25 March 2002 00:00 [Source: ICB Americas]While a number of fine chemicals companies have backed off of capital investments in the face of a softer market, a handful of midsized Swiss firms are stepping up their capabilities. New facilities and technologies for the production of active pharmaceutical ingredients (APIs) were showcased at last week's Swiss Flash Outsourcing Symposium in New York.
The inaugural Swiss Flash Out-sourcing Symposium set out to raise the profile of a number of midsized fine chemicals players, many of which have been actively investing to broaden their capabilities. "We are doing more to promote our image, especially in the US, because this is the most important market for us," says Roger LaForce, director of marketing and sales at Helsinn Group. The goal is to meet annually in conjunction with DCAT (Drug, Chemical, & Allied Trades Association) Week to highlight the activities of Swiss companies.
All four of the contract manufacturers present at the symposium--Hel-sinn, Orgamol, Rohner Fine Chemicals and Siegfried Exclusives--recently made capital investments to bolster their ability to produce kilo and full-scale APIs. For the contract research organization in attendance, Solvias AG, the event was an opportunity to highlight progress since its inception just three years ago as a spinoff from Novartis.
While the recent softness in the market has caused some companies to put projects on hold, the Swiss companies have generally gone forward, some in stages, with introducing new capacities. "Many investments were [initiated] when the market was gearing up for outsourcing," but were stopped when the waters turned rough, adds Mr. LaForce. For some firms, such as Rohner, the capital investment was a must in order to be a contender in the contract manufacturing market. For others, the investments were part of a refocusing on API manufacture, or they added a key strategic component to the company's technology portfolio.
Rohner AG is "on the verge of a fundamental transition from a dyestuff manufacturer to a contract manufacturing organization," says Peter Pollak, fine chemicals industry consultant. Rohner, part of Dynamic Synthesis, is leaping onto the scene with a SFr 80 million ($48 million) investment to construct a full-scale multipurpose cGMP facility, "cGMP Building 40". The first phase of the project, building a production site with four trains at Rohner's site near Basel, Switzerland, was initiated in March 2000. Con-struction should be complete in May and the unit is set to come on line in July. The second phase will involve investing another roughly $40 million to install eight additional trains to respond to market needs.
The plant was designed with flexibility and cost controls in mind. The company first developed a detailed computer model of the new facility that enabled Rohner to avoid many of the errors that crop up in plant construction. It also allowed for the development of an efficient maintenance program, decreased the installation time and can now be used to train operators.
"We are convinced that with multipurpose plants you can cut costs considerably," says Erich Habegger, head of technical operations at Rohner. While the company cannot pinpoint an exact savings figure, its benchmark studies have shown "tremendous cost efficiency," says Mr. Habegger. Further, the company is "happy to start in July with over 50 percent of capacity filled," Mr. Habegger states, "well within our expectations."
Zofingen, Switzerland-based Sieg-fried Exclusives has weathered the recent slight downturn in fine chemicals well and is also investing in a strong pipeline to fuel future growth. Siegfried's success can be attributed to "a consistent strategy, the quality of their assets and the quality of their people," says Mr. Pollak.
"Looking at the history of Siegfried, we have been a very conservative company on investing," says Stefan Peterli, director of US sales at Siegfried. "Over the past few years, we've been a very young and dynamic management team and we have changed that policy."
The company sold off some of its noncore assets and reinvested the cash to update and expand its production capabilities. Last December, the company completed construction of a new development building dedicated to its pharmaceutical development platform that contains a new kilo lab and pilot plant for chemical development. Start-up of the new pilot plant and kilo lab, which represent an investment of SFr 38 million ($22 million), is slated for June.
The kilo lab/pilot plant was built to avoid cross-contamination, with the capabilities for each unit to operate independently, allowing for up to four projects or four chemical steps to run simultaneously.
Helsinn, based in Biasca, Switzer-land, is banking on a growing trend toward high potency active ingredients (HPAIs) in pharmaceutical development. In the last several years, the company has significantly expanded its capabilities. Most recently, Helsinn Chemicals SA spent SFr 40 million ($23 million) to construct a new cGMP manufacturing facility at its Biasca site, adding 40 cubic meters of capacity to the existing 46 cubic meters at the site. The plant has both API and HPAI manufacturing capabilities.
In May 2000, Helsinn Advanced Synthesis SA started up a new cGMP facility dedicated to HPAI manufacture at the Biasca site. The site manufactures Helsinn's drug Palonosetron as well as HPAIs for other companies.
According to Helsinn, just 5 percent of the APIs in development were considered highly potent in 1990, but today over 30 percent of the manipulated APIs fall into the highly potent category. Its two new facilities in Biasca, together with its site in Ireland, tie into its niche strategy to become a leader in the area of HPAI custom manufacturing.
Evionnaz, Switzerland-based Orga-mol recently installed a fully validated kilo lab adjacent to its Swiss pilot plant. Operations at the plant began in January. "It is aimed at offering our customers the possibility of rapidly obtaining small quantities of substances for toxicology or preclinical studies," says Jean-Pierre Burion, commercial director of Orgamol. He adds that there is room at the site to add reactor trains.
In 2000, Orgamol started operations of a second building at its French site, giving it a second phosgene generator. The same year, the company installed a 650 L Hastelloy cryogenic reactor in its Swiss pilot plant, followed by a 4,000 L reactor at the French site. Both Orgamol Switzerland and Orgamol France have their own fully validated phosgene generators, with a capacity of 200 kilo per hour and 300 kilo per hour, respectively.
While others are putting steel into the ground, contract researcher Solvias has focused its resources on its brainpower. Solvias was formed in 1999 as a spinoff of Novartis, and has since created a business around providing catalytic methods throughout each stage of a drug's life cycle.
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