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Expansion activity was limited as fine-chemical producers and CMOs of API and intermediates grapple with changing industry fundamentals.
The year 2011 was another year of transition for fine-chemical producers and contract manufacturers of APIs and intermediates. As the pharmaceutical industry as a whole deals with slowing growth, increased generic-drug incursion, reduced R&D productivity, and the financing pinch for smaller and emerging bio/pharmaceutical companies, so do its suppliers. Expansion activity among fine-chemical producers and contract API manufacturers was limited although certain areas, such as high-potency manufacturing, continue to attract investment as do biopharmaceutical manufacturing and related services.
Patricia Van Arnum
One of the noteworthy expansions in 2011 was the opening of Almac's new North American headquarters in Souderton, Pennsylvania, in May 2011. The completion of the two-year construction project and $120-million investment provides the company with parallel service offerings in the United States and in Europe through the company's Craigavon, Northern Ireland, site. The new 240,000-ft2 North American headquarters houses more than 800 employees.
The new Souderton site integrates the company's clinical technologies and clinical services activities into one location after being housed in separate locations in Audubon and Yardley, Pennsylvania. Almac consists of five major units: Almac Clinical Services, Almac Clinical Technologies, Almac Sciences, Almac Pharma Sciences, and Almac Diagnostics. Almac Clinical Services provides clinical-supply services, such as comparator sourcing, blinding and overencapsulation, packaging and labeling of clinical-trial supplies, and distribution and depot activities. Clinical Technologies provides interactive voice and web-response systems and other similar support services. Almac Sciences provides custom-synthesis services and technology. Key functions include: API development and manufacturing, biocatalysis screening and selection, route selection, process development, solid-state chemistry services, and development and manufacture of custom peptides, oligonucletides, and proteins. Almac Pharma Services provides pharmaceutical development and drug-product manufacture for all phases of clinical trial supply (Phases 0–IV) and commercialization. Almac Diagnostics provides biomarkers for discovery and validation, bioinformatics, and genomic services.
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In October 2011, Almac announced that it is expanding its manufacturing capacity to over 30 m3 at its European headquarters in Craigavon. The upgraded facility will include reactor vessels, cleanroom product isolation, and drying equipment for highly potent API manufacturing up to 600-kg batch sizes. The company expects the facility to be built, commissioned and validated within the next two years. The company also is expanding its pharmaceutical development services capabilities with a new non-GMP formulation-development facility for the development and scale-up of solid oral dose products, including for high-potency compounds.
In 2011, other companies reported expansions in high-potency manufacturing. Piramal Healthcare announced that it is performing commercial-scale antibody–drug conjugate (ADC) manufacturing at its Grangemouth, Scotland, facility. The company is currently evaluating plans to build out additional manufacturing suites to accommodate kilogram batch sizes. Several ADC-based therapies are in late-phase clinical trials, approximately one dozen are in Phase I development, and more than 20 are in preclinical development. Earlier this year, Piramal opened a new $400,000-quality-control laboratory suite at its facilities in Grangemouth to support its ADC portfolio.
Outlook for global contract pharmaceutical manufacturing, research, and packaging
Sigma-Aldrich's custom manufacturing and services business unit, SAFC, recently completed an assessment by SafeBridge Consultants and has been granted SafeBridge certification for its commercial-scale high-potency API facility in Verona, Wisconsin. Constructed at a cost of $30 million and officially opened in April 2010, the Verona site was built specifically to support manufacturing for Phase III and commercial scales up to Category IV compounds. The SafeBridge assessment also included a successful recertification of SAFC's nearby Madison, Wisconsin, high-potency facility.
Also in 2010, SAFC completed an expansion of its Jerusalem, Israel facility, which increased SAFC's contract manufacturing capabilities in large-molecule recombinant proteins and small-molecule APIs through fermentation, including high-potent APIs and secondary metabolites. The expansion focused on niche fermentation of APIs and bulk drugs, secondary metabolites, cytotoxins, and large-molecule proteins.
In October 2011, Saltigo reported that it will build new production capacities for potent APIs at its facility in Redmond, Washington. The company will expand its production to produce and handle Category III substances. Capacity up to the kilogram range will become available at the beginning of 2012.
Aescia recently invested in a new high-containment facility in Queenborough, United Kingdom. Separately, the company also purchased three manufacturing sites in Germany and Italy from the biopharmaceutical company UCB as announced in late 2010. Aesica acquired sites in Monheim and Zwickau, Germany, as well as UCB's Pianezza, Italy site.
In September 2011, Alphora completed the expansion of a cytotoxics R&D laboratory as part of an ongoing $4-million capital program for 2011. The 2011 capital program also includes other additions to R&D, GMP operations, analytical services and staffing. The new laboratory is designed to handle high-potency APIs and Class IV compounds. Other parts of the capital plan include the construction of a fourth cGMP kilo laboratory, a 10,000-ft2 GMP warehouse, and a new enterprise resource planning system, all of which are expected to be completed in the fourth quarter of this year. Expansion of a second pilot plant is planned for 2012.
Lonza is investing CHF 24 million ($26.2 million) to expand cytotoxic manufacturing capabilities at its fine-chemicals facilities in Visp, Switzerland. The investment will add multikilogram-scale cytotoxic capacity for clinical and commercial production. Lonza currently operates high potency GMP laboratory suites on a gram scale. The expansion is expected to be completed in the second quarter of 2012.
Lonza also is investing CHF 10 million ($10.9 million) to expand its biopharmaceutical development services platform in Singapore. The expansion includes the addition of 1858 m2 of laboratory space and associated equipment and will support cell-line construction, upstream and downstream process development, and analytical services. The facility is expected to come on line in the first half of 2012.
In March 2011, Lonza announced it was investing £16 million ($25.3 million) to further develop the flexibility and capability of its Slough, UK biopharmaceutical manufacturing facility with the construction of a new 60,000-ft2 building adjacent to existing buildings to create a Slough campus. The investment includes a new fermentation suite, new purification suites, new process-development laboratories, and a new GMP warehouse. The project is scheduled for completion by the end of 2012.
In May 2011, Lonza announced an expansion of its viral-based therapeutics business with the construction of a new, cGMP cleanroom located adjacent to its existing Houston, Texas, operations. The expansion provides for large-scale capacity to support late-stage viral vaccine and gene therapy projects. Lonza announced entering the viral manufacturing business through the acquisition of Vivante GMP Solutions in August 2010.
Other firms are making select investments. Hikal has started construction of a new, multipurpose, multiproduct API manufacturing facility, which is scheduled to be operational by June 2012. The plant will consist of two parallel streams and will accommodate 32 reactors with capacities ranging from 6 m3 to 10 m3 for a total reactor volume of approximately 300 m3. The custom manufacturing arm of Dr. Reddy's Laboratories expanded its Chirotech Technology Center at Cambridge Science Park, UK. In April 2011, the company opened a new 33,000-ft2 facility for laboratories and offices. The facility will support the company's capabilities in biocatalysis and chemocatalysis, activated mPEGs, and peptides.
A changing landscape
This year also saw some merger and acquisition (M&A) activity, primarily bolt-on acquisitions by select providers, some acquisitions by private-equity investors, reorganizations by other companies, and the emergence of new names in contract biopharmaceutical manufacturing.
Evonik Industries reorganized by combining its business in custom manufacturing of APIs (exclusive synthesis), pharmaceutical amino acids (the Rexim product line), and pharmaceutical polymers in a new healthcare business line, effective Sept. 1, 2011. The newly formed business line is part of the Health and Nutrition Business Unit. Earlier this year, Evonik increased its capacity by 50% to make pharmaceutical-grade glycine at its plant in Nanning, China.
Earlier this year, Johnson Matthey completed the integration of the biocatalyst offerings from X-Zyme, which the company acquired in July 2010. Johnson Matthey expanded the biocatalyst offerings into product and service offerings into its catalysis and chiral technologies business. The portfolio from X-Zyme includes enzymatic catalysts for scalable production of highly pure chiral amines and alcohols. The biocatalysts and related technology complement the chemocatalytic technology and related expertise of Johnson Matthey.
Granules India, a pharmaceutical manufacturer, and Ajinomoto OmniChem, a producer of fine chemicals, formed a joint-venture, Granules–OmniChem, to provide APIs and intermediates. Granules OmniChem is constructing a new facility in Vishakhapatnam (Vizag), Andhra Pradesh, India. The construction of the facility was scheduled to begin by November 2011 and is expected to be completed by late 2012 with production beginning by January 2013. The company will initially focus on high-value, low-volume APIs and intermediates for existing customers and will custom manufacture new chemical entities in the future.
CABB, a fine- and specialty-chemicals company, acquired the fine-chemicals company KemFine Group Oy through its Swiss subsidiary, for an undisclosed sum. In October 2011, Barclays Private Equity agreed to acquire CU Chemie Uetikon, a fine-chemical producer based in Lahr, Germany.
Carbogen Amcis restructured its Swiss operations in Bubendorf, Aarau, and Hunzenschwil. Under the restructuring plan, the Aarau site will focus more strongly on development and the Hunzenschwil site on the pilot production of early-phase projects. Large-volume production and the manufacturing of highly active agents will continue at the Bubendorf site. The company planned to reduce headcount by 60 employees.
On the biopharmaceutical front, earlier this year, Genzyme completed the sale of its pharmaceutical intermediates business to International Chemical Investors Group (ICIG). ICIG purchased substantially all of the pharmaceutical intermediates business, excluding the drug-delivery technologies portion. The acquired business was renamed Corden Pharma Switzerland and operates as part of ICIG's pharmaceutical business within the Corden Pharma group platform of companies. In September 2011, ICIG also acquired the former Boulder, Colorado, operations of Roche, which manufactures APIs, peptides, and small molecules. The operations are now named Corden Pharma Colorado.
Fujifilm Diosynth Biotechnologies, the former Merck Biomanufacturing Network, began operations under its new name following the completion of the acquisition of the Merck Biomanufacturing Network by Fujifilm in April 2011. Fujifilm Diosynth Biotechnologies provides contract biologics development and manufacturing services. The acquisition included facilities in Research Triangle Park, North Carolina, and Billingham, UK, manufacturing contracts, business-support operations, and a workforce.
In June 2011, Fujifilm and Mitsubishi formed a partnership for contract manufacturing for biopharmaceuticals. Under the partnership, the companies signed an agreement to transfer the ownership of 20% equity interests in Fujifilm's wholly owned biopharmaceutical contract manufacturing subsidiaries, Fujifilm Diosynth Biotechnologies U.S.A. and Fujifilm Diosynth Biotechnologies UK to Mitsubishi.
Also, in 2011, Johnson & Johnson acquired the biopharmaceutical and biomanufacturing firm, Crucell. Following the acquisition, Crucell operates as the center for vaccines within the Johnson & Johnson pharmaceuticals group.
Patricia Van Arnum is a senior editor at Pharmaceutical Technology, 485 Route One South, Bldg F, First Floor, Iselin, NJ 08830 tel. 732.346.3072, firstname.lastname@example.org.