PCAS, a supplier of fine and specialty chemicals, already makes more than half its business in the synthesis of APIs but lacks the knowledge of biocatalysis that biotech specialist Proteus prossesses.
Conversely, Proteus, focused on providing new proteins and bio-based products, is not capable of producing APIs and intermediates on a multi-ton scale.
So both partners believe this joint venture will produce complex chiral compounds using commercially viable routes, reduce manufacturing costs, improve productivity, reduce byproducts and develop competitive green chemistry.
However, the market for APIs is quite crowded, with market research analyst Frost & Sullivan predicting a relatively slow compound annual growth rate of 3.8 per cent to reach $5.85bn (€4.9bn) in 2010.
This is because of the huge overcapacity and price erosions in the market, exacerbated by the relative absence of new drugs and the unforeseen failures of several late-stage drugs.
Nevertheless, the two French companies are banking on the growing demand in niche segments such as biopharmaceuticals, where high potency APIs with innovative drug mechanisms are showing double-digit sales growth.
What is more, the market for APIs in generics is also on the rise, driven by a combination of factors such as the ageing population, growth of chronic therapies, cost constraints on social security systems, patent expiries and a thinning pharmaceutical drug pipeline.
"Our goal is to take advantage of the increased capacity to offer new highly effective products but we will also be making generic products," Jean Francois Bloch, director of intellectual property and licensing for Proteus, told In-PharmaTechnologist.com.
"As a result of this venture, our customers will enjoy great value for money because they will benefit both from chemical and biotechnological know-how for the price of dealing with one company."
The new company, PCAS Biosolution, will have exclusive licence rights to the intellectual property platform from both PCAS and Proteus to apply to chemical process development and manufacture of pharmaceuticals.
Nonetheless, Bloch said they are still deciding on how their staff will be shared and where different operations will take place.
"The early-stage integration of biocatalysis into the Chemical Process R&D gives us an edge to reap all the benefits of this technology for the projects of our clients," Christian Moretti, chairman of PCAS, commented in a statement.
By using Proteus's gene shuffling technology, biocatalysts will be tailored to develop what is hoped will be cutting edge chemo-biocatalytic routes to the target molecules of the new company's clients.