Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

Process chemists face the challenge of developing cost-effective and efficient commercial manufacturing routes for APIs. They encounter the challenges of increasing product yield, achieving greater stereoselectivity and regioselectivity, and improving process conditions, such as temperature and pressure, all in a means to produce a high-quality pharmaceutical compound in a safe manner. A variety of tools may be used in this effort, including the application of green-chemistry approaches, such as biocatalysis, solvent replacement, and continuous-flow chemistry, to help achieve more efficient chemical transformations under improved reaction conditions.  

In June 2012, Codexis, a company specializing in biocatalysis, and Yi Tang, professor in the Department of Chemical and Biomolecular Engineering at the University of California at Los Angeles (UCLA), were awarded the "2012 Greener Synthetic Pathways Award" as part of the Environmental Protection Agency's (EPA) Presidential Green Chemistry Challenge Awards for developing a biocatalytic route for making simvastatin, the active ingredient in Merck & Co.'s anticholesterol drug Zocor, which is now off patent (1). Codexis and Tang won the award this year after having made prior submissions of the new process in 2010 and 2011 (2–4). 

For the simvastatin route, Codexis licensed technology from Tang. The previous synthetic routes to simvastatin involved converting lovastatin into simvastatin by adding a methyl group that required protecting and then deprotecting other functionalities in the lovastatin molecule in a multistep synthesis. In the first route, lovastatin was hydrolyzed to the triol, monacolin J, followed by protection with selective silylation, esterification with dimethyl butyryl chloride, and deprotection. The second route involved protecting the carboxylic acid and alcohol functionalities, methylating the C2' carbon with methyl iodide, and deprotecting the product. These routes were inefficient because they produced less than 70% overall yield and were mass-intensive due to protection and deprotection (1–4).  				

DON BISHOP/BRAND X PICTURES/GETTY IMAGES			

The route developed by Tang and his group circumvented protection and deprotection and resulted in greater atom economy, reduced waste, and overall less hazardous reaction conditions. First, they cloned LovD, a natural acyltransferase produced by 

 that is involved in synthesizing lovastatin and that can accept nonnatural acyl donors. Recognizing that LovD might be a type of simvastatin synthase and a starting point for creating a new biocatalytic process, they evolved the enzyme toward commercial utility (1–5). Codexis licensed Tang's technology, engineered the enzyme further, and optimized the simvastatin manufacture. 

The biocatalyst LovD selectively transferred the 2-methylbutyryl side chain to the C8 alcohol of monacolin J sodium or ammonium salt. The acyl donor, dimethylbutyryl-

-methylmercaptopropionate (DMB-SMMP), is efficient for the LovD-catalyzed reaction, is safer than traditional alternatives, and is prepared in a single step from inexpensive precursors, according to the awards summary report (1). Codexis licensed this process from UCLA and subsequently optimized the enzyme and the chemical process for commercial manufacture. Codexis carried out nine iterations of 

 evolution, creating 216 libraries and screening 61,779 variants to develop a LovD variant with improved activity, in-process stability, and tolerance to product inhibition (1). The approximately 1000-fold improved enzyme and the new process pushed the reaction to completion at high substrate loading and minimized the amounts of acyl donor and of solvents for extraction and product separation. In the new route, lovastatin is hydrolyzed and converted to the water-soluble ammonium salt of monacolin J (1–5).  

Computational modeling: drug interactions			

As specified in the Presidential Green Chemistry Challenge Awards summary report, the genetically evolved variant of LovD acyltransferase from 

 uses DMB-SMMP as the acyl donor to make the water-insoluble ammonium salt of simvastatin. The only coproduct of simvastatin synthesis is methyl 3-mercaptopropionic acid, which is recycled. The final yield of simvastatin ammonium salt is more than 97% at a loading of 75 g/L of monacolin J. It avoids the use of several hazardous chemicals, including 

-butyl dimethyl silane chloride, methyl iodide, and 

-butyl lithium. More than 10 metric tons of simvastatin have been manufactured using this new process (1).  

Pfizer also employed a more environmentally approach in developing a biocatalytic route to making atorvastatin, the active ingredient of Lipitor and submitted the process as an entry for consideration to the EPA's Presidential Green Chemistry Challenge Awards (1). The new process incorporated a water-based 2-deoxyribose-5-phosphate aldolase (DERA) enzyme at the beginning of the route to make a lactol from an amino aldehyde (i.e., 3-phthalimidopropionaldehyde; PPA) and acetaldehyde (1).  

Improving protein purification through high-performance membranes			

The synthesis eliminated the use of cyanide or azide moieties to introduce nitrogen because it is already present in the lactol. In contrast to the original synthesis, the DERA enzyme set both stereocenters with high selectivity in water at room temperature. Converting the resulting lactol into isopropyl acetonide atorvastatin (IAA) involved only four high-yield chemical steps (oxidation, esterification, deprotection, Paal Knorr). The IAA product was isolated as a solid, and IAA was converted to atorvastatin (1). The new synthesis eliminated the previous high-pressure hydrogenation step with its associated metal catalysts. It also avoided pyrophoric 

-butyl lithium and its associated butane waste gas. FDA approved the new manufacturing process in April 2010, and Pfizer manufactured commercial-scale validation batches in 2011 and is currently transitioning to full-scale commercial manufacture, according to the EPA's Presidential Green Chemistry Challenge Awards report (1). 

The Grignard reaction is a well-established reaction in organic chemistry but it poses some challenges in scaling up to commercial scale:  strongly exothermic activation and reaction steps; heterogeneous reactions with potential problems suspending and mixing the reaction mixture; and operational hazards posed by ethereal solvents such as diethyl ether (1). Eli Lilly developed safer Grignard chemistry using a continuous stirred tank reactor (CSTR) that allows continuous formation of Grignard reagents with continuous coupling and quenching operations, a process in which the company submitted an entry to the 2012 EPA Presidential Green Chemistry Challenge Awards (1). According to the entry, the CSTR approach mitigated hazards by operating at a small reaction volumes, performed metal activation only once for each campaign, and used 2-methyltetrahydrofuran as a Grignard reagent and reaction solvent, resulting in products with enhanced chemo- and stereoselectivity. Relative to batch processing, the continuous approach allowed steady-state control and overall reductions up to 43% in magnesium, 10% in Grignard reagent stoichiometry, and 30% in process mass intensity (1).  

Improved solvents for making diaryl aldimines

Imines are intermediates used in many pharmaceutical syntheses. Diaryl aldimines, for example, are used in the synthesis of the anticancer drug Taxol (paclitaxel) and the anticholesterol drug Zetia (ezetimibe) (1). Traditional syntheses of diaryl aldimines often require hazardous solvents and include energy-intensive, multihour reflux steps. Although some imine syntheses use more benign solvents or conditions, they still require long reaction times, recrystallization, or other environmentally harsher procedures. Jacqueline Bennett, professor in the Department of Chemistry and Biochemistry, State University of New York (SUNY) Oneonta and the SUNY Research Foundation, developed a process that used ethyl L-lactate as a solvent to synthesize imines. The process was submitted as an entry to the 2012 US EPA's Presidential Green Chemistry Challenge Awards (1). According to the awards summary report, the method was efficient under ambient conditions, required less solvent than other methods, had a median yield of more than 92%, and had a median reaction time of less than 10 min (1). The resulting imines were generally sufficiently pure without recrystallization as the polarity of ethyl L-lactate was modulated by adding water. The starting materials remained dissolved, but the imine crystallized out of solution as it formed (1). Although traditional methods often drive reactions forward by removing water, this method drove the reaction forward by removing the product through crystallization, according to the summary report (1). Bennett and her research team have synthesized nearly 200 imines using this method and filed a US patent for the process (1, 6). 

Another interesting entry to the US EPA's Presidential Green Chemistry Challenge Awards involved the use of ethylene in fine-chemical synthesis developed by T. V. RajanBabu, professor in the Department of Chemistry, Ohio State University (1). According to the awards summary report, practical methods using carbon feedstock sources as starting materials to form enantioselective carbon–carbon bonds are not common. A broadly applicable reaction using ethylene to install vinyl groups enantiomerically, as developed by RajanBabu, could have significant impact in fine-chemical synthesis.  

RajanBabu and his team developed highly catalytic (substrate–catalyst ratio up to 7,412:1) protocols for nearly quantitative (isolated yields of more than 99% and highly selective (approximately 100% regioselectivity; enantiomeric ratios of more than 99:1) codimerization of ethylene and various functionalized vinylarenes, 1,3-dienes, and strained alkenes. These reactions proceeded under mild conditions (–52 °C to 25 °C; 1 atmosphere of ethylene) to produce intermediates, such as 3-arylbutenes, which can be transformed to nonsteroidal anti-inflammatory drugs (NSAIDs) in two steps. These reactions consume both starting materials, leaving no side products. Successes include highly enantioselective syntheses of common NSAIDs, such as ibuprofen, naproxen, flurbiprofen, and fenoprofen, from the corresponding styrenes and ethylene (1).  

Cyclic and acyclic 1,3-dienes also underwent efficient enantioselective addition of ethylene. Syntheses of several 1-vinylcycloalkenes and 1-substituted-1,3-butadienes achieved yields up to 99% (1). The approach has also been applied to other biologically relevant classes of compounds, including bisabolanes, herbindoles, trikentrins, steroid D-ring 20S- or 20R-derivatives, (–)-desoxyeseroline, pseudopterosin A–F, G–J, and K–L aglycones, and helioporins (1).  

Chemicals, intermediates, and reagents as well as byproducts of synthetic processes can have toxic properties and be present as impurities at low levels in an API or final drug formulation. The detection and removal of these impurities are of crucial importance to process chemists, particularly in the case of genotoxic impurities. One of the potentially genotoxic impurities based on structural alerts is acrolein, an α, β-unsaturated aldehyde that is used as a building block in the production of pharmaceuticals (7).   

Researchers at MIP Technologies, a subsidiary of Biotage, and the Universität Dortmund in Germany recently reported on an approach for selective removal of acrolein from APIs using iodixanol as a model API. The acrolein scavenging performance of polystyrene- and silica- based aldehyde scavengers in organic media in the presence of the API iodixanol was tested. Several scavengers were tested, and the resins that the showed highest binding efficiency and selectivity were further evaluated. The most effective and selective scavenging was obtained with polystryene–amine, which removed up to 97.8% of acrolein and only 2.0% of iodixanol within 20 min using a batch-mode extraction procedure (7). 

 485 Route One South, Bldg F, First Floor, Iselin, NJ 08830 tel. 732.346.3072,  

1. EPA, "The Presidential Green Chemistry Challenge Awards Program: Summary of 2012 Award Entries and Recipients" (Washington, DC, 2012). 

3. EPA, "The Presidential Green Chemistry Challenge Awards Program: Summary of 2010 Award Entries and Recipients" (Washington, DC, 2010). 

4. EPA, "The Presidential Green Chemistry Challenge Awards Program: Summary of 2011 Award Entries and Recipients" (Washington, DC, 2011). 

Green Synthesis of Aryl Aldimines Using Ethyl Lactate

, US Patent Application 20110196174 (Aug. 11, 2011).  

Articles

Approaches to scaling up API syntheses center on ways to optimize process conditions and operability.

Scaling up API Syntheses

Measured growth. That is the best way to sum up the manufacturing investment activity of the pharmaceutical majors during the past year. Companies continue to implement restructuring programs as a way to reduce costs and optimize their manufacturing and supply networks. Investment, when it is made, is primarily in biologic-based manufacturing and emerging markets, with a few select projects proceeding in established product and geographic markets. 

 Pfizer continues with plans to restructure its manufacturing network following its $68-billion acquisition of Wyeth in 2009. Following the acquisition, Pfizer's manufacturing sites totaled 81, and other acquisitions added 20 manufacturing sites. Pfizer subsequently exited nine sites and operated 90 plants as of the end of 2011, with major manufacturing facilities in Belgium, China, Germany, Ireland, Italy, Japan, Philippines, Puerto Rico, Singapore, and the United States. It plans to exit a further 10 sites during the next several years.  

BURAZIN/PHOTOGRAPHER’S CHOICE RF/GETTY IMAGES			

After the acquisition of Wyeth in 2009, Pfizer operated 20 R&D sites and has restructured its R&D operations, which involved several site closures, including its R&D facility in Sandwich, United Kingdom, except for a small presence there.  In 2011, Pfizer rationalized several other R&D sites. It disposed of its toxicology site in Catania, Italy; exited its R&D sites in Aberdeen and Gosport, UK; and disposed of a vacant site in St. Louis, Missouri. Pfizer also shifted its cardiovascular, metabolic and endocrine disease and neuroscience research units from its site in Groton, Connecticut, to Cambridge, Massachusetts, where it signed a lease with the Massachusetts Institute of Technology, with occupancy anticipated in early 2014. In 2011, Pfizer opened Centers for Therapeutic Innovation laboratories in Boston, New York, and South San Francisco.  

 In 2010, Novartis initiated a company-wide program to review its manufacturing footprint, which progressed in 2011, with major goals to create manufacturing centers of excellence, reduce its cost structure, and enhance utilization rates at strategic sites to 80% of capacity. To these ends, the company has announced the exit or partial exit of 14 sites since the program started in 2010. In Liverpool, UK, and Marburg, Germany, Novartis discontinued certain manufacturing activities to consolidate its influenza-vaccine platforms. Novartis also divested the pharmaceuticals division's sites in Casablanca, Morocco, and Huningue, France, and Sandoz (the generic-drug business of Novartis) sites in Jena, Germany,  and Buenos Aires, Argentina. The company also discontinued pharmaceuticals manufacturing at sites in Tlalpan, Mexico, and Horsham, UK, and exited CIBA Vision production sites in Cidra, Puerto Rico, and Farnham, UK. Additionally, the company announced the discontinuation of certain manufacturing activities at its CIBA Vision site in Atlanta, Georgia, and the consolidation of pharmaceutical chemical operations in Switzerland, as well as closure of its chemical operations in Torre, Italy. 

Novartis continues to make progress in the long-term redevelopment of its St. Johann headquarters site in Basel, Switzerland. This project, called "Campus," started in 2001 with the aim of transforming the site from one of primarily pharmaceutical production into a center of knowledge with a primary emphasis on international corporate functions and research activities. Through Dec. 31, 2011, the total amount paid and committed to be paid on the Campus Project was $2.1 billion. The company expects that through 2015, it will spend more than $2.5 billion and transfer production facilities to other sites in the Basel region.  

Novartis continues to expand in emerging markets. In June 2011, Novartis began construction on a new $140-million manufacturing plant for pharmaceuticals and generic drugs in St. Petersburg, Russia. The plant is expected to produce approximately 1.5 billion units per year (oral solid dosage forms). In China, in 2007, Novartis opened a start-up facility for a new R&D center in Shanghai, China, and broke ground in 2008 on Phase 1 of a new facility that was originally to be home to approximately 400 R&D scientists and approximately 400 other pharmaceuticals division personnel. In 2009, it expanded the scope of the site with plans to invest $1 billion during the next five years to increase the size of its operations in Shanghai. Based on a re-evaluation of the site conducted in 2010, the current Phase 1 has been extended by two buildings. The cross-divisional Shanghai campus will house 800 offices and 400 laboratory workplaces.  

Table I: Top 50 pharmaceutical companies (Rankings 1â25).			

In October 2010, Novartis announced plans to invest $600 million during the next five years to build new laboratory and office space for research activities in Cambridge, Massachusetts. In 2011, the company finalized design plans for the new buildings, received necessary zoning changes from the city of Cambridge, and began preparing the site for construction.  In late 2010, Novartis began a construction project on the campus of Novartis in East Hanover, New Jersey, which will continue through 2013. The company expects that through 2013, it will spend more than $545 million to complete the construction and consolidate operations there.  

Table II: Top 50 pharmaceutical companies (Rankings 26â50).			

In other recent investments, in June 2008, Novartis broke ground on a new $330-million rabies and tick-borne encephalitis manufacturing facility in Marburg, Germany. Construction is complete, and the facility is in the process of executing the necessary validation activities. Regulatory approvals for products are planned for 2012 and 2013. In November 2009, Novartis opened a new cell culture-based influenza vaccine manufacturing site in Holly Springs, North Carolina. As of December 31, 2011, the total amount spent on the project was $463 million, net of grants reimbursed by the US government. The total investment in this new facility is expected to be at least $900 million, partly supported by grants from the US government and prior investments in influenza cell- culture technologies at the Novartis vaccines site in Marburg, Germany. Novartis also began a project for a new $305-million vaccine-manufacturing facility in Recife, Brazil, with technical start-up of the facility planned for 2015. In 2011, Novartis' eye-care business, Alcon, completed the construction of a new $134-million manufacturing and R&D plant in Singapore; the plant is scheduled to produce saleable product after regulatory approval in 2012. 

Novartis said it is making progress for resolving quality-control issues at its consumer healthcare operations in Lincoln, Nebraska, and at three facilities of Sandoz. In December 2011, Novartis suspended production at is Lincoln manufacturing site in conjunction with a voluntary recall of all lots of select, bottle-packaged configurations of certain over-the-counter products. In December 2011, FDA cited quality-control issues at three Sandoz manufacturing facilities in Broomfield, Colorado; Wilson, North Carolina; and Boucherville, Canada. In an Apr. 24, 2012, first-quarter earnings release, Novartis said that it is making progress in remediating the quality issues at the Lincoln site and the  three Sandoz production sites. 

 Merck & Co. continues to move forward with restructuring. In February 2010, subsequent to the Merck and Schering-Plough merger, Merck began a global restructuring program in conjunction with the integration of the two companies. In July 2011, the Merck announced the latest phase of the restructuring program, which included a further reduction of its workforce of 12–13% company worldwide. A majority of the workforce reductions in this phase relate to manufacturing (including animal health), administrative, and headquarters organizations. Previously announced workforce reductions of of 17% in the earlier phases of the program primarily reflected the elimination of positions in sales, administrative and headquarters organizations, as well as from the sale or closure of certain manufacturing and R&D sites and the consolidation of office facilities.  

 Sanofi's subsidiary Genzyme began production of the enzyme-replacement therapy Fabrazyme (agalsidase beta) at its new facility in Framingham, Massachusetts, following approval of the facility by FDA and EMA in January 2012. In May 2012, EMA and FDA approved a second operation for fill–finish at Genyzme's Waterford, Ireland, manufacturing plant, which nearly doubled capacity for fill–finish for Myozyme and Lumizyme (alglucosidase alfa) at the 4000-L scale. These developments follow a 2010 consent decree issued by FDA to Genzyme for manufacturing violations at its Allston, Massachusetts, facility and resulting requirements to transfer fill–finish production out of that facility. Other investments by Genzyme include expansion of Myozyme production capacity in Geel, Belgium, Fabrazyme in Framingham, Massachusetts, Thymoglobulin (anti-thymocyte globulin (rabbit)) in Lyon, France, and the filling operations in Waterford, Ireland.  

Other recent investments by Sanofi are in two new Lantus production lines in Frankfurt, which complemented an earlier acquisition of the Diabel manufacturing site from Pfizer, to expand insulin production. Sanofi invested in its Brindisi, Italy, site to expand production of spiramycin, the API in the antibiotic Rovamcyin. The company also is investing in the launch of epiCard, a gas-powdered single-dose, single-use, auto-injector for epinephrine.   

Sanofi is continuing with its Biolaunch project, which is designed to converts its chemical facilities to biotechnology-based production. It is on track to create a monoclonal antibody production facility at its site in Vitry-sur-Seine, France, and is investing in new biosynthetic processes as its sites in Saint-Aubin-Les Elbeuf and Vertaolaye, France. In May 2009, Sanofi began construction of a new EUR 300 million ($364 million) manufacturing center in Neuville-dur Saône, with the the goal to progressively transition existing chemical production to vaccine production beginning in 2013. Sanofi Pasteur, the vaccine arm of Sanofi, is scheduled to begin commercial production of a new antigen production unit in Mexico for seasonal and pandemic influenza vaccines in 2012, once the necessary production and marketing approvals have been obtained from Mexican regulatory authorities.  

In emerging markets, in May 2012, Sanofi inaugurated a new assembling and packaging line for producing its prefilled insulin injection pen Lantus SoloStar at its facility in Beijing. The company announced a second phase $90-million project to install a cartridge aseptic product line at the facility. The facility has a designed capacity of 48 million units. Sanofi is building a new manufacturing site in Hangzhou, China, to replace an existing manufacturing site there, which is scheduled to be completed in 2012. The company reached an agreement with the King Abdulah Economic City to build a manufacturing facility for solid-dosage forms in Saudi Arabia.  

 In 2011, Roche executed 25 major engineering projects. Key projects included transforming its manufacturing facility for solid dosage forms in Shanghai from a local to a global supply operation. In early 2011, the facility received FDA and EMA approvals to produce Xeloda (capecitabine) for the US and EU markets.  

In June 2011, Roche completed a CHF 191-million ($193 million) expansion at it facility in Penzberg, Germany, which upgraded and expanded the site's therapeutic protein development and production capacity. In November 2011, Roche completed construction of a new CHF 250 million ($252 million) technical R&D facility in Basel, Swizterland. The facility houses laboratories, offices, and small-scale production lines. In late 2010, Roche divested technical development and small-molecule manufacturing operations in Boulder, Colorado, to Corden Pharma. Corden will continue to supply Roche with commercial-scale peptides and chemical APIs. Roche also sold its clinical plant in Oceanside, California to Gilead Sciences. 

 In March 2012, SmithKline (GSK) announced plans to invest more than £500 million ($798 million) in the UK across its manufacturing sites, which included selecting Ulverston in Cumbria as the location for the first new GSK manufacturing facility to be built in the UK in almost 40 years. The company also will invest in sites in Montrose and Irvine, Scotland.  

GSK's announcement followed plans by the UK government to implement a "patent box" to encourage investment in R&D and related manufacturing in the UK by introducing a lower rate of corporation tax on profits generated from UK-owned intellectual property. Following a feasibility study conducted through 2011, GSK said it will locate a new £350 million ($559 million) biopharmaceutical manufacturing facility in Ulverston, Cumbria. Detailed planning and design of the new facility is underway with an anticipated start date for construction of 2014–2015, dependent on portfolio timing and obtaining necessary planning and related consents. Once construction starts, it is likely to take at least six years before the plant is fully operational. 

GSK also reported in March 2012 that it is considering additional manufacturing investment at Ulverston, which could double the total investment at the site to approximately £700 million ($1.1 billion). GSK will invest more than £100 million ($160 million) in its two manufacturing sites in Scotland: an expansion at Montrose for key materials for its respiratory drug and aluminum adjuvants for vaccines and expanded antibiotic production capacity at Irvine. GSK will also invest in sustainable green-energy production and environmentally friendly manufacturing technologies at both sites. The company is making other investments totaling £80 million ($128 million) at its sites in Ware in Hertfordshire to increase manufacturing capacity for its respiratory-inhalation device and at Barnard Castle in County Durham to establish a dermatology-manufacturing center of excellence.   

As GSK proceeds with new manufacturing investment, it continues to restructure. In 2011, GSK met its original target of £2.2 billion ($3.4 billion) in annual cost-savings and identified additional annual savings of approximately £600 million ($931 million), bringing expected total annual savings of  £2.8 billion ($4.3 billion) by 2014. GSK has cut its pharmaceutical R&D footprint by more than 45% during the past three years from 494,000 m

. During the same period, its manufacturing organization has achieved annual savings of approximately £600 million ($931 million). Since 2006, GSK has exited 19 manufacturing sites, including selling or closing four factories in 2011, thereby reducing its total number of manufacturing sites to 74. 

 In February 2012, AstraZeneca announced new restructuring initiatives aimed at delivering annual cost-savings of $1.6 billion by the end of 2014. The restructuring will reduce headcount by 7300. The job cuts include 1350 positions in supply-chain and manufacturing operations and 2220 positions in R&D, including ending R&D activity at sites in Sodertalje, Sweden, and Montreal. 

Overall, AstraZeneca's capital expenditures on supply and manufacturing facilities were approximately $388 million in 2011 (2010: $333 million; 2009: $360 million). At the end of 2011, approximately 9600 people at 23 sites in 16 countries were working on the manufacturing and supply of products. In October 2011, AstraZeneca announced an investment of $200 million to build a manufacturing facility in China Medical City in Taizhou, Jiangsu province, China, to meet growing local demand.  

 In May 2012, FDA approved Bristol-Myers Squibb's biologics manufacturing facility in Devens, Massachusetts, for commercial production of the company's arthritis drug Orencia (abatacept). The $750-million multiproduct bulk biologics manufacturing facility in Devens represented the largest capital project in the company's history.  

Pharmaceutical Technology's annual manufacturing investment update shows slight gains in biopharmaceutical manufacturing and emerging markets and continued restructuring of supply networks.

Measuring Growth in Big Pharma's Manufacturing Investment

Enhancing bioavailability can be achieved through hot-melt extrusion (HME) or spray drying. The drug product's API properties and stage of development are important factors to consider when deciding which technique to use.  There are also considerations to be made with regard to process, time, and cost. To gain perspective on these issues as well as insight into more recent advances in HME and spray drying, 

 spoke to Bend Research, an independent drug-formulation development and manufacturing company based in Bend, Oregon.

One tool for bioavailability enhancement is to create amorphous solid dispersions through such processes as hot-melt extrusion (HME) or spray drying. What factors come into play when deciding whether to produce the amorphous solid dispersions through HME or spray drying?   

Both spray drying and HME can be used to produce amorphous dispersions that enhance the bioavailability of poorly soluble compounds. There are a number of factors that come into play when deciding to progress an amorphous dispersion. These include performance, projected dose, stability, and manufacturability. When choosing which technology to employ for optimizing the amorphous dispersion formulation's performance, two key factors are: the physical-chemical properties of the API and the phase of development, which influences the amount of API available for formulation development. 

Important physical–chemical properties include the solubility of the API in either a solvent (for spray drying) or polymer (for HME), the melting temperature of the API, and the LogP value of the API. For spray drying, the solubility of the API in the solvent is crucial to ensure a readily scalable and viable process, whereas for HME, the solubility of the API in the polymer is crucial to ensure a thermodynamically stable system. The particle size of the API, which influences the dissolution rate during processing, can also be crucial for complete dissolution into the polymer melt. 

The processing temperature is important for HME because the API must either melt to form a dispersion or dissolve through high shear forces into the molten polymer. If the processing temperature is too high, the compound or the polymer used in the formulation can degrade. Typically, 200 °C to 225 °C is regarded as the upper processing-temperature limit for an effective HME process. Although compounds can be extruded at higher processing temperatures, this physical situation often produces a partially crystalline formulation instead of an amorphous dispersion. 

The phase of development is also an important factor in process selection. For example, for early-stage or discovery-support activities, API availability is often limited. This limited API availability tends to make spray drying the preferable process because its feasibility can be determined with as little as 50 to 100 mg of API, whereas several grams of API are typically required to develop an initial HME process. For APIs that are amenable to HME, typically after proof-of-concept clinical studies, when hundreds of grams of API are available, an initial spray-drying process can be converted from spray drying to HME. 

Advantages and disadvantages of each technique

 What are the advantages and disadvantages of using HME compared with spray drying to produce the amorphous solid dispersion?  

HME has two primary advantages. First, no solvents are used, so solvent cost and recovery are not a factor in cost-of-goods or environmental health and safety considerations. Second, the equipment footprint for HME is relatively small when the process is scaled up. 

The primary disadvantage of HME is that the compound must be melted or dissolved in molten polymer at high temperatures. Thus, it is less applicable to compounds with higher melting temperatures or those that are thermally labile. This disadvantage can be partially remedied by including nonvolatile and volatile plasticizers in the formulation, which lower the temperatures required to produce an amorphous dispersion. Because an ideal amorphous dispersion is homogeneous at the molecular level, a second disadvantage is that the homogeneity of the final dispersion can be affected by process parameters such as temperature, screw configuration, screw speed, and feed rates; this aspect, combined with the relatively large minimum batch size, results in cost and risk during early development. 

What are the advantages/disadvantages of using spray drying compared with HME to the amorphous solid dispersion?  

Spray drying offers the following advantages: it is applicable to a broader chemical space for the API and types of dispersion polymers that can be used (due to dissolution of the API in a volatile organic solvent); it does not expose the API to excessive heat during manufacture of the amorphous dispersion; and it can be scaled down, requiring smaller quantities of API during formulation screening. 

Spray drying has a few disadvantages as well: solvents are used and must be recovered, equipment footprints are larger, and capital and operating costs are higher. These considerations must be taken into account when designing later-stage or commercial processes and facilities, but they are not insurmountable—as evidenced by successful operation of Hovione's PSD-4 and PSD-5 spray-drying facilities and the fact that spray drying is used extensively outside of the pharmaceutical industry at large scales.  

Can you be specific in terms of achieving desired bioavailability/solubility of the resulting product, stability of the resulting product, the ease and/or scalability of the manufacturing process, and other process conditions that are important in deciding which approach to use? 

As mentioned previously, both spray drying and HME can be used effectively to manufacture amorphous dispersions. A formulation produced by either process would be expected to yield similar bioavailability and physical stability as long as both processes yield a homogeneous amorphous dispersion with appropriate final-powder particle size, which generally requires milling for HME. If either of the processes fails to produce a homogeneous amorphous dispersion, the resulting formulation will likely underperform. This situation is most common when a compound fails to completely dissolve during the HME process due to either the high melting temperature of the compound, or the low solubility of the compound in the molten polymer, resulting in crystallization or phase separation when the melt cools. 

Spray drying and HME are readily scaled. Commercial-scale equipment is available at many pharmaceutical organizations and several contract research organizations. 

 On an industry level, can you highlight recent advances in HME with respect to improvements in the manufacturing process and its application to different types of APIs?  

HME is a technology that has been widely used in pharmaceutical and nonpharmaceutical industries for decades. Recent advances in HME include efforts to reduce processing temperatures by including plasticizers and reduce the residence time of the compound and polymer during processing. Numerous research groups are looking at nonvolatile plasticizers, such as vitamin E or triethyl citrate, to reduce processing temperatures. Others have reported the use of volatile excipients, such as supercritical carbon dioxide, to avoid decreases in the final dispersion's glass-transition temperature that occur with traditional plasticizers.  

There have also been recent reports of the use of equipment that has significantly reduced residence time. Professor McGinity's research group at the University of Texas has developed a process called Kinetisol to make amorphous dispersions. It is based on equipment that was developed to recycle plastics, which can reduce the residence time of the API and polymer at processing temperatures from minutes to tens of seconds. 

 Can you highlight recent industry advances in spray drying with respect to improvements in the manufacturing process and its application to different types of APIs?  

 Although spray drying is a well-established process, innovations in formulation approaches and process equipment are occurring. In formulation, there is an increasing need for a third component in the dispersions to help deliver challenging compounds aimed at novel biological targets. Often, a surfactant is added to help increase the dissolution rate or dispersion-particle wetting or to provide an alternate micelle source to enhance drug solubility 

Equipment advances include novel spray-dryer and cyclone designs to collect the dispersion particles more efficiently. This is especially significant for particle-engineering applications such as inhalation, which requires the manufacture and collection of particles with a narrow particle-size distribution for delivery to the lung.  

As part of the effort to formulate compounds with low solubility in organic solvents, Bend Research has developed a "hot process," which allows a drug suspension to be heated to high temperatures—often well above the ambient-pressure boiling point of the solvent—in a heat exchanger to dissolve the drug immediately before it is introduced into the spray dryer. This decreases solvent use and can result in a more scalable process. 

 One specific technology of Bend Research is the spray-dried nanoadsorbate technology. Can you explain this technology and how it differs from conventional spray drying?  

Two physical situations are dose-limiting when formulating amorphous dispersions: low dissolution rates for compounds that are highly lipophilic and recrystallization for compounds that have high melting temperatures. To formulate highly lipophilic compounds, we have developed the spray-dried nanoadsorbate technology as an extension of spray-dried dispersions. This technology is based on spray drying an amorphous dispersion onto a high-surface-area inorganic support such as Cab-O-Sil (fumed silica). The increased surface area promotes faster dissolution of the dispersion and is particularly well suited for highly lipophilic compounds (e.g., compounds that have LogP values greater than 6 to 7). Similarly, to formulate compounds with high melting temperatures, we have developed a technology that is based on intentionally recrystallizing the compounds in the dispersion polymer in nanometer-sized domains. This formulation type also is a high-energy form of the API that contains a concentration-enhancing polymer.  

Enhancing bioavailability can be achieved through hot-melt extrusion or spray drying. Patricia Van Arnum interviews Bend Research to find out more about when to use each technique.

Bioavailability Enhancement: When to Use Hot-Melt Extrusion versus Spray Drying

Achieving a good return on assets through manufacturing-capacity utilization is an ongoing challenge for biopharmaceutical companies. Pharmaceutical companies need manufacturing capacity on hand to produce commercial products and also to launch new products as they come through their drug-development pipelines. The inherent uncertainty of drug development, however, makes it difficult to balance the need for timely access to manufacturing capacity with the interest of avoiding underutilizing capacity and a resulting reduction on a return on assets. This balancing act is particularly challenging with biologics manufacturing because the capital costs for manufacturing capacity are higher than traditional small-molecule drug-substance manufacturing. A long-term manufacturing capacity-sharing arrangement by Merck & Co. and MedImmune LLC, the biologics arm of AstraZeneca, established in September 2011, demonstrates a potential solution for the capacity challenges increasingly being faced by  biopharmaceutical companies. 

Changing fundamentals for biologics manufacturing

The impetus for the companies' manufacturing capacity-sharing agreement reflected larger trends in biopharmaceutical manufacturing. In the 1990s, many large pharmaceutical companies began building biologics manufacturing capacity in anticipation of advancing biologic-based drug candidates. At the same time, certain CMOs began to emerge to fill capacity requirements. As these changes occurred, during the 2000s, technology gains also started to significantly improve upstream yields, explained Michael Kamarck,then president of Merck BioVentures, who spoke at the Drug, Chemical, and Associated Technologies Association (DCAT) Business Development Forum, 

Successfully Partnering Pharmaceutical Manufacturing Throughout Product Lifecycle

, which was held in mid-March 2012 in New York. Proprietary fermentation technology, for example, improved yields at the beginning of the decade from 0.5 to 1 g/L to 1–3 g/L in 2002, to 3–5 g/L in 2004 to 10 g/L in 2007. The confluence of increased manufacturing capacity that resulted from both improved technology and recently constructed greenfield biologic-based manufacturing facilities resulted in overcapacity on an industry level. 

"This evolution brought us to another chapter in biomanufacturing," said Kamarck, pointing to strategic collaborations as a way to manage the capacity overflow and biomanufacturing needs. 

The genesis of the Merck–MedImmune collaboration

The fundamental changes in biomanufacturing trends came into play with the biologics manufacturing capacity-sharing arrangement made by Merck and MedImmune in September 2011. In 2007, AstraZeneca completed the acquisition of MedImmune, which became the biologics arm of AstraZeneca, incorporating the MedImmune assets, legacy AstraZeneca biologics assets, and Cambridge Antibody Technology, which AstraZeneca had acquired in 2006. A key manufacturing asset for MedImmune, which is headquartered in Gaithersburg, Maryland, is the company's large-scale monoclonal antibody (mAb) manufacturing facility in Frederick, Maryland. Prior to its acquisition by AstraZeneca, in 2005, MedImmune committed to support 500 kg of production per year through the addition of two 15,000-L bioreactors, which would replace an original 2 x 2500 L plant. The additional capacity was intended to meet the mid-range product demand of MedImmune through 2013. In acquiring MedImmune in 2007, AstraZeneca further authorized an additional 500 kg of capacity to include a total of four 15,000-L bioreactor trains at the new Frederick facility. 

When the MedImmune product for which the initial capacity was intended did not proceed through clinical development, MedImmune realized that existing products would not fill the site. The combination of a pipeline-delivery gap and the subsequent improvement in titres or grams-per-liter yields required an alternative solution to fill capacity.  

"This became the genesis of the concept for sharing capacity or selling it directly," explained Andrew D. Skibo, executive vice-president of operations at MedImmune, who also spoke at the DCAT Business Development Forum. The business case for developing an alternative approach to utilizing capacity was clear, he said.  

Contrary to the original plan, the plant would not be fully utilized by MedImmune's own pipeline until at least 2022 based on a three- to five-year delay in product commercialization and dramatically improved titres. In addition to the underutilization of the facility, the associated staff at the facility would be in standby status. "The skilled and trained staff was the highest value asset of concern," said Skibo. "We wanted to retain key employees by getting them working in their area of expertise." 

With the motivation of covering operating expenses of staff and depreciation for the manufacturing assets, which was estimated at $100 million per year, the business case for developing a partnership for sharing capacity was made. In evaluating a potential partner, Skibo outlined that certain criteria came into play. The ideal situation would involve one or two partners with large-volume needs specific to needing capacity for mammalian cell culture (i.e., Chinese hamster ovary). The arrangement would require joint capacity planning in a long-term deal (i.e., 10 to 15 years). In an arrangement, MedImmune capacity needs would prevail, and reciprocity with capacity in other areas, such as microbial bulk capacity, high-capacity mAb filling, and live-virus filling would also be part of any agreement. "This criteria would preclude a strictly CMO-type agreement from working," explained Skibo. 

"This type of arrangement would require the right people and people 'chemistry.' It is more than a financial agreement; both parties would have 'skin in the game,'" he said. 

Using those criteria, MedImmune selected Merck & Co. as its partner. The companies formed a 15-year manufacturing capacity-sharing agreement in September 2011 with Merck utilizing MedImmune's Frederick, Maryland, facility for Merck bulk product manufacturing. The companies also are exploring the suitability of Merck's facilities in the production of microbial-based compounds in MedImmune's pipeline, and other potential manufacturing opportunities where business strategies intersect. Manufacturing began in the fourth quarter of 2011. The arrangement provides benefits to both parties. For MedImmune, the arrangement provides long-range utilization of excess capacity at the company's Frederick facility while maintaining sufficient capacity for MedImmune's own products. For Merck, the arrangement provides flexible and rapid access to capacity for the company's maturing biologics pipeline, which includes biosimilar candidates. 

Skibo points out that the deal represents a new model in pharmaceutical manufacturing, one based on "co-opetition," a mindset that contains both cooperation and competition (1). A key consideration of a "co-opetition" model is that the players in the game of business include customers, suppliers, competitors as well as those that provide complementary rather than competing products and services. In the case of Merck and MedImmune, although both companies provide pharmaceutical products, there is no direct competition in the service being shared, namely biologics manufacturing capacity. The deal is structured to provide MedImmune and Merck a balance of lot cost versus production risk allocation that in combination is uniquely different than a typical CMO arrangement. Lot cost is based upon MedImmune's own internal fully absorbed lot production costs. The risk associated with lot production reflects a traditional CMO assignment of risk. Merck pays for any additional specialized resources and/or capital expansion upgrades as needed. The initial focus is on cell-based compounds for which Merck develops the process and analytics through medium scale, so any future changes are limited to fit and manufacturing needs only. MedImmune can provide large-scale technology transfer out of the Frederick facility as needed and can decline to work on any specific project. 

Since Merck and MedImmune announced their manufacturing-capacity arrangement, several other companies have partnered in biosimilars in a co-opetition-like or strategic partnership model. In February 2012, Biogen Idec and Samsung formed a joint venture, Samsung Bioepis to develop, manufacture, and market biosimilars in keeping with their agreement announced in December 2011. Under the agreement, Samsung is contributing $255 million of the $300 million for an 85% stake, and Biogen Idec is contributing $45 million for a 15% stake in the joint venture. The joint venture, which will be based in Korea, will contract with Biogen Idec and Samsung Biologics for technical development and manufacturing services. Samsung Biologics is a Samsung business formed in April 2011 to specialize in biopharmaceutical manufacturing. The joint venture will not pursue biosimilars of Biogen Idec's proprietary products. 

Amgen and Watson Pharmaceuticals formed a collaboration in December 2011 to develop and commercialize, on a worldwide basis, several oncology antibody biosimilars. Under the agreement, Amgen will assume primary responsibility for developing, manufacturing, and initially commercializing the oncology antibody products. Watson will contribute up to $400 million in codevelopment costs over the course of development, including the provision of development support, and will share product-development risks. In addition, Watson will contribute its expertise in the commercialization and marketing of products in specialty and generic-drug markets. The collaboration products are expected to be sold under a joint Amgen/Watson label. Watson will initially receive royalties and sales milestones from product revenues. The collaboration will not pursue biosimilars of Amgen's proprietary products. 

Baxter and Momenta Pharmaceuticals also formed a collaboration in December 2011, to develop and commercialize biosimilars. Baxter will provide its clinical-development and biologic manufacturing expertise while Momenta will provide its expertise in high-resolution analytics, characterization, and product and process development. 

Looking ahead, Skibo observed, "Partnering to minimize investment risk will become commonplace in the future. It easier to justify a $600 million to $800 million investment when there is more than one pipeline to support, in addition to in-licensing, biosimilars, and novel products." 

The manufacturing capacity-sharing model in biologics and Merck & Co. and MedImmune ushers in a new paradigm of "co-opetition".

A Manufacturing Capacity-Sharing Model: Merck & Co. and MedImmune LLC

Biosimilars represent a niche segment in the global biopharmaceutical market, but their potential is engendering interest from a mix of traditional generic-drug companies, innovator biopharmaceutical companies, new players to the market, and contract service providers. As a second-generation wave of biosimilars, inclusive of monoclonal antibodies, is scheduled to come off patent during the next several years, opportunities exist, but it is unclear as to what the true potential of the biosimilars market will be given differing regulatory issues, technical requirements, and developmental costs compared with traditional small-molecule generic drugs. 

Although the market for biosimilars is growing at a rate higher than the global prescription-drug market, it is still a relatively small market. The global market for prescription drugs is expected to reach $1.2 trillion by 2016, increasing at a compound average growth rate (CAGR) of 3% to 6%, according to 2012 estimates by the IMS Institute for Healthcare Informatics. Global sales of biosimilars, estimated at $693 million in 2011, are expected to reach $4 billion to $6 billion by 2016, representing 2% of biologic-based drug spending.  

BCC Research projects a slightly stronger market. It estimates that the global demand for biosimilars (inclusive of low-molecular weight heparin) totaled nearly $2.5 billion in 2011 and should reach $3.6 billion in 2016, a CAGR of 7.7% over the five-year period. BCC breaks the biosimilars market into four regions: APAC (Asia Pacific), the United States, Europe, and the rest of the world. The APAC region accounted for $683 million in 2011 and should reach $1.1 billion in 2016, a CAGR of 10.3%, according to BCC. The US accounted for nearly $1.1 billion of the biosimilars market in 2011 and should increase at a CAGR of 4.1% to reach $1.3 billion in 2016. Europe, worth $377 million in 2011, should reach $625 million in 2016, increasing at a CAGR of 10.6%. The rest of the world accounted for $335 million in 2011 and in 2016 should total $522 million, a CAGR of 9.3%.   

Looking at global biosimilar demand by value and product type in 2011, low-molecular weight heparin accounted for 44% of the market, according to BCC. Epoetins held the next highest share at 19%, followed by recombinant human growth hormone (11%), granulocyte colony-stimulating factors (7%), interferons (6%), insulins (5%), and other products (8%). 

				Interest in the biosimilars market is spurred by a number of top-selling biologics slated to come off patent during the next five years, including Herceptin (trastuzumab), Enbrel (etanercept), Humalog (insulin lispro recombinant), MabThera/Rituxan (rituximab), Remicade (infliximab), and Aranesp (darbepoetin alfa) (1). Unlike manufacturers of small-molecule generic drugs, however, manufacturers of biosimilars face a different path based on developmental costs, regulatory issues, and technical requirements to bring a biosimilar to market as well as greater uncertainty as to payer, physician, and patient acceptance of a biosimilar product (1).			

The establishment of a regulatory pathway for biosimilars through the passage of the 

Patient Protection and Affordable Care Act 

in 2010 and the recent upholding by the Supreme Court of that law as well as recently issued FDA draft guidance on biosimilar development is moving the establishment of a regulatory pathway for biosimilars in the United States (1–4). The recently enacted 

on July 9, 2012, established a new user-fee program for biosimilars to support the review of marketing applications for biosimilar biological products, further enabling US regulatory implementation of a biosimilars pathway. 

Although the US is considered a potentially strong market for biosimilars, the true test for biosimilars to date has been in the European Union, which represents the most advanced market for biosimilars, accounting for 80% of global spending (1). Despite an established regulatory pathway, only a few manufacturers have launched biosimilars in the EU, which include Sandoz (the generic-drug business of Novartis), Stada, Hospira, Medice and Ratiopharma (part of Teva Pharmaceutical) (1). According to a recent IMS analysis, biosimilar market penetration varies by EU country.  Germany and France account for half of the biosimilars market by value with a respective 34% and 17% share (1). On a product basis, granulocyte colony-stimulating factors have generally achieved the highest penetration by value (25%) and human growth hormone the lowest (4%)in the EU (1). In its analysis, IMS points out that the first generation of biosimilars has been met with limited uptake compared to small-molecule generic drugs mainly due to the limited price reductions of biosimilars. Average list (ex-manufacturer) price cuts in the EU of 30% are considerably less than those for traditional generic drugs, which are 70–80% (1).  

A recent study by the IGES Institute, based in Berlin, and commissioned by Sandoz, projects that by 2020, eight EU countries could save a cumulative total of between EUR 11.8 billion ($14.5 billion) and EUR 33.4 billion ($41.0 billion) through the use of biosimilar medicines (5). The study calculated the amount of expected savings from introducing biosimilars to eight EU countries: Germany, France, the UK, Italy, Spain, Sweden, Poland, and Romania. The IGES study was limited to three classes of biologics: erythropoetin alfa and granulocyte colony-stimulating factors, for which biosimilars already exist, as well as monoclonal antibodies, considered an emerging opportunity with several drugs coming off patent. The study team at IGES developed different scenarios based on possible developments of market share, pricing, and the time period for market entry of biosimilars after patent expiration. A typical biosimilar takes seven to eight years to develop, at a cost of between $100 million and $250 million, which includes additional clinical trials (5) (see sidebar, "The Costs and Opportunities in Biosimilars"). 

The costs and opportunities in biosimilars  			

According to the IMS analysis, the immediate opportunity for biosimilars will be in emerging markets although longer term, the US is positioned to be the leading market. It estimates that the US biosimilars market could reach between $11 billion and $25 billion in 2020, respectively representing a 4% and 10% share of the total biologics market subject to certain market, technical, and regulatory conditions (1). Part of this growth will also be tied to more complex biologics, such as monoclonal antibodies, assuming their position in the market. 

The biosimilars market has engendered several strategic partnerships among innovator biopharmaceutical companies, traditional generic-drug companies, new players to the biopharmaceutical market, and contract service providers (see 

). For example, in February 2012, Biogen Idec and Samsung launched a joint venture, Samsung Bioepis to develop, manufacture, and market biosimilars following their December 2011 announcement to form such a partnership. Under the agreement, Samsung is contributing $255 million of the $300 million for an 85% stake, and Biogen Idec is contributing $45 million for a 15% stake in the joint venture. The joint venture, which will be based in Korea, will contract with Biogen Idec and Samsung Biologics for technical development and manufacturing services. Samsung Biologics is a Samsung business formed in April 2011 to specialize in biopharmaceutical manufacturing. The joint venture will not pursue biosimilars of Biogen Idec's proprietary products. 

Table I: Select partnerships in biosimilars among contract service providers, generic-drug companies, and innovator-drug companies. 			

In February 2011, Samsung Electronics entered into a strategic partnership with the CRO Quintiles as part of Samsung's entry into the biopharmaceuticals market. The companies formed a new joint-venture company to provide biopharmaceutical contract manufacturing services in South Korea, with Samsung owning 90% and Quintiles 10%. At the time of the announcement in February, Samsung said it plans to commercialize biosimilars by 2016 and to expand into innovative biologics in the future. The joint-venture company plans to construct a biopharmaceutical manufacturing plant in South Korea with the goal of beginning full-scale operations in April 2013. 

Fujfilm began building its biosimilars business in 2011. In November 2011, it agreed to form a 50–50 joint venture for biosimilars with the biopharmaceutical company Kyowa Hakko Kiron. The joint venture was launched in late March 2012, with an initial focus on a biosimilar version of adalimumab. In April 2011, Fujifilm completed its acquisition of the former Merck Biomanufacturing Network, which provides contract biologics manufacturing. The acquisition included facilities in Research Triangle Park, North Carolina, and Billingham, United Kingdom. Merck & Co. had acquired the Billingham facilities through its 2009 acquisition of the contract manufacturer Avecia and the Research Triangle Park facilities as part of its acquisition of Schering-Plough in 2009. Diosynth was the former contract manufacturing activities of Organon, the pharmaceutical business of the Dutch chemical company Akzo Nobel. Schering-Plough acquired Organon in 2007, and Merck & Co. acquired Schering-Plough in 2009. Merck combined the UK and US contract biologic activities into the Merck Biomanufacturing Network, which was acquired by Fujifilm in 2011, and later named Fujifilm Diosynth Biotechnologies. Also in 2011, Fujifilm formed a partnership with Mutsubishi for contract biologics manufacturing under which Mitsubishi took a 20% equity interest in FujiFilm Diosynth Biotechnologies. 

Baxter and Momenta Pharmaceuticals formed a collaboration in December 2011 to develop and commercialize biosimilars. Baxter will provide its clinical-development and biologic manufacturing expertise while Momenta will provide its expertise in high-resolution analytics, characterization, and product and process development. 

In 2011, Merck & Co. partnered with the CRO Parexel by which Parexel will provide strategic access to global clinical development services for designated biosimilar candidates to Merck BioVentures, Merck & Co.'s biosimilars division. Under the agreement, Parexel will provide Merck BioVentures with strategic access to a broad range of regulatory strategy and clinical development planning capabilities for the development of certain broad classes of biosimilars across various therapeutic areas, including exclusivity for certain candidates. The agreement also provides for the establishment of a dedicated Merck BioVentures unit within the Parexel organization. In another deal, in June 2011, Merck & Co. partnered with the Korean chemical company, Hanwha Chemical, to develop and commercialize HD203, a biosimilar candidate of Enbrel (etanercept). Under the agreement, Merck will conduct clinical development and be responsible for manufacturing. In addition, upon marketing approval, Merck will commercialize HD203 globally, except for in Korea and Turkey, where Hanwha retains marketing rights. In return, Hanwha received an upfront payment from Merck and will be eligible for additional payments associated with milestones for technology transfer and regulatory progress as well as tiered royalties on sales. 

In June 2012, Merck Serono, a division of Merck KGaA, and India-based Dr. Reddy's Laboratories formed a partnership to codevelop a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies. The partnership covers codevelopment, manufacturing, and commercialization of the compounds globally, with some specific country exceptions. Dr. Reddy's will lead early product development and complete Phase I development. Upon completion of Phase I, Merck Serono will take over manufacturing and will lead Phase III development. The agreement is based on full R&D cost sharing. Merck Serono will undertake commercialization globally, outside the United States and with the exception of select emerging markets, which will be co-exclusive or where Dr. Reddy's maintains exclusive rights. At the time of commercialization, Dr. Reddy's will receive royalty payments from Merck Serono. In the US, the parties will co-commercialize the products on a profit-sharing basis. 

The Merck Serono and Dr. Reddy's partnership marks the first step by Merck Serono to enter the biosimilar space. Earlier this year, Merck Serono set up a dedicated biosimilars unit that will be based in the Canton of Vaud in Switzerland, where the main biologics manufacturing facilities of Merck Serono are located. Also, in September 2011, Boehringer Ingelheim announced plans to establish a new separate business for the development and commercialization of its own biosimilars. 

Not all biosimilar partnerships have succeeded. In March 2012, Pfizer and the Indian biotechnology company Biocon ended their alliance to commercialize Biocon's biosimilar versions of insulin and insulin analog products. The companies agreed that due to the individual priorities for their respective biosimilars businesses, it was in their best interest to move forward independently. Pfizer and Biocon had signed their biosimilar pact in October 2010 for the worldwide commercialization of Biocon's biosimilar versions of insulin and insulin analog products: recombinant human insulin, glargine, aspart, and lispro. Under the 2010 agreement, Pfizer had exclusive rights to commercialize these products globally, with certain exceptions, including co-exclusive rights for all of the products with Biocon in Germany, India, and Malaysia. Pfizer also had have co-exclusive rights with existing Biocon licensees with respect to some of the products, primarily in a number of developing markets. Under the 2010 agreement, Pfizer made upfront payments totaling $200 million, and Biocon was eligible to receive additional development and regulatory milestone payments of up to $150 million and to receive additional payments linked to Pfizer's sales of its four insulin biosimilar products across global markets. 

 Shaping the Biosimilars Opportunity: A Global Perspective on the Evolving Biosimilars Landscape (

Draft Guidance for Industry on Biosimilars: Q&As Regarding Implementation of the BPCI Act of 2009

Draft Guidance for Industry Scientific Considerations in Demonstrating Biosimilarity to a Reference Product

Draft Guidance for Industry Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product 

Saving Money in the European Healthcare Systems with Biosimilars IGES Institute 

An examination of the current and projected market for biosimilars, development costs for biosimilars compared with small-molecule generic drug, and partnerships in biosimilars.

Market Strengths and Weaknesses in Biosimilars

The practice of outsourcing development and manufacturing services is not new in the pharmaceutical  industry. The traditional outsourcing model involves a sponsor company outsourcing particular projects to a contract services provider, which performs the agreed-upon services at the CDMO's or CMO's facilities. Other variants of this model can be adapted, however, as in the case of an adaption of an insourcing model. Although the term "insourcing" typically refers to taking functions back in-house to perform internally with in-house staffing and resources, a hybrid of insourcing and outsourcing can also be employed. Such is the case with an insourcing relationship between Eli Lilly and the contract research and manufacturing organization AMRI for chemistry services. Christopher Conway, vice-president of business development with AMRI, discusses the partnership with Patricia Van Arnum, executive editor of 

: In late 2011, AMRI formed an insourced partnership with Eli Lilly for chemistry services to support Eli Lilly's drug-discovery programs. Can you describe the nature of the partnership in terms of the resources (staffing, expertise, services) that AMRI is providing and the related infrastructure and support that Eli Lilly is providing as part of the partnership?  

: In November 2011, AMRI entered into a six-year collaboration with Eli Lilly based on an AMRI insourcing model. As a result of the experience gained in establishing operating infrastructure at several remote locations in India, Singapore, and Europe, AMRI's knowledge of the logistics, legal ramifications, human resources needs, information technology and infrastructure demands, and finances associated with the insourcing model has enabled a smooth establishment and ramp-up.  

AMRI announced in November 2011 that it would employ more than 40 synthetic chemists in Indianapolis in 2012 to support Eli Lilly's drug-discovery programs. This team is anchored by a core of experienced AMRI employees, who had been based in Albany, New York, and who have relocated to Indianapolis to assume various leadership roles. The remaining employees are new hires, the majority of which are being recruited from Indiana and surrounding states. 

Comparison with traditional outsourcing models

: How does an "insourced" relationship differ from a traditional "outsourced" relationship? What are the advantages of such a relationship compared with a traditional outsourcing relationship?  

: An insourcing relationship has the potential to accelerate a customer's drug-discovery, drug-product development, or manufacturing efforts by maximizing the real-time exchange of scientific information and the resulting ability to rapidly adjust research priorities in response to breaking results. Working closely together, AMRI's scientists can rapidly adapt to changing project needs, leading to faster turnaround response times and yielding reduced cycle times in lead-optimization programs. Co-location brings such benefits in sharp contrast to having synthesis support at a remote location in Asia, for example. 

An insourcing relationship is an ideal option when the sponsor may have significant unoccupied laboratory facilities and equipment available because of prior downsizing initiatives. These are already paid for or are being depreciated anyway, and utilization of an insourcing opportunity derives the most value from these assets. 

Customers/sponsors can take advantage of AMRI's intellectual capital because the insourced scientists still have access when needed to AMRI's global network of knowledge and experienced problem-solving in drug discovery and development. In addition, working with hundreds of companies across the industry exposes AMRI to best practices that the company can bring to the table. From a human resources (HR) perspective, the insourced scientists are AMRI employees, and this increases the flexibility of these resources while also relieving the burden of HR support, recruiting, and providing employee benefits, which remain the responsibility of AMRI and are already baked into the research agreement. 

Pharmaceutical companies are looking for CROs and CMOs that can use their expertise in more strategic ways. Insourcing sets the stage for true collaboration. In a traditional vendor–client relationship, the vendor's scientists work at their own site, often far removed from the client. With insourcing, a core team of scientists is located at the customer facility. This close proximity allows for constant communication, idea sharing, and joint problem-solving, ultimately creating a real-time collaboration with increased project productivity.  

From the provider's perspective, an insourcing relationship is a prime opportunity to demonstrate the value that the provider can bring to the relationship, In Darwinian fashion, providers that can demonstrate real contributions and value create opportunities to cement and grow a relationship. Those that do not will see these relationships ending or being transferred to someone else. In this fashion, both the sponsor and the provider evolve for the better of both.  

 For an insourced relationship, the employees of the contract service provider work at the facility of the sponsor company. How is that arrangement managed in terms of the project itself and the employees? In having both sponsor company and contract service employees together at one site, how does project management in an insourced relationship differ from project management in a traditional outsourcing relationship?  

 As employees of AMRI, all HR, benefits, safety, and other AMRI practices remain our responsibility. At the same time as we institute our corporate practices, our insourced employees also are obligated to layer over that the work obligations and corporate practices of our host sponsor. In establishing this insourcing relationship, AMRI has placed a senior leader on site to serve as the team leader and liaison with sponsor leadership. The team has been further partitioned into groups or sections under the direction of experienced leaders who function as project managers and group leaders. For significant challenges, these team leaders can tap into the broader AMRI leadership team as well as the sponsor's managers. 

What types of performance metrics are used in an insourced relationship and how do they differ from metrics used in a traditional outsourcing model? Are different or additional measurements put into play? 

 Insourcing models enable a truly collaborative work environment. For example, in traditional vendor–client relationships, the vendor scientists work at one site and the client at another. With the insourcing model, a core group of AMRI scientists will work alongside the customer's scientists at the customer facility allowing for constant communication, idea-sharing, and problem-solving. This ultimately creates a real-time intellectual think tank with increased project productivity. 

AMRI holds its scientists working at the customer site to the same stringent standards that are the hallmark of our reputation of quality. In addition, as part of the establishment of the insourcing collaboration, negotiators from both parties established performance metrics and set expectations, unique to this relationship, which are expected to be met. 

 What type of projects lend themselves to an insourcing model? Is it appropriate across the continuum of drug-development and manufacturing services or is the model more suited to certain phases of development and related activities? What are the key factors in deciding whether an insourced model is appropriate? 

 Availability of facilities and technologies that the insourcing scientists will need to access are key to the ability to establish such a relationship. The insourcing provider should have the ability to carve out work functions and conduct activities unique to existing functions, as well as provide supplemental capabilities to strengthen service areas that may already be in-house at some of these organizations. For example, a company may have synthetic chemists or biologists in-house, but AMRI may add more through the insourcing model. These groups would be separate, but not totally unique, in its core function to the customer. 

AMRI's technical capabilities enable the company to custom build an insourcing model depending on the specific and ever-changing needs of any customer. The insourcing model affords our customers the ability to tap into experienced, highly trained discovery, drug-product development and manufacturing teams to help translate customer ideas to clinical candidates to large-scale APIs both on the customer's site and/or at any of AMRI's global locations. 

 Traditional outsourcing models still dominate external development and manufacturing activities, but do you think insourcing models will become more common in the industry? Why factors may influence greater adoption of this model? 

 Pharmaceutical companies are adapting new strategies and reorganizing their programs, facilities, and resources, with many companies beginning to contemplate a greater reliance on outsourcing. With substantial layoffs within Big Pharma in the United States and Europe, many experienced discovery and development scientists are taking positions in the CRO industry. As a result, over time, the balance of expertise is beginning to shift from customers to suppliers. 

 Public policy perspectives: the lexicon of insourcing versus outsourcing			

The ability of providers to adapt and respond to industry changes is going to play a vital role in improving the success rate and outcomes at all stages of the drug-discovery and development pipeline. The ultimate factors in the adoption of this model are going to be driven by: the needs of customers within the industry, which includes the services being delivered on time and to budget; the need for collaborative advice; the need to ease the burdens of project management; and the need for more flexibility, adaptability, and quality. In addition, insourcing can offer significant cost savings compared with hiring permanent employees. As insourced scientists are AMRI employees, the administrative and benefit costs and obligations accrue to it. At the highest level, insourcing allows a customer to ramp up insourced full-time equivalents (FTEs) at a rate competitive with global external outsourced FTE costs and to use available laboratory space that would otherwise sit idle while demonstrating improved productivity that can be measured in pipeline candidates. 

The company is involved in another outsourcing model through its SMARTSOURCING program. Can you explain the program and how it fits into an insourcing/outsourcing model? 

 AMRI SMARTSOURCING is a new initiative to address the evolving needs of the industry, which includes insourcing and outsourcing. AMRI has examined the needs of pharmaceutical and biopharmaceutical companies and itself and has found that customers are looking for more supplier accountability and more trust as well as a better balance of risk and greater flexibility. AMRI's SMARTSOURCING approach is a versatile and strategic way of partnering that is a means of insourcing or outsourcing, or a hybrid model of both. It encompasses the broad range of technologies, capabilities, and global integration that AMRI can bring to a relationship, allowing our customers to customize an approach unique to its needs and budget. The company has used the rollout of its SMARTSOURCING initiative to showcase its improved performance and the customer experience that results from the close integration of global capabilities across the spectrum of drug discovery and development. 

AMRI, a contract research and manufacturing organization, discusses its adaption of an insourcing model with Eli Lilly.