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Cleantech Chemistry: Khosla, KiOR Double Down in Mississippi

Grand CENtral: Join “Countdown to the Chemistry Nobel!” Google Hangout #chemnobel – UPDATED

Newscripts: Amusing News Aliquots and In Print: Nature’s Call, Nature’s Mimic

The Chemical Notebook: Breaking Bad: A Clueless Review

The Safety Zone: Friday chemical safety round up

The Watch Glass: Nobel prize montage and Designer Magnets and Progress Under Superfund Criticized, Defended and The Technology Behind Nuclear Proliferation and Auto Tire Marketing Practices

 

ChemOutsourcing: Day Two

On the Waterfront

On the Waterfront

Dateline: Long Branch, New Jersey

The day kicked off with a panel discussion on Quality by Design (QBD), a somewhat self-explanatory method of efficient process design associated with the quality management movement of the previous century. It has been revived with the FDA’s recent establishment of an enhanced submissions regimen based on QBD for drug companies filing new drug applications.

QBD comes with other quality sub-practices, including Design of Experiment (DOE), which was featured in an article in C&EN earlier this year. It also comes with additional costs in process design and R&D. As so often happens when something like a quality standard is established as a way to achieve regulatory approval, the industry has tended to focus efforts more on gaining that approval  at the lowest cost rather than on designing the most efficient process.

Panelists agreed that cost concerns can lead to a lot of confusion on QBD, especially when dealing with a contract manufacturing organization. Emerging pharma companies that have little experience in advanced stages of process engineering are unlikely to employ QBD effectively.

According to panelist Kevin Siebert, senior research adviser at Eli Lilly & Company, Lilly has put together four enhanced submissions using QBD. “One was withdrawn, but FDA gave us feedback on it,” he says. “We’ve embraced the initiative. It’s an effort that we use in the early stages when we are looking at process robustness. But it is intended to deliver not only material but also information to support the advanced submissions.”

Panelists agreed that the opportunity to deliver on the information is often lost when dealing with a CMO.

From the perspective of an emerging pharmaceutical company, said panelist James Bruno, president of Pharmaceutical and Chemical Solutions, the focus is on minimizing the amount of work needed to reach clinical milestones. “There is a heavy reliance on CMOs, because few of these companies have strong tech groups. Many don’t understand scale up and process development. Their whole point is, ‘how much will it cost and when can you deliver.’”

The CMO, he said, is therefor under significant cost and time pressure, and will move a reasonable process along without the full QBD vetting. “There is a disconnect on expectations,” he said. “It’s a highly competitive market, and you want to make sure what you turn over to Merck and Lilly is a good package.” The CMO looks to the drug company, and vice versa, to get that together. “It is about money at end of day,” he says. “It’s about how can you minimize cost going forward.”

After the panel, Bruno told me that QBD will eventually be applied effectively, and that it will accelerate the use of efficient technology and process design that are beginning to transform drug chemical production—see his comment yesterday on the need for simple assets.

The panel was followed by a plenary presentation featuring Stefan Loren, managing director of Westwicke Partners. Loren reprised his plenary talk of 2010 on Wall Street’s view of emerging pharma, biotech, and pharma outsourcing.

That view has changed markedly since Loren’s last appearance, largely because money can be had at the moment.

Loren noted, however, that uncertainty is a dirty word on The Street. And there is a solid trace of it in the air right now. For example, there is concern that the upswing in productivity at Big Pharma results from in-licensed products, and that gains in drug approvals may not be sustainable.

Outsourcing, said Loren, has “matured” in Wall Street’s assessment in recent years. It is applauded now as a means of diversifying risk. This marks a welcome evolution from an earlier insistence on the one-stop-shop approach. He advised pristine due diligence in picking a contract manufacture, however, noting that a problem caused by a contractor can hit a drug firm’s stock hard and long.

One surprising bit of intelligence at ChemOutsourcing comes from Fabbrica Italiana Sintetici (FIS): Managing director Laura Coppi will be leaving for a position at CordenPharma in Milan after two years in the key business management role at the Vicenza-based pharma chemicals firm. Her replacement has not been named.

I haven’t spoken with Coppi since writing a C&EN Talks With feature about her earlier this year. But on hearing the news, I was reminded of the quote that ended that article: “I would have loved to have studied mathematics. But, I have to say, I am a chemist in the soul. Deep inside.”

Meanwhile FIS has been investing in Delmar, the Montreal, Quebec-area pharma chemical company it acquired shortly after Coppi came in, boosting capacity and adding significant new isolation and drying capabilities. Delmar will also be adding a kilo lab to its existing pilot plant and expanding its R&D lab to enhance small-scale cGMP synthesis. Delmar and FIS will continue to operate as separate companies, with Delmar making some material for FIS, says John Brady, business development manager. They will also coordinate on projects, leveraging their newly-established connection between Europe and North America, with Delmar passing some projects to FIS for larger-scale production.

FIS has invested about $19 million in developments at Delmar to date, with an additional $5 million per year slated for the next two years, according to Brady.

The day ended on the beach with the annual bonfire, which this year seemed to throw an inordinate quantity of sparks. Not enough to deter marshmallow roasting, however. The karaoke stage had a few takers. Fullish moon. All very nice.

ChemOutsourcing: Day One

Speed Dating

Speed Dating

The pharmaceutical chemicals sector returned to the miraculously unmolested Ocean Place Resort & Spa on the Jersey Shore this week. Unlike much of the coast to the north and south, Long Branch sustained only minor damage from Sandy, which hit shortly after last year’s meeting. The place has a fresh coat of paint, and the Tiki Bar looks pretty much like the one that was there last year.

There have been a few changes, however. Tighter security. Conference sessions held in the exhibit halls, and an increased emphasis on biopharma, reflecting the growing business in biotech drugs. There was also a kind of speed dating session—a stretch of the afternoon during which Merck, Pfizer, Novartis, Celegene, Gilead Sciences, Ironwood Pharma and other drug companies large and small had representatives at round tables around which contract chemical suppliers could sit and try to break the ice. This was a hit with attendees who are always looking for customers (ie drug company decision-makers) at pharma chemical trade shows,  usually finding very few.

“Large and small” was a big theme in discussions on the exhibit floor and in one of the panel sessions (which was technically also on the exhibit floor—taking the sessions out of the conference rooms was not such a big hit with attendees). Focusing on contract work, both manufacturing and research, with biotech and emerging drug companies, the panel came to the conclusion that extra up-front planning is in order when passing work from a small drug firm to a contractor, but that the time to do that work is generally extremely tight.

“As we learned in grad school, a day in the library is worth more than a week in a lab,” said Stuart Levy, principal at SBL Chemistry Consulting, who chaired the panel. It is especially important to get the technical package in order before transferring a project to a contract manufacturing organization (CMO), he said. “You need to write up a good request for proposal and set the tone. If you don’t, trying to back-fill that later is extremely difficult.”

But windows of opportunity don’t always allow for much time in the library, said panelist Richland Tester, principal scientist at Celgene Avilomics Research. “Sometimes we are asked to do crazy things.,” he said. There is generally a deadline to deliver the next data point in a clinical trial in order to receive the next tranche of venture funding. “If you have until a particular date to do it, you have to do it,” he said. “It’s not like having a six-month timeline from a big drug company. Sometimes you don’t have that luxury.”

Time, on the other hand, is money. “I have heard clients comment that money is no object,” said panelist Cheryl D Garr, director of business development at PharmaCore. Such comments are, she noted, more often than not disingenuous.

Jeff Saunders, vice president of small drug design at Ember Therapeutics, responded that the object is value, not money.

Overall, the companies in the sector continue to be optimistic about business. James Bruno, president of consulting firm Chemical and Pharmaceutical Solutions, told me, however, that a shift is underway in the work being done, one that puts the installed manufacturing base a bit out of kilter.

“I’ve said for a number of years that I’m concerned about is what I call simple assets,” he said. “Some companies just have the wrong assets. We have large reactors when we really need smaller ones. We have big vessels that can make 100 tons when the product is only going to be two tons.” Oncology drugs and other high potency, highly active drugs make up an increasing proportion of the work being outsourced. And drug company pipelines are filling with more.

“We are still not pushing drugs out at a rate that makes everyone happy,” he says. “And if your pipeline is weak, the generic pipeline is weak.”

The current business environment in China was a prominent subject of discussion today, with a panel on the subject (see previous post The China Conundrum

). More on this topic in the magazine (C&EN) soon. Another panel of interest covered “crowdsourcing,” an online, open innovation technique, as employed by Pfizer and Purdue Pharma—another topic ripe for coverage in C&EN, so I will keep my powder dry for the moment. But it’s an interesting topic at a conference like this.

And in the interest of full disclosure, this from David Zimmerman, CEO of Kalexsyn: “I am actually going to walk away from here tonight with three very good leads. Frankly, I came out of ACS  [the Society's annual meeting in Indianapolis last week] with one!”

Behind the Story: Cheryl Hogue on Chemists’ Environmental Awareness

Cheryl Hogue wrote one of the many fascinating stories in today’s 90th anniversary issue. Hers has a title that will certainly appeal to the Muppets fans out there: “It’s not easy being green.”

Chemists have become more environmentally sensitive during the last half-century, she writes. But the work Rachel Carson kick-started when she published “Silent Spring” is far from over.

Watch my interview with Cheryl for more context on her reporting and the story.

The China Conundrum

Photo by Jean-François Tremblay

Photo by Jean-François Tremblay


China has traditionally
presented a complex mix of threats and opportunities to the pharmaceutical fine chemical industry, as it has to most other industries. Cost of operations, quality of manufacturing, environment and safety standards, corrupt business practices, and corrupt local authorities are widely tolerated as threats by western firms interested in the overwhelming opportunity of doing business in and with the world’s second-largest and fastest-growing economy.

Lately, however, a new threat of doing business is in the news—the threat that strict environment, site licensing, and anti-corruption laws will actually be enforced. With the advent of President Xi Jinping and the start of the new five-year plan, crackdowns are on a real upswing. Worldwide coverage of the corruption trial of Bo Xilai, a former member of the Central Politburo, has only slightly distracted from coverage of GlaxoSmithKline’s travails. Chinese authorities have accused the British drug major of funneling as much as $500 million to travel agencies to facilitate bribes to doctors in order to boost the sale of drugs.

I sent several e-mails to executives at fine chemical firms operating in China this week, inquiring on the new enforcement regime. I received two replies and spoke with one of the respondents, an executive at a European firm who, like many others that have spoken on China in the press recently, asked not to be identified. The second respondent, Oliver Ju, CEO of Porton, a company based in Chongqing, China, sent a detailed e-mail. Both see the changes underway as extremely important to active pharmaceutical ingredient (API) manufacturers in China.

From a follow-up interview with my first source, I gleaned that the new environment of investigation and enforcement is the latest episode in a kind of cat and mouse game in which authorities, well aware of the complexity of regulations and the slow process of licensing and other approvals, generally turn a blind eye to businesses that can’t wait years for the system to work before getting to work themselves. With every new change in leadership and new five-year plan, there is a crackdown. It is a kind of cyclical cat and mouse game.

Under Xi, however, it seems there is a more thoroughgoing enthusiasm for rooting out corruption and enforcing laws that impact manufacturers in a variety of ways. Energy conservation is high on the docket, as the country reacts to the cost of its huge urban and industrial development programs. Somewhat bizarre enforcement practices have included edicts that if the air conditioning in a hotel brings the temperature in any room below a designated degree, all power to the building will be shut down until further notice. Industrial parks are told with no warning that necessary power shutdowns will be implemented. Management at companies in these parks is encouraged to give employees a little vacation time.

Bribery is prominent on the radar screen as well. Chinese New Year celebrations were curtailed this year in order to assure that government officials were not unduly entertained.

In essence, given business practices that have gone on in China for a long time, cracking down on corruption will be like shooting fish in a barrel. Companies will seem to be randomly targeted. But as my source, who has operated in China for many years, says, everything in China happens for a reason.

Ju contends that recent developments have to be viewed in the context of a wave of economic reforms proposed by China’s new leadership. “Otherwise,” he writes, “it’s difficult to understand what’s going on and how to do business in China in the next decade.”

He notes that a meeting of the Plenary Session of the 18th Central Committee of the Communist Party of China in November may yield more information. “But the direction and priority is already seen since early this year,” he writes. “In my view it’s quite clear that the new leadership strives to transform China into a more market-oriented economy.” The top priorities, he says are a leaner but more effective government, greater law enforcement, and a lowering of barriers to market entry. The latter will provide entry by private companies into banking, energy, and telecommunications.

“I believe API and drug companies will be impacted inevitably,” Ju writes. This will include greater enforcement of current good manufacturing practice standards in API manufacture.

For fine chemical companies, the major practical concern will be flexibility of manufacturing operations, according to my source in Europe. “For you to get approval to build a plant, you must describe the products, the processes, and the quantities,” he says. “It will take you three years for approval, but nobody waits. Think of the speed with which China is growing! How could you be in such a licensing environment? Obviously nobody is in compliance.”

Xi has been extremely vocal in his vow that corruption will not be tolerated. But so has every leader since Mao Zedong. The show of force in recent months may be a sign of a major shift, or it may be another antic swing in the game of cat and mouse. “It remains to be seen whether they just pick on one or two situations to showcase,” says my source, “or whether it percolates everywhere, and people have to come up with the goods.”

Either way, it highlights the conundrum of operating in a vital, but still-developing country where laws and law enforcement are in flux and industry advances at a rapid pace.

Welcome Food Matters at Scientific American Blogs- Chemistry Represent!

Recovered from your Labor Day barbeque? Good. Because something’s cooking at the Scientific American blog network, and it is decidedly meaty. I’m talking about the SciAm network’s new food blog, Food Matters, which launches today, in time for Scientific American’s Food Week celebration.

This group blog features seven authors- three researchers and four journalists, and includes a familiar face (more on that later). According to Bora Zivkovic, who heads the network, at Food Matters “there will be explainers of basics, coverage of new papers, carefully researched pieces of in-depth journalism, pushback against non-science-based activism, posts that provide historical context, and just plain fun stuff from original multimedia to quirky recipes.”

And chemists, if that’s not enough to whet your appetite, consider this: the blog’s authors include Julianne Wyrick, who holds a B.A. in biochemistry, and friend of GlobCasino See Arr Oh. I asked them some questions ahead of the launch and here’s what they had to say. (Quotes edited for grammar and/or shortened for brevity).

Carmen: Why do you think food is a great medium for talking about chemistry and biochemistry?
Julianne: Food touches everyone; from biochemists to ballet dancers, we all eat. Discussing the chemistry involved in food and nutrition helps science come alive to scientists and non-scientists alike.
See Arr Oh: People are surrounded by food, but they don’t always take a second to realize that food is all about chemical processes- from photosynthesis, to preservatives, to digestion.

C: Why is it important to have chemistry representin’ on the big blog networks?
J: Blogging about the chemistry involved in topics like food is important because chemistry is the foundation for so much of science. Many processes, like how a nutrient affects the body, boil down to chemical reactions. If we know more about the chemistry, we have a better understanding of the process.
S: There’s a stereotype that may be in some people’s minds of chemists holed up in their labs, drumming up massive profits for corporations. I’d like to show that chemists can be relatable and fun and communicate well.

Congrats on hitting the bloggy big time, you two. Now, make sure you commission some guest posts from the likes of Matt Hartings and Martin Lersch, and then I’ll really be sated.

This Week on GlobCasino: #SheriSangji update, acetyl fentanyl, and more

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To the network:

Fine Line: European Producers See a False Start on Falsified Drugs

Newscripts: Amusing News Aliquots

Terra Sig: Acetyl Fentanyl: Dangerous, Poorly-Named Street Drug

The Safety Zone: UC expands its lab safety program and National Academy of Sciences lab safety culture committee meeting in Boston tomorrow and Judge denies three Harran defense motions

The Watch Glass: Jacobus Henricus van’t Hoff’s birthday and chemical warfare in 1980 and making the atomic era safe and Transfer RNA Structure Unraveled

European Producers See a False Start on Falsified Drugs

API producers discuss the impact of the Ranbaxy case at ChemSpec in Munich this summer.

API producers discuss the impact of the Ranbaxy case at ChemSpec in Munich this summer. (Photo by Alex Scott)


The European Union’s
Falsified Medicines Directive (FMD), a law enacted in 2011 to prevent falsified active pharmaceutical ingredients (APIs) from entering Europe’s drug supply chain, went into effect on July 2. The FMD requires that any APIs coming into Europe be accompanied by a written confirmation from a competent authority that the chemicals were manufactured according to current good manufacturing practice (cGMP) standards, the U.S. Food and Drug Administration criterion that has been established as the gold standard for regulatory quality oversight worldwide. The response from Europe’s API suppliers to FMD is: good, but far from good enough.

Characterizing FMD as merely a step in the right direction, Tony Scott, adviser to the European Fine Chemicals Group (EFCG), says the level of trust involved in requiring only a written confirmation on material shipped from China, India and elsewhere is ill advised, given the known instances of falsified documentation and corrupt practices in those countries. He points to the recent, rather glaring example of Ranbaxy, a major Indian generic API supplier that has been embroiled in a data falsification scandal since a plant inspection brought problems to light in 2006.

According to Scott, who was instrumental in forming EFCG and has led the organization since its inception in 2004, the only way to assure the quality of materials entering Europe is to actually inspect the plants manufacturing those materials. In the protracted debate and discussion leading up to the FMD, however, European regulatory authorizes arrived at an estimate of 15,000 to 20,000 facilities supplying APIs to Europe’s drug makers.  Inspecting that many plants, it reasonably determined, would be impossible. Scott says EFCG has no idea how regulators arrived at that range. The association insisted during deliberations that fewer than 1,500 sites operated by the top 20 API suppliers from outside the EU are the source of most imported APIs—a number of facilities that could have manageably undergone inspection in time for the law to go into effect, says Scott.

“I think the European authorities have taken a big risk in beginning a process of trust, and I think that is an admirable thing to do,” says Scott. “But where is the enforcement?” The only way to enforce the directive is to physically inspect the plants importing APIs to Europe, he says.

Scott contends that far more powerful lobbyists than the EFCG —including those representing pharmaceutical companies—supported the notion that the number of plants involved would eliminate the possibility of comprehensive inspection, or lead to drug shortages and price increases if an inspection regime were launched.
Enforcement of laws protecting the supply chain has been a thorny issue in Europe for some time, says Scott. He points to a 2001 European Commission directive requiring APIs to meet the cGMP standard. “If that were to have been properly enforced, you wouldn’t need the FMD,” he says. “FMD is really an umbrella over things already in place for regulatory purposes with a view to putting sticking plaster over them and assure that they seem to be working better than they have in the past.”

Scott says the API producers have also expressed a willingness to pay for inspections through a program similar to the Generic Drug User Fee Amendments of 2012 (GDUFA) in the U.S., under which drug makers and API suppliers pay a fee to expedite plant inspections as part of the drug approval process for generic drugs. “We offered, but we were refused by the European Medicines Agency,” says Scott. The agency, Europe’s equivalence to the FDA in the U.S., saw a user free as, “a step too far,” he says. “And very often, dare I say, when the Americans do something and do it well, the European people will just for that reason not do it. And it is really very worrying if this attitude prevails.”

Scott notes that differences between the U.S and European fine chemicals sectors have become a bit problematic elsewhere, as negotiations on pending trade agreements currently find the Europeans, “more advanced in their preparations and thinking than the Americans, who are dragging their feet in all directions.” More on that at Fine Line soon.

FMD, of course, is but one front in the war against falsified, counterfeit, and criminally adulterated drugs which has ramped up considerably since the heparin case in 2008. FMD is also inextricably connected to the competitive landscape in pharmaceutical fine chemicals, where European and U.S. producers have over a long period of time seen much of the business go to lower-cost, and in many cases, lower-quality producers in China and India. While there are many world-class chemical suppliers in these countries, all of which are regularly inspected and glad of it, there are many stories about Chinese companies being inspected, but having the chemicals they supply manufactured by uninspected subcontractors. Scott claims EFCG has presented photographic evidence of this practice to regulators.

And then, there is Ranbaxy, which has truly shaken the Indian API supply sector.

What is lacking, still, is a great public outcry for safer drugs. This is partly a problem of communicating the arcane mechanisms of the drug supply chain. API falsification is a lot harder for the public at large to understand than lead paint on toys.  And Scott says regulators throughout the process of developing the FMD, have challenged industry repeatedly for greater evidence of a threat to the public due to falsified drugs.

“They keep saying, ‘show us the body bags,’” says Scott. “We can’t!” And he admits that the issue not resonating with the public is a problem, given the political dimension to making changes in a law that will be perceived as liable to increase the price or interrupt the availability of drugs, and/or raise taxes. It is an uphill climb for EFCG. “Trade associations like ours have a lot of high quality thinkers,” he says. “But only modest resources.”