DSM Scales Back

DSM Pharmaceutical Products is restructuring its pharma chemicals and biologics units, discontinuing operations at its pharmaceutical chemicals plant in South Haven, Mich., in the first half of 2007, and mothballing its biologics facility in Montreal in the beginning of this year.

The moves will result in the loss of 142 jobs in South Haven and 85 in Montreal. They are taking place as part of a DSM review process called Vision 2010 that, among other things, aims to better position the company's contract manufacturing business.

In announcing the Michigan shutdown, DSM said it has determined that the markets for generic pharmaceutical chemicals and early-stage, nonregistered intermediates are commoditizing and will increasingly be served by Asian producers. The company, which acquired the Michigan plant as part of its 2000 acquisition of Catalytica, will consolidate production of pharmaceutical chemicals in Linz, Austria, and Venlo, the Netherlands.

In biologics, DSM says it will emphasize cell-line technology development and licensing as it scales back its earlier ambition to build commercial manufacturing capacity. Last year, the company said it would abandon plans for a large-scale mammalian cell-culture plant in Montreal.

DSM also announced an acceleration of its two-year-old human-cell-based protein and monoclonal antibody licensing alliance with the Dutch biotech firm Crucell. The companies plan to develop a fully integrated version of Crucell's PER.C6 cell line for protein and antibody production.

DSM's change in emphasis pushes it further from its initial goal of becoming a major biologics manufacturer in a league with firms such as Lonza and Boehringer Ingelheim. It also parallels developments at Dow Chemical's Dowpharma unit, which, after its own initial steps toward becoming a commercial-scale biologics manufacturer, has also shifted to emphasize technology.

Last week, Dowpharma announced a partnership under which Cambrex will use Dowpharma's Pseudomonas-based Pfenex technology to manufacture biologic drugs for third-party customers.