Pfizer CentreSource Moves Forward with Asian Supply Pact

(PCS, Kalamazoo, MI) is proceeding with two major moves this year: the implementation of a new manufacturing pact with Asian contract manufacturing organizations ScinoPharm (Shan-Hua, Taiwan) and Shanghai Pharmaceutical Company(Shanghai) and the sale of (New York, NY) Feucht, Germany manufacturing facility.

PCS is an operating unit within Pfizer Global Manufacturing (PGM), the manufacturing arm of Pfizer. As part of PGM, PCS provides third-party contract manufacturing services and products to other pharmaceutical companies, explains Michael J. Kosko, president of PCS. PCS consists of two businesses: contract manufacturing of dosage-form products and fine chemicals.

The fine chemicals business uses Pfizer's Kalamazoo active pharmaceutical ingredients (KAPI) facility in Portage, Michigan, outside of Kalamazoo, Michigan. KAPI is a large multipurpose, pharmaceutical chemical and fermentation facility. It is Pfizer's largest API facility and produces fine chemicals for use in Pfizer's drugs products as well as products for PCS. The site includes people involved in the administration, production, support, and development of APIs and intermediates.

PCS positions in steroids

PCS's fine chemicals business is primarily focused on the sale of steroids and steroid intermediates. PCS's position in steroids dates back to 1949 with the former pharmaceutical company Upjohn, which commercialized the first large-scale, cost-effective synthetic route for glucocorticosteroid. In 1995, Pharmacia & Upjohn was formed from the merger of Pharmacia AB and The Upjohn Company, and in 2000, Pharmacia acquired Searle, the pharmaceutical business of Monsanto. Pfizer then acquired Pharmacia in 2003.

Given increasing cost-competition in the steroids market, PCS embarked on a new strategy last fall by deciding to outsource part of production to Asia through manufacturing pacts with Shanghai Pharmaceutical and Taiwan's ScinoPharm.

"The steroids market is very cost-competitive, and these manufacturing pacts allow us to access lower-cost production for select product and for select steps of the synthesis," explains Doris Scheffel Symonds, vice-president of global marketing for fine chemicals.

Under the pacts, Pfizer is transferring the late-stage processing of 18 steroid APIs and intermediates to Shanghai Pharmaceutical and ScinoPharm over the next three years, beginning with certain commodity steroid APIs. Pfizer will continue to do the early-stage bioconversion operations at its plant in Portage, Michigan. PCS will also have parallel quality control testing of the APIs performed at the Asian manufacturing facility and then at an external shadow laboratory. In addition to overseeing quality issues, PCS will file all drug master files and maintain distribution and marketing responsibilities of the products.

PCS expects the first products from the pact, progesterone and hydrocortiscone, to be available by the end of 2008.

Shanghai Pharmaceutical and ScinoPharm are both adding manufacturing capacity to implement the PCS projects.

PCS moves forward with Feucht sale

PCS also provides contract manufacturing of solid and sterile dosage forms at facilities throughout Pfizer's internal manufacturing network, a function served as part of PGM's strategy to fully optimize its manufacturing capacity.

Earlier this year, Pfizer announced its intention to divest its Feucht, Germany manufacturing facility and the related PCS-Feucht business unit. The PCS-Feucht business unit targets specialty APIs and solid-dose manufacturing, including high-containment drug product manufacturing for potent compounds. Pfizer is currently evaluating potential buyers for the unit and hopes to complete the divestment by the fourth quarter of 2007, says PCS's Kosko, adding that the sale of the Feucht facility will not affect PCS's fine chemicals and contract manufacturing business activities.

Pfizer's plans to sell the Feucht, Germany site is part of an overall strategy by Pfizer to rationalize its internal manufacturing facility. Since the Pharmacia integration began in 2003, Pfizer has been reducing the number of its plants to bring capacity in line with product demand, to eliminate duplication, and to improve manufacturing efficiency. By the end of 2009, the number of global plants will have been cut by almost 50%. This reduction includes rationalization of its internal manufacturing network and the sites included in the sale of Pfizer's consumer healthcare business to Johnson & Johnson(New Brunswick, NJ, www.jnj.com)

Pfizer's Feucht facility made a number of investments in 2006, including a new capsule filler for its high-containment drug product area. Completion of these upgrades will be included in the sale of the facility.