Patheon, a global provider of drug development and delivery solutions to the pharma and biopharma industries, has revealed a new brand identity centered around an updated brand promise based on the belief that the world would be a healthier place if tomorrow’s medicines were made available today. The branding elements include an updated logo and a new company tag line that represent how the company is differentiated and best-equipped to help address client challenges: “A Healthier World. Delivered.”

In addition, with recent acquisitions and investments, Patheon has bolstered its API capabilities. The company first acquired IRIX Pharmaceuticals, a company that specializes in difficult to manufacture APIs for drugs from development through commercial launch. As a result Patheon secures additional API development and manufacturing services in the U.S., including high-potency (OEL< 30ng/m3) and controlled substances (Schedule 1-4). IRIX has a well-established reputation for the optimization of chemical processes and scale up for commercial API manufacturing at sites in Greenville and Florence, SC.

Patheon also recently bought Agere Pharmaceuticals, a CDMO headquartered in Bend, OR, that specializes in bioavailability. Agere helps customers improve the absorption rate and delivery of medications through its solubilization expertise and technologies. The Bend facility will serve as a solubility center of excellence and will fall under Patheon’s pharmaceutical development services (PDS) operations. Combining Agere’s solubility expertise with Patheon’s large-scale, global development and manufacturing network, provides customers seeking to improve drug absorption rates with support from early development through commercialization.

The company also has invested in continuous manufacturing at its Greenville plant.

Contract Pharma was able to catch up with Franco Negron, Patheon’s senior vice president in North America for commercial operations and global integration. With more than 20 years of experience in the pharmaceutical industry, Mr. Negron joined Patheon in November 2009 as vice president and general manager of the company’s operations in Puerto Rico. Mr. Negron talked about some of Patheon’s recent key investments as well as other market trends.            —TW

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Contract Pharma: What is the latest news at Patheon on the API/intermediate front?

Franco Negron, senior vice president, North America commercial operations and global integration, Patheon: Patheon has been building its comprehensive API capabilities, securing additional API process development and manufacturing presence in the U.S., with the acquisition of IRIX Pharmaceuticals in March 2015. The strategic deal complements Patheon’s existing API facilities in Europe and expands offerings to include capabilities for high-potency and controlled substances, and allows us to address our clients’ most challenging needs for drugs in all development phases. Our acquisition of Agere, also in March 2015, gave us low solubility capabilities. Another key investment is the continuous manufacturing suite in our Greenville, NC facility, which we believe will start transforming the industry.

CP: What trends and challenges are you seeing with respect to API and intermediate sourcing?

Negron: We see challenges in two directions. On the one hand, large pharma still demands very challenging quality and cost standards, which make it difficult to earn a risk adjusted margin. On the other hand, small and mid size pharma companies specialize in more complex products for specialized markets. This products are challenging to produce and have complex supply chains but with medium size volumes. Dealing with the complexity in production and supply chain and delivering additional services like supply chain management, regulatory and quality support besides activities like process development, route scouting or clinical production make such customers very interesting but challenging due to complexity.

CP: How is the market performing?

Negron: The global pharmaceutical industry is a large and growing market. Clients are faced with increasing prices and competition, forcing them to decrease fixed costs and reduce time to market for new drugs, while maintaining reliability and quality. These pressures, combined with a growing demand for quality medications, have led to an increase in outsourcing, with more and more pharmaceutical companies relying on development and manufacturing providers such as Patheon.

Currently, the industry remains fragmented, with more than 600 players. However, customers are increasingly expressing a desire to simplify supply chains due to pressures from regulatory agencies and investors, which calls for fewer, but larger players in the industry. Because of these demands, the CDMO industry will likely follow the same path that the CRO industry has in the last 20 years. We believe we will see the emergence of a few major players receiving a bulk of the outsourcing contracts as companies will want to have products manufactured and delivered quickly, and in a cost-effective, reliable manner.

CP: What types of product do you see an increased demand for?

Negron: We at Patheon see an increased demand for supply chain services, either a combination of drug substance and drug product or API sourcing and drug product. Since Patheon also focuses on mid-size and smaller pharma companies, requests for regulatory and supply chain support is increasing. We are also seeing similar demands from some large pharma companies. Compared to smaller customer, big pharma still treats supply chain activities in drug product & drug substance as separate items.

CP: What are some of the main challenges sponsors approach Patheon with?

Negron: At Patheon, we have seen an increase in the demand for more complex drug substance development and manufacturing. This is visible in small molecules with much more complex synthesis paths and more synthesis steps from starting material to the API. The same trend is also visible in large molecules, where DSP and partially USP is becoming more complex. Similarly, we have seen the same development in the formulation space, in sterile and non-sterile formulation. Low solubility formulation is also a key formulation development area.

It is estimated that 60 to 90% of all new compounds entering development will need specialized manufacturing and/or molecular profile modification—expertise that Patheon is well-positioned to deliver.

CP: How have continued challenges with India and China impacted your business?

Negron: We are always evaluating organic and inorganic growth opportunities for our company, but there is currently enough growth in Europe and the U.S and we remain focused on opportunities here for now. From a supply perspective, we have increased our procurement investment in Asia, coupled with very strong local quality supervision.

CP: What do you anticipate in the near term as far as any progress in these regions? 

Negron: We anticipate continued growth in Asia. In the near future, we will focus on collaborations with top raw material, intermediates and API suppliers. For us, quality at source (e.g. our own quality personnel in China) is a top priority to ensure we continue to deliver the Patheon Quality standard to our customers. In the medium term, we will decide if we have to build up own manufacturing and development centers in Asia or if we will rely on close collaborations with key partners.

CP: What are the major supply chain hurdles experienced today? How can they be overcome?

Negron: As previously mentioned, the industry remains fragmented, but is moving toward a more consolidated state in response to customers’ increased demands for a simplified supply chain solution. While customers previously had to contract with multiple providers for different steps of the supply chain process, more and more CDMOs are offering integrated services to ease clients’ burden.

Although the development and manufacturing industry is strewn with challenges, the existence of reliable CDMOs is increasing as the demand continues to also increase. And clients are also becoming more selective when deciding which CDMO to partner with. While cost has been an important factor in the past, clients have recently shifted to a much broader examination, focusing on reliability as the most important element, noting flexibility and the ability to troubleshoot as other important traits they seek in a CDMO. Other key characteristics such as quality, expertise and end-to-end services are what make clients so willing to pursue and commit to fully integrated CDMOs like Patheon, which can offer both drug substance and drug product services.

Innovative offerings like Patheon OneSource, an end-to-end development offering that streamlines supply chain activities and focuses on driving value through simplicity, speed and quality, are leading the industry’s transformation and enabling the successfully delivery of breakthrough medicines.

CP: How do you help sponsors navigate increased legal and regulatory hurdles?

Negron: Patheon’s commitment to excellent product quality and deep regulatory experience makes us perfectly positioned to help our customers navigate the changing regulatory landscape. 

Customers rely on us to be focused on quality, compliance, flexibility, capability, consistency and the capacity to react to new market trends and global needs. Additionally, the regulatory environment for both the sterile development and commercial manufacturing businesses has continually become more closely monitored, including closer oversight by the U.S. FDA and its global counterparts. With these strict regulations in place, there is a high expectation for CDMOs to understand how to effectively operate within the regulatory environment. Through a focus on operational excellence and regulatory expertise, suppliers like Patheon can help customers bring medicines to market in a safe and timely manner.