “We delivered from here all over the world,” says Langner. The one and a half meter long glass tubes from the Schott plant in Mitterteich are threaded into machines, separated into sections using a gas flame and formed into vials. The capacity of the vial depends on the diameter of the tubes – from a few milliliters to 100 milliliters. “We make different qualities here,” says Langner.

What is processed here is not simple glass, such as for windows or doors. The vials are made of borosilicate glass, which is chemically more resistant and thermally stable. The vials for the vaccines are more standard, says Langner. The aim is to expand the proportion of higher qualities in the overall production, which can then also be used to achieve higher prices. “This is important so that production at high-wage locations is worthwhile,” says Langner.

There are vials with a lotus effect

You don’t necessarily see the qualities of the glasses. But Langner can explain the differences. The special properties include, for example, an inner coating which, similar to the lotus effect, ensures that as much medication as possible can be removed from the vials and very little sticks to the walls. “These are very expensive medicines, for example for cancer therapies, which are filled in vials,” says Langner. Some pharmaceutical manufacturers want vials that are already sterilized, a market that is just emerging. Every vial is cosmetically detected, i.e. checked for defects such as air bubbles with the help of cameras.

Open detailed view

Langner and Reisse, both know every production step. Reisse is an industrial engineer. With the exception of a short trip to VW in Wolfsburg, his hometown, he has spent his entire professional life in the Schott Group. At VW in purchasing, he learned how “clear, efficient and straightforward processes can be organized and how crises can be managed. Reisse stayed at VW for a good year.

At the beginning of 2000 he was back at Schott because he “had more freedom to shape things”. Since the fall of 2010, he has been in charge of the area that became legally independent a few months ago as Schott Pharma AG & Co. KGaA. In the 2021 financial year, the group generated sales of EUR 650 million with around 4,700 employees worldwide. “We are planning to continue to grow profitably in the double-digit percentage range over the next few years, and thus more strongly than the pharmaceutical market,” says Reisse.

Now he is to lead Schott Pharma to the stock exchange. A date has not been set. A lot is not certain yet. “We have no need – neither Schott Pharma nor the parent company,” says Reisse: “We have no compulsion to do this in a bad stock market environment.” The Mainz-based Schott Group wants to keep the majority. How high this will be is still open. In any case, the volume placed must be large enough for the share to be attractive to investors. In analyst circles, from which the Frankfurter Allgemeine Zeitung quoted in the summer, a valuation of four billion euros had been mentioned. The company does not want to comment on this. It is also unclear whether there will be a capital increase when the company goes public. If only Schott places shares, Schott Pharma would not receive any money.

“We can finance the investments that we need today from ongoing business,” says Reisse. So why the IPO? The parent company also wants to invest the income in the energy transformation. As a glass manufacturer, Schott operates many furnaces that consume a lot of energy. The group wants to be CO2-neutral by 2030. “That means considerable investments,” says Reisse.

With the IPO, Schott Pharma is gaining better access to the capital markets, also in the event of an acquisition. There are currently no gaps in the range, says Reisse. “We currently have everything we need in terms of products and are geographically well positioned. But if we get a unique opportunity, we will of course look at it.” So why the IPO? Being ready for the capital market would open up a new perspective on the company, says Reisse. And he loves challenges. That is the IPO in any case.