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Volume 32, Issue 2
A news roundup for February 2008.
Report from: Europe
by Sean Milmo
A wave of pharmaceutical expansions is expected in Europe this year, surprisingly by Indian companies. Their goal is to use the region as a production base for supplying the global market—particularly North America—with active pharmaceutical ingredients (APIs) and intermediates. In the past two years alone, Indian companies such as Dr. Reddy's Laboratories (Mumbai) have used acquisitions to build a strong presence in the European generics sector. Among the biggest deals have been Dr. Reddy's $690-million takeover in February 2006, of Betapharm, Germany's fourth largest generics player, and Mumbai-based Wockhardt's $265-million acquisition of Negma, France's fourth biggest integrated pharmaceutical company, in May 2007. In fact, Wockhardt has taken the lead as the largest Indian pharmaceutical company in Europe, with 1500 staff.
Now there are signs that Indian companies desire a significant position in contract manufacturing in Europe. They plan to grow production capacity via outsourcing, partnerships, and acquisitions.
Bangalore-based Avesta Biotherapeutics and Research Pvt. Ltd (ABRPL), a joint venture between Avesthagen (Bangalore) and Meditab Specialties of the CIPLA Group (Mumbai), acquired the biologics operation of Siegfried GmbH in Switzerland with the aim of strengthening its biopharmaceutical contract-manufacturing activities. The move fits in with ABRPL's strategy of being able to meet the manufacturing standards of both the US Food and Drug Administration and the European Union's European Medicines Agency.
These deals demonstrate a reversal in a trend of European pharmaceutical companies manufacturing their APIs and intermediates in India. "Indian companies are now outsourcing APIs from Europe because of the advantages of having products in both the North American and European market which are made in European plants and have been approved by the EU plant inspection agencies," said Roger Laforce, marketing and sales general manager for Fabbrica Italiana Sintetici (FIS), a leading Italian advanced intermediates producer, at the 2007 ICIS Fine & Specialty Chemicals conference in Hamburg, Germany. "We're now making APIs for Indian companies."
Manoj Dutt, managing director of Solaris Chemtech (Gurgaon, India), said on the sidelines of the conference that, as Indian companies become global operators in the production of APIs and intermediates, they will inevitably want to have production facilities in Europe.
"As they expand internationally, Indian [companies] want to make use of the technological expertise of European fine chemical companies by, if necessary, taking them over," he added. "They also want to benefit from the close relationships which European fine chemical producers have with the large Western pharma companies. Some of the European fine chemical companies seem content to restrict their activities to Europe because of these close ties with Big Pharma."
Indian pharmaceutical companies are targeting Central and Eastern Europe (CEE) for expansion because the area provides a platform for exporting into Western Europe as well as into the neighboring Commonwealth of Independent States (CIS), including Russia.
A number of Indian companies are already making their move. Ranbaxy (Gurgaon) acquired Terapia S.A., Romania's largest independent pharmaceuticals company, for $324 million in 2006. Sun Pharma (Mumbai) bought ICN Hungary, a producer of controlled substance APIs in 2005. And, Strides Arcolab (Bangalore), a leading Indian specialist in the production of finished generic medicines, has established a regional production base for making dosage-form pharmaceuticals in Warsaw, Poland, which will also be part of the company's global manufacturing network.
"Production costs in CEE countries are cheaper than in Western Europe where there is a general trend to move production facilities from western to eastern countries, especially to Hungary and Poland where there is a strong base of qualified employees," says Aleksandra Jargot, an analyst at Frost & Sullivan, a market research organization headquartered in London.
"CIS markets have huge potential and the eyes of multinational pharmaceutical companies are already being directed toward them," she adds. "Currently, India is the third largest exporter of drugs and pharmaceuticals to Russia.
"The CEE is also a fast-growing generics market itself with consumption of pharmaceuticals still being much lower than in Western Europe," she explains. "Thus Indian companies, like other foreign companies, are interested in supplying that market as well."
Indian companies could establish a large manufacturing presence in Europe, perhaps ultimately similar in size to that set up by US pharmaceutical producers in Europe in the 1960s and 1970s. Unlike their US counterparts a few decades ago, however, multinational Indian companies will not have to restrict themselves to Western Europe but will be able to spread across the entire continent.
Sean Milmo is a freelance writer based in Essex, United Kingdom.
ASIA & THE PACIFIC
After a negative year in the news, China has finally agreed to improve the safety of its drug and food exports. Li Changjiang, minister of the General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ) of the People's Republic of China, and US Health and Human Services Secretary Mike Leavitt signed two Memoranda of Agreement (MoA) on Dec. 11 in Beijing, to promote information-sharing, and ensure safety and compliance.• Hikal (Mumbai, India) signed a contract manufacturing agreement with Pfizer (New York) in which Hikal will supply active pharmaceutical ingredients. • WuXi PharmaTech (Shanghai) signed a definitive agreement to acquire AppTec Laboratory Services (St. Paul, Minnesota). The transaction totals approximately $151 million with the additional assumption of AppTec debt totaling approximately $11.7 million.
WHERE IS THAT?
EUROPE & MIDDLE EAST
Novartis (Basel, Switzerland) is launching a new initiative, called "Forward," to enhance productivity by streamlining the organization and redesigning the way it operates. "Forward" will include 2008 and 2009 initiatives estimated to bring in annual pretax cost savings of $1.6 billion in 2010, as well as the reduction of approximately 2500 full-time positions (2.5% of group total) worldwide. • Novozymes (• Bagsvaerd, Denmark) and Millipore (Billerica, MA) announced an agreement to develop, market, and sell new, animal-free, cell-culture supplements for biopharmaceutical manufacturing. The alliance will initially focus on developing recombinant human albumin and recombinant human transferrin. • La-Pha-Pack (Langerwehe, Germany), a manufacturer and provider of chromatography consumables and related products, was acquired by Thermo Fisher Scientific (Waltham, MA) and will be integrated into Thermo's laboratory consumables business. • DSM Pharma Chemicals (Parsippany, NJ), a business unit of DSM Pharmaceutical Products, entered into an enzyme supply agreement with the German company IEP(Wiesbaden) to enable scale-up of chiral alcohol manufacturing based on IEP enzymes. • sanofi-aventis (Paris) ended its participation in the development of IDM Pharma's (Irvine, CA) "Uvidem," an investigational therapy for the treating melanoma. As a result, IDM plans to restructure and reduce its workforce in the first quarter of 2008. • Biotechnology company Crucell (Lieden, The Netherlands) signed a collaboration and commercialization agreement with sanofi pasteur, the vaccines division of sanofi-aventis (Paris), for Crucell's rabies monoclonal antibodies. • Pharmaterials (• Reading, United Kingdom), a preformulation and formulation development company, was acquired by Pharmaceutics International (Baltimore), a manufacture of solid and semi-solid dosage forms.
Coming Down the Pike...
by Michelle Hoffman
Text sirtuins are the new kinases, according to a presentation given last month at the JP Healthcare Investors Conference in San Francisco by Sirtis CEO Christoph Westphal. Sirtuins are a class of proteins that seem to modulate aspects of the aging process. Researchers had noted some time ago the increased longevity of animals on highly calorie-restricted diets. These animals also enjoy better sugar regulation than do animals on higher-calorie, higher-fat diets. Within the past year, scientists have shown that sirtuins in general, and the protein SIRT1 in particular, are activated in calorie-restricted animals.
All of this has led investigators to initiate studies of the sirtuins in order to someday mitigate some of the effects of aging. Westphal predicted that the sirtuins may even merit the kind of attention now enjoyed by the kinases—a family of proteins in which some of its members have been implicated in cancer and autoimmune diseases, and which have been the focus of intense scrutiny by drugmakers for most of the past decade.
Indeed, many of the health benefits of a calorie-restricted diet can be simulated by resveratrol, a small molecule found in red wine. Scientists now understand that resveratrol also activates SIRT1.
Now, it seems, Sirtis has found a small molecule that it is calling SRT1720, which is more potent than resveratrol, and which might be useful in the treatment of Type II diabetes. Westphal reported at the meeting that the experimental drug lowered blood glucose levels and improved glucose homeostasis and insulin sensitivity in mouse models of diabetes and obesity. Late last year, Sirtis researchers, in collaboration with investigators at the University of California at San Diego and Harvard Medical School also reported these results in Nature.
Facility Roundup IMAGES COURTESY OF PATHEON AND BOSCH
Source: J.C. Milne, P.D. Lambert, S. Schenk, et al., "Small Molecule Activators of SIRT1 as Therapeutics for the Treatment of Type 2 Diabetes," Nature (450) 712–716.
Zone in on: IT
Is Pharma Leading the Way in Information Technology?
by Angie Drakulich
A December 2007 study by Diamond Management & Technology Consultants shows just how important information technology (IT) is to business today, including the pharmaceutical business. Only 26 pharmaceutical company executives participated in the survey, which fielded a total 456 respondents, but 90% of respondents had annual revenues of more than $1 billion.
Key findings show that 81% of pharmaceutical firm participants point to IT as a significant factor in the operational success of their business, and 77% believe IT plays a significant role in company success. In terms of IT's impact on core products, 73% felt that IT had a significant influence. In fact, overall respondents placed IT ahead of business functions such as sales, manufacturing, distribution, procurement, and marketing when it comes to the ability of a single function to change company operations over the next three years. Outsourcing may be a large factor behind this predicted change. Overall respondents said they expect 21% of their company's IT services to be outsourced by 2010, although only 9% say they currently outsource IT operations.
Among the fields represented in the survey—consumer packaged goods, retail, manufacturing and distribution, healthcare, media, insurance, financial services, high tech, travel and hospitality, professional services, utilities, and the federal government—the pharmaceutical group (70%) came in higher than all others in stating that their strategic planning processes are "highly effective."
This may have to do with the nature of the pharmaceutical business model, explains Diamond partner Richard Findlay. Because pharma is "heavily dependent on high levels of research and development investment ... (that) can take 10 to 12 years to bring a new product from the bench to the patient .. coupled with the fact that new products can be cancelled at any stage ... leads to a culture intensely focused on long-term strategic planning. "
In the pharmaceutical group, 77% said their Chief Information Officer was involved in business strategy development compared to an average 72% of the other surveyed groups. However, the pharma group came in 10% lower when asked if their strategic planning helps them understand the competition they face from an IT perspective. "This may call into question whether pharmaceutical companies are as effective as they should be," adds Findlay. "Many top-20 companies have thin pipelines, and some of these firms are experieinceing unexpected product withdrawals and prepatent expiry competitive launches." It's likely that the role of IT strategy is going to change, he says.
Already catching on to the importance of IT, the US Food and Drug Administration released a draft plan to advance its own IT infrastructure by improving internal and external communications, and supplying the FDA-user community with better technology tools and services. The agency's long-term goal is to create an automated, fully electronic, standards-based, submission-and-review environment for human drugs. The plan is open for public comment until Feb. 22, at www.fda.gov/opacom/backgrounders/voice.html.
Zone in on: Regulation
FDA's Draft Annex to ICH Q8 Clarifies Key Concepts
by Erik Greb
The US Food and Drug Administration published in January a draft annex to its International Conference on Harmonization (ICH)Q8 Pharmaceutical Development guidance that clarifies the document's key concepts. Titled ICH Q8 (R1) Pharmaceutical Development Revision 1, the annex describes the principles of quality by design (QbD) and explains how manufacturers can implement concepts listed in ICH Q8 (e.g., design space) for all dosage forms.
In the draft document, FDA encourages manufacturers to adopt a systematic method for understanding their products and manufacturing processes. Such a strategy "can create a basis for more flexible regulatory approaches," according to the annex.
One major section of the annex examines the elements that should be included in pharmaceutical development. The section suggests systematic ways for manufacturers to gain a thorough understanding of the products and processes they develop. It lists the purposes and advantages of tools such as target product profiles, critical quality attributes, risk assessment, design space, control strategy, and life-cycle management.
A subsequent section of the annex offers advice about submitting pharmaceutical development information in a common technical document format. The annex states that data derived from tools that are part of the applicant's pharmaceutical quality system (e.g., product life-cycle management and continual improvement) do not need to be submitted in a registration application. The draft guidance says "the degree of regulatory flexibility is predicated on the level of relevant scientific knowledge provided in the registration application."
To read the full draft guidance, visit www.fda.gov/Cber/gdlns/ichq8pharmann.htm.
FY 2008 Funding Increases
INTERACT in FEBRUARY...
Protein Formulation and Delivery, Second Edition (Informa Healthcare, 2007)
Eds. Eugene J. McNally and Jayne E. Hastedt
The book summarizes recent research for formulators and drug-delivery specialists. Reviewed on pharmtech.com.
Interphex Puerto Rico
Venue: Feb. 14–Feb. 15, San Juan, PR
More Info: www.interphexpuertorico.com
Biogenerics 2008: An Open Forum on Scientific and Regulatory Issues
Venue: Mar. 2–Mar. 4, Boston, MA
More Info: www.barnett.neu.edu/biogenerics/
WBF 2008 North American Conference: Shaping the Future of Manufacturing
Venue: Mar.24-Mar. 27, Philadelphia, PA
More Info: www.wbf.org
Venue: Mar. 26-28, Philadelphia, PA
More Info: www.interphex.com
See special pullout in this issue.
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