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Last year at this time, fine chemicals makers were facing the start of an economic downturn that would eventually dominate their businesses and those of their customers. At CPhI, the annual European pharmaceutical ingredients conference held in Madrid, suppliers were hopeful that the worst has passed and that new business can be found.
“This year has been a challenging year for us,” as it has been for most players, said Gilles Cottier, president of SAFC, the fine chemicals business of Sigma-Aldrich. In the first half of 2009, SAFC’s sales were down 6%, but orders have been “creeping up,” he said.
“We are basically back to about prerecession levels,” Cottier said, “but I am still cautious because we want to see how things continue to evolve.” If the gains that contributed to a strong third quarter persist as anticipated, he believes that SAFC will achieve “low single-digit” growth for the year.
Despite the economic downturn, SAFC and other custom chemical firms have been trying to look ahead. For SAFC this means advancing three plant expansions that will come on-line between now and the second quarter of 2010. By committing to investments in capacity and technology, companies are trying to assure customers that they’ll be around for the long term.
India’s Piramal Healthcare announced at CPhI that it will spend $1.6 million to expand its Grangemouth, Scotland, facility for making highly potent active pharmaceutical ingredients (APIs). The new capacity will support the planned launch of an antibody-drug conjugate by a U.S. biotech firm, Piramal said. Piramal also continues to work with Pfizer, which has renewed the supply contracts set up when Piramal bought the U.S. firm’s Morpeth, England, site.
At Ampac Fine Chemicals, third-quarter sales were down 10–12% compared with the same quarter last year, President Aslam Malik told C&EN, noting that 2008 sales were exceptionally good. One factor was customer drawdown of inventories. As part of a forward-looking push into continuous processing, the California company recently validated a continuous liquid-liquid extraction process for commercial-scale API production.
Similarly, Arch Pharmalabs, based in Mumbai, is partnering with equipment maker Orochem Technologies to add simulated moving-bed (SMB) chromatography capabilities. Arch will produce a late-stage API for a U.S. pharmaceutical firm. The project will mark the first time plant-scale SMB technology is used to make an API in India, according to Arch.
Meanwhile, U.K.-based catalyst technology firm Reaxa is launching a subsidiary in India and will set up manufacturing there with help from the chemistry services firm S. Amit & Co. Reaxa wants to scale up production of its Nickel EnCat immobilized catalyst, which a major drug firm might use for production of a high-volume API.
While large pharmaceutical companies continue to outsource, cash-poor biotech firms have cut back to focus on a limited number of late-stage products. As a result, many custom manufacturers have seen a decline in early-stage projects, which could have dire repercussions for future years at CPhI.
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