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Puerto Rico seeks to build its standing in biopharmaceutical manufacturing and research as it retains its role in bulk pharmaceutical and dosage manufacturing for small molecules.
As the pharmaceutical industry undergoes restructuring, facility rationalization, and a shift toward biologics, Puerto Rico is keeping pace with a strategy to attract investment in research, manufacturing, and science education in biologics. Although small-molecule and solid-dosage form manufacturing remains important for Puerto Rico, the commonwealth is strengthening its commitment to the life sciences with further investments in drug discovery and biotechnology.
Puerto Rico is a major site of pharmaceutical activity. Pharmaceutical shipments from Puerto Rico to the United States were valued at $35.17 billion in 2006, an increase of 1.3% from $34.71 billion in 2005, according to data from the Puerto Rico Industrial Development Company (Pridco), a government-owned business development agency. Puerto Rico has roughly 58 pharmaceutical manufacturing facilities (see Figure 1) and 27,000 people employed in the industry.
Thirteen of the 20 top-selling drugs are either partially or completely manufactured in Puerto Rico, according to Puerto Rico Industrial Development Company. Based on 2006 rankings, these drugs include: "Lipitor" (atorvastatin), "Plavix" (clopidogrel), "Nexium" (esomeprazole), "Norvasc" (amlodipine), "Enbrel" (etanercept), "Zyprexa" (olanzapine), "Risperdal" (risperidone), "Aranesp" (darbepoetin alfa), "Effexor" (venlafaxine), "Protonix" (pantoprazole), "Procrit/Eprex" (erythropoietin), "Cozaar/Hyzaar" (losartan), and "Fosamax" (alendronate).
Figure 1. Figure 1 courtesy of Puerto rico Industrial development Company
Recent plant closures
Despite these positive signs, Puerto Rico is facing facility rationalization by Big Pharma and the top generic-drug companies. During the past 18 months, five major drug-manufacturing plants have either closed or were announced to be closed in Puerto Rico. In 2007, Bristol-Myers Squibb (BMS, New York) announced that it will close its plant in Mayaguez, Puerto Rico, by the end of 2008. This closure is in addition to Bristol-Myers Squibb's December 2007 announcement that it plans to reduce the number of its manufacturing facilities by more than 50% by the end of 2010. As of press time, Bristol-Myers Squibb had not disclosed which facilities were to be closed. In addition to Mayaguez, BMS has manufacturing facilities in Barceloneta, Manati, and Humacao.
GlaxoSmithKline announced in October 2007 that it will close a plant in Cidra, Puerto Rico because of declining sales of its diabetes treatment "Avandia" (roseglitazone). The company is transferring production of Avandia and the related drug, Avandament (rosiglitazone and metformin), to other facilities.
In early 2007, Watson Pharmaceutical (Corona, CA) closed its solid-dosage manufacturing facility in Humacao as part of strategic move to rationalize manufacturing facilities in North America.
Teva Pharmaceutical Industries (Petach Tikva, Israel) and Schering-Plough (Kenilworth, NJ) closed facilities in Puerto Rico in 2006. As part of a strategy to create manufacturing centers of expertise, Teva closed five manufacturing facilities in North America, including its facility in Cidra. The move followed Teva's $7.9-billion acquisition of Ivax in early 2006. The Cidra facility was a former Ivax facility that had manufactured 50 products.
During 2006, Schering-Plough closed its manufacturing operations in Manati, Puerto Rico. It also reduced its workforce in Las Piedras, Puerto Rico, and New Jersey.
Also, the contract manufacturing organization Patheon (Toronto, ON, Canada) announced in December 2007 that it would divest its Carolina, Puerto Rico, facility. The 230,000-ft2 facility manufactures oral cephalosporin solid-dosage forms, including tablets, capsules, and powders for suspension. The Carolina facility manufactures four products on behalf of six clients. Patheon, however, will retain its facilities at Caguas and Manati, Puerto Rico, and plans to improve operating costs, quality and training systems as well as reduce overhead costs.
These plant closures reveal not only changing product sales for individual companies but also reflect a broader shift in pharmaceutical manufacturing from small molecules and solid-dosage forms to biologics.
"We are confronting changes in the pharmaceutical industry such as overcapacity in solid-dosage manufacturing, the transition from the blockbuster drug model to specialty therapeutics and niche markets, and the increased importance of biopharmaceuticals," says Enrique Mirandes, director of life sciences at Pridco. "As a result, we are aggressively pursuing biotechnology manufacturing and research and are putting into place the physical and human capital to make that transformation."
Shift to biologics
The growing importance of biopharmaceuticals in Puerto Rico is evident in several large investments in biopharmaceutical manufacturing and in the commonwealth's strategy to work with public and private sources to attract investment for research in biologics.
In April 2007, Abbott Laboratories (Abbott Park, IL) opened a $450-million, 330,000-ft2 biologics manufacturing facility in Barceloneta, Puerto Rico, to support the long-term supply of its biologic agent, "Humira" (adalimumab). In August 2006, Eli Lilly (Indianapolis, IN) completed a $1-billion expansion of its manufacturing operations in Carolina, Puerto Rico. The investment included new bulk capacity for "Humalog" (insulin lispro [rDNA origin] injection).
Also, BMS is expanding its fill–finish capacity at its facility in Manati, Puerto Rico. The project is targeted for start-up in 2009. The approximately $200-million expansion will add new space and renovate existing space for the filling–finishing of the company's sterile products and biologic compounds, including "Orencia" (abatacept), BMS's first internally developed biologics compound.
BMS is building a new $660-million large-scale, multiproduct bulk biologics manufacturing facility in Devens, Massachusetts for Orencia. The facility is scheduled to be completed in 2009 and brought on line in 2011.
In 2006, Amgen announced plans to invest $1 billion over four years to expand its manufacturing capacity at its facilities in Juncos, Puerto Rico. The plan includes an expansion of bulk-protein manufacturing facilities for "Neupogen" (filgrastim) and "Neulasta" (pegfilgrastim), a new bulk plant for "Epogen" (epoetin alfa) and "Aranesp" (darbepoetin alfa), a new formulation, fill–finish facility, and enhancements to its existing fill–finish plant.
Pridco's Mirandes expects the majority of the project will proceed as planned despite an announcement by Amgen in August 2007 that the company will be implementing a restructuring program aimed of achieving cost savings of $1.0–1.3 billion in 2008. The restructuring reflects decreased revenues and potential further revenue declines for Epogen and Aranesp. The restructuring involves reducing headcount by 12–14%, reducing capital expenditures by $1.9 billion during 2007–2008, and closing certain production facilities. A key target for the cutback in expenditures is in Ireland. Amgen announced in October 2007 that it will postpone indefinitely its $1-billion planned design and build-out of a bulk manufacturing facility in County Cork, Ireland.
BD Biosciences, part of Becton, Dickinson (Franklin Lakes, NJ), invested $53 million to expand its facility in Cayey, Puerto Rico, for producing monoclonal antibody reagents.
Also, Abraxis BioScience (Los Angeles, CA) invested $45 million to add lypholization capacity in the former Pfizer (New York) facility in Barceloneta. Abraxis BioScience purchased the facility from Pfizer in 2006. Abraxis opened the 172,000-ft2 facility in May 2007. The facility produces injectable pharmaceuticals, protein-based biologics, and metered-dose inhalers.
Also, in 2006, Janssen (Titusville, NJ) completed a $70-million investment for a new fill-finish facility in Gurabo.
Push to biologics
To further support biotechnology investment on the island, Puerto Rico has several projects underway. In February 2008, the $12.5-million Bioprocess Training and Development Center in Mayaguez will open. The facility will provide local companies with training facilities and technical support. It includes 8600 ft2 of bioprocess research laboratories, microbial and mammalian cell culture suites, purification capabilities, and bioanalytical and biochemical characterization laboratories. The center is funded by the University of Puerto Rico at Mayaguez, Pridco, and the US Department of Commerce.
In 2007, Pridco, the University of Puerto Rico at Mayaguez, and the US National Institutes of Health (NIH) broke ground on the Molecular Sciences Center. The $60-million, 120,000-ft2 facility (which includes 40,000 ft2 of laboratory space) will house research facilities and offer incubator space to biotechnology companies. The facility is expected to be completed in mid-2009.
"The new facility will provide state-of the-art laboratory facilities and support top researchers in multiple disciplines such as proteomics, nanotechnology, and the newer sciences," says Mirandes.
The government of Puerto Rico also is partnering with the M.D. Anderson Cancer Center in Houston, Texas, to build the Puerto Rico Cancer Center. The facility will be a NIH-designated comprehensive cancer center in Mayaguez and will support clinical research.
The Molecular Sciences Center, the BioProcess Training and Development Center, and the Puerto Rico Cancer Center are part of a larger effort by Puerto Rico to attract research and development in the life sciences. The Puerto Rican government recently launched the Knowledge Corridor, a 1000-acre region in San Juan that will house research centers, corporate offices, and trading sites. The corridor is being developed by the Science and Technology Trust, a government-backed initiative created in 2004 with funding of $150 million to develop the site. The site, in its first phase, will include 400,000 ft2 of laboratory and research space and also will include infrastructure to support researchers and early-stage life science ventures. The Knowledge Corridor will bring together several research facilities now under construction and the medical center and medical science campus of the University of Puerto Rico. "The project provides infrastructure to attract companies, researchers, start-ups, and established companies," says Mirandes. Construction of the site infrastructure is expected to begin in 2008 and be completed in five years.
Puerto Rico competes with other established areas for pharmaceutical manufacturing investment such as Singapore and Ireland. And China and India, although still emerging areas for pharmaceutical investment, are a consideration for future development.
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