PCAS GROUP 2011€¦ · PROFILE Pcas • activity report 2011 PCAS is a fine and specialty...

PCAS GROUP 2011

· BP 181 · 23 RUE BOSSUET · Z.I. LA VIGNE AUX LOUPS91160 · LONGJUMEAU · FRANCE · WWW.PCAS.COM

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more than chemistry

02. Markets 03. 50 years of cheMistry01. Pcas essentials

Contents

Profile 01Message from the Chairman 02Key figures 2011 04Strategy 06Organisation 08

01 PCAS eSSentiAlS 01

PHARMACEUTICALS 12 - Active substances in the development

phase 12 - Exclusive and patented active substances 13 - Generic active substances 14 - Biomaterials and functional excipients 15

CONSUMER PRODUCTS 16 - Personal Care 16 - Home care 17

INDUSTRY 18 - Energy & environment 18 - Construction 19 - Printing, micro-electronics

and organic electronics 20 - Other industrial applications 21

50 YEARS Of COMMITMENT 24 - Operational Governance 24 - 50 years of commitment 25

50 YEARS Of QUALITY AND INDUSTRIAL PERfORMANCE 26 - 50 years of quality 26 - 50 years of industrial performance 27

50 YEARS Of INNOVATION 28 - 50 years of technological progress 28 - 50 years of R&D supporting

industrial development 29

Glossary 30Addresses 33

02 MARKetS 10

03 50 yeARS of CheMiStRy 22

PROFILE

Pcas • activity report 2011

PCAS is a fine and specialty chemicals group that uses cutting-edge technology to produce complex, high added value substances, sold worldwide.

The Group operates on the basis of a “business to business” model. It offers its customers exclusive production services, along with an expanding range of multi-customer proprietary products.

Pharmaceutical and cosmetic ingredients, functional excipients, performance additives for lubricants or special products for the micro-electronics, energy, environment or construction industries, the substances produced by the PCAS Group often form the basis for the functionality of its customers’ products.

The Group’s customers are primarily international groups, themselves market leaders, with whom PCAS shares a common ambition: excellence. PCAS designs and delivers the very best industrial solutions to meet their specific requirements. These diverse requirements all share the same high standards in terms of safety, quality, competitiveness, innovation and sustainability.

01

more than chemistry

our values

Safety and qualityAbsolute priority to safety and quality for people and products.

CompetitivenessA determination to support the continuous performance improvements required by major world trends.

InnovationThe conviction that the best levers for competitiveness are research and mastery of cutting-edge technology.

Sustainability An industrial vision that incorporates protection of the environment and promotion of renewable raw materials.

* glossary page 30

02

MeSSAge FROm thE ChaIRman

Christian MoreTTIChairman PCAS Group

Improving the PCAS Group’s profitability is our number one priority for 2012 and 2013.


03

* glossary page 30

products are present in a range of key sectors, including health, well-being, energy and materials. Throughout, PCAS has retained its original entrepreneurial spirit, flexibility, responsiveness, determination to keep its customers satisfied and ability to innovate in order to develop competitive processes. We do business worldwide, with exports accounting for around 70% of our total sales.

In recent years, the economic environment has changed. Globalisation has led to the emergence of new markets, but new competitors too. Pressure on prices has also intensified. Quality and environmental standards have become stricter and the financial environment has become unstable. Our teams have managed to stand firm against these difficult conditions, confirming the fact that a company’s most valuable asset is still the men and women working for it. I would like to thank them all today.

PCAS’ strategy today is to continue to develop proprietary products, incorporating even more technological innovation to ensure they stand out on their markets. However, to take this strategy forward, PCAS needs to improve its financial results, which are still inadequate. Consequently, the number one priority set by the Board of Directors for 2012 and 2013 is to significantly improve the profitability of our operations.

The strategy consulting firm, Roland Berger, forecasts average annual growth of 4% for the world chemical market over the next 20 years. So our business - chemicals, the «mother of all industries» - still has a bright future ahead.

Chritian MorettiChairman PCAS Group

2012 marks the fiftieth anniversary of the PCAS Group, which was founded by two French entrepreneurs, Félix le Pors and Henri Barbier. Twenty years later, when its founders moved on, it was sold to Stauffer Chemicals, and then, following a series of mergers and acquisitions, it became part of the AKZO Group, and was subsequently taken over by Dynaction, in association with the PCAS management team, in 1992.

At that point, PCAS focused purely on specialty chemicals and had only two plants - in Couterne and Bourgoin, France. Under the impetus of Dynaction, the Group expanded and developed significantly, driven by both internal and external growth. The acquisition of St-Jean Photochimie (Canada) gave the Group access to the electronic components market and then a series of acquisitions (Limay, Turku, Aramon, Villeneuve-la-Garenne, and, more recently, Santa Rosa) helped it break into and rapidly develop in the pharmaceutical synthesis market, a sector that accounts for two thirds of its business today.

With each new acquisition, PCAS has also reinforced its portfolio of differentiating technologies (see below, p. 28). The most recent technology acquired by our Group is enzymatic biocatalysis following the take-over of a young Nîmes-based company, Protéus, in 2010.

Since 2005, PCAS has been undergoing a phase of industrial, commercial and financial integration and consolidation, aimed at strengthening the Group’s cohesion, gradually updating the businesses acquired and paying back acquisition debts. Today PCAS operates nine industrial sites, seven of which are located in Europe and two in North America. From a start-up, PCAS has grown to an intermediate-sized company employing 927 people and recognised as a leading player in the French chemical industry. Its


04

Key figuReS 2011

in millions of euros 2010 2011

Net sales 158.5 164.5

Including Pharmaceutical Synthesis 99.4 102.1

Including Fine Speciality Chemicals 59.1 62.4

EBITDA (*) 16.1 16.5

EBITDA margin 10.2 % 10.0 %

Current operating income (*) 3.4 5.4

Other operating income and expenses -2.2 -1.7

Financial result -4.2 -3.6

Taxes (**) -0.9 -3.1

Share of profit/loss of associates -0.1 0.2

Net Result -4.0 -2.8

Net Result (excluding depreciation of deferred tax assets) -4.0 0.2

Equity 71.6 69.2

Net Debt 47.5 53.6

Gearing 0.66 0.77

Net asset per share 5.2 5.1

(*) including Research Tax Credit of €2.8 million in 2011 and €2.7 million in 2010.(**) including depreciation of deferred tax assets of €3 million in 2011. ----------Definition of EBITDA in the glossary on page 30.

62%

14.3%

10.5%Fragrance, Flavours, Cosmetics

Pharmaceutical Synthesis

Performance Fine Chemicals

13.2%New Technologies

2.95%Other

33.95%France

63.65%Dynaction

16.76%Asia

Pacific

10.10%North

America

36.24%Europe

1.56%

Public

3.37%Management

31.42%

Treasury stocks

PCAS SAleS by maRkEt

62%

14.3%





2.95%Other

33.95%France

63.65%Dynaction

16.76%Asia

Pacific

10.10%North

America

36.24%Europe

1.56%

Public

3.37%Management

31.42%

Treasury stocks

PCAS SAleS by GEOGRaPhIC ZOnE

62%

14.3%





2.95%Other

33.95%France

63.65%Dynaction

16.76%Asia

Pacific

10.10%North

America

36.24%Europe

1.56%

Public

3.37%Management

31.42%

Treasury stocks

bREakdOwn OF PCAS ShARe CAPitAl


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05

€164.5 MConsolidated net sales

5.2%of net sales in

industrial investments

9Production sites

€16.5 MEBITDA

7.4%of net sales

dedicated to R&D

927employees

in euros 2009 2010 2011

highest price 3.25 3.75 3.40

lowest price 1.15 2.44 1.75

Price at the end of December 2.79 2.49 1.85

net sales 11.37 11.56 12.01

Current operating income 0.33 0.25 0.39

net result attributable to the group (0.08) (0.29) (0.20)

PCAS ShAReS

PCAS shares are included in the Nyse Euronext compartment C index. The shares have been continuously listed since 17 October 1996 and are part of a liquidity contract with ODDO.

Key adjusted per share figures Share value movements

Jan Feb March April May June July Aug Sept Oct Nov Dec

2.25

2.0

2.5

2.75

3.0

3.25


2.25

2.0

2.5

2.75

3.0

3.25

PCAS


2.25

2.0

2.5

2.75

3.0

3.25

CAC Mid&Small

* glossary page 30


06

StRAtegy

Focusing on increasing the share of its proprietary products in its portfolio and reinforcing its competitiveness through the development of differentiating technologies, the number one priority for the PCAS Group’s strategy is to improve its profitability.

rallying the support of players from the various business lines that together drive our strategic projects forward and contribute to their success.

Vincent ToUrAILLeVice Chief executive officer PCAS Group

Interview


07

* glossary page 30

quality start-up businesses, often emerging from top Californian universities. Our proximity with this custo-mer base gives us access to business at an early stage in the innovative active substance development pro-cess. PCAS Nanosyn supplies innovators with the first batches of active substances for the early phases of their development and our European production plants then take over for higher production volumes as clinical trials advance.

What is the situation in PCAS’ other sectors of activity?

Several major trends in our society are fostering the de-velopment of specialty chemicals. In many industries, specialty chemicals now play a key role in ensuring that the end product offers the properties and performance levels demanded by consumers. The development of this industry is currently being driven by consumer de-mand, with consumers seeking increasingly high-per-formance products with new or enhanced functions, on the one hand, or greater safety, sustainability and environmental protection, on the other. Specialty che-micals should therefore remain central to our economic development since they are integral to the progress of other industries.

In this diversified sector, there are numerous innovative project opportunities available to us as a result of new sustainable development requirements and our speci-fic industrial profile. We will give priority to projects in niche markets where we can become - either alone or in partnership - a world leader, such as the super-insula-tion sector (Enersens), the organic photovoltaics sector (Saint-Jean Photochimie) and for certain performance additives and biocatalysis applications (Protéus).

How do you plan to implement all these projects?

We will continue to modernise our industrial facilities in order to reinforce our competitiveness and keep pace with regulatory changes. In addition, we have made some major changes to our organisation and internal procedures, the primary objective being to improve the way we manage our new strategic projects. These new project management procedures have made the Group more responsive and more efficient. In 2012, at the request of the Board of Directors, each and every one of us will focus on significantly improving profitability.

What is your strategy for PCAS and what are your priorities for 2012?

In order to successfully implement the Group’s deve-lopment strategy, which focuses on increasing the share of proprietary products and the development of differentiating technologies, the Board of Directors has asked me to concentrate on continuing to improve our profitability in the very short term in 2012.

In terms of sales, the Group has made good progress but the profits remain unsatisfactory. To improve these results, we are going to focus our efforts on loss-ma-king areas, business by business and site by site. In particular, our approach will be to work with constant or even reduced resources to streamline our operations, adjust our product portfolio and change model for those demonstrating inadequate profitability. We will also turn our attention to harmonising our working methods, which may lead us to make organisational changes. This review of existing products and procedures will be conducted without affecting or relaxing our efforts to reinforce our range of proprietary products.

What is PCAS’ position with respect to the changes at work in the pharmaceutical industry?

For a number of years now, the pharmaceutical sector has been undergoing significant changes in terms of its economic model. First of all, generic medicines are becoming increasingly important economically and, se-condly, biotech companies are playing an ever greater role in the innovative drug sector.

In order to grasp the opportunities offered by this changing landscape, we are supporting the growth of generics, stepping up the development of competitive proprietary processes for the production of generic active substances. This competitiveness is largely dependent on the incorporation of differentiating tech-nologies which will enable us to significantly boost our productivity.

Furthermore, we are evolving the range of services we offer in order to adapt it to the new needs of innovators. Thus, our new Santa Rosa production plant in Califor-nia (PCAS Nanosyn) has been located in the heart of a region that has become one of the most innovative in the world, thanks to the exceptional density of high-


08

oRgAniSAtion

PCAS Group products feed and guarantee the competitiveness of numerous key industrial sec-tors. Its commitment to quality and its industrial and commercial know-how have made PCAS a preferred supplier among the leading industrial players in a variety of various sectors.

The Group’s organisational structure reflects this diversity. Organised into two main divisions, consisting of pharmaceutical synthesis, on the one hand, and specialty chemicals activities, on the other, business units have been set up to meet the needs and expectations of customers operating in such diverse sectors as pharmaceu-ticals, consumer products (cosmetics, house-hold products) or other industries (construction, micro-electronics, etc.).

The table below provides a mapping of the main markets served by our different business units. The range of services and products offered by PCAS for each of these markets is described in detail in the next chapter (chapter 3: “The markets”).

This organisation into commercial divisions dedi-cated to specific markets means that the Group’s customers have constant access to competent people with whom to do business - people who understand their specific needs, are capable of delivering relevant technical, regulatory and com-mercial solutions and who are able to ensure cus-tomer satisfaction. To achieve this, the commer-cial divisions are supported by the coordinated action of other professions within the company and, in particular, the industrial department and the R&D, supply chain and quality departments.

A major exporter (with exports accounting for around 70% of sales), PCAS targets global, diversified markets. Its organisation by sector and international presence mean that it is capable of meeting the demanding expectations of industrial customers seeking quality, safety, competitiveness, innovation and sustainability.

INDuSTRIAl MARKETS

PCAS BuSINESS uNITS

Pharmaceutical synthesis fine specialty chemicals

Exclusive synthesis Generics Fragrance, flavours and cosmetics

Performance fine chemicals

New technologies

Active pharmaceutical substances in the development phase X

Exclusive and patented active pharmaceutical substances X

Generic active pharmaceutical substances X

Biomaterials and functional excipients X

Personal care X

Home care X

Énergie, environnement X X

Construction X

Car industry, lubricants X

Micro-electronics X


09

An inteRnAtionAl PReSenCePCAS has a long-established international com-mercial development policy, supported by agents and subsidiaries. This system, which is accompa-nied by an industrial development policy in the USA enables it to meet the requirements of dif-ferent regions, with the same high quality stan-dards. Commercial sites in Germany, the United States and China back up the efforts of business development teams at the company’s French head office.

These three regions represent the world’s most dynamic economies. Its base in continental China (Shanghai) enables PCAS to reinforce its operations in Asian markets, which are driving world growth, especially in the specialty chemi-cals sector. It has a dual presence in the USA, with a commercial site in New Jersey and an in-dustrial site in California. This gives PCAS geogra-phic proximity with the world’s big pharma deci-sion-making centres and innovative biotech start ups, both of which are key partners in the Group’s pharmaceutical fine chemicals operations. Finally, the unique industrial dynamism of Germany in Europe explains PCAS’ choice to have a specific commercial site there.

the executive Committee From left to right: Vincent Touraille, Philippe Delwasse, Christian Moretti, Gérard Guillamot, eric Moissenot, Dominique Mabire.

New York

San FranciscoVilleneuve-la-Garenne

Bourgoin-Jallieu

St-Jean-sur-RichelieuCouterne

MourenxShanghai

Limay

Aramon

Frankfurt am Main

Turku

oRgAniSAtion

2 sales subsidiaries Head office at Longjumeau 5 Pharmaceutical synthesis sites (all fDA inspected)*

3 flexible sites (ISO 9001) 1 fine Specialty Chemicals site (ISO 9001)

longjumeauHead Office

* glossary page 30


10

9production

sites


11

the men and women working in the Pcas Group’s laboratories and industrial units develop the industrial solutions required to meet the expectations of society and the challenges of sustainable development.7.4%

of net sales dedicated to R&D

927employees

MARKETS02Pcas • activity report 2011

12

ACtive SuBStAnCeS in the DeveloPMent PhASe

Almost half of all substances entering the clinical trial phase* come from bio-pharmaceutical start-ups, for which the business model is predominantly one based on subcontracting. PCAS accele-rates the clinical development* of these new treatments by developing competi-tive and safe processes to manufacture their active pharmaceutical ingredients.

____

The Group’s products and services cover almost every stage of a drug’s life cycle. PCAS accompa-nies its customers from the very first clinical trials* in humans right up to commercial production.

The increase in the number of drugs in phase III cli-nical trials is a very favourable signal indicating the improved efficiency of pharmaceutical R&D. This improvement is largely due to the intensive inno-vative activities of biopharmaceutical companies. The most dynamic regions of the world include the north-eastern USA and California, which are home to numerous start-ups of this type, as well as certain European countries.

2011 also confirmed the trend of big pharma companies to no longer concentrate only on the development of blockbusters*, but to also deve-lop more efficient products, better tailored to the specific characteristics of patients. This approach, known as «personalised medicine» helps to re-duce the attrition rate during clinical trials and maintain the number of new drugs being autho-rised at a high level. In 2011, 35 innovative new drugs were approved by the US FDA*, one of the highest figures in the last decade.

Every year, PCAS develops safe and competitive production processes for several dozen products that are used in the composition of drugs under-going clinical trials. Generally speaking, the bio-tech companies developing these drugs have no industrial facilities of their own. They therefore subcontract this activity in its entirety.

In the United States, the PCAS Nanosyn site, acquired in 2010 in joint venture with a medici-nal chemicals specialist, supplies the quantities required for the very first human trials. Located in California, it gives the Group prime access to US biotech companies and enables it to win busi-ness at a very early stage in the value chain. In Europe, PCAS then scales up production for all clinical trial phases and provides its regulatory expertise to help put together international regis-tration applications.

PhARMACeutiCAlS

APIs in the development

phaseGeneric APISExclusive and

patented APIsBiomaterials &

functional excipients

____Evolution in the number of substances in clinical development worldwide over the last five years (source: IMS Health).

20112010200920082007

200

400

600

800

1000

1200

1400

Pre-registration Phase IIPhase I Phase III


13

exCluSive AnD PAtenteD ACtive SuBStAnCeS

Being able to rise to the technical chal-lenges involved in the industrial-scale production of the active substances used in modern medicines, and successfully meeting the draconian quality requi-rements of health agencies around the globe, are prerequisites to gain access to the exclusive active pharmaceutical substances synthesis market.

____

Sales of innovative drugs protected by patents account for the majority of the total drug market, estimated to represent US$940 billion in 2011, an increase of 4.5% (source: IMS Health). To be able to focus on the discovery of new drugs and the pur-chase of new substances from biopharmaceutical start-ups, the innovative pharmaceutical industry subcontracts a growing proportion of its active and intermediate substance production. Within the next ten years, leaders such as AstraZeneca will have subcontracted this activity in its entirety. This mar-ket is one of PCAS’s major activities. It produces

active pharmaceutical substances, advanced inter-mediates* and building blocks* for the commercial-phase production of innovative drugs. This type of production is described as «exclusive» since it is specifically dedicated to the inventor of a new drug, who benefits from exclusivity thanks to patents protecting their invention. These innovative subs-tances often have very complex structures, posing genuine technical challenges to manufacturers. To address these challenges, PCAS has world-class R&D teams and international technological plat-forms, including, in particular, biocatalysis* facilities. But this is not the only barrier preventing access to this market. The requirements of agencies are now stricter than ever before. Thanks to powerful and appropriate industrial facilities that comply with the most stringent regulatory standards, the PCAS brand today is a guarantee of quality, reliability and compliance with environmental standards.

The most significant proportion of the intellectual property is generally attached to the active pharma-ceutical ingredient component of the patented pro-duct. The information concerning these substances is only disclosed to chemists trusted by the inno-vators. PCAS is part of a small circle of «preferred suppliers» used by several of the world’s top ten pharmaceutical groups.

PCAS accompanies its customers from the earliest clinical trials right up to commercial production.

PhARMACeutiCAlS


phaseGeneric and

patented APIsExclusive APIs Biomaterials &


* glossary page 30

Olga Issakova Chief Executive Officer of Nanosyn


14

geneRiC ACtive SuBStAnCeS

PCAS is supporting the strong growth in sales of generics* (worth more than 100 billion US dollars in 2011) by producing their active substances using new pro-prietary processes. These new processes draw on the most recent technological advances and significantly reduce the costs of active substances without com-promising their quality.

____

Following recent patent expiry peaks, the main therapeutic fields are now increasingly domina-ted by generic medicines. Between 2011 and 2015 in the United States alone, drug sales worth 105 billion dollars will be exposed to competition from generics (source C&EN News, 5 Decem-ber 2011). Furthermore, the growth of generics

is being strongly encouraged by numerous go-vernments, who hope that they will help control health insurance system spending. The average annual growth in generic sales between 2010 and 2015 is likely to be 10% in the USA and 11% in Europe. This situation is leading to a fundamental shift within the pharmaceutical industry towards generics.

The PCAS Group’s «generic active substances» activity draws on 50 years of industrial, techno-logical and regulatory expertise. The Company develops proprietary processes for the pro-duction of active substances (APIs*, or Active Pharmaceutical Ingredients) for generic drugs. The contribution of competitive and sustainable technologies, such as biocatalysis* in particular, leads to significant reductions in the production costs of these APIs in comparison with those for the ingredients contained in princeps* or brand-name drugs. All the Group’s sites dedicated to this activity have been audited and approved by both PCAS’ customers and the competent health authorities, such as the US FDA* or EMEA*. Re-gulatory applications are filed in all high-potential zones, including Europe, the United States and Japan, of course, but also BRIC* zone countries, which are considered to be strategic and a high-growth zone for PCAS.

In 2011, new R&D programmes were launched to reinforce the Group’s catalogue, which today boasts some fifty generic APIs marketed to more than 250 pharmaceutical companies on all five continents of the globe.

the PCaS Group develops innovative and competitive processes benefiting from the most recent technological advances.

API en développement API génériquesAPI exclusifs

et sous brevetBiomatériaux &

excipients fonctionnels


15

BioMAteRiAlS AnD funCtionAl exCiPientS

In addition to active substances and their synthesis intermediates, PCAS has developed expertise enabling it to produce, at GMP* sites, complex subs-tances associated with new treatment forms without having the status of active substances. This activity is promoted by the Group through the sale of proprie-tary product families and exclusive pro-duction services for big pharmaceutical groups.

____

Up until the 1960s, the pharmaceutical industry was primarily interested in active substances. At this point, the galenic form was simply consi-dered to be a way of packaging it and nobody envisaged that it might play an important role in a drug’s therapeutic activity. Today, choosing the right functional excipient has become a prerequi-site for the success of any new drug. Excipients need to fulfil a range of various functions: main-tain the drug’s stability throughout manufacture and storage, improve its bioavailability and control its release after administration to the patient.

PCAS offers three broad families of products & services for this growing market:

• A range of biocompatible and biodegradable polymers (particularly PLGA/PLAs*) marke-ted by PCAS under the EXPANSORB® brand, which increase and potentiate the perfor-mance of the drug. These polymers are espe-cially used as systems for the controlled deli-very of active substances. Their effects can last from a few weeks to a few months. Their field of application includes, in particular, the controlled administration of parenteral drugs (peptides, therapeutic proteins, hormones, antibiotics, etc.).

• Chemical substances produced in a GMP pharmaceutical environment for medical de-

“Building a long-term relationship of trust” The notion of therapeutic progress is closely associa-ted with the daily activities of PCAS in the pharmaceu-tical sector. These activities lead the Group’s teams to be in permanent contact with cutting-edge phar-maceutical research players. These very high-tech players find in PCAS a partner capable of delivering a series of products and production services (intermediates, active pharmaceutical ingredients and functional excipients) that help to speed up the development of their products, be these innovative drugs or generics.

The Group’s organisational structure is also governed by a “customer focus” that enables it to build up long-term relationships with its customers founded on mutual trust. PCAS is a “B to B” organisation; its successes are also its customers’ successes and vice versa. So, the Group’s priorities are to create and maintain this high-quality relationship that ensures the equitable sharing of value produced.

vices, often associated with chronic diseases. For example, PCAS produces a substance that guarantees the performance of a medi-cal device that accounts for sales in excess of one billion euros covered by a confidentiality agreement.

• Manufacturing services as part of an exclusi-vity contract in a BPF* environment relating to materials used to purify biological drugs, such as therapeutic proteins.


phaseGeneric and

patented APIsExclusive APIs Biomaterials &


exPAnSoRB® Kit

A broad range of polymers available for pharmaceutical developers to help them identify the best form for the controlled release of their product.

* glossary page 30


16

PeRSonAl CARe

PCAS delivers exclusive cosmetic ingre-dient production services and a cata-logue of olfactory compounds to global cosmetic industry leaders. The group also develops new proprietary subs-tances aimed at beauty and personal care product formulators. ____

In 2011, the cosmetic products market was esti-mated to be worth US$ 150 billion, having grown by 5% in developed countries. World growth is primarily being driven by emerging countries, with two-digit figures in Russia, China and Brazil.

However, the needs and desires of consumers in Europe, America and Asia differ significantly. PCAS uses the most advanced technologies to allow formulators to speed up and secure their cosmetic care developments tailored to the spe-cific characteristics of these markets. Thanks to the efforts of its R&D, industrial production and quality assurance teams, PCAS supports its customers throughout the development of their new concepts, guaranteeing the quality of their ingredients and compliance with regulatory constraints.

Industrially, this activity is primarily supported by the French Couterne and Bourgoin sites, where sun filters or anti-ageing products, in particular, are produced. In the cosmetics sector, the regu-latory requirements are gradually moving closer to those of the pharmaceutical industry. The reco-gnised expertise of PCAS in this field therefore reinforces the credibility of its cosmetics pro-ducts and services.

PCAS develops several innovative products re-sulting from its own research and protected by patents:

• cosmetic anti-ageing active substances (generi-cally referred to as anti-glycation active agents) that limit the stiffening of the collagen and elas-tin fibres, which is the cause of rapid ageing of the skin

• locally applied «soothing» products.

The Group also provides formulators with a cata-logue of olfactory compounds for use in skin care and beauty products.

ConSuMeR PRoDuCtS

Biosourced cosmetic substances

Market demand for biosourced cosmetic products is higher than ever before and will continue to grow. Protéus, the PCAS Group’s industrial biotech company, has competitive facilities for the development of biosourced substances production processes. In particular, Protéus has developed technologies for the transformation of fats and carbohydrates* into specific products. These processes use enzymes* some of which were discovered within a marine biodiversity collected in the hydrothermal zones of deep ocean vents. The microorganisms* from these environments are able to cope with extremely harsh living conditions. Protéus exploits the robustness of their enzymes* to catalyse* specific reactions.

Fragrances are an essential component in the notion of “well-being” and contribute to our personal balance.


17

hoMe CARe

The fragrances given off by a cleaning or laundry product during or after use play a key role in consumer satisfaction. At its specialized site in Bourgoin-Jallieu, PCAS produces a broad range of olfac-tory products including, in particular, popular aromas, such as jasmine, but also green, herbaceous, woody, balsamic and citrus notes.

____

The perfumes used in laundry products, soaps, room fragrances and detergents are often com-plex blends of pure fragrances skilfully assem-bled by specialists. This specialised industry forms a very concentrated sector, in which PCAS’ customers are world leaders. Specialists in the creation of fragrance compositions, they use fragrances supplied by PCAS to prepare ori-ginal formulations tailored to the characteristics of laundry products, soaps, room fragrances or detergents carrying brand names that are fami-liar to consumers and which represented a global market of around 94 billion euros in 2010.

The PCAS site in Mourenx (SBS «Société Béar-naise de Synthèse» site) is almost exclusively dedicated to the production of large-volume products aimed at the mass market detergents, washing powders and room fragrance sectors. Specific chemical reaction schemes allow simple but very reactive substance derivatives (acro-lein*) to be used to obtain essential olfactory bases. Performance and safety standards at the site are very high to meet the strict requirements imposed by the reactivity of acrolein.

Olfactory materials are always prepared by com-bining the chemical synthesis process (in parti-cular on the basis of natural products) and the distillation phases, which purify the products and guarantee the accuracy of the olfactory note. A team of Regulatory Affairs experts guarantees compliance of the products with standards, par-ticularly to ensure the safety of regularly used products.

SUStAiNABLe DeVeLoPMeNt:olfactory base ingredients from renewable raw materials

PCAS develops the technologies that will enable the use of renewable natural raw materials that meet sustainable development criteria and set the Group apart from its Asian - and particularly Chinese - competitors.In addition, the integration of the industrial biotech company Protéus into the Group means it can now incorporate the biotechnological production of substances from renewable materials.

* glossary page 30


18

eneRgy & enviRonMent

The PCAS Group provides the new in-dustries forming in the energy and envi-ronment sectors with innovative solu-tions for a smooth transition towards clean and safe energies, and towards the more efficient, economical and sustai-nable environmental technologies of the future.____

The long heralded shortage and increased cost of fossil resources, exacerbated by speculative processes and the threats linked to global cli-mate change, constitute major challenges for our contemporary society. The PCAS Group is com-mitted to the development of fourth-generation photovoltaics*.

In the field of organic photovoltaics, the Group is developing semiconductor materials for orga-nic photovoltaic systems at its Canadian subsidia-ry, St-Jean Photochimie (SJPC). Some products developed by SJPC are also aimed at other inno-vative applications, such as OLED* technology li-ghting. SJPC conducts this product development work either in partnership with innovative start-up companies, carrying out the industrial pro-duction of new active substances, or by creating innovation through its own in-house research.

In the majority of environmental applications (production of organic methane or hydrogen, soil detoxification, purification of organic waste, or recycling into raw materials or energy, etc.), enzymes and microorganisms play a central role in processes. Protéus, the PCAS Group’s biotech subsidiary, has developed pollutant disinfection and detoxification applications using enzymes, particularly for biodegradation of toxic substances such as chlorinated alkanes in the environment.

PCAS is active in the organic photovoltaics sector, a complementary technology to silicon photovoltaics.

Organic photovoltaics, bioenergy, bioremediation and detoxification: the PCaS develops high-performance chemistry for sustainable development.

inDuStRy


19

ConStRuCtion

42% of our energy consumption is dedi-cated to heating or air-conditioning our homes, offices or production units. The PCAS Group has carved out a position for itself in the superinsulating mate-rials market by creating eNerSeNS, a subsidiary that develops a range of com-posite materials based on silica aerogel, an ultra-light, non-combustible material designed for the manufacture of highly efficient thermal insulation complexes. ____

The French Grenelle de l’environnement round table highlighted the need to update French housing in general, since it is not very energy efficient having been designed at a time when energy was cheap. The PCAS Group aims at becoming a major superinsulation player, particu-larly in the construction sector, where the energy challenges are the greatest.

In 2010, following several years of research and development work, PCAS decided to create ENERSENS, a subsidiary that develops safe and highly efficient superinsulating materials. A range of composite materials based on silica aerogel, a

PCAS delivers innovative solutions for a smooth transition towards cleaner, safer, more sustainable and more efficient industry.

non-combustible material, are developed for the manufacture of exceptionally thin thermal insu-lation complexes. These high-tech products will be marketed in panel form. One of their particu-lar advantages is that they resolve the technical difficulties related to a lack of available space for insulation. This is a common problem in France where thermal insulation is often installed from inside buildings.

Developments also concern exterior thermal in-sulation since in this application too, silica aerogel technologies lead to substantial improvements in terms of space saving and safety. For example, the ISOGEL® grade of silica aerogel in granular form can be incorporated into mortar used for fa-çades in order to give a building a stable and sus-tainable mineral skin with insulating properties that are significantly greater than other insulating materials of a similar thickness. Furthermore, this skin is breathable and capable of withstanding high temperatures, preventing damp walls and improving the safety of homes.

The PCAS Group also supplies precursor* mate-rials that, when applied to glass in a thin layer, make it possible to produce glazing with radiative properties that limit thermal exchange.

CoMfoRt in SuMMeR, CoMfoRt in WinteRInsulation is a major priority for housing designers, builders, householders and the public authorities. The quest for efficient solutions for both new builds and existing properties need to reconcile energy savings and safety. ENERSENS’ non-flammable superinsulating materials are the ideal solution to meet these new needs.

inDuStRy

* glossary page 30


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PRinting, MiCRo-eleCtRoniCS AnD oRgAniC eleCtRoniCS

The printing and semi-conductor industries are very closely related to one another. Manufacturers in these markets are highly dependent on advances in the fields of materials chemistry, surface chemistry, thin film application technologies and interactions between active materials and light.____

For the printing industry, PCAS has developed ranges of products used for the preparation of the sensitive coating of offset or digital plates. This coating, which is sensitive to lasers with specific wavelengths, is made using materials allowing high resolution and durability (photo-sensitive materials*, dyes, special polymers and complex precursor* chemicals).

In the semi-conductors industry, through its St-Jean Photochimie subsidiary, PCAS develops, on behalf of major players in the micro-electronics industry, products with a high degree of purity for use in micro-lithographic processes for G-line, I-line, 248 nm and 193 nm technologies. These products are used in the formulation of photore-sists and Bottom Anti-reflective Coating (BARC)*, which allow the etching of integrated circuits and microprocessors on a nanometric scale.

In addition to these activities, the PCAS Group and St-Jean Photochimie are also involved in research in the field of organic electronics, a field that is likely to represent one of the next major technological revolutions. A technological range has been developed for the manufacture of materials used in the composition of flat screens or lighting employing OLED technology and for printed electronics.

Printed electronics are set to transform the eve-ryday objects of today into “smart” interactive products, via the integration of electronic compo-nents that will be printed on their surfaces. They are based on the emergence of new applications and new generations of products that are econo-mically highly accessible, flexible, light and very slim. The applications of printed electronics are extremely varied: flexible display systems, sen-sors, Radio Frequency Identification Tags (RFID) *, organic photovoltaic cells* and batteries.

high-performance, high-functionality products for markets with short industrial cycles, reflecting the rapid technological changes taking place.

Printed electronics: a technological breakthroughPrinted electronics will probably represent one of the biggest technological revolutions of the 21st century. They create a new market, enabling the integration of light, flexible, very slim, economically highly accessible components into everyday products to make them interactive or «smart».

The PCAS Group, and in particular its Canadian SJPC (St-Jean Photochimie) subsidiary, manufactures materials for printed electronics. The materials are used in the formulation of active inks that are applied to flexible media (polyester film, paper, etc.). These inks can contain metal nano-particles, inorganic compounds, as well as organic compounds such as semi-conducting polymers.

The expertise acquired by SJPC gives the PCAS Group the opportunity to be a key player in this technological revolution.


21

otheR inDuStRiAl APPliCAtionS

The PCAS Group provides solutions to combat corrosion, ensure lubrication in industrial applications and give new functionalities to special polymers. ____

In the car industry, PCAS supplies substances, products or materials used for long-lasting pro-tection against corrosion in vehicles, particularly in hollow parts or under the body shell.

In the lubricants market, the Group is a refe-rence supplier in the metal working sector, for which it develops additives* that give lubricants or technical fluids used in metal working pro-cesses essential properties such as «extreme-pressure”, “anti-wear” and ”anticorrosion” pro-perties. PCAS also has proprietary technologies for the production of compounds such as calcium sulphonates and carbonates for the development of high-performance greases aimed at the car, iron and steel, naval, paper, oil or construction industries.

In the field of lubricants, the PCAS Group’s activi-ties are based on two business models:

• the design, manufacture and marketing of mul-ti-customer products, or custom-developed products using a proprietary technology, to give a customer a competitive advantage.

• a partnership with oil companies who wish to outsource part of their production in order to benefit from the technological assets, available capacities and flexibility of the PCAS Group’s industrial sites.

In the polymers sector, PCAS develops and manufactures special polymers or monomers for major corporations used in the composition of high-tech products: textile fibres with a very high thermal resistance, special functionalised resins for environmental or biomedical applications,

very high-performance polymers for aeronauti-cal or oil industry applications, etc. In addition, through its Canadian subsidiary PCAS BioMatrix, the Group supplies resins for the production of biological components such as protein* or gene fragments (“peptides*” and “oligonucleotides”) using chemical processes.

* glossary page 30


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7.4%of net sales

dedicated to R&D

9production

sites


50 yEARS oF ChEMISTRy

03

23

ouR VAluES AND ouR EXPERTISEPCAS is a leading fine and specialty chemicals group that shares a common ambition with its customers, namely excellence. Its mission is to offer the best response to the global challenges and specific expectations of our clients with secure, competitive, innovative and sustainable industrial solutions.

927employees

* glossary page 30


24

50 yEaRS OF CoMMitMent

PCAS is a company organised into business lines, which work together on a process basis. This method of operational governance progressively implemented in all PCAS’ activity sectors, mobilises and energises all employees from the various business lines to work together for the success of the Group’s strategic projects.

oPeRAtionAl goveRnAnCe

How can we revitalise PCAS’ operational governance and at the same time improve the efficiency of its industrial structure? How can we get managers more involved in company strategy and identify the top executives of tomorrow?

____

Revitalising operational and decision-making processes…Like all companies, PCAS has a duty to efficiently and responsibly manage the resources made available to it by its shareholders. PCAS has chosen to adopt explicit control and governance principles and rules, forming the framework for operational and decision-making processes and laying down clear lines of conduct in terms of responsibility sharing, administrative processes, coordination and performance reporting.

…to successfully implement strategic projectsBut a company also has a duty to grow and develop. It must not only manage day-to-day operations, but also build its future. It is for this reason that PCAS has launched several strategic projects. To successfully implement these, PCAS applies an operational governance system based on three main processes:

• “Business development”: a process that identi-fies, selects and prioritises projects;

• “Project management”, which brings together a temporary «project team» made up of employees from the Group’s various divisions;

• “Supply chain”, which, once a project has rea-ched sufficient maturity, handles planning, pro-curement of raw materials, production, monito-ring and logistics.

Two processes support these three project processes. First of all, the «human resources» process, designed to provide the company with the labour it needs to fulfil the requirements of the project processes and, secondly, the «material resources» process, which aims at ensuring the company has access to appropriate industrial facilities, in line with HSEQ regulatory requirements.

Identify, select, prioritise and steer strategic projects


25

50 yeARS of CoMMitMent

Active on global markets, PCAS is a company on the move. It constantly seeks to create the conditions required to make all its employees an integral part of the changes under way. ____

The expertise and commitment of its employees are two of PCAS’ principal strengths. Employee motivation, training and the recognition of skills are thus placed at the heart of the Group’s employment policy. The diversity of businesses and activities at PCAS, along with their potential in terms of deve-lopment, innovation and personal challenges, allow it to implement a dynamic and personalised human resources policy.

The PCAS Group’s Human Resources Department strives to continually improve the way it manages and nurtures talent. One of its objectives is to detect new potential wherever it may be and help employees develop their careers in line with their profiles and growing skills. In 2011, a new training plan more appropriate to the changes currently un-der way was implemented to support employees in their career paths.

The diversity of its businesses and markets, along with their potential in terms of development, innovation and career opportunities, allow PCAS to implement a dynamic and personalised human resources policy.

A centralised Human Resources management team for the Group is responsible for developing inter-site mobility and ensuring the transfer of expertise. Since 2004, several Finnish employees have successfully joined teams in Limay (France) and Santa Rosa in California as part of a drive to pool critical resources (R&D, Quality, Regulatory Affairs, etc.).

The company is particularly keen to recruit young graduates and placement students as well as employees who volunteer for international work experience via the French VIE system. These young people bring their knowledge, dynamism and crea-tivity to PCAS while the Group helps them up on the first step of the employment ladder. To help new recruits settle in, personalised integration plans are implemented.

Proximity, dialogue and constant interaction are the keys to professional relations between depart-ments. They enable PCAS to achieve the very high level of responsiveness that is so valued by its cus-tomers who share a common ambition with the Group: excellence.

* glossary page 30


26

50 yEaRS OF quAlity and inDuStRiAl PeRfoRMAnCe

Quality is a driver for industrial performance for the company, which must understand the changes currently under way, adapt to new contexts and satisfy the explicit and implicit needs of its customers.

50 yeARS of quAlity

Quality is not a destination, it is a journey. This is because we can always do better, market needs change, standards and regulations evolve, as do the technical resources available to the Group. Accordingly, quality today is very different from what it was in the early days at PCAS.

____

However, the same behaviours guide and under-pin the quality culture at PCAS. Quality implies professionalism, integrity, the courage to speak up about problems and correct them, responsive-ness and the ability to understand the objectives and priorities of the Group’s customers.So exactly what is quality? Above all, it is the abi-lity to keep the customer satisfied. Quality is a driver for performance for the company. Ideally, compliance with standards should merely be a consequence of the application of a quality mana-gement system and not its primary objective.Five PCAS sites operate in accordance with the rules required for pharmaceutical chemicals (Good Manufacturing Practice or cGMP*). These sites are regularly inspected by ANSM* (France), the FDA* (USA) and other international health authorities. They are frequently audited by cus-tomers of the Group. These standards are also a component of the global competitive context. In the past decade, international competition has

not always been fair in the area of quality. The same standards were not applied by everyone. However, there was good news in 2011 with the European Union’s adoption in May of a new direc-tive designed to combat the introduction of coun-terfeit medicines into the distribution chain. The new directive introduces stricter provisions to require active ingredient manufacturers to com-ply with Good Manufacturing Practice.

Finally, in 2011, PCAS modified the basic pro-cesses forming the framework for its quality ma-nagement system. The practical result of this is a greater focus on activities generating added va-lue for the company and hence greater efficiency. These changes are likely to make a significant contribution to the achievement of the Group’s objectives in 2012.

Jean-Baptiste Colbert 3 August 1664

Professionalism, integrity, courage, responsiveness and the ability to understand customers’ priorities.

If our plants could, through care, impose the superior quality of our products, foreigners would see the advantage of purchasing French goods and money would flow to our kingdom.”


50 yeARS of inDuStRiAl PeRfoRMAnCe

The PCAS Group has production facilities allowing it to respond to an extremely broad variety of requests. Versatile and complementary in terms of the available technology, these industrial installations provide numerous points of access to a diversified chemistry.

____

It was in the Orne area of Normandy that PCAS opened its first industrial site at the start of the 1960s. At that time, the Couterne plant, formerly a thermal power plant, was a straightforward pro-duction unit, focusing on the manufacture of just a few chemicals. It soon became apparent that there was not enough space to meet the growing and diverse requirements of increasing numbers of customers.

Production units dedicated specifically to fine specialty chemicals and others for performance fine chemicals were therefore installed. The constantly growing need to diversify production equipment naturally led the group to acquire new facilities, either by taking over existing sites or creating new ones. This was the case with the Bourgoin-Jailleu (Isère), St Jean sur Richelieu (Canada) and Mourenx (Pyrénées Atlantiques) initially.

At the end of the 1990s, it was necessary to move up a gear in order to grasp the opportuni-ties offered by the pharmaceutical market. The acquisition of the Limay site (Yvelines) gave the Group its first industrial facility capable of pro-ducing active pharmaceutical ingredients under cGMP* conditions. Sites in Aramon (Gard), Turku (Finland) and Villeneuve La Garenne (Hauts de Seine) successively added to the Group’s produc-tion capacities and cGMP* facilities.

Excellent coordination of exchanges between the various sites and an optimised cross-functional or-ganisation allow the Group to deliver the very best solutions to meet their customers’ requirements. The complex management of these industrial faci-lities is entrusted to highly professional men and women possessing recognised skills. When new projects arrive on the Group’s desks, the associa-ted input data are rigorously analysed, the focus being on maintaining the necessary flexibility and responsive capacity. Meeting delivery deadlines, high Quality/Safety standards and cost control are the top priorities for industrial teams.

SPECIALITY CHEMICALSAll ISO* certified, the Group’s four manufacturing sites have a total capacity of 450 m3 entirely dedica-ted to the production of fine speciality chemicals for all the PCAS Group’s departments.- Couterne (Orne / France) /01- St-Jean-sur-Richelieu (Quebec / Canada) /02- Bourgoin-Jallieu (Isère / France) /04- Mourenx (Pyrénées Atlantique / France) /09

PHARMACEUTICAL FINE CHEMISTRYFive sites are dedicated to pharmaceutical synthesis* for the Group’s Health Division. They are allcGMP* certified and regularly inspected by both French and international health authorities.- Nanosyn Santa Rosa (Californie / United States) /05- Turku (Finland) /06- Aramon (Gard / France)) /07- Limay (Yvelines / France) /08- Villeneuve-la-Garenne (Hauts-de-Seine / France) /03

/01

/04

/07

/02

/05

/08

/03

/06

/09

/04

/02

/05

The Group’s sites

27

* glossary page 30


28

50 yEaRS OF innovAtion

PCAS has implemented an innovation, research and development policy designed to keep it at the cutting edge in terms of world competitiveness and help it better meet the expectations of its customers and partners.

50 yeARS of teChnologiCAl PRogReSS

Through its constant r&D efforts, the PCAS Group builds strong expertise at all levels, from the production process design stage right through to the indus-trial deployment of these processes. ____

When PCAS was created in 1962, the demand for certain high added value industrial products in intermediate volumes (i.e. less than two thousand metric tons/year) were not met by either major chemical groups or small producers. PCAS opted to position itself in this segment. Unusually for the time, the company very quickly set up a structure based on “business units”, each with their own R&D. PCAS therefore acquired a culture marked by the priority given to market needs rather than the power of technologies.

However, over the years, new chemical enti-ties have become increasingly complex. To ad-dress this trend, in the 1990s PCAS set up the «Thiophene» and «Phosphorus» platforms, still much in use today. The former makes it possible

to control the substituents introduced at each position of the cycle concerned and the latter to access poly-functionalised molecules.

PCAS has also stood out through its mastery of difficult-to-implement technologies, such as «Acrolein», «Butyl lithium» and «Crystallisation polymorphism». With its secure Mourenx site, PCAS is currently the only European company capable of using acrolein in fine chemistry on an industrial scale. The introduction of cryogenics* has also made it possible to control the stereo-chemistry around the carbon atom and to use bu-tyl lithium on an industrial scale. Finally, PCAS has become an expert in the control of crystallisation polymorphism, this expertise being necessary to produce active ingredients destined for new for-mulations (gel, patch, cream, etc.) in which the size of the crystals and the crystalline form of the active ingredients influence their bioavailability.

Recent years have seen «green» chemistry take off with, in particular, biocatalysis and new cou-pling methods. Biocatalysis increases competi-tiveness, notably by the possibilities it offers in terms of avoiding protection-deprotection reac-tions. Coupling methods using boronic acids have also given access to new molecular diversi-ties at a much lower cost than the previous state of the art.

Technological and industrial expertise built up over the years to design new, high-performance industrial products and services.


29

50 yeARS of R&D SuPPoRting inDuStRiAl DeveloPMent

The versatility of industrial facilities is a factor for quality and competitiveness. This versatility implies the need to have robust processes. And this robustness of processes is today central to a modern «Quality by Design*» approach, which the PCAS Group is particularly well equipped to adopt.____

Over the decades, customers’ requirements have evolved significantly. Analytical specifications, which used to be relatively limited, have become increasingly important due, in particular, to the progress made in terms of analytical instruments. This trend is continuing with the growing power of technologies capable of obtaining crucial infor-mation on crystallisation polymorphism, particu-larly with X Ray Powder Diffraction (XRPD).

In addition, the pilot* and «kilo-lab»* scales have become very important today in quantitative terms. In the active pharmaceutical substances sector, this trend is not unconnected with better knowledge of the pharmacological properties of products and the significant reduction in daily doses observed over recent decades. PCAS has therefore reinforced its «pilot»* unit teams and dedicated certain facilities to recurrent, low-vo-lume demands. Recently, the rise in such de-mand has led PCAS to increase its offer on this scale, by acquiring a cGMP* «kilo-lab»* in Cali-fornia, notably.

On the scales required, the construction of pro-duction units dedicated entirely to a specific product is not possible. Consequently, existing industrial facilities must be versatile. In order for the Group to be able to implement production in these facilities, the processes developed must therefore be robust and, in particular, present low

sensitivity to variations in a number of parame-ters, such as agitation speed, reactor geometry, thermal transfers, etc. This expertise in process robustness is today central to the «Quality-by-De-sign*» approach. Its know-how when it comes to exploring the technical limits of processes and identifying their critical parameters allows PCAS to support its customers in this new indus-trial trend.

Boosting the competitiveness of the PCAS Group: the role of biotechnologiesProtéus has been part of the PCAS Group since September 2010. This industrial biotech company has some fifteen years’ experience in the development of innovative bioprocesses. Its technological platform, the only one of its type in the world, combines natural biodiversity, protein engineering and fermentation. It can boast numerous achievements, particularly in the pharmaceutical fine chemicals and specialty chemicals sectors.

It is in these sectors that biotechnology is creating unprecedented opportunities to reduce production costs and increase the competitiveness and quality of products. The specific characteristics of biocatalysis and bioconversion make it possible to reduce the number of steps in processes and waste volume, at the same time increasing their productivity. In addition to improving energy balances and atom economy, biotechnologies are also capable of facilitating the use of renewable raw materials and generating intellectual property rights. Thanks to the acceleration power of biocatalyst reactions, production can be carried out in gentler conditions than is the case with traditional chemical processes. Hence these bioprocesses generate fewer by-products, thereby helping to improve the quality, performance and functionality of the Group’s customers’ products.

Juliette Martin, Chief Executive Officer Protéus

* glossary page 30


30

Glossary


Acrolein: Highly reactive substance used in the synthesis of numerous products, primarily for the fragrance and pharmacy markets, the use of which requires special safety equipment.

Additives: Chemicals which impart specific properties to fuels, lubricants, paints etc. to which they are added.

ANSM: Agence nationale de sécurité du médicament et des produits de santé (French national agency for the safety of medicines and healthcare products). French public administrative institution formerly known as»Afssaps», for «Agence française de sécurité sanitaire des produits de santé» (French Health Products Safety Agency), renamed following a draft law submitted on 1 August 2011.

API: Active Pharmaceutical Ingredient. These substances correspond to the active substance in a drug, the other ingredients being called “excipients”.

BARC: The anti-reflective coating improve the photolithographic process, enabling fine resolution of photoresist feature by reducing during exposure the degradation induced by the phenomenon of diffusion and reflection of light. This thin absorbing layer reduce the reflective wave seen by the photoresist.

Biocatalysis: Synthesis of a chemical substance using an enzyme as a catalyst*.

Biotechnology: The use of life sciences for industrial applications. Biotechnologies can be differentiated on the basis of their field of applications: «red” biotech (use of living organisms for health); “white” biotech (industrial production of chemical substances); “green” biotech (use of plants); and sometimes also “blue” biotech (use of marine biodiversity).

Blockbuster: Drug for which sales exceed 1 billion US dollars.

BPF: «Bonnes pratiques de fabrication» (French Good Manufacturing Practice - GMP). In Europe, community code relative to drugs instigated by directives drawn up by the European Parliament and the European Commission. BPF are the French equivalent of Good Manufacturing Practice - GMP - and apply to the manufacture of medicines for human or veterinary use.

BRIC: acronym designating four emerging superpowers: Brazil, Russia, India and China.

Building Block: Basic element for the development of more complex substances.

Carbohydrates: Also known as “sugars”, carbohydrates are one of the three major components of living matter, along with “lipids” (fats) and proteins. The most widespread carbohydrates in the living world include cellulose and starch in particular.

Catalysis: Action of increasing the speed of a reaction during chemical synthesis or reducing the level of energy required to complete it. To achieve this, a substance called a “catalyst” is used, which may be chemical (such as a metal-ion or a complex) or biological (in this case, the catalyst is called an “enzyme” or a “biocatalyst”). When the reaction is catalysed by an enzyme, this is known as enzymatic catalysis or biocatalysis. The specific characteristic of enzymatic catalysis is the high selectivity of the reaction and the relatively gentle operating conditions in terms of pressure and temperature.

Clinical trial: Any systematic drug trial conducted in humans – be they

healthy volunteers or patients – in order to demonstrate or verify the effects, identify all the adverse effects, study the absorption, distribution, metabolism, extraction to establish the efficacy and safety of use of the drug in question.

cGMP (current Good Manufacturing Practice): production standard in accordance with prevailing US standards, as published by the Food and Drug Administration (FDA). These production methods are mandatory in order to be able to export a pharmaceutical active ingredient (or certain synthesis intermediates) to the USA. The FDA carries out inspections to make sure that factory productions comply with these rules.

Cryogenics: technology making it possible to conduct chemical reactions at temperatures below -80°C.

Clinical development: Set of medical investigations defining the therapeutic activity of an active ingredient, the administration method, the doses to be taken, the side effects, etc. Full development of a drug generally takes 10 to 14 years and concerns one substance in 10,000, on average.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation): Defined as the current operating income plus amortisation of tangible and intangible assets (hence including estimated expenses on stock counted in consumed purchases and estimated expenses for employee benefits counted in payroll expenses) and depreciation of goodwill. EBITDA is not a measurement of performance defined by IFRS standards and should not be considered to be an alternative to operating profit from ordinary activities or net profits (as calculated in accordance with IFRS standards) to measure the operational

31

performance of PCAS, to cash flow resulting from current operations, generated by investments or resulting from financial operations (as calculated in accordance with IFRS standards) to measure the capacity of PCAS to meet its cash flow requirements or to any other performance measurement defined by IFRS standards. PCAS considers that EBITDA is a measurement that is frequently indicated and widely used by investors and other interested parties as a measurement of the operational performance of PCAS and its debt service capacity insofar as it makes it possible to make a constant comparison of performance without taking into account amortization expenses, which may vary significantly depending on the accounting methods used (particularly in the event of acquisitions) or non-operational factors (such as historical cost). Consequently, this information is indicated in the present source document to enable a more exhaustive and global analysis of operational performance in comparison with other companies and of PCAS’ debt service capacity. Insofar as not all companies calculate the EBITDA in the same way, the presentation of EBITDA in the present source document may not be comparable to the EBITDA communicated by other companies.

EMEA (or EMA): European Medicines Agency: community agency that assesses, coordinates and supervises the development of new medicines for human and veterinary use in the European Union.

Enzyme: protein with a catalytic activity. Enzymes are usually characterised by the very high specificity of their catalytic power (substrate or transformation specificity, etc.).

FDA (Food and Drug Administration): US state organisation which issues authorisations for launching new drugs.

Generic: A drug for which the patent(s) protecting it has/have fallen into the public domain and for which the data protection period attached to its marketing authorisation has expired.

GMP: Good Manufacturing Practice (see cGMP)

ISO (International Standard Organisation): Set of international reference systems, including ISO 9001 for quality.

Kilo-lab: Small-scale production unit (for production of around 1 kg), between laboratory scale (a few hundred g) and pilot unit scale (10 to 100 kg).

OLED/LED: New flat-screen technology using organic molecules which, subject to an electric field, are able to emit light directly. Depending on the composition of the molecules, blue, red and green lights may be emitted and the whole colour palette may be reconstructed by mixing these colours. When the emitting molecules are of a very small size, this technology is known as OLED (Organic Light Emitting Diodes) technology. When the molecules are of a large size (polymers), this will be referred to as PLED (Polymer Light Emitting Diodes) technology.

Oligonucleotides: short segments of nucleic acids (RNA or DNA), a few dozen nucleotides long, generally obtained by chemical synthesis, in single-strand form. Frequently used in molecular biology, particularly to serve as primers in PCR reactions (Polymerase Chain Reactions), prepare DNA «chips» or for other applications, such as aptamers.

Peptide: Polymer of amino acids linked together by peptide bonds. Peptides are generally made up of 2 (dipeptide) to a few dozen amino acids (oligopeptides). Polymers composed of a larger number of amino acids are called “polypeptides”.

Photoresist: Photosensitive formulation for use in the process of transferring an image or pattern onto a substrate. The microelectronics industry uses this for manufacturing memories and microprocessors: these are very advanced photoresists which are applied under very specific conditions for the transfer of patterns (circuits) with a line thickness of only 120 nm.

Photosensitive materials: Materials that react on a molecular level with light or part of the light spectrum (at a given wavelength), or with other types of radiation.

Photovoltaics: Technology converting the energy from light (energy from sunlight) into electrical power. The term “organic photovoltaic” refers to technology in which the photovoltaic effect is obtained using organic matter and not silicon as is currently the case. The material capable of accepting photons is an organic polymer as well as the material that accepts electrons.

Pilot: Intermediate plant between the laboratory and industrial-scale production unit consisting of medium-sized equipment which is required for industrial testing of new syntheses before scaling up to real production. The operating procedures may be monitored and adjusted with the pilot plant and the requirements in industrial equipment may be anticipated. As regards quality, it is also possible to produce small-sized validation batches which are less costly than industrial batches.

PLGA/PLA: Poly (D, L-lactide-co-glycolide) from the Expansorb® range are copolymers of lactide and glycolide.


32


Precursors (of advanced materials): Molecular entity generally containing a metal which may be applied by various techniques to form a film or thin layer imparting functional properties (such as conducting, semi-conducting, anti-reflecting, dielectric, piezoelectric, etc.) to a material so that it may be used in high-tech applications.

Princeps: Latin word meaning «occupying the first place». In the world of drugs, this term is used for an original drug, invented by an innovative pharmaceutical company which has exclusive rights to it throughout the period of its patent protection. The term is used in contrast with «generic» drugs.

Proprietary: Used to describe a product whose manufacturing process was independently developed by PCAS which can therefore freely manage its marketing, production and any associated intellectual property rights.

Protein: biological macromolecule composed of one or more polypeptide chains in a defined three-dimensional organisation. Proteins are synthesised by all living beings and fulfil different functions within cells and, in particular, catalytic functions (enzymes), functions of communication between cells or structural functions.

Quality-by-Design: systematic approach to drug development, founded on exploration of manufacturing processes and their limits and on identification of critical parameters. The objective of this approach is to guarantee quality no longer through the achievement of a target value but, instead, a value range in which the production parameters may vary without affecting the quality of the end product.

RFID: Radio-frequency identification is a wireless system that uses radio frequency to transfer data from a tag attached to an object. The RFID tags contain an antenna for receiving and transmitting a signal and an integrated circuit for storing and processing information, modulating and de-modulating a radio frequency (RF) signal. These tags can be used to identify and track an object.

Synthesis intermediate: Defined chemical substance used as a raw material in a subsequent synthesis step.

PCASChairman: Christian MorettiHead OfficeBP 181 - 23 rue BossuetZI de la Vigne-aux-Loups91 160 Longjumeau – FrancePhone: 33 (0)1 69 09 77 85Fax: 33 (0)1 64 48 23 19www.pcas.com

Plants• bourgoin plant

15 avenue des frères lumière cs 52009 38 307 Bourgoin-Jallieu cedex France Phone: 33 (0) 4 74 93 63 33 Fax: 33 (0) 4 74 28 29 98

• Couterne plant Route de Lassay 61 410 Couterne – France Phone: 33 (0)2 33 37 50 20 Fax: 33 (0)2 33 37 50 21

• Limay plant 19 route de Meulan 78 520 Limay – France Phone: 33 (0)1 34 78 87 87 Fax: 33 (0)1 30 92 03 46

exPAnSiAHead OfficeBP 181 – 23 rue BossuetZI de la Vigne-aux-Loups91 160 Longjumeau – FrancePhone: 33 (0)1 69 09 77 85Fax: 33 (0)1 64 48 23 19

PlantRoute d'Avignon 30 390 Aramon – France Phone: 33 (0)4 66 57 01 01 Fax: 33 (0)4 66 57 01 48

PCAS finland oyMessukentänkatu 820 210 Turku – FinlandePhone: 00 358 2 330 51Fax: 00 358 2 330 55 [email protected]

Société Béarnaise de SynthèseHead OfficeBP 181 – 23 rue BossuetZI de la Vigne-aux-Loups91 160 Longjumeau – FrancePhone: 33 (0)1 69 09 77 85Fax: 33 (0)1 64 48 23 19

PlantSobegi PlatformPôle 4Avenue du Lac /R.D.28164 150 MourenxPhone: 33 (0)5 59 92 75 33Fax: 33 (0)5 59 92 75 31

vlg ChemHead Office35 avenue Jean-Jaurès92 390 Villeneuve-La-Garenne – FrancePhone: 33 (0)1 46 85 91 91Fax: 33 (0)1 46 85 91 61

Plant35 avenue Jean-Jaurès92 390 Villeneuve-La-Garenne – FrancePhone: 33 (0)1 46 85 91 91Fax: 33 (0)1 46 85 91 61

PCAS BiosolutionHead Office23 rue BossuetZI de la Vigne-aux-Loups91 160 Longjumeau – FrancePhone: 33 (0)4 66 27 29 21Fax: 33 (0)1 66 27 29 [email protected]

PRoteuS70, allée Graham BellParc Georges Besse30 000 NîmesPhone: 33 (0)4 66 70 64 64Fax: 33 (0)4 66 70 64 [email protected]

St-Jean Photochimie - SJPC725 TrotterSt-Jean sur Richelieu J3B 8J8Québec - CanadaPhone: 00 1 450 348 09 01Fax: 00 1 450 349 15 [email protected]

PCAS America inc.208 Third StreetHoboken New Jersey 07030USAPhone: 1 201 633 0290Fax: 1 201 377 [email protected]

PCAS gmbh Kennedyvallee 97a60 596 Frankfurt am Main - GermanyPhone: 00 49 21 02 89 24 307Fax: 00 49 21 02 89 24 [email protected]

PCAS BioMatrix inc. 725 TrotterSt-Jean sur Richelieu J3B 8J8Québec - CanadaPhone: 00 1 450 348 09 01Fax: 00 1 450 349 15 [email protected]@pcas.com

PCAS nanosyn3331-B Industrial DriveSANTA ROSA CA 95 403USAPhone: (1) 707 526 4526Fax: (707) [email protected]

eneRSenSHead Office23 rue BossuetZI de la Vigne-aux-Loups91160 Longjumeau – FrancePhone: 33 (0) 1 69 79 60 62Fax: 33 (0) 1 64 48 33 [email protected]

PCAS ChinaBaohua City Jingdian Building, Room 806No. 518, Anyuan Road, Putuo District 200060 Shanghai People’s Republic of ChinaPhone: +86 21 52530016Fax: +86 21 [email protected]

上海普陀区安远路518号宝华城市晶典大厦 806室邮编: 200060中国电话: +86 21 52530016

CALYPTUS - Design by: www.profil-design.com except for the cover Jules Moretti - Photos: Fotolia and PCAS

PCAS GROUP 2011

· BP 181 · 23 RUE BOSSUET · Z.I. LA VIGNE AUX LOUPS91160 · LONGJUMEAU · FRANCE · WWW.PCAS.COM

Phone: +33 (0)1 69 09 77 85 · Fax: +33 (0) 1 64 48 23 19 · 2012

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PCAS GROUP 2011€¦ · PROFILE Pcas • activity report 2011 PCAS is a fine and specialty...

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