Press Room

News / Mar 22, 2021

Guy Villax speech to the Informal Meeting of Ministers Responsible for Competitiveness

EU Presidency: COMPET - Internal Market and Industry

Informal Meeting of Ministers Responsible for Competitiveness (COMPET) | Hovione

 

Dear representatives of the Commission, Dear Ministers, Ladies and Gentlemen, Good-Morning

It is a privilege for me to address you.

 

Dear Pedro thank you for giving me this opportunity.

 

I have been fortunate to have a front row seat watching the Pharmaceutical Industry since I was born, that was 60 years ago. Hovione was founded by my father, a Hungarian refugee, in the basement of our home in Lisbon. Often as children we could not go into the garden because a bromination was going on a l’air libre for safety reasons!

My first job in the family business, aged 24, was selling active ingredients made in Portugal to Indian firms in Bombay, Madras, Delhi and Goa.

 

I will start by telling you about the successes of our industry and end with our failures as these are the ones we need to collectively tackle.

 

10 years after the HIV virus was discovered in Paris and Washington, American companies invented the protease inhibitors that would treat this horrible disease. But who made these complex molecules industrially possible then were exclusively European companies.

 

In the last decade several cures for Hepatitis C were discovered. Over 4 million patients have been cured and ¾ of those with pills made with a Hovione process with product that came out of our plants in Portugal and Ireland.

 

It is also important to acknowledge the complexity of the manufacturing processes and the extreme specialization that each step requires. Remdesivir, one of 3 approved therapies for Covid-19 needs factories in two continents just to make the active ingredient, but it won’t work without an enabling excipient called Captisol® that Hovione makes exclusively. To face the pandemic’s tremendous demand we are now making per month what we usually made per year.

 

Europe has 600+ plants that have the science, the technology, the know-how and the capacity to be the workhorse of innovative medicines for global supply. For most of us it has been some time that we have stopped focusing on serving the generics industry of our home market, Europe. Hovione has not supplied one kilo of a generic API to Germany for 15 years because one cent of difference means the Indian product is preferred. Had we not exported to the USA and served innovators and generics there we would be bankrupt, or weak and unable to invest in R&D and new technology.

 

The beauty of the pharma ecosystem is that the very high prices of patented products pay for the R&D and the risk, but as soon as the patents expire the best science can be had for a few cents per pill. Innovative drugs, under patent, and the large multinationals are today a minority volume player – over 80% of prescriptions are filled by generics.

 

Today the EU is not in control of its generic medicines – we face frequent shortages and a geostrategic fundamental dependence for APIs and precursors from India and China – where serious accidents, government policies and market failures make us vulnerable. 

 

We have ended up in this untenable situation due to 1) the unbridled market forces of globalization and 2) 30 years of EU regulations that failed to consider that pharma is an intensely globalized and highly competitive industry.

 

Europe was once the cradle of pharmaceuticals. In the 50s any American that wanted to study chemistry had to learn to speak German as all good text books were written in German. We have faced a 30 year decline – today in the top 10 largest generic firms in the world only 1 is European.  

 

As an industry we survived by moving away from intermediates and generic APIs – including the essential ones – and focusing on high value innovative products. The world is competitive and if the climate in Europe in unfavorable to certain segments, factories move – it is that simple.

 

Nobody saw the unfolding of this radical structural transformation.

Nobody heard Industry’s calls for levelling the playing field.

 

 

In 2004 the EU API industry founded EFCG, the European Fine Chemicals Group, a member of CEFIC, to level the playing field, this need remains. 

 

In my first trip to Brussels to flag the growing risk to patients and the lack of level playing field, in 2005, I was met with bemusement, étonnement and some sarcasm. In 2007 I testified at a hearing of a sub-committee of the US congress in connection with the risks to patient from imported APIs. I went public and frequently said and wrote that EU Regulators inspected on proximity not risk. The contaminated heparin tragedy that killed over 150 patients occurred in 2008. By 2011 our advocacy work resulted in the Falsified Medicines Directive, too little, too late. 

 

Today price pressure has driven the European Generics supply chain to, in 74% of cases, buy from low-cost countries. These production locations have low regulatory oversight therefore present higher risk to patient, often cause environmental damage and antimicrobial resistance because of poor control over wastes, and have a high frequency of deadly accidents – the EU industry cannot compete with such low standard, low cost operations. 

 

In summary in the last 30 years a large part of the EU API and intermediates industry disappeared to the benefit of its competitors. Certain key technologies (eg fermentation, nitration, halogenation) almost disappeared from Europe. This represents a damaging loss of critical mass, as these technologies act as platforms that allow the production of many different APIs.  Fermentation is key to making many antibiotics. Without fermentation Europe is now totally vulnerable and dependent on supplies from Asia/China.

 

To reduce this dependence and to ensure the resilience of the medicines supply chains on the long term, the only solution is to rely on the robust, reliable, competitive and sustainable manufacturing capabilities we still have in Europe.

 

So what are Industry’s proposals in this regard?

 

  • First, we must support the existing European manufacturers of APIs and intermediates in the on-shoring of technologies that will guarantee the supply of the essential medicines. Dual sourcing of the essential medicines must be a cornerstone of our policies.

 

  • Second, level the playing field with other world regions to ensure that import and purchase requires not only verified compliance with GMPs, but also demands process safety, respect for the environment and an absolutely reliable supply chain. Linking the purchase of critical supplies to the sole criteria of price cannot be a sustainable supply strategy.

 

  • Third, we need a long-term EU industrial policy that can accelerate sustainable Research, Development and industrialization of innovative and green technologies, as well as manufacturing capacities within the EU territory.

 

  • Fourth, regulatory centralization, transparency and flexibility. EMA must be given more clout. We need a central record of EU shortages.  EMA must know the complete supply chain mapping of each medicine, so it can act. EMA should turn into a compliance matter the good example of the Swedish regulator that considers environmental aspects when granting permits and approving products and APIs.

 

We are optimistic that this straightforward strategy will be successful to eliminate not only existing drug shortages but more importantly avoid future risks of shortages.

 

 

Europe can rely on its the 600+ existing manufacturing sites, on its strong innovation capacity, its highly-trained workforce to reverse the trend and build back a robust pharmaceutical industry in Europe.

 

Industry is involved in the Commission’s EU Pharma Strategy Structured Dialogue. We are looking forward to working with the Commission to implement, as quickly as possible, the appropriate structural, pragmatic and efficient measures to support our industry. 

 

However as we embark to build the future and drive a Renaissance of the European API and generic industry it is imperative that we first look into the past and understand what got us into this situation of dependence and weakness. 

 

The US and Japan have already launched countermeasures, we must work with our allies and not independently.

 

An EU patient centric pharmaceutical industry needs a EU centric pharma supply chain with a sustainable EU manufacturing base, this requires deliberate and careful regulation to compensate for market forces and to correct the playing field.

 

European citizens deserve medicines that are Affordable, Accessible and most importantly Available. 

 

Dear Commission representatives, you can count on me and on our industry associations to fill in the blanks, spend time analyzing the situation and design a solution for the future.

 

Thank you for your attention.

 

Guy Villax
CEO, Hovione
Lisbon, 22nd March 2021

PDF version

 

 

 

Find more about this virtual event at 2021portugal.eu

 

 

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The company is building out more than 200,000 square feet of space in New Jersey. In April, Contract Pharma had the opportunity to tour Hovione’s expanded manufacturing facility in East Windsor, NJ. The company is planning a formal ribbon-cutting this fall; before that, we got an inside look at some new features. Having established United States operations in 2002, Hovione now has more than 200,000 square feet of space in New Jersey. This will be developed into a large, integrated campus in the next five to ten years. Overall, the company’s recent NJ expansion, which began in 2025, has tripled its total spray-drying capacity in the U.S. Future Facility Upgrades A 125,000-square-foot greenfield acquired by Hovione at the East Windsor campus will eventually be a large-scale production site. This includes enhanced quality control and R&D capabilities. Together, all this adds to Hovione’s stable of manufacturing sites, R&D centers, and other offices spread across three continents. Key to the expansion is a targeted reduction of Hovione’s carbon footprint by 40% by the year 2030. Part of this goal is embracing new and/or changing solvent types to help meet sustainability standards. Additionally, the company says automation that has been put in place at its Portugal site will be replicated in NJ. Hovione Aligns NJ Operations At the Drug, Chemical & Associated Technologies Association (DCAT) Week in New York in March, Contract Pharma met with Hovione. There, David Basile, Vice President of Technical Operations—Americas, further illustrated the New Jersey expansion. “Hovione aims to build an equivalent manufacturing network, where clients can go to any site across the globe,” Basile said. “The design of the facility has been well-thought through with material flows [and] gravity-fed processes. 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.” Ultimately, with these moves and a strategic partnership model, Hovione aims to provide customers an opportunity to co-invest and access the company’s proprietary knowledge and assets to accelerate programs and create long-term value. Read the full article at ContractPharma.com    

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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 hospitals to patients’ homes, discover the solutions that make it possible to administer high-dose biologics with greater comfort, less pain, and more freedom in treatment. What if some of the scientific breakthroughs that could improve the lives of millions of people were happening right now in Portugal? The Next Discovery. Listen to the last episode of the podcast here, featuring João Pires and Joana Cristóvão from Hovione’s Research and Development Center. [English transcription] Nelson Ferreira (NF): Welcome to the sixth and final episode of The Next Discovery, a podcast series in which Hovione opens the doors to its world to share the global impact of innovation developed in Portugal. I’m Nelson Ferreira, and throughout this journey we have explored chemical processes, ultrafine particles, and revolutionary production lines. Today, we look directly at the future of medicine. After exploring the world of small molecules, we are now entering a new therapeutic dimension: biologic medicines. Based on larger and more complex molecules, these treatments are opening new possibilities for addressing a wide range of diseases. To explain how this field is evolving and how science can make these treatments more effective, stable, and accessible to patients, I’m joined by João Pires and Joana Cristóvão from Hovione’s Research and Development Center. NF: Welcome to you both. João, let me start with you. For someone who has never heard this term before, what exactly are biologic medicines, and what sets them apart from small-molecule drugs, which are more closely associated with traditional chemistry? João Pires (JP): If we think about the medicines we find in pharmacies today, most of them are indeed composed of small molecules. These are simpler structures that are still highly effective and that we can design and manufacture through what we call classical chemistry, a field that has developed its knowledge over the last 150 to 200 years. Biologics are completely different. Because of their complexity, larger size, and structure, they differ mainly in their origin. They are produced from living organisms, such as cells, which, under the right conditions, can function as biological factories. Just as in our own bodies, they allow us to produce and extract substances that can have a significant therapeutic effect for certain diseases. In that sense, biologics benefit from millions of years of evolution, something classical chemistry simply does not have. NF: Biology is what carried out that evolution. JP: Exactly. Biology. That’s part of the beauty of it. NF: Nature carried out that entire process for us. NF: Joana, since these medicines are created from living organisms, can we say they are, in a way, more “intelligent” and have greater therapeutic potential? Joana Cristóvão (JC): In some cases, they do have tremendous therapeutic potential. One of the advantages of these molecules is their remarkable specificity. You can think of it as a key fitting into a lock. It has to be the right key. Biologics, because they speak the same biological language as our bodies, have this advantage. However, that does not mean they are better than small molecules. It means that, because they are produced by living microorganisms, they are highly complex and would be very difficult, and in some cases impossible, to produce through traditional chemical synthesis. Their great strength lies in their specificity. Examples of biologics include proteins that facilitate communication within the body and monoclonal antibodies that identify specific targets. These functions are particularly suited to biologics and less common among small molecules. NF: João, as I understand it, this is still an emerging field worldwide. How did Hovione, a company historically linked to chemical synthesis and small-molecule particle engineering, decide to embrace the challenge of biologics? JP: Honestly, it has been a very natural transition. Over the years, Hovione has developed highly specialized expertise in chemistry, particle engineering, and formulation science. When we look at biologics, despite their greater complexity, the underlying challenge is very similar. These medicines still require materials, processes, and controls to ensure they reach patients safely, consistently, and effectively. NF: But is there real potential? JP: Absolutely. Not only is there potential, but there are also significant challenges. This leads to the second point: curiosity. Throughout Hovione’s history, starting with our founder, there has always been a drive to embrace increasingly complex challenges. That curiosity is part of our DNA, particularly within our Innovation and Development Center. It is also one of the most rewarding aspects of working at Hovione: being part of this transition. NF: And it is not that far removed from Hovione’s history either. JP: Exactly. NF: Joana, in which therapeutic areas have biologics already had the greatest impact? Are there diseases where they have clearly transformed patient treatment? JC: There are several areas. NF: So this is no longer science fiction. It already exists in practice. JC: Exactly, and it has existed for quite some time in some fields. In oncology, for example, antibodies are used to target and kill cancer cells with high specificity. Instead of attacking cells broadly, these treatments target the disease’s underlying mechanisms. NF: Which I assume reduces side effects. JC: It does. Cancer is also a very clever disease. It evolves rapidly and often hides from our immune system. There are biologic therapies designed to help our natural defenses do their job by removing the “invisible cloak” that some tumors use to evade detection and progress rapidly. Another classic example is diabetes. Insulin has been the most common treatment for diabetes for decades. Before biotechnology, insulin was extracted from animals, making production limited. With biotechnology, we gained the ability to produce human insulin, known as recombinant insulin, using living microorganisms. This transformation made the treatment available to far more people and has saved countless lives. NF: Two clear examples where biologics are already making a difference. João, these medicines are on the market today, but I imagine developing and stabilizing them in the laboratory presents major technical challenges. What are they? JP: Because these molecules are highly complex and, as Joana described, quite elegant, they are also extremely sensitive, almost like greenhouse flowers. Biological evolution has optimized them to survive under very specific conditions, conditions that often do not exist during manufacturing, transportation, or administration. As a result, they are highly sensitive to heat, air, pressure, and even prolonged contact with one another. When these molecules interact too much, they can lose their structure and unfortunately their therapeutic effect as well. This is where we come in. Clients often approach us with molecules that have tremendous therapeutic potential but are still only proof-of-concept projects. Our role is to take those early experimental results and develop the controls, processes, and formulations needed to scale production to thousands or even millions of doses while maintaining impeccable quality and stability. NF: Joana, how are these medicines administered? Are they different from conventional drugs? Traditionally, many biologics require intravenous administration in a hospital setting. Is that still the case? JC: Traditionally, yes. Most biologics are administered directly into a vein through an infusion, similar to receiving an IV drip. However, the pharmaceutical industry is not only focused on treating diseases. It is also increasingly focused on the patient experience. These treatments require hospital visits and can take time to administer. For chronic illnesses, this process repeats throughout a patient's life. The industry's goal is to develop alternative treatments that are more comfortable and give patients greater independence. NF: So they would no longer need to go to the hospital. JC: Exactly. The ultimate objective is to create injectable solutions that patients can administer themselves. Achieving this requires innovation in technology, formulation development, and medical devices. 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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 asthma to therapies that may one day reach the brain, we follow Hovione’s journey in respiratory and nasal drug delivery, where every particle is engineered to improve patients’ lives. 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 fifth episode of the podcast here, featuring Eunice Costa, Director of Research and Development Center 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 where we open the doors to science and innovation with global impact. I’m Nelson Ferreira, and today we’ll explore how the respiratory system and the nasal route are being used to deliver medicines throughout the body in fast and innovative ways. Joining us is Eunice Costa, Director at Hovione’s Research and Development Center. NF: Hello, Eunice, and welcome. Hovione’s history is closely linked to the lung. More than two decades ago, you began developing and manufacturing solutions for inhaled medicines. What are the major diseases whose treatment has advanced significantly with the help of these innovations? Eunice Costa (EC): Hello, Nelson. Thank you for the invitation. To begin with, respiratory diseases are among the most prevalent conditions and have a tremendous societal impact. We have asthma and chronic obstructive pulmonary disease, or COPD. The technology required to manage these diseases, from molecule design to formulations and delivery devices, is fundamental to making them manageable. While they certainly have a significant impact on patients’ daily lives, these conditions can be effectively controlled, allowing people to live normal lives. NF: Especially because some of them aren’t curable. EC: Exactly. NF: COPD is one example. EC: That’s right. The medicines available today are primarily aimed at disease management, particularly bronchodilation, keeping the airways open and unobstructed. NF: Is that what an asthma inhaler does? EC: Exactly. That’s what the asthma inhaler does, the device everyone recognizes. It’s probably the most iconic example, and one that we often see used incorrectly in movies. NF: Really? Is it also what we use during a spirometry test? EC: Spirometry is primarily a diagnostic test that measures lung capacity when disease is already present. NF: But an inhaled medication is also used during the procedure, right? EC: Exactly. NF: Today, Hovione is also proud to offer end-to-end solutions for inhaled and nasal medicines, primarily targeting the lungs, as we’ve been discussing. Does that mean you control the entire process, from molecule synthesis all the way to the final inhaler device? EC: Yes, exactly. And the journey has been very gradual and organic, so to speak. If I can make a chemistry joke, “organic” fits quite well. But let’s continue. Hovione started with molecule synthesis, which is part of our history. From there, we specialized in controlling what we call particle size, or particle engineering, because these medicines need to be carefully engineered to be delivered effectively to the lungs. We handle synthesis, though we don’t work in drug discovery itself. We’re not discovering new molecules; rather, we support pharmaceutical companies with synthesis and, in this case, particle engineering, which is critical for inhaled medicines. Next comes combining the active pharmaceutical ingredient with additional components to create a medicine, which is also far from simple. Finally, there’s the inhaler, the medical device people actually see. It’s the engine that generates the aerosol. In the traditional asthma inhaler, which is the best-known example, aerosol generation is active. A pressurized gas propels the medication. In the types of devices we specialize in, known as passive devices, dry powder aerosols are generated using the patient’s own inhalation effort. NF: The patient inhales the powder. EC: Exactly. It’s still a challenge because there needs to be a perfect combination of particle properties, formulation, and device design to create the aerosol and achieve effective deposition in the lungs. We have control over all those aspects. NF: The lung seems like a particularly challenging organ for drug delivery. What makes it so difficult to ensure the medicine reaches exactly where it’s supposed to go? EC: Right. NF: Do you put a GPS on it? EC: Not exactly. That would be nice. The reality is that the lung has evolved over millions of years to prevent the entry of any foreign particle, whether it’s a pathogen, a virus, or anything else. NF: That’s its natural behavior. EC: Exactly, and fortunately for us. The lung is very effective at preventing exposure. It’s often said that if the entire surface of the lungs were spread out, it would be about the size of a tennis court. It’s an enormous surface area. Without defense mechanisms, we would constantly be exposed to harmful particles. Evolution designed the lungs to keep everything out. When we try to use the lungs as a route of administration to treat patients, we have to find ways to navigate around those defense mechanisms. NF: Or trick the lungs. EC: Yes, you could say that. We have to persuade them. The key lies in a magic number: aerosol particle size. Whether it’s a dry powder cloud or a liquid aerosol, the particles need to be between one and five microns in size. We’re talking about particles at least ten times smaller than a human hair. These are extremely fine powders. Very small particles tend to clump together, absorb moisture, and behave unpredictably. First, you have to reduce particle size, then control those behaviors, and finally use a relatively simple device. NF: Of course. EC: A device capable of generating that aerosol. NF: And one that anyone can use. EC: Exactly. NF: I believe Japan crossed paths with Hovione’s story again through the success of Inavir. What is this product, and what impact did it have? EC: Inavir is a story that goes back several years and is very illustrative of Hovione’s role in this specialized pharmaceutical niche. It’s an area that requires a broad set of competencies. For context, Inavir is an antiviral medication used to treat influenza. It’s administered directly to the lungs, which are the entry point for the virus. Hovione was involved in developing both the formulation inside the device and the device itself. The inhaler remains, to this day, the world’s only single-use inhaler. It’s extremely simple because patients using it have the flu. Reusing an inhaler in that situation makes little sense. The goal is to use it once and then discard it. The challenge was developing an inhaler that was cost-effective and sustainable while being designed for a single administration. NF: Use it once and throw it away. EC: Exactly. Since its approval in 2010, it has remained the world’s only single-use inhaler. We can say that millions of people have been treated with a technology developed in Portugal. NF: That’s also a source of national pride. EC: Absolutely. NF: In recent years, the nasal route has generated tremendous scientific interest, particularly because of its potential to reach certain areas of the body, including the brain and central nervous system, more quickly. What makes this route so special? It seems to have no toll booths. EC: Well, there are a few. We still need to bypass the body’s defense mechanisms. The nasal route is fascinating because we often associate anything administered through the nose with allergic rhinitis, pollen allergies, or sinus infections. NF: And allergies in general. EC: Exactly. Conditions that are very localized. But in reality, the nasal cavity offers extremely rapid absorption. Researchers began exploring it as a gateway for treating conditions not necessarily linked to nasal symptoms. Initially, this included areas such as pain management, particularly migraines. More recently, it has also been explored as a potential route to the brain itself. Why? Because our sense of smell originates in the nasal cavity, which contains a network of nerves. NF: Although what allows us to smell is actually in the brain. EC: Exactly. This is one of the few non-invasive routes that provides a relatively direct pathway from the nose to the brain through the olfactory and trigeminal nerves. It opens the door to much more patient-friendly approaches for treating disease. NF: Looking toward the future of healthcare, could nasal delivery eventually replace injections for many therapies? Might we someday say goodbye to needles? EC: Unfortunately, I don’t think so. So many innovative therapies are being developed, and needles and injections remain the most reliable way to ensure delivery, especially for advanced biologic therapies, where administration efficiency must be close to 100%. Everything that is prepared must reach the patient. We’re still far from guaranteeing that level of efficiency through the nose or the lungs. Not yet. NF: Not yet, but there are already significant advantages in certain situations. To bring all these innovations to market, research can’t happen in isolation. Does your team work with scientific and academic partners who accelerate these discoveries? EC: Absolutely. First and foremost, our partnerships with Portuguese universities have been an essential source of talent and knowledge for the advances we’ve made over the years, particularly in respiratory drug delivery. The Faculties of Pharmacy in Lisbon and Coimbra, NOVA University, and Instituto Superior Técnico have all been key partners. Not only academic institutions, but also industry partners. Given the complexity of what we do, multiple disciplines need to come together, from mechanical engineering and physiology to biology. No one achieves major breakthroughs alone. We also collaborate with companies such as Precisepart in Germany in the area of inhaler devices. These partnerships have been absolutely fundamental to our success. NF: Eunice Costa, scientist at Hovione, thank you for helping us understand how science is transforming lung health and how the nasal route is becoming a gateway for medicines that could improve the lives of millions of people. This was the fifth episode of The Next Discovery. Next week, we’ll reach the final chapter of this season and explore what almost sounds like science fiction becoming reality. We’ll discover high-dose biologic medicines and learn how cancer treatments may move from hospitals into our homes. All episodes are available at observador.pt and on major podcast platforms. Until the next discovery.

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