The New Girindus Bets on Custom Manufacturing

16 July 2001 00:00  [Source: ICB Americas]

In less than two years, Girindus AG has transformed itself from a trader of pharmaceutical and cosmetics intermediates to a manufacturer of complex APIs and pharmaceutical intermediates. To achieve its goal, the Germany-based company bought two production sites in Germany and, by assuming ownership of the Aventis chemical development and pilot plant facilities in Cincinnati, Ohio, reached across the Atlantic in January of this year.

During this same period the company also became a publicly traded entity. In May of last year, following a launch at Frankfurt, Germany's Neuer Markt, the family-owned Girindus became Girindus AG.

Primary targets for the new manufacturer are international biopharmaceutical companies who have expertise in drug discovery but maintain no in-house drug manufacturing capabilities. As part of its dramatic transformation, Girindus uses the funds generated from its IPO to make acquisitions and equip the purchased sites with a broad range of complex technologies, enabling it to serve its preferred customer base.

"We have come from being a trader to a manufacturer who is serving the biotech industry worldwide," says Fritz Link, Girindus CEO. "The market is changing very quickly, and in response we decided to get into manufacturing," he explains.

The company's first move in this new direction came in July of 1999, following the purchase of Degussa-owned Asta Medica's active APIs plant in Künsebeck, Westphalia, Germany. Mr. Link describes the plant as "pretty large," containing nearly 60 reactors and capable of handling production quantities ranging from kilo scale to multi-ton quantities.

Since this purchase, Girindus has been investing an additional á8 million annually to upgrade the site. Among the significant projects are the completion of facilities for hydrogenation, nitration, and high and low temperature reactions, the installation of a new pilot facility for the production of APIs in 200 to 500 kilo quantities and the installation of a 5,000 liter reactor. The site conforms to cGMP requirements.

Complementing its small molecule synthesis capability, in November of the same year Girindus ventured on the large molecules path. It bought, at the same site, also from Degussa, a fermentation plant. Among the completed projects are the expansion of the biotechnology facilities for producing proteins and performing biotransformations. This move allows Girindus to offer synthesis and fermentation at a single site.

What was missing at that point, Mr. Link explains, was a plant allowing the company to attract new businesses in the early drug development stages. As one consequence of the purchase of the Aventis development and pilot facilities in Cincinnati, Girindus now can offer its services as a supplier of small molecule process development and can follow with scale-ups ranging from launch to commercial production.

"When a biotech company finds a new molecule that is pharmaceutically active, they can come to us and we do the process development and then make them anything from 100 grams to up to tons," Mr. Link notes. Stressing the benefits of his seamless palette of services ranging from developmental to commercial production capability, he adds, "We have the advantage. If a customer comes to us and gives us a molecule that we should make, we have the experience to design the process from the beginning, so it will be suitable for scaling up. You don't have the typical handover going from one company to the next with each new firm designing its own process. With us you get a smooth transfer from step to step and optimization of process, which is to the customer's benefit and saves time."

Purchase of the Aventis site also came with an extended supply contract whereby Aventis contracted Girindus to provide process R&D and manufacture to support key pharmaceutical projects for three years. In support of its new position as both small-scale and large-scale manufacturer, Girindus announced in May of this year that it had been contracted by Aventis to produce an additional large quantity pharmaceutical project at its Germany-based larger-scale Künsebeck plant.

Overall, Mr. Link notes, Aventis projects occupy about 45 percent of the Cincinnati plant, with the remainder dependent on third party contracts. The company just hired additional scientists to be in position to attract new projects to the site.

One recent project is a Phase III API validation milestone contract worth up to $3.2 million with Pennsylvania-based Adolor Corp. for the development, scale-up and manufacture of demonstration batches in preparation of NDA documentation and scale-up batches in accordance with cGMP regulations. The drug, designed for pain management, is in Phase III clinical trials. The milestones are expected to be complete by April of next year. At this point, Girindus and Adolor may enter into a commercial supply agreement, subject to FDA approval, of course.

For 2000, the company reported sales of á14 million, split between its new manufacturing business, which claimed roughly á7.8 million, and its traditional trading of pharmaceutical and cosmetics ingredients, which came in at á6.2 million. The sales level for the company's trades represents a drastic decline over 1999 sales, when the trading segment came in at á13.1 million

For 2001, Girindus hopes to hit a sales mark of á20 million, with about 85 percent of sales derived from manufacturing.

In addition to trying to fill its pipelines for small molecule synthesis, the company is also developing its muscle in the area of large molecules. "We would like to participate more in the market for large molecules," Mr. Link told stockholders at the company's annual meeting in Bensberg, Germany, last month. He added that roughly one third of active ingredients currently in various phases of clinical testing are of the large molecule variety. Of immediate interest are monoclonal antibodies, Mr. Link notes, adding that he is about to enter a new large-scale development project for mammalian cells.

Overall, the company is still in a buying mode and is actively investigating possible merger and alliance options.

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