Top 10: Investments & Moves in Bio/Pharma Manufacturing

What are the key developments in bio/pharmaceutical manufacturing? From large-scale biomanufacturing projects, to mergers and acquisitions involving cell and gene therapy production, to continuous manufacturing, DCAT Value Chain Insights looks at significant investments and other key activity. 

A Top 10 list for key developments in biopharmaceutical and pharmaceutical manufacturing 

1. Manufacturing investment in cell and gene therapies—pharma companies. Although a niche modality, cell and gene therapies have been a recent active area of investment by pharmaceutical companies to add products to their pipelines and manufacturing capabilities. Facing limited manufacturing capacity, several of the large bio/pharmaceutical companies have added manufacturing capabilities for cell and gene therapies as part of larger-scale acquisitions. A summary of these deals is outlined below. 

Novartis. Earlier this year (2019), Novartis acquired CELLforCURE, a CDMO of cell and gene therapies in Europe, from LFB, a French pharmaceutical company. The acquisition included a cell and gene manufacturing facility located outside of Paris in Les Ulis, France and the related adjacent land. The site joins Novartis’ network of cell and gene therapy sites that include sites in Morris Plains, New Jersey and Stein, Switzerland.

In 2018, Novartis made a large play in gene therapy with its $8.9-billion acquisition of AveXis, a Bannockburn, Illinois-headquartered clinical-stage gene-therapy company. Earlier this year (April 2019), AveXis announced it had agreed to purchase an advanced biologics therapy manufacturing campus in Longmont, Colorado, to expand its manufacturing capacity for its gene therapy, Zolgensma (onasemnogene abeparvovec-xioi). The Longmont facility will add to AveXis’ manufacturing network. AveXis has a manufacturing facility in Illinois, is building a manufacturing facility in North Carolina that is scheduled to be operational in 2020, and is expanding its product-development capacity at its San Diego facility.

Gilead Sciences. Following its $11.9-billion acquisition in 2017 of Kite Pharma, a developer of cell therapies, Gilead announced plans earlier this year (July 2019) for a 67,000-square-foot facility in Oceanside, California for the development and manufacturing of viral vectors. Viral vectors are a starting material in the production of cell therapies. Kite’s facility will be constructed within an existing Gilead biologics operations facility in Oceanside and will become part of Kite’s commercial manufacturing network that includes sites in California, Maryland and the Netherlands. Earlier this year (April 2019), Kite announced plans for a new facility in Frederick County, Maryland, to produce cell therapies. The 20-acre site will expand Kite’s ability to manufacture a variety of chimeric antigen receptor T cell (CAR T) therapies, including Yescarta (axicabtagene ciloleucel), Kite’s first commercially available CAR T cancer therapy, and investigational T cell receptor cell therapies being evaluated in solid tumors.

Bristol-Myers Squibb and Celgene. Earlier this year (January 2019), Bristol-Myers Squibb (BMS) agreed to acquire Celgene for $74 billion in a deal that is expected to close by the end of 2019. With the acquisition, BMS will gain cell-therapy manufacturing capabilities. In 2018, Celgene acquired Juno Therapeutics, a company developing cell therapies and immunotherapies, for $9 billion, which included a cell-therapy manufacturing center in Bothell, Washington. In February 2018, Celgene reported that it completed the first phase of a new immunotherapy manufacturing center for CAR T therapies at its Summit West campus in New Jersey.

Roche. Earlier this year (February 2019), Roche agreed to acquire Spark Therapeutics, a commercial gene-therapy company based in Philadelphia, for $4.3 billion; the deal is still pending regulatory review. The acquisition would net Roche a gene-therapy manufacturing facility.

Pfizer. Last month (August 2019), Pfizer reported that it is investing an additional $500 million in the construction of its gene-therapy manufacturing facility in Sanford, North Carolina. Last month Pfizer completed the first phase of the expansion project at the facility in Sanford.

2. Manufacturing investment in cell and gene therapies—CDMOs/CMOs. Adding capabilities in cell and gene therapy production has also been a target of certain contract development and manufacturing organizations/contract manufacturing organizations (CDMOs/CMOs). Key deals completed this year to build manufacturing capabilities in cell and gene therapies are Catalent’s $1.2-billion acquisition of Paragon Bioservices, a Baltimore, Maryland-based contract provider of viral vector development and manufacturing services for gene therapies, and Thermo Fisher Scientific’s $1.7-billion acquisition of Brammer Bio, a CDMO of viral vector manufacturing for gene and cell therapies.

Table I: DCAT Value Chain Insights: Top 10 Investments and Activity in Bio/Pharmaceutical Manufacturing
Ranking Issue
Number 1 Manufacturing investment in cell and gene therapies—pharma companies.
Number 2 Manufacturing investment in cell and gene therapies—CDMOs/CMOs.
Number 3 Fujifilm’s $890-million acquisition of Biogen’s large-scale biomanufacturing facility.
Number 4 High-potency manufacturing investments.
Number 5 Continuous manufacturing advances (regulatory).
Number 6 Continuous manufacturing advances (company activity).
Number 7 End-to-end pharmaceutical service business models.
Number 8 European Union’s reforms of patent rules for APIs.
Number 9 Increased Congressional focus on FDA’s inspection process for foreign-drug manufacturing facilities.
Number 10 Reduction of carbon footprint in bio/pharma production.

Source: Company information, FDA, US Department of Health and Human Services, and the European Council.

3. Fujifilm’s $890-million acquisition of Biogen’s large-scale biomanufacturing facility. Another large-scale deal by a CDMO was Fujifilm’s  acquisition of Biogen’s large-scale biologics manufacturing site in Hillerød, Denmark, near Copenhagen, for approximately $890 million, in a deal completed last month (August 2019). The site now becomes the fourth biopharmaceutical manufacturing site of Fujifilm Diosynth Biotechnologies, a subsidiary of Fujifilm and biologics CDMO.

4. High-potency manufacturing investments. High-potency manufacturing, which requires specialized high-containment manufacturing conditions, has been an active investment by certain CDMOs/CMOs for both active pharmaceutical ingredients (APIs) and drug products. A summary of some recent investments is highlighted below. 

Cambrex. Earlier this year (April 2019), Cambrex completed the construction of a $24-million highly potent API (HPAPI) manufacturing facility at its site in Charles City, Iowa. The 6,000-square foot facility was scheduled to commence customer projects in May 2019.

Lonza. Lonza is proceeding with a multi-year (2017 to 2020) CHF 100-million ($100 million) investment for HPAPIs and for increased automation in small-molecule manufacturing in its site in Visp, Switzerland, the largest production site in the company. The investments center on HPAPIs and “Manufacturing 4.0” to enhance automation and digitalization in its small-molecule manufacturing operations. In July (2019), Lonza began the expansion of its bioconjugation facility in Visp that will span the next two years. The additional capacity will provide launch and commercial manufacturing and will serve the clinical-phase market for bioconjugates. In June (2019), the company announced an expansion of its Visp site to increase HPAPI capacity. The expansion adds two 4-square-meter multipurpose production lines for HPAPI manufacturing to complement Lonza’s existing range of production capacities from lab to large commercial scale. A subsequent capacity optimization will also improve Lonza’s flexibility in existing production lines. The HPAPI capacity expansion is expected to be on line by July 2020.

Seqens. Seqens is investing approximately $30 million for high-potency manufacturing for a new facility, which will consist of two units, located in the same building, a smaller one named UPP10 and a larger one named UPP30, to handle production of potent molecules from tens of kilograms to several hundreds. The new facility is in Villeneuve-La-Garenne, France, located outside of Paris. Construction started at the beginning of this year and was scheduled to be completed in the fall of 2019.

Cerbios-Pharma. Cerbios-Pharma, a Lugano, Switzerland-based CDMO of both chemical and biological APIs, is expanding to include installation of a new production line in a building dedicated to HPAPIs to accommodate larger volumes and batch sizes. Completion is expected to be in the second half of 2020. The investment follows another investment in a new antibody drug conjugation suite. The suite is scheduled to be qualified for cGMP production during the third quarter of 2019. Total investment, including the building, utilities and equipment, corresponds to $2.5 million. Overall, the expansions are part of a $30-million multi-year investment plan in HPAPI production.

Piramal Pharma Solutions. Earlier this year (June 2019), Piramal Pharma Solutions, opened a new wing at its Riverview, Michigan site dedicated to the production of HPAPIs for a total investment of approximately $10 million.

CordenPharma. Other recent expansions include those by CordenPharma, which in 2017, acquired a former Pfizer 54,000-square-foot API manufacturing facility in Boulder, Colorado; the site specializes in the development, scale-up, optimization, and production of highly potent and cytotoxic/cytostatic APIs from development quantities to commercialization. The site complements the company’s capabilities in both HPAPI and high-potency drug-product manufacturing. 

Procos SpA. In 2018, Procos SpA added a GMP manufacturing unit dedicated to high-potency APIs at its facility in Cameri, Italy, located near Milan. The high-potency manufacturing unit is part of a larger investment and site-expansion project of $70 million that was initiated in 2014 and that was supported by Procos’ parent company, CBC Co. Ltd. Group, a privately held company based in Tokyo.

BSP Pharmaceuticals. BSP Pharmaceuticals, a Latina Scalo, Italy-based CDMO of oral solid dosage forms and injectables, is expanding high-containment capacity dedicated to oncology compounds. It is expanding existing facilities for oncology products and cytotoxics by approximately 30,000 square feet to increase its total conjugation capacity of antibody drug conjugates (ADCs) to 200 kilograms of monoclonal antibodies per annum. The company is also expanding injectable drug-product capacity by 25% through the addition of  5 million lyophilized vials to its current capacity of 20 million lyophilized vials per annum. It is also adding new capacity to support production of immunotherapies. The company has completed the construction of two new buildings with a footprint of approximately 150,000 square feet to allow for up to five GMP suites to manufacture injectable drug products and to include approximately 30,000 square feet to generate the utilities needed to feed the new plant. The new capacities will be available by the end of 2020

Ajinomoto Althea. In August 2018, Ajinomoto Althea, a San Diego, California-headquartered CDMO, opened a new antibody drug conjugate and highly potent fill/finish facility near its existing campus in San Diego. The 57,000-square-foot facility manufacturing facility includes areas dedicated to bioconjugation, formulation, purification, quality control, and sterile fill/finish including lyophilization. The facility can accommodate early clinical phase through commercially approved programs.

5. Continuous manufacturing advances (regulatory). Although batch manufacturing is the dominant mode of manufacturing in the pharmaceutical industry, the industry, with support from the US Food and Drug Administration (FDA), is making some progress in investigating and using continuous manufacturing. The FDA’s support for the adoption of new technologies, such as continuous manufacturing, is crucial as the industry needs regulatory support and guidance to consider the adoption of new technology. With the industry’s installed manufacturing base still in batch manufacturing and further investment required in equipment, analytical technology, such as process analytical technology (PAT) and technical training for continuous manufacturing, the industry has been proceeding on a measured and limited basis in adopting continuous manufacturing.

To support these efforts, earlier this year (February 2019), the FDA issued draft guidance, Quality Considerations for Continuous Manufacturing, to specify key quality considerations and provide recommendations for how applicants should address key considerations in new drug applications (NDAs), abbreviated new drug applications (ANDAs), and supplemental NDAs and ANDAs for small-molecule, solid oral drug products that are produced via a continuous manufacturing process. The draft guidance clarifies the FDA’s current thinking regarding continuous manufacturing approaches to help resolve potential issues some companies may have as they consider implementation, such as concerns that use of new continuous manufacturing technology might impact the time the FDA takes to assess applications for new products and what is required from a regulatory view for switching from a batch to a continuous-manufacturing process for existing products.

To date, there are four companies manufacturing five approved products using continuous manufacturing, according to information from the FDA, with approximately 20 additional companies, both brand and generic, engaging with the FDA in their efforts to develop and implement continuous manufacturing processes.

The FDA also proposed development of a guidance on continuous manufacturing to the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). The ICH assembly accepted the FDA’s proposal and set a goal of finalizing the guideline by 2021. In 2018, ICH endorsed the development of the guideline, ICH Q13, Continuous Manufacturing of Drug Substances and Drug Products. ICH has formed an Expert Working Group for the development of the guideline with the goal of having a draft guideline available for public consultation by June 2020. ICH anticipates it would take three years to develop with the adoption of a final guideline expected in November 2021.

6. Continuous manufacturing advances (company activity). Several pharmaceutical companies are advancing projects in continuous manufacturing. Earlier this year (August 2019), GlaxoSmithKline (GSK) opened two continuous pharmaceutical manufacturing facilities in Jurong, Singapore following a S$130-million (US $96-million) investment.The new facilities include two continuous manufacturing facilities and an expansion of one of the site’s production buildings. One of the new continuous manufacturing facilities is part of GSK’s Jurong’s research and development pilot plant, where new chemical entities (NCE) are developed and scaled up. The first NCE to be developed at the new facility will be daprodustat, an oral hypoxia-inducible factor prolyl hydroxylase inhibitor for treating anemia associated with chronic kidney disease, which is currently under development. The expansion of the production building, which makes APIs for HIV medicines, will increase GSK’s capability to produce Tivicay (dolutegravir sodium), a GSK drug for treating HIV.

In another continuous manufacturing project, GSK, along with AstraZeneca, is partnering with the Center for Process Innovation (CPI), the process manufacturing arm of the UK government’s network of Catapult centers that are designed to encourage innovation, to establish a continuous wet-granulation manufacturing facility for small-scale development of oral solid dosage pharmaceuticals. CPI is also working closely with a number of suppliers, including GEA Group, Perceptive Engineering, Siemens, Innopharma Labs, and Kaiser Optical Systems, to create the facility, which will be based at CPI’s existing facilities at NETPark, County Durham in the UK. CPI reported earlier this year (April 2019) that a prototype of the facility has been constructed, and work is continuing on the integration of sensors and controls with the manufacturing equipment.

CONTINUUS Pharmaceuticals, a spin-out from a collaboration between the Massachusetts Institute of Technology and Novartis in continuous manufacturing, recently completed final pilot-plant studies that integrate synthesis with formulation in the same continuous line and is anticipating the build-out of a commercial manufacturing facility to begin later this year. The company was founded in 2012 by the company’s current CEO, Salvatore Mascia, a former Strategic Project Manager at the Novartis–MIT Center for Continuous Manufacturing, where he led the integration of the first end-to-end (API and drug product) continuous manufacturing process for pharmaceuticals.

7. End-to-end pharmaceutical service business models. A continuing trend in the CDMO/CMO market is the adoption of end-to-end service models, meaning a single CDMO/CMO providing development and manufacturing services for both drug substances and drug products. The past several years has seen several large-scale acquisitions by CDMOs/CMOs to build end-to-end capabilities. Most recently, Cambrex, made a large play in becoming an end-to-end provider through its $425-million acquisition of Halo Pharma in 2018 and its $252-million acquisition of Avista Pharma Solutions earlier this year (January 2019). The addition of Halo added formulation development and finished-dosage manufacturing capabilities to Cambrex’s existing global small-molecule API manufacturing network. Avista offers a suite of services ranging from API and drug-product development and cGMP manufacturing to stand-alone analytical, microbiology testing and solid-state sciences.

The end-to-end model was also pursued and implemented by other companies with key recent deals: Lonza’s $5.5-billion acquisition of Capsugel, a provider of dosage forms, and Catalent’s $950-million acquisition of Cook Pharmica, a CDMO of biologic drug substances and parenteral drug products, both completed in 2017. They joined other established end-to-end providers of APIs and drug products, such as Alcami, Thermo Fisher/Patheon, AMRI, CordenPharma, Siegfried, Almac, and Piramal Pharma Solutions, among others.

8. European Union’s reforms of patent rules for APIs. In a much-debated move, the European Union adopted earlier this year manufacturing waivers to supplementary protection certificates (SPCs), a move supported by generics and biosimilars producers and API manufacturers. The manufacturing waiver for SPCs has been the subject of great debate between the generics/biosimilars industry and innovator drug companies. The purpose of the original EU legislation that authorized SPCs, which was enacted in 1992, was to recompense product-development companies for the time taken to obtain regulatory approval of their medicines and give them longer market exclusivity in the form of a SPC. The SPC regulation, however, according to some, had the unintended effect of putting the European generic-drug, biosimilar, and API manufacturing industries at a competitive disadvantage vis-à-vis manufacturers producing in non-EU countries where no similar patent/SPC protection exists. 

The adoption of the new regulation for an SPC manufacturing waiver will entitle EU-based companies to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the certificate, if done either for the purpose of exporting to a non-EU market where protection has expired or never existed, or for stockpiling during the final six months of an SPC ahead of entry into the EU market. Generic and biosimilar makers will be required to notify authorities before they start production of their products at least three months in advance, meet labeling obligations to ensure that their products are not diverted to the EU, and inform their supply chains that the products are covered by the waiver and cannot be sold in the EU market before the Day-1 entry, according to information from the European Parliament.

The European Parliament approved the SPC manufacturing waiver in April 2019, and the European Council formally adopted the measure in May 2019. The waiver came into force in July 2019 and companies will be able to start manufacturing under the waiver from July 2022. 

9. Increased Congressional focus on FDA’s inspection process for foreign-drug manufacturing facilities. The FDA’s process and resources for inspecting foreign drug-manufacturing facilities is receiving increased attention by Congress. In June 2019, a bipartisan group of Congressman from the Energy and Commerce Committee of the US House of Representatives sent a letter to the US Government Accountability Office to request a review of the FDA’s drug-inspection program following a series of recent recalls of certain sartan-containing blood-pressure medications that were manufactured in China and India. The lawmakers also sent a letter to the FDA following up on an earlier request for information on the agency’s ability to ensure the safety of the drug supply chain following a series of recalls involving drugs manufactured overseas. The call to the GAO included a request to look into FDA’s high-risk inspection selection process, the quality of data the FDA relies on to select establishments for inspection as well as the number of foreign sites subject to inspection and the frequency with which the FDA inspects such sites. 

In a separate action, Senator Chuck Grassley (R-IA), Chairman of the US Senate Finance Committee, submitted a letter to US Department of Health and Human Services’ (HHS) Secretary Alex Azar and the FDA Acting Commissioner Norman Sharpless over concerns with the FDA’s foreign-drug inspection program, including the need to make unannounced FDA inspections of foreign drug-manufacturing facilities. He submitted a letter in response to the HHS’ Safe Importation Action Plan, which was released in July 2019, and which outlines two potential pathways that would lay the foundation for the importation of certain drugs originally intended for foreign markets. One pathway for implementing the Safe Importation Action Plan is through a notice of proposed rulemaking (NPRM). Current federal law allows for drug importation as long as certain conditions are met, including drug quality, record-keeping, testing, and protections against counterfeiting. The Safe Importation Action Plan notes the NPRM would list those requirements and invite proposals as to how those conditions would be met by a demonstration project. In his August letter to the HHS and the FDA, Sen. Grassley asked that such demonstration projects include unannounced inspections of foreign drug-manufacturing facilities to determine whether they meet the required API and drug quality and safety standards for sufficient record-keeping, testing, and protection against counterfeiting.

10. Reduction of carbon footprint in bio/pharma production. An ongoing goal of pharmaceutical companies is to reduce their carbon footprint in bio/pharmaceutical manufacturing. One notable announcement in this area earlier this year was from Novo Nordisk, which announced a plan, beginning in early 2020, to have its global production to be completely powered by renewable electricity, with a 10-year goal of achieving zero carbon emissions from operations and transportation.

The announcement follows a $70-million investment in a 105-megawatt dc solar energy installation to be built in Pender County, North Carolina. When completed, ground-mounted solar arrays will harvest sunlight and provide renewable electricity to all existing Novo Nordisk US offices, laboratories, and manufacturing facilities as well as support the company’s new manufacturing facility under construction in Clayton, North Carolina.

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