Message from the Chairman
Formosa Laboratories has been established for 28 years. Looking back to the end of 1995 when it was founded, Formosa Laboratories was just a small laboratory that undertook process development projects. Subsequently, our products were favored by international pharmaceutical companies, and we successfully passed the FDA inspection in the United States in 2004, embarking us on the world stage. Formosa Laboratories has successively developed Active Pharmaceutical Ingredients (APIs) such as Colesevelam for treating hyperlipidemia, Sevelamer for treating renal dysfunction and hyperphosphatemia, and also developed UV filters and Vitamin D derivatives. These three major product lines of APIs have gradually made the Company grow into an internationally renowned APIs pharmaceutical company.
Afterwards, with the rapid rise of Indian APIs companies, price competition has led to a decrease in profit margin of niche products. In addition, large molecule drugs, also known as Biosimilars, have gradually become mainstream. In response to these challenges, Formosa Laboratories has adjusted its business layout. On December 21, 2012, the Company assisted in the establishment of EirGenix, Inc. (6589.TW) and acquired the right to merge with the "Protein Drug Pilot Factory of the Biotechnology Center" in 2013, becoming the largest shareholder of EirGenix, Inc. at that time. From this point on, Formosa Laboratories officially entered the field of biopharmaceuticals.
The synthesis and high potency production capacity of Formosa Laboratories, combined with the protein drug research and production capacity of EirGenix, Inc., have laid the foundation for the development and manufacturing services of Antibody-Drug Conjugates (ADCs). the Company's commitment to product quality has never wavered and has successfully passed 8 FDA on-sit inspection. In 2022, the FDA inspection of Formosa Laboratories' fermentation plant resulted in No Action Indicated (NAI).
With our core competitiveness in process development and pathway optimization, Formosa Laboratories actively expands its Contract Development and Manufacturing Organization (CDMO) services. However, a one-stop service is expected by customers. In 2017, the Company invested in the construction of an injectable plant and introduced internationally renowned brand equipment. From clinical to commercial, conventional to high potency production lines, the construction of three injectable production lines, including freeze-dried powder for injection, Injections, and Prefilled syringe, has been completed in 2022.
At this point, the Company's CDMO service scope covers the synthesis, fermentation, analysis of APIs, and the filling of sterile injectables, completing a one-stop comprehensive service.
Formosa Laboratories invested in the establishment of a new drug research and development company, Formosa Pharmaceuticals Inc. in 2010, which acquired Activus Pharma, a subsidiary of the Japanese Sosei Group in 2017, and obtained the Activus Pure Nano-particle Technology (APNT) for the treatment of postoperative inflammation and pain in the eyes. The product, APP13007, is suitable for the US FDA 505(b)(2) new drug approval pathway. Data analysis from phase III clinical trials has shown significant clinical and statistical significance. It is expected to submit a New Drug Application (NDA) to the US FDA in the first half of 2023.
At the end of 2019, with the outbreak of COVID-19 in the world
Taiwan experienced a large-scale pandemic in mid to late May 2021. In order to ensure the normal operation and production of the Company, Formosa Laboratories immediately organized a pandemic prevention team and held regular meetings to comply with the pandemic prevention guidelines of the government health authorities. Specific pandemic prevention measures were formulated, including conducting comprehensive screening of employees, contractors, outsourced suppliers, and visitors on a weekly basis, mandatory wearing of masks upon entering the factory, hand sanitization, temperature measurement, completion of a health declaration form by incoming guests and contractors, manpower alternation and drills in each unit, conducting meetings via video to reduce the chance of cluster infections, incentivizing employees to receive vaccinations, and providing pandemic prevention dormitories for colleagues. Although at the end of April 2022, Taiwan's daily domestic cases exceeded 10,000 for the first time, under the well-planned pandemic prevention measures, the Company's operations, including production, were not greatly affected, and the Company still achieved outstanding results.
This 2022 Sustainability Report is the first report issued by Formosa Laboratories in response to the concerns of stakeholders regarding the sustainable development of the Company. In addition to following the latest version of the Global Reporting Initiatives (GRI) guidelines for reporting on sustainability content, we also appoint a third-party verification organization (SGS) to obtain AA1000 Type 1 moderate assurance to enhance the completeness and credibility of the report.
Formosa Laboratories has made sustainable development a company goal and incorporated into KPI in order to continue implementing energy conservation and carbon reduction, fulfilling corporate social responsibility, and strengthening corporate governance. In addition, the Company established a Sustainable Development Committee in May 2022, with myself as the convener of the committee, and the CEO as the advisory committee member, and the Vice President of the Engineering Department as the director committee member. The committee is divided into three executive teams: Sustainable Development Team, Social Welfare Team, and Corporate Governance Team.
In terms of environmental aspects, the Company has established a high-performance wastewater treatment plant and a Regenerative Thermal Oxidizer (RTO) based on the characteristics of the industry and the operational needs of the Company, improving the efficiency of VOCs (Volatile Organic Compounds) waste gas treatment to over 95%. A complete environmental management system has been established, continuously passing verifications such as ISO 14001, CNS 15506, and OHSAS 18001. Since 2018, the boiler fuel has been changed from heavy oil to natural gas to reduce emissions of SOx and NOx. In 2019, an energy-saving and carbon reduction plan was launched, including (1) rezone and utilize the entire plant's lighting, (2) replace traditional lighting fixtures with LED fixtures, (3) replace old chillers in the plant to improve equipment efficiency, (4) replace inverter air conditioners, (5) install inverter drives on the aeration tank blowers, and (6) implement energy-saving measures in cleanrooms: construction of solar power panels has begun in 2022 and is expected to be completed and operational by mid-2023.
Moreover, the waste reduction and recycling rate has reached 40.98% in 2022. After recycling and treating the process water in 2022, the reuse amount reaches 115,014 tons per year, accounting for 26.01% of the total annual water consumption.
As for social aspects
during the early stages of the COVID-19 outbreak, Formosa Laboratories immediately distributed 75% of the rubbing alcohol for pandemic prevention to community offices, public welfare organizations, or schools in the neighborhood, totaling more than 2,800 liters. Since the outbreak of COVID-19 in the country, all employees of the Company have cooperated with various pandemic prevention measures, and so far, there have been no major injuries or interruptions in operation and production due to the pandemic. To strengthen early warning and health risk management capabilities, promote a culture of exercise among employees, organize club activities, conduct annual physical examination for employees, and provide incentives for receiving COVID-19 vaccinations. Formosa Laboratories also complies with the "Labor Standards Act" and other relevant labor laws, and has formulated the "Measures for Preventing Workplace Unlawful Infringement" to protect the labor rights, workplace safety, and job rights of employees, setting up female lactation rooms and unisex public toilet, providing a safe and secure workplace environment for employees.
In terms of human resource utilization or employment conditions, compensation, benefits, training, performance evaluation, and promotion opportunities, the Company handles them with an attitude of equality and fairness. Currently, female employees account for 28.5% of the total workforce Formosa Laboratories, and among the 16 senior managers at or above the first level, 6 are women, accounting for 37.5%. In addition, the Company has always been enthusiastic about participating in public welfare activities, such as sponsoring activities in neighboring countries, organizing two blood donation events every year, holding charity sales and donating all proceeds to public welfare organizations, mobilizing employees for beach cleaning activities, actively participating in river conservation and maintenance, and receiving the "River Adoption Excellence Award" from the Taoyuan City Government.
Regarding corporate governance, the Company complies with relevant laws and regulations of the competent authorities to carry out major information disclosure and various information reporting operations. In May 2022, a corporate governance director was appointed to provide assistance required for the Director of the Board's executive business, specifically enhancing the efficiency of the Board of Directors' operations.
Furthermore, we integrated the departments' current risk management methods to create the "Risk Management Policy and Procedures", which aim to evaluate alterations in multiple environmental risks, pinpoint potential hazards for the Company, devise plans to enhance risk management, and periodically review execution. The awareness of risks will be integrated into the Company's operations, and a business continuity plan (BCP) will be developed based on the risk level for the Company's continuous operation.
Looking ahead
Formosa Laboratories' pursuit is not only for the profitability of its core business, but also to meet the expectations of its shareholders. Moreover, we expect to be a part of global citizens. In addition to continuously enhancing corporate governance, we also increase investment in social and environmental aspects, such as talent cultivation and energy conservation. Formosa Laboratories aims to enhance the sustainable power that drives society forward through the disclosure of various information in its sustainability report, and become a corporate citizen with social influence, creating a better future for the next generation.
