Daiichi to carve out manufacturing division

Daiichi Pharmaceutical is to set up a new manufacturing subsidiary
in a bid to profit from forthcoming Japanese legislation that makes
it easier for firms to produce drugs for third parties.

The new company, to be made up of its three Japan-based factories, will begin operations from April next year, Daiichi said yesterday, manufacturing drugs such as Cravit, Omnipaque, Panaldine, Artist and Coversyl levofloxacin in bulk form.

The Pharmaceutical Affairs Law, which will take effect in April 2005, has already prompted similar moves to boost contract manufacturing from Taiyo Pharmaceutical Industry, Sumitomo and Kyorin.

The contract manufacturing sector is on a rising trend, with the active pharmaceutical ingredient (API) and intermediates market forecast to grow 7 to 8 per cent annually.

The Daiichi Group,/a> recently implemented a restructuring strategy and the creation of a single unit for its manufacturing activities is expected to reduce costs and improve management efficiency.

Daiichi also plans to integrate Daiichi Technos and Kansai Daiichi Service Co, which service the maintenance of equipment and facilities in its current plants, into the new company, expected to have around 560 employees.

The parent company will continue to take responsibility for the manufacturing division as well as R&D functions related to pharmaceutical manufacturing technologies.

The name and headquarters for the new company are yet to be decided.