| PharmSource ADVANTAGE: Sourcing Intelligence for Intelligent Sourcing |
October 2010
In This Issue
India Takes a Step Backward on IP Rights
PharmSource Special Report: Top Dose CMOs by Number of NDA and BLA Approvals
Business Conditions: Services Industry Stabilizes in Q2
Contractor Profile: ABC Laboratories
PharmSource ADVANTAGE Free Test-Drive Offer
| Welcome to the PharmSource Advantage Briefing! |
Welcome to the October 2010 issue of the PharmSource ADVANTAGE Briefing, a complimentary newsletter designed to provide actionable intelligence to bio/pharmaceutical and contract service professionals. Inside each issue, you will find a snapshot of the intelligence packed into our flagship newsletters, Bio/Pharmaceutical Outsourcing Report and Emerging Markets Outsourcing Report, along with a company profile developed from our comprehensive PharmSource ADVANTAGE contractor database.
This month, we discuss the Indian government’s considerations for strengthening the country’s compulsory licensing provision. In addition, we analyze the second quarter performance of publicly traded contract service providers. We also profile Analytical Bio-Chemistry (ABC) Laboratories, which recently completed an expansion of its facility in Columbia, Mo., USA. And don’t miss the information on our latest report, Top Dose CMOs by Number of NDA and BLA Approvals.
Enjoy the issue!
| Feature Story |
India Takes a Step Backward on IP Rights
The Indian Department of Industrial Policy and Promotion (DIPP) released a document outlining its considerations for strengthening the country’s compulsory licensing provision. Compulsory licensing provides governments with leeway to allow third parties to manufacture patented pharmaceuticals without the consent of the patent owner. According to both the Doha Declaration and the WHO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, this provision is normally reserved for national emergencies and other circumstances of extreme urgency and anti-competitive practices.
Initially designed to provide a balance between access to new treatments and promotion of drug innovation, this licensing provision can be invoked only after several other conditions have been met. For example, the drug must be used for public, noncommercial use; the product must be produced predominantly to supply the domestic market; there must have been an attempt to seek a voluntary license first; remuneration must still be paid to the patent holder; and the compulsory license must be nonexclusive such that the patent holder can continue to produce the drug as well.
“This [DIPP] paper seems to take a predetermined point of view with a broad opinion on when these [compulsory licensing provisions] can be used. In the industry, these are only to be used in the direst of situations,” explained Gregory Kalbaugh, director and counsel at the US-India Business Council. “The situations in which these should apply are few and far between.”
The DIPP, however, would like to widely extend the circumstances in which the Indian government can invoke compulsory licensing. For example, the document argues that the compulsory licensing provision can be used in the event of any public health crisis, such as the need to treat patients with cancer, diabetes and other chronic diseases. The DIPP states that the underlying principle of compulsory licensing is to “promote access to medicines for all” – including the underprivileged in India, who cannot afford expensive medicines, and those countries without sufficient manufacturing capacity to supply their populations with drugs. According to the DIPP, this would enable Indian manufacturers to supply medicines to neighboring countries. Furthermore, the DIPP argues that since the manufacture of these medicines would be fulfilling a “government purpose” to ensure the well-being of the Indian population, compulsory licensing can be freely used.
In the document, the DIPP also expressed concern over the number of foreign companies purchasing Indian pharma firms. The Indian government’s fear is that this trend, which began when Mylan Laboratories bought Hyderabad-based Matrix Laboratories for over USD 700 million in 2006, will cause drug prices to increase. Most recently, Abbott announced that it acquired Piramal Healthcare Solutions for USD 2.2 billion in an upfront payment and USD 400 million in additional payments over the next four years. Piramal’s portfolio includes a range of branded generics in several therapeutic areas, including antibiotics, respiratory, cardiovascular, pain and neuroscience.
As part of an effort to control the Indian pharma market, the DIPP document contains several recommendations for the government, including:
- Re-analyze its policy on foreign investment in pharma companies;
- Determine the root causes of high drug pricing and restricted availability in the country; and
- Expand the role of the Indian National Pharmaceutical Pricing Authority (NPPA).
Subscribers to PharmSource ADVANTAGE received an enhanced analysis of the Indian DIPP’s proposal concerning the use of compulsory licensing which includes the implications for domestic and foreign pharma companies as well as investors.
To read the full version of this article, sign-up for a free trial of PharmSource ADVANTAGE.
| PharmSource Special Report |
New Report Highlights CMO Success
A new analysis by PharmSource documents one measure of success in the CMO industry – the number of regulatory approvals gained. The report, Top Dose CMOs by Number of NDA and BLA Approvals, was published as part of the PharmSource Market Intelligence Service.
In our analysis, we found that 200 of the 487 products receiving FDA approval (NDA and BLA) during the period 2005-2010 involved a contract dose manufacturer. Of those 200, we were able to successfully identify the CMO for 185 (92%) of them.
In total, 72 different CMOs had at least one of the 200 outsourced FDA approvals granted during the 2005-2010 period. Of those 72 CMOs, 44 (60%) received only one FDA approval during the nearly five years covered by this analysis. Nearly half of the CMOs getting approvals (34 of the 72) are selling excess capacity and are not dedicated to the CMO business. The 12 companies receiving the most approvals accounted for 105 (52%) of all approvals involving a dose CMO.
The analysis suggests that we should see more industry consolidation in the coming years. Consider that more than 60% of CMOs listed in the PharmSource ADVANTAGE database that claim FDA compliance received no new FDA approvals in the period, while most CMOs that did receive an approval received only one.
The report contains a list of the 72 CMOs receiving FDA approvals and the number of approvals received by dosage form.
Click here for more information on Top Dose CMOs by Number of NDA and BLA Approvals.
| Side Effects |
Side Effects identifies CMOs and CROs that might be impacted by key events affecting their clients, including company acquisitions, product acquisitions and licenses, product approvals, late clinical product terminations, and FDA rejections.
| Contractor | Pharma Company | Event | Product | Relationship |
| Potentially Positive Side Effects | ||||
| Swiss Caps AG | Basilea Pharmaceuticals | Marketing alliance with Actelion Ltd. | Toctino (alitretinoin) | Soft gelatin capsules manufacturing |
| Catalent Pharma Solutions | BioAlliance Pharma | Loramyc launched in US | Loramyc | Solid dose manufacturing |
| Aptuit, Inc. | Celgene | Receives full marketing authorization by Japan’s Health Authority | Revlimid | Small molecule API manufacturing |
| Patheon, Inc. | Orexigen Therapeutics | Marketing alliance with Takeda Pharma | Contrave | Solid dose manufacturing |
| Diosynth Biotechnology | Pharming | BLA filed | rhC1INH | Purification only |
| Potentially Negative Side Effects | ||||
| Laureate Pharma | Seattle Genetics | Development discontinued | Lintuzumab (SGN-33) | Cell culture |
| Bachem | Transition Therapeutics | Development discontinued | TT-223 | Small molecule API manufacturing |
| PolyPeptide Laboratories | Transition Therapeutics | Development discontinued | TT-224 | Small molecule API manufacturing |
| Abbott Laboratories | ZymoGenetics | ZymoGenetics to be acquired by BMS | Recothrom (rThrombin) | Cell culture |
| Cardinal Health | ZymoGenetics | ZymoGenetics to be acquired by BMS | Recothrom (rThrombin) | Logistics and shipping |
Source: The PharmSource Lead Sheet
| Business Conditions |
Services Industry Stabilizes in Q2
Performance by publicly traded contract services providers in the first half (H1) of 2010 indicated that most of the industry has at least steadied, if not resumed robust growth. The most promising news was from the API manufacturers. The group was up 3% for H1, thanks to strong performance in the second quarter (Q2). API sector performance was pulled down by Lonza, which accounted for 30% of reported revenues in the sector and which reported a revenue decline of 7% from H1 2009.
CMC providers reported modest but positive results. CMC services comparisons suffer from the fact that Catalent had not yet reported at the time of this report. Revenues for the other reporting companies were up 4% for the quarter and 5% for H1 (which includes Catalent’s Q1 results), thanks largely to good performance in Patheon’s commercial manufacturing operations.
Revenues at clinical CROs also grew modestly but positively, up 3% for the quarter and H1. Revenues at the four largest public CROs (PPD, Covance, Icon and Parexel) had mostly low single-digit growth, owing to study delays and cancellations (and their large size, which makes rapid growth difficult). Performance at their midsize competition was quite mixed, with Omnicare and Kendle suffering sharp declines while RPS, which has filed for an IPO, had growth greater than 30%.
Subscribers to PharmSource ADVANTAGE received the complete version of this article, which contains a detailed examination of the growth in each sector.
To read the full version of this article, sign-up for a free trial of PharmSource ADVANTAGE.
| PharmSource ADVANTAGE: Contractor Profile |
|
ABC Laboratories
Headquarters: Columbia, MO, USA Services:
|
Analytical Services
ABC Laboratories Completes Renovation Project
Analytical Bio-Chemistry Laboratories (ABC – Columbia, Mo., USA) completed a USD 4.5 million renovation and expansion project at its site in Columbia. ABC upgraded 27,000 square feet of laboratory space in its chemical services division and added 10,000 square feet to the facility.
Below is a part of an actual profile from the PharmSource ADVANTAGE database of contract service providers. The database provides detailed information about contractor capabilities in dose and API manufacturing, packaging services, formulation and more. Qualified companies are listed in PharmSource’s contractor database free of charge, based on their relevance to our data sets. Along with each profile, you’ll find information about known clients, mergers/acquisitions/alliances, company financials and our comprehensive archive of proprietary articles.
The PharmSource ADVANTAGE database of contract service providers can be used to create a shortlist of contractor candidates, or for benchmarking. It can help you save weeks of searching, researching and due diligence.
| ABC Laboratories |
|||
| Mergers/Acquisitions | News & Analysis | FDA Reports | Known Clients |
| Corporate Profile: | |
| Address: | 7200 E. ABC Lane Columbia, MO 65202 USA |
| Voice: | 800-538-5227 , 573-474-8579 |
| Fax: | 573-443-9033 |
| Website: | www.abclabs.com |
| E-mail: | abc@abclabs.com |
| Ownership: | Private: private equity or venture capital |
| PharmSource Commentary: | Contract Services |
| Contract Business: | |
| Business head: | Byron Hill |
| Title: | President and CEO |
| Contract revenues: | $25-49 million |
| Number of employees: | 251-500 |
| North American contact: | Tim Bilyeu Voice: 800-538-5227 Fax: 573-443-9033 E-mail: tim@abclabs.com |
| Trade shows: | AACC, AAPS Annual Meeting, ACRP, CPhI Worldwide, DIA, Informex, PDA, SOT |
| ABC Laboratories, Inc. Columbia – MO – USA Facility 7200 E. ABC Lane Columbia, MO 65202 USA Phone: 800-538-5227 Fax: 573-443-9033 abc@abclabs.com |
|
| Specifications for “Analytical chemistry and stability” | |
| Services | |
| Chemistry | |
| Cleaning validation: | Yes |
| Dosage forms: | Yes |
| Environmental testing: | Yes |
| Methods development: | Yes |
| Preformulation studies: | Yes |
| Process water: | Yes |
| Raw materials: | Yes |
| Stability storage: | Yes |
| Stability studies: | Yes |
| Project acceptance criteria | |
| Antibiotics | |
| Cephalosporin: | Yes |
| Penicillin: | Yes |
| Controlled substances | |
| DEA schedule II: | Yes |
| DEA schedule III, IV, V: | Yes |
| High potency and cytotoxic | |
| Cytotoxic materials: | Yes |
| Compliance | |
| GLP: | Yes |
| GMP: | Yes |
| High potency and cytotoxic | |
| Hormones/steroids: | Yes |
| Vaccines and viruses | |
| Vaccines-killed: | Yes |
| Vaccines-recombinant: | Yes |
| Dosage form experience | |
| Aerosols: | No |
| Metered-dose inhalers: | No |
| Other materials | |
| Radiopharmaceuticals: | Yes |
| Dosage form experience | |
| Semi-solids and liquids: | Yes |
| Solid dose – extended release: | Yes |
| Sterile liquids & parenterals: | Yes |
| Transdermals: | Yes |
| Compendial experience | |
| American Chem. Society (ACS): | Yes |
| British Pharmacopoeia (BP): | Yes |
| European Pharmacopoeia (EP): | Yes |
| Food-Chemical Codex (FCC): | No |
| Japan Pharmacopoeia (JP): | Yes |
| US Pharmacopoeia (USP): | Yes |
| Stability storage | |
| Automated monitoring/mapping: | Yes |
| Out-of-limits warning system: | Yes |
| ICH conditions | |
| -20° C freezer: | Yes |
| -70° C freezer: | Yes |
| 2-8° C refrigeration: | Yes |
| 25° C/ 60% RH: | Walk-in |
| 30° C/ 60% RH: | Walk-in |
| 40° C/ 75% RH: | Walk-in |
| Light chamber: | Yes |
| Regulatory approvals and certifications | |
| USA – FDA: | Yes |
To view the full version of this profile, sign-up for a free trial of PharmSource ADVANTAGE.
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