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Fine Chemicals: After a Good 2013, Optimism Increases

by Rick Mullin
January 13, 2014 | A version of this story appeared in Volume 92, Issue 2


The optimism expressed in the fine chemicals sector last year is ready to tilt toward something more like enthusiasm in 2014. Industry executives agree that 2013 was a successful year, continuing a steady climb up from the downturn in 2009, and most are confident that 2014 will be at least as good. The market for active pharmaceutical ingredients (APIs) in particular is primed for growth.

“I think 2014 is probably going to be a good year for most people, but those are the guys that started preparing for it in 2010, 2011,” says James Bruno, president of the consulting firm Chemical & Pharmaceutical Solutions. Companies that invested in technologies to manufacture complex molecules in small quantities, as well as those that built up services including regulatory support and finished-dosage manufacturing, are starting to reap the benefits.

The agricultural chemical market will continue to grow in 2014, Bruno says, noting that some diversified fine chemicals companies will move their emphasis away from APIs to agchems and industrial fine chemicals.

A recent deal with implications for 2014 is DSM’s agreement to merge its API division with Patheon, a finished-pharmaceutical services company. Although some industry watchers were surprised by DSM’s move, Bruno says there is some logic in emphasizing services. “A lot of other companies are starting to refocus and rethink,” he says, “just not so drastically.”

Aslam Malik, president of Ampac Fine Chemicals, sees the opportunity for growth in 2014 hinging on the ability to deliver complex chemistry. He points to his firm’s development of simulated moving bed separation technology and its building of small-scale manufacturing facilities as examples of investments that should pay off this year.

Steven M. Klosk, CEO of the fine chemicals maker Cambrex, says he is optimistic going into 2014, “particularly with our business to branded pharmaceutical companies.” Cambrex invested more than $30 million last year to expand its Charles City, Iowa, facility to support a major contract. Klosk says the firm has also geared up in specialized high-potency chemistry and is pursuing smaller projects.

Klosk and others point to a continued flow of work from Asia back to U.S. and European fine chemicals manufacturers. And many of the new molecules brought forth by small drug companies will be manufactured in proximity to the innovators, who want to stay closely involved. “These little guys love to be touchy-feely,” Bruno says.



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