A look at the financial performance of Big Pharma through the first half of 2007 shows mixed results. Competition from generic drugs hurt the performance of certain companies such as 

 (London). Particularly strong sales, with growth in the double digits, were recorded by 

Pfizer faces flat revenues and sales erosion from generics 

Pfizer reported lower sales revenues and net income for the second quarter and first half of 2007 as the company experienced the impact of sales erosion resulting from generic competition and increased competition for certain key products.  

Pfizer posted a 6% decline in its second-quarter revenues from $11.74 billion in 2006 to $11.08 billion in 2007. Year-to-date (through the second quarter of 2007) revenues were nearly comparable: $23.49 billion in 2006 compared with $23.56 billion in 2007. Reported net income, however, declined 48% in the second quarter from $2.42 billion in 2006 to $1.27 billion in 2007. Reported net income also declined 29% for the first half of 2007 from $6.53 billion in 2006 to $4.66 billion in 2007.  

 "While there's no question that we faced difficult challenges in the second quarter of 2007—including the impact of the loss of US exclusivity for Zoloft and Norvasc, the timing of some expenses, and Lipitor's performance in the US—we're still on track to meet our previously announced 2007 and 2008 revenue and adjusted diluted EPS [earnings-per-share] goals," said Jeffrey Kindler, Pfizer's chairman and CEO, in a company release. "This underscores our ability to meet our goals despite a highly competitive and complex environment."  

Several factors accounted for Pfizer's results. Pfizer's top-selling product, the anticholesterol drug "Lipitor" (atorvastatin), reported a 13% decline in second quarter sales as 5% growth in international markets was offset by a 25% decrease in the United States. Worldwide sales of Lipitor were $2.72 billion in the second quarter. For the first half of 2007, Lipitor's sales were $6.08 billion, down 2% compared with the same period last year. Pfizer expects its 2007 full-year revenues for Lipitor to be flat or decline 5% compared with 2006. 

Additionally, Pfizer faced decreasing revenues stemming from generic competition for two key products: "Zoloft" (sertraline) and "Norvasc" (amlodipine). Worldwide second-quarter revenues for Zoloft declined 82% from $706 million to $127 million, and worldwide second-quarter sales for Norvasc declined 45% from $1.16 billion to $642 million compared with the second quarter of 2006. For the first half of 2007, Zoloft's global sales decreased 82% from $1.49 billion to $273 million year over year, and Norvasc's global sales declined 27% from $2.34 billion to $1.71 billion.  

 Outsourcing is crucial to Pfizer's cost-reduction strategy 

Pfizer's Kindler reported on the company's progress in meeting short- and long-term goals for cost reduction and operational efficiency. The company’s goal is to reduce the total pretax component of its adjusted growth income by at least $1.5–$2.0 billion in 2008 compared with 2006.  

Key achievements noted by Kindler include the reduction of the number of manufacturing plants in its global network from 93 four years ago to 60. The cumulative effect is a 50% reduction in the number of plants and a 35% decrease in manufacturing employees compared with 2003. "We currently outsource the manufacture of approximately 17% of our products on a cost basis and plan to increase this substantially by 2010," he said in the release.  

Kindler also stressed the importance of outsourcing other functions. "We continue to outsource where it makes sense," he said in the release. "For instance, we recently partnered with a single strategic service provider for certain information technology activities which are now performed by Pfizer and contractors. By consolidating 11 third-party providers and reducing labor cost, we expect to generate considerable annual savings and higher quality services."  

Kindler also notes that Pfizer is on track with its plans to close five research and development (R&D) sites. Two-thirds of the projects from those sites were transferred to other sites. The company expects the balance of early-stage projects to be transferred by the end of the third quarter of 2007 and for late-stage project transfers to be completed by the end of 2007.  

Pfizer updates status of key APIs and looks to biologics

Pfizer also provided an update on several new molecular entities (NMEs) under development. In collaboration with 

 (New York), Pfizer is developing apixaban for treating several arterial thrombotic conditions. Late-stage clinical trials are underway, and Bristol-Myers Squibb expects to file for approval of the first indication in the US in the second half of 2009.  

 issued an approvable letter for maraviroc, a drug to treat CCR5-tropic HIV-1. Also in June, Pfizer resubmitted its registration filing for dalbavancin, a cell-wall synthesis inhibitor to treat skin and skin-structure infections. Pfizer says it expects to receive FDA approval for the drug by the end of 2007. 

In addition to short-term progress on NMEs, Pfizer also is looking to build what it terms as a "major presence" in biotherapeutics. "The majority of drugs will continue to consist of small molecules; this has always been a core strength of our company," said Kindler in the release. "But large molecules must also be a very important part of our future—they involve some of the most promising R&D technology and cutting-edge science in medical research. We are looking to integrate our investments, R&D, and existing internal capabilities with disciplined business development."   

GlaxoSmithKline reports slightly lower sales

GlaxoSmithKline reported an almost 5% decline in global pharmaceutical revenues for the second quarter. Sales declined from Â£5.02 billion ($10.30 billion) in the second quarter of 2006 to Â£4.78 billion ($9.81 billion) in the second quarter of 2007. For the first half of 2007, pharmaceutical sales were Â£9.58 billion ($9.67 billion) compared with Â£10.07 billion ($20,67 billion) in the first half of 2006.   

For the second quarter, US pharmaceutical revenues decreased 2% to Â£2.3 billion ($4.7 billion) because of continued generic competition for "Zofran" (ondansetron)  and "Wellbutrin XL" (bupropion) and a decline in sales in "Avandia" (rosiglitazone), an antidiabetes drug that has come under scrutiny for possible safety issues.  

Global sales of Avandia products fell 22% in the second quarter of 2007 to Â£349 million ($716 million) following the publication in May 2007 of a meta-analysis that raised concerns of possible cardiovascular side effects. FDA was scheduled to hold an advisory committee meeting to discuss the potential risks on July 30.  

On a positive note, GlaxoSmithKline had several strong-performing products in the second quarter. Sales of "Seretide/Advair" (fluticasone) increased 12% to Â£871 million $1.79 billion), "Lamictal" (lamotrigine) 18% to Â£271 million ($556 million), "Valtrex" (valacyclovir) 14% to Â£226 million ($464 million), "Coreg" (carvedilol) 37% to Â£202 million ($415 million), and vaccines 6% to Â£398 million ($817 million).  

GlaxoSmithKline also had had several NCEs approved in 2007: "Tykerb/Tyverb" (lapatinib), "Veramyst" (fluticasone furoate), and "Altabax" (retapamulin).  

 (Whitehouse Station) reported global sales of $6.1 billion for the second quarter, up 6% year-over-year. Sales for the first half of 2007 also increased 6% to $11.9 billion. On a product basis, global sales of "Singulair" (montelukast) increased 15% in the second quarter to $1.1 billion. Combined global sales of "Zeita" (ezetimibe) and "Vytorin" (ezetimibe and simvastatin), anticholesterol products by Merck and Schering-Plough, were $1.3 billion, up 30% from the second quarter of 2006. Global sales of "Cozaar" (losartan) and "Hyzaar" (hydrochlorothiazide and losartan) were $847 million in the second quarter of 2007, an 8% increase year-over-year. On the downside, global sales of "Fosamax" (alendronate) and "Fosamax Plus D" (alendronate and holecalciferol) declined 4% from the second quarter of 2006 to $786 million in the second quarter of 2007.  

Led by several key products, Novartis reported a 12% increase in pharmaceutical sales to $11.99 billion in the first half of 2007 and a 6% increase in the second quarter to $6.07 billion. For the first half, key performers were "Diovan" (valsartan) with sales of $2.4 billion and "Gleevec/Glivec" (imatinib) with sales of $1.4 billion.  

In the US, pharmaceutical sales increased 5% in the first half as growth in several brands offset the impact of the "Zelnorm" (tegaserod) suspension in March and generic competition for "Lotrel" (amlodipine and benazepril) and and anticipated generic competition for "Lamisil"  (terbinafine). Zelnorm sales decreased 66% in local currencies to $91 million following a suspension of sales in the US and 20 other countries following a FDA request in March 2007 to review cardiovascular safety data. Lotrel sales were negatively affected by the at-risk launch of a generic version by 

 (Petach Tikva, Israel) in May 2007. Sandoz, the generics arm of Novartis, subsequently launched a generic version. A trial date for Novartis's ongoing lawsuit against Teva has not been set, according to Novartis. 

Sales in the company's vaccines and diagnostics business increased from $127 million in the first half of 2006 to $482 million in the second half of 2007. Sales in Sandoz, Novartis's generics division, increased 19% from $2.88 billion in the first half of 2006 to $3.42 billion in the first half of 2007.  

Sales in Roche's pharmaceutical division rose 18% to CHF 11.37 billion ($9.44 billion) in the first half of 2007 compared with the first half of 2006. Growth was primarily driven by a 22% increase in sales for Roche's oncology drugs, which include "MabThera/Rituxan" (rituximab), "Herceptin" (trastuzumab), "Avastin" (bevacizumab),  "Xeloda" (capecitabine), and "Tarceva" (erlotinib). Also contributing positively to sales were "Lucentis" (ranibizumab), a drug  developed by Roche and 

 (South San Francisco, CA), and continued pandemic stockpiling of Roche's influenza drug "Tamiflu" (oseltamivir).  

At the end of June, Roche had 112 clinical projects in its R&D pipeline, which includes 54 NMEs and 58 additional indications. Thirty NMEs are in Phase I, 19 in Phase II, and 3 are in Phase III.  

Lilly is optimistic about prospects for pharmaceuticals 

 (Indianapolis) reported a 20% increase in sales to $4.63 billion for the second quarter. Sales of "Alimta" (pemetrexed), "Byetta" (exenatide), "Cialis" (tadalafil), "Cymbalta/Yentreve" (duloxetine), "Forteo" (teriparatide recombinant), "Strattera" (atomoxetine), "Symbyax" (fluoxetine and olanzapine), and "Xigris" (drotrecogin alfa activated) grew collectively 61% to $1.48 billion, accounting for 32% of the company's sales. Growth in these products, which have been launched since 2000, is in keeping with the company's strategy to target revenue growth from new products. The top-selling product for Eli Lilly in the second quarter was "Zyprexa" (olanzapine) with sales of $1.21 billion, and the strongest sales growth was from Cymbalta, which experienced a 67% sales increase to $519.5 million in the second quarter. Based on positive results through the first half, Lilly expects full-year sales to grow in the mid-teens.  

Schering-Plough, Wyeth, J&J, and AstraZeneca post steady gains 

 (London) posted strong to moderate growth. Schering-Plough posted global pharmaceutical sales of $2.52 billion in the second quarter, a 13% gain year-over-year, and sales of $4.92 billion for the first half of 2007, up 15% compared with the first half of 2006. Key performers in the first half were: "Remicade" (infliximab), which posted a 31% sales gain to $767 million; "Nasonex" (mometasone), up 23% to $579 million; "Clarinex/Aerius" (desloratadine), up 18% to $455 million; and "Temodar" (temozolomide), up 23% to $412 million.   

Schering-Plough announced earlier this year plans to acquire 

 (Oss, Netherlands), which includes Organon's human-health and animal-health businesses. The deal is expected to close by the end of the year.  

Wyeth and Johnson & Johnson also reported good results. Wyeth posted a 10% increase in revenues for the second quarter to $5.6 billion and a 10% gain to $11.0 billion for the first half of 2007. Johnson & Johnson's global pharmaceutical sales increased 8.2% in the first half of 2007 to $12.37 billion and increased 5.8% in the second quarter to $6.15 billion. AstraZeneca posted a 6.1% increase in sales to $7.27 bullion for the second quarter and a 11% gain to $14.24 billion for the first half of 2007.   

Bristol-Myers Squibb, meanwhile, posted global pharmaceutical sales of $3.9 billion for the second quarter of 2007, relatively the same year-over-year. Global pharmaceutical sales declined 3.3% from $7.56 billion in the first half of 2006 to $7.31 billion in the first half of 2007.  

Articles

Global Feature

The financial performance of the pharmaceutical majors was generally favorable through the first half of 2007, with most companies reporting moderate to double-digit growth. Industry leader Pfizer, however, reported a sales decline for the second quarter and flat revenues through the first half of 2007. Pfizer Chairman and CEO Jeffrey Kindler says the company remains committed to its plans for cost-cutting, more outsourcing, and increasing its position in biologics.

A Mid-Year Scorecard for Big Pharma

The growth in biological-based drugs is creating opportunities for contract manufacturing organizations (CMOs) involved in sterile manufacturing. 

 (Ravensburg, Germany) is one such company, and it is investing in its production facilities.  

Vetter invests $100 million in new facility 

Vetter Pharma provides contract manufacturing and aseptic filling of prefilled injection devices for the parenteral drug market. The company recently completed a three-year, $100-million investment for a new 16,000-m

  facility near its headquarters in Ravensburg, Germany. The new facility increases Vetter's production capacity for prefilled injection systems by roughly 30% to 400 million units per year. The new facility has a capacity of approximately 90 million units per year. The new facility supports dosage-form studies in the early phases of product development, material for clinical studies,  and full commercial manufacturing.  

In launching the new facility, Vetter is addressing growing demand for prefilled-injection systems such as syringes, cartridges, and vials. About 1.4 billion prefilled syringes were sold industry-wide in 2006. By 2010, the quantity is expected to top 2.4 billion (1). 

Preliminary operations at Vetter's new facility began in October 2006, and full production began in January 2007. The facility has two filling lines for liquid and lyophilized injectable drugs in dual-chamber syringes, single- and dual-chamber cartridges, and vials. In addition to 2920 m

  of production floor space, the new facility includes a separate building with steam production and an uninterruptible power supply. The facility also will include laboratories for chemical and microbiological analysis in the near future. 

 "A key feature of the facility is the high degree of automation," says Thomas Otto, one of the managing directors of Vetter. "Automation was planned throughout the building, from door openers to the use of the brand new restricted access barrier system on the filling lines."   

The filling lines are arranged to allow for modularity and flexibility. "Thanks to the modular structure of the site, two additional filling lines can be added while production is in progress on our existing filling lines," says Otto. "If required, this expansion can be implemented at very short notice." The plans take into account the space requirements for the two additional lines. The supply of resources is basically already in place, he adds.  

Investment builds on position in dual-chamber syringes

Vetter has a strong patent position in dual-chamber syringes. Its key product is the "Vetter Lyo-Ject" syringe. In the dual-chamber syringe, one chamber is filled with a lyophilized product, and the other is filled with a diluent. When the plunger is pressed, the diluent and lyophilized product are mixed and can be injected.  

While single chamber systems are used for liquid substances, a dual-chamber system is especially well-adapted for two-drug components (lyophilzed-liquid or liquid-liquid) that must be kept separate in the syringe or cartridge until they are used. Since both drug components are already inside the syringe or cartridge, less active substance is lost when administering the drug. This can save as much as 10% of the active substance, in comparison with the application of conventional injection systems, according to the company. 

 "As the growth in the overall pharmaceutical market is predominantly  from new biotechnology products, the relevance of the Vetter Lyo-Ject syringe becomes obvious," says Otto. "Most biotechnology drugs can only be stable in a lyophilized form." 

In addition to the new facility, Vetter has three other similar facilities in and around Ravensburg, including two aseptic-filling facilities and one final-packaging facility. The filling facilities can be used as backup systems.  

Close to the new Ravensburg South production facility, Vetter has started building a new facility for secondary packaging. Secondary packaging involves the final packaging of the application system in blister packages and cardboard boxes. The 19,000-m

 facility will be ready for production at the end of next year.  

"With our new facility, we will be able to meet the most stringent international packaging standards," says Otto. The expansion is driven by increased customer demand in the growing market for homecare applications, which includes pen- and autoinjectors, and to meet increased adoption of safety systems for needlestick prevention.  

Overall, Vetter manufactures 18 different client products that have been approved by the 

. In addition to providing commercial manufacturing, the company offers early drug-development services to meet growing demand from that segment.  

 "Currently, the pharmaceutical market is strongly influenced by globalization as well as stricter worldwide regulatory demands and growing competitiveness," says Otto. "This situation will persist for the foreseeable future. In this context, reducing the time needed to introduce a new drug to the market is becoming a major success factor for pharmaceutical and biotech companies around the world owing to the constant rise in development costs." 

As a result, there is a need for contract manufacturers to bridge the phase between formulation and filling, provide the aseptic filling itself, and for packaging sensitive and complex active substances. To fill that need, Vetter Development Service (VDS) offers  services to pharmaceutical manufacturers seeking to develop and launch parenteral drugs. Through VDS, Vetter provides services in the preclinical phase in process development and in clinical production. Support services include  pharmaceutical analysis, regulatory affairs, and the development of primary packaging supplies. 

1. M. Rios and B. Harrison, "Big Shot: Developments in Prefilled Syringes" 

Pharma Partner Focus

The company begins production at a new $100-million manufacturing facility for prefilled injection systems, plans further investment in packaging facilities, and targets both early-phase development and commercial manufacture.

Vetter Pharma Invests in Sterile Manufacturing

 commissioned two new GMP manufacturing suites for producing therapeutic proteins and monoclonal antibodies. The new fermenter lines with 500 L of working volume are sized so different cell-culture processes can be run (batch, fed-batch, or perfusion).  The company also is building two new 2500-L multiprocess fermentation suites, the first of which is slated for commissioning in mid-2008. Both can run perfusion processes. The expansion includes a new laboratory building, a central energy station, a logistics space, and additional facilities for sterile filling of syringes and injection vials. 

 expanded its sterile-pharmaceutical manufacturing facility in Glasgow, United Kingdom. The company doubled its capacity for the aseptic GMP manufacture of clinical trial material.  

 (RSIL) formed a joint venture in India, Evotec-RSIL Ltd, to design, synthesize, and manage compound libraries as a service. The joint venture will be located in Thane, India.  

 plans to expand and consolidate its Global Central Laboratories in Smyrna, Georgia, and its Clinical Development Services office in Atlanta, Georgia, within a single structure in nearby Marietta, Georgia. The 201,366-ft

, three-story structure in Marietta will more than double the combined space now occupied by Global Central Laboratories in Smyrna and CDS in Atlanta and allow the addition of about 400 jobs through 2011. Renovation of the structure is expected to begin in the third quarter of 2007. 

, an independent French drug company, opened a new manufacturing center in Sophyno, Russia, to produce brand-name drugs for the local market. The facility, the result of a EUR 40-million ($55-million) investment, is expected to produce 60 million packs and employ more than 180 people. 

 announced a $41-million fundraising round, of which $22 million will be invested in expanding the company's injectable-cytotoxics manufacturing site in Braine L'Alleud, Belgium. This investment will more than double the facility's capacity, and the facility will be on line in 2009. NextPharma also acquired 

 (San Diego, CA), a contract manufacturing company. 

News

A roundup of manufacturing and service expansions.

Expansions

 (Cambridge, MA) formed a global collaboration to jointly develop and commercialize AP23573, Ariad's mTOR inhibitor, which is expected to enter Phase III trials this year.  

The agreement provides for an initial payment of $75 million to Ariad and as much as $452 million more in milestone payments, based on the successful development of AP23573 in multiple cancer indications. Both companies will share overall responsibility for global commercialization and development of AP23573. Each party will fund 50% of the cost of global development of AP23573, except that Merck will fund 100% of the cost of development outside the United States. 

			On a global basis, Ariad will be responsible for manufacturing the active pharmaceutical ingredient used in the product, and Merck will be responsible for the formulation of the finished product (tablets). 			

 received two Phase I contracts totaling $13 million from the 

(Arlington, VA) for the Accelerated Manufacture of Pharmaceuticals (AMP) program. The AMP program is a three-phase program in which the US military is focused on technologies for producing emergency therapeutics and vaccines. Phase I of the AMP program optimizes host strains that will express a model vaccine and antibody and demonstrate small-scale production. Subsequent phases will be aimed at rapid process optimization, scale-up, and cost-effective production.  

Xcellerex will serve as the prime contractor on the first grant, in which the company is collaborating with 

(London). On the second contract, Xcellerex is collaborating with 

 (Burlingame, CA) as the prime contractor,  

(Menlo Park, CA), and BioPharm Services.  

 (Armonk, NY) signed a $1.4-billion global outsourcing deal with 

(London). The seven-year agreement, which renews and expands on a current contract, covers the provision of information technology (IT) infrastructure services to 60 countries and additional functions within AstraZeneca. 

The original agreement was signed in 2001 for a reported $1.7 billion, covering 45 countries. In the renewed contract, IBM will provide a single global technical infrastructure, managing IT services for AstraZeneca such as email and computer operations, storage hosting, and communication services. AstraZeneca, in turn, will manage its overall IT strategy, as it has been doing under the existing contract, as well as the development and support of its application systems. 

, a privately held developer and marketer of prescription and nonprescription pharmaceutical products, signed a manufacturing and supply agreement with Cedar Pharmaceuticals 

 (Shreveport, LA) for "Northyx" (methimazole) oral tablets. Under the agreement, Centrix will sell and distribute four strengths, two of which (15 mg and 20 mg) have not been previously available. Cedar Pharmaceuticals manufactures and supplies Northyx. 

 (Taizhou, China) to double its capacity to manufacture vancomycin, one of Hisun's major active ingredients, subject to US and European regulatory approvals. Vancomycin treats severe gram-positive hospital infections. Alpharma currently manufactures vancomycin at its sites in Copenhagen, Denmark, and Budapest, Hungary. 

(South San Francisco, CA) for the development, manufacture, and worldwide commercialization of two products containing Genentech's recombinant human-growth hormone "Nutropin AQ" (somatropin (rDNA origin)) and Tercica's recombinant insulin-like growth factor-1 "Increlex" (mecasermin (rDNA origin) injection) for the treatment of short stature, adult growth-hormone deficiency, and potentially other metabolic disorders. The Nutropin AQ and Increlex hormones were originally designed and formulated to be combined and administered as a single, daily injection. 

 (Vienna) for "Actimmune" (interferon gamma-1b). InterMune thus eliminates roughly $91.6 million in future purchase commitments for Actimmune that existed under the previous supply agreement. InterMune will pay Boehringer Ingelheim Austria approximately $5.5 million to terminate the existing supply agreement and to enter into the new supply agreement. 

, a biopharmaceutical contract manufacturer, signed a contract with 

 (Moscow) for the process development and manufacture of polyclonal antibodies. The contract is valued at approximately $914,000. 

will provide engineering, procurement, and construction-management services for 

's (Basel, Switzerland) new manufacturing facility to be located in Holly Springs, North Carolina. The new facility will produce trivalent pandemic and interpandemic influenza vaccines using a cell-culture-based process for American and overseas markets. Officials did not disclose the contract value. 

 joined forces with international life-sciences supply company 

 (Zurich, Switzerland) to develop a new state-of-the-art monoclonal-antibody production system at the university's Clayton campus.  

The latest pacts from the pharmaceutical supply chain.

Agreements and pacts

, a privately held clinical-stage pharmaceutical company. Merck will pay $350 million plus the amount of cash on hand at the time of closing. NovaCardia's lead product candidate, KW-3902, an adenosine A1 receptor antagonist, is in Phase III clinical trials. NovaCardia will spin out a new corporate entity to support clinical development of the company's second compound, K201 (JTV-519) for atrial fibrillation. The deal is subject to regulatory approval and is expected to close within 45 days of the announced acquisition on July 25.  

, a contract research and manufacturing firm, filed a Form F-1 with the US Securities and Exchange Commission for an initial public offering priced at roughly $120 million. Wuxi PharmaTech's operations are grouped into two segments: laboratory services (consisting of discovery chemistry, service biology, analytical, pharmaceutical development, and process development services) and manufacturing (manufacturing of advanced intermediates and active pharmaceutical ingredients), according to the company's prospectus. The company says it provides services to 70 pharmaceutical and biotechnology customers, including nine of the top 10 pharmaceutical companies based on 2006 revenues. The company posted 2006 revenues of $69.9 million. 

, a private biotechnology company specialized in biocatalysis, acquired 

 (Pasadena, CA), a private company producing custom and off-the-shelf enzymes used in chemical process manufacturing by pharmaceutical and fine-chemical companies. BioCatalytics will remain at its location in Pasadena. David Rozzell, former president of BioCatalytics, will join Codexis as vice-president of enzyme products and services in the Pharma Services Group.  

's (Bangalore, India) enzyme business for about DKK 551 million ($102 million), thus strengthening its position in India. Biocon is an Indian biotechnology company specializing in biopharmaceuticals, contract research, clinical research, and enzymes. 

 (Pratteln, Switzerland), a custom manufacturer to the pharmaceutical and agrochemical industries. The combined company will specialize in manufacturing and marketing chlorine and sulfur compounds, which include specialized raw materials and intermediates. The combined company will have annual revenues of CHF 400 million ($330 million).   

 reached a definitive agreement to acquire a minority interest in Sunstone Pharmaceutical. Sunstone is a privately held manufacturer of primarily over-the-counter medicines with operations in Tangshan, China. 

 and JHP Pharmaceuticals (Saddle River, NJ) signed an asset-purchase agreement, whereby JHP will acquire King's Rochester, Michigan sterile-manufacturing facility, some of King's products that are manufactured there, and the related contract manufacturing business. The companies also entered into a manufacturing and supply agreement under which JHP will provide fill and finish support to King's hemostatic product, "Thrombin-JMI" (thrombin, topical, bovine, USP).  

 reduced its workforce from 33 employees to 8 employees during June and July to conserve its remaining cash balance. The total charge for this workforce reduction is approximately $260,000. The company will reduce its workforce further by replacing its employees with a variable consulting team. In addition, the company will move out of its current headquarters this month to a smaller, temporary suburban space. 

—Indian contract-manufacturing organization 

's (Brussels) fine-chemicals and vitamin businesses for an undisclosed sum. The transaction includes   Solvay's Veenendal, Netherlands, facilities, as well as the intellectual property rights for fine chemicals, vitamin D, and vitamin D analogues.  

 (Bad Homburg, Germany). This transaction includes Pharmatec's subsidiary 

 (Ternitz, Austria) and was approved by the relevant antitrust authorities without conditions. Pharmatec is a pharmaceutical-plant engineering company that focuses on hygienic and sterile-process technologies. 

A roundup of company moves and positioning from the pharmaceutical and biotechnology industries and contract service providers.

Mergers, acquisitions, and restructuring

Resolving a problem in the synthesis of an active pharmaceutical ingredient (API) or in scale-up is critical for a drug's commercial success. Several recent examples underscore the versatility of approaches to API manufacturing.  

ILLUSTRATION: M. MCEVOY. PHOTOGRAPHY: PHOTOS.COM			

's (New York) "Lipitor" (atorvastatin) is the pharmaceutical industry's top-selling drug, with 2006 sales of $13.6 billion, according to 

 (Fairfield, CT).  A key intermediate in Lipitor is ethyl (

)-4-cyano-3-hydroxybutyrate, which can be produced through biocatalytic routes.   

 (Midland, MI) uses a nitrilase developed by 

 (San Diego) for the asymmetric hydrolysis of 3-hydroxyglutaronitrile to make ethyl (

)-4-cyano-3-hydroxybutyric acid, which is then converted to ethyl (

)-4-cyano-3-hydroxybutyrate. The route to making ethyl (

)-4-cyano-3-hydroxybutyrate starts with epichlorohydrin, which is subjected to a cyanide reaction. This step is followed by an enzyme desymmetrization (100% theoretical yield) using a nitrilase engineered by Diversa to work at 3-M substrate concentration to give 99% conversion and 99% enantiomeric excess (1, 2). 

 A key part of the process is the scale-up of the production of the nitralase, which Dowpharma does via its "Pfenex" expression technology to give soluble, active enzyme in titers in excess of 25 g/L fermentation broth. The final step is a simple esterification (1, 2). 

 (Redwood City, CA) also developed a biocatalytic process for making ethyl (

)-4-cyano-3-hydroxybutyrate. The process involves two enzymes that catalyze the enantioselective reduction of ethyl 4-chloroacetoacetate by glucose to form an enantiopure chlorohydrin. In the second step, a third evolved enzyme catalyzes the biocatalytic cyanation  of the chlorohydrin to cyanohydrin under neutral conditions (2). 

's (Whitehouse Station, NJ) "Januvia" (sitagliptin) (see Figure 1), a new molecular entity approved by the 

 (Rockville, MD) in 2006 to treat Type 2 diabetes, is a chiral-β amino acid derivative. In collaboration with 

 (Basel, Switzerland), Merck advanced an approach for the asymmetric catalytic hydrogenation of unprotected enamines to synthesize sitagliptin using a ferrocenyl ligand in a rhodium-based catalyst. This approach improved yield and reduced waste from the reaction (3).  

Figure 1: Merck & Co.'s "Januvia" (sitagliptin), a new molecular entity approved in 2006. (US FOOD AND DRUG ADMINISTRATION)			

The production of colesevelam hydrochloride, the API in "WelChol," is an example of a successful scale-up for an API. 

 (Parsippany, NJ), is evaluating increasing production to meet increased demand for colesevelam, an oral polymeric, lipid-lowering agent. DSM produces colesevelam at its small-molecule manufacturing facility in Linz, Austria.  

DSM's manufacturing facility in Linz, Austria. (DSM)			

's (Cambridge, MA) US marketing partner for the product, 

WelChol is indicated for lowering low-density lipoprotein (LDL) cholesterol and was approved by FDA in May 2000. In December 2006, Daiichi Sanyko submitted a supplemental new drug application to the FDA for WelChol to improve glycemic control in patients with Type 2 diabetes mellitus. If approved, WelChol will be the first LDL cholesterol-lowering medication also indicated for improving glycemic control. The new indication for WelChol for treating Type 2 diabetes would potentially increase the volume requirements for colesevelam.  

To meet current and projected demand, DSM is evaluating a potential new investment at its Linz facility, which would include the addition of new manufacturing equipment to increase the efficiency in the gel-cutting procedure and the reaction part of the colesevelam production unit.  

In December 2006, DSM produced its millionth kilogram of colesevelam at the Linz facility. DSM optimized the manufacturing process for colesevelam and supplied the initial 25 kg for conducting the first human clinical trials to the innovator of the product, 

 which was acquired by Genzyme in 2000. DSM has manufactured the API on a commercial scale since the drug's US marketing approval in 2000 and European approval in 2004.  

In optimizing the manufacturing process for colesevelam, DSM had to overcome certain key challenges. Colesevelam is poly (allylamine hydrochloride), cross-linked with epichlorohydrin and alkylated with (6-bromohexyl) trimethylammonium bromide and 1-bromodecane.The main steps of the API synthesis are the cross-linking of poly (allylamine hydrochloride) and the alkylation of the cross-linked polymer.  

Geltex first approached DSM with the project because it had difficulty producing the product on an industrial scale. Although the synthesis of the compound was not problematic, the material is a polymer hydrogel, and DSM had to design specialized equipment to cut the material. DSM engineer George Haubel worked with a team that designed the gel cutter and the specific reactors for polymer-suspension reactions.  

DSM optimized the manufacturing process for colesevelam, which is carried out by cross-linkage, comminution, alkylation, washing with several washing steps between the individual stages, and drying in a fluid-bed dryer (4). Following polymerization, the cured crude gel is cut in a defined shape, washed with methanol batchwise in a static or stirred bed, and finally alkylated in methanol. The akylated gel is washed in methanol and sodium chloride in a static or stirred bed followed by washes of sodium chloride and final water washes with deionized water (4). Because of the adhesive quality of the gel, the material is dried in a fluid-bed dryer because it adheres to the surface of a cone dryer. 

The particle size of the API is important for the clinical efficacy of the drug. Colesevelam is a non-systemic drug that is not absorbed into the bloodstream and does not pass through the liver and kidneys. It travels through the body to the intestines, where it binds to bile acids, which are then carried out of the body by the normal digestive process. Bile acids are made from cholesterol. The body needs to use LDL to make more bile acids. This process reduces the amount of bad cholesterol in the blood. 

If the particle size of the API were too small, it would be absorbed by the body, and if too large, it would be retained in the system. Micronization of the API is performed by 

An emerging area in API development is aptamers. Aptamers are single-stranded nucleic acids that form well-defined three-dimensional shapes, which allows them to bind to target molecules in a manner that is conceptually similar to antibodies, according to 

 (Cambridge, MA), a company specializing in aptamer development. Unlike monoclonal antibodies, aptamers are chemically synthesized, rather than biologically expressed. 

Archemix recently signed aptamer drug development pacts with 

"Macugen" (pegaptanib sodium), which was approved by FDA in 2004, is an example of a commercial aptamer. The drug was developed by 

 (Melville, NY) in  2005. Pegaptanib is a covalent conjugate of a 28-mer oligonucleotide that terminates in a pentylamino linker, to which two 20-kilodalton monomethoxy polyethylene glycol units are covalently attached via the two amino groups on a lysine residue (5). 

, "Nitrilase-Catalyzed Desymmetrization of 3-Hydroxyglutaronitrile: Preparation of a Statin Side-Chain Intermediate," 

 2. P. Van Arnum, "Achieving Enantioselectivity in Synthesizing APIs and Intermediates," 

Technology Outlook: APIs, Intermediates, and  Formulation 

 3. P. Van Arnum, "Optimizing Strategies for API Synthesis and Formulation Development," 

, "Preparation of Alkylated N- or Amino, Ammonium or Spirobicyclic Ammonium Group-containing, Cross-linked Polymers," US Patent 7105631, Sept. 12, 2006.  

www.fda.gov/cder/foi/label/2006/021756s006,s007lbl.pdf

APIs

Catalytic routes to producing atorvastatin and sitagliptin are recent advancements.

Improving Routes in API Manufacturing

Developments from the US Food and Drug Administration, European Medicines Agency, and other key regulatory bodies and news from key trade associations.  

's Nanotechnology Task Force released a report that recommends that the agency consider developing guidance for manufacturers and taking other steps to address the benefits and risks of drugs and medical devices using nanotechnology. The task force was initiated by FDA Commissioner Andrew von Eschenbach in 2006. 

The report addresses regulatory and scientific issues. The report outlines that nanoscale materials potentially could be used in most product types regulated by FDA and that those materials present challenges similar to those posed by products using other emerging technologies. The challenges, however, may be complicated by the fact that properties relevant to product  safety and effectiveness may change as size varies within the nanoscale. 

The report  recommends consideration of agency guidance that would clarify, for example, what information to give FDA about products, and also when the use of nanoscale  materials may change the regulatory status of particular products. As with other FDA guidance, draft guidance documents would be made available for public comment before being finalized. 

Policy Statement Concerning Cooperative Manufacturing Arrangements for Licensed Biologics

 of Nov. 1992 (57 FR 55544) (Ref. 1), and revises the draft guidance of the same title, dated August 1999. 

The draft guidance on cooperative manufacturing arrangements applies to biological products subject to licensure under section 351 of the Public Health Service Act (PHS Act) (42 USC 262). This document is issued jointly by the Center for Biologics Evaluation and Research and the Center for Drug Evaluation and Research.  

The draft guidance addresses several types of manufacturing arrangements (i.e., short-supply arrangements, divided-manufacturing arrangements, shared-manufacturing arrangements, and contract-manufacturing arrangements) and describes certain reporting and recordkeeping responsibilities associated with these arrangements for the licensed manufacturer(s), contract manufacturer(s), and final product manufacturer(s). These responsibilities include: notification of any proposed change in the product, production process, quality controls or facilities; notification of results of tests and investigations related to or impacting the product; notification of products manufactured in a contract facility; and standard operating procedures. 

Comments on the draft guidance are due Sept. 1, 2007. The draft guidance may be found 

 announced the International Conference on Harmonization (ICH) draft guidance Q10 Pharmaceutical Quality System in the Federal Register (Docket 2007D-0266, CDER 200783). 

The ICH Q10 draft guideline describes one approach for "an effective pharmaceutical quality system that is based on ISO concepts, includes applicable good manufacturing practice regulations and complements ICH Q8 'Pharmaceutical Development' and Q9 'Quality Risk Management.'" The guideline, which is optional, applies to pharmaceutical drug substances and drug products, including biotechnology and biological products, throughout the product life cycle. 

The document specifically outlines the "product life cycle" to include pharmaceutical development, technology transfer, manufacturing, and product discontinuation. Among the areas discussed in the guideline are management responsibility (including planning, management, communication, and review), continual improvement of process performance and product quality (including life cycle stage goals), and continual improvement of the pharmaceutical quality system (including monitoring internal and external impact factors). 

 is open for public comment until Oct. 11, 2007. 

 advises companies about how to treat polymorphic drug compounds—those that exhibit multiple structural forms—when filing abbreviated new drug applications. The bottom line, according to the guidance, is that generic drug products containing the polymorphs be the "same" as the reference listed drug in active ingredients, bioavailability, and bioequivalence. The guidance pertains to orally available drugs that are either solid- or suspension-dosage products. 

The latest on active pharmaceutical ingredients in development and under commercial manufacture

Regulatory and association news

, a contract research organization, named Deepak Hegde vice-president of formulation development services. Before joining WuXi PharmaTech, Hegde was general manager of drug-delivery research laboratories at USV Ltd and also worked at Sandoz, the generic arm of Novartis.  

 named  Jean-Pierre Robert president of Draxis Specialty Pharmaceuticals Inc. (DPS). Previously Robert was president of Draximage, the division of DSP that produces and markets its own radiopharmaceutical products. Robert will also have responsibility for Draxis Pharma, the contract-manufacturing division of DSP, which produces sterile and nonsterile products  

In addition, Draxis created the Office of the President, which will include Martin Barkin, president and CEO of Draxis Health Inc., and Dan Brazier, chief operating officer. Within the Office of the President, Barkin and Brazier will retain their current responsibilities, and Robert, as president of DPS, will report to Brazier. John Durham left the company as president of Draxis Pharma, effective July 20.  

 reported that Severin Schwan, currently CEO of Roche Diagnostics, will succeed Franz B. Humer as chief executive of the Roche Group at the next annual shareholders' meeting on March 4, 2008. Humer will focus on his role as chairman of Roche Holdings. Severin Schwan's successor as CEO of Roche Diagnostics will be announced at a later date, according to the company.  

, a provider of technologies and services for pharmaceutical development and manufacturing, announced that Karen Daniels had become president of the company's bioservices division. Daniels joins Althea's management team as the company continues to expand capacity and capabilities, including commercial manufacturing operations. 

 appointed Gary Christianson to the newly created position of chief operating officer. Christianson has more than 20 years of operational expertise in areas such as technical development, the manufacturing of pharmaceutical products, facilities design and management, and personnel development. 

—Anders Hedegaard will assume the position of president and chief executive of 

 on August 1. Peter Wulff, the current chief executive, will become executive vice-president of business development. Hedegaard is presently executive vice-president in charge of business operations and marketing at 

 appointed Dr. Robert Swift, a member of its board of directors, to the role of chairman and chief executive officer–president on an interim basis. Swift replaces Dr. Ramesh Pandey, who will continue to serve on the board of directors. Pandey relinquishes responsibility for the company's day-to-day operations, but will play an advisory role with the company. 

, a biopharmaceutical company focused on developing therapeutic products for the treatment of celiac sprue, appointed Abhay Joshi, PhD, president and chief executive officer. Joshi will be based in the company's new facility in San Carlos. Most recently, Joshi served as executive vice-president and chief technical officer at CoTherix, Inc. 

 named Sean Alan F.X. Reade vice-president of global regulatory affairs. Reade has more than 25 years of experience in the pharmaceutical industry, including positions at PPD (Wilmington, NC) and UCB (Brussels). Pharm-Olam is a multinational, full-service contract research organization to the pharmaceutical and biotechnology industries. 

 appointed Dr. J. William Freytag chairman and chief executive officer (CEO), succeeding Richard Glickman, effective immediately. Glickman, one of Aspreva's founders and the company's first chairman and CEO, announced his planned departure from Aspreva in May 2007. 

 added David M. Ryckman to its management team. Ryckman will serve as vice-president of manufacturing and pharmaceutical operations and will lead Cylene's scale-up and manufacturing operations. He has nearly 20 years of experience in developing formulation and process chemistries. 

 promoted François Nader to executive vice-president and chief operating officer. Nader will manage NPS's research and development, regulatory affairs, and commercial operations and will plan and implement the company's outsourcing business model. Nader previously served as senior vice-president of integrated healthcare markets and head of North American medical and regulatory affairs at Aventis Pharmaceuticals. 

PTSM: Pharmaceutical Technology Sourcing and Management-08-01-2007