Contract drugmakers invest in dosage form | April 25, 2016 Issue - Vol. 94 Issue 17 | Chemical & Engineering News
Volume 94 Issue 17 | p. 12 | News of The Week
Issue Date: April 25, 2016 | Web Date: April 21, 2016

Contract drugmakers invest in dosage form

Moves by Recipharm, others highlight merging of chemical and finished drug manufacturing
Department: Business
Keywords: outsourcing, APIs, formulation, contract development and manufacturing organization
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Recipharm’s operations will include Kemwell’s dosage formulation plant in India.
Credit: Recipharm
A factory in India.
 
Recipharm’s operations will include Kemwell’s dosage formulation plant in India.
Credit: Recipharm

Continuing a push by pharmaceutical services companies to merge chemical and finished drug manufacturing, Sweden’s Recipharm has agreed to acquire the contract pharmaceutical business of Kemwell, including facilities in Sweden, India, and the U.S., for about $210 million. The deal was announced one week after Recipharm closed on its $100 million acquisition of a 74% stake in Nitin LifeSciences, an Indian contract manufacturer of injectable drugs.

Like other recent deals, Recipharm’s two acquisitions accelerate the joining of active pharmaceutical ingredient (API) and finished drug manufacturing into single businesses. Last week, for example, Pfizer announced the launch of Pfizer CentreOne, which combines its Pfizer CentreSource API manufacturing arm with Hospira One 2 One, an injectable drug service business it acquired last year. Similarly, the recently renamed firm Alcami combines the API maker Cambridge Major Laboratories with the finished drug contractor AAIPharma Services.

Meanwhile, the API major Lonza is reported to be in talks to acquire Catalent, a U.S.-based finished dose and drug delivery systems contractor. Lonza’s failed attempt to acquire a similar firm, Patheon, in 2009, was among the first efforts to combine API and finished drug businesses.

At the time, the proposed deal was met with skepticism from market watchers who doubted that the two fundamentally different businesses could be effectively combined. Yet Patheon went on to merge with DSM’s pharmaceutical chemicals business in 2014.

Enrico Polastro, a fine chemicals market consultant with Arthur D. Little in Brussels, claims that the jury is still out on the effectiveness of combining API and finished product businesses, citing Patheon failure to launch an initial public offering last year.

But Jan Ramakers, another European consultant, sees the trend gaining traction where finished drug operations fit with specific strengths in API manufacturing. “Once you have something that fits your technology, including biotech, you might just as well do the formulation as well,” he says. “It is a vertical one-stop shop.”

 
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