BUSI NESS
BEYOND SMALL MOLECULES After a tough 2009, attendees at CPhI were looking for growth in biotech and nonpharmaceutical markets RICK MULLIN, C&EN NORTHEAST NEWS BUREAU
THE DRUG INDUSTRY’S problems in the
Both AstraZeneca and Eli Lilly & Co. say service firms attending CPhI, the annual they will participate in the market as well. conference on pharmaceutical ingrediAccordingly, they’ll be looking for ways to ents, expressed a guarded optimism, it manufacture complex molecules, Wittner is partly because they have lowered their said. And they will be looking for partners. expectations. Novasep is among the contract service The pharmaceutical chemicals sector firms building a biotech-oriented business. is showing signs of recovery from a steep Last year, the French synthesis and puridrop in business in 2009. But business fication specialist purchased Henogen, a managers in Paris, where the meeting was bioprocess development and manufacturheld earlier this month, agreed that the ing firm with expertise in Escherichia coli, double-digit growth rates of 2007 and 2008 yeast, mammalian cells, and viral vectors. for contract-manufactured small-molRecently, Novasep formed ecule and biologic active pharmaceutia partnership with Cerenis cal ingredients (APIs) are not likely to THROUGH A GLASS Therapeutics, a French DARKLY Contract return this year or next. firm that focuses on develservice firms The sector remains focused on a oping drugs based on the mix of pharmaceutical industry trends prognosticated high-density-lipoprotein the future of that predate the recession. These cholesterol recombinant pharmaceutical chemicals in Paris. include an increase in outsourcing by protein. major drug companies and the chronic doldrums in big pharma’s smallmolecule drug pipeline. The big drug firms are compensating for lack of innovation in the lab by expanding their biotech portfolios. As a result, some contract manufacturers are planning to boost biotech offerings or invest in specialized technologies for which demand is increasing. Many big pharma customers are turning to the biopharmaceuticals market with plans to offer both proprietary and “biosimilar”—or generic biopharmaceutical—products, according to Peter Wittner, a senior consultant with London-based Interpharm Consultancy who spoke at a preconference seminar sponsored by United Business Media (UBM), which hosts CPhI. Biologics are expected to grow at double-digit rates, or about twice as fast as traditional pharmaceuticals, Wittner said. Merck & Co. plans to launch six biosimilars by 2017 through its Merck BioVentures business, he noted, and Pfizer estimates it will launch 10–15.
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lab will also boost Novasep’s synthesis and purification service businesses, Bléhaut predicted. “Our main driver is big pharma’s pipeline weakness,” he said. “Drug companies are struggling over a minefield of patented molecules, so that any new molecule will likely be very complicated with an increased need for advanced purification. Some chiral molecules have two or three asymmetric centers and are a nightmare to synthesize without the help of chiral chromatography.” Nor is Novasep going it alone. The company expanded its chromatography services this year in a partnership with instrAction, a German firm specializing in stationary-phase technology for mapping ligand structures and identifying active areas in functionalized polymers. instrAction boasts a library of more than 3,000 stationary-phase structures, according to Bléhaut. Novasep also has a three-year-old partnership with Chiral Technologies for large-scale chiral separations. Novasep’s sales slipped slightly in 2009 to about $420 million, Bléhaut said. “But I think the industry is now seeing projects coming back.” Much of the work will come from emerging pharma and biotech companies, according to Bléhaut, who estimates that 80% of new chemical entities will be generated outside the major drug companies. Several other firms say they are expanding biotech-oriented contract manufacturing. Germany’s Chemie Uetikon launched its biotech operation in 2007 with the acquisition of a start-up at Dublin City University, now operating as BioUetikon. The company is planning to expand operations in Dublin with the addition of single-use bioreactors, according to Heinz Sieger, Uetikon’s chief executive officer. Uetikon lost a major project last year and experienced no growth in sales. Sieger expects a repeat performance this year, although he notes RICK MULLIN/C&EN (ALL)
IF THE CONTRACT manufacturing and
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Jean Bléhaut, Novasep’s business development manager, figures that one-third of his firm’s business today is in biotech. “Before 2008, 95% of our work was in small molecules,” he said. Biotech presents a major growth opportunity, given the need for chromatography in purification, “which is mandatory in biopharma,” he added.
LaForce
that new business is starting to come in. “We are working four shifts, and in September, we were at full capacity,” he said. Almac also forecasts growth in the biotech part of its business. “The future of small molecules is unclear,” said Denis Geffroy, the Northern Ireland firm’s vice president of business development. Almac has seen “tremendous growth” in its sixyear-old peptides business. “Thirty percent of what we do is in peptides,” he said. “If we didn’t launch that business, we’d be in very different shape right now. But we certainly don’t want to bury the small molecule.”
Geffroy acknowledges that the biotech business was hardest hit by the recession. Venture capital spending dried up, putting a halt to many drug development projects and the associated contract work. “It’s trickling back,” he said. “But companies are glad to be getting $1 million in venture capital backing, whereas they used to get $10 million.” Joseph Pont, head of marketing for custom manufacturing at Lonza, anticipates steady growth ahead in small molecules, driven in part by demand for drugs in emerging markets, especially China. “But there is an innovation gap, and big pharma is struggling,” he said, noting that major drug companies have worked to bolster their biotech pipelines in recent years.
ested in adding fill-and-finish services, as finished-drug formulation is called, to its contract services offerings. Last year, the firm made an offer to purchase Patheon, a drug formulation specialist, but Patheon’s board rejected the bid. Lonza continues to look for a fill-and-finish asset “with the right fit,” Pont said. “We don’t want to be just another company churning out tablets. We could have cheaply purchased large Cottier
LONZA, WHICH has long offered both
small-molecule and biologic contract manufacturing, recently signed an agreement with GlaxoSmithKline under which it will manufacture batches for five GSK antibody-based drug candidates in Phase I and II clinical trials and provide GSK with capacity for later-stage production. According to Pont, Lonza is also inter-
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BIOCATALYSIS
Custom Manufacturers See Growth In Niche Technology Targeting alternative end-use markets may be one way to grow a custom manufacturing business, but companies also believe that offering alternative process technologies can give them a leg up. Stepping in this direction, several companies announced expanded biocatalysis offerings at the recent CPhI trade show in Paris. After getting feedback from potential customers, Codexis has launched new screening kits to make its biocatalysts more accessible for pharmaceutical production. Geared toward process chemists, the kits contain vials of 24 “heavy hitters,” the more commonly used ketoreductase and transaminase enzymes that are likely to be successful in synthetic routes, explained Peter Seufer-Wasserthal, senior vice president for pharmaceuticals.
“These enzymes are good enough to immediately make the first 100 g to 1 kg,” he said, and may not require any further optimization to work well in a scaled-up process. Because the enzymes are commonly used, Codexis has large quantities available. The company is supplying commercial quantities of enzymes and intermediates to drug company customers and anticipates announcing more deals in the near future. “We always used to have a generic drug pipeline, but now the innovator pipeline is catching up, and we are supplying a good number of intermediates to Phase III drugs,” Seufer-Wasserthal added. Similarly, Almac has moved from selling enzyme screening kits to offering customized biotransformations that can yield hundreds of kilograms of chiral intermedi-
pharma assets if we wanted to do that.” Roger LaForce, general manager of Fabbrica Italiana Sintetici (FIS), an Italian contractor focused almost exclusively on small-molecule APIs, sees growth ahead for small molecules, driven largely by the demand for drugs in China and other developing markets. “Large pharmaceutical companies are not exactly walking away from small molecules,” he said. FIS is currently extending its capability to synthesize oncology-related APIs, LaForce said. The family-owned firm added a 10- to 20-kg facility in the second half of 2011 at a cost of about $7 million. FIS currently operates a smaller kilo lab and a larger production unit with capacity up to 100 kg. “But we are looking into biotech,” LaForce said. FIS is at the pilot stage of building a biocatalysis platform, according to LaForce, and the company is looking for a biotech firm with interesting technology. “We are evaluating targets.” Across CPhI’s exhibit halls, companies were reporting a turnaround in sales this
ates. The company looks first to enzymes for scaling up the production of any chiral compounds, according to biocatalysis head Tom Moody. To further support its efforts, Almac is investing $4 million to discover additional biocatalytic approaches that can be rapidly put into play. Meanwhile, Cambrex acquired the German biocatalyst firm IEP in March to broaden its chiral chemistry offerings. Excited by the prospects IEP brings, Cambrex Chief Executive Officer Steven Klosk expects that his company’s business development expertise should open doors for the new technology. “They have been involved with several commercial products already, and we have signed a long-term licensing deal with a large pharma customer since the acquisition,” he said.
year, often due to strength in nonpharma markets. Sales at SAFC, the fine chemicals arm of Sigma-Aldrich, are up 10% in the first half of 2010, President Gilles Cottier said. Areas outside small-molecule pharmaceutical chemicals are having the biggest impact on sales growth. “Our business targeted to electronic chemicals is growing extremely strongly this year,” Cottier explained. SAFC’s life-sciences-oriented businesses are also doing well, he added. “Our business in raw materials for bioproduction is very strong as customers continue to develop more and more biologic drugs.” SALES ARE UP over last year at fluoro-
chemicals specialist Halocarbon Products. “Even more encouraging than the sales increase is the large number of inquiries we’ve been receiving for new compounds,” CEO Peter Murin said. Halocarbon has expanded its offering to the electronics industry. It can now offer 1,1,1-trifluoroacetone and its derivatives for use in synthesizing photoresists. WWW.CEN-ONLINE.ORG
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Piramal’s Pharma Solutions business reports that demand has been strong at its Wilton, England-based biocatalysis operation, where the company proactively applies biocatalysis to customer projects, Pharma Solutions Director Gerhard Klement explained. “For every compound, we look very carefully for any benefit from using enzymatic reactions to enhance the productivity and quality.” Combining biocatalysis with other technologies can make suppliers even more competitive, Seufer-Wasserthal told C&EN. “The enzyme is very often a good part of the process, but it is not the cost driver.” With many ways available to make intermediates, he added, success depends not only on technology, but also on quality, pricing, and being a reliable, approved supplier.—ANN THAYER
Endeavour Speciality Chemicals enjoyed robust sales of flavor and fragrance chemicals during the economic downturn, according to Jordi Robinson, sales manager. The company was acquired by fellow British firm Robinson Brothers in 2008, and he attributes Endeavour’s strength in the sector in part to its ability to supply commercial volumes of its specialty products from Robinson Brothers’ larger facilities. The combined companies offer novel intermediates and building blocks derived largely from sulfur and heterocyclic chemistries. Other nonpharma markets for the companies include imaging and electronics. Overall sales should reach about $40 million in 2010, according to Robinson. Although UBM has not released audited attendance figures for CPhI, Richard Kerns, director of European operations for Impress Public Relations, a UBM partner, said attendance “will easily surpass” the 25,000 who attended the 2009 event in Madrid. The number of exhibitors reached 1,934, an increase of 7%. ■
