Bachem and PolyPeptide — the invisible industry that produces every approved peptide
If you are prescribed a peptide medicine — semaglutide, octreotide, leuprolide, almost any other — the actual active ingredient was very likely synthesised in one of a few specialised facilities in Switzerland, Sweden or Belgium. Bachem, PolyPeptide and Polypeptide Laboratories are the world's largest contract manufacturers for clinically approved peptides — an industry that rarely appears in public but forms the backbone of all peptide pharmacology.
A specialised industry behind a specialised substance class
In the pharmaceutical value chain there are two worlds: brand owners (pharma conglomerates like Novo Nordisk, Eli Lilly, Pfizer, Ipsen) and contract manufacturers (Contract Manufacturing Organizations, CMOs). For small molecules the CMO landscape is globally distributed and relatively competitive; for peptides it is highly concentrated. About five companies worldwide have the capacity and regulatory qualification to produce tonnage quantities of synthetic peptides for approved medicines: Bachem (Switzerland), PolyPeptide (Sweden/Belgium/USA), CordenPharma, Lonza and Cambrex.
Peter Grogg founded Bachem in 1971 in Bubendorf near Basel — at the same time Bauer at Sandoz in the same region was working on octreotide and Merrifield's solid-phase peptide synthesis (published 1963) became industrially scalable. Bachem started as a specialist for research quantities — milligram-to-gram amounts for academic labs — and grew over four decades into the world's largest independent peptide CMO. Listed on the Swiss stock exchange since 1998, the 2024 market cap was in the high single-digit billion Swiss franc range.
What these facilities actually do
A modern peptide production facility has three main areas. First: solid-phase peptide synthesis (SPPS) in industrial reactors — typically 50-2000 litre reactor volume with polystyrene resin as solid phase. One reaction cycle per amino acid: activation of the amino acid, coupling to the growing chain, washing, removal of the protecting group, next washing. For a 30-amino-acid peptide that is about 90-120 reaction steps per production batch. Second: purification via preparative HPLC — columns with several hundred litres of volume separating the crude peptide from sequence errors, deletion forms and truncations. Third: characterisation and packaging — mass spectrometry, amino acid analysis, endotoxin tests, sterile filling.
These processes are not trivial to scale. Tonnage synthesis of a GLP-1 analog like semaglutide (31 amino acids plus C18 fatty acid modification) requires hundreds of tons of protected amino acid building blocks, several tens of thousands of litres of solvent per batch and several weeks per production run. Investment costs for a commercial peptide facility are in the high triple-digit million to low billion range.
The GLP-1 wave and its supply consequences
Global demand for GLP-1 analogs (semaglutide, liraglutide, tirzepatide, future retatrutide and CagriSema) exceeded installed CMO capacity abruptly from 2022. Novo Nordisk operates its own peptide facilities in Kalundborg (Denmark), massively expanding since 2023 and supplementing them with Bachem as CMO partner for semaglutide. Eli Lilly produces tirzepatide independently in Lebanon, Indiana (USA), with multi-year expansion programmes. The supply shortages for Wegovy/Ozempic 2022-2024 were not an anomaly but the direct consequence of this CMO concentration: a single new production line takes 2-4 years from groundbreaking to GMP approval.
This concentration has geopolitical implications. About 70% of global clinical peptide synthesis capacity is in a geographically narrow zone in Europe (Switzerland, Sweden, Belgium). The supply-chain resilience of this industry is limited — a systemic failure (natural disaster, geopolitical escalation, energy crisis) would have immediate global supply consequences for diabetes, oncology and endocrinology therapies.
„If you inject Wegovy today, the amino acid building blocks are probably manufactured in China, the finished peptide synthesised in Switzerland or Denmark and the finished end product filled in France or the US. The industry behind the medicine is global and narrow."
What CMO concentration means for patients
Three consequences are directly relevant. First: generics availability depends not only on patent expiry but on CMO willingness to supply generics manufacturers at competitive prices. With peptides this threshold is higher than with small molecules because facility utilisation is critical. Second: supply shortages are not solvable by 'more marketing budget' — they are limited by physical facility capacity. Third: regulatory complexity of GMP inspection of a peptide facility is substantial, and authority-personnel shortages especially in emerging-market authorities make this a secondary bottleneck.
On the positive side: the industry has shown in the GLP-1 wave that rapid capacity expansions are possible. Novo Nordisk has invested several billion in peptide production since 2022. Bachem has commissioned a new facility in Sissach. These investments will become effective from 2025-2027 — which at least for existing GLP-1 substances should mark a transition from shortage to sufficient supply.
Open questions
- How far can GMP-compliant peptide synthesis capacity be expanded in the next 5 years — and which countries will benefit?
- Will the iteration from solid-phase synthesis to flow chemistry or enzymatic synthesis change production economics?
- How does the industry respond to the geopolitical risks of amino acid precursor suppliers in China?
- What role does recombinant production (e.g. insulin) play as an alternative supply chain vs. chemical synthesis — and for which peptides is it competitive?