InterviewNew pharma standards open up China

21 April 2008 20:44  [Source: ICIS news]

By Clay Boswell

NEW YORK (ICIS news)--Higher standards in the pharmaceutical markets of China and other emerging nations have created new opportunities for producers of high-quality active pharmaceutical ingredients (APIs), a Hovione executive said on Monday.

“These markets that, 10 or 15 years ago, were not so interesting now have very good dynamics in terms of growth,” said Luis Gomes, vice-president of generics at Hovione, a Portuguese manufacturer of fine chemicals.

“At the same time, they are becoming more regulated, so it is not the Wild West anymore," he said. "They are something we have to look at now.”

Until recently, Hovione has served emerging markets only on a reactive basis, Gomes said.

As standards have risen, however, so has demand for the kind and quality of service that the company offers.

Last month’s acquisition of a 75% stake in HiSyn Pharmaceutical, a Shanghai-based API manufacturer with 180 employees, is an outgrowth of Hovione’s sourcing efforts, he added.

“For many years we felt we'd be better off being an important client of Chinese plants through contract manufacturing deals, because at that time there were many [joint ventures] going very wrong,” he said. “But now is the right time for Hovione to acquire infrastructure in China to tap into a growing market and leverage China’s manufacturing abilities.”

Hovione will invest about $5.5m (€3.5m) in HiSyn through the end of the year. The capacity of the greenfield facility, currently about 200 cubic metres, will be doubled, and the existing capacity will be upgraded.

“This is a plant where we have good capacity and space for expansion, even after this expansion,” Gomes said. “It’s clearly a facility where we think we can have cost-competitiveness in products and markets where that is an issue.”

Hovione has a long familiarity with the Chinese market, having sourced raw materials there since 1979. In 1986, the company began operations at a new API manufacturing facility in Macau, which has been inspected by the US Food and Drug Administration (FDA) every four years or so, Gomes said.

Drawing on this resource, Hovione has audited and qualified around 100 suppliers in China who supply raw materials not only to Macau, but also Hovione’s primary site in Loures, Portugal, near Lisbon, Gomes said.

($1 = €0.63)

By: Clay Boswell
+1 713 525 2653

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