ChemOutsourcing: Day One

Speed Dating

Speed Dating

The pharmaceutical chemicals sector returned to the miraculously unmolested Ocean Place Resort & Spa on the Jersey Shore this week. Unlike much of the coast to the north and south, Long Branch sustained only minor damage from Sandy, which hit shortly after last year’s meeting. The place has a fresh coat of paint, and the Tiki Bar looks pretty much like the one that was there last year.

There have been a few changes, however. Tighter security. Conference sessions held in the exhibit halls, and an increased emphasis on biopharma, reflecting the growing business in biotech drugs. There was also a kind of speed dating session—a stretch of the afternoon during which Merck, Pfizer, Novartis, Celegene, Gilead Sciences, Ironwood Pharma and other drug companies large and small had representatives at round tables around which contract chemical suppliers could sit and try to break the ice. This was a hit with attendees who are always looking for customers (ie drug company decision-makers) at pharma chemical trade shows,  usually finding very few.

“Large and small” was a big theme in discussions on the exhibit floor and in one of the panel sessions (which was technically also on the exhibit floor—taking the sessions out of the conference rooms was not such a big hit with attendees). Focusing on contract work, both manufacturing and research, with biotech and emerging drug companies, the panel came to the conclusion that extra up-front planning is in order when passing work from a small drug firm to a contractor, but that the time to do that work is generally extremely tight.

“As we learned in grad school, a day in the library is worth more than a week in a lab,” said Stuart Levy, principal at SBL Chemistry Consulting, who chaired the panel. It is especially important to get the technical package in order before transferring a project to a contract manufacturing organization (CMO), he said. “You need to write up a good request for proposal and set the tone. If you don’t, trying to back-fill that later is extremely difficult.”

But windows of opportunity don’t always allow for much time in the library, said panelist Richland Tester, principal scientist at Celgene Avilomics Research. “Sometimes we are asked to do crazy things.,” he said. There is generally a deadline to deliver the next data point in a clinical trial in order to receive the next tranche of venture funding. “If you have until a particular date to do it, you have to do it,” he said. “It’s not like having a six-month timeline from a big drug company. Sometimes you don’t have that luxury.”

Time, on the other hand, is money. “I have heard clients comment that money is no object,” said panelist Cheryl D Garr, director of business development at PharmaCore. Such comments are, she noted, more often than not disingenuous.

Jeff Saunders, vice president of small drug design at Ember Therapeutics, responded that the object is value, not money.

Overall, the companies in the sector continue to be optimistic about business. James Bruno, president of consulting firm Chemical and Pharmaceutical Solutions, told me, however, that a shift is underway in the work being done, one that puts the installed manufacturing base a bit out of kilter.

“I’ve said for a number of years that I’m concerned about is what I call simple assets,” he said. “Some companies just have the wrong assets. We have large reactors when we really need smaller ones. We have big vessels that can make 100 tons when the product is only going to be two tons.” Oncology drugs and other high potency, highly active drugs make up an increasing proportion of the work being outsourced. And drug company pipelines are filling with more.

“We are still not pushing drugs out at a rate that makes everyone happy,” he says. “And if your pipeline is weak, the generic pipeline is weak.”

The current business environment in China was a prominent subject of discussion today, with a panel on the subject (see previous post The China Conundrum). More on this topic in the magazine (C&EN) soon. Another panel of interest covered “crowdsourcing,” an online, open innovation technique, as employed by Pfizer and Purdue Pharma—another topic ripe for coverage in C&EN, so I will keep my powder dry for the moment. But it’s an interesting topic at a conference like this.

And in the interest of full disclosure, this from David Zimmerman, CEO of Kalexsyn: “I am actually going to walk away from here tonight with three very good leads. Frankly, I came out of ACS  [the Society’s annual meeting in Indianapolis last week] with one!”

Author: Rick Mullin

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