Fine Chemicals

From India to the world

Major Indian CMOs no longer see themselves as such. Andrew Warmington reports from CPhI Worldwide 2011

Whilst most contract manufacturing organisations (CMOs) from India serving the pharmaceuticals industry remain essentially low-cost competitors to European companies, some have bigger plans. Having acquired and subsequently embedded Western assets in the past decade, they increasingly see themselves as global competitors who happen to be headquartered in India.

Two of these, who are both business units of much larger companies, Piramal Pharma Solutions and Dr Reddy's Custom Pharmaceutical Services (CPS), presented their capabilities via press conferences at CPhI Worldwide 2011 in Frankfurt at the end of October. Another major Indian CMO, Hikal, had other important investment news to announce there.

Piramal Pharma Solutions, according to its German-born director Gerhard Klement, is an "end-to-end service provider for APIs and formulations across the drug life cycle", complemented by special services such as clinical trial supplies, antibody-drug conjugates (ADCs), biocatalysis and packaging. It has sales of about $200 million/year and a global asset base.

As well as five main Indian sites, Piramal Pharma Solutions owns a former Pfizer APIs and formulation site at Morpeth, UK, and two ex-Avecia assets: an API development and manufacturing site at Toronto and an ADCs site in Grangemouth, UK. Another ex-Avecia facility in the UK, the Early Phase Development Team at Huddersfield, has been closed. There is also a sourcing office for raw materials in Shanghai.

After a flat 2009-10, revenues for Piramal Pharma Solutions were 8.6% up year-on-year in the year to March 2011 and 40% up in Q2 of calendar 2011, with further growth reported in Q3. UNCTAD listed the company as a whole in the top ten of pharmaceutical CMOs in its July 2011 World Investment Report but Piramal's ambitions run higher still.

According to company chairman Ajay Piramal at an analysts meeting back in August, the firm will invest about €930 million over the next five years to grow. Of this, over 40% (nearly €390 million) will be on Piramal Pharma Solutions. Among other things, the division will invest to acquire new technologies in such fields as biocatalysis, sterile injectables and solubilisation.

Driven by 18-20%/year organic growth and the acquisition of facilities from pharmaceuticals companies, Piramal Healthcare wants Piramal Pharma Solutions to be a top three global CMO by 2016-17. The company will also spend some €360 million on its over-the-counter business, with the aim of making it a top three supplier in India, and the rest on the critical care business, hoping to become one of the top two anaesthetics suppliers.

(Piramal Healthcare certainly has the money to spend, having sold its Domestic Formulations business to Abbott Laboratories for $3.8 billion in 2010. Of late, indeed, it has looked increasingly like an old-fashioned conglomerate, acquiring large chunks of real estate and a stake in the Indian arm of mobile phone operator Vodafone.)

Piramal Pharma Solutions has invested heavily in ADC capabilities at Grangemouth

In the past year, Klement said, the three primary business units of Piramal Pharma Solutions - API Services, Formulation Services and API Generics - have been streamlined to improve the customer experience. Internal processes have been redesigned around customer needs and two strategic marketing teams have been formed to look at such key issues as emerging customer requirements.

"Whilst the facility map and technical capabilities look broadly the same, our intent is that our customers will experience a more focused service," he said. "We will deliver maximum value to our customer through utilising the power and capabilities of the whole network to design and deliver a reliable supply chain."

Last December, Piramal acquired O2h Solutions, a Cambridge-based supplier of medicinal and synthetic chemistry and in vitro ADMET services whose Indian base happened to be right next to its Ahmedabad site. This has recently been rebranded as Piramal Discovery Solutions and took on a series of new projects over the summer. "We have since looked at other potential acquisitions but had to walk away because the deals didn't make sense," Klement revealed.

Specific investments for the near term future will include additional API capacity in India by streamlining existing capabilities and improved asset utilisation at the early phase assets there. Among other things, the company created extra capacity by shifting non-regulated intermediates from the Ennore site to create GMP capacity.

Piramal also plans "substantial" investment at Morpeth, including a fluid bed processor a hormonal coater and a packaging line to meet demand from US clients. It is also looking at adding SafeBridge Class III isolation, having looked at its current requirements and found that it would be needed for the third synthetic step in a key project; the first two are done at an Indian site.

Some of the most substantial investment, however, has been at Grangemouth. Here, Piramal has spent about €900,000 in the past four years, most recently adding a single suite incorporating previously separate cell-based assay, microbiology and culture and QC analytical labs, new documentation archives, offices and training facilities. The QC labs accounted for about one third of the spend.

"Grangemouth has a good track record in ADC development and scale-up, having made over 300 batches of over 30 NCEs at 2-500 gram scales. It is now supporting commercial manufacture of ADC products," Klement said.

The company has worked with 11 of the top 16 global ADC producers, one of whom has just received FDA approval for the first marketed ADC-based drug. Several more are in late phase trials, with about a dozen more in Phase I and over 20 at the pre-clinical stage. Huge growth potential is envisaged for ADCs, which are widely seen as the next generation in oncology drugs.

Hikal will open its new API facility by June 2012

Dr Reddy's CPS, meanwhile, is also a strategic business unit of a much larger company. Dr Reddy's itself is one of India's largest drugs firms, turning over $1.7 billion in the 2011 fiscal year after ten years of 25%/year growth and was the first Indian company to be listed on the New York Stock Exchange. It employs 14,000 people, about 2,000 outside India, including 1,400 scientists in R&D.

Dr Reddy's has eight API and seven finished dosage form (FDF) facilities in India. In addition to those in India, it has dedicated R&D facilities in Cambridge, UK, and Cuernavaca, Mexico (which came under intense FDA scrutiny this year), and a pilot plant in Mirfield, UK. Both the UK facilities came from acquiring most of the former Dowpharma. The company also claims to be the world's second largest API manufacturer, with 170 US Drug Master Files.

Dr Reddy's CPS says that it "draws on Dr Reddy's expertise and capabilities in pharmaceutical development and manufacturing to provide innovators with customised services and solutions for starting materials, intermediates, APIs and FDFs". It supplies innovators in Big Pharma, Emerging Pharma and biotech companies all across the world.

Manoj Mehrotra, head of the CPS business, said at CPhI that the business mix divides roughly 2:1 between the Global Generics and Pharma Services & Active Ingredients units. The third unit, Proprietary Products, is a small business that is currently in incubation mode.

The division has also changed its strategy in the past year. Dr Reddy's CPS now presents itself under the slogan 'More than meets the eye'. As well as being a pun on the fact that the Mirfield site makes a major API for Alcon Laboratories's Travatan, the glaucoma treatment, he said "it means that if you want to know CPS, you need to scratch beneath the surface."

"This is far more than a standard generic APIs company," Mehrotra said. "We are a CMO but with the strength of a large integrated company. Customers get access to a portfolio of over 100 APIs and over 150 finished dosage forms and large manufacturing capabilities, but with a CMO attached. It is a unique combination that is too little known about in the pharmaceuticals industry."

Dr Reddy's CPS now defines itself by its activity 'wheel' (Figure 1). This shows how it differentiates itself through both hard and soft capabilities, plus some expanding technology areas, such as PEGs for the conjugation of peptides, proteins and antibody fragments - it is one of only two companies to be back-integrated into the alcohol mPEG-OH - chiral chemistry, high potency APIs, steroids, prostaglandins, complex carbohydrate chemistry, formulation and tailored release profiles.

Figure 1 - Dr Reddy's CPS wheel of activity

In 2011, Dr Reddy's CPS moved the Chirotech Technology Centre in Cambridge, UK, to a new R&D centre that has more scientists and is active in more fields, notably PEGs and chiral chemistry. The latter refers mainly to asymmetric chemocatalysis, though biocatalysis and diasteremeric resolution are also core capabilities. Prostaglandins are another speciality.

"The objective is not to be just an Indian company any more. If companies want development done in the West, we can offer that too," Mehrota said.  In 2012, Dr Reddy's will also be expanding Mirfield, which historically made prostaglandins, chiral intermediates and a head lice treatment. This will add the capability of making clinical quantities of APIs to GMP, as well as more capacity.

The company has also recruited heavily in Europe. Recent arrivals include Christian Jones from Prosonix in the UK and Dr Michael Quirmbach from Switzerland's Solvias as managers of sales and business development for Europe, plus Dr Garrett Hoge, an eminent chiral chemist who was formerly with Pfizer and Solvias, as chiral technology manager at Cambridge.

When Dr Reddy's first began CMO work, Mehrotra admitted, there was some customer resistance, but this has faded as the company succeeded in separating out CPS's offerings within the umbrella of a large company. Now, some who refused point blank to speak with it two or three years ago are coming to it, some for its niche capabilities, some because it has acquired former suppliers.

"We are not a typical low-cost Indian CMO. We are a global CMO with a low cost footprint in India and niche technology areas," he said. Many competitors are going in the opposite direction towards generics, but Dr Reddy's CPS is increasingly finding customers appreciative of what it can offer as a CMO integrated into a Big Pharma company.

Finally Hikal, another Indian supplier of APIs and pharmaceutical intermediates announced at CPhI Worldwide 2011 that it had started construction of a new multi-purpose, multi-product API plant that is due to be operational by June 2012. The location was not disclosed; Hikal has facilities dotted across India, at Taloja and Mahad, Maharashtra, Panoli in Gujarat and Jigani near Bangalore, plus its Acoris Research CRO facility in Pune.

The new plant will house 32 stainless steel and glass-lined 6-10 m³ reactors, for a total capacity of 300 m³, with agitated nutsch filters, centrifuges and various types of dryers. They will run in two parallel streams running simultaneously for quick changeovers. Key reactions will include nitration, liquid phase Oppenauer oxidation, Swern oxidation, the Suzuki reaction, chiral synthesis, Mannich and Friedel-Craft reactions, 1,3 polar addition and hetero Diels-Alder reactions.

 

 

From Online Issue: December 2011