Led by growth in the oncology sector, high-potency manufacturing continues to be an area of investment for contract manufacturers and suppliers. DCAT Value Chain Insights (VCI) examines recent investment.

Growth in the global oncology drug market is an important measure of opportunities in drug development and manufacturing, including for contract manufacturers of active pharmaceutical ingredients (APIs) and finished drug products. On the small-molecule side, whether as an API or finished drug product and depending on the product involved, growth in the oncology market is one indicator of potential opportunities in high-potency manufacturing. Within the oncology market, a niche market area are antibody drug conjugates (ADCs), which consist of a cytotoxic small molecule linked to a monoclonal antibody. ADCs,certain oncology drugs, and other high-potency compounds (such as hormones) require high-containment manufacturing, which involve specialized approaches in facility design, equipment selection, and manufacturing processes to achieve the desired levels of containment and minimize operator exposure. Several contract manufacturers have recently invested in high-potency manufacturing.

Crunching the numbers
Global spending on oncology medicines (both small molecules and biologics) is forecast to reach $100 billion by 2018, representing absolute growth of $30 billion to $40 billion, according to a recent analysis by the IMS Institute for Healthcare Informatics. Oncology continues to be the largest therapeutic category in developed countries and the largest specialty area in pharmerging countries, a term used by IMS to denote the most promising emerging markets. Spending on medicines in oncology in developed markets is expected to increase at a compound annual growth rate (CAGR) of 7% to 10% in the forecast period of 2014 to 2018 and reach between $71 billion and $81 billion. In pharmerging countries, oncology will be the fourth largest therapeutic class behind pain, antibiotics, and hypertensive drugs, and the largest specialty therapeutic class. IMS projects that spending on oncology drugs in pharmerging markets will reach between $12 billion and $14 billion by 2018 and increase at a CAGR of 12% to 15% in the forecast period between 2014 and 2018.

Although cancer therapies represent an important engine of growth for the global pharmaceutical market, the market has seen key shifts behind that growth, according to a recent analysis, Innovation in Cancer Care and Implications for Health Systems, by the IMS Institute for Healthcare Informatics, released in May 2014. From 2003 to 2008, growth was consistently above 15% for therapeutic agents, reflecting the launch of key biologic products, such as Avastin (bevacizumab) and the expansion of the breast-cancer drug Herceptin (trastuzumab). The years spanning 2004 to 2006, however, represented the last big period of major oncology approvals, such as Avastin and its line extensions, Erbitux (cetuximab), and small-molecule approvals Sutent (sunitinib), Nexavar (sorafenib), and Tarceva (erlotinib). Most product launches between 2005 and 2009 addressed smaller patient populations and saw lower adoption rates than earlier products, which was reflected in overall lower sales. Also, safety issues regarding the use of erythropoietin-stimulating agents in 2007 resulted in a decline in their use. More recently, sales growth of key biologics, MabThera/Rituxan (rituximab) and Herceptin slowed in 2013 relative to previous periods.

The result is that biologic products now represent less than half of the oncology market, a slight decline over the past 10 years, as new drug launches have been concentrated in small molecules, including kinase inhibitors, according to the IMS report. In 2003, the global oncology market was evenly split (50%/50%) between small molecules and biologics. Since 2008, biologics’ share of the global oncology market has declined slightly, in part driven by less supportive care products and new small-molecule product introductions. In 2008, small molecules accounted for 51% of the global oncology market and biologics 49%; in 2013, small molecules’ share of the global oncology market had increased to 53% and biologics had declined to 47%, according to the IMS report.

Even though small molecules have advanced their share of the global oncology market, the share of certain type of drugs, cytotoxics and hormonal therapies, have declined as the share of targeted therapies have increased. In 2013, targeted therapies represented 46% of the global oncology market (down from 48% in 2003), supportive care products 24% (up from 11% in 2003), cytotoxics 20% (down from 26% in 2003), and hormonal therapies 10% (down from 15% in 2003). In the top seven countries (France, Germany, Italy, Japan, Spain, the UK, the US), the oncology market was valued at $68 billion in 2013. Targeted therapies accounted for 48% (down slightly from 49% in 2003), supportive care products 24% (up from 11% in 2003), cytotoxics 19% (down from 26% in 2003), and hormonal therapies 9% (down from 14% in 2003). In pharmerging countries, the oncology market was valued at $11 billion in 2013, with targeted therapies representing 35%, supportive care products 27%, cytotoxics 30%, and hormonal drug therapies 8%, according to the IMS report.

In terms of the industry’s pipeline, oncology drugs are a key target for new drug development with more than 30% of all preclinical and Phase I development projects being targeted to cancer (see Table I).

ADCs are a niche area within the global oncology market. Only two ADCs are now commercially approved: Seattle Genetics’/Takeda’s Adcetris ( brentuximab vedotin), a CD30-directed ADC for treating Hodgkin lymphoma and systemic anaplastic large cell lymphoma, and Roche’s Kadcyla (ado-trastuzumab emtansine), an HER2-targeted antibody and microtubule inhibitor conjugate indicated as a single agent, for the treatment of patients with HER2-positive, metastatic breast cancer. According to a recent analysis by Root Analysis, a UK-based business and market research firm, there are approximately 45 ADCs under clinical development, with approximately one-quarter of these drugs in Phase II or Phase III development. Most commonly used cytotoxins for ADCs under clinical development include auristatin, calicheamicin, maytansine and duocarmycin. Auristatin dominates the market and accounts for over 50% of ADCs in clinical development. The report estimates that approximately 70%-80% of ADC manufacturing is currently outsourced. It projects that conditioned on approximately seven to 10 new ADC commercial launches over the next decade, the ADC market will increase to approximately $10 billion by 2024.

Contract service providers expand
High-potency manufacturing continues to be an active area of investment for contract manufacturers. On the API side, in March 2015, Johnson Matthey, a provider of pharmaceutical services, APIs, and catalyst technologies, announced the completion and commissioning of  new high-containment facilities for potent product manufacture at its Edinburgh, UK site (i.e., Macfarlan Smith site). The self-contained facility meets existing demand for potent products and also provides additional capacity for anticipated future requirements. It features isolators containing a range of hastelloy and glass vessels, with powder transfers being mediated through split butterfly values with active valve wash stations. It also contains a dedicated finishing room, quality control laboratory and control room. The facility has the necessary manufacturing controls and procedures in place to produce compounds with occupational exposure limits of less than 30 ng per cubic Johnson Matthey also manufactures highly potent products through its facilities in West Deptford, New Jersey and Devens, Massachusetts.

Earlier this year, Patheon closed on its previously announced acquisition of IRIX Pharmaceuticals, a Florence, South Carolina.-headquartered company that specializes in making difficult-to-manufacture active pharmaceutical ingredients (API) for drugs from early and late development, through commercial launch. With the acquisition, Patheon secured additional API development and manufacturing services in the US, including high-potency (SafeBridge Class IV certified) and controlled substances (Schedule 1-4) IRIX has commercial API manufacturing at sites in Greenville and Florence, South Carolina.

Other companies also recently invested in high-potency manufacturing. In 2014, Lonza started up its second-large scale ADC facility in Visp, Switzerland. Since 2010, Lonza has validated large-scale commercial manufacturing of platform ADC technologies primarily used by ADC drug developers in conjunction with novel linker/payload platforms. Also in 2014, Carbogen Amcis, the Swiss-based pharmaceutical process development and API manufacturing company, agreed to take over the operations of a high-containment facility located in Vionnaz, Switzerland. The high-potency facility in Vionnaz opened in December 2005 and was formerly managed by Bachem as an integrated part of its site in Vionnaz. In 2014, Carbogen Amcis also constructed a cleanroom dedicated to conjugation projects at its site in Bubendorf, Switerland, and said at the time of the investment, that it plans to introduce additional capability for highly potent drugs at its site in Neuland (Hunzenschwil), Switzerland. In May 2014, Novasep completed an EUR 4 million ($5.5 million) investment to expand its highly potent API manufacturing capabilities at its facility in Le Mans, France. The Le Mans production facility combines chemical and purification capabilities to manufacture ADC payloads at commercial scale. In May 2014, WuXi PharmaTech (Cayman) Inc.’s manufacturing subsidiary, Syn-The-All Pharmaceutical Co., Ltd. (STA), began operation of a high-potency API laboratory in Shanghai, thereby adding high-potency API processing to its portfolio of services. The laboratory supports process development and clinical-trial supply of high-potency small molecules at kilogram scale. In 2014, Cerbios-Pharma SA invested in a cGMP atomization plant for particle engineering using super critical fluid technology capable of generating micro and nano API particles with very narrow particle size distribution. By the end of 2015, the plant will be fully operative for the handling of high-potency APIs at 200 grams cGMP scale.

In October 2014, Catalent acquired the remaining stake in Redwood Bioscience Inc., which includes the SMARTag ADC technology platform. Catalent announced in April 2013 that it had acquired an exclusive license to market the SMARTag technology and subsequently collaborated with Redwood for the ongoing development and marketing of the platform. The proprietary SMARTag site-specific protein modification and cytotoxin-linker technologies developed by Redwood enable the generation of homogenous bioconjugates engineered to enhance potency, safety and stability. The technology employs natural post translational modifications found in human cells to create one or more aldehyde tags at designated sites on protein molecules. These chemical handles are then stably conjugated to cytotoxic payloads to prevent their systemic release. The SMARTag platform enables payload positioning and defined stoichiometry of payload-protein ratios.

In January 2015, Catalent entered into a collaboration with Sanofi -Aventis Recherche & Développement, a Sanofi company, to implement Catalent’s proprietary SMARTag technology in the development of antibody drug conjugates. Under the agreement, Catalent will develop site-specifically modified antibody conjugates using Sanofi’s proprietary antibodies. The collaborative work will involve teams at Sanofi, and Catalent’s facility, in Emeryville, California, which was formerly headquarters to Redwood Bioscience Inc.

In a move to integrate ADC API and drug product manufacturing, in September 2014, Baxter’s BioPharma Solutions business and Sigma-Aldrich Corporation’s SAFC Commercial custom manufacturing services business unit have established a collaborative manufacturing agreement for ADC. SAFC is contributing expertise in conjugation and the manufacture of drug linkers while Baxter BioPharma Solutions is offering sterile fill/finish services for final filling of ADC products. Dedicated project managers at each site will work closely together to help ensure a consolidated timeline and a transparent transfer, with a primary project lead identified as the main contact as mutually agreed. The bulk drug substance conjugated by SAFC will be transferred directly to Baxter’s project management team using established protocols. The Baxter team will then work to provide the correct filling, regulatory testing and validation, packaging, and import/export paperwork processing as well as product lot approval for distribution.

On the drug product side, earlier this year, Catalent expanded its potent handling and manufacturing capabilities at its facility in Somerset, New Jersey. The company completed the expansion of facility and engineering controls for its high-potency tableting and OptiMelt Hot Melt Extrusion operations in Somerset to supplement existing potent capabilities in oral solid and its Zydis Fast Dissolve manufacturing. The company is further investing in additional potent containment for large-scale blending, fluid-bed processing, and high-shear granulation, which will come on line throughout the first half of 2015. The Somerset facility is capable of handling SafeBridge Category 3 and 4, with SafeBridge certification expected in July of 2015. The expansion created a manufacturing Center of Excellence for potent handling across Catalent’s portfolio of oral solid manufacturing solutions, which includes hot-melt extrusion, high-shear and wet granulation processing, solvent-based capability, extrusion/spheronization, fluid-bed processing, Wurster coating, and compression and encapsulation. In November 2014, Catalent also began an expansion of its highly potent and cytotoxic clinical drug packaging capabilities within its 450,000- square foot campus in Kansas City, Missouri, which was scheduled for completion earlier this year. The expansion is designed to increase the available packaging space for highly potent compounds adding two large packaging suites, a sampling lab, and space for various storage conditions. Segregated and separated from non-potent manufacturing operations, the new 6,000-square foot facility is capable of handling SafeBridge Category 3, 4 and cytotoxic compounds. Catalent also has several highly potent and cytotoxic drug packaging suites in its clinical supply facility in Bolton, UK.

In July 2014, Aptuit LLC announced it will be making a $1-million investment at its facility in Glasgow, Scotland facility to upgrade the site’s sterile cytotoxic liquid and lyophilized drug-product manufacturing capabilities. This upgrade for meeting cytotoxic GMP clinical supply was scheduled to be operational by January 2015. Aptuit later sold the Glasgow facility to AMRI, in a deal announced in January 2015.

Also in 2014, Dalton Pharma Services, a provider of chemistry, analytical and formulation development services company, and AB SCIEX, an analytical instrumentation company, formed a research collaboration to develop ADC analysis capabilities to include development of a more definitive and comprehensive method for the identification of drug loading and position of conjugation on macromolecules. The research includes the preparation and characterization of ADCs by Dalton scientists working with AB SCIEX experts to develop standardized analytical procedures for determining the chemical structures of conjugated molecules.

And in 2014, PSC Investments, a subsidiary of California based PSC Biotech Corporation, has acquired a high-potency sterile injectable facility from the Morgridge Institute for Research (MIR), a private research institute affiliated with the University of Wisconsin-Madison. The contract manufacturing operation will be named BioTechnique and will be a newly formed subsidiary of PSC Biotech. The 37,000-square foot sterile injectable fill-finish facility, located in Madison’s University Research Park was constructed in 2008 by Mentor Biologics, Inc. and later conveyed to MIR. The facility provides specialized filling services for cytotoxic, high-potency, biologic, and other sterile injectable drugs.