Pharma Outsourcing

Economists are calling the past 24 months or so the Great Recession, but you wouldn’t know it during a visit to a typical drug discovery lab or pharmaceutical chemical manufacturing plant.

That’s because the discovery, development, and commercialization of new active pharmaceutical ingredients is a multiyear endeavor that transcends business cycles. From initial discovery to market launch, the process of creating a new drug can encompass multiple economic ups and downs.

Of course, the drug industry is not immune to the vicissitudes of economic fortune. Small biotech firms depend on venture capitalists to provide funding, and funds dry up during periods of financial hardship. Even profitable big drug companies seem more inclined to cut back when the business world around them is doing the same.

But for many pharmaceutical molecules with good efficacy and promising market potential, the recent recession was little more than background noise. The backers of these molecules had the foresight—and luckily the money—to stick with them.

In the pages that follow, C&EN presents case studies of three pharmaceutical molecules and the outsourcing partnerships that have shepherded them during the latest downturn, and previous ones, as well.

In the first case, a biotechnology firm enlists the aid of a pharmaceutical chemical manufacturer to find a synthetic route to a molecule better than its own cumbersome medicinal chemistry process. That relationship got its start in 2000 and, despite one big setback, continues today.

The second case chronicles a molecule that was developed by a hospital, licensed to a multinational drugmaker, and then turned over to a biotech firm, which finally won Food & Drug Administration approval in January. One chemical maker stood by the molecule for more than 25 years, which is a long time even by drug industry standards.

In the third case, a contract manufacturer decides to step outside its usual role as hired hand and develop a molecule on its own. The outsourcing company became the outsourcer, partnering with a technology firm for process chemistry and a big drugmaker for legal and marketplace assistance. Because the molecule is a generic drug, the timeline is relatively short: five years and counting.

For the economy at large, even five years is a lifetime. For companies involved in drug discovery and development, however, five years is just getting started.