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Roche, GSK ramp up production

24-Jun-2004

Swiss pharmaceuticals company Roche said it is investing 800 million Swiss francs (€530 million) to build two new manufacturing facilities in Europe.

The new facilities will be used to make two antibody-based drugs for cancer - Herceptin (trastuzumab) and Avastin (bevacizumab) - that have been developed alongside Genentech, in which Roche has a controlling stake.

Analysts quoted on Swissinfo said that the move appeared to be 'prudent housekeeping' to make sure that manufacturing supply matches future demand for the two drugs.

 

A spokesman for the company would not comment on the increase in capacity that would be achieved from the new facilities. Herceptin is already achieving significant revenues in the treatment of breast cancer, with Genentech recording 2003 sales of over $400 million (€330m). Meanwhile Avastin has just been approved by the US Food and Drug Administration (FDA) for colorectal cancer. Both drugs are tipped to achieve sales of around SF1.3 billion at peak.

 

Genentech and Chugai of Japan, also controlled by Roche, have investment programmes of their own in biotechnological production totalling about $1 billion.

 

The new Roche factories are to be built in Basel, Switzerland, where Roche has its headquarters, and Penzburg, Germany. An existing chemical production building will be demolished at the group's headquarters in Basel to make room for the proposed new eight-storey centre, while in Penzberg, the largest biotechnology manufacturing site in Europe, existing capacity will be expanded by adding a new five-storey facility. They will create around 300 new jobs.

 

Biotechnology drugs accounted for a third of Roche's pharmaceuticals sales of SF21.6 billion last year.

 

GSK in Asia

 

Meanwhile, GlaxoSmithKline has opened a €48 million expansion of its production capacity in Singapore in a move which it said strengthened its presence in the Asian market.

 

The S$100 million expansion has been carried out to boost production of fluticasone propionate, the active pharmaceutical ingredient (API) used in theproduction of the asthma medicines Seretide and Flixotide, as well as Flixonase which is used to treat allergic rhinitis.

 

Singapore has emerged as a hothouse of pharmaceutical production in recent years, as multinationals have located here as a springboard into Asia, benefiting from generous tax concessions and Singapore's strong intellectual property protection.

 

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