IHS Chemical Week


Pharma/Fine Chemicals Roundup – August 2

8:19 AM MDT | August 2, 2011 | By DEEPTI RAMESH


Lonza has recorded a 28% fall in first-half profits compared with the year-ago period, to SF97 million ($120 million), and Ebitda decreased by 14%, to SF265 million. Sales decreased 8%, to SF1.19 billion, mainly due to the negative currency exchange rate, Lonza says.
“Despite the heavy hit we have taken in our reported numbers as a result of the strong Swiss franc, I am pleased that the company has delivered 5% growth in underlying revenues and operating profits,” says Stefan Borgas, CEO of Lonza. “Looking forward, our pipeline looks promising, our capacity utilization is improving and our growth projects are moving forward. I am particularly excited by the opportunities that our newly focused strategy will allow us to capitalize on, not least the offer for Arch which is proceeding to plan and we expect to complete later this year.”
Lonza agreed last month to acquire biocides maker Arch Chemicals (Norwalk, CT) in a deal valued at $1.4 billion.


Pharmaceutical company Dr. Reddy’s Laboratories (Hyderabad, India) says that it has signed an agreement with Fujifilm (Tokyo) to establish a joint venture in Japan and to enter into an exclusive partnership in the generic drugs business for the Japanese market. Fujifilm will have 51% stake in the jv and Dr. Reddy’s will hold the rest. The new company will develop and manufacture generic drugs utilizing Dr. Reddy’s expertise in cost competitive production technologies for active pharmaceutical ingredients (APIs) and formulations, and Fujifilm’s quality control technologies.
“With the execution of the memorandum of understanding with Dr. Reddy’s, Fujifilm will have excellent capability in developing and manufacturing across APIs and formulations of generic drugs,” says Shigetaka Komori, president and CEO of Fujifilm.

By Alex Scott

DSM's pharma business recorded second quarter sales down 9% to €178 million.
The performance of the pharmaceuticals manufacturing business “remains below acceptable levels,” says CEO Feike Sijbesma. “We know we need to take some strategic actions there to make repairs.”
The pharma business has been impacted by “challenging business conditions,” Sijbesma says. “We are not happy with [pharmaceuticals] results – but let’s put it into perspective; the pharma business is less than 10% of the total company. The second quarter was better than the first quarter so we have shown some improvement but we are clear that it is not enough. We need to tie up with the Chinese in antibiotics – we mentioned Sinochem – we are in the phase of concluding that [negotiation].” The company also sees a need “to make a deal” in the contract pharmaceutical manufacturing business, Sijbesma says. “This will take a little time – don’t expect this to be done in a few weeks or even a few months because it takes two to tango here.”


Market analysts PMR have launched a new paper highlighting the potential for API production in Russia, Ukraine and the Baltics. Though API production is still predominantly a Chinese and Indian industry the authors claim that recent sourcing issues – such the Chinese Heparin case – have led companies to look elsewhere. Now through analysis of business and market strengths and weaknesses, as well as obstacles and availability of resources, polish-based market experts PMR project Russia and the Baltic States as viable alternatives for the entire API process; from sourcing to contracting to manufacture the finished dose product. Monika StefaƄczyk, Head Pharmaceutical Market Analyst and coordinator of the report, largely attributes this conclusion to the new Federal Target Programme (FTP) Strategy for the development of the pharmaceutical industry of the Russian Federation between now and 2020. As part of the $1.3bn project, Russian PM Vladimir Putin has promised to construct 200,000m² of facilities producing sterile and non-sterile pharmaceuticals.

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