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Pharmaceutical Outsourcing

Chemistry is still key to the drug industry’s fortunes

by Ann M. Thayer , Jean-François Tremblay , Michael McCoy
March 9, 2015 | A version of this story appeared in Volume 93, Issue 10


CORRECTION: This story was updated on March 13, 2015, to correct the status of burixafor’s Phase II clinical trials in China for use in chemotherapy sensitization in leukemia patients. The trials have been initiated but are not yet complete.

Decorative artwork from phamaceutical outsourcing story.
Credit: Shutterstock/Yang H. Ku/C&EN

Those concerned about chemistry’s future in the pharmaceutical industry were undoubtedly alarmed when the French giant Sanofi bragged recently that 72% of its drug discovery and development projects these days are in biologics.

Biologics are hot. Sales are growing at close to 10% per year, and biologics represent nine of the top 20 pharmaceuticals by sales, according to the market research firm EvaluatePharma. Companies such as Sanofi are investing more and more research money in them. Traditional small-molecule drugs seem to be left in the dust.

But in a recent webinar, executives from the pharmaceutical chemical firm Cambrex and Jan Ramakers Fine Chemical Consulting Group made the case that, even if it no longer dominates the headlines, small-molecule pharmaceutical chemistry continues to thrive.

Crunching numbers from EvaluatePhar­ma and IMS Health, the two firms pointed out that the number of small molecules on the global pharmaceutical market will grow from 3,005 in 2013 to 3,552 in 2020. Small molecules’ share of the drug market is down—to 84% in 2013 from 87% in 2009—but sales continue to grow.

Indeed, 33 of the 41 drugs cleared for marketing by the Food & Drug Administration last year were small molecules or peptides. In 2013, fully 24 of the 27 drugs approved were small molecules.

And as drug companies shift their focus to discovery and marketing, manufacturing of those small molecules will increasingly be carried out by service firms such as Cambrex. Cambrex’s largest customer is Gilead Sciences, the marketer of Sovaldi, a hepatitis C drug that was the top-selling small-molecule drug in 2014.

Jump to Topics:
CASE STUDY 1: Staying Connected
Cerus and Ash Stevens partner over many years to make an active agent for purifying blood
- CASE STUDY 2: Seeking Perfection
Taiwan’s TaiGen mandates that its contract manufacturing partners achieve 99.8% purity
- CASE STUDY 3: Evolving Science
Novogen returns to Regis for a second go at developing a cancer drug


CASE STUDY 1: Staying Connected

Cerus and Ash Stevens partner over many years to make an active agent for purifying blood

The pages that follow contain three stories of the relationship between a custom manufacturing firm and its drug industry partner. The molecules involved range from preclinical to just approved by FDA. But they are all for life-threatening diseases, and they are all the product of chemistry.

Relationships are vital when it comes to custom manufacturing pharmaceutical ingredients, and the strongest ones survive a long time. The biomedical products firm Cerus, based in Concord, Calif., and its manufacturing partner Ash Stevens have worked together for decades and have academic ties that go back even further.

“We actually have been producing their compound for 20 years now,” says Stephen A. Munk, chief executive officer of Riverview, Mich.-based Ash Stevens. The compound is amotosalen, which Cerus uses in its Intercept Blood System to inactivate pathogens and reduce the risk of transfusion-transmitted infections. More than 100 blood centers in 20 countries use the ex vivo purification system, some in Europe since 2002. In late 2014, the U.S. Food & Drug Administration finally approved Intercept for platelets and plasma.

Amotosalen, like other psoralens, works by penetrating viruses and bacteria, and then intercalating itself between their DNA and RNA bases. On exposure to 320- to 400-nm UVA light, the photosensitive molecule creates cross-links that block replication. The process doesn’t compromise the function of platelets, red blood cells, and plasma because these blood components don’t contain functional nucleic acids, but it does disable white blood cells.

Naturally occurring psoralens have been used to treat skin conditions for centuries. But it wasn’t until the late 1980s that a connection between pathogens, blood, and the right psoralens was made. At that time, University of California, San Francisco, hematologist Laurence M. Corash was looking for a way to prevent transfusion-transmitted HIV infections and came upon psoralens.

Across the bay, UC Berkeley chemists John E. Hearst, Henry Rapoport, and Stephen Isaacs had been synthesizing psoralens and studying their ability to cross-link both DNA and RNA. Around 1978, they had formed a garage-based business, HRI, to supply research materials. In 1991, Corash and HRI created Steritech; it was renamed Cerus around the time it went public in 1997.

As the start-up set out to develop a device for decontaminating blood, it evaluated hundreds of psoralens, explains Suzanne Margerum, Cerus’s vice president for manufacturing. Cerus selected amotosalen for its activity against a range of pathogenic viruses and bacteria and its ability to move through cell membranes. It also had to pass safety and carcinogenicity tests and show that it would not affect the function of transfused platelets and plasma.

With a compound decided upon, Cerus went to Ash Stevens to get material made for clinical development. Although Cerus had a synthetic route, it knew nothing then about process development.

Customers pick their suppliers for many reasons, and Cerus liked that Ash Stevens is “a very chemistry-conscious company,” says Susan Wollowitz, who headed Cerus’s chemistry effort at the time and is now a consultant. “They really thought about the chemistry and how they could improve it.”

Ash Stevens didn’t change the synthetic route much, “but its industrialization was a bit of a challenge,” Munk says. Some operations, such as filtration and drying, took as long as a few weeks. “As part of the process development, we were able to decrease the cycle times, increase the yield, minimize waste, and get rid of toxic reagents like hydrazine.” The process also had to be contained to avoid worker exposure to the photoactive compound.

Ash Stevens had been making amotosalen for a few years when Munk joined the firm in 1997. He was excited to see the project under way since he had been a graduate student in Rapoport’s lab when the psoralen work was done and knew many of the former Berkeley people involved with Cerus.

“We have had a collaborative and highly productive relationship with Cerus for many years,” Munk says. The 2014 FDA approval of the Intercept Blood System, he adds, is “particularly heartwarming for me as I witnessed the fundamental research.”

Winning that approval took patience and persistence, according to Margerum. Although used to treat blood outside the body, amotosalen had to move through development and regulatory review as though it were an active pharmaceutical ingredient. “In fact, it has no intended pharmacological effect on humans,” she adds. And prior to transfusion, an adsorption step reduces residual amotosalen to trace levels.

Meanwhile, for review purposes, the blood-processing equipment and illuminator were handled as a Class III medical device. And the treated blood components had to meet the requirements of a biologic agent. “We have an extensive safety and clinical study database,” Margerum says. Cerus also has demonstrated the inactivation of about 20 different bacteria, 15 viruses, and four parasites.

Because development spanned many years, there were stretches, one as long as five years, when Cerus didn’t need Ash Stevens to make amotosalen. But the companies stayed connected. And despite the challenges created by changing people and expectations, Ash Stevens was able to restart production without any problems because it had the appropriate Good Manufacturing Practices documentation in hand, Margerum notes.

Although most process development occurred about 15 years ago, more recently the companies began doing additional process optimization and parametric studies to ready the regulatory filing package for the 2014 approval.

Cerus is betting that the wait was worth it. “Certainly, the FDA approval should be a huge impetus for growth,” Margerum says. Earlier this year, Cerus raised $76 million through a stock offering in part to support commercialization. Late-stage clinical testing on a different system for red blood cells is under way, and the company hopes to file for European approval in 2016.

Intercept is proving effective against well-known pathogens, such as hepatitis B and C, HIV, West Nile virus, and bacter­ia, as well as emerging threats including dengue and Chikungunya viruses for which blood bank screening tests aren’t available.

Cerus’s system is also part of a Bill & Melinda Gates Foundation-supported effort in Africa to evaluate plasma taken from recovered Ebola patients as a potential therapy for others infected with the virus. The company has also filed with FDA to make Intercept available under a compassionate use exemption for U.S. Ebola patients.


CASE STUDY 2: Seeking Perfection

Taiwan’s TaiGen mandates that its contract manufacturing partners achieve 99.8% purity

Screening tests available today have lowered the risk from transfusion-transmitted pathogens. But in the past 10 years, Margerum says, “the risk-benefit equation for Intercept has changed, including recognition of the value in having something that is prospective, because you can’t possibly know or test for everything that is in the blood.”

To do a job well is one thing, but to consistently deliver a product that is nearly flawless is quite a different challenge. For its new molecule burixafor, the Taiwanese drug discovery firm TaiGen Biotechnology instructed its contract manufacturing partners to achieve 99.8% purity in the production of the active pharmaceutical ingredient (API).

Discovered in TaiGen’s labs in 2006, burixafor is in Phase II clinical trials in both the U.S. and China for use in stem cell transplants and cancer chemotherapy. Avecia, a unit of Japan’s Nitto Denko, manufactures the drug substance in the U.S., where burixafor was tested for the first time on human patients. When TaiGen later initiated clinical trials in China, it chose the Taiwanese firm ScinoPharm to produce the drug at its plant in Changshu, near Shanghai. Under Chinese law, only drugs made domestically can be tested in China.

It is rare for a drug discovery firm to select two companies to scale up the production of a new molecule. TaiGen went one step further by paying both contract manufacturers to reach an extremely high level of purity.

“We are trying to avoid any unwanted side effects during the trials,” says C. Richard King, TaiGen’s senior vice president of research. Drug regulators in the U.S. and China “need very tight specifications these days for new drugs,” he adds.

TaiGen registered burixafor with the U.S. Food & Drug Administration in 2007. When it contracted Girindus America (bought by Avecia in 2013) to manufacture it that year, TaiGen specified purification by column chromatography, a cumbersome and relatively expensive procedure when carried out on a large scale. “Our process development efforts were racing against the clinical trials launch schedule,” King recalls. Column chromatography, he points out, is a “tedious approach, but it works.”

By the time ScinoPharm was hired last year, TaiGen’s process development team had come up with a simpler and more elegant process. But its purity demands hadn’t changed.

“Usually, clients are satisfied with a purity level of 98% to 99%,” says Koksuan Tang, head of operations at ScinoPharm’s Changshu plant. “To go from 99% to 99.8% is very different.” The manufacturing of burixafor, he adds, involves five chemical steps and two purification steps. Upstream of the API, ScinoPharm also produces burixafor’s starting material.

Purity level aside, burixafor is not a particularly difficult compound to make, Tang says. Nonetheless, the process supplied by TaiGen had to be adjusted for larger-scale production. “If you heat up 10 g in the lab, it takes two minutes, but in a plant, it could take as long as two hours,” he says.

Although, while hydrogen chloride gas can be controlled effectively when making minute quantities of a compound in the lab, it’s another challenge to handle large volumes of the toxic substance at the plant level. To safely execute one reaction step, ScinoPharm dissolved HCl in a special solvent that does not affect the purity profile of burixafor.

TaiGen selected ScinoPharm as its China contractor after a careful process that involved two visits to Changshu by TaiGen’s senior managers, Tang recalls. ScinoPharm’s track record of meeting regulatory requirements in different countries, including China, was a plus, Tang believes. Its ability to produce both for clinical trials and in larger quantities after commercial launch was also decisive.

Operational since 2012, ScinoPharm’s Changshu site can deliver products under Good Manufacturing Practices in quantities ranging from grams to kilograms. It employs 220 people.


“Moving from the single-kilogram quantities we make now to hundreds of kilograms will require some adjustment to the process, but we believe we can deliver,” says Tang’s colleague Sing Ping Lee, senior director of product technical support in Changshu. One thing to keep in mind, he notes, is that Chinese regulatory standards for drug production are actually more restrictive than those in the U.S. or Europe, going so far as specifying what equipment manufacturers need to use.

Other than complying with Chinese regulators, one reason TaiGen needed to carefully select its China contractor is that the two companies could well be long-term partners, since TaiGen believes it has the ability to market the drug on its own in China, Taiwan, and Southeast Asia. In the event of approvals elsewhere, TaiGen plans to license the compound to a large drug company, which may or may not stick with ScinoPharm or Avecia.

Relatively unknown outside Taiwan, TaiGen was formed in 2001 by Ming-Chu Hsu, the founder of the Division of Biotechnology & Pharmaceutical Research at Taiwan’s National Health Research Institutes. The holder of a Ph.D. in biochemistry from the University of Illinois, Urbana-Champaign, she headed oncology and virology research at Roche for more than 10 years before returning to Taiwan in 1998.

TaiGen employs about 80 people, three-quarters of whom are in R&D. The company develops its own drugs in-house and also in-licenses molecules that are in early stages of development. The company licenses out the molecules for the European Union and U.S. markets but seeks to retain Asian marketing rights. Burixafor was discovered in TaiGen’s own labs in Taipei. To come up with it, researchers used a high-throughput screening approach that involved 130,000 compounds, including the design and synthesis of 1,500 new compounds. “It went back and forth between chemistry and biology many times,” recalls King, TaiGen’s research head.

A so-called CXCR4 chemokine receptor antagonist, burixafor mobilizes hematopoietic stem cells and endothelial progenitor cells in human bone marrow and channels them into the peripheral blood within three hours of ingestion, according to results of Phase I and Phase II trials.

In the U.S., burixafor is undergoing clinical trials for use during stem cell transplantation in patients with multiple myeloma, non-Hodgkin’s lymphoma, or Hodgkin’s disease. In China, TaiGen is testing it as a chemotherapy sensitizer in relapsed or refractory adult acute myeloid leukemia. Owing to its activity on CXCR4 chemokine receptors, the drug could also fight age-related macular degeneration and diabetic retinopathy diseases, as well as find use in tissue repair, King says. For clinical trials in the U.S., TaiGen has partnered with Michael W. Schuster, a medical doctor who conducts research at Stony Brook University Hospital in New York.

TaiGen sees particular potential for burixafor in stem cell applications. For example, patients undergoing hematopoietic stem cell transplantation often must take a granulocyte colony-stimulating factor plus a Sanofi drug called Mozobil to stimulate stem cell production. TaiGen says burixafor could accomplish this goal on its own in multiple myeloma patients. It cites one consulting firm forecast that puts eventual sales at more than $1 billion per year.


CASE STUDY 3: Evolving Science

Novogen returns to Regis for a second go at developing a cancer drug

With that kind of potential, the company is counting on significant interest among licensors, any one of which might want to engage its own contract producer of burixafor. If that happens, a third manufacturer will have to learn to reach 99.8% purity.

For a pharmaceutical company established more than 20 years ago, Novogen doesn’t look like much. It’s completely virtual, with no labs or manufacturing facilities of its own and only about a dozen employees. Like most other biotechs, it struggles with finances and has had its share of setbacks along the way.

But Novogen is nearing the start of clinical trials on a cytotoxic small molecule that it believes could favorably change the outcome of chemotherapy for patients with ovarian and other cancers. To help it conduct those trials on a modest budget, the company has come back to an old friend, Regis Technologies.

Last July, Novogen chose Regis to be the contract manufacturer of Trx-1, the active pharmaceutical ingredient in the cytotoxic drug product it is calling Cantrixil. At its facility in Morton Grove, Ill., Regis is now in the process of synthesizing Trx-1 for use in toxicological studies and Phase I clinical trials.

For Andrew Heaton, an Australian chemist who is Novogen’s vice president of drug discovery and manufacture, reaching the point of production under current Good Manufacturing Practices (cGMP) conditions is an important milestone in a long journey.

Novogen was founded in 1994 by Graham Kelly, a researcher at Australia’s University of Sydney who saw cancer-fighting potential in isoflavones and their metabolites. Heaton joined the firm in 1999 and helped it get to clinical trials with four drugs, including two anticancer compounds containing a benzopyran core.

One of the four, phenoxodiol, made it to Phase III trials as an ovarian cancer treatment but ultimately failed. Other technology was licensed to MEI Pharma, and by 2010 Novogen was all but defunct.

Heaton was discouraged but not defeated. “I had the idea that we’d left a lot of fundamental R&D on the table,” he says. In 2012 Heaton and former Novogen colleagues, including Kelly, created Triaxial Pharmaceuticals to improve upon the benzopyran chemistry.

Heaton realized he could take an eight-step synthesis down to four steps. He also succeeded in eliminating a Grignard reagent that was limiting the range of functional groups that could be attached to the benzopyran core. “With that increased dynamic range, we can carefully tune these molecules,” Heaton says.

The firm’s ability to generate screening libraries suddenly skyrocketed, Heaton recalls. The cost of creating 10 mg of a compound went from thousands of dollars to only $100 or $200.

Improved chemistry in hand, Triaxial looked to raise funds. It considered venture capital, but in late 2012 it took a different approach, entering a reverse takeover of Novogen, which by then still had some cash but was otherwise dormant. Reenergized, although hardly rich, Novogen set about developing the new family of compounds, dubbed super-benzopyrans.

To test them, Heaton and Kelly reconnected with Gil G. Mor, a professor of obstetrics, gynecology, and reproductive sciences at Yale University. In the early 1990s, Mor had isolated ovarian cancer cells in his lab and injected them into mice. Companies would submit experimental compounds so Mor could test their ability to kill the cells.

“Because Gil has the capacity to isolate cells from real people who are suffering from cancer, you are much closer to human disease,” Heaton says.

According to Mor, phenoxodiol was the only drug that killed the cells. Although phenoxodiol failed in later studies, Mor was all ears when Novogen returned two years ago with a new generation of compounds.

Since his earlier collaboration with Novogen, Mor had refined his mouse model to include cancer stem cells. Many ovarian cancer patients respond to the first round of chemotherapy, but the cancer recurs in around 70% of cases. The reason, Mor discovered, is that the cancer stem cells survive and repair themselves following chemotherapy.

Putting Novogen’s benzopyran compounds through Mor’s test, Heaton says, yielded one that kills both cancer stem cells and the more prevalent somatic cancer cells. In 2013, Novogen and Yale formed a joint-venture company, CanTx, to develop Trx-1 as an abdominal injection. CanTx is owned 85% by Novogen and 15% by Yale.

Around the same time, Heaton moved to the U.S. to help take Trx-1 out of the lab and into the testing clinic. That meant increasing manufacturing from grams to kilograms.

As Heaton did with Yale, he went to visit another friend from the past: Regis Technologies, which had successfully manufactured one of Novogen’s earlier drug candidates.

Regis also had a capability that Novogen needed this time. Trx-1 is an enantiomer, and Regis is one of only a handful of pharmaceutical contract manufacturers to combine expertise in large-scale chemical synthesis with chiral separation via supercritical fluid chromatography, both under GMP conditions.

When he got there, Heaton found a company eager to take on new challenges. And synthesizing Trx-1 presented several of them, according to Angie Thayer, a synthetic organic chemist who manages the Novogen project for Regis.

Although Heaton had cut in half the number of steps needed to produce super-benzopyrans, some of them are complex, Thayer says, involving multiple chemical transformations. Particularly vexing is a step in which a deprotection and reduction occur during the same reaction. It had stumped a European contract research firm that Novogen earlier engaged for small quantities of the molecule.

Regis stuck with Heaton’s basic chemistry, Thayer says, but it made several process changes. For example, the firm’s chemists realized that a reagent was being used in unnecessarily high quantities. They sharply reduced the volume, limiting the opportunity for unwanted side reactions. Reaction times and temperatures were optimized. And Regis modified how one intermediate is handled and isolated after determining that it is sensitive to decomposition.

Today, Regis is in the process of producing two multikilogram lots of Trx-1, one for toxicological studies and one for clinical trials, which Novogen hopes to begin by August in Australia.

To pay for those trials, Novogen recently tapped private investors for about $6 million, enough, the firm says, to complete a Phase I trial. The fundraising also helped Novogen avoid getting delisted from the NASDAQ stock market.


Jeff Samuel, a business development manager at Regis, says the two companies are talking about other super-benzopyrans in Novogen’s pipeline that Regis might manufacture. They also have discussed introducing a chiral reduction to Heaton’s synthesis to get the right enantiomer of Trx-1 without a separation.


Jump to Topics:
- CASE STUDY 1: Staying Connected
Cerus and Ash Stevens partner over many years to make an active agent for purifying blood
- CASE STUDY 2: Seeking Perfection
Taiwan’s TaiGen mandates that its contract manufacturing partners achieve 99.8% purity
- CASE STUDY 3: Evolving Science
Novogen returns to Regis for a second go at developing a cancer drug

But Samuel and Heaton don’t want to get ahead of themselves. They have a much more immediate goal: Finish manufacturing Trx-1 and get it into the clinic.


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