AstraZeneca announced its Q1 2016 results last Friday, and among reporting slight increases in revenues and profits year-on-year - $6.1bn and $625m respectively – the firm’s CFO Marc Dunoyer said the firm plans to reshape its manufacturing network.
“We plan to reshape our manufacturing base, optimising our presence in key strategic sites,” he told investors. However, he added, AstraZeneca must do this “while taking into account the need to create capacity in our biologics supply chain.”
Growing biologics capacity
Over the past 12 months, the Anglo-Swedish pharma giant has bolstered its bioproduction capacity through a $285m investment at its Södertälje, Sweden biologics plant, and acquired a mothballed site from Amgen in Colorado, effectively doubling its US capacity.
“These projects, in addition to a previously announced expansion plan at Frederick, Maryland, will increase production capacity to support the growing demand for biologics, which represents half of our development pipeline,” AstraZeneca spokesman Jacob Lund told Biopharma-Reporter.com.
Currently the firm has 29 production facilities in 17 countries, six of which are focused on biologics: Nijmegen, Netherlands; Liverpool, UK; Frederick, US; Philadelphia, US; Boulder, US; and the site in Sweden.
“Looking ahead, we will continue to invest appropriately in areas of growth, including allocating greater resources to oncology,” Lund said.
“We are focused on ensuring our supply network is flexible and responsible enough to meet future changes in patient and market needs, while at the same time achieving the right balance of service, quality and cost.”
He also told us AstraZeneca will continue to use third-party manufacturers, depending on technology needs and product segmentation. “The announcements last week do not alter our approach to use of contract manufacturing.”
Big Biopharma investments
AstraZeneca’s strategy resembles that of a number of other Big Pharma firms which have been looking to reduce their small molecule production footprint, while concurrently growing their biomanufacturing capabilities.
Novartis, for example, is looking to save $1bn by 2020 by capitalising on manufacturing synergies, and continues to reduce a network which has seen 25 sites restructured or divested since 2010.
In parallel, the firm has built a cell-culture based manufacturing plant in Singapore, and pledged to keep the majority of its biologics manufacturing in-house.