Pharmaceutical Materials

Pharmaceutical Materials Division performed very well in 2001/02 with operating profits 74% up at £31.3 million.

Pharmaceutical Materials was created as a separate division in 2001 following the acquisition of Pharm-Eco Laboratories, Inc. and Meconic plc.

During the fiscal year 2001/02, Johnson Matthey acquired Pharm-Eco Laboratories, Inc. and Meconic plc, the parent company of Macfarlan Smith. These acquisitions, along with Johnson Matthey’s long established active pharmaceutical ingredient (API) manufacturing business in West Deptford, USA, enable the newly formed Pharmaceutical Materials Division to provide the pharmaceutical industry with chemical synthesis, process development and manufacturing services throughout the entire life cycle of both proprietary and generic drugs. In addition, Macfarlan Smith provides Pharmaceutical Materials with a European base and offers major opportunities for cross selling and collaboration in development of new products for both the European and American markets, especially in the field of controlled drugs.

West Deptford
The division’s West Deptford facility manufactures a range of small to medium volume, high value active pharmaceutical ingredients, mainly metal based and controlled substances. These products comprise ingredients used in both generic and proprietary drugs, including the platinum anticancer drugs cisplatin and carboplatin and the powerful painkillers fentanyl and hydromorphone. In 2001/02 sales at West Deptford increased 12% over the prior year despite a drop in revenues from platinum pharmaceuticals resulting from the termination of patent protection on cisplatin. Most of this growth occurred in the second half of the year when the business received regulatory approval for three new products, all of which were developed for new customers and were launched in early calendar year 2002. In support of these and other new products, a major expansion of manufacturing and laboratory facilities on the site is nearing completion with plant validation and commissioning early in fiscal year 2002/03. This expansion will immediately increase plant capacity by up to 40% and includes space for additional reactors as well as the necessary laboratories to support further growth.

Macfarlan Smith
Based in Edinburgh, UK, Macfarlan Smith is a world leader in the manufacture and marketing of controlled drugs. Johnson Matthey acquired Meconic plc, Macfarlan Smith’s parent company in July 2001, and the business has performed well in Johnson Matthey’s first nine months of ownership. Macfarlan Smith’s product line of bulk opiates such as codeine, morphine and dihydrocodeine yielded good sales, and those of specialist opiates, several of which are being used in new applications or in novel dosage forms, showed excellent sales growth. Other established non-controlled products such as Bitrex™, an extremely bitter substance added to many household and garden products to prevent accidental poisoning, and galantamine, used in the treatment of Alzheimer’s disease, also performed strongly. Late in the year, Macfarlan Smith completed a new manufacturing plant on its Edinburgh site. This facility was constructed to manufacture key specialist opiate and other controlled drug products and contains space for additional capacity to support expected growth in these products.

Pharm-Eco
Pharm-Eco Laboratories, Inc., based near Boston, USA, was acquired by Johnson Matthey in April 2001. Pharm-Eco is a leading provider of contract chemistry services to the pharmaceutical industry, including medicinal chemistry, process development and the manufacturing of drugs in the early and middle phases of their development cycle. Outsourcing of chemistry services by both small and large drug companies is a growing trend, and Pharm-Eco made excellent progress in all segments of its business during the year. Major new contracts were obtained in the areas of medicinal chemistry, as well as the small scale manufacture of products for use in clinical trials. Pharm-Eco has also expanded its activities in analytical chemistry services and by adding specialised equipment to perform process hazard assessments for customers. The business’ sales grew well throughout the year with particularly strong growth in the second half of 2001/02. In support of this, a long term programme of installing additional laboratories and manufacturing capacity has been initiated at Pharm-Eco’s principal site in Devens, Massachusetts. Employee numbers have grown by 33% from the time of acquisition.

 

Research and Development Pharmaceutical Materials Division’s research and development activities are primarily focused on developing manufacturing processes for active pharmaceutical ingredients. At West Deptford and Macfarlan Smith, the development of novel manufacturing and analytical methods for new products provides a steady pipeline of products for these businesses. Collaboration between the research and development groups at West Deptford and Macfarlan Smith is enabling the development of common products and implementation of the most efficient manufacturing processes within the two businesses. Macfarlan Smith has particularly strong extraction technology that complements West Deptford’s strength in drug synthesis. This provides opportunities for synergies through the sharing of production technology and expertise. Pharm-Eco provides synthesis and process development services for drugs in pre-clinical and the early to middle phases of clinical trials. The ultimate success of any drug in these stages of clinical development is uncertain. However, Pharm-Eco’s experience in product development and scale-up places Johnson Matthey in a strong position to manufacture commercial quantities for Pharm-Eco’s clients should their products obtain regulatory approval.