North East leading the UK in pharmaceutical industry

DR Stan Higgins, chief executive of Nepic, the organisation that represents and promotes the pharmaceutical sector in the region, explains how the sector is developing despite continuing global market pressures.

Aesica Pharmaceuticals

THE pharmaceutical sector is vitally important to the economy of the whole north east region of the UK. It received another boost this month when TryggPharma (Norway) announced that it had purchased and intend to reopen the former facilities of Lundbeck Pharmaceuticals (Denmark) at Seal Sands, Middlesbrough.

The site, which had previously won a global industry award for its leading-edge manufacturing technology, was closed down at the heart of the recession in 2008, when Lundbeck decided to consolidate production from three sites to two in Europe. Since then the site has been for sale with Nepic working to promote the facility and attract new owners from around the world.

The pharmaceutical industry growth in the UK remains strong with the number of enterprises in the UK manufacturing basic pharmaceutical products and preparations increasing by more than 10% since 2008. This is also reflected in North East England where several businesses have grown and prospered. We have seen homegrown companies such as Specials Labs growing from their base in Prudhoe while SCM Pharma have also recently announced a further expansion of their Northumberland-based facilities, expanding capabilities to handle high-potency materials and increasing the firm’s ability to simultaneously manufacture multiple products. Meanwhile, the success of Cramlington-based Aesica Pharmaceuticals has been outstanding by any business yardstick.

Following its most successful year to date in 2010, Aesica Pharmaceuticals doubled in size and successfully expanded into new markets. The company’s vision is to become the world’s leading supplier of active pharmaceutical ingredients (APIs) and formulated products and recent developments are enabling Aesica to rapidly achieve this. It is already one of the fastest- growing UK companies, increasing its turnover by 300% in the past five years. In doing so it was ranked third in Deloitte’s 2011 Buyout Track 100 as published in The Sunday Times.

Aesica announced recently that it is now the market leader in the production of the active pharmaceutical ingredient, flurbi- profen, a drug used to treat the pain and inflammation associated with arthritis. The company has achieved its market-leading position as a result of continuous process improvement, investment in facilities and its ability to respond quickly.

The pharmaceutical industry success in the North East cannot be underestimated with its huge impact on the region’s and the UK’s exports. Few realise that our region is the only net exporting region in the UK economy and this is largely down to the industries based on or around chemistry. Up to £3bn of the annual £12bn of exports come from the region’s pharmaceutical industry. Over 35% of the UK’s GDP in pharmaceuticals continues to be manufactured here. There has been growth and development at GlaxoSmithKline, MSD, Sanofi, Piramal Healthcare-Pharma Solutions and Shasun Pharma Solutions.

Many have reported increased productivity and investment in their manufacturing facilities, particularly into biopharmaceutical capabilities. In some cases products have been relocating from elsewhere in the world back to the North East factories.

As we have seen from the Aesica case above, the pharmaceutical sector remains of interest to investors. In 2010 Nepic also saw the takeover of a number of the region’s pharmaceutical businesses with Reckitt Benckiser taking over the Peterlee facilities of SSL international, Covance acquiring the Alnwick research facilities from Sanofi and the recent announcement that FujiFilm Diosynth Biopharmaceuticals are the new owners of the former MSD/Avecia Biologics facility in Billingham.

Clearly this is a region with an active, modern pharmaceutical industry and a key part of the hi-tech industry sectors that underpin the UK economy. North East England has a full capability in pharmaceutical manufacturing and the companies that are based here can deliver all aspects of the value chain of the sector, including pre-clinical drug discovery and development, clinical research and develop- ment, clinical trial management, pilot-scale manufacturing, full-scale pharmaceutical ingredient and intermediate manufacturing, as well as final product formulation, packaging and distribution. There are few, if any, regions in the world which could stake this claim.

Furthermore these businesses are supported by an experienced and successful supply chain and academic expertise at our universities.

To participate in industry-led collaborative projects that are aimed at growing the pharmaceutical sector in North East England contact Nepic at www.nepic.co.uk

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