CMO Angel & Russian pharma plan drug production JV

17-Oct-2011 - Last updated on 18-Oct-2011 at 11:02 GMT

Angel Biotechnology is negotiating a joint-venture with a Russian firm that would see it add dedicated production space at a UK site.

Details of the joint-venture are being discussed by Russia-based Materia Medica Holding (MMH) and Angel. The current plan is for Scotland-headquartered Angel to add a GMP (good manufacturing practice) unit dedicated to producing MMH drugs at its Cramlington, UK plant.

“This deal opens a new and important chapter of the continuing growth and development of Angel, cementing an alliance between the company and its major customer and giving greater visibility of work and income well into the future”, Paul Harper, executive chairman of Angel, said.

Angel will add 230 sq m of space for manufacture of MMH products as part of the re-commissioning of its Cramlington, UK site. MMH will fund the cost of the expansion, capital equipment and production activities. The joint-venture will also occupy a 93 sq m non-GMP development laboratory at Cramlington.

Operation and staffing of the dedicated facility will be handled by Angel which plans to hire between eight and 15 people in relation to the project. The joint-venture will place orders and manage work performed in the dedicated unit, with Angel receiving fees for use of its facility, staff and infrastructure. Based on work previously done for MMH Angel predicts earnings of around £10m ($16m).

MMH will give funds for commissioning new programmes and profits retained by the joint-venture will be split between the partners. Angel and MMH will own 49 per cent and 51 per cent of the venture respectively and profits will be split in this proportion.

Future plans

The agreement will be reviewed after five years and over this period MMH expects to manufacture at least seven products. Working with Angel will give MMH capacity to grow its biologics business.

“Through the formation of this joint venture company, we expect to move into a secure, long term supply agreement with Angel for the manufacture of advanced biologicals that form the core of our business”, Oleg Epstein, general director of MMH, said.

MMH has three programmes ready to go and work will begin under a current agreement with Angel. Details of the joint-venture are still being negotiated. MMH will transfer control of the programmes to the joint-venture if it is formally created.