H Lundbeck eschews outsourcing and buys Elaiapharm

By Gareth Macdonald

- Last updated on GMT

Related tags: Manufacturing, Copenhagen

CNS focused drugmaker H Lundbeck says its acquisition of French CMO Elaiapharm represents a cheaper option than third-party manufacturing.

Elaiapharm, which offers a range of dry, liquid and sterile form manufacturing capabilities as well as packaging and European distribution services, has worked with Lundbeck for almost a decade.

Lundbeck spokesman Mads Kronborg told in-PharmaTechnologist that: “Elaiapharm represented a unique opportunity for us in that we knew the company very well from many years of collaboration. That gives a number of [strategic] advantages.

Kronborg went on to say that: “[Through the acquisition] we are able to produce these goods cheaper ourselves than when using external suppliers, which is the whole reason why we wanted to buy Elaiapharm​.

Furthermore we will now have a more flexible production that will provide a great platform to even further increase our already high supply efficiency​.”

The acquisition also fits with recent strategic moves undertaken by the Danish drugmaker, most notably in September when it announced plans to cut as many as 220 jobs in favour greater use of “insourcing and changing the travel activities of its employees​.”

This point was also touched upon by Kronborg who explained that: “We sell most of our medicines in Europe so it is beneficial to have our finished goods production located here close to our biggest markets​, France being one of them.”

Elaiapharm to retain CMO focus

Through the deal Lundbeck gains Elaiapharm’s active pharmaceutical ingredient (API) production facility in Nice, which it believes will compliment its manufacturing plant in Copenhagen, Denmark.

Lundbeck will retain all 130 Elaiapharm employees, expects the integration process to be completed this year and, according to Kronborg, does not plan to alter operations at the contract manufacturing organisation (CMO) in the short term.

Kronborg also said that while Lundbeck has long been Elaiapharm’s biggest customer, the CMO does have other clients with which it will continue to work. However, he added Lundbeck will use a greater proportion of Elaiapharm’s manufacturing capacity.

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