Covectra eyeing new industries and new markets

Covectra logoBrand security specialist Covectra (which until last month was known as PharmoRx Security) has enjoyed phenomenal growth on the back of burgeoning interest among pharmaceutical companies in securing their supply chains, tripling its workforce in the last 12 months.

Now, the company is casting its net wider and offering its suite of serialisation, track-and-trace and authentication technologies to clients outside the pharmaceutical sector. spoke recently to Covectra's chief executive, Steve Wood, about how the business has developed over the last 12 months and its plans for the future.

A year ago Covectra was essentially a US company, according to Wood, but 2009 saw the firm expand into Europe - helped by an alliance with Northern Irish distributor partner MSO - and is now looking toward Asia, particularly China and the southeast Asian region.

"Many western companies who are manufacturing goods in China are insisting that their Chinese subcontractors or subsidiaries adopt measures to combat counterfeiting or grey market diversion," said Wood, just before heading off for an extended business trip to the country.

The growth of the Chinese economy also means that counterfeiters are increasingly targeting domestic manufacturers' products, he said, so there is a push effect from multinational firms as well as a pull effect from China's own industrial sectors.

And as Covectra became more international in its dealings, so has its portfolio of brand security technologies come to the attention of customers outside the pharmaceutical sector.

The decision to reposition the company came because overtures were being made by a number of non-pharmaceutical companies, particularly at packaging and brand security trade shows in the latter half of 2009 and early 2010, with several new non-pharma clients emerging "almost simultaneously," according to Wood.

He sees major new opportunities for Covectra in markets such as cosmetics, luxury garments and other goods, premium beverages and software, and has already signed up clients in some of these sectors.

"The level of counterfeiting and grey market diversion in some of these markets is so high as to defy quantification," according to Wood, who cited one case in the cosmetics arena where the problem was so great that the company had to stop using certain distributors to try to alleviate diversion.

Premium beverages are also a huge target, with counterfeiters going to extraordinary lengths - even posing as recycling companies - to get hold of original bottles to make their fake products even harder to detect.

That shift in customer base prompted a change in name to reflect the broader focus. Covectra was derived by combining the first syllable of 'covert' and the first syllable of 'track and trace'.

Broader technological focus

Meanwhile, the last 12 months have also seen the company continually add new technologies to its portfolio so that it can offer a truly end-to-end solution across anti-counterfeiting, anti-diversion and track and trace.
profiled Covectra's smartphone-based authentication system - BLIS (Brand Loyalty and Integrity Service) last year, and Wood confirmed this has already been adopted by one pharmaceutical customer for a support programme aimed at patients for a particular prescription medicine.

A unique code on the pharmaceutical package serves as the gateway for patients to secure access to a high-value counselling programme that the drugmaker is making available.

Since then Covectra has been talking to companies providing technologies to add both covert and overt anti-counterfeiting features to its portfolio.

"The last 12 months has seen us develop into a truly multilayered solution provider," said Wood.

"Almost all of our projects now will make use of our AuthentiTrack serialisation technology as well as one or two of our covert and overt security features."

The deal with MSO provided a number of covert features such as invisible inks, and Covectra has recently added to its invisible ink capabilities with additional agreements with other unnamed suppliers in the USA.

Meanwhile, the company recently added another partner called ITW Covid, a subsidiary of Illinois Tool Works, for an overt holographic technology. That deal marks the culmination of a long search for a hologram that is virtually impossible to replicate, according to Wood.

"We're continually trying to identify additional barriers to stay one step ahead of the counterfeiters," he said.

Related articles:

Cutting out the middleman: the rise of direct distribution in pharma

PharmoRx brings counterfeit detection to the masses

PharmoRx: taking on the drug diverters

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