Charting Dosage-Form Manufacturing

The outlook for contract dosage manufacturing bodes well. Increased outsourcing by the pharmaceutical majors, strong market projections, and recent expansion activity by several contract manufacturers are favorable indicators for select segments of the market.

Patricia Van Arnum

Market growth

The market for contract manufacturing of bulk and dosage form prescription drugs was estimated at $30.7 billion in 2006 and is expected to reach $46.5 billion by 2011, according to a recent analysis by Business Communications Company (BCC). This increase represents compounded annual growth of 8.7% between 2006–2011 and a near doubling of the market by 2011 from 2004 levels, when it was estimated at $24.6 billion.

Expansion activity

In keeping pace with that growth, several leading contract manufacturers announced expansions last year in select segments. In November 2007, DSM Pharmaceuticals (Parsippany, NJ) expanded its service offerings to include formulation development and clinical- trial manufacturing for solid-dosage form products. DSM has a well-established presence in commercial manufacturing of solid-dosage products at its Greenville, North Carolina, facilities, and the move allows the company to offer formulation development and clinical-trial materials supply at Greenville.

In January 2007, DSM completed an expansion to its sterile parenteral manufacturing facility in Greenville by adding a clinical-trial material manufacturing suite. The suite can manufacture large- and small-molecule liquid and lyophilized products for Phase I–III clinical trials.

In addition to expanding its formulation development and clinical-trial materials supply, DSM added aseptic fill–finish manufacturing service for injectable cytotoxic products. The aseptic cytotoxic capabilities include flexible commercial-scale fill-finish services for liquid and lyophilized products in vial sizes up to 65 mL. The facility was scheduled to be ready for commercial production in January 2008, according to a September 2007 company release.

Other companies expanded cytotoxic contract manufacturing capabilities in 2007. Baxter BioPharma Solutions (Round Lake, IL) expanded its lyophilization capacity at its cytotoxic contract manufacturing facility in Halle, Germany. The expansion, which was announced in September 2007, increased the company's total cytotoxic lyophilization capacity to more than 1100 ft² and four dedicated lyophilizers. Two large-scale lyophilization units were added as well as an automated loading cart and in-process quality analysis technology.

Catalent Pharma Solutions (Somerset, NJ) reported several expansions in 2007. In November, the company reported that it was adding a Phase I sterile vial-filling suite in its Research Triangle Park, North Carolina, facility. The expansion complements existing clinical and commercial capabilities at the company's North Raleigh, North Carolina, facility. The suite will be equipped to fill vials with most highly potent compounds, traditional small molecules, biologics, and Drug Enforcement Administration Schedule 1–5 compounds. The suite is scheduled to be completed in early 2008 and will offer liquid-fill and lyophilization capabilities. Catalent has Phase I capabilities in blow–fill–seal and in prefilled syringes in its facilities in Woodstock, Illinois, and Limoges, France, respectively.

Catalent is also upgrading its clinical-supply facility in Bolton, United Kingdom, by expanding a temperature-controlled warehouse to meet demand for clinical supply services, especially cold-chain storage and distribution. The expansion involves a purpose-built extension of the existing facility and is expected to be operational in June 2008. The new temperature-controlled warehouse will have floor space of 7500 ft² , 2700 controlled ambient storage locations, and will house a 320-pallet refrigerator. The expansion follows two already completed expansions at Catalent's other clinical-supply facilities in Europe (Schorndorf, Germany) and the United States (Philadelphia, Pennsylvania).

Pharmaceutical industry competitiveness at a crossroads

In addition to enhancing its clinical-trial materials capabilities, Catalent advanced its position in prefilled syringes. In November 2007, the company announced that it completed its first influenza vaccine manufacturing campaign for its new prefilled syringe manufacturing facility in Neder-Over-Heembeck, near Brussels, Belgium. The influenza vaccine production exceeded 21 million prefilled syringes for the 2007 campaign. The company's new prefilled syringe filling–finishing facility doubled its previous prefilled syringe capacity and replaces existing facilities in Brussels. Catalent received European regulatory approval for this facility in July 2006 and expects to have the first product approved by the US Food and Drug Administration at the facility in 2008.

Vetter Pharma-Fertigung (Ravensburg, Germany) started the construction of a new facility for visual inspection and secondary packaging. Vetter is a contract manufacturer of aseptic prefilled application systems. It is adding the new building close to Ravensburg Vetter South, its existing facility, at an investment of approximately EUR 20 million ($29 million). The new facility seeks to meet demand for homecare applications, including dual-chamber syringes and cartridges for pen- and autoinjectors and to meet new international requirements, such as the adoption of safety systems for anticounterfeiting, according to the company. The facility is scheduled to be operational by the end of 2008.

Keata Pharma (Toronto) opened a 46,400 ft² -pharmaceutical manufacturing facility in Cape Breton, Nova Scotia, in November 2007. The facility includes offices for the pharmaceutical consulting division of PharmEng (Toronto), Keata Pharma's parent company, pilot laboratories for formulation development, rooms with various capabilities such as high-shear mixing, container blending, and equipment for modified-release technology. The facility provides formulation development and testing services for manufacturing and packaging products in solid and liquid dosage forms. Production is expected to begin in the first quarter of 2008. Keata's long-term goal is to develop capabilities in other dosage forms, such as suppositories, topicals, and injectables.

To that end, in late December 2007, Keata Pharma acquired Pfizer's (New York) 85,000-ft² manufacturing facility in Arnprior, Ontario, including inventory. The acquisition gives Keata aseptic manufacturing capability. With the acquisition, Keata also entered into a supply agreement with Pfizer for the exclusive manufacture of certain Pfizer products for Canada at the Arnprior facility for a period of three years. Keata will also manufacture products from the Arnprior location for two other major pharmaceutical clients with multiyear supply contracts. The aggregate revenues of these multiyear supply contracts is estimated at C $75 million (US $72.5 million).

In late 2006, DPT Laboratories (San Antonio, TX) opened a new 258,000-ft² research, development, manufacturing, and distribution facility. The $24-million expansion allowed the company to increase its formulation development and analytical chemistry capabilities. DPT is a contract manufacturer of semi-solid and liquid prescription, over-the-counter (OTC), and biotech drug products.

Restructuring for some

As some companies make select expansions, other leading contract manufacturers are restructuring. At the end of last year, Patheon (Toronto, Ontario), a contract manufacturer of solids, semisolids, and liquid dosage forms, outlined its progress in returning to profitability. In December 2007, Patheon reported a modest gain in revenues from continuing operations for fiscal year 2007 (ended Oct. 31, 2007) to $677.1 million compared with $674.1 million in the year-ago period. Its loss from continuing operations for FY 2007 was $84.5 million compared with $288.7 million for FY 2006.

Contributing positively to its financial results were its European, Canadian, and Cincinnati sites, which generated revenues of $577.3 million in FY 2007, an increase of 6% over 2006, according to a company release. These gains, however, were offset by losses in the company's Puerto Rico facilities in the fourth quarter. The company was affected by generic competition and resulting significantly lower revenues in the fourth quarter for "Omnicef" (cefdinir), the largest single product manufactured at its Carolina site. Its Caguas facility also experienced increased losses because of lower revenues of several products and various operating efficiencies.

Patheon reported in December that it will retain and continue to streamline its facilities in Caguas and Manati. Patheon hopes to return its Puerto Rico operations to break-even on a EBITDA (earnings before interest, taxes, depreciation, and amortization) level by the end of FY 2008. To that end, Patheon reduced its workforce at Caguas by 40 to bring the total workforce at Caguas and Manati to 775 positions as of the end of fiscal 2007. It also secured commitments to manufacture four additional products and expects revenues for these products to begin contributing to its bottom line in 2008.

The company, however, plans to divest its 230,000-ft² facility in Carolina, Puerto Rico. The Carolina site specializes in manufacturing oral cephalosporin solid-dosage forms, including tablets, capsules, and powders for suspension.

Patheon also is in the process of restructuring its Canadian operations. In December 2007, it agreed to sell its Niagara-Burlington OTC pharmaceutical manufacturing business to Pharmetics (Laval, Quebec), a nutraceuticals producer. The deal includes the assets of Patheon's facilities in Fort Erie and Burlington, Ontario. As of press time, the deal was scheduled to close by Jan. 31, 2008.

The divestment of its Niagara-Burlington OTC business is part of a larger strategy by Patheon to improve its profitability by focusing on manufacturing prescription pharmaceutical products. Patheon announced in April 2007 plans to restructure its six manufacturing facilities in Canada. In addition to divesting its Niagara-Burlington OTC business, Patheon plans to close its York Mills, Toronto, facility and transfer substantially all commercial production and development services to its site in Whitby, Ontario. The process of transferring production to other facilities is expected to be completed by the first half of fiscal year 2009.

Patricia Van Arnum is a senior editor at Pharmaceutical Technology, 485 Route One South, Bldg F, First Floor, Iselin, NJ, 08830, tel. 732.346.3072, pvanarnum@advanstar.com