Development services shake-up for Rhodia

- Last updated on GMT

Related tags: Rhodia, Pharmacology, Pharmaceutical drug, Pharmaceutical industry

After a difficult period which has seen the departure of its chief
executive and first-half loss of €150 million, Rhodia took the
opportunity presented by the CphI meeting in Frankfurt, Germany, to
reassert its commitment to the pharmaceutical market and insist
that, for the three core units make up Rhodia Pharma Solutions,
business development is continuing.

After a difficult period which has seen the departure of its chief executive and first-half loss of €150 million, Rhodia took the opportunity presented by the CphI meeting in Frankfurt, Germany, to reassert its commitment to the pharmaceutical market and insist that, for the three core units make up Rhodia Pharma Solutions, business development is continuing.

Evidence for that commitment was provided by Rhodia's announcement that it is to consolidate the US activities in its development services unit into a new 101,000 square-foot purpose built facility at DuPont Pharmaceuticals' site at Chambers, New Jersy that is due to come on-line in early 2004.

The decision provides an object example of Rhodia's commitment to Pharma and also the company's perception of the drug industry marketplace. Nick Green, president of RPS, believes that while the market itself remains tough there are encouraging signs of an up-tick in the industry's fortunes. He pointed out that, in the last 12 months, the number of New Chemical Entities reaching the market have reached the level approved by the US Food and Drug Adminisation (FDA) in the whole of last year.

Should this view translate to an actual increase in 2003, it at least provides relief from the relentless decline in annual NCE approvals since the late 1990s, and could reflect a firming of the opportunity for companies involved in developing services. Big pharma pipelines are staring to look more encouraging,"​ said Green.

In addition, he noted that along with Rhodia other companies have started 're-sizing' their activities to deal with the current supply and demand problem in the market place. Rhodia's own efforts in this area will complete by the end of the financial year, according to Green. Meanwhile, signs of the recovery in the financial markets are also encouraging and could indicate a resurgence in funding for emerging pharma companies.

For the development services business, the new facility signals the end of production at Rhodia's Malvern-based production unit, although both sites will run in parallel until the transfer of projects can be completed. The company's Boston facility closed in August.

The Chambers site, latterly operated by Bristol-Myers Squibb, contains 11 synthetic, four analytic and four kilo-scale laboratories, as well as 17 reactors across six sites, ranging from 30 gallons each. It also bolsters Rhodia's technology portfolio with the addition of additional cryogenic, phosgenation and hydrogenation capabilities.

Green noted that the facility can cope with preclinical and Phase I-III clinical trial supplies, nd also potentially small-scale active pharmaceutical ingredient (API) manufacture. Utilisation will likely be light for the first few months, said Green, but he is confident that the potential is there to make full use of the unit.

He also stressed that it is important to segment when analysing the custom manufacturing and development services market. While there has clearly been a downturn of late, growth in projects spanning the preclinical to Phase Iia/IIb are still holding up, although of course nowhere near the bonanza years in the late 19900s, when NCE hauls topped 50 a year.

The decision to consolidate Rhodia's US activities in development services very much reflects the fact that this market is driven by North America. It also provides much-needed space for technology expansion compared to the smaller, semi-residential Malvern site. Another key factor is that Rhodia can now cover an entire project, from preclinical through the clinical phase, at a single facility and removes the need for switching processes between units.

"The transfer is a significant one for the industry,"​ he noted. Also, given the trend for new APIs to exhibit higher potency, the company can hold on to the projects for longer using the new plant.

Rhodia would not give any information on the cost associated with taking over the facility, which has been taken on a 10 year lease in the first instance.

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