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Case Study #3: BioVectra seeks greater returns by partnering with Taxolog and Sandoz on a generic cancer drug

Being a custom manufacturer of active pharmaceutical ingredients (APIs) for drug company customers can be rewarding on its own, but there is more to be gained financially by making and selling the final drug. As a rule of thumb, suppliers know that the API accounts for only 10% or less of the value of the final pharmaceutical product.

After spending about 40 years making a living on APIs, BioVectra decided to try to tap into the bigger piece of a pharmaceutical's value as a hedgeagainst pressures on API prices. The Canadian firm came up with a strategy in which, as Chief Operating Officer Dale Zajicek explains, “the ability to make the API was just something that enabled a greater value for the company.”

Experienced in producing taxane APIs, notably the generic anticancer drug pacli¬taxel, BioVectra is determined to bring to market a generic version of docetaxel, a paclitaxel analog that differs in its side-chain structure and the substituent on C-10. In 1996, Sanofi-Aventis launched docetaxel as Taxotere. Last year, the French company enjoyed $3 billion in worldwide Taxotere sales, but in late 2013, the last U.S. patents protecting it from generic competition will expire.

Although it has the skills to extract starting materials and manufacture taxanes, BioVectra knew that to advance its version of docetaxel it would need plenty of other expertise. It looked for help with intellectual property, technology development, formulation, regulatory filing, and commercialization. “We used partnering as a means of accomplishing the end product,” Zajicek explains.