Traditionally contract development and manufacturing organizations (CDMOs) were Big Pharma’s Cinderellas, working hard behind the scenes, working their niches, usually seeing to either chemical or biologic active pharmaceutical ingredient (API) manufacturing, final drug product manufacturing, or early and clinical-stage development work.
Eventually, even Cinderella was invited to the ball and CMOs are too, increasingly being asked to the dance and to take on more and more production and commercialization tasks for Pharma’s innovators, as well as all those companies, big and small, serving markets near and far with well-known formulations and dose forms. Creating an organization that can serve the growing demands of drug owners and innovators large and small is no mean feat, and DPx Holdings B.V. has spent the last year creating a dance partner that knows all the steps: from the minuet of engagement, the foxtrot of clinical trials, the Charleston commercial scale up and the long Waltz associated with commercial manufacturing at scale to meet the demand for a successful compound.
Last March DPx was created from the merger of Patheon and DSM Pharmaceutical Products, the life sciences operations of Royal DSM in an effort to launch a full-service, end-to-end pharmaceutical contract services provider. Privately owned by JLL Partners (51 percent) and Royal DSM (49 percent), DPx is a culmination of the $2.65 billion deal between the two companies, a deal first announced late in 2013 and completed in March 2014. Led by CEO Jim Mullen (former CEO of Patheon), DPx is operated as an independent standalone company and is parent to business units Patheon Pharma Services, DSM Fine Chemicals and Banner Life Sciences.
According to DPx, the Patheon business unit encompasses solid and sterile commercial dose manufacturing, pharmaceutical product development services and the biosolutions and biologic businesses formerly associated with DSM Pharmaceutical Products. DSM Fine Chemicals’ main focus is centered on custom synthesis services for the Pharma and fine chemical industries. Banner Life Sciences focuses on R&D, in-licensing, out-licensing, commercializing formulation technologies and the production of proprietary, over-the-counter (OTC) and nutritional products. Headquartered in Durham, North Carolina, DPx manages some 8,000 employees at 20 locations globally including the U.S. and Canada, Europe, Latin America and Australia.
But beyond the merger that created the world’s largest organization of its type, the company continues to pursue its hoped-for market leading strategy. Last September, DPx completed the transaction to acquire Gallus BioPharmaceuticals LLC, another contract manufacturing company leader specializing in biologics. According to the Gallus presser, Patheon’s biologic drug substance business now spans four global facilities in Europe, Australia and North America and includes more than 550 employees.
At the time, DPx’s Mullen declared confidently that with the Gallus acquisition his company was now more capable than ever, able to provide customers with “an even higher level of service with our expanded service offerings and dedicated biologics presence in the U.S.” Mullen explained the acquisition allows DPx to better serve the biologics segment and that it aligns with the company’s strategy to “bring our customers an industry-leading, end-to-end service offering.”
Patheon pharma services business provides commercial manufacturing, pharma product development services for a full array of solid and sterile dosage forms, and biologic and chemical drug substance development and manufacturing. With the Gallus acquisition, said the company, Patheon is “now a leading provider of process development as well as clinical and commercial scale manufacturing of mammalian cell culture derived products.”
The deal sought to integrate two existing Gallus sites (St. Louis and Princeton, New Jersey) and complement the two existing Patheon sites in Groningen, the Netherlands and Brisbane, Australia. Three of these four global sites, said Gallus, have nearly three decades of mammalian cell culture experience, while the Brisbane site, opened within the last year, is considered a facility of the future for biologics, one which was covered extensively in Pharmaceutical Manufacturing’s January 2014 issue.
At the end of the day, the enhanced capabilities provided by the Gallus acquisition further supports Patheon’s end-to-end integrated offering strategy by providing small-scale API and biologic drug substance through to commercial manufacturing capabilities and the capacity to win more of this business going forward.
RESPONSE TO SUPPLY CHAIN COMPLEXITY
According to Mullen (whom Pharmaceutical Manufacturing encountered at DCAT Week 2015), “whether it’s the big pharma guys or some of the smaller customers, those companies want to outsource more, for one, because supply chains are getting more complex.” So they’re looking at outsourcing more work, but with companies with broader capabilities.”
Mullen says the strategy is to shrink the network of suppliers and in the process make the supply chain more manageable. Mullen points to emerging drug product complexity as another strategy imperative served by a CMO with robust technical capabilities. He notes a growing slice of products requires special, sophisticated processing capabilities and that includes both biological drugs and drugs in development on the small molecule side. “The estimate,” says Mullen, “is maybe a third of the pipelines out there that have solubility absorption issues.” So what does that mean, asks Mullen? “They need more specialty formulation technologies to solve these problems.” And what does that mean for DPx? “We keep building our technology base,” citing the recent Agere Pharmaceuticals acquisition as a transaction “exactly aimed at that problem.”