PROCESS DEVELOPMENT
Discovery and development: the new paradigm in outsourcing
AMRI chairman, CEO and president Thomas D’Ambra explains the company’s strategy to meet new pharmaceutical industry needs in process development and API synthesis. In part one of our two-part feature, Dr D’Ambra describes how AMRI was founded as one of the first companies to provide customised contract services for the industry, and AMRI’s subsequent evolution in response to changing market pressures.
AMRI was founded in June 1991 as Albany Molecular Research, Inc, built around the concept of using experienced industry professionals to provide chemistry resources, problem-solving and decision-making to companies, primarily in the health care field. At that time, the establishment and growth of clinical contract research organisations (CROs) had taken hold and pharma and biotech companies had begun to allocate significant budgetary resources to outsourcing portions of their clinical development efforts. Although there were one or two small providers of custom synthesis at the time AMRI was founded, the industry did not outsource discovery or early development and scale-up work. Large contract manufacturing organisations (CMOs) did exist, but they were essentially toll manufacturers that scaled up the synthesis of APIs and drug products that had been developed in-house within pharma, and had little development capability or expertise. AMRI was one of the first companies to provide the industry with customised resources to support the discovery and early development research efforts of the pharmaceutical and biotech industries.
AMRI was founded on the belief that if high- quality resources and expertise were available, pharma could contract additional support on a variable basis to cover peak demand as well as augment internal capabilities. An emerging, venture-funded small biopharmaceutical industry was also beginning to develop at this time and it was believed that this industry could also benefit from the availability of additional chemistry resources. Chet Opalka, a former colleague at Sterling Winthrop who had joined me at Coromed, Inc as an early employee, became a co-founder of AMRI and we also hired a
16 sp2 Inter-Active July/August 2012
small number of scientists as business very slowly grew.
Early successes
The industry had not outsourced chemistry discovery or early development at the time, however, and AMRI was not able to raise financing, so the growth of the company was slow and had to be bootstrapped off customer revenues. It took 2-3 years for revenues to reach $1 million. Little by little, customers began to outsource various chemistry projects, including custom synthesis in quantities ranging from milligram to kilo scale. An early success is the work that was done for UCB Pharma, beginning at Coromed, which involved the development of a novel process to synthesise the pure single enantiomers of the antihistamine ceterizine, and provided UCB with the ability to study and ultimately develop and launch Xyzal as an improved single enantiomer of cetirizine. Making additional quantities of the active enantiomer of cetirizine provided AMRI with early revenue during its first year. Also during the company’s first year of business, I performed the laboratory work that led to the development of the process to prepare fexofenadine, the active ingredient in the antihistamine Allegra or Telfast. A patent application was filed for this work in 1993 and led to a licensing agreement in 1995 with Marion Merrell Dow, which became part of what is now Sanofi. The royalties from sales of Allegra, beginning in 1998, have provided significant financial resources that have allowed AMRI to build and expand its business.
The year 1995 was also significant in that AMRI received its first medicinal chemistry lead optimisation programme, working with Astra scientists based in Molndal, Sweden.
The period from 1995 to the beginning of the millennium saw AMRI experience substantial growth; chemistry services were broadened to include development and scale-up, analytical method development and GMP synthesis of clinical batches. AMRI also entered into a relationship with Cambrex to provide customers with larger batches of intermediates and APIs than AMRI could produce. During this period, AMRI could not grow fast enough to handle the growing demand for outsourcing of chemistry, matching an unprecedented expansion and hiring spree in pharma. The strong demand for chemistry outsourcing led to the growth of a number of competitors in the West and spawned the emergence of low-cost copycats in Asia in the early 2000s.
Facility acquisitions
AMRI’s success as a contract chemistry provider, along with the global launch and growth of Allegra sales and resulting royalties, allowed the company to become publicly traded in 1999, raising about $56 million at that time followed by a follow-on public offering in 2000, generating proceeds of $119 million. The availability of cash and publicly traded stock provided the resources for AMRI to expand its business, adding its Rensselaer, New York, USA large-scale API manufacturing plant, the former Sterling Organics, by financing a management buy-out in December 1999, followed by the full purchase from the management team in 2003. In 1999, AMRI added biocatalysis and enzyme- mediated synthesis capabilities through the purchase of EnzyMed, Inc, at that time based in Iowa City, Iowa, USA. In 2001, AMRI added natural products-based libraries, technologies and know-how through the acquisition of New Chemical Entities, in Bothell, Washington,
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