Diosynth specialises in the contract manufacture of active pharmaceutical ingredients both for Akzo Nobel's in-house pharmaceuticals business and customers around the world. It is among the largest manufacturers of APIs in the world, with annual sales of over €500 million.
Dr Alec Ingram, managing director of the Diosynth Ltd subsidiary, told local newspaper The Scotsman that its workload had also been cut as a result of the patent expiry in the US on Remeron (mirtazepine), an antidepressant that is one of Akzo Nobel's biggest-selling products.
In June 2003, the US Food and Drug Administration gave the go-ahead to several generic forms of the drug, leading to a 40 per cent year-on-year decline in Remeron sales in the third quarter to €174 million (though sales in the rest of the world rose 28 per cent to €227 million).
At the same time, turnover at Diosynth, Akzo's active drug ingredients unit, fell 27 per cent to €114 million, impacted by delivery delays, a slowdown at Akzo's pharmaceutical division Organon and weakening third-party demand.
Although he insisted that the long-term future of Diosynth Ltd is secure, Dr Ingram said it was likely to be at least 2006 before work picks up at the plant. The firm's main products are trityl chloride, 4,4'-dimethoxytrityl chloride, ethyl 3-amino crotonate, trimethylsulphoxonium iodide, and thiazolidine dione.
Describing the decision to cut staff as 'devastating news', Dr Ingram said it was necessary to preserve the future of the company. In addition to the Asian competition and patent loss, Diosynth is being affected by the general downturn in the pharmaceutical industry's fortunes.
The FDA is taking longer to make decisions on drugs, he suggested, while the patent life of new medicines is shortening and there is a decline in the number of new blockbuster (billion dollar-selling) drugs reaching the market.
Dr Ingram also said that new legislation introduced for the chemicals industry has had a detrimental effect on Diosynth, pointing in particular to the new REACH programme, which requires all chemicals manufactured within the EU at over one tonne to be tested and registered.