Issue Date: May 21, 2012
Chemspec USA returned to Philadelphia earlier this month, attracting some 1,200 attendees and nearly 100 exhibitors. The fledgling North American iteration of the long-running European exhibition of fine and specialty chemicals suppliers saw a significant uptick in activity over its debut last year when only 700 attendees registered. Many attribute increased traffic to the organizers, Quartz Business Media and Speciality Chemicals Magazine, which scheduled a conference program during the exhibition rather than on the day before, as they had done last year.
Continuing improvement in business in both the pharmaceutical and agricultural chemicals sectors may also have boosted interest in Chemspec USA this year. Still, the event—which is seen as a shot across the bow of Informex, the annual fine chemicals exposition launched in the 1980s—is vying for attendees and exhibitors with several other industry events. ChemOutsourcing is scheduled for mid-September in Long Branch, N.J., and Specialty & Agro Chemicals America, a new event, for the same week in Wilmington, N.C.
Despite the growing number of industry gatherings, there is continued talk of consolidation in the pharmaceutical contract services sector. Consolidation was a theme during an opening-day panel discussion on pharmaceutical outsourcing moderated by Magid Abou-Gharbia, director of the Moulder Center for Drug Discovery Research at Temple University’s School of Pharmacy. Panelists, representing two drug companies and two contract research organizations (CROs), discussed an evolution in research and manufacturing services away from low-cost supply contracts and toward strategic partnerships.
“Ten years ago, outsourcing was for supplementary projects we didn’t care much about,” said panelist William V. Murray, head of chemistry for cardiovascular and metabolism research at Janssen Research & Development, a division of Johnson & Johnson. Much work, therefore, went to low-cost service providers in Asia. “But outsourcing has become the critical path,” Murray said. “Pharma is trying to virtualize as much research as possible.” Drug firms will be more closely involved with contract research and manufacturing in critical areas of discovery and development, he added.
The shift to strategic partnerships will not necessarily swing contract services back to the U.S., Murray explained. In the future, “we will be looking at five or so big pharma companies dealing with a handful of very large contract research organizations. Many will be in China and India,” he said.
John W. Ellingboe, senior vice president of discovery chemistry at GVK Biosciences, an India-based CRO, said his company is addressing changing needs in the drug industry by integrating services in chemistry, biology, drug discovery, computational chemistry, and clinical research. Integration is one way of looking at strategic partnerships, he said. “The other is scale.”
Panelist Thomas E. D’Ambra, chief executive officer of Albany Molecular Research Inc., agreed that global scale and breadth of services will be a determining factor in competing for work in the pharmaceutical sector. In D’Ambra’s view, however, the need for innovative chemistry services will work to the advantage of Western suppliers; AMRI has operations in India and Singapore.
D’Ambra described a reorganization of services at AMRI that the company has branded SmartSourcing, which integrates chemistry, biology, discovery, and development work on a global scale. The program also includes in-sourcing, or the placement of AMRI researchers at clients’ research facilities. The company initiated one such in-sourcing relationship with Eli Lilly & Co. in late 2011.
European firms, which dominate the pharma-oriented manufacturing sector, were well represented at Chemspec USA, and several Chinese service firms had a presence. Xavier Jeanjean, director of sales for Isochem, a French fine chemicals producer that generally supplies pharma, said the Philadelphia show was “better than we thought it would be.” Isochem, he said, made new contacts with potential nonpharmaceutical fine chemicals customers.
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