Press Room

Hovione for CPhI 2003 The service of an API manufacturer not only involves the development of the chemical process and the supply of high quality API, when and where required, but also paying close attention to those physical parameters which make up the necessary requisites for a successful formulation. Chemical skills must be complemented by a pharmaceutical culture. For a successful custom synthesis partnership it is imperative that the API contractor be both cognizant of the importance of having the correct particle size and morphology, and be able to develop a process that delivers consistently the required crystal form and size. This is key in many galenic forms; in the field of inhalation for instance it is absolutely critical; it can also be the source of many last-minute surprises and frustrations until the matter is well controlled. Traditional know-how includes: expertise in controlled crystallisation, micronization and jet milling. These are skills that Hovione has used for decades in its plants to achieve the desired crystal form and consistent particle size. All of this needs to be backed up with analytical techniques, including laser diffractometry and impaction, used in a manufacturing scenario, to assure the necessary QC controls. But technology moves on…. Hovione is pleased to announce it is installing a state of the art Spray Drying facility, capable of evaporating 35 to 90 Kg of water per hour under the most stringent cGMP conditions. The supplier of the Spray Drier, Niro A/S has designed this to the most advanced specifications. It is equipped with two atomizer systems (a rotary and co-current two-fluid nozzle) to deliver injectable grade APIs and is configured to be “cleaned-in-place” it discharges into a classified clean-room. This multipurpose unit was the result of a close collaboration with Niro and allows Hovione to produce dry solids in either powder, granulate or agglomerate form from liquid feedstocks such as solutions, emulsions and pumpable suspensions. This technology will enable continuous production, at low-cost and with a high degree of precision, over a wide range of particle sizes. The system meets explosion-proof requirements and can therefore spray-dry out of most organic solvents in a safe and compliant environment. Niro has described the unit as one of the most flexible and versatile GMP compliant spray-driers that they have ever built. Continuing its programme to expand scientific know-how in advanced technologies, Hovione is actively developing expertise in other particle design techniques: Supercritical Crystallization and Sono-crystallization. Supercritical crystallization offers a trouble-free separation of the product from the solvent and the capability to control the size and form of the crystals. The principle is based on replacing a conventional solvent with a supercritical fluid, which may act as a solvent or as an anti-solvent. This technique may be used to produce very small particles with narrow size distribution. Sono-crystallization uses ultrasound to influence crystallization behaviour by promoting cavitations within the liquid media, which serve as nuclei for new crystals to form. Benefits can include improved crystal habit, purity and the ability to manipulate crystal-size distribution and powder flow characteristics. It also offers a useful and more controllable alternative to seeding.

Article

Particle Design, New Technologies for Better Crystals

Sep 19, 2003

New Generic Drug Developments Mometasone: Hovione’s DMF has been filed worldwide; it had been accessed and all deficiencies satisfactorily and promptly addressed. The relevant pre-approval inspection did not result in a Form 483 being issued. The product is now in routine manufacture   Fluticasone: Hovione filed a DMF for Fluticasone at the FDA in 2002. This product is currently in commercial manufacture addressing the needs of 3rd parties for early intermediates and API for use in clinical supplies and registration. Fluticasone was developed by Glaxo Wellcome and is currently marketed as Flonase®, Flovent® and Cutivate® by GlaxoSmithKline. Its worldwide sales amount to USD3bn.   Simvastatin: Validation for this new generic compound as been successfully completed and a DMF has been filed. Hovione and CKD Bio, a Korean Company with extensive experience in fermentation of APIs, have established a joint collaboration to produce and market Simvastatin. This collaboration guarantees an integrated supply chain for Simvastatin with CKD Bio producing lovastatin that Hovione further transforms into Simvastatin. This collaboration has as primary objective manufacturing capacity and reliability of supply. Availability of API and a challenging specification remain the key issues surrounding this block-buster generic – a matter Hovione has addressed. Simvastatin was developed by Merck and is currently marketed as Zocor®, by Merck & Co. and was the largest selling prescription drug in worldwide sales (USD6.67bn) in 2001. The markets of United States, France, Germany, United Kingdom and Japan account for 58 tons of API annual consumption. Capacity increase for production of Minocycline In order to meet market demands, a project to increase the production capacity of minocycline by 40% is currently underway. This increase in the production line installation represents a significant investment, improving solid handling conditions and increasing the hydrogenation, filtration and drying operations. The additional capacity will go on stream as of Q3 2004 in phases and we expect stepwise increases as from the end of this year. Sales: Hovione has announced sales for the year ended 31st March 2003 amounting to US$70. Generic products for multi-customer remain with the largest share, however custom synthesis business continues to grow at a faster rate. Hovione is committed to serving both segments of the pharmaceutical industry with equal priority. Commercial Products Simvastatin  Sancycline Roxithromycin  Ivermectin Methacycline hydrochloride Minocycline hydrochloride Doxycycline hyclate Doxycycline monohydrate  Beclomethasone dipropionate monohydrate Beclomethasone dipropionate Betamethasone dipropionate Betamethasone valerate Betamethasone acetate Betamethasone disodium phosphate Clobetasol propionate Dexamethasone dipropionate Mometasone furoate  Fluticasone propionate Halobetasol propionate  Hovione is an international group dedicated to the process development and synthesis of APIs (active pharmaceutical ingredients) serving exclusively the pharmaceutical industry. With FDA inspected plants in Europe and the Far East and a Technology Transfer Centre in New Jersey,USA, Hovione is committed to the highest levels of service and quality. Hovione’s capabilities include process chemistry, worldwide regulatory affairs, kilo to multi-ton manufacture of complex multi-step chemistry of APIs under FDA and ICH cGMP quality standards. Note: Hovione does not sell or offer to sell products to countries where they are protected by patents.

Press Release

Hovione generic product portfolio update

Sep 15, 2003

Hovione is pleased to announce that its new and latest facility, the Technology Transfer Centre (TTC) located in East Windsor, NJ, is now open and in full operation. The 30.000 sq.feet / 3000m2. state-of-the-art facility consists of process chemistry R&D labs and scale-up facilities to springboard pharmaceutical pipeline products into full commercialization. Headed by Dave Hoffman, the TTC is ideally located just off exit 8 of the New Jersey Turnpike, in close proximity to nine of the world’s major pharmaceutical companies. A Greenfield project, the site now employs 16 people with the capability of expanding up to 45. The TTC offers Hovione’s US based customers process development and scale up services, along with quality control/assurance and regulatory support. The cGMP kilo-lab and pilot plant, aimed at preparing small quantity NCE’s to support customer’s pre-clinical and early phase clinical development, demonstrate processes locally before transferring them to Hovione’s full scale manufacturing plants, in Europe and Asia. The development labs, staffed with multi-disciplinary project teams, allow fast turn around in producing small quantity pre-clinical APIs and investigate emerging technologies for scale-up for incorporation into Hovione’s core capabilities. Process R&D and scale-up studies, carried out in glassware to 22 lt, aim to identify potential problems arising with the industrialization of the synthetic process.   The kilo lab has a capacity to 200 lt in glass-lined reactors and 100 lt Hastelloy® C-22 cryogenic reactors. The kilo-lab develops the industrialization of the process and produce pre-approval quantities for clinical studies in compliance with strict cGMP procedures.   The Pilot Plant, equipped with a 400 lt Hastelloy® C-22 cryogenic reactor and 800 lt glass-lined vessels, produces kilo quantities of API under cGMP. From the pilot plant, a seamless technology transfer of industrial scale quantities is in place for full-scale commercialization. The Finished Goods storage guarantee local stocking in compliance with cGMP of all Hovione APIs for US customers.   Sales, Marketing and Administrative offices communicating via a global IT connection provide a permanent presence and service to US customers, a market that already represents over 60% of Hovione Group sales. The technical capacity of the TTC mimics that of Hovione’s fully commercial quantities for seamless transition to commercial scale production. The TTC is fully integrated into Hovione’s global quality network offering US customers real time data and regulatory support for ongoing production in the manufacturing plants. Operating under the same procedures, company culture and team management, TTC benefits customers with efficient, seamless and cost-effective technology transfer. “The unique design and equipment of our TTC compliments Hovione’s existing facilities in Europe and Asia and allow us to expand upon our core capabilities,” says Dave Hoffman. “Those of us with Hovione in the US are proud to carry on the tradition of excellence in service to the pharmaceutical industry, first established by Ivan Villax over 40 years ago.” Hovione is an independent, privately held, European-based producer of Active Pharmaceutical Ingredients. Hovione is dedicated to the process development, quality and synthesis of APIs, serving exclusively the Pharma industry, Hovione is a specialist in manufacturing difficult to make APIs and Regulated Intermediates under the most stringent controls of safety, quality and environmental protection. Hovione has more than 40 years of experience in chemical processes and, with 500 m3 of reactor capacity, has produced industrially more than 40 APIs.

Press Release

Hovione opens new Technology Transfer Centre in New Jersey

Sep 03, 2003

Hovione and CKD announce joint collaboration to produce and market Simvastatin1 Hovione and CKD Bio Corporation (CKD Bio) have signed an agreement to produce and market simvastatin on a worldwide basis. The joint collaboration will offer the active pharmaceutical ingredient (API) for simvastatin under cGMP to FDA and ICH requirements as well as the registration dossiers for simvastatin tablets for the European and United States markets. Both companies will be offering the product for sale only in countries where such does not represent an infringement of third party patent rights. The collaboration guarantees an integrated supply chain for simvastatin – CKD Bio produces lovastatin that Hovione further transforms into simvastatin. Hovione has exclusive rights to use CKD Bio´s patented process (WO 01/45484 A2) for simvastatin manufacturing. The process validation batches of simvastatin (API) have been concluded, the filings will be ready in Spring 2003 and are suitable for worldwide registration. The joint collaboration offers the market with probably the most competitive integrated manufacturing platform for the reliable supply of simvastatin API for the generic industry. CKD Bio has dedicated a portion of its fermentation capacity to the production of lovastatin. The new complete automated manufacturing building inaugurated in November 2001 in Macao by Hovione is dedicated to the synthesis of simvastatin. This integrated supply assures the generic industry with a reliable supply of simvastatin as well as a competitive price. The two Companies enjoy a long and fruitful business relationship, having collaborated in several projects involving semi-synthesis active ingredients over the last 30 years. The simvastatin project demonstrates the unique synergies, which the two companies benefit from. One with an unparalleled excellence in fermentation and the other with a long history of success in building synthetically on natural products and scaling the processes to industrial manufacture. This strategic integration puts Hovione and CKD Bio in a unique position to guarantee reliability of supply, competitive terms and complete customer support – for both API supply and/or final formulations including all registration requirements. Simvastatin was developed by Merck and is currently marketed as Zocor®, by Merck & Co. and was the largest selling prescription drug in worldwide sales (USD 6.67bn) in 2001. The markets of United States, France, Germany, United Kingdom and Japan account for 58 tons of API annual consumption.   Hovione is an international Group dedicated to the process development and synthesis of APIs, serving exclusively the Pharma industry. With FDA inspected plants in Europe and Asia and a Technology Transfer Centre in New Jersey, Hovione is committed to the highest levels of service and quality. Hovione is a specialist in manufacturing difficult to make APIs and regulated intermediates under the most stringent controls of safety, quality and environmental protection. Hovione has more than 40 years of experience in chemical processes and, with 500 m3 of reactor capacity, has produced industrially more than 50 APIs. CKD Bio is a Korean company established in 1941, with extensive research and production capabilities in the fermentation of active pharmaceutical ingredients. CKD Bio has a fermentation plant in Korea with a total fermentation capacity of 1.200m3. This plant is FDA inspected for several products. CKD Bio exports 30-40% of its production to the United States and Europe. CKD Bio has a division of Pharmaceutical Technology and New Drug Development of the Research Institute, located in Korea.   1 This announcement is not to be construed as a representation or as an offer to sell in those countries where such would constitute an infringement of third parties’ patent rights

Press Release

Hovione and CKD announce joint collaboration to produce and market Simvastatin

Sep 03, 2003

Hovione announces that sales for the year ended 31st March 2003 amounted to US$70m. This represents a growth of 27% on the previous year, and accounts for the Company´s best sales performance ever. Guy Villax, CEO of Hovione noted that “Hovione has successfully delivered on the business plan approved two years ago. In addition to the good performance of the financial indicators a good management of the product portfolio was successfully managed – Hovione now has two distinct business areas – generics and exclusive manufacturing – accounting, respectively, for 2/3 and 1/3 of sales”. The company forecasts an average annual sales growth of around 15% from 2003 to 2006 through organic growth. Over the past 7 years the company’s sales grew at 13% pa, a growth that was financed by the company’s cash flow and bank loans. During 2002, Hovione pursued on schedule its 3 year US$56m investment programme due for completion in 2003. The investment programme addresses a growth strategy directed at strengthening Hovione’s leading world position in the supply of active pharmaceutical ingredients to Pharma Multinationals, the emerging Biotechs and the Generic houses. - The new Technology Transfer Center in New Jersey, USA was concluded on time and budget in September 2002, suitably qualified to enable it to start taking on customer projects in the last quarter of the year. This greenfield project includes a kilo-lab and a pilot plant and provides a permanent presence in the market that already provides over 60% of Hovione Group sales. - At the Loures plant the construction of a cGMP compliant pilot plant started in 2002. This shall provide Hovione with the necessary facilities to be able to continue expanding its process chemistry R&D resources. A first-phase will enter into service before year-end 2003. - In the Taipa facility in Macau manufacturing equipment and validation is now in place for production of injectable grade APIs. This plant has been regularly inspected by the US FDA since 1987 and Hovione is now well equipped to address the growing outsourcing needs of the NASDAQ quoted Biotechs that operate under the virtual company business model. Hovione is an international group dedicated to the process development and synthesis of APIs (active pharmaceutical ingredients) serving exclusively the pharmaceutical industry. With FDA inspected plants in Europe and the Far East and a Technology Transfer Centre in New Jersey, USA, Hovione is committed to the highest levels of service and quality. Hovione’s capabilities include process chemistry, worldwide regulatory affairs, kilo to multi-ton manufacture of complex multi-step chemistry of APIs under FDA and ICH cGMP quality standards.

Press Release

Hovione Group financial results for the year ended 31st March 2003

Jul 30, 2003

Ivan Villax was fond of saying he had left his country aged 23 with a toothbrush in one pocket, a chemical engineering diploma in the other and the Russians at his heels. Born in 1925 in Magyaóvár, a small town in Hungary just East of Vienna, his mother was of Austro-Hungarian landowner stock and his father a Hungarian scientist. In 1948, while the family was in a displaced persons camp in Salzburg, a letter from Professor Victoria Pires, then Secretary of State for Agriculture in the Portuguese government, invited Ivan's father to come to Portugal. Ödon Villax was to help establish an agronomy research center into plant genetics in Portugal such as those he had run in Hungary. Ivan arrived in Lisbon a little later to join his family after working at the Centre de Recherches Agronomiques de Clermont-Ferrand in France. He knew then that antibiotics were to be his future and while in France he had isolated from soil samples some tetracycline producing strains that he later named Streptomyces lusitanus. He joined the Instituto Pasteur de Lisboa in 1952, then one of the leading pharmaceutical laboratories in the country. His first inventions were in the area of chloramphenicol preparation and tetracycline and penicillin fermentation. During this period he made good use of Prof. Maia Loureiro’s equipment, the inventor of submerged aerobic fermentation. This Portuguese technology had been instrumental in solving the industrial challenges of penicillin fermentation during World War 2. In 1958 he wed Diane Du Boulay; and together with two other Hungarians, Nicholas de Horthy and Andrew Onody, they founded Hovione in 1959. During the first 10 years the company was a research laboratory located in the basement of the family house in Lisbon, not far from the American and British embassies. As Ivan made chemistry in test tubes, Diane typed out invoices and for the next 45 years they made an amazing team. A close collaboration developed with Fermentfarma Spa, Milan - a company also run by Hungarian refugees - Villax became the technical director and a minority shareholder. Technology for the fermentation and isolation of tetracyclines was licensed to Imperial Chemical Industries of the UK, National Fermentation of South Africa, and to International rectifier of El Segundo, California among others. In 1967 Rachelle Laboratories bought out Fermentfarma and the proceeds of Ivan Villax’s share were used to build the first Hovione plant in Loures, just outside Lisbon. Growing tired of the unpredictability of fermentation processes, he directed his research efforts to chemical synthesis. In the Loures plant he developed and industrialized an 18 consecutive step process to produce betamethasone and its derivatives, and throughout the 70s Hovione enjoyed a privileged position in Japan, thanks to Villax's independent process patents. As the business grew, and Portugal went through some troubled times after the 1974 revolution, Ivan sent his children to finish their studies in England and started looking for a location for further expansion. A Hong Kong office was established in 1978, and in the same year Hovione's first purchasing visit to the Canton fair took place. One after the other his four children spent a few years working in the Far East; it was all part of giving them the best possible education. By 1982 the Loures plant had expanded and got organised to supply the US generic market with semi-synthetic antibiotics; the Macau plant went on stream in 1985 to provide additional capacity. This was prior to the Roche-Bolar amendment, and at FDA for several years people remembered how samples of doxycycline were provided at 9am at their Fishers Lane Rockville, Maryland offices, and not a minute too early, or too late, before the innovator’s patent expired. In Europe this product generated extensive patent litigation with Pfizer suing a number of Hovione customers in 8 different countries. True to his beliefs, Villax volunteered as co-defendant in every suit. His tenaciousness in the face of such adversity meant he did not give up and eventually the matter was settled out of court in 1992. This dispute diverted Villax’s efforts from following other creative pursuits much to his disappointment; though throughout this time the industry recognized in Hovione a fighting spirit that was a characteristic of its founder. Today the generic industry worldwide benefits from Hovione's efficient processes in the production of many other active ingredients: minocycline, roxithromycin, are products where Hovione retains a leading role in several countries. Ivan Villax was always grateful to the country that welcomed him and allowed him to make a new life. He was happy that in providing generic contrast media Hovione was somehow celebrating Prof. Egas Moniz, a Portuguese Nobel Laureate, the father of angiography. After the fall of the Berlin wall he made frequent visits to Hungary. The Technical University of Budapest, his Alma Mater, awarded him a PhD in recognition for his 40 years of work in pharmaceutical chemistry and he was made a member of the University's Senate. By then he had authored over 100 patents and scientific articles. In 1995 his health started to weaken and he made arrangements for an organised hand-over of his responsibilities. With the business in the hands of a professional management team led by his son Guy, Ivan Villax still came to the Loures plant on a daily basis, keen on being kept informed on the new chemistries and on the performance of the business, and quick to point out any slack in the rigour, discipline or housekeeping in either the labs or the manufacturing facilities. Every year, together with Diane, he visited the Macau plant keen to encourage the younger generation and to acknowledge the service of long-standing staff. In his last years he saw Hovione becoming an important producer of HIV protease inhibitors, a key medicine in the fight against AIDS, and taking an active role in many drug development projects as the provider of the active ingredient. In 2002 Hovione established a pilot plant in New Jersey, not far from Rahway where in the 50s Villax had turned down an offer for a position at Merck's research laboratories. He and Diane traveled the world, whereby he was able to satisfy one of his other passions, collecting plants from exotic locations, planting and nurturing them in his quinta outside Lisbon. This May, after a severe deterioration of his lung condition, Ivan, ever the fighter, ever determined to control his own fate, realized that hospitals and science could do no more for him and asked to be taken home. At his quinta in Manique surrounded by his flowers and his trees, with his children, grand-children and his wife Diane, his life-long partner, he lived another two happy weeks - he died on Friday June 6th. Church services will be celebrated at the Igreja Matriz of Loures at noon, and at the Basilica da Estrela, in Lisbon, at 7pm on June 12th.

Press Release

Ivan Villax, 1925-2003

Jun 06, 2003

Dave Hoffman, President of Hovione’s U.S. Operations, is pleased to announce Wayne Davis has joined the staff of the Technology Transfer Centre (TTC) as Director of Technology Transfer. Dr. Davis comes to Hovione from Bristol-Myers Squibb Company, (formerly DuPont Pharmaceuticals), where he gained extensive experience in piloting NCE’s and managed their technical transfer to commercial facilities. As the focal point and coordinator for all technical transfers worldwide, Wayne will prove a strong asset to Hovione who once again raises the standard for API service providers. Hovione’s TTC opened in September 2002. The facility is now fully qualified and under normal activity. Hovione´s 3 sites, in New Jersey, Portugal and Macao, are now totally integrated in their ability to take customer projects from kilo-lab to pilot-plant through to industrial scale using a common, site independent, quality system. This common culture and the frequent rotation of staff between sites enables swift technology transfer along the life cycle of each project. Hovione is dedicated to the development and manufacture of pharmaceutical fine chemicals. Serving exclusively the Pharma industry, Hovione has FDA inspected plants in Europe and the Far East, and Technology Transfer Centre in New Jersey. Committed to the highest levels of service and quality, Hovione’s capabilities include process chemistry, worldwide regulatory affairs, kilo to multi-ton manufacture of complex multi-step APIs and regulated intermediates under FDA and ICH cGMP standards. In the past 5 years, Hovione has been the API manufacturer behind 4 successful product launches in the USA.

Press Release

Hovione PRESS RELEASE for Informex 2003

Jan 24, 2003

The dust has now settled after the exciting but turbulent times 2 years ago that saw the chemical giants snapping up pharmaceutical fine chemical specialists for hundreds of millions. Almost 3 billion dollars were invested in three deals alone; the transactions listed in Table 1 add up to more than $14b (includes Gist at $6b and the recent Roche V&FC deal at $2.5). The drivers for outsourcing of APIs remain unchanged, yet the business model adopted by the various players seems to fall clearly into two very different types – with different offerings and different strategies. Yet for all exclusive manufacturing of NCE APIs remains a roller-coaster: approvals carry high rewards, product cancellations and withdrawals mean significant disappointments. The notable new entrants are the integrated chemical giants that have acquired or invested in GMP businesses (some of the businesses that got acquired were great brands: Archimica, ChiRex, Finorga, Gist-brocades, Laporte, Profarmaco, Raylo, Torcan…). Their original strategy was to bet on size and enter a high-margin non-cyclical business that had synergies with their existing businesses. Some articles emphasized that the acquisition of API capabilities was strategically aimed at giving them total control over the key building blocks, which could be sourced internally. BASF advertised with the slogan: "Backward integration is another form of forward thinking". On the other hand the traditional players have remained independent and have taken no part in the M&A frenzy (FIS, Hovione, Lonza, Omnichem, Orgamol, Siegfried, Sumika). In fact, they all probably see M&A as a strength-diluting exercise, as it debilitates one of their strongest asset, namely: their company culture. Their growth, which is consistently in double digits for the past 10 years, remains purely organic – and they enjoy a stable ownership, Table 2. The independents strongly disagree with the assumptions which formed the strategies of the new entrants: Why should size matter ? when most APIs are only a few tens of tons when there is a trend to more highly-active compounds when an API producer should be a generalist -able to do all technologies- and not the lowest-cost technology specialist when the early phase clinical materials requires service, service, and more service, which traditionally is not a characteristic of large, multi-site companies   Backward integrating only adds to an already risky business; whereas the Independents have the whole world -including India and China- to source low cost raw-materials.   Buying sites from Large Pharma with supply agreements often resulted in: a low-margin business, a single-customer dependence, an old plant, which was often not multi-purpose and certainly not designed for quick change-over and evolving compliance standards. Furthermore with their expansion into the API business the chemical giants risk antagonizing their traditional customers who now could perceive them as competitors and no longer as supplier/partners. As an example, Hovione would prefer to discuss its new catalyst needs with Engelhard rather than Degussa or Johnson Matthey, who are now perceived to be competitors. Neither the analysts, the board members nor the shareholders considered any of these matters – but management thought they saw opportunities for making a difference in their shareholder value and the stock-market supported them wholeheartedly. In our view the winning model appears to be a company big enough to: have the critical mass that will support the diversified portfolio necessary to mitigate risk support a large process chemistry group able to develop several dozen simultaneous projects have the depth and breath of know-how and technology that is necessary to support multiple process validation campaigns per year assure long-term capacity. And yet a company small enough to: take decisions and communicate them quickly provide extreme levels of service, flexibility and transparency We believe the entrepreneurial, single-minded company without share-price concerns or peripheral activities to serve as distractions is likely to be a step ahead of the competition. The constant need for large amounts of capital investment, the many years that projects take to mature from development phase to commercial scale, and the inherent risk of each project makes our business unfriendly to the stock-market. Therefore it should be no surprise that the key players have a reference shareholder able to look at the longer-term: whether it be Ajinomoto, a family or a foundation. Over the last 12 months Hovione’s normal growth has been further enhanced by: Satisfied customers that bring us repeat business Projects that have moved beyond validation to commercial phase Customers with projects in Phase III who are looking for a more reliable long-term supplier or for further capacity Our experience indicate that Phase III projects change suppliers because: They want a stable supplier for the long term, “one that does not shop itself around constantly” They want assurance of capacity and of compliance – and are fed up of “getting a different color batch every time” They want to be “in-the-loop”, and not be the last ones to know of problems or of process changes The key-buying factors for our customers seem to include: a company capable developing robust processes based on sound science that deliver “right-first-time, every time”, shareholders who are committed for the long-term and a track-record of rock-solid delivery as well as open and honest communications. Some European companies have continued to invest at a time when others are trying to sell. Orgamol is building a new pilot plant and synthesis unit in Switzerland, Siegfried has innovated dramatically in the GMP design of its own new facility. Rohner has started-up a new cGMP multipurpose plant. Hovione has just commissioned its new Technology Transfer Centre in New Jersey, USA. This is an investment in a green-field site with kilo-lab and pilot-plant facilities within a short drive of the largest cluster of API customers in the World. In the past few years exclusive manufacturing as an industry has been the object of far too much interest, and too many bets were placed with exaggerated expectations –and most are not pleased with their investments. The business however exists, the market continues to grow but it is just not as simple as many companies expected it to be. Fines for non-compliance of GMPs have reached a record $0.5b, and FDA’s most recent initiative “Pharmaceutical cGMPs for the 21st Century” are but two examples that indicate that the scope for differentiation has increased yet again; and that the role of a professional independent manufacturer of APIs has never been more relevant. Guy Villax Chief Executive Hovione Loures, 11th September 2002   Article published at Show Daily for CPhI 2002

Article

Outsourcing: The dust has now settled

Sep 10, 2002

Lisbon – 6th May, 2002 - Hovione announces that it has completed a $35m 7 year credit facility, involving a loan from the European Investment Bank and a syndicated commercial bank loan that together with the company’s generated cash-flow, will finance Hovione’s $56m investment programme expected to be completed in 2003. The investment programme addresses a growth strategy directed at strengthening Hovione’s leading world position in the supply of active pharmaceutical ingredients to Pharma Multinationals, the emerging Biotechs and the Generic houses. Investments will be carried out at the three Hovione sites located in USA, Macau and Portugal, and will include: - A new Technology Transfer Center in New Jersey, USA. This greenfield project includes a kilo-lab and a pilot plant and provides a permanent presence in the market that already provides over 60% of Hovione Group sales; - The doubling of the manufacturing capacity of the Taipa faciliy in Macau. This plant has been regularly inspected by the US FDA since 1987 and is geared to address the growing outsourcing needs of the NASDAQ quoted Biotechs that operate under the virtual company business model; - Adding pilot plant, research facilities and general infrastructure facilities in the Loures site (office space, IT facilities, R&D facilities and the renovations of several manufacturing buildings). The $20 million EIB loan was guaranteed by Banco Espirito Santo, Banco Comercial Português, Banco BPI and Caixa Geral de Depósitos. The Macau tranche which comprised a $15 million syndicated commercial bank loan was granted by Banco Espírito Santo do Oriente, Banco Nacional Ultramarino and Banco Comercial de Macau. The company forecasts an average annual sales growth of 16% from 2001 to 2008 through organic growth. Over the past 7 years the company’s sales grew at 13% pa, a growth that was financed by the company’s cashflow and the 1995 $14.5m syndicated loan by Banco Espírito Santo. Hovione is an international group dedicated to the synthesis of APIs (active pharmaceutical ingredients) serving exclusively the pharmaceutical industry. With FDA inspected plants in Europe and the Far East and sales offices in Hong Kong, Switzerland and New Jersey, Hovione is committed to the highest levels of service and quality. Hovione’s capabilities include process chemistry, worldwide regulatory affairs, kilo to multi-ton manufacture of complex multi-step chemistry of APIs under FDA and ICH cGMP quality standards.

Press Release

Hovione signs a $35m credit facility

May 06, 2002

Article published in the Informex Show Times Newsletter   Pharma Fine Chemicals - Nothing's changed! Since the summer there has been an avalanche of gloom in the industry magazines. Many articles reporting how much everything had changed since the last year; how fine chemicals are suffering by over-investment, by over-capacity, by a downturn in the cycle etc.. etc.. The reality is many companies made bets that the market perceived then as being excellent ones, but hindsight now tells us that too much optimism about the fine chemicals sector drove acquisitions and investment in plant expansion by companies inexperienced in the sector. The tough part is, though many are now hurting, the misunderstandings seem to persist: 1. "We are in a down-turn in the cycle". In pharma API there is no cycle - indeed some trends are up (more projects are coming out of the Biotech sector) others are down (more advanced stage projects are cancelled, more drugs have been withdrawn, pressures for better plant utilization at the merged large pharma drives less outsourcing) ) but overall they probably cancel each other out - the amount of work out there is still increasing and is finding outsourcing homes. It is probably now in smaller parcels, bought by more experienced decision-makers and there is certainly more competition. The only cycle at Hovione is the winter when more antibiotics are sold because of the US flu season. 2. "The complete tool box". Every company out there seems to agonize about the technologies they do not have. In making APIs you do not need to be a cost leader and a specialist in everything, you need to be a sound generalist able to address all the technologies, whether chemistry, engineering, analytical, etc... Technologies are therefore not a differentiator; if you are not a generalist, you are out of pharma APIs anyway. In the past 40 years Hovione has addressed every chemical reaction that has come its way, successfully. We have however some policy decisions such as: We do not use cyanides or other dangerous poisons and do not work with betalactams, penicilins or cephalosporins. 3. "Building a $500m business in 5 years". The wishful thinkers blame the failure of their plans on market changes. In fact nothing has changed: the $300b Pharma sales worldwide are still made up by about 4000 different APIs, 95% of the medicines in the pharmacy have sales of

Article

Pharma Fine Chemicals - Nothing's changed!

Feb 27, 2002

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