API maker ScinoPharm is to invest in cancer drug and injectables capacity, citing current global shortages as a driver for its decision.
The Taiwan-based CMO (contract manufacturing organisation) announced last week that it will spend NT$1.1bn ($37.6m) on a production facility for high-potency actives for injectable cancer drugs at the Tainan Science Park, which is expected to be operational in 2014.
Company CEO Jo Shen said: “The global demand for oncological injectable production capacity far exceeds the supply. Many international generic customers of ours have been eagerly searching for partners who can provide a high quality and stable supply of oncological injectable drug products.”
The new plant will also feature capacity for the production of prefilled syringes for non-cytotoxic drugs which ScinoPharm said was added “as a response to the severe shortage of capacity in the market.”
The comments about shortages and supply stability are timely given current public and regulatory concerns. The prevailing opinion is that recent drug shortages are due -at least in part - to a lack of global capacity that has made Pharmas rely too heavily on too few specialist contractors.
Boehringer Ingelheim-owned US CMO Ben Venue - and its injectable drug manufacturing subsidiary Bedford Labs - are perhaps the highest-profile examples of the difficulties that such overreliance can cause.
Problems at Ben Venue’s facility in Ohio resulted in recalls of cancer meds sold by Genzyme and J&J and also prompted regulators on both sides of the Atlantic to ask Pharmas to do more to prevent shortages – including that they diversify their supplier bases .
Clearly pressure to seek backup or multiple suppliers in an area where there is a shortage of capacity will be a boon for firms – like ScinoPharm – that have the specialist technology to do this type of manufacturing.
A similar observation was made by equity analyst Time Evans and Patheon CEO James Mullen at the Wells Fargo Securities Healthcare Conference last month .
Evans said: “Regulatory pressures [will] force a rethinking of how drugs are manufactured,” while Mullen said in his presentation that warning letters to major biopharma firms are creating an opportunity for Patheon.
The investment is the third ScinoPharm has made since its IPO on the Taiwan stock-exchange last year , when it announced its intention to add peptide production capacity at its base in the country and construct an APOI plant in Jiangsu, China.