Tablets & Capsules

TC0316

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Tablets & Capsules March 2016 11 I outsourcing Solid dosage outsourcing: Mergers, expansions, and new technologies Matthew Knopp Editor As the number of "virtual" companies grows and as Big Pharma shifts away from fixed infrastructure, CDMOs are shouldering more of the work load in product development and manufacture. This article summarizes how four companies with a strong presence in solid dosage forms—Capsugel, Metrics Contract Services, Patheon, and Rottendorf—are capitalizing on this new business and technological environment. n the past, companies we now call contract development and manufacturing organizations (CDMOs) were seen as hired hands. Some offered niche technologies and exper- tise, while others focused on clinical or commercial manu- facturing. But today's CDMOs are larger, more diversified, and offer more services than ever. Capsugel, Morristown, NJ, is a good example of how the industry has evolved. It's one the oldest and largest sup- pliers of empty hard capsules but until recently, it offered few product development or manufacturing services. Its transformation began in 2011 after KKR, an investment firm, bought the company from Pfizer and launched its Dosage Form Solutions (DFS) business. In March 2013, it acquired Scotland's Encap Drug Delivery, giving it more expertise in liquid/lipid-filled for- mulations and a commercial manufacturing facility. In October 2013, it acquired Bend Research, Bend, OR, which specializes in enhancing bioavailability and modifying API release using spray-dried dispersions and hot-melt extru- sion. In January, Capsugel acquired Xcelience, Tampa, FL, which specializes in formulation development and the man- ufacture, packaging, and distribution of clinical trial sup- plies. It also bought Powdersize, Exton, PA, which uses micronization to improve the solubility of APIs. "We could have just focused on the capsule business," said Amit Patel, president of DFS. Instead, the company planned to make Capsugel a leading provider of innovative dosage forms and solutions to healthcare customers. "That vision statement doesn't mention capsules. It doesn't men- tion gelatin," Patel said. "So we took all the things that Capsugel was already doing beyond hard capsule supply and brought them together as the Dosage Forms Solutions business, and went beyond just the capsule." He cited bioavailability enhancement, modified release, high- potency handling, and clinical trial services as examples of high-growth areas. "No matter which lens we look at the business through, geography-wise, segment-wise, or offer- ing-wise, we're seeing growth across the board." Business is also good at Metrics Contract Services, Greenville, NC. "We've seen tremendous demand for for- mulation development projects that involve potent or cyto- toxic compounds," said John S. Ross, executive vice presi- dent. The company is owned by Mayne Pharmaceuticals, a publicly traded Australian pharmaceuticals manufacturer. But Metrics is exclusively a development company, and Ross estimates that 75 percent of Metrics' new clients are "virtual" companies with little or no infrastructure to develop or manufacture a product. In fact, all its work is pre-commercial and novel. It do- esn't work on generics and it doesn't—at the moment— offer commercial manufacturing. But that will change once Mayne Pharma completes a $65 million, 126,000-square- foot oral-dose facility adjacent to Metrics' current opera- tions, doubling manufacturing capacity. The company will also introduce commercial-scale fluid-bed processing to make modified-release multiparticulate dosage forms. "In the past, we didn't really offer a viable solution for commercial manufacturing," Ross said, so most customers took that work elsewhere. "With the expansion, fewer clients will have to exit, and because the expansion is right here on-site, it will not involve a tech transfer. It will be the same FDA establishment." Patheon, Durham, NC, is also expanding. In October 2012, it acquired Banner Pharmacaps, the world's second- largest pharmaceutical business dedicated to softgel formu- lations. In 2014, it combined with DSM Pharmaceuticals, which added US capacity for sterile, oral solid dosage, and API manufacturing. In 2015, it bought Agere Pharma- ceuticals, Bend, OR, which enables it to manufacture solid dispersions that improve API solubility-bioavailability. It

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