PharmEng is also close to completing a Chinese acquisition that could lead to a stream of further manufacturing and distribution contracts for active pharmaceutical ingredients (APIs) and finished pharmaceuticals.
Contract manufacturing is a relatively recent addition to PharmEng's core consulting business but the relationship with Bayi, together with the Canadian company's ongoing activities in the Chinese market, are an illustration of how these two strands knit together.
Last year PharmEng completed a US Drug Master File application for Bayi to confirm quality assurance for the Chinese company's bulk acetaminophen prior to export.
PharmEng performed a comparable service for Bayi in the Canadian market.
It has already exported more than 70 metric tons of acetaminophen to North America for use by its contract manufacturing division, Keata Pharma, in the production of private label medicines.
Annual consumption of acetaminophen by Keata is around 300 metric tons and PharmEng says it saves 20 per cent a year by sourcing from Bayi compared with its previous acetaminophen supplier.
Now these benefits will be available to other pharmaceutical manufacturers in North, Central and South America, where PharmEng will act as exclusive distributor for Bayi's acetaminophen under an eight-year contract.
Annual consumption of acetaminophen in North America is around 50,000 metric tons, with a value of roughly US$200m (€150.3m), PharmEng noted.
"Our partnership with Bayi validates our growth strategy of assisting Chinese companies to explore North American markets, generating revenue for our consulting operations and providing cost savings for our manufacturing division," commented Alan Kwong, PharmEng's chairman and chief executive officer.
The Canadian company is poised to ratchet up that strategy several notches as it works towards closing an agreement that would give it access to another 100-150 Chinese pharmaceutical suppliers manufacturing a wide range of both APIs and finished drugs.
In March 2006, PharmEng signed a letter of intent to acquire a controlling interest in Beijing BRD Lixin PharmaTech Co. Ltd. (Lixin), a privately held Chinese company that provides consulting services in good manufacturing practices (GMPs), validation and engineering design to clients throughout China.
PharmEng would bring to Lixin and its clients expertise in US/European GMP standards and other regulatory requirements for supplying the North American market.
In return, the Canadian company would secure contract manufacturing and distribution rights to the approved products in its own territories as well as a firm base for stepping up its consulting operations in China.