This year's Informex was held in late January in New Orleans, and I would describe the mood as upbeat but cautious. Most manufacturers had a strong year in 2007, and they believe that the same dynamics are in place for 2008. In particular, the robust early stage pipeline continues to drive demand for process development services and preclinical and clinical quantities of intermediates and active ingredients, especially from small biopharmaceutical and pharmaceutical companies. In fact, company presentations during the Exhibitor Showcases focused primarily on development services, often touching just briefly on commercial-scale capabilities.
The ability to offer "one-stop shopping," i.e., to service the client from early development through commercial supply, was a common theme, but contract manufacturing organizations (CMOs) clearly understand that, in light of the slowdown in new commercial approvals, the present market opportunity is primarily in early development.This year's "must-have" capability was solid-state chemistry, which has become increasingly important for improving compound performance and for intellectual property protection. Once reserved for a handful of specialty labs, the ability to analyze different polymorphs and salts of a chemical compound is now being offered by many, if not most, active pharmaceutical ingredient (API) manufacturers.
There has always been something of a herd mentality in the pharmaceutical chemical sector as CMOs try to offset any competitor's advantage in service offerings, and this year is no different. With most CMOs emphasizing their development and scale-up capabilities, solid state and chiral chemistry know-how, and high potency facilities, it's not easy to tell them apart.
Several CMOs complained of some price-cutting by competitors, and there were concerns about some companies whose financial positions were somewhat shaky. There were some complaints about the relatively low number of pharmaceutical company attendees and slow floor traffic, but this may be a reflection of changing shopping habits (major pharmaceutical companies want fewer vendors, not more) rather than overall industry conditions.
Strategies bridge Asia and the West
A major element of the API development and manufacturing environment in recent years has been the emergence of CMOs and CROs, contract research organizations, in Asia and Eastern Europe. Although cost has been viewed as a major advantage of those companies, the actual strategic implications have been more complex. On the one hand, the cost advantage can be played in several ways, either on the development side, which is labor-intensive, or on the commercial side, where lower capital costs and environmental compliance requirements can be exploited. On the other hand, companies can compete in segments where cost advantages are not so important (e.g., for high-potency compounds; processes exploiting new technologies; or development services where proximity to the customer and intellectual property protection are more important considerations). These strategy considerations are faced equally by companies based in North America, Europe, and Asia.