Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

Generic-drug incursion and resulting declines in revenues continue to be major issues for the large pharmaceutical companies. An analysis of second-quarter and first-half results in 2013 of some of the leading companies reflect this issue as companies seek to continue to build their pipelines through acquisitions and organic growth. 

 Pfizer reported pharmaceutical/biopharmaceutical revenues of $23.66 billion for the first half of 2013, a 10% drop compared to revenues in the first half of 2012.  A primary contributor to the decline was reduced sales for the company’s anticholesterol drug Lipitor (atorvastatin calcium), which continued to experience sales erosion due to generic-drug competition. Lipitor lost exclusivity in the United States in November 2011 and various other major markets in 2011 and 2012. This loss of exclusivity reduced branded worldwide revenues by $657 million in the second quarter of 2013, in comparison with the second quarter of 2012. The decline in Lipitor’s sales reflected the losses of exclusivity of the drug in developed Europe in the second-quarter 2012 as well as the impact of multisource generic competition in the US beginning in late-May 2012. First-half 2013 sales of Lipitor declined 55% year over year from $2.62 billion in the first half of 2012 to $1.17 billion in the first half of 2013. 

Additionally, Pfizer’s second-quarter revenues were negatively impacted by other product losses of exclusivity, government purchasing patterns for Prevnar/Prevenar, a pneumococcal conjugate vaccine, in various markets, and certain other events, primarily within the company’s emerging markets unit. In emerging markets, for the second-quarter of 2014, Pfizer’s revenues grew 4% operationally, primarily due to strong volume growth in China, most notably for Lipitor and Prevenar, which was partially offset by the impact of the transfer of certain product rights to the Pfizer–Hisun joint venture in the first-quarter 2013 and the timing of government purchases of Enbrel (etanercept), a drug to treat psoriasis, psoriatic arthritis, and rheumatoid arthritis, and Prevenar in certain other emerging markets. Pfizer expects operational revenue growth in emerging markets to accelerate in the second half of the year to a high-single-digit percentage, with the full-year 2013 operational revenue growth expected to be a mid-single-digit percentage. 

In key pipeline and other business developments thus far in 2013, Pfizer received breakthrough-therapy designation by FDA for palbociclib, a drug to treat breast cancer. A Phase III study, evaluating the safety and efficacy of inotuzumab ozogamicin in patients with relapsed or refractory CD22+ aggressive non-Hodgkin lymphoma who are not candidates for intensive high-dose chemotherapy, was discontinued due to futility. This compound continues to be studied in adult acute lymphoblastic leukemia and other hematological malignancies. 

In other business developments, Pfizer gained $10.5 billion (pretax) for the sale of its 80.2% remaining stake in its animal-health business, Zoetis. In June 24, 2013, Pfizer completed the full disposition of Zoetis, which was achieved through a series of steps, including the formation of Zoetis as a separate company to which Pfizer transferred substantially all of its animal-health assets and liabilities, an initial public offering of a 19.8% interest in Zoetis, and a subsequent exchange offer for the company’s remaining 80.2% interest. Pfizer also entered into a worldwide (except Japan) collaboration agreement with Merck & Co. to develop and commercialize ertugliflozin and ertugliflozin-containing fixed-dose combinations with metformin and Januvia® (sitagliptin) tablets. Ertugliflozin is Pfizer’s investigational medicine for Type 2 diabetes, with Phase III trials expected to begin later in 2013. 

Pfizer also announced plans to move forward to internally separate its commercial operations into three business segments, two of which will include Innovative business lines and a third which will include the Value business line. Each of the three segments will include developed markets and emerging markets. The changes will be implemented in fiscal 2014 in countries that do not require a consultation with works councils or unions and will be implemented in countries that require consultation after the successful conclusion of those processes. 

 Merck reported a 12% decline in pharmaceutical product revenue for the second quarter of 2013. In the second quarter of 2013, the company had pharmaceutical sales of $10.56 billion, which was down from $9.31 billion in the year-ago period. A primary cause was a decline of global sales of Singulair (montelukast sodium) due to generic-drug competition. Worldwide sales of Singulair, a once-a-day oral medicine for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, declined 80% to $281 million in the second quarter of 2013 from $1.41 billion. The patents for Singulair expired in the US in August 2012 and expired in major European markets in February 2013. The company experienced a significant and rapid reduction in sales in the US and is now also experiencing a substantial decline in Europe. Merck also saw revenue declines due to further loss of market exclusivity for the antimigraine drug Maxalt (rizatriptan benzoate), the antihypertensive drug Cozaar (losartan potassium)/Hyzaar (losartan potassium/hydrochlorothiazide) and the antihistamine Clarinex (desloratadine). These declines were partially offset by growth in the company’s diabetes drugs, Januvia (sitagliptin)/Janumet (sitagliptin/metformin HCI), Gardasil (human papillomavirus quadrivalent (Types 6, 11, 16 and 18) vaccine, recombinant], and the arthritis drug Simponi (golimumab). 

In other key developments for the second quarter, Merck reported preliminary results from an ongoing Phase IB expansion study evaluating the safety and efficacy of MK-3475, Merck’s investigational antibody therapy targeting PD-1, in patients with advanced (inoperable and metastatic) melanoma. Also, FDA approved Liptruzet (ezetimibe and atorvastatin) tablets for the treatment of elevated low-density lipoprotein cholesterol in patients with primary or mixed hyperlipidemia as adjunctive therapy to diet when diet alone is not enough. The company also received a Complete Response Letter from FDA regarding the new drug application for suvorexant, Merck’s investigational medicine for the treatment of insomnia. The company is evaluating the requests outlined in the Complete Response Letter and plans to submit definitive data in response to FDA in the first half of 2014. 

 In reporting its second-quarter 2013 results, Sanofi CEO Christopher A. Viehbacher acknowledged the negative impact resulting from loss of patent expiration and resulting generic-drug incursion. “The second quarter was a difficult quarter. As expected, this was the last quarter with a tough comparison to the prior year due to the residual impact of the patent cliff,” he said in a company press release. “Sales were also affected by our business in Brazil and commercial underperformance in certain business areas. However, sales growth of 7.7% of our growth platforms in the first half of 2013 continues to demonstrate the value of Sanofi’s integrated business model. In addition, we keep on making strong progress in delivering a growing portfolio of high potential R&D assets, as highlighted by the multiple clinical and regulatory milestones reached in the second quarter of 2013. We continue to expect to return to growth in the second half of 2013,” he concluded. 

In the second quarter, Sanofi reported that sales in its pharmaceuticals business were EUR 6.71 billion ($8.92 billion), a decrease of 7.1%, which reflected generic competition, EU austerity measures, and an adjustment of  EUR 122 million ($162 million) related to Brazil. Sales lost due to generic competition on its main legacy products in the US and European Union were EUR 481 million, ($640 million) primarily due to declining sales in the US for  the anticancer drug Eloxatin (oxaliplatin injection), the anticoagulant Lovenox (enoxaparin), and the active ingredient of Plavix  (clopidogrel bisulfate), a drug to inhibit blood clots, and in the EU, for the antihypertensive drug Aprovel (irbesartan). 

Overall, Sanofi’s 2013 first-half sales for its pharmaceuticals business reached EUR 13.5 billion ($18.0 billion), a decrease of 5.7%. First-half sales lost due to generic competition on main legacy products in the U.S. and EU were EUR 1.036 million ($1.378 billion). Sales of Plavix were EUR 493 million ($656 million), down 1.3% in the second quarter impacted by decreased sales of active ingredient for the US (EUR 5 million [$6.6 million] versus EUR 28 million [$37 million] in the second quarter of 2012) as the product lost its exclusivity in the US on May 17, 2012. Sales of Lovenox were EUR 436 million ($580 million) in the second quarter, a decrease of 9.2%, mainly due to generic competition in the US where sales of the branded product declined 43.7% to EUR 48 million ($64 million). Second-quarter sales of Eloxatin were EUR 60 million ($79.8 million), a decrease of 83.7%, reflecting generic competition in the US where the product lost its market exclusivity August 9, 2012,  and sales decline in emerging markets (EUR 31 million [$41 million], down 20.0%). First-half sales of Eloxatin declined 84.2% to EUR 119 million ($158 million). Second-quarter sales of Aprovel/Avapro decreased 27.5% to EUR 238 million ($316 million), reflecting generic competition in Western Europe where sales decreased 45.3% to EUR 94 million ($125 million). 

On a positive note, products from Sanofi’s diabetes franchise sales totaled EUR 1.621 billion in the second quarter, an increase of 16.2%. For the first half of 2013, the company’s diabetes division recorded sales of EUR 3.163 billion, an increase of 17.8% in the first half of 2013. Second-quarter sales of Genzyme reached EUR 525 million ($698 million), an increase of 25.6%, driven by growth of Cerezyme (imiglucerase), a drug to treat Gaucher’s disease, and the enzyme-replacement therapy Fabrazyme (agalsidase beta) and the launch of the multiple-sclerosis drug Aubagio (teriflunomide) in the US. First-half sales of Genzyme totaled EUR 1.018 million ($1.354 million), an increase of 25.5%. 

 AstraZeneca reported a 4% decline in sales to $6.232 billion in the second quarter. Loss of exclusivity on several key brands accounted for approximately $500 million in revenue decline in the quarter. Five growth platforms (emerging markets, Japan, the antiplatelet Brilinta (ticagrelor), its diabetes franchise, and its respiratory franchise) contributed more than $400 million in revenue growth in the second quarter. 

Other key developments thus far for the company in 2013 are the acquisitions of the specialty pharmaceutical company Omthera Pharmaceuticals and the pharmaceutical company Pearl Therapeutics and a recent collaboration with FibroGen to add three late-stage assets to the pipeline. Omthera’s investigational product, Epanova, for the potential treatment of patients with very high triglycerides, is an omega-3 free fatty acid composition that has been shown to bolster levels of eicosapentaenoic acid and docosahexaenoic acid. Pearl Therapeutics specializes in inhaled small molecules to treat respiratory disease. Pearl’s lead product, PT003, is a fixed-dose combination of formoterol fumarate, a long-acting beta-2-agonist and glycopyrrolate, a long-acting muscarinic antagonist. AstraZeneca and FibroGen formed a strategic collaboration to develop and commercialize FG-4592, an oral compound in late stage development for the treatment of anemia associated with chronic kidney disease and end-stage renal disease. Separately, AstraZeneca also filed a new drug application for Forxiga (dapagliflozin) with FDA in July 2013.

"We have made real progress in the second quarter against our strategic priorities despite the anticipated impact on revenue of the loss of exclusivity for some brands,” said AstraZeneca CEO Pascal Soriot,” in a company statement. “We continue to invest in distinctive science, our pipeline projects, products and key markets and our five key growth platforms delivered a double-digit increase in revenue contribution. Despite the fostamatinib disappointment, the late-stage pipeline in our core therapy areas is growing and has been further strengthened with the acquisitions of Omthera Pharmaceuticals and Pearl Therapeutics and the recently announced collaboration with FibroGen. In announcing the Cambridge Biomedical Campus as the location of our new UK strategic center, we also reaffirmed our commitment to invest in research and development productivity." 

Articles

Pfizer, Merck, Sanofi, and AstraZeneca are among the companies reporting revenue declines from generic-drug incursion. A look at what the companies are doing to stimulate growth.

Pfizer, Merck, Sanofi, and AstraZeneca Facing the Generic-Drug Squeeze

Led by strong demand for oncology drugs, high-potency manufacturing   continues to be an active area of investment, particularly for antibody drug conjugates (ADCs). ADCs, which consist of a monoclonal antibody (mAb) chemically linked to a small-molecule therapeutic, are a promising modality for certain therapeutic areas. ADCs are attracting the interest of both small and large pharmaceutical companies in their drug-development efforts as well as contract manufacturers specializing in high-potency manufacturing.  

The potential of ADCs was affirmed earlier this year when Roche's Genentech received FDA approval for Kadcyla (ado-trastuzumab emtansine or T-DM1) for treating HER2-positive metastatic breast cancer (mBC). The drug combines trastuzumab (Herceptin), which targets human epidermal growth factor receptor 2 (HER2) receptors with a maytansine derivative DM1, a small-molecule cytotoxin that binds to tubulin to prevent microtubule formation, through a stable thioether linker (4-[

-maleimidomethyl] cyclohexane-1-carboxylate) (1–3). Roche/Genentech has more than 25 ADCs in development, with eight ADCs in Phase I or Phase II studies for different types of cancer. 

Kadcyla is the first FDA-approved ADC for treating HER2-positive mBC, and one of the few commercially approved ADCs. In August 2011, FDA approved Adcetris (brentuximab vedotin), codeveloped by Seattle Genetics and Millennium Pharmaceuticals (now part of Takeda Pharmaceutical). Adcetris consists of three parts: the chimeric IgG1 antibody cAC10, specific for human CD30, the microtubule-disrupting agent monomethyl auristatin E (MMAE), and a protease-cleavable linker that covalently attaches MMAE to cAC10 (1, 2). Before the approval of Adcetris, the only other ADC approved by FDA was Mylotarg (gemtuzumab ozogamicin), approved more than 10 years ago in 2000. The drug, an anti-CD33 mAb conjugated to the cytotoxin calicheamicin, was developed by Wyeth (now part of Pfizer) and granted accelerated approval in 2000 but was voluntarily withdrawn by Pfizer in 2010 because a required Phase III trial failed to demonstrate a survival advantage (1, 3).  

Pfizer suffered another setback in its ADC development program earlier this year, when in May, it discontinued a Phase III study for one of its investigational ADCs, inotuzumab ozogamicin, for treating non-Hodgkin lymphoma. The drug continues to be evaluated as a treatment in adult acute lymphoblastic leukemia. Inotuzumab ozogamicin was originally developed by Celltech (now UCB) before Pfizer acquired all manufacturing and development rights. 

Pfizer, like other pharmaceutical companies, is partnering with smaller biopharmaceutical companies to advance ADCs. In June 2013, Pfizer formed a global strategic collaboration, worth up to $635 million, with CytomX to develop and commercialize multiple CytomX Probody Drug Conjugates (PDCs), propertiary ADCs of CytomX. Pfizer has exclusive rights to pursue development and commercialization of select PDCs. The companies will work together on preclinical research. Pfizer is responsible for development and potential commercialization of any selected PDCs with CytomX eligible to receive upfront, research, and preclinical milestone payments as well as potential tiered royalties.  

In May 2013, Ambrx, a clinical-stage biopharmaceutical company, partnered with Bristol-Myers Squibb for the discovery and development of ADCs using Ambrx's protein medicinal chemistry technology. Ambrx will receive an upfront payment of $15 million, funding for discovery and   research activities, potential development, and regulatory and sales milestones of as much as $97 million per product. BMS will have worldwide rights to develop and commercialize products resulting from the collaboration, and Ambrx is eligible to receive royalties on sales. In April 2013, Ambrx partnered with Astellas in an ADC deal worth up to $300 milllion. Ambrx received an upfront payment of $15 million from Astellas and may receive up to $285 million in potential milestones for an undisclosed number of targets for ADCs in oncology. Ambrx also inked a deal in ADC development with Merck & Co. in 2012. In June 2013, Ambrx partnered with the Chinese pharmaceutical Zhejiang Medicine  (ZMC) to develop and commercialize ARX788, Ambrx's ADC targeting HER2-positive breast cancer. Ambrx and ZMC will continue the development of ARX788, with ZMC bearing the ongoing development cost. ZMC will manufacture the drug on a commercial basis. The CRO WuXi PharmaTech will develop and manufacture the toxin, antibody, and ADC as well as provide preclinical development and clinical trials.  

The "new normal" in biopharmaceutical financing			

Seattle Genetics, which partnered with Takeda for developing Adcetris, is collaborating with Genentech, Pfizer, AbbVie (formerly Abbott), Bayer HealthCare, Progenics, and Genmab for ADCs using Seattle Genetics' proprietary ADC technology. Seattle Genetics' technology uses synthetic cytotoxic agents, such as E (MMAE) and monomethyl auristatin F (MMAF), and stable linker systems. In April 2013, Seattle Genetics reported on a newly developed cytotoxic agent, a pyrrolobenzodiazepine (PBD) dimer. PBDs are a class of highly potent, synthetic DNA-crosslinking agents, and the company presented data on ADCs using the company's site-specific conjugation technology (EC-mAbs) to link PBDs to mAbs targeted to CD33 and CD70. The company also reported on its preclinical candidate, SGN-LIV1A, which uses the same proprietary ADC technology as Adcetris and presented research on a new method for making highly stable linkers, specifically self-stabilizing maleimido-DPR linkers (4).  

In June 2013, Genmab and ADC Therapeutics teamed to develop a new ADC product combining Genmab's HuMax-TAC antibody and ADC Therapeutics' PBD-based cytotoxic and linker technology. In 2012, Spirogen announced a multiyear collaboration and license agreement with Genentech for the discovery and development of ADCs using Spirogen's PBD-based drugs and associated linker technology. Spirogen is primarily responsible for synthesizing and manufacturing drug reagents while Genentech is using Spirogen's drug reagents to generate ADCs and evaluate their potential therapeutic utility. Genentech has the exclusive license to fully develop and commercialize licensed products that contain these ADCs (3). 

Mersana Therapeutics, which is developing ADCs using its Fleximer polymer and customizable linker chemistries, formed a $270-million collaboration with Endo Pharmaceuticals in early 2012. The Fleximer polymer is customized to improve the pharmacokinetics of targeting moieties, such as antibody fragments, and also to optimize the quantity of cytotoxic payload carried per targeted conjugate and the stability of the drug–polymer linkage as well as the targeting moiety–polymer linkage (3). In July 2012, Mersana received $27 million in venture-capital funding, which included investment by Pfizer Venture Investments. Biotecnol and PolyTherics formed a collaboration in 2012 for multispecific tribody drug conjugates to use Biotecnol's tribody technology with PolyTherics' proprietary site-specific linker technologies. Tribody molecules are multispecific antibody products that, from a single molecule, enable the targeting of two or three tumor antigens in the same disease or two or three epitopes on the same tumour target. PolyTherics' ThioBridge linker technology is a conjugation technology for creating more stable, less heterogeneous ADCs through site-specific linkage and rebridging of disulfide bonds (3).  

Contract API manufacturers offering high-potency manufacturing and related services are expanding in response to increased demand for ADCs and other highly potent compounds. In January 2013, Lonza announced plans to invest CHF 14 million ($15 million) to expand ADC manufacturing capacity in Visp, Switzerland. The expansion of the ADC facility will double the company's existing large-scale manufacturing capacity in Visp. The expansion is expected to be completed in the second quarter of 2014.  

In 2012, Carbogen Amcis and ADC Biotechnology (ADC Bio) partnered for ADC development and manufacturing services. ADC Bio is providing proprietary solid-phase immobilization technologies for conjugation and long-term storage of ADCs, and Carbogen Amcis is providing small- to large-scale GMP supply and the formulation of ADCs. ADC Bio also recently expanded its facility in St. Asaph, United Kingdom in northern Wales with the addition of a new technical service laboratory. Commissioned in April 2013, the additional facility at St. Asaph provides ADC screening, process development, and scale-up capabilites. 

In October 2012, Fujifilm Diosynth Biotechnologies formed a strategic alliance with Piramal for ADC production, whereby the two parties will offer contract development and manufacture of ADCs. Piramal offers ADC production at its site in Grangemouth, Scotland. Fujifilm recently announced an expansion of its cGMP manufacturing facilities at its sites in Research Triangle Park, North Carolina, and Billingham, UK. Novasep announced in 2012 a EUR 3 million ($3.9-million) investment to expand its highly potent API manufacturing capabilities at its Le Mans, France facility, which is part of the company's strategy to be positioned in the ADCs.  

Earlier this year, Catalent Pharma Solutions acquired an exclusive license to market Redwood Bioscience's proprietary SMARTag protein-chemical engineering technology used in site-specific protein modification and linker chemistry for ADCs. Catalent will have the exclusive right to sublicense the SMARTagtechnology and will work with Redwood to comarket the technology and support sublicense programs. As part of the collaboration, Catalent will also take a minority equity stake in Redwood, which may increase over time up to a potential acquisition. 

Companies also are expanding on the finished product side. In February 2013, Baxter International's BioPharma Solutions business began an approximately 1750-m

  capacity expansion at the company's fill–finish cytotoxic contract manufacturing facility in Halle (Westfalen), Germany. This expansion follows previous expansions in Halle in 2007 and 2011. In April 2013, Goodwin Technology and Coldstream Laboratories agreed to develop and manufacture high-potency, highly cytotoxic materials, such as small molecules, protein toxins, cytotoxic ADCs, and other bioconjugates. GBI will use Coldstream's cGMP platform of services, including analytical testing, formulation, liquid or lyophilized fill–finish, storage and shipment of manufactured highly-potent bioconjugates. 

In May 2013, Penn Pharma successfully completed the first batch of coated tablets at its new contained manufacturing facility in South Wales, UK. The facility is designed for the clinical and commercial manufacture of tablets and capsules. In November 2011, Metrics began offering neat API capsule-filling at its potent and cytotoxic facility in Greenville, North Carolina. The company secured a Capsugel Xcelodose system, a powder microdoser and automated encapsulator that places API directly into capsules with a high level of accuracy. Metrics also installed a custom-built isolation system for the equipment. The company offers dedicated and segregated potent and cytotoxic cGMP manufacturing for Phase I–III projects. It opened a new potent and cytotoxic drug-development facility in 2009 as part of an expansion of the company's Greenville facility. 

Other companies are positioned in both API and finished product manufacturing for highly potent compounds. For example, CordenParma has facilities in Plankstadt (Germany), Latina (Italy), and Boulder (Colorado) for manufacturing highly potent APIs and drug products. Aesica, based in Newcastle-Upon-Tyne, UK, opened a new high-potency manufacturing facility in Queenborough for formulated products in late 2011. The company later upgraded its UK-based API manufacturing facilities in Cramlington and Queenborough to manufacture high-potency APIs.   

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

 2. FDA, "Label for Adcetris, BLA 125338," FDA Approved Drug Products: Drugs@FDA, accessed June 5, 2013. 

 4. Seattle Genetics, "Seattle Genetics and Collaborators Highlight Multiple Antibody-Drug Conjugate (ADC) Programs and Technology Advances at AACR," Press Release, Apr. 9, 2013. 

Contract service providers expand capabilities in API and finished product manufacturing to meet demand for high-potency drugs

Gauging Investment in High-Potency Manufacturing

GÃ¼nay Mutlu/Getty ImagesThe pharmaceutical majors target biologics and emerging markets in their manufacturing expansion activities and plans.

Restructuring and manufacturing rationalization have been the recent norm for large bio/pharmaceutical companies. Despite such cost-cutting, particularly in small-molecule API and solid-dosage operations, there are some bright spots. A review of leading companies (see Tables I and II) show key trends. Several Big Pharma players are investing in biologic drug-substance, vaccine, and parenteral drug manufacturing and are also making select investments in emerging markets. 

.  Pfizer is investing $130 million in two of its Irish manufacturing sites: $100 million at its Grange Castle site in Dublin and $30 million in the Ringaskiddy site in Cork, according to a July 11, 2013 press release from IDA Ireland, Ireland’s industrial development agency. The $100-million investment in Grange Castle is for additional mammalian-cell manufacturing capacity with the addition of a new production line, scheduled to be operational in 2015, when the first process validation batches will be made. In 2011, Pfizer invested $200 million in the Grange Castle site to develop a new suite to expand the manufacturing process for an invasive pneumococcal vaccine, according to IDA. 

Bristol-Myers Squibb. Bristol-Myers Squibb is spending approximately $250 million to expand its large-scale biologics manufacturing facility in Devens, Massachusetts. The expansion will introduce biologics development and clinical-trial manufacturing capabilities to the site while adding approximately 350 employees. The Devens site is home to the company’s large-scale bulk biologic manufacturing facility. Construction of the Devens site was completed in 2009. It was the company’s largest single capital investment ($750 million) and provided the company with large-scale bulk biologics production capacity. In May 2012, the company received FDA approval to manufacture its arthritis drug Orencia (abatacept) at the Devens facility. The new $250-million investment will be used to construct two new buildings: one for process development and one for clinical manufacturing. Together, the two buildings will add approximately 200,000 ft

 of laboratory and office space to the Devens site. 

Bristol-Myers Squibb also announced plans to locate a North America Capability Center in Tampa, Florida, according to a July 18, 2013 press release from the Office of the Governor of Florida. The 70,000-ft2 facility will open in January 2014 with approximately 250 employees with plans to add more than 325 additional jobs supporting scientific and technical activities at the site by 2017.

Table I: Top 50 pharmaceutical companies (Rankings 1-25)

. In the fourth quarter of 2012, Novartis announced plans to construct a new biotechnology production site in Singapore with an investment valued at more than $500 million. The new facility will focus on drug- substance manufacturing based on cell-culture technology. Construction begins in 2013, and the site is expected to be fully operational in 2016. It will be colocated with the company’s pharmaceutical production site in Tuas, Singapore. In the future, Novartis expects its Singapore site to be a technological competence center for both biotechnology and pharmaceutical manufacturing.

In December 2012, Novartis acquired a 16,000-m

 FDA-approved manufacturing facility in Morris Plains, New Jersey from the biopharmaceutical company Dendreon for $43 million. The facility and certain former Dendreon personnel that were retained will support clinical and commercial production of products from the Novartis-University of Pennsylvania (Penn) collaboration announced in August 2012. Under the Novartis-Penn pact, the parties will research, develop, and commercialize targeted chimeric antigen receptor immunotherapies as well as build on the Penn campus in Philadelphia the Center for Advanced Cellular Therapies, which will be dedicated to developing and manufacturing adoptive T-cell immunotherapies.

On the vaccine side, Novartis is proceeding with a multiyear vaccine-production project. In 2008, it broke ground on a new rabies and tick-borne encephalitis $330-million manufacturing facility in Marburg, Germany. Construction is complete, and the facility is in the process of executing the necessary validation activities with regulatory approvals for products planned for 2013. In 2009, Novartis opened a new cell culture-based influenza vaccine-manufacturing site in Holly Springs, North Carolina. As of Dec. 31, 2012, the total amount spent on the project was $426 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 is also building a new $475-million vaccine-manufacturing facility in Recife, Brazil. The technical start-up of the facility is planned for approximately 2015.

Novartis is moving forward with other investments. The current phase of the long-term redevelopment of its St. Johann headquarters site in Basel, Switzerland is expected to be finalized in 2015. This project was started in 2001 with the aim of transforming the site from one designed mainly for pharmaceutical production into a center of knowledge with an emphasis on international corporate functions and research activities. Novartis expects that through 2015 it will spend more than $2.3 billion on the project and will transfer production from the site to other facilities in the Basel region.

In the second quarter of 2012, Novartis began construction of a new CHF 500 million ($535 million) solid-dosage manufacturing facility in Stein, Switzerland. The new facility will replace an older facility that will be partially demolished by 2016. Stein is planned to be a technological competence center for sterile and solid dosage drugs. During 2012, Novartis also began a series of projects in which the company expects to invest over $300 million during the next several years in the following three areas: implementation of a serialization product-tracking program across its pharmaceutical operations network, a GMP upgrade for its milling and blending center at Stein, and an upgrade of change-control systems. The company also is continuing a multiyear upgrade of its campus in East Hanover, New Jersey. The company expects that through 2013, it have spent more than $545 million to complete the construction and consolidate operations there. 

In emerging markets, Novartis is investing $140 million for a new pharmaceutical plant in St. Petersburg, Russia. Annual production is expected to be 1.5 billion units per year (oral solid dosage forms), of which the majority will be for generic-drug products. Product registration for production at the site is expected to begin in 2014.

In China, Novartis is moving ahead with an expansion of its research facilities. In 2009, Novartis announced it was investing $1 billion to increase its R&D operations in Shanghai. Based on a re-evaluation of the site conducted in 2010, the company expanded its Phase 1 plan to include two buildings to house 800 offices and 400 laboratory work places. As of Dec. 31, 2012, structural work was finished, and the first above-ground buildings began to be built. Novartis also began construction in April 2012 for new laboratory and office space at its research facilities in Cambridge, Massachusetts as part of a multiyear $600-million investment at that site. 

Table I: Top 50 pharmaceutical companies (Rankings 26-50)

. As part of its growth strategy in diabetes, Sanofi’s Frankfurt, Germany site, its principal manufacturing center for diabetes products, is being equipped with a new aseptic processing area that uses isolator technology to improve the aseptic-filling process. This investment will be operational in 2016. Sanofi’s Frankfurt site is one of three dedicated biotechnology hubs that the company is developing in Europe. In 2012, its facility in Vitry-sur-Seine, France, the company’s largest integrated cell-culture facility, produced the first technical batches of aflibercept, the API in the company’s anticancer drug Zaltrap. Its facility in Lyon Gerland, France, is a new world center dedicated to the production of thymoglobulin, a drug to prevent and treat transplant rejection. During 2012, teams at Lyon prepared a dossier for the healthcare authorities as part of the process of transferring production to this site.

In the United States, Sanofi, through its subsidiary Genzyme, has major investments underway, including at its Framingham, Massachusetts biologics site, which was approved by FDA and EMA in 2012 for the manufacture of Fabrazyme (agalsidase beta) to treat Fabry disease. Its site at Allston, Massachusetts moved forward with a major investment program in connection with the implementation of a compliance-remediation workplan approved by FDA in January 2012. Also, in 2012, Sanofi’s Genzyme acquired the Bayer Healthcare facility in Lynnwood, Washington, which specializes in the manufacture of Leukine (sargramostim).

On the vaccine side, Sanofi Pasteur, the company’s vaccine arm, is undergoing a major investment phase, which includes a new dedicated dengue fever vaccine facility in Neuville, France scheduled to produce its first batches in 2014. In response to observations made by FDA during routine inspections conducted in 2012 at Sanofi’s facilities in Toronto and Marcy l’Etoile, France, Sanofi Pasteur initiated a compliance program to address quality issues. 

Sanofi is moving forward with other investments in emerging markets. Two new dedicated influenza vaccine-manufacturing facilities are in the start-up phase. Sanofi’s facility in Shenzhen, China is testing its production processes, and its facility in Ocoyoacac, Mexico was approved by Mexican regulatory authorities at the start of 2012 and began production in time for the Mexican influenza vaccination program in September 2012.

The Sanofi diabetes industrial network also is expanding its manufacturing footprint in emerging markets in Russia as well as in China (Beijing), where a new facility that was inaugurated in 2012 began assembly and packaging of SoloSTAR, the prefilled injection system for Lantus (insulin glargine). Also, during 2012, Sanofi’s pharma site in Ankleshwar, Gujarat State, India, handled packaging and quality control through to release for the first commercial batches of AllSTAR, the company’s insulin pen specifically intended for the India market.

Earlier this year, Sanofi began construction for a new $75-million manufacturing in Saigon, Vietnam. The plant, which is scheduled to be operational by the end of 2015, will have an initial capacity of 90 million units per year with a possible extension up to 150 million units. In the Middle East, Sanofi is investing in a new solid-dosage manufacturing facility in Saudi Arabia; products from the facility are expected in 2015. The company is also investing in a new hormonal- products facility in Brasilia, Brazil. The company’s Goa site in India expanded solid dosage production capacity to approximately 2.5 billion pills a year. And in Algeria, Sanofi signed an agreement with the local authorities for a major industrial investment that will lead to the construction of a large industrial complex in the Africa-Middle East region.

. Roche is investing CHF 240 million ($257 million) at its facility in Penzberg, Germany to expand raw-material manufacturing for its Elecsy immunoassays, to be completed by the end of 2014, as well as to increase compounding, filling, and lyophilization capacity, which is planned for 2016. At its sites in Basel and Kaiseraugst, Switzerland, Roche is investing approximately CHF 230 million ($246 million). Three projects were completed in 2012: a new pharmaceutical quality control and assurance building, expansion of cold-chain storage capacity, and a filling line upgrade for Herceptin (trastuzumab) subcutaneous formulation. The company is also expanding capacity for high-potency drugs. Additionally, Roche plans to upgrade the filling line for the cephalosporin antibiotic Rocephin (ceftriaxone) throughout 2013 and 2014. In Shanghai, Roche is investing CHF 260 million ($278 million) for ongoing expansion of its pharmaceutical facilities, including new laboratory, warehouse, office and training facilities, to be completed in 2014. 

These moves comes as Roche restructures. In 2012, Roche announced that it is closing its R&D facility in Nutley, New Jersey, which is expected to be completed by the end of 2013. The R&D activities at Nutley are being consolidated at existing sites in Switzerland and Germany and at the planned Translational Clinical Research Center at the Alexandria Center for Life Science in Manhattan in the United States. 

. In 2012, GlaxoSmithKline (GSK) announced it was investing more than £500 million ($767 million) in the United Kingdom 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 will locate a new £350-million ($538 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, according to GSK.

In June 2013, GSK received an offer from South Africa’s Aspen Holdings/Aspen Pharmacare for its facility in Notre-Dame de Bondeville, France and the associated thrombosis brands manufactured at the site. GSK is also proceeding with plans, announced in February 2013, to improve the competitiveness of its European pharmaceutical business and restructure its manufacturing and R&D operations. The company is targeting to realize annual savings of at least £1 billion ($1.5 billion) by 2016.

. In April 2013, Eli Lilly indicated it plans to invest an additional $180 million in the company’s insulin manufacturing operations in Indianapolis, Indiana. The investment is in addition to the company’s November 2012 announcement for a $140-million expansion of the company’s Indianapolis insulin-manufacturing operations. Eli Lilly is proposing several other ancillary investment projects totaling about $80 million, including a $40-million product-inspection center. The latest $180-million proposed investment would add a second insulin cartridge-filling line and increase its insulin-active-ingredient manufacturing capacity through productivity enhancements. In addition, Eli Lilly is investing EUR 330 million ($436 million) in a new biopharmaceuticals facility at its Kinsale campus in Cork, Ireland, according to a Feb. 27, 2012 IDA Ireland press release.

 Earlier this year, Merck & Co. opened a new $120-million, 75,000-m2 pharmaceutical manufacturing facility in Hangzhou, China. The facility has capacity of up to 16 high speed lines to package pharmaceutical tablets and sterile products. Annual packaging capacity is more than 300 million packages. The facility builds on other recent investment by Merck in China. In 2011, the company established its Asia R&D headquarters in Beijing and committed to invest more than $1.5 billion in R&D in China during the next several years. 

. In June 2013, AstraZeneca announced that Cambridge, United Kingdom will be the location for the company’s new UK-based global R&D center and corporate headquarters. The new £330 million ($507 million) facility in Cambridge will bring together AstraZeneca’s small-molecule and biologics R&D activity. The purpose-built facility, which will be located in the Cambridge Biomedical Campus, is part of the company’s previously announced plan to create strategic global R&D centers in the UK, US, and Sweden by 2016. The company is also proceeding with further restructuring activity, which entails an estimated global headcount reduction of about 5050 over the 2013-2016 period. AstraZeneca also moved forward with two key production facilities during 2012 in China (Taizhou) and Russia (Vorsino) to supply products to both markets locally. These sites are intended to begin phased commercial production in 2014.

The pharmaceutical majors target biologics and emerging markets in their manufacturing expansion activities and plans.

Evaluating the Pieces in Big Pharma's Manufacturing Investments

Advancing Peptide Synthesis Through Stapled Peptides (SHUNYU FAN/GETTY IMAGES)	As a drug type, peptides offer certain benefits, such as specificity and potency, but they also present challenges, such as poor stability and short half-life. Stapled peptides, small modified helical proteins, are an emerging class of peptides that seek to address these limitations. These alpha-helical peptides have structural and functional properties that enable them to penetrate into the cell, bind to the therapeutic target, and modulate biological pathways.  	

Patricia Van Arnum		Although peptides have the size and functionality to effectively modulate intracellular protein–protein interactions, they often do not permeate cells and, therefore, are used to modulate extracellular targets such as receptors (1–3). The majority of peptide candidates target extracellular molecules with less than 10% binding to intracellular targets, according to an analysis of the peptide drug pipeline by the Peptide Therapeutics Foundation (1, 4). The most common extracellular targets were G-protein coupled receptors (GPCRs), which include nearly 1000 transmembrane proteins that activate cellular response. During 2000–2008, 60% of peptides entering clinical development targeted GPCRs, and most had agonist activity. Although peptides represent a small portion of total drug candidates, the number of peptide drugs entering clinical development has increased during the past several decades, according to the Peptide Therapeutics Foundation analysis, which excluded insulins (1, 4). The study found that the average number of new peptide candidates entering clinical development in the 1970s was 1.2 per year, which rose to 4.6 per year in the 1980s, 9.7 per year in the 1990s, and 16.8 per year through 2000–2008 (1, 4).  

On a commercial level, there are several peptide drugs that have reached blockbuster status. These include: Teva Pharmaceutical's Copaxone (glatiramer acetate), an L-glutamic acid polymer with L-alanine, L-lysine and L-tyrosine; AbbVie's Lupron (leuprolide acetate), a synthetic nonapeptide analog of the naturally occurring gonadotropin-releasing hormone (GnRH or luteinising hormone-releasing hormone [LHRH]); AstraZeneca's Zoladex (goserelin acetate), a decapeptide and GnRH agonist and synthetic analog of a naturally occurring LHRH; Novartis' Sandostatin (octreotide acetate), a cyclic octapeptide with pharmacologic actions mimicking those of the natural hormone somatostatin; and Eli Lilly's Byetta (exenatide), a 39-amino-acid peptide amide (1, 4).  		

		Stapled peptides are a nascent class of peptides that use stabilization technology to enhance potency and cell permeability to address pharmacological limitations of small molecules and existing biologics in intracellular protein–protein interactions. Although small molecules are able to penetrate cells, the large binding surfaces for intracellular protein–protein interactions often make small-molecule modulators ineffective. Peptides and proteins have the size and functionality to effectively modulate intracellular protein–protein interactions, but do not permeate cells and, therefore, re used to modulate extracellular targets (1, 2, 5). Stapled peptides seek to resolve those problems. Because many undruggable therapeutic targets include those protein–protein interactions in which alpha-helices are required in lock-and-key-type mechanisms, an approach is to design alpha-helical peptides that have structural and functional properties that enable them to penetrate into the cell, bind to the therapeutic target, and modulate the biological pathway (1, 2, 5).    

			Aileron Therapeutics is one company specializing in developing stapled peptides. Its technology stabilizes peptides by "stapling" them with hydrocarbon bonds into an alpha-helix. Once constrained in the alpha-helix structure, the peptides are protected from degradation by proteases. The stabilized alpha-helical peptides can penetrate cells by energy-dependent active transport and typically have a higher affinity to large protein surfaces (1–3, 5). 

Aileron was cofounded in 2005 by Gregory L. Verdine, recently named CEO of the genomics company Warp Drive Bio. Verfine, who served as professor of chemistry at Harvard University, director of the Harvard/Dana–Farber Programme in Cancer Chemical Biology, and executive director of the Chemical Biology Initiative at the Dana–Farber Cancer Institute, is noted for advancing the field of stapled peptides. In 2006, Aileron acquired exclusive rights from Harvard University in Massachusetts and the Dana–Farber Cancer Institute to develop and commercialize a drug-discovery pipeline of stapled peptides. In 2006–2007, Aileron licensed rights from the fine-chemicals and technology firm Materia for catalysts used in olefin metathesis. Materia holds the rights to the olefin metathesis technology developed by Robert H. Grubbs, professor at the California Institute of Technology, who was awarded the Nobel Prize in Chemistry in 2005 with Richard R. Schrock and Yves Chauvin for their work in olefin metathesis using ruthenium-based catalysts. Part of the reaction scope of olefin metathesis is ring-closing metathesis (RCM), which transforms a diene into a cyclic alkene and is used to create macrocycles, including bioactive cyclic peptidomimetics. Grubbs was one of the first to offer research describing RCM to tether residues of helical peptides (1, 5). 

Aileron is partnered with Roche for stapled peptides. The companies formed a potential $1.1-billion drug-development collaboration in 2010 for the discovery, development, and commercialization of stapled-peptide drugs and later expanded the collaboration. The initial program encompasses up to five programs with the initial two programs targeting oncology, and the third program, launched in late 2011, involving inflammatory diseases. Aileron also is partnered with Novartis and Eli Lilly through the respective venture funds of those companies (1, 5). In May 2013, Aileron announced the completion of the first-in-human study of its lead stapled peptide drug, ALRN-5281, a proprietary, long-acting growth-hormone-releasing hormone agonist for treating orphan endocrine disorders. 

Other companies are involved in stapled peptides. In November 2012, MorphoSys, a company specializing in antibody technology, partnered with the Dutch biopharmaceutical company Lanthio Pharma, which is involved with discovering and developing lantipeptides, a class of stapled peptides with high target selectivity and improved drug-like properties, which the company produces through its proprietary technology LanthioPep. The technology is used to identify peptides that are selective for a specific disease target and to stabilize them in their optimal structural conformation for receptor binding. LanthioPep is a 

 based lanthionine-peptide technology and is used to discover peptide therapeutics with increased resistance to peptidase degradation, high receptor specificity, and increased intrinsic activity.  

Lanthio Pharma has generated stable, peptidase-resistant lanthionine peptides with specific agonistic activity for a number of GPCR targets, which is a focus area of the company. Many peptide ligands are thought to bind to their GPCR receptors through a "turn motif," which can be stabilized in Lanthio Pharma's peptides with a strong thioether bond. Fixing the turn motif in its optimal receptor binding conformation can result in specific agonistic receptor activation, according to the company. The technology also includes a proprietary bacterial display library capability, which allows for the construction of focused or randomized libraries of lanthionine-peptides. These libraries allow for functional screening and production of peptides for further 

 testing. Therapeutic plasma levels of lantipeptides can potentially be achieved by oral, pulmonary, or subcutaneous delivery. Therapeutic products in Lanthio Pharma's pipeline include a lanthionine-stabilized specific agonist of the AT2 receptor, which has potential in diseases where tissue protection is important, such as fibrosis. 

Under the agreement, MorphoSys and Lanthio Pharma will jointly apply their respective technologies to establish lantipeptide-based libraries. MorphoSys received preferred rights to exclusively license the LanthioPep technology for drug discovery and made an equity investment for a minority stake in Lanthio Pharma. Lanthio Pharma also is partnered with US-based Tarix Pharmaceuticals for Lanthio's lead compound PanCyte, a lanthionine-stabilized angiotensin-(1-7) agonistic peptide for treating pulmonary indications. The start of clinical development of PanCyte is expected this year, according to company information.  

			Scientists are advancing research in stapled peptides in both drug design and peptide synthesis. Researchers at the New York Structural Biology Center reported on high-resolution nuclear magnetic resonance techniques with dynamic light-scattering to characterize a family of hydrocarbon-stapled peptides with known inhibitory activity against the HIV-1 capsid assembly to evaluate the various factors that modulate activity (1, 6). The researchers reported that helical peptides share a common binding motif but differ in charge, the length and position of the staple. The research showed that the peptides share a propensity to self-associate into organised polymeric structures mediated predominantly by hydrophobic interactions between the olefinic chain and the aromatic side-chains from the peptide. The researchers also detailed the structural significance of the length and position of the staple and of the olefinic bond isomerization in stabilizing the helical conformation of the peptides as potential factors influencing polymerisation (1, 6). 

Researchers at the Dana–Farber Cancer Institute, Children's Hospital in Boston, and Harvard University reported the use of hydrocarbon double-stapling to remedy the proteolytic instability of a lengthy peptide (5, 7). Specifically, the researchers applied the stapled approach to Fuzeon (enfuvirtide), a 36-amino-acid peptide that inhibits human immunodeficiency virus Type 1 (HIV-1) infection by targeting the viral fusion apparatus (5, 7). 

The researchers noted that enfuvirtide is used as a salvage treatment option because of poor 

 stability and poor oral bioavailability. To address the proteolytic shortcomings of long peptides as therapeutics, the researchers studied the biophysical, biological and pharmacological impact of inserting all-hydrocarbon staples into the drug (5, 7). The researchers found that the peptide double-stapling created protease resistance and improved pharmacokinetic properties, including oral absorption. The hydrocarbon staples created a "proteolytic shield" by reinforcing the overall alpha-helical structure, which slowed the kinetics of proteolysis and also created a complete blockade of peptide cleavage at the constrained sites in the immediate vicinity of the staple (5, 7). The researchers noted the potential of double-stapling to other lengthy peptide-based drugs. 

But for all their promise, some researchers point to limited benefits of stapled peptides. Earlier this year, researchers from the Walter and Eliza Hall Institute of Medical Research in Australia, the University of Melbourne and Roche's Genentech reported on a study involving stapled peptides, specifically for stabilized BimBH3 peptides (BimSAHB), which had reduced affinity for their targets, the pro-survival Bcl-2 proteins (8, 9). The researchers attributed the loss in affinity to disruption of a network of stabilizing intramolecular interactions present in the bound state of the native peptide. They suggested that altering the network may compromise binding affinity, as in the case of the BimBH3 stapled peptide in their study. They also said that cells exposed to these peptides do not readily undergo apoptosis, which indicates that BimSAHB is not inherently cell permeable (8, 9).  

			4. Peptide Therapeutics Foundation, Development Trends for Peptide Therapeutics Report (San Diego, 2010). 

, DOI/10.1073pnas.1002713107 (18 June 2010). 

Stapled peptides offer promise to enable cell permeability, binding to therapeutic targets, and modulation of biological pathways.

Advancing Peptide Synthesis Through Stapled Peptides

Dimitri Otis/Getty ImagesQuality agreements are a crucial element in the relationship between a sponsor company and contract service provider. Recent draft guidance from FDA on contract manufacturing and quality agreements highlights the importance of such agreements and define the roles and responsibilities of each party to be in keeping with quality risk-management principles.  

The expectations between a sponsor company and contract service provider define not only the nature of the outsourced relationship but also dictate the quality of the material being supplied or service provided. Quality agreements between contract manufacturers and their pharmaceutical customers are a well-established practice. Recent draft guidance by FDA brings quality agreements into greater focus by applying the science- and risk-based approach inherent in quality risk-management principles and practices. 

 FDA issued its draft guidance, Contract Manufacturing Arrangements for Drugs: Quality Agreements, in May 2013 to describe the agency’s current thinking on defining, establishing, and documenting the responsibilities of parties involved in contract cGMP manufacturing of drugs (1). Public comment on the draft guidance was scheduled to close at the end of July 2013 (1). The draft guidance describes how parties involved in contract manufacturing of drugs can use quality agreements to delineate their responsibilities and ensure drug quality, safety, and efficacy. The guidance applies to the commercial manufacturing of APIs (drug substances or their intermediates), finished drug products, combination products, and biological drug products (1). 

Defining the roles and responsibilities of each party (i.e., sponsor company and contract manufacturer) is crucial to a quality agreement. For purposes of the draft guidance, the “owner” is defined as the party that introduces the drug into interstate commerce, whether the drug is covered by a marketing application/license or not. The “contracted facilities” are the outside entities performing manufacturing operations for the product owner. Some of the manufacturing operations performed by contracted facilities include: formulation, fill–finish, chemical synthesis, cell-culture  manufacturing and fermentation for biological products, analytical testing, other laboratory services, and packaging and labeling. The draft guidance specifies that the owner is responsible for ensuring that drugs introduced for interstate commerce are neither adulterated nor misbranded as a result of the actions of their selected contracted facilities. In turn, all contracted facilities must ensure compliance with applicable cGMP for all manufacturing, testing, or other support operations performed to make a drug(s) for the owner (1). 

The quality agreements described under the draft guidance fit within the larger scheme of pharmaceutical quality systems and provisions of ICH guidelines, including ICH Q7 Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients, ICH Q9 Quality Risk Management, and ICH Q10 Pharmaceutical Quality Systems (1–4). In the draft guidance, FDA specifies that the principles of quality management extend to contract manufacturing, and that the agency FDA expects parties engaged in contract manufacturing to implement quality-management practices. The draft guidance is intended to build upon the quality-management principles in ICH guidelines in developing and executing contracted-manufacturing arrangements (1-4). 

ICH Q7, for example, recommends that manufacturers evaluate contractors for cGMP compliance by establishing a formal agreement that delineates cGMP responsibilities, including quality measures and also by auditing the contractor’s facilities. Product owners may hire another party to perform the operational processes that are part of a manufacturer’s inherent responsibilities, and quality systems call for quality agreements (i.e., contracts) that clearly describe the materials or service, quality specification responsibilities, and communication mechanisms. 

ICH Q9 recommends a comprehensive evaluation of suppliers and contract manufacturers through auditing and implementing supplier quality agreements (1–3). 

ICH Q10 specifies that quality risk management include certain key activities. For example, the guideline specifies that before outsourcing manufacturing activities, the owner should conduct a risk review that evaluates the extent of controls required for the particular supplier and the particular product or service covered by the agreement. Based on this risk, the owner should assess the appropriate oversight  and assess the suitability and competence of the potential contracted facility to carry out the activity (e.g., audits, material evaluations, and qualification). Additionally, owners and contracted facilities should define the responsibilities and communication processes for quality-related activities of the involved parties, and document these in a written agreement between the owner and contracted facility. Owners also should monitor and review the performance of the contracted facility and identify and implement any needed improvements.Additionally, all parties performing manufacturing operations should monitor incoming ingredients and materials to ensure they are from approved sources using the agreed supply chain (1-4). 

The draft guidance notes that although written quality agreements are not explicitly required under existing cGMP, owners and contracted facilities can draw on these quality-management principles to carry out the complicated process of contract drug manufacturing by defining, establishing, and documenting the responsibilities of all parties involved in drug manufacturing, testing, or other support operations. Accordingly, FDA recommends that owners and contracted facilities implement written quality agreements as a tool to delineate responsibilities to ensure the quality, safety, and effectiveness of drug products (1).  

 1. FDA, Draft Guidance for Industry–Contract Manufacturing–Arrangements for Drugs: Quality Agreements (Rockville, MD, May 2013). 

 2. ICH, Q7, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients (Geneva, 2000). 

 3. ICH, Q9 Qualified Risk Management (Geneva, 2005). 

 4. ICH, Q10 Pharmaceutical Quality Systems (Geneva, 2008). 

Recent draft guidance from FDA on contract manufacturing and quality agreements highlights the importance of such agreements and define the roles and responsibilities of each party to be in keeping with quality risk-management principles.

Defining Quality Agreements

Bjorn Holland/Getty ImagesThe investment activity of CDMOs and CMOs reveals the broader business and technical trends of the pharmaceutical industry.

The author examines recent expansion activity. Some key areas of investment are technologies for bioavailability/solubilization enhancement, formulation and manufacture of high-potency drugs, and modified-release applications. 

 Contract service providers offering formulation-development, drug-delivery, and manufacturing services are an important part of the value chain for pharmaceutical companies. Recent expansion activity of CDMOs and CMOs reflect the business and technical trends in the pharmaceutical industry as a whole. Key areas of investment include capabilities to support bioavailability enhancement, modified-release applications, parenteral-drug manufacturing, and high-potency drugs. 

 Thus far in 2013, Catalent Pharma Solutions has made several moves to strengthen its position globally as well as to strengthen its toolbox. Earlier this year, the company formed two joint ventures in China, one for its softgel technologies business and one for its clinical-supply-solutions business. In softgels, Catalent agreed to acquire, pending regulatory approvals, a majority share in the Haining-based and privately held Zhejiang Jiang Yuan Tang Biotechnology, which produces nutritional softgel products for the Chinese and Asia Pacific markets. In a separate move, Catalent, and ShangPharma Corp., formed a new joint venture, which includes a new 31,000-ft

 facility in Shanghai. The facility, currently under construction, will offer capabilities in clinical-trial supplies, including comparator sourcing, primary and secondary packaging and labeling, storage, and distribution. The facility is scheduled to open later this year. 

On an organizational basis, in July 2013, Catalent created a new business unit, Advanced Delivery Technologies, which aligns the company’s existing modified-release and 

 medication-delivery businesses. The company’s business units now include Catalent Softgel Technologies, Advanced Delivery Technologies, and Development and Clinical Services. Additionally, Catalent is investing $35 million to expand its controlled-release manufacturing facility in Winchester, Kentucky. The 100,000-ft

 facility is expanding by almost 80,000-ft

. Catalent expects the expansion to be completed by October 2014.

Earlier this year, Almac’s Clinical Services business unit expanded its services for dispensing and bottling solid dosage products with new enhanced containment equipment and processes at its EU and US headquarters, respectively in Craigavon, the United Kingdom and Souderton, Pennsylvania. Additionally, Almac is expanding its commercial-manufacturing capacity and recently added a new non-GMP drug formulation-development facility in Craigavon for a total investment of £13.7million ($21 million). The commercial expansion adds blending equipment and an automated packing and integrated cartoning line for high-volume bulk commercial manufacturing scheduled to begin in November 2013. Almac also launched US commercial packaging services following a successful FDA inspection and new client partnership for its facility in Audubon, Pennsylvania. The facility offers flexible packaging from primary packaging of solid oral dosage forms to customized secondary labeling and packaging of sterile biopharmaceutical products. 

Metrics launched a new proprietary technology (SUBA) that enhances the bioavailability of poorly water-soluble drugs. The technology was successfully used by the parent company of Metrics, Mayne Pharma, which acquired Metrics in 2012. Mayne Pharma has applied SUBA technology to improve the bioavailability of the antifungal drug itraconazole. Metrics also introduced proprietary taste-masking technology, Cleantaste. The company also launched capabilities to produce nonsterile liquids, creams, and gels. The company’s cream suite can manufacture two- and three-phase suspensions and emulsions, including pastes, creams, lotions, and gels. Its two filling lines, which are modular and can be assembled according to product format, and its liquid-processing equipment can produce batch sizes ranging from 250 kg to 2000 kg. Metrics also introduced proprietary pellet technologies for controlled-release applications. Mayne Pharma has successfully applied the pellet technology to a number of proprietary pharmaceuticals with modified-release profiles, including Eryc (delayed-release erythromycin), Doryx (delayed-release doxycycline), Kadian (extended-release morphine), Astrix (delayed-release low-dose aspirin), and pulsed-release diltiazem.

The CDMO UPM Pharmaceuticals acquired a former Pfizer 500,000-ft

  commercial-manufacturing facility in Bristol, Tennessee. The acquisition provides UPM with large-scale commercial capabilities for manufacturing and packaging of solid oral dosage tablets and capsules as well as for semisolid manufacturing of creams and ointments. The facility further provides for technology-transfer support, pilot-plant scale-up capabilities, analytical and microbial testing, and dedicated suites for potent compounds. As part of the purchase, UPM will continue to manufacture Pfizer’s current portfolio of products within the facility for two years. Pfizer gained the facility with its acquisition of King Pharmaceuticals in 2012. King Pharmaceuticals was founded by UPM’s current Chairman and CEO John Gregory. In addition, in May 2013, UPM increased its capabilities for API-in-capsule dosage forms with the addition of a powder-microdosing system (Xcelodose, Capsugel). The company also added to its analytical capabilities with the addition of a differential scanning calorimeter and a thermogravimetric analyzer. 

Parenteral drug manufacturing and analytical support

 Several companies recently expanded their parenteral-drug manufacturing capabilities. In late 2012, AAIPharma Services announced the expansion of its parenteral-drug manufacturing facility in Charleston, South Carolina. The expansion includes the installation of compounding and aseptic processing suites to contain a newly acquired Monoblock vial-filling machine, expansion of a microbiology laboratory, onsite formulation-development capabilities, and enhanced analytical instrumentation. Following the company’s opening of its technology center in May 2012, AAIPharma acquired additional instrumentation to support its analytical and biopharmaceutical development laboratories. It added systems for new inductively coupled plasma-mass spectrometry, gas chromatography-mass spectrometry, liquid chromatography-mass spectrometry, ultra-high-performance liquid chromatography, and high-performance liquid chromatography. The company also expanded its biopharmaceutical development services by adding a micro-flow imaging system, a multi-angle laser light-scattering detector, and a dynamic light-scattering detector to support aggregate and particulate-testing services. A capillary isoelectric focusing system was added to support protein analysis. AAIPharma also expanded its extractable and leachable) testing services.

In 2013, Vetter’s new filling line at the company’s Ravensburg Vetter South facility in Ravensburg, Germany was fully validated for cGMP filling. The line’s capacity ranges from mid- to large-volume batch sizes, with a maximum filling speed of 800 presterilized syringes per minute. The line currently fills 1-mL-standard-format syringes, with additional formats to be added in the near and long terms. Also, its 18,000-ft2 facility, known as Ravensburg Vetter West, which began operations in April 2012, successfully completed an FDA inspection. The site provides high-bay warehousing for cold storage and room-temperature products as well as visual inspection. Additionally, Vetter broadened its portfolio for lyophilized substances by offering its filling service for high-quality sterile water for injection syringes with five years of stability data.

In January 2013, Dalton Pharma Services began the first stage of its aseptic-filling expansion plan. The investment adds high-speed sterile vial-processing and washing capability, an upgraded high-purity water system, vial-depyrogenation capabilities, lyophilization capacity, and automated vial-inspection capabilities. The upgraded GMP sterile-manufacturing capabilities will allow the company to handle larger-volume commercial aseptic filling of sterile liquids and sterile powders. Later stages of the sterile-processing expansion will include additional GMP manufacturing facilities, equipment, and automation to provide integrated sterile manufacturing services from preclinical to commercial production for sterile API and finished doses. 

 Companies also have made investments to increase capacity for high-potency forms. In February 2013, Baxter International’s BioPharma Solutions business began an approximately 1750-m2 capacity expansion at the company’s fill-finish cytotoxic contract-manufacturing facility in Halle (Westfalen), Germany. This expansion follows previous expansions in Halle in 2007 and 2011. In April 2013, Goodwin Technology and Coldstream Laboratories agreed to develop and manufacture high-potency, highly cytotoxic materials, such as small molecules, protein toxins, cytotoxic ADCs, and other bioconjugates. Goodwin will use Coldstream’s cGMP platform of services, including analytical testing, formulation, liquid or lyophilized fill-finish, storage, and shipment of manufactured highly potent bioconjugates. In May 2013, Penn Pharma successfully completed the first batch of coated tablets at its new contained manufacturing facility in South Wales, UK. The facility is designed for the clinical and commercial manufacture of tablets and capsules. Penn invested £14 million ($21 million) for the new 15,000-ft2 facility, which includes the capability to handle potent compounds. In July 2013, the company announced an additional £3-million investment ($4.6 million).

 Other companies are making moves as well. Bend Research expanded its GMP analytical capabilities with the addition of onsite stability storage and additional GMP testing capabilities for clinical-trial material supply. The company recently added instrumentation to its existing suite of GMP-qualified analytical equipment, including a differential scanning calorimeter and particle-size analyzer. In May 2013, Halo Pharma took a minority ownership position in and established a formal collaboration with the  drug-formulation and development company Altus Formulation. Capsugel launched its new LIPIDEX technology platform that integrates its lipid, liquid, and semisolid fill technologies, product-development capabilites, and  commercial-manufacturing infrastructure. The platform is part of Capsugel’s Dosage Form Solutions business unit. 

Earlier this year, Azaya Therapeutics, an oncology company developing cancer treatments through its nanotechnology platform, launched Parexo Labs, a CDMO providing contract chemical testing and liposomal manufacturing services. In April 2013, the fine-chemicals company Ajinomoto acquired the CDMO Althea Technologies, which offers protein formulation and fill-finish services as well as contract biologics manufacturing. Aptuit launched a translational strategy (i.e., Complementary Vision) for chemistry, manufacturing and control (CMC) services. It is an approach that encompasses all the services that precede and follow CMC in the target product profile: API development and manufacture; qualitative/quantitative chemical, physical and biopharmaceutical characterization of actives and dosage forms; dosage-form design; development and manufacturing for preclinical and clinical dosing; and the development, manufacturing and testing of inhaled products such as dry powder inhalers. 

The investment activity of CDMOs and CMOs reveals the broader business and technical trends of the pharmaceutical industry.