API manufacturers are pursuing strategies that address these cost and non-cost considerations in various ways. For example,
Cambrex Corporation (East Rutherford, NJ), now focused on the API market after the sale of its biomanufacturing and research
products businesses to Lonza (Basel, Switzerland) last year, has targeted high-end generic APIs and custom manufacturing.
With manufacturing assets in relatively high-cost countries (the United States and Sweden), Cambrex has focused on niche high-value
APIs, including controlled substances and high-potency compounds.
At the same time, Cambrex's management realized that if it is to remain competitive in the custom manufacturing arena, it
had to strengthen its offering of early development services, where long-term commercial relationships are often established
these days. Consequently, in January, it agreed to acquire ProSyntest AS, of Tallinn, Estonia. ProSyntest provides early process
development and scale-up services and has particular expertise in chiral and organometallic chemistries. It was established
in 1990 and has 25 chemists. The business will be renamed Cambrex Tallinn after completion of the acquisition, and Cambrex
will invest to expand its capacity.
The ProSyntest acquisition benefits that strategy in two key ways: it gives it the capability to serve the early development
market, and it provides that capability in a low-cost geography, enabling Cambrex to compete more effectively with CROs in
Asia. The deal should enhance Cambrex's ability to engage clients at early stages and keep them through scale-up to late-clinical
and commercial-scale manufacturing, especially European clients.
Coming from the other direction, CMOs in India have used acquisitions in the US and Europe to gain proximity to clients and
build their technology base. A prime example is Dishman Pharma and Chemicals (Ahmedabad, India) which acquired Switzerland-based
Carbogen and Amcis in 2005 from Solutia. Carbogen Amcis, with three sites in Switzerland and one in the United Kingdom, has
a strong technology base with particular capabilities in chromatography, chiral separations, and high-potency compounds. The
company has a staff of 400, including 150 PhD chemists. According to CEO Mark Griffiths, Carbogen Amcis is doing more than
300 development project per year, which sets up a substantial potential commercial pipeline for Dishman. In fact, says Griffiths,
the ability to offer a commercial scale-up route via Dishman's operations in India has been a business development boon for
Carbogen Amcis, enabling them to win contracts that they might not otherwise have won without the large commercial capabilities.
Other prime examples of companies with footprints in the West and Asia include Albany Molecular Research (US, Eastern Europe,
India and Singapore), NPIL Pharmaceuticals (India, Canada, and the UK) and Lonza (Switzerland, China, and the US). With the
pharmaceutical research and development networks and high growth market opportunities now encompassing Asia and Latin America
as well as North America and Western Europe, the globalization of the CMO industry is bound to pick up speed.
Hear Jim Miller review the "State of the Pharmaceutical Outsourcing Industry 2008" at INTERPHEX(9 AM, Mar. 26, Room 103A),
sponsored by Pharmaceutical Technology.
Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report, tel. 703.383.4903, fax 703.383.4905, email@example.com