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Article / May 20, 2019

In the drug services industry, growth has no end in sight

C&EN, 20 May 2019

Transformative investments, and capacity expansions abound at CPhI North America

Pharmaceutical services firms attending the CPhI North America trade show in Chicago earlier this month were virtually unanimous in reporting another year of strong growth in a business that has seen no direction other than up for nearly a decade. Investment continues apace, as do acquisitions, with many firms claiming their manufacturing assets are at or near full capacity.

Tied as it is to the drug industry, the sector has long defied traditional economic cycles. Contract manufacturers of active pharmaceutical ingredients (APIs) have also added services, developed expertise in complex chemistry, and generally taken risks to grow businesses in the direction required by customers developing the drugs of the future.

Results this year indicate that many of these risks have paid off. And ongoing investments hint at another round of risk taking on new technologies and service models.

"Business is buoyant, the strongest it's been on record," said Denis Geffroy, vice president of business development for the Northern Irish firm Almac Sciences. "We are approaching 20% growth this year, which is really surprising because we've been growing 15-20% for the last 10 years."

Several factors explain yet another year of strong results, Geffroy said. "First, I like to think we are doing a good job. But the market has improved, especially in the US," he said, citing a steady flow of venture funding for biotech start-ups. Meanwhile, customers continue to bring their outsourcing back to Europe from China, a shift that accelerated with a Chinese crackdown on environmental regulations starting in 2017.

Almac Sciences is experiencing strong growth and is operating near full capacity. The firm plans a major expansion.

Almac has also benefited from a commitment it made to biocatalytic services beginning in 2010. "We are staying ahead of the game, using enzymes not only for chiral molecules," Geffroy said. "About 20% of the compounds we make have got an enzyme somewhere, either in a final step or in an intermediate step." The 2015 acquisition of the Irish firm Arran Chemical was key to developing the service, he added.

At the time, he told C&EN that Almac was "hitting the wall" on biocatalysis capacity. The company is hitting the wall again, according to Geffroy, this time in its core API business. "We are growing so quickly, we are at full capacity at the moment, which is a bit frustrating," he said. "We need more capacity, and we now have the approval from the board to start building an API plant next door to our current plant." The $20 million facility is expected to open in 2021, yielding a fivefold jump in the firm's capacity to make highly potent APIs.

The Portuguese firm Hovione is also expanding. "We acquired a new piece of land in Portugal, a greenfield site, 10 times larger than the site we have," Marco Gil, senior director of commercial services, told C&EN. At the 40-hectare site, a half-hour drive from Hovione's headquarters plant in Loures, outside Lisbon, the firm will add API capacity while expanding in new areas such as flow chemistry and finished-drug production.

The company is already expanding in Loures, where it recently established a continuous tableting line. Spreading out at the new site will give Hovione a chance to broaden its services and establish a full line from early-stage development to commercialization, all in the Lisbon area, according to Gil.

In France, Minakem is building a lab for cytotoxics used in antibody-drug conjugates at its site in Louvain-la-Neuve, Belgium, where it is also installing a high-performance liquid chromatography column, according to Jean-Marie Rosset, vice president of sales and marketing. And the company, last year, completed and $11 million API-capacity expansion in Dunkirk, France.

"We are facing capacity constraint," Rosset said, noting that Minakem is also pursuing an acquisition. "We have been looking for 18 months." The company may acquire R&D or pilot manufacturing assets in the US, he said.

Rosset said that prospects look good for the year ahead. "We have a lot of stuff in the works that will require scale-up," he said. "The problem is where to put these products. But that's a good problem to have-better than empty capacity."

Helsinn finds itself in similar straits, according to Sandra Moro, business development director. The company is in the midst of a $20 million project at its Biasca, Switzerland, headquarters to install large-scale cytotoxic manufacturing capability.

 

Marco Gil CPhI North America 2019 | Hovione

 

 

 

 

 

 

 

 

 

 

 

 

We believe in the one-site shop with chemistry, particle engineering, and final product.

Marco Gil, senior director of commercial services, Hovione



The project will free up smaller-scale capacity, Moro said, allowing Helsinn to take on more of customers' early-stage work, such as oncology projects that have been fast-tracked by regulators. "We can go from Phase I to Phase III," she said, referring to stages of drug development, "but we currently have very few early-phase compounds-56% of our compounds are commercial."

Tight capacity has not stifled growth, however. Helsinn's revenues increased about 20% for the second year in a row last year, Moro said.

It's not only European firms that are investing. India's Hikal also has achieved 20% annual growth in recent years, according to Anish Swadi, head of business development and strategy.

The company is also in need of capacity. "We are investing $55 million into assets and infrastructure," Swadi said; this investment will support the company's pharmaceutical chemical and crop protection divisions, which share core chemistries. The new capacity will expand continuous manufacturing and biocatalysis capabilities, he added.

Some of the firms that disclosed expansions at CPhI did so on top of large acquisitions. Executives from such firms discussed integrating internal and external investments to create full-service offerings for their drug-industry customers.

Catalent recently announced a $1.2 billion acquisition of the gene-therapy specialist Paragon Bioservices, setting itself up in an increasingly competitive new field in drug development.

Separately, the company is investing more than $200 million to expand its monoclonal antibody (mAb) and other large-molecule production capabilities in Madison, Wisconsin, and Bloomington, Indiana. It's adding fill-and-finish and associated analytical and packaging capabilities as well, to "take your mAb from preclinical all the way to commercial," said Elliott Berger, vice president of global marketing and strategy.

Although Catalent doesn't manufacture pharmaceutical chemicals, it is looking to bolster its presence in small molecules, where bioavailability-enhancing techniques are of increasing importance. Acquisitions over the past 5 years-including Micron Technologies in 2014, Pharmatek Laboratories in 2016, and Juniper Pharmaceuticals in 2018-have brought in spray drying, formulation, and other services downstream of API production. At the Chicago event, Catalent announced a $40 million expansion of oral-dose capabilities and the addition of spray drying in Winchester, Kentucky.

And the company is also ready to invest heavily in its newest business, Berger said, noting that Paragon is building two commercial production facilities in Baltimore and expanding its relationship with Sarepta Therapeutics, a key customer for its adeno-associated virus vectors. "We have financing secured for larger than the acquisition to fund that," he said.

At CPhI, Lonza announced what it calls a "first in human" service: a combination of API and finished-drug development, formulation, and manufacturing targeted at the 70% of compounds in development that have solubility challenges.

According to David K. Lyon, a senior research fellow with Lonza, the service draws on both internal assets and those acquired in recent years, such as Micro-Macinazione, a Swiss micronization specialist that Lonza bought in 2017. Other assets are as far afield as Bend, Oregon, where Lonza does solubility work; Guangzhou, China, where it manufactures APIs; and Edinburgh, Scotland, where Lonza operates a liquid-drug formulation facility.

Lonza is cuing up these assets to crack the bioavailability case at Phase I and expedite commercialization, especially of fast-tracked projects, Lyon said. It aims to reduce development time from 52 weeks to 32 weeks for customers seeking to file an investigational new drug application with the US Food and Drug Administration.

The small-molecule specialist Cambrex is also putting recent acquisitions together. The company brought in early-stage API development when it bought PharmaCore in 2016 and added early-stage API capabilities and sites in the US and Scotland when it acquired Avista Pharma Solutions last year. It also bought Halo Pharma, a finished-drug producer, for $425 million last year. Cambrex is now better positioned to address the changing needs of innovative drug companies, according to Matthew Moorcroft, vice president of marketing.

Meanwhile, Cambrex continues to invest in large-scale API production. It completed an expansion of its high-potency API plant in Charles City, Iowa, last year. The company is now ramping up continuous manufacturing capabilities at its Highpoint, North Carolina, facility-the former PharmaCore-and its factory in Karlskoga, Sweden.

"To make a long story short, we are excited about what we've done over the last 6 months," Moorcroft said. "Now it's all about delivering."

 

 

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The podcast "The Next Discovery" is a six-episode series created by Observador, a leading Portuguese digital newspaper and radio station, in partnership with Hovione. From factory to pharmacy in far less time: how continuous tablet manufacturing is making treatments faster, more robust, and more accessible to those who need them most. What if some of the scientific breakthroughs that could improve the lives of millions of people were happening right now in Portugal? Welcome to The Next Discovery. Listen to the fourth episode of the podcast here, featuring João Ventura, Senior Director of Pharmaceutical Product Development at Hovione. [English transcription] Nelson Ferreira (NF): Welcome to The Next Discovery. This is a partnership between Rádio Observador and Hovione—a six-episode series in which we open the doors to global pharmaceutical development driven from Portugal. I’m Nelson Ferreira, and today we’ll explore a technology that is transforming the way medicines are produced and accelerating patient access to new treatments. To guide us on this journey, we’re joined by João Ventura, Senior Director of Pharmaceutical Product Development at Hovione. NF: Hello, João, and welcome. For decades, the industry relied on what is known as batch manufacturing. How did this traditional method work, and why does continuous manufacturing represent such a significant change for the pharmaceutical industry? João Ventura (JV): Thank you, Nelson, for the invitation and for that question, which is a great place to start discussing this innovation. As you mentioned, for many decades the pharmaceutical industry produced tablet medicines using the traditional batch manufacturing method. This approach involves producing a very specific quantity of product—a batch—at a time and performing each individual production step separately. This means that each subsequent step typically begins only after the entire batch from the previous stage has been manufactured, processed, collected, and sampled for quality verification. In tablet production, the process includes weighing, blending, granulation, tablet compression, and finally tablet coating. While this method is well understood, mature, and fully established from both an industrial and regulatory standpoint, it can become inefficient because material may spend a considerable amount of time sitting idle between production stages—waiting for quality checks or for equipment in the next step to become available. By contrast, continuous tablet manufacturing allows material to move continuously and automatically through all stages of the process while simultaneously monitoring the quality of the tablets being produced. This enables continuous manufacturing to deliver benefits that traditional batch manufacturing simply cannot achieve. NF: João, producing continuously certainly sounds more logical, but as I understand it, this is still a relatively new technology in the pharmaceutical industry. When did the market begin to embrace this change? JV: You're absolutely right, Nelson. As you know, the pharmaceutical industry is necessarily conservative and adopts innovation very carefully, for good reason. It was only in the early 2000s that the U.S. Food and Drug Administration (FDA) began encouraging the industry to develop alternative technologies that were both more agile and more robust from a quality perspective. These technologies are based on integrating and automating the entire tablet manufacturing process in a continuous flow. This required the development of a new generation of manufacturing equipment capable of performing the entire process automatically and continuously, as well as sophisticated electronics and software to monitor and inspect product quality throughout intermediate stages and in the final tablet. Following these early technological developments, the FDA approved the first continuously manufactured products from major pharmaceutical companies such as Vertex and Janssen during the 2010s. This marked a pivotal turning point and significantly accelerated adoption of continuous tablet manufacturing. NF: What practical challenges does this new system solve in day-to-day operations? I imagine there are important quality-control advantages as well, especially since you mentioned quality can be assessed throughout the process and in the final tablet. JV: Absolutely. The successful commercialization of that first wave of continuously manufactured medicines by companies such as Vertex and Janssen was extremely important because it demonstrated to the industry that this technology could deliver substantial benefits for both patients and manufacturers. First, it shortens development and production timelines for new medicines, allowing innovative therapies and new drug products to reach patients much faster than before. NF: So they can reach the market sooner as well. JV: Exactly. In addition, as you mentioned, this technology makes it possible to verify the quality of every tablet produced, rather than relying on a small sample as in batch manufacturing. That alone provides greater quality assurance and robustness, ultimately benefiting society as a whole. NF: And does that speed advantage become particularly important during medical or public health emergencies? Can this system respond more quickly to urgent demand? JV: Yes, that is one of the technology’s most significant potential advantages. In a continuous process, it’s possible to produce in minutes what might take weeks in traditional batch manufacturing due to processing delays and waiting times. Beyond the economic benefits, this offers a major advantage in medical or public health emergencies, where production of new medicines may need to be rapidly scaled up to meet urgent demand. NF: Was COVID-19 an example of that? JV: It’s a perfect example. NF: Has this technology already delivered that benefit? JV: Not yet, but we anticipate that in future pandemic situations, continuous manufacturing will play a critical role in scaling industrial production much more rapidly, much as we saw with the need to rapidly expand vaccine production. NF: Hovione positioned itself as a global pioneer in this technology, largely through a strategic partnership with Vertex that you mentioned earlier. This happened in 2016. How did a Portuguese company become the first of its kind to adopt such an important industrial-scale advancement in the United States? JV: Since its founding, Hovione’s history has been closely linked to the adoption and application of new pharmaceutical manufacturing technologies capable of delivering significant industrial and economic advantages. That has been one of the company’s keys to success. During the 2010s, Hovione recognized the potential and benefits of continuous tablet manufacturing early on. As you mentioned, in 2016, Hovione entered into a strategic partnership with Vertex to establish industrial-scale continuous tablet manufacturing capabilities in the United States. Hovione was likely the first company of its kind to adopt this technology. This was important not only for industry-wide adoption but also because, in partnership with Vertex, it played a key role in developing a new, more effective treatment for cystic fibrosis—a devastating, currently incurable disease that primarily affects children. NF: Earlier, you mentioned that this represented a significant industrial challenge. I imagine it required designing and installing far more sophisticated equipment to make it all work. JV: That's correct, Nelson. The challenges were enormous during the first industrial-scale implementation of continuous tablet manufacturing. Hovione’s team led the project from the initial facility and equipment design stages all the way through construction of the building, installation of the new equipment, and operational execution of the manufacturing process for this new Vertex medicine, which has played an important role in treating a serious and incurable disease. NF: After that first facility in the United States, this technology was also brought to Portugal, to Loures, where Hovione has operated a second production line for several years. Does this, in a way, complete the cycle for Hovione, allowing the company to work from molecule to finished tablet? JV: Exactly. Following the success of the first industrial installation and the experience gained, and driven by growing market demand and interest in the technology, Hovione expanded its manufacturing capacity in the early 2020s by building and commissioning a second continuous tablet manufacturing facility at its Loures site in Portugal. As you noted, the Loures facility is capable of performing the entire development cycle—from chemical production of the innovative molecule through formulation and manufacture of the final tablet. NF: João, we’re speaking at a time when global soccer competitions often inspire national pride. I imagine there’s also a sense of pride when patients anywhere in the world take an innovative medicine knowing that the engineering and technology behind it involved Portuguese teams. JV: Absolutely, Nelson. By combining our ability in Portugal to identify and adopt innovative technologies with investments in advanced manufacturing capabilities, we can position ourselves as trusted partners to our customers across our industries. That has certainly been the case with Hovione. As you mentioned, we have helped produce innovative medicines that improve the quality of life of millions of people around the world. That should be a source of pride for all of us here in Portugal, just as our national soccer team is. NF: João, thank you very much for explaining how this technology is challenging traditional manufacturing and accelerating the production of life-saving medicines. João Ventura is Senior Director of Pharmaceutical Product Development at Hovione. That concludes the fourth episode of The Next Discovery. In the coming weeks, we’ll explore a new topic: how the respiratory and nasal systems can be used to deliver medicines more effectively to the lungs and, in some cases, even serve as a direct highway to the brain. Don’t miss the upcoming episodes at observador.pt and on your favorite podcast platforms. Until the next discovery.

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The podcast "The Next Discovery" is a six-episode series created by Observador, a leading Portuguese digital newspaper and radio station, in partnership with Hovione. From particle engineering to global leadership in spray drying, discover the technology that enables oral medicines to be effectively absorbed by the body and help treat millions of people. What if some of the scientific breakthroughs that could improve the lives of millions of people were happening right now in Portugal? Welcome to "The Next Discovery. Listen to the third episode of the podcast here, featuring Filipe Gaspar, VP Technology Intensification, and José Luís Santos, Strategic Business Management Senior Director, at Hovione. [English transcription] Nelson Ferreira (NF): Welcome to The Next Discovery. This is a partnership between Rádio Observador and Hovione, a six-episode series in which we show how science developed in Portugal has a real impact around the world. I’m Nelson Ferreira, and in the last episode we explored how APIs—the active pharmaceutical ingredients in medicines—are produced. Today, we move to the next stage: how do we transform that chemical powder into a medicine that our bodies can actually absorb? To help explain this science, I’m joined by Filipe Gaspar and José Luís Santos, who were involved in the creation and development of Hovione’s particle engineering division. Welcome to you both. Filipe, let me start with you. NF: When we hear about a new medicine, we usually think about the molecule that was discovered. But why isn’t that discovery alone enough? What exactly is particle engineering, and what role does it play in turning a promising molecule into a medicine that is truly effective? Filipe Gaspar (FG): Nelson, the active ingredients in many modern medicines are not effective in the form in which they are produced through chemical or biological processes. To work properly in the body, they need to undergo additional transformations. For example, some medicines must be protected from the acidity of the stomach so they can later be released in the intestine, where the environment is less acidic and absorption into the bloodstream can occur. Others require very specific particle sizes. This is the case with inhalation powders, often used to treat asthma or chronic bronchitis. If the particles are too large, they become trapped in the upper airways and never reach the alveoli, where they need to be absorbed. On the other hand, if they are too small, they may simply be exhaled before absorption occurs. Finding the right particle size is therefore essential to ensuring an effective treatment. Another remarkable example is modern oral medicines, which often need to be converted into a different form—the amorphous form—so that the body can absorb them properly. Particle engineering makes all of this possible, overcoming many of these limitations by improving drug absorption, distribution, and therapeutic effectiveness. NF: I believe that in 2003 Hovione made a bold decision and invested in spray drying technology. José, for our listeners, could you explain in simple terms what this technology is, what problem it solves, and why it was so revolutionary at the time? José Luís Santos (JLS): First, it’s worth noting that spray drying has been used for decades in other industries. Think, for example, about powdered milk, instant coffee, or the powdered detergent we use in our washing machines. In all these cases, we start with a liquid—milk, coffee, or a soap-based paste—and transform it into a very fine powder that dissolves almost instantly when mixed with water. This transformation is achieved through spray drying. To explain it simply, imagine a very large chamber, something like a giant hair dryer. Inside, the liquid we want to dry is converted into a spray—a kind of mist—creating extremely small droplets. These microscopic droplets are then dried very rapidly using hot gas inside that giant dryer. In just milliseconds, the liquid evaporates, leaving behind a powder made of tiny particles with properties that, as Filipe mentioned, make them highly soluble. The powders we produce in the pharmaceutical industry are physically similar to powdered milk, instant coffee, or powdered detergent. Now, why was this technology revolutionary for pharmaceuticals? Just as spray drying made it possible to preserve milk for months without refrigeration or gave us coffee that can be prepared in seconds, pharmaceutical spray drying made it possible to create medicines with improved therapeutic effectiveness because they became more soluble. Without access to spray drying technology, many of these medicines would simply not have had a viable path to reach the market and ultimately patients. NF: Filipe, we now have a better understanding of what happens in the factory, but I’m curious about what happens inside a patient’s body. Can you give us some concrete examples? What happens when a molecule looks promising in the laboratory, but the body cannot absorb it effectively? FG: Of course. As surprising as it may sound, most medicines taken orally—tablets and capsules—are actually less soluble in water than glass or marble. Since our gastric and intestinal fluids consist primarily of water, these medicines, in their original crystalline form, dissolve very poorly and can pass through the digestive system without being absorbed into the bloodstream. That would make them completely ineffective. Spray drying solves this problem by transforming them into an amorphous form that dissolves much more easily and can be absorbed by the body. A simple analogy would be to compare an ice cube with snow. Both are solid water, but snow melts much faster because of its structure. Spray drying applies a similar principle to medicines, significantly enhancing their ability to dissolve and be absorbed. NF: José Luís, some of this may sound very technical to our listeners, but the outcome is ultimately that people live longer and healthier lives because of these technologies. Are there concrete examples of medicines that only reached the market and patients because of this technology? JLS: Absolutely. One of the most significant examples involving Hovione was the COVID-19 treatment effort. Hovione participated in the production of Captisol, a compound that was essential in the manufacture of Remdesivir, Gilead’s antiviral medicine, which became one of the few treatments authorized for COVID-19. Another important example is the treatment of hepatitis C. Around 10 to 12 years ago, the disease was virtually eradicated in many parts of the world thanks to new medicines whose manufacturing processes relied on spray drying technology. This enabled those therapies to achieve the solubility and therapeutic effect required. These are just two examples. At Hovione—and across the industry—we are working with a growing number of medicines, including treatments for oncology, cystic fibrosis, and many other diseases that benefit from spray drying technology and the advantages it offers. NF: From what I understand, this technology will continue to play an important role in future discoveries as well. Filipe, when Hovione invested in spray drying, it was a technology that was almost inaccessible and rarely used in the pharmaceutical industry. What did Hovione see that others didn’t? And how did what seemed like a risky bet eventually position the company as a global leader in this field? FG: When we invested in the technology in 2003, we had already identified one or two opportunities. As you said, it was a technology that was practically nonexistent among companies like Hovione that provide services to the pharmaceutical industry. We decided to invest before there was established market demand, which meant taking a significant risk. We were talking about many millions of euros—the cost of an industrial-scale spray dryer. Afterward, we actively developed the market. The demand we saw, particularly the need to improve the bioavailability of oral medicines, confirmed our highest expectations. We have made—and continue to make—ongoing investments in science, technology, and industrial capacity. Over the years, these investments have consolidated Hovione’s position as a global reference in spray drying. Now, we must continue innovating to maintain that position. NF: Based on the examples we’ve been hearing, that doesn’t seem likely to be a problem for Hovione. We also know that innovation doesn’t happen in isolation. Spray drying appears to be another example of that. Hovione seems to have strong ties with academia and universities through master’s and doctoral programs conducted in industrial settings. Is this collaboration the secret to staying at the forefront? JLS: Yes. Our connection with academia has always been very important and continues to be so. Today, we have more than 300 people working in research and development roles, and we maintain strong ties with the academic community. Hovione is one of the largest private employers of PhDs in Portugal, with approximately 120 PhDs on staff, and we actively promote projects in partnership with universities and research centers. FG: I would also like to mention the Hovione Research Program. NF: What is that? FG: It is Hovione’s research program. It is a collaborative initiative with Portuguese academic institutions and has been active for more than 15 years. To give you an idea, at any given time we typically have around 10 PhD candidates and between 20 and 30 master’s students conducting their work in an industrial environment simultaneously. Most of these researchers end up joining Hovione after completing their studies, integrating into the same areas in which they carried out their research. They are a reflection of this collaboration with academia, which has been a key driver not only of our ability to innovate but also of our capacity to attract and retain highly qualified talent. NF: Filipe Gaspar and José Luís Santos, thank you both for showing us that behind every medicine there is an enormous amount of science, innovation, and talent. And often it is invisible technologies—such as the spray drying technology we discussed in greater detail today—that make a difference in the lives of millions of people. This concludes the third episode of The Next Discovery. Next week, we take the next step and discover how Hovione challenged industry tradition by introducing continuous tablet manufacturing. You can listen to the next episodes on observador.pt and on your usual podcast platform. See you at the next discovery.    

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The podcast "The Next Discovery" is a six-episode series created by Observador, a leading Portuguese digital newspaper and radio station, in partnership with Hovione. From hard-to-produce antibiotics to innovative therapies, Hovione uses complex and sustainable chemistry to bring safe medicines to patients around the world. What if some of the scientific discoveries that could improve the lives of millions of people were happening right now in Portugal? “The Next Discovery.” Listen to the second episode of the podcast here, featuring Rui Loureiro, scientist at Hovione. [English transcription] From hard-to-produce antibiotics to innovative therapies, Hovione uses complex and sustainable chemistry to bring safe medicines to patients around the world. What if some of the scientific discoveries that could improve the lives of millions of people were happening right now in Portugal? “The Next Discovery.” Nelson Ferreira (NF): Welcome to the podcast “The Next Discovery.” This is a partnership between Rádio Observador and Hovione—a six-episode series where we open the doors of a Portuguese-founded multinational pharmaceutical company to share real stories of science, innovation, and global impact. I am Nelson Ferreira, and in the first episode we explored the story of the basement where it all began more than 65 years ago. Today, we will understand what happens inside this company. We will talk about complex chemistry, because that is where the journey of many medicines that pass through Hovione begins. We will discover how laboratory science becomes industrial processes, how sustainability is part of this transformation, and how all of this contributes to producing medicines that truly help improve and save lives. To guide us on this journey, I am joined today by Rui Loureiro, a scientist at Hovione’s Research and Development Center. Hello, Rui. Welcome to Rádio Observador. NF: Rui, most people may never have heard of Hovione, but they may be taking a medicine where Hovione played an important role. Where exactly do you fit into this long journey that takes a medicine to the patient? Rui Loureiro (RL): Hello, Nelson, good morning—and thank you for the question. The path for a medicine to reach a patient is long. It starts with producing a very small amount of a drug, which through development eventually needs to be produced in kilograms. Let me give an example. Imagine baking cookies. When you buy cookies at the supermarket, someone first made the initial batch at home—but then they needed a partner to scale those cookies to an industrial level. NF: A factory, exactly. RL: Exactly. That is where Hovione comes in. We are that partner for the pharmaceutical industry—helping turn one cookie into many cookies that eventually reach patients. NF: For those listening who are not familiar with this field, people often talk about APIs in the pharmaceutical industry. I had to look it up myself. What is it, and why has Hovione focused so much on it since early on? RL: API can mean different things depending on the field—for example, in IT it means something entirely different. In the pharmaceutical industry, API stands for Active Pharmaceutical Ingredient. In Portuguese, princípio ativo—the component that treats or cures the disease. Using the cookie analogy again: a chocolate cookie has many ingredients—but the chocolate is what defines it. The API is exactly that in a medicine: a small but essential part that delivers the therapeutic effect. Even though tablets contain multiple substances, producing something like a 10 mg tablet of the active ingredient alone is difficult—so other components are added to create the final form. NF: Over many years, Hovione also specialized in complex generics. How did that experience help you move into working with companies developing entirely new medicines? RL: That was a very important step. Developing complex generics means the chemistry required is challenging—it may involve very low temperatures or tightly controlled conditions to ensure we produce the desired result and not something unwanted. Those early capabilities—developing antibiotics and other materials—led the market to recognize Hovione’s expertise. Ultimately, chemistry involves combining building blocks. If someone proves they can assemble the most complex ones, the industry will take notice. That is how we became recognized as a trusted partner for complex pharmaceuticals. NF: I am curious about this idea of “complex chemistry.” You often compare chemistry to cooking—what distinguishes traditional chemistry from the complex chemistry you do at Hovione? RL: Let me simplify for clarity. Complex chemistry depends on the reagents and solvents used. The starting materials may be difficult to transform and may require very specific conditions. The resulting product may also be unstable and require careful handling. Using cooking as an analogy: simple chemistry is like making jelly—you mix powder with hot water and let it set. Complex chemistry is more like making ice cream—it involves a more intricate process, and many people prefer to leave it to specialists. NF: Another fascinating challenge: in the lab, you work at milligram or gram scale, but factories must produce tons. How do you scale from a teaspoon to a truckload without ruining the recipe? RL: That is indeed our biggest daily challenge. Scaling up requires understanding every variable in the process. Going from a small kitchen setup to industrial production is not just about bigger equipment—it requires entirely different systems and expertise. We work with multidisciplinary teams—chemists, engineers, analytical specialists—to control every variable that affects product quality. In a typical GMP (Good Manufacturing Practice) process, there are 4–5 main steps. And across those steps, we may need to control around 350 variables to ensure the final product meets quality standards for patients. NF: When people think of chemistry, they often think of something negative. But Hovione has been developing more sustainable approaches. What does sustainable chemistry mean in practice? RL: Sustainability is a daily priority. We design processes with sustainability in mind from the very beginning. We follow green chemistry principles—avoiding harmful reagents whenever possible. And when that is not possible, we apply the “four Rs”: reduce, reuse, recycle, and recover. For example, just as the paint industry moved from solvent-based to water-based systems, we are also moving toward chemistry in water. This reduces the carbon footprint of our processes. We are also exploring micellar chemistry, flow chemistry, and even reactions without solvents at all—similar to grinding ingredients together with a mortar and pestle. These approaches help reduce waste and improve efficiency. NF: Looking to the future—will chemistry remain our best tool to save lives, and in a more sustainable way? RL: Absolutely. That is what motivates me every day. Artificial intelligence is already helping identify targets and design molecules—but those molecules still need to be produced. That is where chemistry remains essential. It is the foundation for creating and improving medicines. Innovation and sustainability will go hand in hand—and that is the path we are committed to. NF: Rui Loureiro, thank you for helping simplify chemistry and for showing this more sustainable side of science. This was the second episode of “The Next Discovery.” In the coming weeks, we will continue exploring this world. In the next episode, we will look at the future of particle engineering.   You can listen to the next episodes on observador.pt and on your usual podcast platform. See you at the next discovery.      

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