In my Editor’s page in the last issue of sp2 (November/December 2009), under the heading ‘Fluctuation fortunes’, I commented on how the pharmaceutical industry’s performance can best be described as ‘mixed’, noting that progression of drug candidates through clinical trials was continuing with some notable successes for new types of drugs in Phase 1 and Phase 2, but that the downward trend in the introduction of real, commercial products was also continuing.
I also remarked on the effects of the current economic climate, referring to Pfizer’s closure of several R&D facilities in the USA and UK, and its consolidation of its research activities into just a few main centres, as well as to other companies making significant cuts in their operations, including UCB’s restructuring and fine chemical company CARBOGEN AMCIS consolidating its early-phase services into one site and rationalising the activities of another, with consequent job losses.
Well there’s been more news of this kind recently, with one of the largest custom fine chemical companies, Lonza AG, reacting to the economic pressures of the past 18 months and the cost reduction efforts of the pharmaceutical industry by strengthening its platform in Asia and announcing its intention to close its sites at Conshohocken (Riverside), Pennsylvania, USA; Shawinigan, Canada; and Wokingham, UK later this year. The company says this complements its existing platform in Nansha, China and is its “response to customer needs for mature regulated products at competitive conditions in a new market segment”.
It isn’t just fine chemicals that are affected: as part of a modernisation and streamlining initiative within Lonza’s Bioscience supply chain, the offices and warehouse in Wokingham, UK will be closed and these activities transferred to Verviers, Belgium.
Another disturbing announcement was the recent statement by Charles River Laboratories that the company will suspend operations at its Preclinical Services facility in Shrewsbury, Massachusetts, USA by the middle of this year when ongoing in-life studies will have been completed. The company said it intends to resume operations when global preclinical market conditions improve and it requires additional capacity. It said suspension of operations would likely result in some loss of revenue in 2010, but that it would retain the majority of the business and provide its services at other PCS sites.
So it isn’t just the pharmaceutical companies that are feeling the pinch: these two major suppliers to the pharmaceutical industry, one a fine chemical and biotech custom manufacturer, the other a leading provider of preclinical research services, have felt the need to close some operations in the West and concentrate these activities in Asia. I expect that, unfortunately, we’re going to see more developments of this kind throughout the pharmaceutical and biotech industry materials and services supply chain as well as in the pharmaceutical and biopharmaceutical manufacturing sectors. sp2 will continue to bring you news of these developments as they occur.
