Recent News and Links with the past

I have been busy the past few days and haven’t been able or motivated enough to put a real post together. So this morning, after being reminded that I had left MedImmune off the Companies list (which is one of the most popular Pages on the Blog in terms of hits), I wanted to take a step back to a press release from Feb. 6th from a new company started in Frederick County named Vaccinogen. This could be a really big story if they are able to demonstrate this process is effective.

Here’s the blurb from their web site:

Frederick, MD – February 6, 2008 – Cancer research pioneer Michael G. Hanna Jr. Ph.D., also Vaccinogen, Inc.’s Founder, Chairman and CEO has acquired the rights to OncoVAX®, a vaccine with the potential to prevent colon cancer from recurring in many patients.

“This agreement represents a major step forward in defeating cancer by increasing the body’s immunity to it,” said Dr. Hanna, who has been working on cancer vaccines for more than 30 years.

“This agreement represents a major step forward in defeating cancer by increasing the body’s immunity to it.”

In the agreement, Vaccinogen obtained exclusive license to OncoVAX® Active Specific Immunotherapy as well as an important component of the product TICE BCG. The vaccine is made from the patients’ own tumor and is injected back into the patient to effect an immune response against recurrence of that cancer.

The FDA views Stage II colon cancer as an unmet medical need. When colon cancer recurs after surgery it is frequently fatal. OncoVAX® prevents that recurrence and thereby reduces recurrence and deaths by over 50%. Vaccinogen is currently preparing to commercialize the vaccine in Switzerland.

I should also post an update off their web site from Feb 27th, that announces the availability of the vaccine in Europe:

Frederick, MD – February 27, 2008 –Vaccinogen, Inc. announced that its new vaccine to block colon cancer from recurring will be commercially available in Europe starting June 2008.

“This makes OncoVAX® the world’s first commercially viable vaccine for colon cancer,” said Dr. Michael G. Hanna, Jr., Ph.D., Chairman & CEO of Vaccinogen. “It is the beginning of our worldwide strategy of profitable distribution. Questions of the feasibility of patient specific anti-cancer therapies have been raised and this new European initiative will obviate these issues.”

Pro Vaccine AG, a leading Swiss-based pharmaceutical distributor, will begin distributing OncoVAX® throughout Switzerland starting with Zurich and Neuchâtel by June 2008. “We are very excited about the prospects of offering OncoVAX® to Swiss and foreign patients,” said Renato Duckeck, GM of Pro Vaccine.

Pharmacenter Hungary, a rapidly growing oncology company that commercializes a broad portfolio of oncology treatments, will begin distributing the vaccine in Hungary, Czech Republic, Slovakia, Poland, Romania, Bulgaria and Slovenia starting in the third quarter of 2008. Dr. Christian Galli, Director of Business Development of Pharmacenter Hungary noted, “We recognize the excellent opportunity OncoVAX® provides us and the growing population of colon cancer patients in Eastern Europe.”

And I also wanted to go waay back to an article I started a post about in January that ran in the FNP when Vaccinogen first started. From the FNP, 1/22/08:

A company that uses a unique system to fight colon cancer has opened in Frederick.

Vaccinogen, located at 5300 Westview Drive, uses some of the patient’s own cancer cells to help cure the disease.

The company is headed by Michael Hanna, director of the National Cancer Research Center in Frederick from 1975 to 1983.

“At that time, I headed the entire operation,” he said of the cancer center. “We went from a small center to 50 buildings.”

After he left, the center’s operations were broken into several divisions, each headed by a different director, he said.

Although a resident of Bethany Beach, Del., Hanna said he is happy to be back in Frederick. It seemed the perfect place to locate the headquarters for his company.

Vaccinogen has a manufacturing plant in Emmen, Holland.

Although still undergoing studies here for approval, Vaccinogen’s system is being used in Switzerland.

“It is considered a transplant there,” Hanna said.

The immunotherapy, known as OncoVAX, follows surgery for removal of Stage II colon cancer. The tumor cells are processed in the facility in the Netherlands.

A specific vaccine is created using those cells and injected into the patient in four doses during a six-month period. The vaccine unleashes the body’s own immune system to fight cancer cells.

“It is the first time a patient-specific therapy has been successful,” Hanna said.

“We have done all the hard work. There are final clinical trials that need to be done,” he said.

Even though it was put on the fast track by the federal Food and Drug Administration, it will be four years before OncoVax could be on the market in the United States, Hanna said.

He said he would like to eventually build a manufacturing plant in the U.S., most likely in Baltimore.

“It is truly a Frederick product,” Hanna said. Research for the process began at the Frederick Cancer Research Center.

When he left the local cancer research center, Hanna ran a research institute for Litton Bionetics on individualized targeted therapy. That institute was later acquired by Azko Nobel. At that time, Hanna’s research team also developed a treatment for bladder cancer that is considered the standard for today.

Hanna acquired the OncoVaX technology and formed a company called PerImmune in 1997. In 1998, PerImmune merged with Intracel Corp., but Hanna continued to hold OncoVAX assets and formed Vaccinogen.

More than $300 million has been spent on research during the 35 years of OncoVax’s development.

Besides Switzerland, and eventually the U.S., Hanna said the company is working to market the product in Eastern Europe and other locations.

I knew a bit about the history of Vaccinogen before this story came out because we were doing a little work with their predecessor, Intracel, as they were closing up operations. Intracel also made HDL and LDL, which I believe Vaccinogen also acquired and is making today. Anyway, they have real nice History and TimeLine pages, with nostalgic pictures scrolling across the top of their About Us page.

So here’s where the story gets real interesting. The whole thing started in the 60’s with the formation of Litton Bionetics, which became a popular target of the conspiracy theorists in the 90’s due to their links with the military and germ warfare. It is a documented fact that Litton Bionetics was a major Defense Contractor of the time and the recipient of a1970 Dept. of Defense appropriations request for 10 million dollars for a 5 year study to develop immune system targeted micro-organisms for germ warfare. What they did with the money is where people get excited.

This research was overseen by Dr. Hanna the likes of emerging giants in the field such as Dr Robert Gallo, working at the National Cancer Institute at the time. To make a long story short, the conspiracy theorists claim, amongst other things, that this group is responsible for introducing AIDS & Ebola as a contaminant in a polio or small pox vaccine used in Africa in the 70’s. The allegation is that the vaccine was contaminated with monkey retrovirus that were used in germ warfare experiments.

Quite frankly, I was expecting to do a brief post on he topic, but my research took a strange turn towards the bizarre I had not anticipated. A long, unsubstantiated rumor, or maybe just a bit more Frederick County Biotech folklore?

And I thought Stem Cells were controversial……

My 100th Post: Marligen Makes a Deal

It’s been a while since I’ve heard anything about Marligen, the only Biotech company in my home town of Ijamsville. And even though they are less than a mile from the Montgomery County line, they’re still a FredCoBio member. That’s like having a semi-sterile cell culture flask, I guess. Here’s the news clip, via businesswire.com:

Marligen Exclusively Licenses Genisphere Labeling Technology for the Detection of microRNAs on the xMAP® Platform

Marligen Launches Vantage™ Line for the Purification, Labeling and Detection of microRNAs

IJAMSVILLE, Md.–(BUSINESS WIRE)–Marligen Biosciences, Inc., a supplier of innovative products for the life sciences research market, will become the exclusive provider of Genisphere’s biotinylated labeling kits for detection of microRNAs on the xMAP^® multiplex platform. The microRNA labeling kits using Genisphere Inc.’s 3DNA^™ dendrimer signal amplification technology will be an integral product to Marligen’s new offering supporting researchers studying microRNAs. The Vantage™ product line includes reagent kits for purifying, labeling and detecting microRNA species.

Genisphere’s unique 3DNA^™ dendrimer technology is based on highly branched DNA structures serving as scaffolds for multiple biotins. The use of Genisphere’s signal amplification technology in combination with the Vantage™ microRNA detection panels offers researchers a fast and cost-effective system to directly profile multiple microRNAs in a single sample. The complete system offers exceptional sensitivity and throughput capabilities of greater than 100 samples in a single day and is compatible with total RNA or enriched RNA including degraded RNA from archived tissues. The initial Vantage™ microRNA Detection Panels are designed for profiling the relative abundance of different microRNA species known to be relevant in oncology. The Vantage™ Products will be launched at the upcoming annual meeting of the American Association of Cancer Research.

“High throughput profiling of MicroRNAs presents a challenge when combining rapid, effective labeling with improved detection sensitivity,” said Dr. Robert Getts, Director of R&D at Genisphere. “The complete Vantage™ package, having integrated our rapid 3DNA™ dendrimer microRNA labeling method with Marligen’s carefully designed detection panels, provides an optimized solution with consistent performance and much needed sensitivity on the xMAP® high-throughput detection platform.”

“Because microRNA play such an important role in tumor development and progression, it is vital we offer researchers innovative tools that allow them to profile these biological markers in archived samples. Our collaboration with Genisphere allows us to provide one of the most rapid and sensitive methods to screen directly from such samples,” said James Lazar, Chief Scientific Officer of Marligen Biosciences. “This will not only advance basic research but should expedite the application of microRNA detection in the diagnosis of cancer.”

It’s strange, because this article couldn’t be more timely. The Founder & CEO, Sherry Challberg, was the one who hired me in April 1988 to move South to Maryland. It’s hard to believe that it has been 20 years ago to this day.

I was working in a lab at the University of Rochester doing papilloma virus research (which supported research leading to a Nobel prize for Micheal Bishop in 1989 and in support of research into Open Reading Frames, which lead to the 1993 Nobel Prize for Sharp & Roberts and also 1989 Nobel prize in Chemistry for Thomas Cech’s discovery of Ribozymes) and steroid hormone modulation of gene expression (in support of research into Protein Phosphorylation as a regulatory mechanism of proteins leading to the 1992 Nobel prize for Edmund Fisher and Edwin Krebs and leading to the discovery of COX-2 enzyme and COX-2 inhibitors in 1991 which was subsequently “borrowed” by Pfizer and made into the blockbuster drug Celebrex, reaffirming Dr Young’s assertion that I was leaving academia to go work in the “Evil Empire” that is Industrial research).

But enough name dropping, lest you think this blog is just about shameless self-promotion.

Back to the story. We moved down here in 1988 to work in the Molecular Diagnostics Division of Life Technologies. This was sold in 1990 or ‘91 to become Digene. To the left you see the 25 year old version of yours truly, pretending I am doing lab work. This is from the front page of the Baltimore Sun’s Business section on Dec. 21, 1988. The story was about our pending FDA approval for (one of?) the first clinically approved DNA test on the market. You may notice that the paper has a tinge of orange from age, and if you look closely, you’ll see my beard was still orange, too. By the way, the Dow closed at a mere 2,166 that day, a 1-year CD would yield 9.00 % and the Prime was 10.5%.

Another busy day in the news

I was so caught up with some of the news yesterday, that I missed a whole special section of the business pages in the FNP called Progress 2008.

This section contained features on many local companies we’ve covered in the past: Akonni, FiberCell Systems, SAIC-Frederick, SuperArray and Dynport.

As the Opening “Editorial” suggests:

There may be no more exciting industry than biotechnology in these opening years of the 21st Century.

Maryland has more than 350 biotech companies and Frederick is a growing hub for research, home to nearly 40 biotech firms.

Economic development is targeting this low-impact, high-potential area; our educators are gearing to train the next generation of workers for what is anticipated to be a booming sector.

Among the highlights of the feature on SAIC-Frederick called “Cutting Edge”:

• Science Application International Corp., or SAIC, has been a mainstay of Frederick’s biotech research community since 1972 when President Nixon’s declared the “War on Cancer”
• SAIC-Frederick employs about 1,770 people, and operates on the largest single research contract awarded by the Department of Health and Human Services.
• SAIC-Frederick occupies 68 acres and 116 buildings at Fort Detrick
• Working with about 800 employees of the National Cancer Institute, the company operates from basic research and experimental levels, up to clinical trials and vaccine production (in their new facility off Rt 85 adjacent to the Ballenger Creek waste water treatment plant).
• SAIC-Frederick is currently monitoring 300 clinical trials that are under way all around the world, from Africa to Southeast Asia, and in the United States as well
• The company is also managing test locations at 16 hospitals around the country to deliver the latest in cancer care to rural and underserved urban areas
• In a separate article in today’s FNP, the parent of SAIC-Frederick reported revenues for 2007 of $8.94 billion, up 11 percent from the previous fiscal year

Dynamic DynPort: Headquartered just off U.S. 15, the DVC building covers a total of 60,000 square feet in the small business park, paralleling Thomas Johnson Drive. With over 87,000 employees worldwide, according to senior manager of communications April Finnen, “DVC is a world-class provider of solutions for the development of biopharmaceutical products.” More than specializing in vaccines for biological defense, Finnen said more recently DVC has begun to specialize in chemical defense and emerging infectious diseases.

Don’t forget to check out their current openings HERE. Rumor has it that they’re also looking to hire a number of for paid students internships over the summer! The application deadline is Aprill 11th, so you don’t have much time. I also wanted to give the interns from Hood we have working here get a jump on the competition, so I didn’t let the news out earlier.

FiberCell Doing Well: Since I know the owners pretty well, not much I can add. I know that they are busy this week strumming up business in New England (I’ve heard there are a few decent Biotech & academic institutions up there) and then off to the Left Coast for more Business Development. Rumor has it they’re going to get a big order for some systems from one of those Pharmas in NE. I hope they do. All I know is that John needs to be here tomorrow with me to cut open the three HF systems I have running with my MSC which have (hopefully) differentiated into neurons using placental basement membrane extract as a matrix.

SuperArray: The company has become a thriving biotech firm that sells its products worldwide : So successful, rumor has it, that they’re looking at a brand new, larger facility. SuperArray is home to about 65 employees. Although still a small number in comparison to many other companies, SuperArray has no problem finding business. “Sales are increasing. We are making a name for ourselves,” says Heather Fox-Brashears (yet another former Life Tekker). SuperArray experienced an 85 percent increase in revenue from 2005 to 2006.  I hope to be able to use their Stem Cell products pretty soon, pending my results from this weeks FiberCell collaboration.  I had set up some experiments about a year ago, but I was not able to follow through on it so I owe them a visit.

And finally, Quick Draw about Akonni.   They have been in the news so much lately, I don’t know if there is much more to say about them, other than the fact that they’re doing pretty well, leasing more space and expanding.  Here’s something I didn’t know:  The company was founded in Russia in 1988 by Dr. Andrei Mirzabekov, the director of the Engelhardt Institute of Molecular Biology in Moscow. The team was brought to the United States in 1995 and the technology’s license was acquired by Akonni in 2002.  They are about 25 people strong, but I look for them to add more pretty soon.

I also wanted to direct you to the North (or is that the West?) with the announcement that Washington County is opening a new incubator in Hagerstown. According to the Herald-Mail, Hagerstown CC “has opened 11 wet labs suitable for biotech research, with $1.3 million from the Maryland Department of Business and Economic Development, Maryland Technology Development Corporation and the Washington County Commissioners”.  Sounds like people have caught on to the success of incubators elsewhere in the state.  Now if they start one in Ocean City…..

The Double Edged Sword

I read with interest the recent press release from Invitrogen that they have established a “Philanthropic Foundation.” I can’t restrain myself any longer. And let me be up front that this is a rant for my own benefit. I am stating facts as I know them and don’t have any specific documentation to back any of this up.

Invitrogen acquired Life Technologies (LTI) in 2000 after a 2-3 year struggle for control of LTI Board by the Dexter Corporation, that majority owners of LTI. For many years, the State of Wisconsin Teachers pension Fund (or it may have been WARF) was a 25 something percent owner of LTI stock, Dexter owned about 70 % and most of the remaining 5% was split between members of the Board of Dexter and the Executive Officers of LTI.

When I started in the old Molecular Diagnostics Division of LTI (now known as Digene) in 1988, sales of Maryland Produced products were about $20MM annually on overall sales of about $110MM (GIBCO products accounting for 90MM, primarily FBS products). Back in those days, Fetal was king, and because this was traded as a commodity, it was a wild ride. My recollection is that somewhere in the neighborhood of 40% of our revenue in those days was linked to Fetal Bovine Serum and derivatives.

So the timing for the explosion of Molecular Biology techniques couldn’t have been more perfect, because we needed some new products to offset the turbulent Fetal market.   LTI had already recruited some of the top molecular biology talent of the time. Hiring guys who were the first to isolate restriction endonucleases, Reverse Transcriptases, Cationic lipids, tranferases, polymerases, and competent cells. We were on the leading edge, creating tools for cloning and gene manipulation that were so advanced we had to explain to our customers how they could use them in their research.

Maryland produced products grew from about $20MM in 1988 to about $250MM by 2000 with gross margins approaching 80% in some cases.   The corporation was generating between $60MM and $80MM in cash year over year, most of which was paid as “special dividends” to the share holders (namely, Dexter, who were losing their shirts in their other businesses and were being raped by the EPA for years of pollution of the Boston Harbor). We built a new Corporate HQ in 1993 on Shady Grove (which was subsequently purchased and bungled by HGS) for $75MM, paid in cash and opened a new Manufacturing & distribution center in Frederick in 1994.

Somewhere in 1997 or 1998, Dexter announced that, due to the overwhelming success of LTI, they were going to sell off their other, less profitable divisions and focus on being a Life Sciences company. Shortly thereafter, International Specialty Products made an offer to the Wisconsin group for their 30% share of LTI that they could not refuse.

This little bit in Wikipedia is a good summary of things:

“Until 2000, Windsor Locks was home to the oldest corporation listed on the New York Stock Exchange, The Dexter Corporation. Established in 1767 as C.H. Dexter and Sons, the company grew from a family-owned saw and grist mill and evolved into a multi-national producer of long fiber papers and chemical laminates. In its 233 years of operation, the company grew from manufacturing tissues, toilet paper, and tea bags to marketing more specialized products like medical garments and industrial finishes. Faced with a proposed buyout by International Specialty Products Incorporated in 2000, the Dexter Corporation separated its three divisions and sold them off to avoid a hostile takeover. The Life Sciences division merged with Invitrogen Corporation. The Specialty Polymers division was sold in part to Akzo Nobel, and the remaining businesses merged with Loctite Corporation. The third division, Dexter Nonwoven Materials, located on the company’s original site in Windsor Locks, was sold to the Finnish Ahlstrom Paper Group. The physical plant was expected to continue operating, but the corporate headquarters were closed. “

This is not entirely accurate: Invitrogen purchased Dexter for $1.9BB. Part of the purchase agreement was that Dexter had arranged buyers for the other divisions, but technically Invitrogen sold off the other divisions.

But anyway, Invitrogen came in and immediately began making plans to purchase all of the land available in the Omega Center in Frederick in order to relocate R&D and all of the Carlsbad operations to Frederick. After all, Invitrogen, prior to purchasing NOVEX about 6 months before, was only a 20-30MM/yr business and they were buying up the leader in the industry, with about 1,200 full time employees in Maryland: 800 or so at “The Palace” HQ in Gaithersburg and 400 in Frederick.

After we’d made arrangements to purchase the Omega Center, suddenly communications with the new owners stopped. A couple weeks goes by and something is obviously wrong. Plans have changed and we weren’t in on the decision. Not a good sign. Then word comes out that everything is moving to Carlsbad and Maryland Operations are to be terminated.

Everything in Maryland is slashed, aside from 30 or so people Custom Primers, facilities and IT in Frederick between 2000 and 2002.  800 or so in a single day just after Thanksgiving 2000, yours truly included.

Why the change in plans? As it turns out, the CEO at the time’s wife was from Hagerstown and fancied a move back east. Long story short, CEO gets caught with his pants down while running back and forth to Maryland, wife drops CEO, wife gets half his money, everyone in Maryland loses their job.

And all of this because we were so successful.

I am glad to see that Invitrogen decided to can the CEO in question and hire a bunch of guys from GE, the Jack Welsh types, to turn things around. They’ve resumed operations in Maryland, firing the Distribution center up again (one of their biggest strategical errors was shutting it down in the first place.  That must have cost them millions) and even getting the fermentation suites back up and running. They are pushing Six Sigma and Lean as a way of life. Funny thing is, I was pushing this agenda from 1995 to 200, but was told in 2000 by Invitrogen they have no interest in this philosophy. I was, yet again, ahead of the times.

So maybe now they have embraced the philosophy that people matter.  Maybe now they can try to rebuild the great enterprise we all worked for years to establish that was Life Technologies.  The company voted as one of the top 10 places to work in the country, where we had community outreach programs, lactation suites for new mothers, generous bonus and paid time off structure.  But more importantly, for the most part the people cared. They wanted to do the right thing.  They were being treated well and treated the company well in return.  This is not to say that we didn’t have our share of scandal, trysts, dishonest managers, lazy workers, sexual harassment and racial discrimination law suits.  We certainly did.  But in spite of it all we were incredibly successful and made a lot of people a lot of money and advanced the concept of molecular biology as common practice.

As I alluded to in an earlier post, the disintegration of LTI-Maryland have proved to be a boom for growth in Biotech in the region, as the people with talent (who flocked out if they were not forced out) seeded other companies in the region or started their own companies.

OK, I am done. I’m glad I got that out.

Breaking News

I have heard through reputable channels that the new owners, Pelican Life Sciences, are pulling the plug on Kemp Biotechnologies. Kemp just moved into a new facility on Pegasus Court. It is a shame, but these things happen in our world. If you’re looking for some good people, there will be another 30 or so looking for work soon. Some I have worked with, some whom have worked for me. Just wish I was able to hire a few myself.

If you have an opening, drop us a comment and I can work to get you in touch with the right people.

Invitrogen Announces Third Quarter 2007 Results

I was surprised to hear that Invitrogen had “turned things around” and pulled out of a major slide. That’s my take, this is the Washington Post’s more sterile version:

CARLSBAD, Calif., Oct 30, 2007 (BUSINESS WIRE) — Invitrogen Corporation (IVGN) today announced results for its third quarter ended September 30, 2007. Revenues for the third quarter were $315 million, an increase of 11 percent over the $284 million for 2006, excluding the impact of discontinued operations.

“We’re pleased our work to achieve balanced growth across all products and regions and return margins to historical levels is paying off sooner than expected,” said Greg Lucier, Chairman and Chief Executive Officer of Invitrogen. “Our focus from here is to sustain and expand upon these results by driving further sales penetration in high growth regions, targeted investments in breakthrough technologies and broader implementation of our reagent productivity strategies.”

“Return margins to historical levels”? I wonder if he’s referring to before Invitrogen came into town and screwed everything up and lost 1/2 of LTI’s old customer base? Now if they would just start working on restoring product quality and Customer service to “historical levels” they might start to win back a few customers in Frederick County.

NCI Seeks Collaborators

Saw this tonight, thought others may be interested

NEW YORK (GenomeWeb News) — The National Cancer Institute is looking to license or co-develop a microRNA sequence that it said can enhance the capacity of T-lymphocytes to recognize tumors in several kinds of cancer, according to the National Institutes of Health.

NIH said the technology, listed under patent application No. 60/940,172, is the “first reported use” of an miRNA gene to treat disease.

According to the agency, NCI discovered that genetically engineering T-lymphocytes with the gene, called miR-181a, “dramatically augmented the function of poorly responsive human tumor-infiltrating lymphocytes and TCR-engineered peripheral blood lymphocytes, resulting in potent anti-tumor reactivity.”

It also said that in a mouse model, miR-181a, “increased the function of self/tumor-specific CD8+ T cells enabling effective tumor destruction in the absence of vaccination or exogenous cytokines that were otherwise essential requirements.”

Pre-clinical work on miR-181a has been completed and clinical studies are being planned, the NIH said.

The IP is up for exclusive or non-exclusive license, NCI said.

NCI also said that its Surgery Branch seeks statements of interest from parties that want to “develop, evaluate, or commercialize the therapeutic use of microRNA-181a in the adoptive immunotherapy of cancer.”

The Anchor Draggers

So much of the Biotech Community in the County is dependent upon the big Anchors in the county: MedImmune (or should I say AstraZeneca), Lonza, Invitrogen, SAIC, NCI.

I wonder if this is going to have any impact on the Frederick Facility, from the UK Business Times:

AstraZeneca hands production to Far East in effort to cut costs
Robin Pagnamenta

AstraZeneca has begun to outsource production of some of its bestselling medicines to low-cost manufacturers in the Far East.

As part of a restructuring drive designed to cut $900 million (£440 million) of the drugs group’s costs by 2010, the drugs giant is to begin purchasing Lactam, a key chemical ingredient used to make Seroquel, its blockbuster schizophrenia drug, from contract manufacturers in China.

Seroquel, which had sales of $3.4 billion in 2006, is AstraZeneca’s second top-selling product after Nexium, its $5.2 billion-selling stomach acid treatment. The decision forms part of a broader strategy gradually to outsource key manufacturing activities and focus on drug development and marketing. Lactam is expected to be the first of many key ingredients for blockbuster drugs produced by contract manufacturers.

In the first stage, AstraZeneca is expected to stop production at plants in Macclesfield, Cheshire, and Plankstadt, Germany, and also trim other drugmaking operations in Sweden.

Britain’s second-largest drugmaker operates 27 manufacturing sites in 19 countries but it is in the process of cutting 7,600 jobs, or 11 per cent of its 66,000-strong global workforce, including 700 jobs in Macclesfield.Plants in Bristol and Dunkirk, France, are likely to continue in the medium term but thousands more manufacturing jobs are likely to go over the next few years as a result of the changes. The shift towards outsourced manufacturing could prove controversial amid recent questions about quality control in China.

A spokeswoman said that the company was only in the “start-up phase” of sourcing Lactam from China. “There are still many steps involved, including internal assurance that standards are met, followed by submissions to appropriate regulatory agencies for approval,” she said.

To assist with the move towards more outsourced production, AstraZeneca has opened a new Chinese sourcing centre near Shanghai to help it to identify low-cost producers and to manage the transition from in-house to outsourced production. It already operates another sourcing office in Bangalore, India. Contract manufacturers in both countries, as well as other regions such as Eastern Europe, are expected to play a growing role in the years ahead.

At present AstraZeneca purchases most of the basic raw materials and chemicals for drugs and then uses its own factories to conduct more advanced stages of active pharmaceutical ingredient (API) production, as well as the formulation of medicines, preparation of pills, capsules and injectables and then final packaging and distribution. However, it is planning to gradually cease in-house production of API, the building blocks of conventional medicines. Ultimately it is looking to outsource other, more advanced manufacturing and logistics activities.

The transformation will take several years because of complex regulatory issues and the need to ensure quality control and complete reliability of supply.

The company said that it would consider further outsourcing opportunities as they arise “where there is a sound business case”. Certain products such as Lactam are easier to outsource than others. Some of AstraZeneca’s more sophisticated drugs require 32 separate, individual chemical processes to manufacture.

A number of other drugmakers, including Pfizer and Merck, of the United States, and Novartis, of Switzerland, are considering similar steps as they struggle to improve efficiency.

Pharmaceutical companies traditionally have been more conservative in their attitudes towards drug manufacturing and the supply chain than in other industries, but this is starting to change as they face increased cost pressures and competition from generic drugmakers.

Makes you wonder how much of our County is falling into Europeans hands, with Lonza now running the Walkersville facility out of Switzerland?