Mapping a Biologics Supply Strategy

Reflecting strong growth prospects for certain biologic-based drugs, the biotechnology and pharmaceutical majors are proceeding with a strategy of expanding their internal manufacturing networks and partnering with select contract manufacturing organizations (CMOs).
May 30, 2007

A spate of recent or planned expansions in biologics production capacity mark the strategy of several biotechnology and pharmaceutical majors as they expand their internal manufacturing networks and partner with select contract manufacturing organizations (CMOs).

Biotech majors proceed with expansions

Genentech. A case in point is Genentech Inc. (South San Francisco, CA, http://www.gene.com/) with several key projects underway or recently completed for bulk biologics production.

Genentech is expanding its Vacaville, California facility by constructing an additional manufacturing facility adjacent to the existing facility as well as office buildings to support added manufacturing capacity. Construction, qualification, and licensure of the new Vacaville plant is expected by the end of 2009. In the fourth quarter of 2006, Genentech received US Food and Drug Adminisration approvals for yield improvement projects at its manufacturing plants in Vacaville related to the production of "Rituxan" (rituximab), according to the company's 2006 annual report. Rituxan is Genentech's top-selling drug with 2006 US sales of $2.07 billion.

The company also received FDA licensure of 90,000 L of biologic capacity at its Oceanside, California manufacturing facility in April 2007 for bulk production of "Avastin" (bevacizumab). Avastin is one of Genentech's top-selling drugs with US 2006 sales of $1.7 billion.

Last year, Genentech formed a supply pact and the option to purchase a new large-scale mammalian cell-culture manufacturing facility with the CMO Lonza (Basel, Switzerland, http://www.lonza.com/). In December 2006, Lonza acquired Genentech's cell-culture manufacturing facility (40,000 L of biologic manufacturing capacity) in Porriño, Spain and at which Lonza will continue to manufacture Avastin bulk drug substance for Genentech under the terms of a supply agreement. Genentech also has an option to purchase from Lonza between 2007 and 2012 Lonza's 80,000-L large-scale mammalian cell-culture manufacturing facility currently under construction in Singapore. The facility is expected to be licensed for the production of Avastin in 2010.

In mapping out other biologics production projects, Genentech announced in March that it was entering into a land-lease agreement in Singapore for the construction and development of a 1,000-L E. coli manufacturing facility. The approximately $140-million facility will be dedicated to the bulk drug production of "Lucentis" (ranibizumab). Construction on the facility is expected to begin in the second quarter of 2007 with licensure anticipated by early 2010.

In 2006, FDA granted approval for the manufacture of Herceptin (trastuzumab) bulk drug substance at Wyeth's (Madison, NJ, http://www.wyeth.com/) production facility in Andover, Massachusetts. Herceptin is one of Genentech's key products with 2006 US sales of $1.23 billion.

In September 2006, Genentech acquired land in Hillsboro, Oregon for the construction of a new fill-and-finish, warehousing and related office facility. Genentech broke ground in December 2006 and FDA licensure is anticipated in 2010. Genentech also selected the Hillsboro, Oregon site as the location for a new West Coast warehouse and distribution center. Construction will begin in the second quarter of 2007 and the facility is expected to be completed and fully operational in the third quarter of 2008.

Also, in April 2007, Genentech received FDA licensure for a third aseptic fill line, which will fill both liquid and lyophilized products for commercial use, on its South San Francisco campus. Construction began in the third quarter of 2005.

Amgen. Amgen (Thousand Oaks, CA, http://www.amgen.com/) has two major expansions underway. Earlier this year, Amgen revised its schedule for completing a new manufacturing facility in County Cork, Ireland. In 2006, Amgen announced plans to invest more than $1 billion in new process development, bulk protein production, and fill-and-finish facilities, with an initial target of beginning operations in 2010. An Amgen official explained that the amount of additional capacity Amgen intends to develop in Ireland, the overall capital investment, and the number of staff it plans to employ have not changed, but the company will stagger and extend its time lines to allow for a more efficient project execution. In addition, Amgen will continue to monitor business needs to determine whether it needs to accelerate the construction start. The bulk-manufacturing capacity is scheduled to be operational in 2012, and regulatory licensure of the facility is anticipated for 2013. The process-development laboratories will be constructed in conjunction with the bulk facility or as needed to support the start-up of the manufacturing capacity. The fill-and-finish capacity is scheduled to be operational by 2013, with regulatory licensure anticipated by 2014.

Amgen is further investing more than $1 billion to build a new bulk-protein manufacturing facility in Juncos, Puerto Rico, for "Neupogen" (filgrastim), "Neulasta" (pegfilgrastim), "Epogen"(epoetin alfa), and "Aranesp" (darbepoetin alfa). The company will construct a new formulation, fill, and finish facility as well.

Biogen Idec. Biogen Idec (Cambridge, MA, http://www.biogenidec.com/) is proceeding with the construction of a large-scale biologic manufacturing facility in Hillerod, Denmark to produce "Tysabri"(natalizumab) and other products in the company's pipeline. After voluntary suspension of Tysabri, Biogen Idec decided to proceed with the bulk manufacturing component of the facility and to add a labeling and packaging component, according to the company's 2006 annual report, although it decided not to proceed with the fill-finish component of the project. Biogen Idec's board of directors authorized an additional $225 million to be spent on the project on top of the $275 million initially spent on the project, according to the company's 2006 annual report.

Tysabri is manufactured in Biogen Idec's Research Triangle Park, North Carolina, facility. Tysabri was initially approved by the FDA in November 2004 and was voluntary withdrawn by Biogen Idec in February 2005. FDA approved resumed marketing of the drug in June 2006.

Gilead Sciences. Another biotech major, Gilead Sciences (Foster City, CA, http://www.gilead.com/), is moving ahead with an expansion in Ireland. Earlier this year, the company announced that it will invest EUR 60 million ($81 million) for a new pharmaceutical plant at Grange Castle Business Park, Clondalkin, Dublin, Ireland. The development of the new Dublin facility will involve the relocation of the company's current facilities and more than 80 staff from Sandyford Industrial Estate to Grange Castle Business Park. The company is relocating from Sandyford as its current facilities have reached maximum capacity and are no longer able to meet its growth targets and manufacturing requirements, according to a release from the Irish Development Agency (Dublin, Ireland, http://www.idaireland.com/). The target completion date for construction of the new facility is late 2008.

Pharmaceutical majors invest in biologic

Just as the biotechnology majors are investing in internal manufacturing capacity, so are the pharmaceutical majors, with several projects announced or recently completed.

Abbott. Abbott Laboratories(Abbott Park, IL, http://www.abbott.com/) opened in April 2007 a $450-million, 330,000-ft2 biologic manufacturing facility in Barceloneta, Puerto Rico, to support the long-term supply of its biologic agent, "Humira" (adalimumab).

Bristol-Myers Squibb.Bristol-Myers Squibb (New York, NY, http://www.bms.com/) broke ground this month for its $750-million, large-scale, multiproduct, bulk-biologic manufacturing facility in Devens, Massachusetts—the single largest capital investment in its history. Phase I of the project calls for the construction of four main buildings: a manufacturing structure that will house six 20,000-L cell-culture vessels and one purification train, a central utility building, an administrative and quality-control building, and a warehouse and storage structure. The facility is projected to be operationally complete in 2009, and BMS plans to submit the site for regulatory approval in 2010.

The facility will support increased production capacity for "Orcencia" (abatacept), BMS's first internally discovered and developed biologic medicine, and also will manufacture commercial quantities of compounds currently in development should those compounds receive regulatory approval. BMS has biologic manufacturing agreements with third-party partners Lonza biologic, Inc. (Basel, Switzerland) and Celltrion, Inc. (Incheon, South Korea).

BMS currently manufactures biologic compounds in a company-owned facility in Syracuse, New York, and finishes and packages biologic compounds in Manati, Puerto Rico. The Syracuse site was not designed to accommodate large-scale commercial production but will continue to serve as a center in process development and early-product launch for BMS's biologic compounds. The Manati facility, which also is wholly owned by the company, will continue to finish and package biologic compounds. In March 2006, BMS announced a $200-million investment to expand this facility.

Big Pharma targets vaccine production

Several large-scale vaccine production expansions are underway as Novartis (Basel, Switzerland, http://www.novartis.com/), Merck & Co. (Whitehouse Station, NJ, http://www.merck.com/), Sanofi Pasteur (Lyon, France, http://www.sanofipasteur.com/) and GlaxoSmithKline (GSK, London, http://www.gsk.com/) proceed with projects.

Novartis. Novartis is building a cell-culture-derived influenza-vaccines manufacturing plant in Holly Springs, North Carolina. Novartis will spend approximately $600 million, including a $220-million award from the US Department of Health and Human Services, to complete the site. The plant is expected to produce about 50 million doses of seasonal trivalent flu vaccines annually for the US market. The site also is designed to produce 150 million monovalent vaccine doses annually within six months of an influenza-pandemic declaration. In parallel, Novartis is making additional investments to expand capacity for flu cell-culture vaccine production in Marburg, Germany.

Merck & Co. Merck & Co. invested $300 million to construct a 272,000-ft2 vaccine-production plant in Durham, North Carolina. The plant is scheduled to be complete and operational by the first quarter of 2008. Following validation, the first vaccines should be available by the first quarter of 2009. The plant is expected to eventually produce more than two thirds of Merck's annual live-virus vaccine stock, which could amount to more than 25 million doses per year. The facility will produce "Zostavax," Merck's new shingles vaccine, and a vaccine for measles, mumps, and rubella.

In addition to the $300 million for the new vaccine facility in Durham, Merck is investing $100 million to increase vaccine-manufacturing capacity at the facility. The 115,000-ft2 expansion will provide room for sterile processing, formulation equipment, lyophilization equipment, automatic inspection equipment, testing laboratories, and high-speed packaging. The new phase of construction is scheduled to begin in the fall 2007 and be completed by 2010.

GSK. GSK is investing £100 million ($200 million) for a vaccine-manufacturing plant in Singapore for the primary production of pediatric vaccines. GSK also is investing more than EUR 500 million ($680 million) in its St-Amand-Les-Eaux, France, vaccine-manufacturing plant to increase formulation, filling, freeze-drying, and packaging production. The facility is expected to be operational in 2011 and will produce vaccine for cervical cancer, meningitis, pneumonia, and influenza. Also, GSK opened an EUR 100-million ($136-million) primary production facility in Gödöllö, Hungary, for manufacturing diphtheria, tetanus, and pertussis antigens used in several pediatric vaccine combinations.

Sanofi Pasteur. Sanofi Pasteur is building a $160-million vaccine-manufacturing facility in Swiftwater, Pennsylvania, which will double its US production capacity. Sanofi also is investing EUR 160 million for a formulation-filling facility in Val de Reuil, France, and will expand cell-culture based virology production at its facility in Marcy l'Etoile, France.

Ramping up insulin production

Eli Lilly (Indianapolis, Indiana, http://www.lilly.com/) and Novo Nordisk (Bagsværd, Denmark, http://www.novonordisk.com/), two major insulin producers are proceeding with expansions.

Novo Nordisk. Novo Nordisk. inaugurated a $200-million expansion of its production facilities in Montes Claros, Brazil. The 37,000-m2 plant will formulate and fill insulin into 3-mL "Penfill" cartridges, which are used in the pen systems marketed by Novo Nordisk. Approximately 95% of the total volume produced in the Montes Claros plant will be exported to other countries such as Germany, Austria, the United Kingdom, Ireland, Australia, New Zealand, Canada, and later on to several developing countries.

Eli Lilly. Eli Lilly completed a $1-billion expansion of its Puerto Rico manufacturing operations in August 2006, which includes new bulk capacity for "Humalog" (insulin lispro [rDNA origin] injection). The company also is adding a new assembly line at its device-assembly operation in Indianapolis. One of the first products made on the assembly line will be its new prefilled insulin pen, "HumalogMirioPen." The product is currently under FDA review and is expected to be launched later this year.

Other biotechnology investments by Eli Lilly include an expansion of its site in Kinsale, Ireland, to manufacture active pharmaceutical ingredients for future biotechnology products. Lilly is also expanding its Indianapolis, Indiana, parenteral operations so that the site can convert the biotechnology APIs made in Kinsale into their final-dosage forms. In October 2006, Eli Lilly completed the first phase of a $560-million expansion to its biotechnology complex in Indianapolis, which included the opening of a bioproducts pilot-manufacturing plant that makes small-scale amounts of drugs for use in clinical trials and a research-support facility. Construction of a third facility, a bioproducts R&D laboratory, was completed earlier this year.