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Outsourcing

Avara pulls back from pharmaceutical chemicals

After period of aggressive acquisition, the drug services firm retrenches

by Rick Mullin
August 2, 2019 | APPEARED IN VOLUME 97, ISSUE 31

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Credit: Avara
Avara has shut down this former UCB pharmaceutical chemical facility in Ireland.

Avara Pharmaceutical Services, a drug services firm built over the past 4 years through the acquisition of plants from major drug companies, has pulled back from pharmaceutical chemical production with two recent plant closures. The company’s remaining plants specialize in finished-drug production.

In July, Avara shut down a former UCB pharmaceutical chemical plant in Shannon, Ireland, that it had acquired for €1 in 2016. And in February, the company started looking for a buyer for a former AstraZeneca facility in Avonmouth, England. In both cases, contracts with the original owner ran their course, and Avara was unable to bring in new business, published reports say. The firm did not respond to requests for comment.

The closures leaves Avara with three plants in the US and two in Europe, all involved with finished-drug production and packaging.

The exit of large drug companies from manufacturing in recent years has provided a means for rapid growth for some contract service firms. Aesica, for example, was a pioneer of the technique with the acquisition of sites from drug companies including UCB, Merck & Co., and Abbott Laboratories. Consort Medical, a medical-device maker, acquired Aesica in 2014.

Other service firms have made such acquisitions selectively. Hovione, for one, has succeeded in attracting customers to a former Pfizer facility in Cork, Ireland, partly on the strength of the plant’s spray-drying capabilities.

James Bruno, president of the consulting firm Chemical and Pharmaceutical Solutions, notes that buying large plants, especially in deals that hinge on continuing to manufacture for the original owner, entails a high level of risk. Trying to combine chemical and finished-dose operations, as Avara did, elevates that risk, he adds.

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