Hovione hikes capacity 50 per cent by adding Pfizer plant

The Loughbeg site manufactures intermediates for atorvastatin, the active pharmaceutical ingredient (API) in Pfizer’s blockbuster cholesterol drug Lipitor.

The deal includes a contract for Hovione to carry out manufacturing for Pfizer when it takes over the site. This is an approach very much in favour among pharmaceutical companies with surplus production capacity, as it offloads unwanted facilities while generally ensuring some level of staff retention and continuity of materials supply.

Hovione said it would retain 70-80 of the 230-odd workers at the facility, and in a statement Pfizer confirmed there would be redundancies although some staff may be moved elsewhere in the company.

While on the surface the announcement seems something of a blow to Ireland’s pharmaceutical sector, Hovione chief executive Guy Villax was bullish about the prospects for the country’s drug industry.

Referring to the current trend towards outsourcing manufacturing to emerging pharmaceutical markets such as Asia, Villax said: “We know very well what China can do for the pharma industry, but we also know what it can't do - and it is for those reasons that we are now in Cork.​”

Cork has the highest concentration of API production anywhere in the world, mainly as a result of Big Pharma companies locating their production facilities there.

Hovione Cork, as it will be known, will manufacture a range of Hovione’s portfolio and over the next 24 months the company will transfer products from its Loures, Portugal site. It will also validate processes for new compounds in expectation of drug approval.

Hovione’s chief financial officer Miguel Calado said that the company had not invested in new manufacturing capacity since 2001, so it was time to add some new assets.

The Loughbeg site offers large-scale capacity, which has benefited from “hundreds of millions of dollars​” of investment from Pfizer, according to Calado, who also pointed to the tax breaks available in Ireland and the well-trained local workforce.

It offers a third pillar to Hovione’s manufacturing network, adding 427 sq. m. to the company’s facilities in Loures and China, with around 400 sq. m. apiece.

The plant can handle a large number of specialised chemistries such as hydrogenation and low temperature chemistry, and also boasts a new, €70m spray-dried formulations unit.

The deal is scheduled to be completed by early April 2009.