Pharma/fine chemicals roundup—25 July 2016
12:05 AM MDT | July 25, 2016 | By DEEPTI RAMESH
Lonza reports 20% core Ebit growth
Lonza has reported sales of 2.02 billion Swiss francs ($2.05 billion) in the first half of 2016, an increase of 6% year over year (YOY), the “best first half in its history,” as a result of “better operational and commercial performance.” Core Ebit was 312 million Swiss francs, an increase of 20% YOY. The core Ebit margin increased to 15.5% in first-half 2016, compared with 13.7% in the corresponding period in 2015. The first half of 2016 was characterized by an overall favorable market demand situation in nearly all business units and by further enhanced operational improvements across both business segments, pharma&biotech and specialty ingredients, according to Lonza. The segments are on course to meet their growth targets for the full year, the company says.
The pharma&biotech segment, reported sales 838 million Swiss francs in the first six months of this year, an increase of 11.1% YOY. Core Ebit jumped by 35.9 % YOY to 159 million Swiss francs in the reporting period. These strong results were driven by good operational performance, strong momentum in the mammalian business, solid market demand, and continuing cost discipline, according to Lonza. The segment’s performance is expected to continue in the second half of this year, the company says.
FDA issues warning letter to SmithKline Beecham's API plant in UK
The US FDA issued a warning letter on 30 June 2016 to the active pharmaceutical ingredient (API) manufacturing facility of SmithKline Beecham Ltd—located at Worthing, United Kingdom—for violating current good manufacturing practice (cGMP). An FDA inspection from 2-10 July 2015 at the facility identified significant deviations from cGMP for the manufacture of APIs, FDA says. FDA has reviewed the company's responses since the inspection. The warning letter was published on the FDA website on 19 July 2016.
SmithKline Beecham's deviations at Worthing include failure to have appropriate procedures in place to prevent cross-contamination from dedicated penicillin manufacturing area to non-dedicated areas; and failure to adequately investigate deviations and implement corrective and preventive actions.
The FDA has asked SmithKline Beecham to respond to the agency in writing within 15 days after receiving the warning letter, and to specify what it has done to correct the deviations and to prevent their recurrence.
FDA says it may withhold approval of any new applications or supplements listing the Worthing facility as an API manufacturer, until all corrections have been completed and FDA has confirmed the facility's compliance with cGMP. Failure to correct these deviations may also result in FDA refusing admission of articles manufactured at the Worthing unit, into the United States, FDA adds.
Merck to invest $115 million to build life science campus in Massachusetts
Merck KGaA (Darmstadt, Germany) says it plans to build a new campus in Burlington, Massachusetts that will serve as a major hub for the North American life science business of the company. The project will involve an investment of $115 million. The facility will include a customer collaboration laboratory and training center as well as office space. Merck’s 850 full-time Billerica, Massachusetts-based life science employees will relocate to the new campus when construction is complete in the second half of 2017. The new customer collaboration lab at the Burlington campus will replace the lab at the company’s Billerica facility. Merck says it will maintain its other North American life science hub at St. Louis, Missouri.
Pharmaceutical market in Vietnam to reach $6.6 billion by 2020
The pharmaceutical market in Vietnam will expand in value from $3.5 billion in 2015 to an estimated $6.6 billion by 2020, registering a compound annual growth rate of 13.8%, according to research and consulting firm GlobalData (London). The increasing elderly population, widespread preference for imported branded drugs, rising government support for the healthcare sector and the impending gains from the Trans-Pacific Partnership (TPP) will be the main drivers of growth for the Vietnamese pharmaceutical market during the forecast period, GlobalData says. Vietnam signed the TPP, a trade agreement between 12 countries, in February 2016. It is expected that, once implemented, tariffs on pharmaceutical imports will fall to 0%, and patents on foreign pharmaceutical companies’ drugs will be extended from five to 10 years.
While the Vietnamese market is seen as attractive for pharmaceutical companies, drug prices are high compared with average incomes, which hinders patient access to medicine, GlobalData says.
Domestic pharmaceutical companies focus mainly on generic drugs, with very low expenditure on R&D. This restricts the scope of domestic companies’ operations, forcing them to establish themselves either within Vietnam or through exports. At present, the five leading pharmaceutical companies in Vietnam are Sanofi, Hau Giang Pharmaceuticals, Imexpharm, Traphaco and Domesco, GlobalData says.
Beyond IHS Chemical Week:
US investor buys J&J's opiate API business and announces restructuring
SK Capital has rejigged the senior teams at opiate active pharmaceutical ingredient (API) maker Noramco and raw material supplier Tasmanian Alkaloids just weeks after buying the firms from Johnson & Johnson (J&J). The US private investment firm announced that Matthew Martin, previously the general manager of both businesses, has been appointed as Noramco CEO.