Over the past decade, the big pharmaceutical companies have been making major efforts to restructure their manufacturing networks. In their haste to shed costs and assets, however, some may be adding risk to their product supply chains.

The number of manufacturing facilities owned and operated by the major pharmaceutical companies mushroomed in the 1980s and 1990s as new blockbuster products were introduced and as companies opened markets globally. In the days before the establishment of regional free trade pacts such as the European Union (EU) and the North American Free Trade Agreement (NAFTA), much of industry viewed having a manufacturing operation in a foreign country as a necessary investment to ensure that country's regulatory approval of their drug product.

In the past decade, the major pharmaceutical companies have determined that they don't need to maintain large, far-flung, and costly manufacturing organizations around the globe. Several factors have contributed to the drive to streamline manufacturing networks, including:  

The establishment of the EU and NAFTA, along with various mutual recognition efforts, which has facilitated the approval and movement of products across borders

Mergers among the major pharmaceutical companies, which left the merged entities with too much capacity

The decline of blockbuster-drug sales and the need for less capacity

The transition from chemical-based drugs to biologics, which require different manufacturing assets.

Shedding these redundant assets is not as simple as shutting the doors, however. Transferring products is costly and time-consuming under good manufacturing practice (GMP) guidelines. In many countries outside the United States, labor laws often require long union negotiations and large severance payments to affected workers. In all countries, legacy environmental issues can make it difficult to just walk away from a site. 

Under these circumstances, selling a facility to a party that intends to maintain it has obvious appeal. Such a sale could help the owner avoid costs incurred in an outright shutdown while maintaining some goodwill with the workers, community, and government. It may generate a little cash as well. 

The availability of redundant facilities has been something of a mixed blessing for the contract manufacturing industry. On one hand, the opportunity has helped some of industry's largest players to quickly and relatively inexpensively build global networks. Major contract manufacturing organizations (CMOs), including Patheon (Toronto), Recipharm (Haninge, Sweden), Famar (Athens), Haupt (Berlin), Piramal Healthcare (Mumbai), and DSM (Heerlen, The Netherlands), have used acquisitions of redundant manufacturing sites from major pharmaceutical companies to build critical mass. Paris-based Fareva went from zero to EUR 300 million ($409 million) of pharmaceutical manufacturing revenues in just four years by acquiring redundant sites in France, principally from Pfizer. 

On the other hand, the purchase of these facilities has been a bane of the CMO industry because it maintains capacity that the market really doesn't need. Major CMOs have the experience and industry understanding to recognize when an available facility has limited marketability. There have been plenty of potential buyers, however, lured by the chance to get into the business for almost no money down and a cushion of contracts for legacy products. This was especially true in the easy-money environment of the past decade. 

Too often, the groups that take over these facilities have little knowledge or experience of pharmaceutical manufacturing or the contract services business. They are especially naïve about the major investment needed in new business development and the long lead times involved in building market awareness and establishing new client relationships. They may not appreciate just how far behind the state-of-the-art their facilities and equipment are. Also, they learn the hard way that GMP compliance is costly and must be maintained regardless of the level of plant utilization. Their working capital resources to cover these requirements are often inadequate. 

Often, the pharmaceutical companies selling these facilities create a major supply-chain headache for themselves because the buyer encounters financial distress. Examples litter the decade. In a somewhat notorious but illustrative example, sanofi-aventis (Paris) sold a facility in Puerto Rico in 2005 to Inyx, a UK-based company, after several larger and more-established CMOs had looked at the facility and passed on it. Inyx's principal owner and executive was known to have some questionable financial dealings and had already led one CMO into bankruptcy earlier in the decade. So it should have been no real surprise that two years after acquiring the Sanofi facility, Inyx filed Chapter 11, ultimately leading to unfilled orders, financial losses, and a great deal of litigation. 

Oread (Lawrence, KS) is another prime example. One of the pioneer providers of analytical and formulation development services, Oread acquired a manufacturing facility in Palo Alto, California, from Roche (Basel, Switzerland) in the late 1990s, and filed for bankruptcy a few years later because it became overextended.

More recently, PharmEng (Toronto), an engineering and validation firm whose Keata CMO subsidiary acquired a Pfizer (New York) manufacturing site in Ontario, filed for bankruptcy protection in Canada. 

These problems could have been avoided if the selling parties had exerted better due diligence. This is especially true in cases where the buyers were depending on the divested site to supply product through the transition period. 

The concern over the financial viability of divested manufacturing operations has become more relevant because industry has entered another period of consolidation that will undoubtedly spark another round of manufacturing facility sales. Most industry observers expect that Pfizer, after its acquisition of Wyeth (Madison, NJ), and Merck (Whitehouse Station, NJ), after it merges with Schering-Plough (Kenilworth, NJ), will have to shed manufacturing facilities in order to achieve cost savings. Wyeth will bring 33 manufacturing sites with it, adding to the 44 Pfizer will have after it finishes its current 13-site divestiture program. Schering-Plough has 23 sites to add to Merck's existing network. 

The sale of manufacturing sites to investors without the staying power to make them successful doesn't benefit any of the parties involved. Moreover, the resulting financial problems could give the entire CMO industry an undeserved black eye. Let's hope that the next round of plant divestitures is handled with more due diligence and foresight.

 is president of PharmSource Information Services, Inc., and publisher of 

Articles

Outsourcing

Pharma companies that sell redundant facilities could endanger their supply chains.

Penny-Wise, Pound-Foolish


The pharmaceutical sciences represent an evolving and highly dynamic field, and two overreaching trends show an increased effort to develop biologic-based drugs and creating more specific or targeted drug delivery techniques. Some recent developments are the development of spatial aggregation propensity for detecting protein aggregation, advances in drug-delivery technologies involving microencapsulation and nanocoatings, and tools to understand the risk of nanomaterials in drug-delivery systems.




Researchers at the Massachusetts Institute of Technology (MIT) have developed a computer model to address the problem of short shelf-life for protein-based drugs due to aggregation. Most of the aggregation seen in antibodies is due to interactions between exposed hydrophobic regions of the proteins."Drugs are usually developed with the criteria of how effective they'll be, and how well they'll bind to whatever target they're supposed to bind," said Bernhardt Trout, professor of chemical engineering at MIT, in a June 2009 university press release. "The problem is there are all of these issues down the line that were never taken into account."

Trout and his colleagues, including Bernhard Helk of Novartis (Basel, Switzerland), developed a computer model that can help designers identify which parts of an antibody are most likely to attract other molecules, allowing them to alter the antibodies to prevent clumping, according to the MIT press release. Trout's new model, spatial aggregation propensity (SAP), offers a dynamic, three-dimensional simulation of antibody molecules. Unlike static representations such as those provided by X-ray crystallography, the new model can reveal hydrophobic regions and indicate how much of those regions are exposed when the molecule is in solution. The model also selects  regions responsible for aggregation as opposed to selecting just single sites. Once the hydrophobic regions are identified, researchers can mutate the amino acids in those regions to decrease hydrophobicity and make the molecule more stable, according to the MIT release. Using the model, the team produced mutated antibodies with greatly enhanced stability (up to 50% more than the original antibodies), and the mutations had no adverse affect on their function. The technology could be applied to screening antibodies in the discovery phase (1). 



 
Bingyun Lim, assistant professor in the West Virginia University (WVU) Department of Orthopedics and director of the WVU Biomaterials, Bioengineering & Nanotechnology Laboratory, and his team developed two drug-delivery technologies—microcapsules and a nanocoating—for delivering the drug interleukin-12 (2).

The first technology involves the use of microcapsules that can be injected or potentially delivered in a fine-mist spray directly to the site of an injury. The second technology is a nanocoating of interleukin-12 applied directly to stents, pacemakers, pain pumps, artificial limbs or other biomedical device. This approach prolongs the half-life of the interleukin-12. In both methods, because the interleukin-12 is delivered locally rather than systematically, potential side effects are minimized (2).

Li drew his team from the WVU Department of Orthopedics, the WVU School of Pharmacy, the National Institute for Occupational Health and Safety, and the WVU Department of Microbiology, Immunology and Cell Biology. The team has spent the past four years in developing the technology. 



 
Nanotechnology offers great promise in the pharmaceutical industry, but the associated risk of nanomaterials is still unknown. Researchers at the University of California at Los Angeles (UCLA) and the California NanoSystems Institute (CNSI) recently published research that examined the nanoparticle-biological interface to identify the potential risks of engineered nanomaterials and to explore design methods that will lead to safer and more effective nanoparticles for use in a variety of treatments and products, according to an UCLA press release. 

Nanoparticles can interact with proteins, membranes, cells, DNA, and organelles and create nanoparticle/biological interfaces that depend on colloidal forces and biophysicochemical interactions, which in turn can lead to the formation of protein coronas, particle wrapping, intracellular uptake, and biocatalytic processes with favorable or negative outcomes. Examining these interfaces allows predictive relationships between structure and activity to be developed based on nanomaterial properties such as size, shape, surface chemistry, roughness, and surface coatings (3). 

"What we have established here is a blueprint that will serve to educate the first generation of nanobiologists," said Andre Nel, team leader  and chief of the division of nanomedicine at the UCLA David Geffen School of Medicine and the California NanoSystems Institute, in a UCLA press release.

The work is important for achieving a better understanding of the interrelationship between intracellular activity and function of engineered nanomaterials, which is needed for nanoparticle drug-delivery systems. According to the UCLA release, much of the current knowledge derives from the study of tagged or labeled nanoparticles and their effects on cells after cellular uptake, without any detailed understanding of whether the outcomes of these interactions may be favorable or not.



 
1.	B. Trout et al., “Design of Therapeutic Proteins with Enhanced Stability,” 

 July 1, 2009, DOI 10.1073.

2.	B. Li et al, “Multilayer Polypeptide Nanoscale Coatings Incorporating IK-12 for the Prevention of Biomedical Device-Associated Infections,” 

(13), 2552–2558 (2009). 

3.	Andre Nel et al., “Understanding Biophysicochemical Interactions at the Nano–Bio Interface,” 

Drug Delivery

As the pharmaceutical industry turns its efforts to biologic-based drugs and to more targeted delivery approaches, new tools are needed. Some recent developments are discussed.

Advances in the Pharmaceutical Sciences


Approaches to improve the environmental profile of manufacturing processes and end products is an important goal in many industries, including pharmaceuticals. In the case of pharmaceutical manufacturing, these approaches can involve ways to increase reaction efficiency and yield in order to reduce waste, reduce solvents and reagents, or to improve reaction conditions when synthesizing active pharmaceutical ingredients, intermediates, or lead compounds. Several entries considered in the 2009 Presidential Green Chemistry Challenge Awards, an annual recognition by the US Environmental Protection Agency, provide approaches in green chemistry with applications to the pharmaceutical industry (1).



 
Bruce H. Lipshutz, professor in the chemistry and biochemistry department of the University of California at Santa Barbara, California, developed an approach to increase reaction efficiency and enhance catalytic activity and thereby reduce the use of organic solvents used in certain chemical reactions (1).

Lipshutz and his team found that a mono-PEGylated, alpha-tocopherylated sebacid acid derivative (PTS) allows several common organic reactions catalyzed by transition metals, particularly palladium and ruthenium, to use water as the only solvent, to be run at room temperature, and produce product in high isolated yield. PTS may be used under mild aqueous conditions for olefin metathesis reactions, palladium-catalyzed Suzuki, Heck, and Sonogashira cross-couplings (2–4). By permitting the catalysis under aqueous conditions, PTS eliminates the use of organic solvents in these reactions (1). 

PTS functions as a surfactant. It is a nanomicelle-foaming amphiphile that features vitamin E or tocopheral as the inner lipophilic solvent with a 10-carbon linker and PEG-600 hydrophilic portion.  Under aqueous conditions, the micelles formed in the PTS function as nanoreactors that allow for high concentration of reactants and catalysts within these micelles to increase reaction rates. The increased activity allows the reaction to be run at ambient temperatures.

PTS is covered by patents owned by the National Research Council in Canada, a research and development organization of the Canadian government, and is under exclusive license to the bioscience company Zymes (Hasbrouck Heights, NJ).



 
Leonard R. MacGillivray, professor in the chemistry department at the University of Iowa, developed a method to control chemical reactivity in the organic solid state. The approach involves using small-molecule templates to assemble olefins (which undergo intermolecular [2+2] photodimerization) in discrete assemblies for solid-state reactions. The solid-state arrangements of the olefins are controlled by the template rather than by the long-range crystal packing. MacGillivray used this method for the solid-state synthesis of ladderanes, building blocks for natural products, and reported regiospecificity, no byproducts, and a 100% yield. Such an approach allows molecules to react in geometries and orientations that are typically  inaccessible in solution. In 2008, he demonstrated a solvent-free method using mortar-and pestle grinding for cocrystal formation, thereby offering a green approach for synthesizing the ligands that may be used as self-assembled metal-organic structures and porous materials (1, 5, 6). 



 
T.V. RajanBabu, professor in the chemistry department at Ohio State University, and his team discovered a new codimerization of ethylene and various functionalized vinylarenes, 1,3-dienes, and strained alkenes (i.e., asymmetric hydrovinylation). This chemistry has applications in the enantioselective synthesis of nonsteroidal anti-inflammatory drugs (NSAIDs) such as ibuprofen, naproxen, fluriprofen, and fenoprofen from the corresponding styrenes and ethylene (1). Specifically, the group developed highly catalytic protocols to allow for the codimerization of ethylene and various functionalized vinylarenes, 1,3-dienes, and strained alkenes under mild reactions conditions to product 3-arylbutenes.  Such chemistry can be applied to the synthesis of select NSAIDs (1).

His work has further application in the synthesis of steroid derivatives. Cyclic and acylic 1,3-dienes can also also undergo efficient heterodimerization with ethylene with yields up to 99% for several 1-vinylcycloalkenes and 1-substituted 1,3-butadienes (1). Phospholanes and phosphoramidites can be used for ligands for an asymmetric variation of this reaction with yields up to 99% and enantiomeric excess of 95% for select substrates. An exocyclic chiral center can be used to install other stereocenters in the ring.  His work also has involved the synthesis of several new ligands for improving enantioselectivity and the use of hemilabile ligands and their synergy with highly dissociated counterions to enhance selectivity (1, 7).  



 
Paul Wender, professor of chemistry at Stanford University in Palo Alto, California, has developed an approach called function-oriented synthesis (FOS), which involves step economy in the organic synthesis of biologically active compound, including compounds from natural products. Although natural products are a good source for potential drug targets, there are often challenges in developing cost-effective synthetic routes to these complex molecules. FOS addresses this problem by seeking to refine or enhance the biologically active lead structure using simpler scaffolds that are more readily synthesized (1, 8) 

Wender has applied the FOS approach to several natural product lead compounds. These compounds include: arenes that modulate protein kinase C and mimic the more complex phorbols; simplified enediyne compounds for cancer treatment; simplified bryostatin analogs, also used as potential anticancer agents; laulimalide analogs with simplified structures that remove the inherent functional instability of natural laulimalide; the design, synthesis, and optimization of polyarginine drug transporters used to improve potency and circumvent multidrug resistance pathways in cancer cells; and a process to convert the natural product, phorbol, into prostratin, an HIV drug adjuvant (1, 8). 



Green Chemistry ChallengeAgency Awards Program: Summary of 2009 Award Entries and Recipients

. 

2. B.H. Lipshutz et al., “Olefin Cross-Metathesis Reactions at Room Temperature Using the Nonionic Amphiphile PTS: Just Add Water,” 

 (7), 1325–1328 (2008).

3. B.H. Lipshutz et al., “Heck Couplings at Room Temperature in Nanometer Aqueous Micelles,” 

 (7), 1329–1332 (2008).

4. B.H. Lipshutz et al., “Room Temperature Suzuki-Miyaura Couplings in Water Facilitated by Nonionic Amphiphiles,” 

 (7), 1333–1336 (2008).

5. L.R. MacGillivray,“Organic Synthesis in the Solid State via Hydrogen-Bond-Driven Self-Assembly,”

 (9), 3311–3317 (2008).

6. L.R. MacGillivray et al., “Supramolecular Control of Reactivity in the Solid State: From Templates to Ladderanes to Metal-Organic Frameworks,” 

 (2), 280–291 (2008).

7. T.V. RajanBabu et al., “Conformationally Driven Asymmetric Induction of a Catalytic Dendrimer,” 

 (25), 7845–7847 (2008). 

8. P.A. Wender, “Function Oriented Synthesis, Step Economy, and Drug Design,” 

APIs

Advances in micellar catalysis, solid-state chemistry, catalytic asymmetric synthesis, and function-oriented synthesis for natural products represent noteworthy developments in green chemistry that can be applied to the synthesis of active pharmaceutical ingredients.

PTSM: Pharmaceutical Technology Sourcing and Management-07-08-2009

Penny-Wise, Pound-Foolish

Advances in the Pharmaceutical Sciences

Deploying Green Chemistry in API Synthesis