Merck Expands Outsourcing With Zhejiang Huahai For HIV Finished Product Manufacturing
This article was originally published in PharmAsia News
Executive Summary
SHANGHAI - China's leading contract manufacturing company and API provider Zhejiang Huahai announced March 8 that the company has reached a drug supply agreement with Merck to produce finished drugs for the next several years
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SHANGHAI - China's leading contract manufacturing company and API provider Zhejiang Huahai announced March 8 that the company has reached a drug supply agreement with Merck to produce finished drugs for the next several years. Under the agreement, Huahai will provide formulation, production and packaging for undisclosed Merck products. While Merck owns exclusive global marketing rights for the finished products, Huahai is responsible for obtaining related regulatory approvals. "The collaboration between Merck and Huahai began in 2000. Three years ago, we expanded the partnership," a manager from Huahai's Shanghai branch told PharmAsia News. However, the company declined to disclose information beyond the announcement. The companies began a trial run of the agreement in 2008. At the time, Zhejiang Huahai said that while the agreement would not contain a revenue-sharing mechanism, the partnership would help the company build its capabilities to gain partnerships with other big pharma (Also see "Merck Trials Manufacturing Agreement With China’s Huahai Pharmaceutical" - Scrip, 7 Aug, 2008.). The manager, who wished to remain anonymous, said the company is now also partnering with Novartis. The contract with Merck will create $20 million in annual revenue for Huahai for five years, estimated Luo Jing, a healthcare analyst with Shanghai Shenyin Wanguo Research & Consulting. According to Luo, the collaboration will focus on Merck's AIDS drugs. According to Q4 reports from Merck, worldwide sales of its HIV integrase inhibitor Isentress (raltegravir) reached $234 million in Q4 2009, representing an 80 percent increase compared with the same period a year ago. Global Isentress sales for the full year of 2009 were $752 million, up 108 percent over 2008. Merck also sells protease inhibitor Crixivan (indinavir) and non-nucleoside reverse transcriptase inhibitor Stocrin (efavirenz) [Bristol-Myers Squibb has development and marketing rights of efavirenz in the U.S., Canada, Italy, France, Germany, Spain and the UK. Merck has development and marketing rights in the rest of the world, according to Elsevier's drug database Inteleos]. Huahai is the only pharmaceutical firm in China that owns a tablet production line in compliance with U.S. FDA's GMP regulations; it has received FDA approval for some of its generic drugs, including a generic of Boehringer Ingelheim's NNRTI Viramune (nevirapine). Recently, the company received a RMB 34.1 million ($5 million) government investment to expand its production capacity. The total investment will reach RMB 650 million ($95 million) to build up another manufacturing facility in line with U.S. FDA GMP standards in three years. Phase I of the project will be complete by the end of this year. Luo predicts China will surpass India to become the largest CMO market in five to 10 years. - Dai Jialing ([email protected]) |