Tipping the Scales in Manufacturing Investment - Pharmaceutical Technology

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Tipping the Scales in Manufacturing Investment
The pharmaceutical majors invest in biologics production capacity as they advance restructuring programs and build their pipelines

Pharmaceutical Technology

Roche bought the Piramed (Slough, UK) in May 2008. Piramed is developing anticancer therapies that target P13-kinase. Last year, Roche formed a major alliance with Alnylam Pharmaceuticals (Cambridge, MA) that provides Roche access to Alnylam's ribonucleic-acid interference technology.

Wyeth. Earlier this year, Wyeth launched "Project Impact," a company-wide program designed to address short-term fiscal challenges, particularly from the launch of generic versions of "Protonix" (pantoprazole), and longer-term strategic redesign. The measure will include productivity initiatives in R&D, manufacturing, commercial, and administrative functions.

In October 2007, Wyeth announced plans to invest EUR 24 million ($37 million) for a new center for pharmaceutical development at its solid-dosage manufacturing facility in Newbridge, Ireland. It also acquired Haptogen (Aberdeen, Scotland), a company specializing in protein optimization and drug discovery.

Eli Lilly. In May 2008, Eli Lilly (Indianapolis, IN) completed a 475,000-ft2 bioproduct R&D laboratory, the third of three facilities that make up its Indianapolis biotechnology complex. The complex also includes a 250,000-ft2 bioproduct pilot plant and a 10,000-ft2 research support facility, which were completed in 2006. The construction of the three buildings and Eli Lilly's 2004 acquisition of Applied Molecular Evolution (San Diego), which conducts protein optimization research, represents a total biotechnology investment of $1 billion. In April 2008, the company broke ground for a EUR 400-million ($619-million) biopharmaceutical manufacturing facility in Kinsale, Ireland.

Eli Lilly is streamlining manufacturing in Indianapolis. The move affects sites producing the active ingredients for Lilly's insulin products "Humalog" and "Humulin" and for its osteoporosis drug "Forteo" (teriparatide recombinant human).

Key recent moves by Lilly include: the $2.3-billion acquisition of ICOS (Bothell, WA) in early 2007; a strategic alliance with MacroGenics (Rockville, MD) to develop the humanized monoclonal antibody, teplizumab, in October 2007; and a licensing and development agreement, announced in December 2007, with BioMS Medical (Edmonton, Alberta, Canada) for a synthetic peptide to treat multiple sclerosis.

Bristol-Myers Squibb. As part of its goal of transforming itself into a biopharmaceutical company, Bristol-Myers Squibb (BMS, New York) announced in December 2007 a strategy and productivity initiative that is expected to generate pretax annual cost savings of $1.5 billion by 2010. The plan involves reducing the number of its manufacturing facilities by more than 50% by the end of 2010. BMS announced the closure of several manufacturing facilities, which include ones in Barceloneta and Mayaguez, Puerto Rico. Also, BMS plans to reduce total headcount company-wide by 10% by 2010.

BMS is proceeding with the construction of a $750-million bulk-biologics manufacturing facility in Devens, Massachusetts. The facility is expected to be operationally complete by 2009. BMS expects to submit the site for regulatory approval in 2010 and begin commercial production in 2011.

Schering-Plough. In April 2008, Schering-Plough announced a productivity-transformation program with a goal of achieving $1.5 billion in annual savings, 80% of which will be completed by the end of 2010. The company plans to reduce the number of its plants globally and create more focused and high-efficiency plants by 2012. The move follows the company's EUR 11-billion ($17-billion) acquisition of Organon Biosciences (Oss, The Netherlands) in 2007.


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