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Article / Sep 10, 2002

Outsourcing: The dust has now settled

The dust has now settled after the exciting but turbulent times 2 years ago that saw the chemical giants snapping up pharmaceutical fine chemical specialists for hundreds of millions. Almost 3 billion dollars were invested in three deals alone; the transactions listed in Table 1 add up to more than $14b (includes Gist at $6b and the recent Roche V&FC deal at $2.5).

The drivers for outsourcing of APIs remain unchanged, yet the business model adopted by the various players seems to fall clearly into two very different types – with different offerings and different strategies. Yet for all exclusive manufacturing of NCE APIs remains a roller-coaster: approvals carry high rewards, product cancellations and withdrawals mean significant disappointments.

The notable new entrants are the integrated chemical giants that have acquired or invested in GMP businesses (some of the businesses that got acquired were great brands: Archimica, ChiRex, Finorga, Gist-brocades, Laporte, Profarmaco, Raylo, Torcan…). Their original strategy was to bet on size and enter a high-margin non-cyclical business that had synergies with their existing businesses. Some articles emphasized that the acquisition of API capabilities was strategically aimed at giving them total control over the key building blocks, which could be sourced internally. BASF advertised with the slogan: "Backward integration is another form of forward thinking".

On the other hand the traditional players have remained independent and have taken no part in the M&A frenzy (FIS, Hovione, Lonza, Omnichem, Orgamol, Siegfried, Sumika). In fact, they all probably see M&A as a strength-diluting exercise, as it debilitates one of their strongest asset, namely: their company culture. Their growth, which is consistently in double digits for the past 10 years, remains purely organic – and they enjoy a stable ownership, Table 2.

The independents strongly disagree with the assumptions which formed the strategies of the new entrants:

  • Why should size matter ?
    • when most APIs are only a few tens of tons
    • when there is a trend to more highly-active compounds
    • when an API producer should be a generalist -able to do all technologies- and not the lowest-cost technology specialist
    • when the early phase clinical materials requires service, service, and more service, which traditionally is not a characteristic of large, multi-site companies
       
  • Backward integrating only adds to an already risky business; whereas the Independents have the whole world -including India and China- to source low cost raw-materials.
     
  • Buying sites from Large Pharma with supply agreements often resulted in:
    • a low-margin business,
    • a single-customer dependence,
    • an old plant, which was often not multi-purpose and certainly not designed for quick change-over and evolving compliance standards.

Furthermore with their expansion into the API business the chemical giants risk antagonizing their traditional customers who now could perceive them as competitors and no longer as supplier/partners. As an example, Hovione would prefer to discuss its new catalyst needs with Engelhard rather than Degussa or Johnson Matthey, who are now perceived to be competitors.

Neither the analysts, the board members nor the shareholders considered any of these matters – but management thought they saw opportunities for making a difference in their shareholder value and the stock-market supported them wholeheartedly.

In our view the winning model appears to be a company big enough to:

  • have the critical mass that will support the diversified portfolio necessary to mitigate risk
  • support a large process chemistry group able to develop several dozen simultaneous projects
  • have the depth and breath of know-how and technology that is necessary to support multiple process validation campaigns per year
  • assure long-term capacity.

And yet a company small enough to:

  • take decisions and communicate them quickly
  • provide extreme levels of service, flexibility and transparency

We believe the entrepreneurial, single-minded company without share-price concerns or peripheral activities to serve as distractions is likely to be a step ahead of the competition.

The constant need for large amounts of capital investment, the many years that projects take to mature from development phase to commercial scale, and the inherent risk of each project makes our business unfriendly to the stock-market. Therefore it should be no surprise that the key players have a reference shareholder able to look at the longer-term: whether it be Ajinomoto, a family or a foundation.

Over the last 12 months Hovione’s normal growth has been further enhanced by:

  • Satisfied customers that bring us repeat business
  • Projects that have moved beyond validation to commercial phase
  • Customers with projects in Phase III who are looking for a more reliable long-term supplier or for further capacity

Our experience indicate that Phase III projects change suppliers because:

  • They want a stable supplier for the long term, “one that does not shop itself around constantly”
  • They want assurance of capacity and of compliance – and are fed up of “getting a different color batch every time”
  • They want to be “in-the-loop”, and not be the last ones to know of problems or of process changes

The key-buying factors for our customers seem to include: a company capable developing robust processes based on sound science that deliver “right-first-time, every time”, shareholders who are committed for the long-term and a track-record of rock-solid delivery as well as open and honest communications.

Some European companies have continued to invest at a time when others are trying to sell. Orgamol is building a new pilot plant and synthesis unit in Switzerland, Siegfried has innovated dramatically in the GMP design of its own new facility. Rohner has started-up a new cGMP multipurpose plant.

Hovione has just commissioned its new Technology Transfer Centre in New Jersey, USA. This is an investment in a green-field site with kilo-lab and pilot-plant facilities within a short drive of the largest cluster of API customers in the World.

In the past few years exclusive manufacturing as an industry has been the object of far too much interest, and too many bets were placed with exaggerated expectations –and most are not pleased with their investments. The business however exists, the market continues to grow but it is just not as simple as many companies expected it to be.

Fines for non-compliance of GMPs have reached a record $0.5b, and FDA’s most recent initiative “Pharmaceutical cGMPs for the 21st Century” are but two examples that indicate that the scope for differentiation has increased yet again; and that the role of a professional independent manufacturer of APIs has never been more relevant.

Guy Villax
Chief Executive
Hovione
Loures, 11th September 2002

 

Article published at Show Daily for CPhI 2002

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The CDMO is preparing for its New Jersey facility to become fully operational this year. Hovione’s multimillion-dollar investment in expanding its East Windsor, NJ manufacturing site is quickly coming to fruition. Contract Pharma will be visiting the site later in April 2026 to provide a unique overview of what’s new. As a preview, the Contract Pharma team met with Hovione at the Drug, Chemical & Associated Technologies Association (DCAT) Week. David Basile, Vice President of Technical Operations—Americas, spoke at the opening Member Company Announcement Forum on March 23, 2026. In this interview, Basile expands on his remarks at the Announcement Forum. As he explains, Hovione is concentrating not only on New Jersey, but also on facilities in Ireland and Portugal. Contract Pharma: Good manufacturing practice (GMP) operations will soon be fully operational at the New Jersey facility. How has Hovione progressed through this process since the initial investment cycle was announced last fall—or even prior? David Basile: It’s been a really great journey and evolution over the last two to three years, conceiving the plan to grow our U.S. footprint. It was one of the reasons I came aboard with Hovione, to grow that footprint and build our commercial manufacturing prowess in the States. In New Jersey, we had originated [the site] as a tech transfer center. [But] we wanted to grow the organization to be more equivalent with our Portugal and Ireland sites, to do more large-scale manufacturing. So, this is part of that journey. And that’s not just bricks-and-mortar and machinery. It’s been people, talent, partnerships with clients, supporting functions such as QC [quality control] and analytical development. We’re growing our R&D teams as well. It’s a comprehensive approach to systems, people, and processes. CP: At the Member Company Announcement Forum, you ran through some of the major technical specifications of the NJ expansion. Can you talk about a few of the highlights and their capabilities? Basile: This year we’ll be starting up two PSD-3 scale spray dryers. This is a useful scale of machinery for our clients. It plays nicely between the PSD-2 and PSD-4 scales that we have elsewhere in the network. I’d say it’s medium-to-large scale capacity; we could do 30 metric tons annually out of this type of a unit. Product to product, that differs, but we do have products that put that kind of volume out in a PSD-3, so it’s not small-scale. Customers want to hear this because [they want to gain] efficiency with their batch size, and turnaround time. And when we campaign, we can really see significant throughput with this line up of new machinery and assets. The first machine that we will start up is a Hastelloy unit, which is unique. We took a pause [in the construction timeline] to make that upgrade, as we had a client that needed this configuration. There are additional clients that are interested in it too, because you can do acidic solutions and more aggressive kinds of formulations as well as solvent-based formulations. So that’s a unique element of that first machine. The second machine is being qualified later this year. Kind of a twin, but this one is standard 316 stainless steel.  CP: When a company brings a new or expanded facility online, new personnel often accompanies the new tech. What is the workforce addition that you expect, and what are the challenges of retaining top talent? Basile: In preparation for commissioning and startup of this new equipment, we’ve already ramped our headcount up, to be ready for GMP launch. We’ve added roughly 20 employees in preparation for this first machine to go [live]. Over the next 18-plus months, we could see something on a similar scale, getting us up to that 40–50 headcount range for that facility once it’s fully operational—and more later on in 2028, when we bring in the CDC [continuous direct compression] Flex unit. That’s what’s really going to be transformative about this new facility: that integrated offering coming to life. CP: Even if the NJ facility is top of mind right now, let’s also touch on some of your plans in Europe. What is your vision for expanding in Europe in the next two to three years? Basile: Ideally, Hovione’s aim is to build an equivalent manufacturing network, where clients can go to any site across the globe and get a similar breadth and scale of offering. We’re doing that now in Ireland, expanding our PSD-4 scale spray drying. One unit was recently installed. Late last year, it went live. Then there’s at least one other new PSD-4 in motion, which is really exciting, because [spray dryers] at this site were historically [exclusive to] larger chemistry manufacturing for API [active pharmaceutical ingredient] synthesis. So now, they’re further building their muscle with additional large scale spray drying capacity. On the Portugal side, there’s a lot of great things going on. Our Tejo campus, in Seixal, Portugal, is a massive, 4.5-million-square-foot plot of land, and there’s a new, modular facility going up there. It’s incredibly exciting. The design of the facility has been well-thought through with material flows [and] gravity-fed processes. Here, we minimize handling and [maximize] speed of processing. It’s scalable. We call each one of these building segments a finger. You can copy and paste these fingers, and they are built to house both spray drying and drug product assets within each unit. So, why is that relevant? Because we can easily scale the number of fingers. When customers say, “we need more capacity,” we have the design on the table ready to go. We know how to execute, we know how to build and implement our technology platforms in a short timeframe. Deployment timeframes are truly becoming more and more relevant to our clients. CP: From last year’s DCAT Week to this year’s, what conversations are you having with industry colleagues about ever-changing geopolitics? Basile: We’re seeing that local, regional manufacturing capacity is vital. The concept of U.S. for U.S. and China for China seems to be a common theme that our clients are talking about. We happen to have an edge, as we [have already] started our journey of expanding our domestic U.S. capacity. So I think that’s a crucial piece to the puzzle, having dual-sided Atlantic manufacturing operations. The traditional global supply chain model is being challenged. Having soup-to-nuts sites that are fully autonomous in development, scale-up, tech transfer, all the way to commercial scale operation, is vital to Hovione, and how we’re protecting our supply chain. [Concerning] starting raw materials and Tier 2 suppliers, our procurement teams are out in the market making sure that there’s no single point of failure for critical materials [like] polymers and solvents that we utilize. We’re managing and mitigating risk by looking at those secondary suppliers across different geographies. CP: Encapsulating your planned expansions on both sides of the Atlantic, how would you sum up the value to the customer? Basile: It’s about speed-to-market. It’s one partner from early-phase development, clinical scale, all the way through commercial. They gain comfort, trust, and not just capacity and equipment time; it’s also about competency and depth of scientific expertise. We’re not just a traditional CDMO. There’s unique expertise in particle science and spray dried dispersions that we offer our clients that they don’t have. [With] traditional CDMOs, customers typically pay for time in [a particular] unit, for example, they’d say: “I need a machine, and I need [it for] three weeks.” Hovione is truly a partner to our clients. They’re leveraging our platforms, our know-how in spray drying, and our know-how in equipment design. Read the article at ContractPharma.com  

Article
Contract Pharma, 6 April 2026

Hovione Eyeing Manufacturing Expansion on Both Sides of Atlantic

Apr 06, 2026

Continuous manufacturing has long promised faster development, improved process understanding and, in the absence of scale-up, smoother commercialization. For many pharmaceutical R&D teams, those benefits are well understood. What still holds them back, however, is not scepticism about the concept; it’s the perceived effort required to implement it To increase the adoption of continuous manufacturing, particularly for tablet compression applications, GEA and Hovione have been working together to overcome these hurdles and demonstrate how solutions such as SimpleCT can accelerate development, provide greater flexibility and simplify production. Manufacturing Chemist spoke to Anthony Tantuccio (pictured), Fellow Scientist, Continuous Tableting/Technology Intensification at Hovione, to find out more.  Simplifying continuous operations: lowering the barrier to faster development Continuous manufacturing (CM) solutions can accelerate product development, reduce costs, improve operational economics and make production more agile with less downtime. With advanced controls and tightly linked process data to product output, it enables more consistent tablet quality. “It’s a more efficient and flexible mode of manufacturing,” notes Tantuccio, “offering consistent and reliable tablet production with fewer operators and less waste of precious active pharmaceutical ingredients (APIs) and raw materials.” “Yet,” he adds, “running a continuous direct compression (CDC) line during development can often be a daunting task.” Any inherent complexity stems from managing parallel, integrated operations that all occur at the same time (as opposed to a single unit operation). “Even relatively straightforward duties — such as collecting samples, changing process conditions or running Residence Time Distribution (RTD) tests — can become multi-person activities with a high potential for error.” SimpleCT focuses on simplifying these development-critical tasks, not by removing flexibility but by embedding automation, structure and guidance directly into the equipment and control systems. The result is a toolset designed for how R&D teams develop continuous tableting — mapping a design space and generating calibration samples within a single run — while reducing manual co-ordination and increasing confidence in the data generated. “Rather than treating continuous development as a scaled-down version of commercial manufacturing,” explains Tantuccio, “SimpleCT recognises that development has different priorities: rapid learning, efficient experimentation and robust process insight.” Accelerating development cycles and time to market One of the most immediate benefits of SimpleCT for R&D teams is speed. Development programmes on continuous lines can be significantly shortened when routine yet complex tasks are automated and synchronised across the system. “During many development scenarios,” says Tantuccio, “Design of Experiments (DoE) execution remains largely manual and labour-intensive — introducing inefficiencies, safety risks and data variability at a time when consistency and speed are paramount.” Tools such as assisted DoE (ADoE) allow development steps to be predefined and executed automatically. Instead of manually adjusting dozens of parameters under time pressure, operators can progress through experimental conditions in a controlled and repeatable way. This reduces the setup time between experiments and minimises the risk of incorrect parameter entries or missed steps. “Shorter development cycles translate directly into faster decision-making and earlier progression to clinical or commercial stages,” adds Tantuccio: “Even a modest reduction in development time — measured in weeks or months — can have a meaningful impact on time-to-market and overall project value. Furthermore, unrealised capacity can become available.” Speed alone is not enough, though; R&D teams also need confidence in their understanding of the process. SimpleCT enhances operational insight by improving how information is presented and captured during development. More detailed screens, clearer alarm messages and time-aligned datasets help operators to understand not just that something has happened … but why it happened. At the core of SimpleCT is the ability to define and execute multivariate experiments within clearly defined operating ranges by a single person. Reducing reliance on specialised personnel Traditional continuous development often assumes the availability of highly experienced operators or process engineers who can manage simultaneous set-point changes, sampling schedules, data alignment and troubleshooting in real-time. In practice, this creates a bottleneck: development becomes dependent on a small number of experts. “SimpleCT is designed to lower that dependency,” suggests Tantuccio. “Automated sampling systems, guided workflows and more informative operator interfaces allow development activities to be done by fewer people with less reliance on niche expertise. For example, automated tablet sampling systems can collect, bag, label and link samples to their respective process conditions at high frequency without manual coordination and management.” Similarly, automated residence mass collection enables system measurement of how much material is present in the blender during steady operation — a standard requirement for understanding mixing behaviour — and time-aligned data capture at the touch of a button. Tasks that previously required multiple operators working closely together can now be performed safely and consistently by a single trained user. “This reduction in headcount pressure is particularly valuable in R&D environments when resources are limited and teams are balancing multiple programmes simultaneously,” Tantuccio adds. Improving process insight during development Manual “spiking” operations have historically posed safety and operational concerns. Spiking involves adding a tracer powder to the process and monitoring its passage through the system, enabling mapping of residence time and identification of key process dynamic behaviour. These activities frequently require operators to work in proximity to moving equipment and APIs, sometimes under time pressure. Clear communication between the operators responsible for spiking, sample collection and human–machine interface (HMI) adjustments is essential, yet even minor misalignments can compromise data integrity or create safety risks. “As the number of experimental runs increases, so too does the likelihood of human error, mislabelling or incomplete data capture,” comments Tantuccio. Automated RTD tools, such as contained automatic spiking (CAS) systems, ensure accurate timing, consistent spike introduction and full time-alignment between process data and experimental events. This removes a common source of uncertainty in RTD studies and allows teams to focus on interpreting results rather than questioning data quality. “By reducing manual steps and human error, SimpleCT supports smoother experimentation and faster learning — enabling teams to identify operating windows, sensitivities and transfer risks earlier in development.” A pragmatic path to continuous adoption “Importantly,” enthuses Tantuccio, “SimpleCT is not positioned as a radical departure from existing development practices. It is a pragmatic, application-based enabler for teams that already see the value of CM but have hesitated because of its perceived operational complexity.” The SimpleCT toolset integrates across GEA’s continuous ecosystem — including CDC and related technologies. This lowers the psychological and operational barrier to entry, making continuous development feel manageable rather than overwhelming. “For many pharmaceutical organisations, this derisking effect is just as important as speed or efficiency. By simplifying day-to-day development activities, SimpleCT allows teams to build confidence in continuous tableting early, thereby creating a stronger foundation for later development stages and commercialisation,” Tantuccio adds. From complexity to confidence The take-home message from Tantuccio is that continuous manufacturing doesn’t need to be complicated to be powerful. “For R&D teams, the real challenge has never been understanding the theory; it’s been managing the practical realities of development on integrated, all-at-once and always-on systems.” By removing manual handling and co-ordination from critical development steps, SimpleCT from GEA and Hovione delivers tangible benefits in three key areas: reliability, ease of operation and data assurance. Automation minimises the risk of human error for standardised workflows, whereas push-button execution allows complex multivariate experiments to be done efficiently and safely. The quality and consistency of the data generated provide a strong foundation for process understanding, supporting faster decision-making and more robust commercialization activities. By automating complex tasks, reducing headcount requirements and improving process insights, SimpleCT enables faster, more confident development on continuous lines. “For teams ready to move beyond batch — but looking for a simpler way forward — continuous has just become easier,” concludes Tantuccio. “With SimpleCT, you can take the complexity out of continuous development and get to market even faster.”  SimpleCT: accelerating time-to-market In an increasingly competitive landscape, the ability to develop and optimise tablet formulations quickly can provide a decisive advantage. Part of GEA’s ConsiGma® portfolio, SimpleCT supports the faster development of direct compression products, reduces material consumption during experimentation and shortens overall time-to-market. At the same time, improved operator safety and reduced exposure to APIs align with the industry’s ongoing focus on sustainable and responsible manufacturing practices. Read the full article at ManufacturingChemist.com  

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Manufacturing Chemist, 2 April 2026

Simplifying continuous operations: lowering the barrier to faster development

Apr 02, 2026

With key expansions coming to fruition on either side of the pond, specialist CDMO Hovione is making sure that drugmakers can access its particle engineering expertise across multiple geographies.  That flexibility will be key for the Portugal-based company in the coming years as the pharmaceutical industry continues to embrace more regional supply chains. In a recent interview, Hovione's David Basile, VP of technical operations for the Americas, discussed this trend and the manufacturer's expansion project, which is set to come online in New Jersey next month.  In the coming weeks, Hovione plans to debut a new spray drying expansion at its campus in East Windsor, New Jersey. The company has invested $100 million to expand its campus, including new construction and the acquisition of an additional facility and greenfield land.  Specifically, one of two pharmaceutical spray drying-3 units, or PSD-3 units, will come online in the coming weeks to tackle amorphous active pharmaceutical ingredients (APIs) and amorphous solid dispersions, according to the company. With some 80% of new small molecules in development insoluble in water, Hovione’s particle engineering and amorphous solid dispersion platform helps medicine developers improve the solubility, bioavailability, and, in some cases, the stability of their drug candidates, Basile said.  The company boasts spray dryers from the lab scale to PSD3 at its original facility in East Windsor, in addition to the pair of large-scale machines about to be activated at the campus' new facility.  “We’re going for a single, unified site with capabilities across the campus to do drug substance through finished drug product under one governance and quality system,” - Basile told Fierce.   Read the full article at FiercePharma.com

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Fierce Pharma, 26 March 2026

As expansions come online, CDMO Hovione aims to meet industry's 'dual supply and sourcing' zeal: exec

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