Next Big Thing at Informex

Keynote speaker James Canton, founder of the Institute for Global Futures, a San Francisco think tank, kicked off the Synthetic Organic Chemical Manufacturers Association's recent Informex conference with a frenetic explication of "tomorrow" that belonged exactly where it happened--on the Las Vegas strip. His multimedia package of megatrends hinged on a prediction that the life sciences will usurp information technology (IT) as the crucible for innovation and societal change over the next five to eight years, thus making Informex attendees the business "rock stars" of this decade.

According to Canton, the ascendance of life sciences is spurred by a convergence of chemical synthesis and biology, specifically in the development of the lifestyle enhancement drugs that baby boomers demand.

Contract manufacturing and research firms at Informex--many of which are still working through the fine chemicals bust of the 1990s--might buy a version of Canton's vision in which drugs of the future target AIDS, cancer, and central nervous system disorders in addition to panic attacks and erectile dysfunction. They also seem receptive to the speaker's warning that the sector will experience a life sciences version of the "digital Darwinism" encountered by IT firms not long ago: They will have to "innovate, adapt, or die," Canton said.

This receptivity could be gleaned from the number of companies at Informex promoting new plans to grow their biotech offerings or add expertise in chemical synthesis niches. A big selling point for many new products and services this year is efficiency improvement, which many view as the pharmaceutical industry's most urgent need.

The most direct means of accessing new technology is acquisition, and some deals were announced at Informex, including Sigma-Aldrich's plan to purchase the JRH Biosciences division of SCL Ltd. for $370 million. Also, Wacker-Chemie announced its acquisition of ProThera, a German microbial biologics company that it is renaming Wacker Biotech. The move adds recombinant proteins to the company's custom manufacturing toolbox, said Gerhard Schmid, president of Wacker Fine Chemicals.

This year, however, partnership emerged as a key strategy for broadening offerings. A new consortium of contract manufacturing and service firms initiated by Chemical Synthesis Services, Craigavon, U.K., is a case in point (C&EN, Jan. 17, page 41). With its first two partners, U.S.-based Chiral Quest and Germany's Juelich Enzyme Products, CSS adds asymmetric hydrogenation and biocatalytic asymmetric reduction technology, respectively, to its base of pharmaceutical contract research and small-scale synthesis.

BY FORMALIZING a network, CSS can go to pharmaceutical customers with a menu of products and services that it could not develop or amass through acquisition, said Rosaleen McGuckin, the firm's vice president of business development. The consortium also meets the market's growing need for globalization of its supply base, she said. "The rationale," she said, "is the market's inexorable drive to reduce cost."

Some new businesses emerging from partnerships in pharmaceutical chemistry may not fit the mold of traditional contract manufacturing. An example, announced at Informex, is Avecia's spin-off of Reaxa, a joint venture of the firm's polymer chemistry group and Cambridge University.

The partners had been working for the past few years on encapsulated precious-metal catalysts and the design of steady-flow manufacturing processes that use these catalysts and metal scavengers to replace batch processes. In 2003, the group introduced a palladium catalyst, Pd EnCat, and more recently developed an osmium tetroxide catalyst. Work on activated nickel is under way, according to David Pears, head of the polymer group at Avecia and chief technology officer of the new firm.

The group, however, has moved into products and services that do not fall within the parent company's core business of current Good Manufacturing Practice (cGMP)-certified contract manufacturing, according to Pears.

IN FACT, Pears said a lot of innovation these days occurs outside the traditional boundaries of custom chemical and biologics production. "Historically, the manufacturing side of the pharmaceutical industry has been a fairly conservative function and hasn't seen the sort of exciting developments that the medicinal chemists have seen over the years," he said. Among these, he counts new methods for chemical synthesis such as microwave chemistry.

"The Reaxa mission," Pears explained, "is to target processes in the pharmaceutical industry and try to introduce some of the exciting innovations we have been working on to improve yields and reduce contamination." This mission could best be accomplished outside the confines of cGMP contract manufacturing, he said; thus the decision to spin the group off. Avecia will remain a minority shareholder in the new company when it is finally launched early this year, and Reaxa will continue leasing laboratory space and kilo-lab production facilities from Avecia.

Peter Jackson, vice president of Avecia's pharmaceutical business and chief executive officer of Reaxa, says the company will have a progressive agenda. "Twenty-first- century drugs need 21st-century processes," Jackson said, explaining that the new company will pursue "a sustainability agenda" focused on cleaner processes that reduce and recycle solvents.

Avecia's polymer group already has good contacts in the field of process development, and Reaxa will engage partners to supply equipment and technologies, Pears said. The critical partnership, however, is with the Cambridge University laboratory of organic chemistry professor Steven V. Ley, which specializes in developing reagents and catalysts to support clean synthetic routes. The laboratory also houses a library of drugs it has synthesized using novel processes. Ley will chair the scientific advisory board of the new company, and Angela D. Morris, a consultant to Ley at Cambridge, will be the chief operating officer.

Some traditional contract manufacturers are relying on partnerships to add cutting-edge technologies to their repertoire. For example, Rohner, the custom synthesis arm of Dynamic Synthesis, announced a partnership with Solvias at Informex under which asymmetric hydrogenation, carbonylation, and catalytic coupling reactions using Solvias technology will be scaled up at Rohner's facility in Basel, Switzerland. To support the effort, Rohner recently installed a 400-L kilo-lab vessel at a cost of $550,000. The firm is already operating a 4,000-L high-pressure hydrogenator that, like the kilo lab, can operate at a pressure of 60 bar and is made of Inconel 686, a highly acid-resistant steel.

Thomas Eisele, Rohner's sales and R&D director, noted that the deal gives his firm access to transition-metal catalysis, which he called "a key technology delivering superior results in the stereoselective synthesis of very complex homochiral molecules." And Solvias Chief Executive Officer Hansjörg Walther said the deal allows his company to move new technology into commercial production.

Contract research firms are also adding new dimensions to their offerings via partnerships. Peakdale Molecular, for example has introduced screening compounds targeted toward G-protein-coupled receptors (GPCR) developed in a strategic alliance with De Novo Pharmaceuticals, a computational chemistry firm, according to Gareth Jenkins, Peakdale's sales and marketing manager.

Jenkins said that accessing De Novo's ability to model structures was key in developing the product line. "Fifty to 60% of all marketed drugs interact with one GPCR target or another," he said.

Peakdale aims to maintain its business balance of 60% medicinal chemistry services and 40% catalog products. "People appreciate that the value we are adding is all about innovating the chemistry, coming up with ideas for new compounds that can be turned into the next generation of drug molecules," Jenkins said. "We would worry if we start to diversify at this stage in our growth too far away from that core. You dilute your efforts and you lose that essence that brought you customers in the first place."

Instead, Jenkins said the company turns to partners for scale-up in later development, sometimes working on technology transfer, other times handing the project over to the partner entirely.

Larger custom manufacturers also see partnerships enhancing their ability to deliver technology and build global networks. Ralf Pfirmann, senior vice president for business development in Clariant's pharmaceuticals business, pointed to a partnership with Jupiter Bioscience in Hyderabad, India, under which Clariant and Jupiter develop peptide-based pharmaceutical ingredients. Pfirmann said the cooperation among suppliers across the industry today mirrors code sharing in the airline industry, whereby airlines have access to their partners' routes and assets to customize itineraries.

Nor have the largest companies abandoned in-house innovation. BASF, for example, said it now offers a range of about 20 ionic liquid products in quantities ranging from grams to tons, as well as process technology and services for their application. Frank Stein, director of new business development at BASF, claimed the technology is gaining as an environmentally friendly reaction media.

The company, which has been developing the technology for several years, claims ionic liquids may also enhance reaction rates. Stein said BASF has achieved a rate enhancement of four orders of magnitude in a commercial-scale process in which ionic liquid technology is used in an acid-scavenging application.

Keynote speaker Canton emphasized that as the market heats up, partnerships proliferate, technologies transfer, and science evolves, chemistry will remain at the center of the life sciences. He warned, however, that chemists have to think of their discipline in new ways as it transforms in the years ahead.

Whether or not chemists are amenable to Canton's advice to "think outside the box," business strategists in the sector say they are at least scoping out what they can access outside their companies. "We see many technologies out there," CSS's McGuckin said in describing the consortium headed by her company. "We want to offer the best, most competitive solution globally."