Actavis gains new contract manufacturing capabilities in India
manufacturing capabilities along the way with the purchase of a
division of Sanmar Specialty Chemicals (SSCL).
The acquired active pharmaceutical ingredients (API) division mainly conducts API contract manufacturing for both the Indian and international pharmaceutical markets. The Icelandic generics giant bought the business with the primary goal of gradually shifting the majority of production away from contract manufacturing and towards the manufacturing of its own APIs for its own generics drugs in order to cut costs. "The API component currently accounts for a high percentage of the total cost of making our generic drugs, roughly 30 per cent," Actavis spokesperson Halldor Kristmannsson told Outsourcing-Pharma.com. "Currently we source a big proportion of our APIs from contract manufacturers in India and China, although if we can make the API in our own in-house facility in India we can reduce our cost base." Some of its APIs will still continue to be sourced externally, however, as the company will still not have the capacity to cope with all the manufacturing on its own. However, despite this new focus, Actavis does not plan to let the contract manufacturing part of the acquired business fall by the wayside. "As well as focusing on our in-house API production, we will continue to grow the contract services part of the business because in terms of volume this is the smart thing to do," said Kristmannsson. "The larger the volumes of API we are producing, the more we can reduce our cost base for our customers and also improve our margins." Meanwhile, Kristmannsson said that the new SSCL business is also complimentary to Actavis' existing operations in India, providing the "first link in the value chain" for its drug manufacturing. The group has existing API and finished dosage manufacturing capabilities in Chennai, acquired from Grandix Pharmaceuticals in December 2006, as well as an API development facility and a contract research business, Lotus Laboratories, in Bangalore. Lotus, acquired in February 2005, undertakes bioequivalence testing of finished dosages.
