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While recent developments suggest some companies are losing faith in the fine chemicals industry, Swiss custom manufacturing giant Lonza is holding fast. Lonza has paid $145 million for UCB-Bioproducts, the peptide-drug-manufacturing arm of Brussels-based pharmaceutical company UCB.
With the purchase, Lonza gains a process development and peptide synthesis facility in Braine-l'Alleud, just outside of Brussels. UCB says the plant has the world's largest capacity dedicated to contract manufacture of peptides. The addition of UCB-Bioproducts also strengthens Lonza's ability to offer the full portfolio of peptide production technologies: liquid-phase synthesis, solid-phase synthesis, and recombinant fermentation production.
The deal builds on a long-term supply agreement established last May between UCB and Lonza, under which Lonza is manufacturing PEGylated antibody-fragment-based bulk actives at its biopharmaceutical site in Visp, Switzerland. "Lonza has managed to become a major supplier of UCB-Bioproducts in the recent past, and the acquisition is a valid forward integration," says Peter Pollak, a fine chemicals industry analyst and former Lonza executive.
Lonza's move to fortify its position in pharmaceutical custom manufacturing comes as other companies are reconsidering their commitment to the industry in the face of a demand slump and tougher competition, particularly from Asia. "The losers often are heterogeneous patchworks of many small companies acquired during the irrational exuberance in the late '90s," Pollak notes.
In the most dramatic moves, Avecia has sold its pharmaceuticals unit to Nicholas Piramal India Ltd., and Rhodia Pharma Solutions recently agreed to sell its custom synthesis operations to India's Shasun Chemicals & Drugs (C&EN, Jan. 16, page 5).
DSM recently announced plans to mothball its biologics facility in Montreal and is closing down its South Haven, Mich., pharmaceutical chemicals plant in the first half of 2007. Cambrex jettisoned its strategy to become a specialty therapeutics company and is exploring strategic options for some business lines, a shift that leads some analysts to question the fate of its biopharmaceuticals unit.
Meanwhile, "pure players" such as Lonza, Hovione, and F.I.S. are faring better, Pollak adds.
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