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Contract service providers position in China as biopharmaceutical and pharmaceutical companies align their strategies in emerging markets for growth.
With China’s pharmaceutical market expected to reach $161 billion by 2016, according to estimates by IMS Health, the major pharmaceutical companies and contract service providers are investing in China to build their development and manufacturing capabilities.
Big Pharma invests in China
Several large pharmaceutical companies are investing in China. In September 2013, Boehringer Ingelheim inaugurated the expansion of its manufacturing plant and the building of its chemicals R&D laboratory Center of Competence in the Zhangjiang High-Tech Park in Shanghai. The EUR 70-million ($95-million) investment makes the Zhangjiang plant one of Boehringer Ingelheim’s most important sites in the Asia Pacific region, according to the company. The number of employees will rise to 350, and the production capacity is expected to triple by 2018. The future vision is to make the Shanghai plant a competitive regional supply site in Boehringer Ingelheim’s global operations network. The project consists of a packaging center with space for packaging lines, new quality-control laboratories, and an automated warehouse and logistics. The main technologies are solid forms (tablets) and liquids (syrups) with a future output of more than 150 million packages in 2016 and up to 220 million in 2018. In addition, the company has built a new facility for the Center of Competence, which has been relocated from Waigaojiao to this new site. This chemicals R&D laboratory, which started operation in 2010, specializes in optimizing processes and analytical testing of APIs and chemical intermediates procured from Boehringer Ingelheim’s strategic partners in China.
Earlier this year, Merck & Co. opened a new $120-million, 75,000-m2pharmaceutical manufacturing facility in Hangzhou, China. The facility has capacity of up to 16 high-speed lines to package pharmaceutical tablets and sterile products. Annual packaging capacity is more than 300 million packages. The facility builds on other recent investment by Merck in China. In 2011, the company established its Asia R&D headquarters in Beijing and committed to invest more than $1.5 billion in R&D in China during the next several years.
Novartis is moving ahead with an expansion of its research facilities in China. In 2009, Novartis announced it was investing $1 billion to increase its R&D operations in Shanghai. Based on a re-evaluation of the site conducted in 2010, the company expanded its Phase 1 plan to include two buildings to house 800 offices and 400 laboratory work places. As of Dec. 31, 2012, structural work was finished, and the first above-ground buildings began to be built.
In Shanghai, Roche is investing CHF 260 million ($278 million) for ongoing expansion of its pharmaceutical facilities, including new laboratory, warehouse, office, and training facilities, to be completed in 2014. In 2012, Sanofi opened a new facility for assembly and packaging of SoloSTAR, the company's prefilled injection system for Lantus (insulin glargine). In 2012, Pfizer formed a joint venture with China's Zhejiang Hisun Pharmaceuticals for developing, manufacturing, and commercializing off-patent pharmaceutical products in China and global markets. Also, Amgen announced in September 2013 that it had entered into a memorandum of understanding (MOU) with ShanghaiTech University to form a strategic partnership for the advancement of biopharmaceutical discovery and translational research in China. This agreement includes plans for Amgen to open a China R&D center at ShanghaiTech University. Under the terms of the MOU, Amgen will colocate its China R&D center with ShanghaiTech University's two life-science institutes: the Shanghai Institute for Advanced Immunochemical Studies (SIAIS) and the iHuman Institute. Amgen expects its China R&D center will be fully operational in 2014.
Reflecting the increased presence of pharmaceutical companies in China, CMOs are expanding in China on both the API and finished product side. Earlier this year, Catalent formed two joint ventures in China, one for its softgel technologies business and one for its clinical-supply-solutions business. In softgels, Catalent acquired, a majority share in the Haining-based and privately held Zhejiang Jiang Yuan Tang Biotechnology, which produces nutritional softgel products for the Chinese and Asia Pacific markets. In a separate move, Catalent, and ShangPharma Corp., formed a new joint venture, which includes a new 31,000-ft2 facility in Shanghai. The facility, currently under construction, will offer capabilities in clinical-trial supplies, including comparator sourcing, primary and secondary packaging and labeling, storage, and distribution. The facility is scheduled to open later this year.
Siegfried is proceeding with a new 300-m3 production plant in Nantong, China. The company broke ground for the new facility in July 2013. The plant will begin commercial production in mid-2014 and employ a workforce of about 300 by 2015. In 2012, Lonza proceeded with the first of two build-out phases of its large-scale multipurpose cGMP API plant in Nansha, China, following FDA approval of several customer projects in late 2011. Also, a new cGMP kilo-laboratory in Nansha and an additional small-scale manufacturing train were successfully brought on line.
West Pharmaceutical Services, a provider of solutions for injectable-drug administration, started up its compression-molding plant in the Shanghai Zhangjiang High-Tech Industrial Development Zone Qingpu Park in China. The new plant is adjacent to West’s injection-molding facility that was dedicated in September 2009. The 11,900-m2 compression-molding plant manufactures components used for packaging injectable drug and primarily supplies customers in China and the Asia Pacific region. Construction began in June 2011.