Jim Miller
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The BIO annual meeting in early May had an upbeat tone. Investment capital is flowing into the industry at high levels, resulting
in strong demand for contract development services. The funding stream is particularly strong in the US, and that is attracting
more European contract manufacturers (CMOs) eager to improve business development here.
In the biomanufacturing sector, Eden Biodesign (Liverpool, UK) and Angel Biotechnology (Cramlington, UK) reported they are
looking to hire sales representatives in the US. Eden Biodesign has the contract to operate the UK National Biomanufacturing
Center in Liverpool, which recently received its license from the UK government's Medicines and Healthcare products Regulatory
Agency (MHRA) to begin manufacturing clinical trial materials.
Rentschler Biotechnologie (Laupheim, Germany) has appointed a new US representative, and in 2006, the company began a €50
million expansion of its biomanufacturing capabilities.
Eden, Angel, and Rentschler join other clinical-scale European biomanufacturers that have been generating business in the
US for some time. Cobra Biomanufacturing (Keele, UK) has had sales representatives in the US for several years and obtains
almost 80% of its business here. Netherlands-based Crucell N.V. has teamed up with DSM Biologics to offer manufacturing services
using its propriety PER.C6 expression system. Among dose manufacturers, Haupt Pharma recently appointed a US-based sales representative,
while NextPharma Technologies (Surrey, UK) has had a US sales representative for several years.
The desire to tap into the US market reflects the greater opportunities here: venture capital support for biophamaceutical
and pharmaceutical start-ups is nearly three times greater in the US than in Europe, as is the number of stage development
candidates. The depreciating US dollar means that using European CMOs is more expensive. However, the strong demand for development
and clinical manufacturing services has pushed US biomanufacturer capacity close to its limits so companies have been forced
to overlook those cost differences.
SAFC ACQUIRES MMB
Given the strong demand for clinical biomanufacturing services, it is surprising that there has not been more acquisition
activity in the industry. Acquisitions are usually driven by strong business prospects and the need for additional capacity.
However, most clinical biomanufacturers are small businesses with limited manufacturing capacities; their allure as acquisition
targets is minimal. One large company that has been building industry presence with small acquisitions is Sigma-Aldrich (SIAL,
St. Louis, MO). During BIO in May, SIAL announced that it had acquired Molecular Medicine BioServices, Inc. (MMB, Carlsbad,
CA), a contract biomanufacturer that specializes in developing viral products and manufacturing viruses for vaccines and
gene therapy.
Founded in 1997, MMB employs 60 people and has revenues of $12 million. It has two sites in the Carlsbad area, a 23,700-sq.-ft.
laboratory and office facility, and a 21,400-sq.-ft. manufacturing facility. The company can manufacture clinical trial materials
under GMP, using Wave bioreactors, cell factories, and other small-scale production technologies. It can also do small-scale
vial fills.
MMB will operate as part of SIAL's SAFC Pharma business segment, which develops and manufactures small-molecule active pharmaceutical
ingredients. SAFC Pharma is pursuing a strategy of offering niche services for the biologics industry, i.e., manufacturing
and processing capabilities beyond the usual tank-based cell culture and microbial fermentation for monoclonal antibodies
and recombinant proteins. In April, the company announced completion of two GMP-compliant facilities for purifying transgenically
derived proteins.
SAFC Pharma's niche biologics strategy mirrors what it has done in the small molecule sector, where it has been successful
at buying niche service providers to build up its capabilities.
