LONDON—In the September issue, we ran a story with the headline “European CMOs invest heavily in containment” (use the “search our archives” window at the top of our www.ddn-news.com homepage to look for the code E091927 if you’d like to read it)—and as it happens, data and analytics company GlobalData had a bit more to say on the topic, via its report titled “PharmSource: Contract Small Molecule API Manufacturing Industry by the Numbers—2019 Edition.”
And what the firm has to say, in part, is that the news right now is particularly pleasing to management ears at several contract manufacturing organizations (CMOs)—notably AMRI, Apeloa, Cambrex, Lonza and Patheon. That is because the growing oncology pipeline is leading to increased demand for containment manufacturing, and all of those companies have multiple containment facilities.
According to GlobalData, there were 1,754 small-molecule active pharmaceutical ingredient (API) contract manufacturing facilities included in the PharmSource API report’s analysis, with 29 percent offering containment capability and 7 percent offering controlled substance capability. Containment and controlled substance capabilities are specialty offerings and defining features. AMRI, Apeloa and Patheon (owned by Thermo Fisher Scientific) are among the CMOs with the highest number of containment facilities able to handle substances such as antibiotics, high potency non-cytotoxics, cytotoxics and steroids.
If the predictions at GlobalData are right, demand for containment manufacturing will continue to increase in the future as the oncology drug development pipeline continues to grow.
The company’s latest report characterizes the contract small-molecule API manufacturing industry through a number of quantitative dimensions, including number and type of participants, containment and controlled substance capabilities. Contract small-molecule API manufacturing is critical for establishing an understanding of the small-molecule API CMO industry and features some of the largest CMOs participating in the industry, GlobalData says. In terms of geographic distribution of small-molecule API manufacturing facilities, 31 percent of U.S. small-molecule API facilities have containment capabilities, compared with 26 percent of Chinese facilities and 20 percent of those in India.
“The emerging markets of China and India provide much of the small-molecule API supply globally, as well as lower-cost labor and fewer regulations than in North America,” said Adam Bradbury, PharmSource analyst at GlobalData. “Europe makes Chinese and Indian facilities ideal for CMOs seeking small-molecule API manufacture. The savings are passed onto the consumer, and generics can be sold for cheaper in an already competitive environment.”
The U.S. opioid abuse epidemic and the resulting lawsuits against pharma companies that market opioids have made it a particularly hazardous time for such companies; for example, Insys Therapeutics and Purdue Pharma have both filed for bankruptcy.
According to GlobalData, dedicated CMOs flourish in controlled substances manufacture; however, a reduction in opioid production may negatively affect CMOs involved. AMRI, Ajinomoto, Cambrex, Johnson Matthey and Patheon are among the contractors with the largest number of controlled substance facilities.
Continued Bradbury: “Controlled substance capabilities and facility requirements can be prohibitively expensive. As such, only the largest CMOs can acquire, construct and/or maintain a controlled substance facility. Therefore, any reaction in the U.S. involving a reduction in their production will negatively affect the larger CMOs involved.”
Also, small-molecule API mergers and acquisitions activity involving CMOs between 2015 to 2018 further highlights the desirability of containment facilities, GlobalData notes—53 percent of facilities acquisitions by both dedicated and excess capacity CMOs were for facilities with containment.
“The number of high-potency new molecular entity (NME) approvals has increased over the last decade, especially for oncology kinase inhibitors,” Bradbury concludes. “This is a positive sign for CMOs as small and mid-cap companies lack the expertise for regulatory compliance and high containment facilities and seek to outsource NMEs requiring special handling.”