CMOs Make Select Investments in Primary and Secondary Manufacturing

Contract manufacturers and pharmaceutical ingredient suppliers proceed with select investments in biologics manufacturing, small-molecule synthesis, and formulation as the industry prepares for CPhI Worldwide in Milan.
Sep 01, 2007



As contract manufacturing organizations (CMOs) and pharmaceutical ingredient suppliers gather for CPhI Worldwide in Milan Oct. 2–4, the outlook for outsourcing is mixed. Companies are proceeding with select investments in small-molecule manufacturing, cautioned by increased competition from Asian suppliers and consolidation pressures. Asian suppliers continue to make inroads into the global outsourcing market as certain companies add small-molecule and formulation capacity. And for those CMOs also positioned in contract biologics manufacturing, the outlook is strong.

Lonza targets biologics

A positive sign for the contract primary manufacturing market is the recent performance of one industry leader: Lonza (Basel, Switzerland). Led by growth in its biopharmaceuticals sector, Lonza reported a 45.2% increase in its first half 2007 sales to CHF 642 million ($532 million) in its biopharmaceutical and exclusive synthesis business. Biopharmaceutical sales almost doubled to CHF 400 million ($332 million). Capacity utilization in its biopharmaceutical business was above 90%, according to the company's first half results.

Microbial production . Reflecting strong growth in its biopharmaceutical business, Lonza is investing in microbial and mammalian cell-culture production. Following its $460-million acquisition of Cambrex 's (East Rutherford, NJ) bioproducts and biopharmaceutical business in February, Lonza named Hopkinton, Massachusetts, as the global US headquarters for its microbial biopharmaceutical business and announced plans to invest more than $30 million in its Hopkinton site to support growth plans for microbial process development and manufacturing. The Cambrex acquisition netted Lonza additional biopharmaceutical services capabilities and small-and mid-scale microbial manufacturing capacity to complement existing microbial capacity in Visp, Switzerland. Lonza started producing current good manufacturing practices (CGMP) batches at a new 15,000-L microbial biopharmaceutical line in Visp, and a second line is mechanically complete.

Mammalian cell-culture production. In March 2007, Lonza began construction of its second large-scale mammalian facility in Singapore. The final build-out of the facility is expected to be completed and operational in 2011. The $350-million facility will have four mammalian bioreactor trains, each with a flexible capacity of 1000–20,000 L, inclusive of purification units.

In May 2007, Lonza broke ground for a new $300-million, 330,000-ft2-facility for biopharmaceutical manufacturing technologies, support systems, and warehouses in Portsmouth, New Hampshire, where the company has commissioned its largest-scale mammalian cell-culture plant to date. Lonza is adding a 5000-L bioreactor to the existing facility, which has 93,000 L of capacity. It also increased its capacity by acquiring Genentech 's (South San Francisco, CA) mid-scale mammalian biopharmaceutical production plant in Porriño, Spain, in late 2006.

Lonza further added to its biopharmaceutical toolbox in August with the acquisition of the "AggreSolve" technology and service business of Zyentia Ltd. (Cambridge, UK). AggreSolve is an in silico protein-analysis platform that can be applied to solving the problems posed by protein aggregation. Zyentia was founded in 2002 as a spinoff from the University of Oxford, based on technologies around protein folding and aggregation first developed in Oxford then in Cambridge by Professor Chris Dobson and coworkers.

Small-molecule synthesis. On the small molecule side, Lonza's exclusive synthesis business reported sales of CHF 242 million ($200 million) in the first half of 2007, down slightly from sales of CHF 257 million ($213 million) in the same period last year. The company attributed the decline to a transformation of its plant in Kourim, Czech Republic and deferred delivery schedules.

Niche technologies. Lonza is proceeding with select investments in its small-molecule business. It is building a new CHF 80 million ($66 million) large-scale plant for manufacturing highly potent active pharmaceutical ingredients (APIs) at its facilities in Visp. It already has small-scale facilities in Visp.