The Swiss Pharma Giant announced on Friday it was looking to divest four small molecule manufacturing plants which are at the end of their product lifecycle while subsequently investing CHF 300m ($300m) into a site to make its low volume, more specialised pipeline.
The sites are bulk active pharmaceutical ingredient (API) plants in Ireland and the US, and finished formulation facilities in Spain and Italy, and according to Roche spokesperson Claudia Schmitt, the planned exits will create opportunities for contract manufacturing organisations (CMOs).
“The four sites support our mature portfolio of small molecules,” she told this publication. “This commercial portfolio is at the end of its lifecycle, resulting in a declining demand overall.
“It is normal business practice to place such products with contract manufacturers.”
Patent Cliff
Schmitt divulged neither which small molecule drug products were made at the four facilities, nor which CMOs were likely to gain the business and on what sort of scale, but Roche’s actions mimic that of other Big Pharma firms which have faced the patent-cliff.
Last year, for example, AstraZeneca announced its Avlon, UK site was to close its doors by 2017 following the drop in sales of Crestor in the US expected once the cholesterol-lowering drug loses exclusivity there in 2016.
“The majority of API manufacturing undertaken at Avlon will be outsourced once the site closes,” a spokesperson told Outsourcing-Pharma at the time.
And Merck & Co. too said it would be outsourcing the manufacture of the API for a number of expired small molecule drugs when it announced it was closing a County Wicklow, Ireland plant in March 2013.
Plant buying opportunities
For the four Roche plants themselves, Schmitt told us it is “looking into divestment options,” and the firm “will approach only very reputable companies.”
According to a panel discussion at last month’s CPhI show in Madrid, CMOs are taking the opportunity to grab both market share and additional manufacturing contracts through the acquisition of ex-pharma manufacturing capacity.
But whether this implies Roche would continue to source the respected APIs and finished formulations from a potential buyer was not revealed. However,such a strategy is not uncommon from fellow Big Pharma firms.
A major Pfizer Lipitor API plant in Cork, Ireland was sold to Hovione in 2009, and the CMO said at the time it would continue to make some API for the Pharma Giant. Merck & Co., meanwhile, sold a Dutch API site to Aspen Group in 2013 which continues to make a number of APIs to Merck under a 10-year supply deal.