CMOs Build Positions in Asia

October 4, 2007

The rising influence of Asia in the global pharmaceutical ingredients market was evident at CPhI Worldwide.

Milan, Italy (Oct. 4)-The rising influence of Asia in the global pharmaceutical ingredients market was evident at CPhI Worldwide, the large trade exhibition, sponsored by CMP Information, this week in Milan, Italy, in terms of numbers of exhibitors at CPhI and recent activity of offshore suppliers and Western contract manufacturing organizations (CMOs). The growing presence of offshore suppliers is evident by recent investment activity of CMOs from India and China, which includes the acquisition of Western manufacturing assets and organic investment.

Asian suppliers grow their presence

In July, Dishman Pharmaceuticals and Chemicals (Ahmedabad, India) agreed to acquire Solvay Pharmaceuticals’s (Brussels) fine-chemicals and vitamin businesses for an undisclosed sum. The deal includes Solvay’s Veenendal, The Netherlands, facilities, as well as the intellectual property rights for fine chemicals, vitamin D, and vitamin D analogues.

The Solvay acquisition is the latest move by Dishman to acquire Western production assets. In 2006, it acquired the CMO Carbogen Amcis (Bubendorf, Switzerland), which included capabilities for high-potency APIs. In February 2006, it acquired I03S, Ltd. a company specializing in ozone chemistry, and in 2005 acquired the UK-based contract research company Synprotec, Ltd.

In April 2007, Jubilant Organosys Ltd. (Noida, Uttar Pradesh, India) acquired Hollister-Stier Laboratories (Spokane, WA), a contract manufacturer of sterile injectables. The move strengthens Jubilant's contract research and manufacturing services (CRAMS) business and provides the company with another US-based manufacturing facility. Jubilant also has a solid-dosage form manufacturing facility in Salisbury, Maryland.

Jubilant provides CRAMS for advanced intermediates, fine chemicals, APIs, and dosage-forms as well as drug-discovery and development services. In 2007, the company booked orders of $60 million for its CRAMS business, up from $40 million in 2006.

In June 2007, Jubilant commissioned a new dosage-form FDA-compliant manufacturing facility at Roorkee, Uttarakhand, India. The facility has annual manufacturing capacity of 1.6–1.8 billion tablets and 150 million capsules.

Jubilant Organosys has manufacturing facilities in seven locations: Gajraula (Uttar Pradesh) for advanced intermediates and fine chemicals; Nanjangud (Karnataka) for API manufacturing; Roorkee (Uttarakhand) for dosage forms; Salisbury, Maryland, for solid-dosage forms; Spokane, Washington, for sterile injectables; and Nira, Maharashtra, and Samlaya, Gujarat, India. The company also is a large producer of pyridine and pyridine derivatives and recently increased production capacity of pyridine and picolines to 42,000 tons per year.

NPIL Pharma (Mumbai, India) is continuing a $100-million investment program in formulation development and manufacturing services. The company has invested roughly $50 million over the past three years as part of its early-phase (development) and late-phase (manufacturing) formulation services in the UK and India, and it plans a similar investment over 2007–2009. The investment includes a new sterile supplies pilot plant in Mumbai, India, which is scheduled to come on stream in the fourth quarter of 2007.

The company's focus on formulation services and final-dosage forms follows the addition of capabilities in this area from NPIL’s 2006 acquisition of Pfizer’s (New York) API and formulation manufacturing facility at Morpeth, UK. As result of the Morpeth acquisition, NPIL Pharma has annualized aggregate drug-formulation capacity of 3 billion tablets, 500 million low RH (<8%) tablets, 270 million hard-gelatin capsules, 180 million ophthalmic liquids, 48 million glass vials, and 30 million ampules.

In custom manufacturing, NPIL formed a new dedicated unit, NPIL Innovations or NPIL(i), to focus on developing and applying new technologies used in process development and production of APIs. The unit focuses on biocatalysis, chemocatalysis, and flow processing, including its catalyst-based racemization technology.

Hikal (Mumbia, India) upgraded its R&D facility at Bangalore and increased the number of laboratories to carry out contract-research activities for innovative companies, according to a July 26, 2007 company release. The company has also commenced construction activities to set up a new multipurpose commercial plant at its Taloja site in India.

Shasun Pharma Solutions (Chennai, Tamilnadu, India),  which acquired the pharmaceutical custom business of Rhodia (Paris) in 2006, is advancing its technology position. In July, Shasun partnered with H Lundbeck A/S (Copenhagen) to allow the use of its proprietary proprietary Buchwald cross-coupling to manufacture and commercialize new APIs.

In China, the contract research and manufacturing firm Wuxi PharmaTech (Shanghai) completed a US initial public offering (IPO) priced to raise 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 APIs) to 70 pharmaceutical and biotechnology customers, including nine of the top 10 pharmaceutical companies, according to the company's prospectus.

Western CMOs invest in Asia

Meanwhile, CMOs from Western Europe and the US are positioning their own capabilities in Asia. Lonza (Basel, Switzerland) recently completed a small-scale manufacturing plant for APIs in Nansha, China. The plant was scheduled to go on stream in August. In addition, the company is constructing a new large-scale API facility in China. Production is expected to begin in the second half of 2008.

In keeping pace with moves by CMOs to offshore locations, AMRI (Albany, NY) acquired the assets of Ariane Orgachem Pvt. Ltd. in Aurangabad and Ferico Laboratories Ltd. in Navi Mumbai, India, giving the company two API and intermediates facilities in India. AMRI also acquired additional land for expansion and plans to invest approximately $15 million to expand and upgrade manufacturing capabilities during the next three years.

In September, AMRI opened a 50,000-ft2 research and development (R&D) center at the Shapoorji Pallonji Biotech Park in Hyderabad, India.The new R&D center, located near AMRI’s existing chemistry facilities in Hyderabad, will provide additional space for AMRI’s laboratory-scale Indian operations. The new facility includes laboratories for conducting early-stage research such as custom chemical synthesis and analytical chemistry. Additional scale-up laboratories for preparing both preclinical and clinical trial supply active ingredients are expected to open later this year and 2008, respectively. Those larger laboratories will be used to develop efficient methods to produce APIs and intermediates. The new facility also is equipped with environmental controls and a wastewater treatment unit. AMRI has invested approximately US $8 million in construction and equipment.

During this first phase of expansion, the new R&D center will add approximately 100 employees to AMRI’s operations in the ICICI Knowledge Park, which currently has 35 scientists. Additionally, infrastructure has been added at the new site to allow a second facility to be added in the future, which would more than double employee headcount.

In September, Sigma-Aldrich  announced its intent to invest in a site at the Wuxi-New District Park (WND) located northwest of Shanghai, China, for its new Asia-Pacific manufacturing hub. Sigma-Aldrich has executed a memorandum of understanding with the WND authorities.

The site is to be developed in three phases. Sigma-Aldrich expects to initially invest $25 million to acquire land rights and construct its first-phase that includes a large-scale, non CGMP, multipurpose organic manufacturing facility dedicated to supporting its SAFC fine chemicals business unit. Sigma-Aldrich plans to begin construction of the new plant by the end of 2007. When fully developed, the site is expected to produce raw materials, key intermediates and final products in support of SAFC's Pharma, Hitech and Supply Solutions businesses through a manufacturing plant, and analytical, packaging and warehousing facilities.

Future development phases at the site will also support Sigma-Aldrich’s Research Essentials and Research Specialties business units and include the extension of analytical, packaging and warehousing facilities for its research-based business.

The development of the new China campus marks a continuation of SAFC’s “build and acquire” strategy, put in place to meet the increased demands for its medicinal chemistry and CGMP manufacturing services. The site complements Sigma-Aldrich's Bangalore, India facility, which began production in October, 2006. Representing an investment of $12 million, the 139,000-ft2. India site provides manufacturing of small-scale, key intermediates for medicinal chemistry.

Aptuit (Greenwich, CT) has been actively building its capabilities through a series of key acquisitions. Its latest move is the formation of a new entity, Aptuit Laurus (Hyderabad, India), which Aptuit formed through a phased acquisition with Laurus Labs Limited (Hyderabad) in June. The deal positions Aptuit in the growing market for pharmaceutical outsourcing in India.

Aptuit Laurus will be comprised of a 160,000-ft2 research and development facility in Hyderabad, a large-scale manufacturing plant for drug substances that it is currently under construction in Pharma City, Vishakhapatnam, and Aptuit's existing informatics development and support group in Bangalore. The Pharma City plant is scheduled for completion in 2008.

“We have been interested in investing in India for over 10 years,” said Michael Griffith, CEO of Aptuit, adding that in Laurus, Aptuit found a company that will meet the pharmaceutical industry's demand for outsourcing services in India and Asia. “We see the Indian pharmaceutical outsourcing industry increasing its share of the global market from roughly 10% today to as much as 50% during the next five to 10 years,” adds Griffith (1).

To further underscore the growing importance of Asia in the pharmaceutical outsourcing market, Griffith points to potential shifts. “If you look at a list of leading global providers of pharmaceutical services today, we think that fewer than 20% of those companies will be on that list 10 years from now,” he said. “We think that many of the leaders on that list will be replaced with leadership coming out of Asia” (1).

Aptuit says it plans to invest approximately $100 million during the next four years to build upon Aptuit Laurus's development, manufacturing, and informatics capabilities with the addition of a complete suite of development services including: medicinal chemistry, preclinical, solid-state chemistry, consulting, clinical packaging and logistics, Phase I/IIa research, and large-scale dosage-form manufacturing. When these investments are completed, Aptuit Laurus will mirror the capabilities of services offered by Aptuit in North America and Europe. In addition, the new company plans to offer expanded services in discovery and clinical research and access to larger-scale manufacturing at the back-end of the product development life cycle.

Satyanarayana Chava, founder and CEO of Laurus Labs, was named president of Aptuit Laurus in June 2007 with the formation of the new company. Chava founded Laurus with two colleagues in late 2005. Chava was formerly chief operating officer of Matrix Laboratories (Secunderabad, India).

In August, Andhra University in Visakhapatnam, India and Aptuit Laurus signed a memorandum of understanding to mutually collaborate in the areas of research, training, consultancy work, and technology management.

References

1. P. Van Arnum, “Aptuit Establishes a New Company in India,” Pharm. Technol. Sourcing and Management3 (9), 2007.