US chemistry process development company Cedarburg Pharmaceuticals has identified a number of process R&D opportunities in the pharmaceutical marketplace in which it can apply its considerable expertise in solving difficult chemical synthesis problems. Chuck Boland, the company's executive vice president, explains the business strategy.

Cedarburg Pharmaceuticals was founded nine years ago when two former Amoco Corporation managers saw an opportunity to establish and build a new business in CMP (not familiar with this acronym) manufacturing of pharmaceutical products and advanced intermediates. "We saw that there was an opportunity to provide a service for more difficult projects, and also that there was an opportunity in the generics area because of the numbers of compounds coming off patent," says Chuck Boland, one of the company founders.

"Cedarburg Pharmaceuticals is a value-driven commercial and clinical API provider," says Boland. "We define 'value' as making life simpler for our customers. That means understanding our customers' needs and exceeding their expectations through transparent project management and resourcefully applying our expertise in process development, validation, scale-up and analytical method development.

Cedarburg recently announced that it has raised a total of $3.5 million in a Series A-3 (fourth round) of preferred stock financing. Participants in the latest round include asset management company Sanders Morris Harris Group and Alfred Bader, founder of Aldrich Chemical (now Sigma Aldrich). Cedarburg has raised $18.8 million to date since its foundation in 1997.   

"This new round of investment demonstrates tremendous confidence for Cedarburg's ability to bring value to the marketplace in the form of making the drug development and scale-up process easier for our customers," says Thomas Groble, the company's chief operating officer. "The funding will be used primarily to expand our capabilities to meet the needs of virtual pharma companies."

Cedarburg focuses on projects manufacturing in the 1-100 gallon range, its largest operating equipment capacity being 500 gallons: "Lower-volume manufacturing means there is a lower technical risk because all the relevant information required to get a project up and running is available in the scientific literature," says Boland. "However, there is a high technical risk involved because the FDA has to approve the manufacturing process."

Boland says that the filing of NDAs for new generic products is not usually a problem insofar that the bioequivalence and stability of the drugs is well-established but the backlog of products within the FDA's approvals pipeline is slowing down the overall process: "Citizen petitions are another factor that can slow down the drug approval process by putting doubts into the minds of FDA officials," he states.

Cedarburg recently received European approval to market cancer pain relievers fentanyl base and fentanyl citrate. The company holds Drug Master Files for both fentanyl compounds in the USA, as well as DEA Schedule I to V licences and permits for controlled substances.

Focus on early-phase projects

Cedarburg's initial focus was on the virtual pharmaceutical and early development areas of the pharmaceutical sector, areas that the company says it needs to revisit following its foray into the generics area:

"We aim to provide service and value by manufacturing quality products at reasonable prices in a timely fashion," says Boland. "The strategy now is to focus on these segments to provide a service companies can rely on."

To support this strategy of focusing on preclinical and Phase I and II process research and manufacturing, Cedarburg has appointed new management in addition to securing its new funding, allowing it to identify more opportunities from more customer projects:

"Consolidation in the pharmaceutical sector means that the major pharmaceutical companies are focusing on discovery R&D and marketing, so this creates opportunities for companies like ours in process R&D and manufacturing. Demand for these types of services is definitely increasing," says Boland.

The company expects to more than double current sales to $30 million per year in three years and increase staff , Boland adds.   Cedarburg also expects to triple sales from virtual pharma companies and is already booking projects from such companies.

Cedarburg already has production facilities in place to execute the anticipated increase in virtual pharma projects.   Cedarburg has two shifts per day, five days per week at its manufacturing facility near Milwaukee, Wisconsin, USA.

"This can be increased 24/7," says Boland.   "We can readily increase manufacturing capacity by 1,000 gallons, lifting the total capacity to 3,500 gal to meet new customers' needs."

R&D techniques used at Cedarburg include HPLC; GC-MS; differential scanning calorimetry; flash chromatography; and reaction block synthesis. Boland says the company's process development chemists are known within the industry for solving tough chemistry problems and that they have a proven track record of success:

"Combining well-equipped labs with team interaction, our process development chemists achieve outstanding results with dependable product delivery," he says.

Multi-step process development

Typical chemistry problems solved by company chemists include multi-step processes for drugs in clinical trials with scale-up and impurity problems or processes for drugs that are off patent but without generic versions due to the complexity of their chemistry. "Interacting as a team, our analytical method development and scale-up groups ensure high-quality and reliable product delivery that is on time and on budget," says Boland.

Cedarburg manufactures clinical and commercial APIs in isolated cGMP manufacturing suites with flexible process configurations. The company also has cGMP kilogram-scale and cytotoxic suites with equipment and systems for safely handling anti-cancer compounds and other compounds with high biological activities. These suites are certified to provide Class 100,000 air quality and contain reactors from 30 gallons to 500 gallons with temperature capabilities ranging from -20ºC to 120ºC.

The company's analytical laboratory contains the full complement of equipment necessary for day-to-day operations ranging from qualifying raw materials and intermediates, providing in-process control and release testing of products. Major techniques include high performance liquid chromatography, gas chromatography, FTIR, polarimetry, UV/visible spectrophotometry, ion chromatography and auto-titration, with all equipment controlled by Hewlett Packard Chemstation software.

"One of Cedarburg's core strengths and another way we make life easier for our customers is our commitment to quality assurance and quality control," says Boland. "We undergo continual cGMP training and have an excellent track record with the FDA. Our most recent successful pre-approval inspection (PAI) was conducted in 2006. We have established a quality control programme that provides for raw material qualifications and sample retain; final product release and retain; method validation and verification; metrology; IQ/OQ; instrument calibration/performance verification; and failure investigations."

Strong US presence plus international business

Cedarburg has a strong presence in the US marketplace working with biotech, virtual pharma and Big Pharma customers. In the international arena, the company has a strong presence through its generics manufacturing business:

"One of the advantages we have as a US company is the dollar exchange rate, which is very advantageous for European companies," says Boland. "And we have a competitive advantage over Chinese and Indian companies too, in that we are fully geared for the manufacture of controlled substances. We have a lot of experience in working with the US Drug Enforcement Agency, which is attractive to our European customers."

There is no drug product area in which Cedarburg has a specific focus, but over the years the company has gained considerable experience in the areas of vitamin D, prostaglandins and steroids manufacture as anti-cancer and pain management medications. Similarly, the company has developed specialist expertise in the use of ozonolysis in chemical synthesis of controlled substances and other APIs.

"The point is," says Boland, "that we are a service company working in an entrepreneurial way, not a technology company. Our differentiation is through service, not technology."

FURTHER INFORMATION

Cedarburg Pharmaceuticals Inc
870 Badger Circle
Grafton, WI 53024

USA

Tel: +1 262 376 1467
Fax: +1 262 376 1068

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MEET CHUCK BOLAND OF CEDARBURG PHARMACEUTICALS

Chuck Boland is Executive Vice President of Cedarburg Pharmaceuticals, and directs the sales, marketing and strategic planning activities of the company.   He has an BS Degree from the Illinois Institute of Technology and an MBA from the University of Chicago.   He has more than thirty years' experience in sales, marketing and strategic planning at several pharmaceutical and fine chemical companies, including Lonza, Hoffmann-La Roche and Amoco BioProducts Corporation.   He is a co-founder of Cedarburg Pharmaceuticals, Inc and is Secretary of the Corporation.

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