Orbus ducks out of contract manufacturing

By Phil Taylor

- Last updated on GMT

Canada’s Orbus Pharma has decided to exit the contract manufacturing business, saying that the division “posed a distraction to the core business and generated low or negative margins.”

The company also said that its cefuroxime axetil product line, as well as the Cambridge, Ontario manufacturing facility where it is made, has been put up for sale to generate cash “to support other product development.​”

The Cambridge facility first came online in 2002 and was one of the pillars of Orbus’ contract manufacturing business, making cephalosporin antibiotic ingredients for supply as active pharmaceutical ingredients (APIs) as well as on contract for third parties.

The other element of the firm’s contract manufacturing arm is the firm’s facility at the site of its Markham headquarters, which makes finished dosage forms. That plant will continue to serve Orbus’ internal manufacturing needs.

The planned sale of the Cambridge facility covers a solid oral dosage form of its cefuroxime axetil product, which is sold in Europe and the Philippines, as well as the 10,000 sq. ft. facility itself. The company has said it wants to sell both parts of the business together as part of a “going concern​.”

Orbus’ cefuroxime axetil has received marketing authorization in three European countries, with additional approvals expected in 2010. The company is also expecting Canadian market authorization early next year.

Meanwhile, the company has also put three development projects – oxcarbazepine for epilepsy, the cholesterol drug fluvastatin and amitryptiline for depression – on hold as it gauges their market potential.

Instead Orbus will push ahead with securing marketing authorisation in the US and Europe for the beta blocker metoprolol succinate, which is expected in second quarter of 2009. This product is partnered with Alfred Tiefenbacher GmbH in Germany and is the subject of a letter of intent to partner with Breckenridge Pharma of the US.

Orbus also reported a net loss of CAD 1.5m in the third quarter of 2008 on revenues of CAD 299m, up 7 per cent on the prior year. CAD 88m came from contract manufacturing.

In a statement, interim president and CEO Andrew Zaleski said: “it now appears that our expectations of becoming cash positive will not materialise until third quarter of 2011​.”

He added that the company is currently “analysing all of its activities with the view of implementing immediate changes in line with the current financial capacity of the business.​”

Related topics: Contract Manufacturing