The document discusses the global market for high potency active pharmaceutical ingredients (HPAPIs) and the challenges of HPAPI manufacturing. HPAPI manufacturing requires sophisticated containment technologies, extensive personnel training, and significant resources to achieve safety and environmental approvals. It is currently a complex and highly regulated process. While the majority of HPAPI manufacturing currently occurs in Western countries, the market in Asia is growing rapidly. However, escalating costs in India and China may drive production to relocate to other regions with lower costs in the future.

1. HPAPI Global Market Opportunity Challenges to HPAPI Manufacturing - India/China & Future HPAPI
Investment, Expertise, Stringent Specification
 Small molecule HPAPI manufacturing is COMPLEX!
High barrier to entry due to costs
Sophisticated manufacturing & containment technologies-high level of personnel
training/experience
Demanding resources required for achieving health safety, environmental approvals-OELs,
Containment validation
 ADC-Antibody Drug Conjugates even More COMPLEX! Cytotoxic molecule Bound to
Monoclonal Antibody for more targeted delivery
 Complex air handling under negative pressure to prevent materials leaking into the
environment, often requiring PPE-Personal Protective Equipment
 Requires fully contained sampling systems and testing methods with sophisticated
engineering controls
 Requires constant medical monitoring on employee operators exposure
 Facility design: single-pass air, airlocks, safe-change filters, misting showers
Oncology
59%
Hormonal
19%
Glaucoma
7%
Others
15%
 Current Generic APIs
Global API market valued at US $109 Billion in 2011-
growing at 7.9% CAGR next 5 years
2011 Global API production- 62.4% in-house
pharmaceutical companies, 37.6% CMO outsourced
 Shift to High-Potency APIs
15% growth shift towards high potency APIs(HPAPI)
manufacturing -CMO/CRAMS capability expansion &
differentiation from generic APIs
 Asia HPAPIs growing 15.4 % between 2009 &
2015.
Notable Asian CMO/CRAMS -Aptuit, Hovione,
Eisai, Asymchem, Arch Pharmalabs, Nicholas
Piramal, Dishman, Ranbaxy, Dr. Reddy’s
 West India Tech-Transfer-M&A:
State-of-the-art HPAPI Category IV in Bavla, India –
designed by Dishman Group’s Swiss-based Carbogen
Amcis:
category
Occupational Exposure
Limit (OEL)
Toxicity
I ≥ 0.5 mg/m³ Low
II 10 µg/m³ to 0.5 mg/m³ Moderate
III 30 ng/m³ to 10 µg/m³ Potent
IV ≤ 30 ng/m³ Highly Potent
HPAPI market -$8.9 B in 2011, 80% in N. America/
Europe USA(45.6&)/Europe (35%) (2009), Asia at 9.35% only-
but oncology market growing at 20%
 Oncology cytotoxic therapeutics, hormones prostaglandins.
 WESTERN CMO/CRAMS (for now?)
- USA-SAFC $75 Mil Wisconsin, new Israel bacterial HPAPIs
- France-Novasep US$12.7 mil HPAPI plant- Le Mans-50%
Capacity increase
(SafeBridge Consultants, Inc. 4-Band Assessment)
LOW OCCUPATIONAL EXPOSURE LIMITS REQUIRE COMPLETE CONTAINMENT AND
SPECIAL HANDLING!
 USA Asymchem’s China HPAPI facility (Roche Most
Valuable Partner Award):
But:
Escalating Labor Costs, increasing Environmental
and Quality Regulatory oversight in China/India
will DRIVE COST UP !
Plus Productivity from skilled labor is 3x higher in
the West than say India.
Captive -
Proprietary and
Generic API
62%
Outsourced -
Proprietary API
19%
Outsourced -
Generic API
19%
2011
ROW, 7.47%
China, 6.98%
CAGR 12.6%
India, 4.25%
CAGR 10.3%
US$109B
High Potency drugs have become the “darling” for Big Pharma and MNCs globally.
CMOs and CRAMs are following suit, i.e. gearing up to build new, sophisticated drug manufacturing that can handle the stringent demands of cytotoxic API manufacturing.
Today, due to high investment costs, technology and process demands plus sophisticated containment ,that small club of CMOs are predominantly Western, but could India & China not be FAR behind?
Although LOWER COST is not the sole reason for outsourcing manufacturing, it remains a BIG FACTOR in the process. China and India have the “home” advantage plus global growth in pharmaceutical markets are leaning
towards serving emerging regions domestic markets.
 Will history repeat itself? (, i.e. India generics formulation take-over plus China’s Global API production dominance)
“ HPAPI Capable CMOs & CRAMS in Emerging Regions”
“ Here Comes India & China (Again) ?”
Source: Chemical Pharmaceutical Generic Association
Source: GBI Research