Firms scramble to build new manufacturing facilities
From the June 1,
2001 print edition
Allison Connolly Journal Staff
Biotechnology companies are running out of manufacturing capacity for large-molecule drugs to the point where many are calling it a crisis.
Demand for manufacturing space already outpaces supply, but the shortage is expected to be at its worst in 2005. Companies may be forced to find alternative methods of production, such as producing protein-based therapeutics in transgenic animals or plants, or worse: They could be forced to halt research and production until more space is available.
Two companies have already had to do just that. Last year, Seattle-based Immunex Corp. was forced to scale back production of its drug Enbrel due to a lack of capacity. And a few years earlier, Berlex Laboratories Inc. of Montville, N.J., was forced to sell its drug for multiple sclerosis on a lottery system because it wasn't ready to manufacture it in large quantities.
Closer to home, developers are consulting with the Massachusetts Biotechnology Council and several biotech companies about how to retrofit the former Casey & Hayes building in Brighton for biotech manufacturing space. While the 412,000-square-foot building was refurbished for a high-tech company and called Boston Technology Center, it is now being marketed for biotech.
"There clearly is a need for a great amount of capacity in the region, and a foundry sounds pretty desirable," said Jay Doherty, president of Cabot, Cabot & Forbes of New England Inc.
Space could become more important than market approval. If companies don't have manufacturing capacity, for example, they could lose their hold on the market to a competitor with enough space.
"Certainly, this is an issue that has come up recently, but will be a problem if people don't start to act," said Janice Reichert, a senior research fellow at Boston's Tufts Center for the Study of Drug Development.
The bigger names are investing heavily in manufacturing plants. In the last week, Biogen Inc. and Genzyme Corp. announced they would be expanding their manufacturing capacity around the world. Both are Cambridge-based companies that produce large-molecule drugs, and they already own several manufacturing plants to produce their products. Biogen is planning a $350 million facility in Denmark while Genzyme announced plans for new plants in Framingham and Waterford, Ireland, as well as expansion of a facility in Haverhill, England.
However, with 25 large-molecule products expected to make the market by 2003, the various construction projects being planned around the world may not be enough to fill the need, according to industry experts.
"Worldwide, there is a crisis in capacity, and the reason for that is the success of biotechnology," said Sylvie Gregoire, vice president of manufacturing for Biogen.
Large-molecule drugs are fermented in vats, so capacity is measured in liters. There are about 380,000 liters of capacity in the world, Gregoire said. Less than 14 companies control all 380,000 liters, which are completely occupied, she said. The largest is Boehringer Ingelheim GmbH in Germany, which has a capacity of 100,000 liters.
"People are madly building more," Gregoire said, "But building this capacity takes three to four years, so you have to plan ahead."
Considering only one in four candidate drugs makes it to market, Gregoire said, many companies don't invest in manufacturing until they know they have a product that will be sold commercially. But the Catch-22 is that companies don't know whether a product will succeed or fail until it reaches Phase II clinical trials. Also, many smaller companies invest all their cash in clinical trials and may not have the money to build a production plant--which can cost between $200 million and $400 million--when their product is ready to market. Timing also counts, as building a plant to the right specifications can take as long as five years, according to a report by New York City-based J.P. Morgan Securities Inc. And, the plant must be approved by the U.S. Food and Drug Administration.
"Because there are so many products in the pipeline now, if people don't get production up, the volume might not be enough to cover the market," said Reichert, who has studied the capacity problem for Tufts.
Worldwide, capacity is being increased by 100,000 liters per year, according to Biogen officials. But by 2005, Biogen figures show, worldwide demand will be for 1.4 million liters of manufacturing capacity, far short of the projected supply of 600,000 liters, assuming the same building rate continues.
Smaller biotech companies have already had to turn to contract manufacturing organizations (CMOs) to produce their products for them, but even CMOs are at full capacity.
Portsmouth, N.H.-based Lonza Biologics Inc., a CMO which offers 22,000 liters of capacity, has seen a surge in business in the last couple of years. In 1999, the facility was operating at 60 percent capacity, but now it is maxxed out. Lonza will soon add another 50,000 liters of capacity to meet demand.
"As the industry matured and companies have pushed through market approval, capacity is being tied up," said Tom Hindle, vice president of commercial development and manufacturing at Lonza, a subsidiary of Swiss-owned Lonza Group Ltd. "In general, it's caught people by surprise."
Some of the bigger companies that are planning ahead, like Biogen and Genzyme, are considering offering some manufacturing services to smaller companies, but mainly through partnership deals.
Genzyme, which has always manufactured its own products, plans to construct a 300,000-square-foot recombinant protein manufacturing plant in Framingham, scheduled to be running by 2004. Genzyme bought a 120,000-square-foot plant in Ireland to produce Renagel, and plans to build a multiproduct manufacturing plant nearby.
Biogen already has 6,000 liters of capacity in Cambridge and another 6,000 liters in Research Triangle Park, N.C. By the end of this year, Biogen hopes to have another 90,000 liters in North Carolina ready to start producing product early next year. By 2005, its facility in Denmark is scheduled to be up and running with a capacity of 90,000 liters.
"Biogen is in a position
where we have sufficient capacity for our products and future ones," Gregoire
said. "We even have capacity to allow us to have business development opportunities."
Copyright 2001 American City Business Journals Inc