Chemical Manufacture New deals, new investments in chemical manufacture We review some of the most recent contracts, investments and merger and acquisition activities in the highly competitive field of fine chemical manufacture.
he manufacture of pharmaceutical fine chemical business is a major player in the global fine chemical sector, intermediates and ingredients remains probably the with a leading position in the supply of contract manufacturing Tmost competitive sector of the chemical industry and services to the agrochemicals, pharmaceutical and speciality there continue to be major changes in the structure of the chemical industries. The acquisition included all Avecia Fine sector and in the geographical spread of major manufacturing Chemicals’ assets and operations on the 65 hectare site at faciltiies, with investments in China and India playing a leading Grangemouth, UK. All 310 Avecia Fine Chemicals’ employees part in companies’ moves to acquire stronger positions. This were included in the transaction. In 2004, the business article looks at just a few of the recent developments. recorded sales of £38 million. Avecia Fine Chemicals Limited now operates as KemFine UK Acquisition of ozone chemistry technology Ltd. Tom Shields is the managing director, and is based at the In February, Dishman Pharmaceuticals & Chemicals Ltd Grangemouth site. KemFine, previously Kemira Fine Chemicals acquired IO3S Ltd of Bern, Switzerland, through its 100% Oy, was created via an MBO of the business from Kemira in wholly owned Switzerland based subsidiary company M/s. 2004. 3i, a world leader in the private equity and venture Dishman Switzerland Ltd. The Assets base of IO3S is currently capital sector, supported the management team in the about $2 million but Dishman says the acquisition was transaction and in the equity funding. achieved for a price less than this figure. IO3S operates in the field of consultancy and research in ozone chemistry. It has a Lonza invests in China fully developed laboratory as well as a pilot plant for ozone The most significant recent development for Lonza Group has based reactions. IO3S has created a strong IP, having serviced been its announcement of its commitment to substantially major global pharma manufacturers and speciality chemical further invest in Nansha Guangzhou, China, enhancing the companies. At the time of the acquisition IO3S had several company’s existing production operations in Guangzhou. The contract manufacturing projects at the planning stage. pledged investment is the result of a signed letter of intent Dishman says the IO3S acquisition is a major step in its between Lonza Group and the Nansha authorities, and will CRO/CMO strategy, because of the customer relationships of amount to $200 million over the next few years. IO3S with pharma and chemical multinationals through its strong market presence in Europe and the USA. Dishman says that IO3S’s past, present and future contract research assignments will provide excellent scale-up opportunities within the company’s manufacturing plants, which include a recent investment in a large-scale ozone chemistry plant at Bavla. Dishman says the move strengthens its activities in contract research and manufacturing in the specialised field of ozone chemistry, as well as further improving its European and US interface with customers. Fine chemicals acqusition One of the most significant recent developments in the contract fine chemical manufacturing sector was the acquisition last September by Lonza’s chemical manufacturng facilities in Guangzhou, China. The company has been making significant KemFine Limited of Avecia Fine investments in this important manufacturing centre. Chemicals. The combined
32 JUNE 2006 www.sp2.uk.com STOP PRESS Dishman can now offer ozonolysis on industrial scale
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acquisition at the end of last year of Avecia Pharmaceuticals for £9.5 million. This was NPIL’s second M&A transaction in the UK after its acquisition of Rhodia’s Inhalation Anaesthetics business in December 2004. Avecia Pharmaceuticals was a global custom manufacturing player focused on providing custom chemical synthesis and manufacturing services for the innovator pharmaceutical and biotechnology companies. The acquisition included early-stage, late-stage and launched manufacturing assets in the UK and North America, and a deep pipeline of products backed by strong customer relationships and a mix of unique technologies. The acquisition comprised the assets of Avecia Pharmaceuticals Limited, Torcan Chemical Limited, and 25 per cent ownership of Reaxa Limited. The acquisition of Avecia Pharmaceuticals demonstrates the start of a new wave of restructuring within the global custom manufacturing industry. Players in Europe and North America, Stefan Borgas, CEO of Lonza: “Chinese investment is another driven by their access to technologies and customers, have important milestone in Lonza’s long-term strategic plan.” historically dominated the industry. However, over the past few The investment plan will occur in phases, taking place over a years, increased cost pressure and downturn in the three- to five-year period. Lonza’s plan design includes pharmaceutical industry has put these players under building a multi-purpose API (active pressure. Many industry experts believe that the pharmaceutical ingredients) and ISO “The winning custom manufacturers of the future regulated intermediate plant complex will have a strong manufacturing base in with large-scale and pilot-scale acquisition of India with a technology and early- production capabilities. phase presence in North America and Lonza says its investment will Europe. build upon the current foundation Avecia Pharmaceuticals The transaction was the first step existing in China, and will in NPIL’s strategy of establishing combine international knowledge demonstrates the start of such a winning global footprint for with local expertise to deliver a its custom manufacturing business. broader range of capacities, a new wave of The reconfigured asset base includes products and services. access to leading early-phase assets, Stefan Borgas, chief executive officer including nearly 100 early-phase and of Lonza, says: “This project will mark restructuring” launched products. NPIL has now established another important milestone in Lonza’s long- significant presence in both the Western European term strategic plan. It is a key element in achieving the and North American regions for value-added targeted growth for Lonza. Since 1995, Lonza Group has manufacturing, with access to key technologies in chiral selected Guangzhou City to be its investment front in China. We synthesis, fermentation, biotransformation and high potency firmly believe that this region offers cutting-edge technology substances. It also has access to a high-quality process R&D platforms, manufacturing excellence, and a competitive cost team. environment which complements Lonza’s other international sites.” Broadening the technology base Albemarle Corporation has recently invested in expanded The role of Indian companies custom synthesis capabilities with a large-scale cGMP facility Indian companies are also playing a major role in contract and the hiring of new R&D staff at the company’s Orangeburg, manufacturing. At the end of last year, Nicholas Piramal India South Carolina site. The new cGMP unit features flexible Limited signed a long-term contract manufacturing related reactors from 1,000 to 16,000 gallons, with multiple solids R&D Services Agreement with Pfizer International isolation and drying capabilities, a 50-stage cGMP LLC for a period of seven years, renewable “We distillation column and a separate liquids packaging thereafter. room. There is also a cGMP hydrogenation unit Under the agreement, NPIL provides for corrosive reaction conditions and pressures process development and scale-up expect this new up to 100 psig, and a pilot plant with 50- services to Pfizer’s Animal Health 500 gallon reactors, and solids separation Division from its facilities in India. business to provide and drying. “Our project pipeline has NPIL also recently completed a already begun filling with new business,” manufacturing and supply a base for future fine says Dave Clary, Albemarle’s vice agreement with a large global president of fine chemistry services, “and hospital products company for an we expect this new business to provide a initial term of ten years, followed by chemistry services base for future fine chemistry services yearly renewals. This agreement growth.” represents an exclusive partnering growth” The company also recently announced the arrangement between the two companies establishment of a virtual Chiral Technology Center for certain global markets. NPIL manufactures to broaden its capabilities for advanced intermediates the products at its FDA-approved facilities at Digwal, and active ingredients for the pharmaceutical industry. The Andhra Pradesh. company’s Technology Centers are combinations of Albemarle However, the most significant development at NPIL was its employees and outside research affiliates brought together to
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expand and deepen the company’s capabilities in key scientific areas. The Chiral Technology Center is the company’s fifth such Center and is headed by Dr Eric L Williams, based in Albemarle’s Process Development Center in Baton Rouge, Louisiana. Albemarle has the ability to apply several different technical approaches to the production of chiral pharmaceutical products, allowing it to choose the technology that gives the best cost, product quality and project timing for each specific compound. “We established the Technology Center programme to add a longer-range dimension Codexis: developing biocatalytic processes for the manufacture of active pharmaceutical ingredients. to Albemarle’s R&D programme, and that is working well,” says David Decuir, Albemarle’s director of fine ThoroughBred™ biological catalysts and proprietary biocatalytic chemicals research and development. “However, we are already system into commercial production of a key intermediate used in seeing the benefits of the work that Dr Williams and his the manufacture of a high-value pharmaceutical active co-workers are doing to give us new chiral technology tools.” pharmaceutical ingredient (API). Arch will continue to scale up the manufacturing process and provide commercial quantities of Application of biocatalysis in research and the intermediate. manufacturing collaboration Under terms of the company’s agreement established in In another technology application area, there was an October of last year, the achievement of the milestone triggers announcement in January of this year by Codexis, Inc on the an undisclosed payment to Codexis. achievement of an important development milestone under its “This achievement marks a significant step in the research and development of Codexis’ generic API business,” says Alan Shaw, manufacturing PhD, Codexis president and chief executive officer. “This is the agreement with first announcement of an internally developed biocatalytic Arch Pharmalabs, system that has been integrated into commercial production of a Ltd, a leading generic version of a blockbuster pharmaceutical product. We are Indian generic pleased with the progress we have made with our partner Arch pharmaceutical Pharma Labs and look forward to further advances in our 2 company. Codexis’ generic API programme.” sp technology is now in use at more than 12 FURTHER INFORMATION pharmaceutical For further information on any of the companies featured in this article and industrial visit the following websites: products manufacturers www.dishmangroup.com with the aim of improving product www.kemfine.co.uk quality and reducing www.lonza.com manufacturing time and cost. www.nicholaspiramal.com Arch has successfully www.albemarle.com integrated Codexis’ Alan Shaw of Codexis: looking forward to advances in the company’s www.codexis.com generic API programme.
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