Good to go. All right, we're going to get started. Welcome to day three of Stephens 2025 investment conference here in Nashville. I'm Mac Etosh, the Life Science Tools and Pharma Services Analyst, and I'm pleased to be joined by the team over at West Pharmaceutical Services: John Sweeney, Head of IR; Bob McMahon, newly anointed Chief Financial Officer; as well as Shane Campbell, the Chief Proprietary Segment Officer. Maybe to kick things off, I'll turn it over to you for any opening comments and we'll launch into Q&A.
Yeah, thanks, Mac. It's great to be here. I'm really excited. This is my first time, my first time attending this conference, and I've been really pleased about the opportunities here. It's also really been—I've been with the company for three months now, and it's really exciting to be part of the organization. It's a great company and a wonderful opportunity. As you know, there's many secular tailwinds for the company, particularly the growth of our high-value components. We're a critical component to the supply chain for injectable drugs, one of the fastest-growing segments of the pharmaceutical pipeline going forward. We also see growth in GLP-1s, and I'm sure we'll get into that, as well as Annex 1.
I have not been in a company that has not as many tailwinds, but also the strong competitive position being the market leader in primary containment or elastomers going forward, and such a strong competitive moat. When you put all these things together, along with opportunities to drive increased leverage earnings, I see a lot of opportunity for value creation and excited to be here. I also want to introduce Shane and let him speak, but both he and I are relatively new to the company and really excited about the opportunities ahead of us.
Yep. Hi everyone, Shane Campbell. I have about six months with West, so also relatively new, as Bob just said. Spent about 20 years of my career with DuPont prior to joining West, so leading a lot of elastomers and polymers businesses, including into the packaging space, which gives some relevant experience to what we do here at West. Much as Bob described, joining West now is just a great position, right? Market leader, clear value in its products and the value to the world that we're providing for our customers as well, but not without opportunity for improvement, and that's what really attracted me as well. Happy to go into that in more depth as we go forward. With that, I'll turn it over to John for an intro.
Hi there, John Sweeney. I'm the Vice President of Investor Relations at West. Delighted to be here, and thanks for hosting us today, Tucker.
Absolutely. Appreciate the time. Maybe to kick things off, could you just give us a quick update on how you're feeling about the business exiting 2025, what you're seeing across high-value products, devices, and the broader demand environment as we look towards the next year?
Yeah, let me kick that off. You know, what we're seeing—we're really good about the momentum in the business. If you look at what we've done over the course of the last three quarters, we see improving underlying momentum in the business, really driven by our high-value components business. That business represented in Q3 48% of the total company revenues and grew 13% organically. We've got line of sight and are expecting in Q4 that momentum to continue to actually grow to low to mid-teens. We're not just looking at that business as growing. We're actually seeing strong performance in the rest of the business.
We actually are feeling very good about not only the recovery of our core business, and I'm sure we'll probably talk about some of the things around destocking that's largely behind us now, but also some of the key growth drivers such as GLP-1s and Annex 1, as I was talking about before, that are really what we see are multi-year growth opportunities going forward. We're headed with some nice momentum here in Q4 and expect that momentum to continue into 2026.
Appreciate that. Maybe just quickly touching on destocking, as you highlight, it's largely behind you at this point. What are you observing in terms of order flow and near-term demand from clients?
Yeah, I'll kick it off and then turn it over to Shane as well. I think what we're seeing is throughout the course of this year, you know, a return to more normalized ordering patterns, which I think is really important. We see that in various types of customer activities and so forth. We also are looking at the pipeline as well as the backlog of the orders that we currently have and are not seeing anyone push out demand or changing and canceling demand, which I think is also a positive. I know Shane has looked at this in detail in his business and can probably talk about it as well.
Yeah, yeah. I think the, you know, it was a learning. The destocking period was a learning for us and others in the industry. I think what it really emphasized for West that we're working on doing differently in the future is just a closer partnership with our customers to understand their inventory levels, understand their true demand. We're having those conversations now and have a lot better sense of kind of where overall volume is. It's really a win-win for our customers and for us. They don't have to sit on inventory for a number of years and buy early and tie up cash, and we have a more stable and steady sell-through.
Is there any element of more of an inventory catch-up or normalization as you move towards normalization? How sustainable is that uptick towards as you move into the next year?
Yeah, we do not think that there has been a "catch-up" where, you know, they had taken their stocks below kind of normal levels and then are trying to recover. You know, based on our conversations with customers, we do expect kind of a more normalized going forward. We are, you know, as Shane was mentioning, you know, in constant conversations with our customers, we are seeing some—you know, many of them are asking to expedite where we can, which is a good sign. We do not feel like that is a symptom that they had taken their stocks down too low and are trying to kind of restock. I think it is in line with kind of underlying demand.
Got it. You have emphasized better visibility lately and more predictable growth as you exit 2025. What has changed operationally or in customer behavior that gives you that increased confidence?
Yeah, I think Shane talked a little bit about this. I'll turn it over to him to, you know, some of the things that we're doing and the processes that we've put in place and continue to put in place in terms of that spirit of continuous improvement, some of the things like the S&OP process and our quarterly conversations with customers.
Yeah, for sure. The S&OP process has been newly refreshed, updated for us, right? It's really trying to link our supply planning with our demand. That's something that we're working through that I think gives us more accuracy and granularity, and it more closely ties our demand planning with our—I'm sorry, our supply planning with the demand plan from the customers. You know, and what we're really thinking about too is for our high-value product components specifically, there can be a little bit more volatility, right? Then some of our standard business that's just a little bit more predictable. Sometimes it's legacy business that is recurring year- over- year, or very often, I should say, not sometimes. We're confident there. Where we see more fluctuations like the company saw during COVID, that was a surprise, right? It was hard to predict that in advance.
West made a lot of investments over time to support that business. GLP-1, which, as you said, I'm sure we're going to go into more detail, that's another growth area, right? Fortunately, we have some level of flexibility with investments that we've made in the past. I think we're going to continue to look at our business in that way to ensure that we've got the flexibility to support business that isn't always quite as predictable as some of our standard business. We're thinking about it differentially in that way also, which helps us, I think, stabilize to some extent.
Yeah, and just to add on that, if you go back, you know, West was a critical component to the COVID delivery of the vaccines and so forth. What that ended up doing is placing COVID volume ahead of everyone else, just given the importance of that and the government intervention. That increased lead times quite substantially and required companies, when they did produce or purchase, to purchase more than they would normally have. As we've gone through this kind of destocking period, I think you've seen less of that kind of situation, certainly with—and we've invested in the capacity to be able to kind of manage that, I think, better than we had given that timeframe.
Appreciate that. Maybe before diving a little bit deeper into the proprietary products, Shane, you have a pretty interesting background. You've been in a number of different companies, but what attracted you to West and where do you see opportunities to put your skills at to work?
Yeah, I touched on this briefly in my intro, but I'll go, yeah, a little bit deeper here. I mean, as I said before, West is just an outstanding company. It's been in business for over 100 years, right? Has been delivering high-value products to the market for longer than I've been active professionally, for sure. I saw a very strong base. I also, I think one of the things that really impressed me the most is we have a CEO, Eric Green, who's been in place for 10 years. Eric recently made a change in our operating structure, right? Moving to operating units to drive accountability and collaboration versus kind of functional units that reported into him as West has grown over the past decade. That's something that really attracted me.
I think that cross-functional collaboration and clear accountability that I have now for the proprietary segment has unlocked a lot of value. It is just a testament to Eric's leadership and really his ability to realize that there may be a different model that can drive even more value, kind of an openness to change versus just relying only on what's worked in the past and allowing us to identify additional efficiency opportunities, additional ways to support growth for our customers. It was really a combination of all those things that drew me to West.
I appreciate that. Maybe just looking at a high level, as we think about high-value products, GLP-1s, Annex 1 represent two pretty strong secular tailwinds in addition to the core biologics and biosimilars growth. Just on Annex 1, I believe you highlighted 375 active projects as a net number. But what portion of projects have transitioned to commercial revenues thus far?
Yeah, I'll start and then Shane can add. You know, Annex 1 we see as a multi-year kind of opportunity for us and really excited about the ongoing momentum there. As a matter of fact, as you know, we've increased our contribution of growth from 150 basis points of growth earlier this year to 200 basis points of growth. We think we're still in the very early innings. As you mentioned, that 375 is an ongoing project. Once the project has completed, it kind of finishes and then moves into commercial production. You can get a sense for the amount of opportunity that we have. If we size the opportunity in Europe, it's roughly 6 billion pieces as an opportunity to potentially upgrade. We're still in the very early innings of that.
If we think about kind of our ongoing pipeline of opportunity, it's greater than the 375. The ongoing, you know, the work that we're doing right now in 375 is current projects. The ones that we've actually completed are less than the number of 375. We are continuing to build the opportunities, which gives us an opportunity to continue to deliver that growth, we think, over multi-years.
Not just adding new projects into the commercial flow, but how long would you say it takes an average-sized project to reach its full run-rate potential?
Yeah, it's a really good question. It depends on the complexity of the program. But on average, it could take anywhere from 12 to 18 months, you know, to upgrade the product from its current, you know, into kind of the Annex 1 version. They complete throughout the course of the year. Think about the 200 basis points this year as value that will also result in incremental value next year, plus the ongoing opportunities that continue to complete. We see this continuing throughout the course of the year, not just in Europe, but increasingly also opportunities to upgrade products in the U.S. While Annex 1 is a U.K., excuse me, U.K., European regulation, we are seeing some of our companies look to want to standardize their supply chain. Taking opportunities in Europe and having the same products for the U.S.
They have flexibility in their supply chain. We see this as an ongoing opportunity going forward.
You know, another portion of the segment that's driving growth is GLP-1s, as we mentioned. They've been an increasingly larger number or larger portion of revenues for both proprietary products, but also contract manufacturing. Maybe it'd be helpful to level set for our audience here today just how much revenue you're generating from GLP-1s, where you see it going, and how those relationships have turned out.
Yeah. Let me just address one other important point on Annex 1, because I think it's important. These are the same products, you know, before and after. Once we have these added value services, we can actually scale the production very quickly because we know how to do it. It's not necessarily a totally new product. It's just adding some additional products that are already or services in. That's the thing that we feel really good about. In terms of GLP-1s, it's continued to grow as a component of our business. In Q3, it was 17% of total company revenues broken out between 8% of our revenues being on the contract manufacturing side and 9% being on the elastomer side. You know, we don't have dedicated lines. I'll let Shane talk about some of the opportunities going forward here.
We do have, you know, across our business. We do expect to see this, you know, continue and grow over time, just given the patient population penetration, some of the ongoing, you know, what I would say tailwinds in terms of access, most recently with, you know, the Trump administration covering for Medicare and Medicaid. The more access for patients, that's beneficial for West. I don't know if you have anything that you would want to add.
I think you covered it really well. It's clearly a growth area for us. I think we're well positioned with some of the existing products on the market, and we're working closely with, you know, some of the generics that are coming on as well, as some of the products that are out there today are going off patent in the next few months and years. I think we're well positioned. It's an important part. It's not the only driver of our growth, of course, but it's one we're happy to participate in and we're going to continue to participate in.
Well, yes.
That's a question on GLP-1. GLP-1, do you supply pretty much all the majors?
The question is, does West supply all the majors?
Yeah. We do not talk about individual competitors or, excuse me, customers. What I would say is we have a very high participation rate in GLP-1.
Do you have a view on the pill that they all talk about versus the injectables?
The follow-up question is whether or not the pill will have much of an impact versus the injectables.
Yeah, it's something that's obviously been a topic of conversation. We think there will be a role to play for both injectables as well as oral GLP-1s. I think if we look at, you know, our conversations as well as external, our modeling suggests that orals will be roughly 30% of the GLP-1 population by 2030. Both injectables as well as orals will grow throughout that course of that timeframe. I would say we're in a unique position at West because we do participate on the contract manufacturing side as well. We have insight into the opportunities to bid on volume requirements on the injectable side across multiple customers. We have the visibility not only on that side, which helps inform our view on kind of what capacity is necessary to continue to support the expansion of injectable GLP-1s going forward.
Appreciate it. Maybe just to follow up on that audience question, it's GLP-1s are becoming a larger portion of the portfolio at this point. How does the company manage those relationships, just given the higher customer concentration and strategic importance?
I mean, we try to support all of our customers, right? I think certainly the ones that are growing quickly, we pay very close attention to. There are a lot of products in our portfolio that are also really important life-saving, you know, drugs as well. Certainly the growth of GLP-1s over the last 12 months has been significant. We see it as continuing to be significant. Our relationships with the key participants and the emerging participants in that space is critical and paramount important. Yeah, I mean, I would just answer in that way.
Yeah. I would just add, you know, we've got a strategic accounts program, which for certain customers, we have more regular interaction with and work very closely with them to understand what their expectations and needs are from a growth perspective. Because, you know, as we build out capacity and ensure to invest for the future, you know, it does take some time to invest. Those are customers that, as Shane says, we do that for every customer. Certain customers, we have much more in-depth conversations to ensure that we have the capacity in our network to be able to continue to supply the demand that they're asking for.
Maybe touching on a few of the specific products that I think recently had a press release running to an integrated packaging offering, but it's being used a more heavily discussed topic lately. I believe the company just announced this. Can you just remind us of the importance here, both from a customer and competitive perspective?
Yeah, sure. We launched a product we're calling Synchrony. It's a prefillable syringe, and it's unique from what's on the market today in that we're essentially bringing together all of the components, so elastomer, glass, the needle itself, and bundling them together, right? Creating a single system from a single supplier that can be used in a master drug file, different than what's available today, right? Today, the supplier or the customer would have to purchase all of those somewhat separately or have multiple different packages that go into their filing. This is a simpler opportunity for a customer to bring a product to market, bring a drug to market. We believe it's something that it's going to enable pharmaceutical companies to streamline their design, accelerate their regulatory submission, and ultimately secure a reliable and predictable supply chain. We're very optimistic about this.
The customer feedback so far has been very positive. We're officially commercially launching it in Q1. We did announce it at CPHI Worldwide last month, as you said, Mac.
Yeah. Fundamentally, how do you stay ahead of the competition with innovations like that? Can you find to how do you do what you do that allows you to be ahead of the curve on innovation?
Before you answer, the question is, how do you stay ahead of the curve on innovation when it comes to product introductions like this?
Yeah, I'll start and then turn it over to Shane. I think one of the things that's I think perhaps underappreciated about West is our scientific connection with our customers. They see us as the experts in the interaction of the elastomer with molecules. We have a unique position where we're working very closely early on as a drug is being developed to ensure that they have the right containment system to ensure sterility, efficacy, and, you know, continued product reliability going forward. We take that knowledge and are able then to build that into kind of our innovation pipeline, which helped inform some of the things that we were just talking about with the prefillable syringe. More importantly, what are the next generation of technologies and elastomers?
We just brought on a new CTO, and I know that Shane and he are working on how do we ensure that we've got, you know, continued innovation going forward. Maybe you can talk a little bit about some of the things that we're talking about there.
Yeah, you set that up really well, Bob. I mean, I think that partnership between our customers, including, you know, our sales organization, our marketing organization, leveraging both the knowledge that our customers have about their future needs, and then also sometimes what we see that the customers may not yet see as a trend in that, as Bob mentioned, that elastomer and drug interaction. Partnering very closely with R&D to make sure that the innovations and the items we're investing in are the ones that have the highest likelihood of success and are going to be the ones that our customers really have a demand for. It is kind of a combination of all those things. As Bob said, I've been working really closely with the new CTO as well, who I think joined right around the time you started.
He is roughly three months in as well.
I would say if you look at the level of spend that we have within the total company, we spend about 2.5% of sales. All of that is within the proprietary business, so focused on exactly what we were just talking about.
Maybe touching on another product portfolio, delivery devices, particularly SmartDose and SelfDose, have been a little bit more of the conversation lately and ongoing investment for West. You are bringing on these automated lines in early 2026. How are you thinking about the broader strategy for that business, both in terms of scale and longer-term margin potential?
Yeah. It's a great question. We have a two-pronged strategy on Smart Dose 3.5. One is continuing to drive down cost. We've been on that journey this year. Every quarter, we've been able to continue to improve our cost per unit. That's largely on the manual lines that we currently are producing on today. We have, as you mentioned, an automated line that's on track for coming in first quarter of 2026 that will ramp up over time. That will not only provide additional capacity, but also lower costs. That's the strategy of evaluating how we continue to drive value and cost down within that business. We're also looking at, are we the, and we've talked about this before, are we the best home for this business going forward? Both of those evaluations are ongoing.
We do expect to have an answer on that before we give formal guidance at the end of the year, end of our, you know, when we give guidance for 2026, excuse me.
With that in mind, how do you think about, you know, maybe the broader strategic fit within the portfolio just as you make these considerations?
Yeah. Outside of Smart Dose 3.5, we do have some other devices within our portfolio. I think these devices are really well positioned, right? This is a strong portion of the portfolio. We see strong organic growth with them, particularly, you know, our CZ and our admin systems businesses or product portfolios there. It is really driven by the trends in biologics and the overall trend of self-administration with the shift kind of from hospitals to home care. They are really well positioned there. We like them. They are operating well. That is a continued area of drive and growth for us as we go forward.
Appreciate it. Maybe before we move on to the contract manufacturing segment, I'll see if the audience has any additional questions.
Just one more. Just on glass with the integrated system that you were referring to, is that something that you ever think a capability you need to have yourself or just something you can partner with others for, like warning certainly?
The question is whether or not West will have glass opportunities within their portfolio, so to say.
Yeah, I think we feel, given our strength in elastomers and the differentiation there and the fact that we, you know, work with all of the glass manufacturers, we think we're well positioned to be able to work the way we are today. I think we can achieve our aspirations without necessarily needing to have glass in our portfolio.
Appreciate it. All right. Maybe touching on the contract manufacturing segment, there has been a strategic shift in that business recently, so focusing more on the higher value capabilities and customer projects. Can you just touch on the actions being taken today in the long-term vision for that segment?
Yeah, it's a great question. For the audience, our contract manufacturing business is roughly 20% of our total revenues. What we have been focusing on is how to in at a lower margin than the total company. What we've got is employing a strategy to actually provide more value-added services for our contract manufacturing customers that will help improve not only the value that we provide to our customers, but also improve the profitability. A great example of that is drug handling. Let me maybe explain a little bit about what that is. Today, we do manufacture pens and auto injectors for certain customers today. One of those customers actually asked us if we could do drug handling. What is drug handling?
It's actually taking the, we don't do the sterile fill finish, but a cartridge and then actually that has been produced by somebody else and actually assemble the final product. That is something that requires additional steps for us in terms of cold storage, additional QA, QC to ensure that the product is the right product to put into the pen and so forth. The value for our customer is actually you have a more continuous supply chain there as opposed to us taking our pen, giving it to somebody else that then establishes that. That should reduce the variability because there's less touch points as well as increase the cycle time for it. There is an opportunity to add these higher value kind of downstream opportunities within our contract manufacturing where we think we're uniquely positioned to be able to do that versus some of our competitors.
It's an opportunity to increase our scope of opportunity within contract manufacturing, but also increase the profitability of that business going forward. Yes.
Just another example, are you co-locating with production line of the customer or is the product coming to your facility in the earlier phase of the ingredients?
Yeah. So the question was, are we co-locating with a customer or is the product coming to us? In short terms, the finished product in the cartridge is coming to us. We are not doing the fill finish and the sterilization of that cartridge that has the API. They're sending that to us, and then we are taking what we had at the front end, which was assembling the pen components, and then actually marrying it up with the final API and then producing the finished good. We have it, it's co-located with the initial manufacturing of the pen.
It does require additional handling from the cold storage investment for us, as well as additional quality and regulatory requirements to ensure that we've got segregation as well as, you know, making sure that the product that comes in is in fact at spec and is the product that should be in that pen.
Maybe touching on, you mentioned it's a higher margin product offering. How do those margins compare to what the underlying contract manufacturing business shows today?
Yeah, it certainly is accretive and it's approaching total company margins, you know, and over time. You know, this first program that we have is expected to generate roughly $20 million of revenue, which will be ramping throughout the course of the year. I would expect 2027 to actually be more than that. It's on track for starting up here in Q1 of 2026 in our facility, one of our facilities in Dublin.
Part of that long-term vision also includes, you know, rolling off some of the less financially feasible projects. You know, I think you're in the process of replacing some CGM contracts. How have those conversations trended and, you know, have the drug handling capabilities coming online added to the conversation?
Yeah. What I would say for the benefit of the audience, we've talked about a CGM or continuous glucose monitoring program that is scheduled to exit our facility in Q2 of 2026. It's about an $80 million annualized, so $40 million kind of headwind that we're looking at replenishing and refilling the facility with what we would call better margin business for us that more aligns with kind of the ongoing strategy for contract manufacturing. We have a number of programs that are in the pipeline, both drug handling as well as non-drug handling opportunities. We are in active discussions with multiple customers on building that capability. I would say it's helpful, but it's not the sole thing that we would be looking to potentially fill that with.
We do think that, you know, it provides an opportunity and an expectation that we can handle higher value opportunities going forward, which is helpful for our contract manufacturing business in general.
Appreciate the context there. Maybe thinking about the broader portfolio as a whole, pricing has, you know, really supported margins over the past few years. As supply conditions normalize, how do you see the pricing environment changing, you know, moving into 2026?
Yeah, I think we've talked before. We continue to see 2-3% price opportunity as we go forward on an annual basis. I think the other trend that we've talked about a little bit is the improvement in the upgrade from due to Annex 1 and some other trends like that that are moving products from kind of a standard product and lower margin to a higher priced, higher value product. We see that as being accretive too. We count that in mix rather than price, but I think that's also an important part of our growth story.
It sounds like customer conversations are still fairly constructive despite.
Yes. Yes, I would say they're still fairly constructive. I think there's still value and understanding overall of what it is that we're increasing and providing.
Appreciate that. You know, maybe just looking at tariffs, you spent several years localizing production and adding capacity across your global network. If tariff structures or trade policies were to shift in 2026, how well positioned do you feel West is today?
Yeah, I'll take that and I'll add shade to it. I think we're, you know, so I think one of the compelling opportunities that West has is if you look at our supply chain network, we've employed a local for local strategy for many years. I think we've got the ability to provide product primarily through local manufacturing close to the customer supply chain already today. As we think about the opportunities around shifting tariffs, we've got a couple of strategies to employ. First of all, we're looking at ways to diversify our own supply chain to eliminate incoming tariffs from our standpoint. We also have the ability to pass on certain tariffs if there's an incremental cost. We're also working with customers to potentially move products from one facility to another to help them. Typically, it's from Europe into the U.S.
to help reduce some of the tariff costs. This also has the dual benefit as we think about some of the investments that many of our customers are now making in the U.S. to be able to scale up capacity. As we mentioned before, we've made some significant investments over time in capacity, you know, during the COVID timeframe that we now can leverage as more investment and more manufacturing capacity is coming here into the U.S. We are working very closely with our customers to be able to manage that. I think that's a unique opportunity that West has in the marketplace.
I believe earlier this year you had a little bit of a shift in where some sort of products were manufactured, which created a little bit of a headwind. Has that been resolved at this point?
Yeah, we have, and I'll start and then let Shane add to it. We did have a bit of a load imbalance as a result of some changing customer requirements earlier in the year. What we've done throughout the course of this year is hired additional labor. It wasn't necessarily a machinery capacity. It was more around labor capacity in one of our plants in Europe. We hired most of those folks by the end of Q3 and are ramping that up quite nicely and feel good about the progress.
Yeah. Yeah, I mean, the only thing I'd add is that, you know, we're continuing to focus there like every, and I think as we go through into 2026, we're going to see that constraint relieved even further.
Just on that point, I think CapEx has been running, you know, a little bit above historical averages just given the automation and capacity buildout. How would you think, or how should we think about normalized levels as you look towards exit 2025 and look into 2026?
Yeah, it's a good question. One of the things that we have, we have been investing disproportionately in CapEx, you know, anywhere from 10-15% of revenue over the last several years. We think we're, you know, our view is that we're going to be able to live into some of that capacity over the next several years and get back to our historical levels. Kind of on a glide path to 6-8% of revenue in CapEx, I'd say that's a combination of maintenance of existing CapEx as well as growth. It's probably 40, 60 going forward. I think we're going to end this year, you know, roughly slightly higher than that range, but much lower than we did in the years before. I feel as we think about 2026, I think it's reasonable to assume we'll be in that sweet spot.
Appreciate it. Maybe just to wrap up, I'd like to turn it over to you for any closing comments that you might have, anything that you want to get across the investor base here today.
Yeah, I'll start and then maybe turn it over to Shane. I think I'll start somewhat as I was finishing. I think there's a number of growth drivers at West, you know, with the newer leadership team coming in and looking at the business. I think that we're on the path of, you know, getting back to improved execution. The market is, we're benefiting from market recovery as well, the elimination of destocking. We've talked a lot about GLP-1s, and they certainly have been a core component of our growth. I want to emphasize that West is not just a GLP-1 story. If we look at the core business in HVP, ex-GLP-1s, every quarter that business has continued to grow given the underlying momentum that we see. It went from negative in double digits in Q1, roughly flattish, slightly down in Q2 to mid-single digit growth in Q3.
Our expectation is that momentum will continue. When we look at our market shares, you know, we are by far and away the market leader within elastomers, 70-75% market share. If you look out, the fastest growing area is really around biologics. When we think about our participation rate in biologics, it is higher than that. It is higher than 90%. That is on new products that are coming to market. We feel very good about the position of West, how we continue to grow and recover and get back and execute, continue to execute in the marketplace. I am excited about it. I do not know, Shane, if you have anything else to say.
Yeah. No, I would just add to it. I mean, I fully agree with all the things you highlighted around the growth opportunities, and there's a lot of tailwinds there. We have also got opportunity on the efficiency and productivity side to drive margin improvements even further than what we have today. You know, we're working already and continue to work on automation, working on yield loss, right? Improving our quality so we're even more robust there. Procurement strategies, all of these things that I think are going to continue to be accretive to our margin and continue to drive costs down. Optimism for me as well.
It's one of the reasons I joined, and I've been very happy to see that there's the openness and the support for it within the organization to go after some of these opportunities that we have in front of us here too.
Can I ask a follow-up question? If you have 80% plus market share, you're implying in all the biologics that come into market, how are you managing price in those relationships? Is it inflation? Are you trying to win on price to maintain that market position? How do you think about pricing?
Yeah, so just real quick before we run out of time, pricing is an area that I think, you know, we've been generally in the 2-3% kind of window. I do think that there's more opportunities to ensure that we're sharing in the value that we're creating with our customers. It is a, what we look at, because we have kind of a made-to-order and almost a unique SKU per customer, we don't have price lists. We really work with them to make sure that we understand what we're providing to customers going forward. We are not the price, we are price premium in the market because we think our quality and reliability affords us that ability, and we'll continue to do that going forward.
We do not think price as a lever, as being the low-cost entry, is what our pharma customers are looking for or needing. What they want is assurance of supply and high-quality, repeatable business. Particularly in biologics, when you think about our price per unit versus the value of the drug, it is a relatively small piece. We feel like there is continued opportunity to get smarter about pricing, and feel very comfortable about the 2-3% going forward. You know, in addition to the high-value mix, biologics are almost all high-value products, which typically are higher priced than the standard products.
Bob, John, Shane, I think that's a great place to wrap. Thank you for joining us here at Stephens.
Thank you.
Thank you.