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An eye-catching series of commercial-graphic watercolors in vivid blues and pinks dominates the marketing images of Helsinn, a producer of pharmaceutical chemicals and finished drugs based in Biasca in the Ticino, the region of Switzerland just north of Italy.
The new images—designed by the Italian artist Pablo Compagnucci and rolled out at last December's CPhI pharmaceutical ingredients show in Brussels—accompany the company's three-phase program to expand capacity in its contract manufacturing business.
The images are a distinct departure from the roly-poly cow that meandered through Helsinn's literature and ads in the mid-1990s. And although Gabriel Haering, commercial director for Helsinn's chemical operations, still fondly displays that cow on his bookshelf, he says the company has set aside the Swiss cliché in its bid to support a business that is international.
But then, an international outlook has characterized the business since Helsinn Healthcare was founded in 1976.
The strategy was clearly set then: The company would focus on finding niche pharma products to license in and license out, eschewing basic R&D. Helsinn's scientists, instead, would focus on the practicalities of bringing products to market, including manufacturing process optimization, product registration, and market clearance. As the privately held company has grown, the R&D now supports not just its own pharmaceutical products, but also the compounds it makes on an exclusive basis for others.
From the one company, the Helsinn Group now consists of three subsidiaries in Biasca and nearby Lugano, Switzerland, and four subsidiaries in Ireland. And from a tiny company with only five employees in 1976, the group last year had 380 employees and sales of roughly $185 million, more than half of which were in contract manufacturing. Its ambitious targets for 2005 are 450 employees and approximately $240 million in sales.
All of the group's companies, Haering points out, are manufacturers dedicated to the pharmaceutical industry, so they operate at a current Good Manufacturing Practice (cGMP) level only.
Helsinn's first milestone came in 1980, when it licensed the anti-inflammatory compound nimesulide from Riker 3M. As Haering explains, the company's idea from the start "was to produce our own active pharmaceutical ingredients (APIs) for nimesulide, but also to have capacity for contract manufacturing."
In 1990, it acquired the small Irish drug firm Birex Pharma, for which Helsinn built a plant in 1998 on the outskirts of Dublin to make nimesulide tablets, sachets, and other dispensing forms. Separately, Helsinn built a pharmaceutical chemical plant in Ireland in 1993 to serve its expanding contract manufacturing business.
Paralleling the Irish investments, Helsinn was investing in Biasca, particularly following the 1998 license of an antiemetic compound from Syntex Roche. Palonosetron, which was at the end of Phase IIB clinical trials when Helsinn acquired it, was registered and launched in the U.S. in 2003 and in the European Union in 2005. A second licensed compound, Wyeth's oxaprozin, was already on the market when Helsinn acquired it.
In 1999, Helsinn Advanced Synthesis (HAS) was set up in Biasca. The firm's goal was to complement existing pharmaceutical chemical plants in Biasca and Ireland with a new facility that made both standard and high-potency APIs, including palonosetron. Today, HAS's sales are evenly split between the U.S. and Europe, with 80% of production for products already on the market.
The company's R&D budget has averaged 18% of sales over the past five years—a total of more than $110 million during the period.
And the company self-finances its investments, says Paolo Guainazzi, general manager of the Biasca operations. If a facilities investment is required in response to a contract manufacturing commitment, the decision can be made very quickly even if it's not in the budget, he says. "This gives us high flexibility and reaction time."
Also strengthening Helsinn's contract manufacturing operations is a three-year-old alliance with Cardinal Health in drug product development and marketing. The alliance is intended to combine Helsinn's process development and API manufacturing capabilities with Cardinal's early-stage drug development, final dosage formulation, and distribution expertise.
The agreement with Cardinal, Haering notes, "identified the missing pieces. Customers want a kind of one-stop shop, so integrated manufacturing is important. For the little pharma companies that need the active substance and the finished product, this capability helps them improve and simplify the supply chain, from early-phase development up to market supply when the product is commercialized."
In a way, Haering suggests, such help ensures that small drug companies survive and thrive in a business dominated by giants. But by the same token, he argues, being able to offer capabilities to such smaller customers is one reason why—contrary to the predictions of industry commentators—the contract manufacturing sector is not consolidating. "There are different kinds of needs," he says. "The big contract manufacturers need big volumes to fill their reactors. The smaller producers can be much faster and more flexible in making decisions, and that is an advantage."
Helsinn's modest size as a contract manufacturer is just right, he contends: "Small pharma likes small contract manufacturers, while big likes big."
The firm's cGMP capabilities range from kilograms to tens of tons, featuring multistep processes and a broad range of chemical reactions and technologies. For example, the company added capability to produce at ultra-low temperatures—down to -85° C—at the request of one customer. "Now, that technology is available to all," says Haering, who notes that the industry "is going to lower temperatures anyway. The higher temperatures will be used for basic or non-GMP materials. But for modern chemicals you need the lower temperatures."
WHEN IT started up in 2001, the HAS plant had one production unit for high-potency active ingredients (HPAIs) and two bays for more standard APIs. At the beginning of 2005, the company's management approved expansion of both sides of the facility.
The HPAI plant already has a mix of 100- and 250-L reactors that can produce batches from 1 to 7 kg, commercial scale for some HPAIs. Now being added are small-scale facilities that can produce 100 to 500 g of product for clinical trials. And the plant has space available for a third high-potency plant for batch sizes of less than 10 kg. The project also calls for addition of a third production bay for standard APIs.
If needed, HAS has even more space in its buildings for expansion, Haering says. Space remains for two further standard API bays that would increase total capacity from 98,000 L to 122,000 L. On the HPAI side, there's space for another production unit for 10- to 50-kg batches that would increase current total capacity of 1,120 L to 1,730 L.
"We are building step-by-step, depending on products and processes," Haering says. "These investments are not for captive products—they are for contract manufacturing. The chemical business is key for us, and for the whole group."
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