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    Si02% 30 40 25 30 25 20 30

    30 30


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    Dispersant Methanol Methanol Methanol Isopropanol Isopropanol Ethyleneglycol Ethyleneglycol-mono-n-propylether Methyl ethylketone Methyl isobutyl ketone N, N-Dimethyl acetamide

    roducts are availa

    Particle 1 Dia.(nm)

    12 22 9

    12 9

    12 12

    12 12



    Colloidal Silica dispersed in organic solvent.

    chain molecules of silica. 10-20nm in width 40-100nm in length

    I Type ST-PS-S

    1 ST-PS-M

    Si02% 19 20

    Dispersant Water Water


    Spherical DLS Method

    PS-S 1 0 - 1 8 8 0 - 1 2 0

    PS-M 1 8 - 2 5 8 0 - 1 5 0 I


    BIOPHARMACEUTICAL FIRM takes the next step in securing an early-stage manufacturing base


    WHEN GILEAD SCIENCES purchased Degussa's Raylo business in Edmonton, Alberta, last year, the news registered as a Degussa story. The German firm was relin quishing its only North American custom pharmaceutical chemical manufacturing plant as it set out to form partnerships in Asia instead.

    Gilead's motive for purchasing the plant of one of its lead contract manufacturers, however, was less clear. "I heard a lot of What the hell are these guys thinking about?' " recalls James Bruno, director of consulting firm Chemical & Pharmaceutical Solutions.

    After all, Gilead, like other biopharmaceuti-cal firms, had succeeded by investing in the discovery or acquisition of new drug candidates and relying on third parties to manufacture its products. But according to Bruno, a close look at Gilead's growth in recent yearsespecially its purchase of biotech drug firms with therapeutic candidates in late-stage developmentshows that the company had good reasons to increase its stake in chemical manufacturing.

    Gilead's revenue growth of nearly 50% last year to $3 billion made it one of the world's fastest growing drug companies. The firm has 10 drugs on the market, including four HIV therapies and the influenza drug Tamiflu, as well as six drugs in clinical trials. Its sales of HIV drugs surpass those of industry majors such as Glaxo-SmithKline and Bristol-Myers Squibb.

    According to Ernie Prisbe, Gilead's vice president of chemical development, keeping things moving is all about moving fast.

    And about building for speed. The $146

    million Raylo acquisition, Prisbe says, affords Gilead a chemistry process development and pilot-scale launch pad. The company will still go to the contract manufacturing market for about 80% of its active pharmaceutical ingredient (API) needs. But

    the Edmonton plant will allow Gilead better control of the time-consuming early stages of preparing for an Investigational New Drug (IND) filing with the Food & Drug Administration, Prisbe says. Better control of early-stage chemical development will enable the company to smooth the road to commercialization by handing highly advanced processes to its manufacturing partners.

    The Raylo acquisition, according to Prisbe, is only Gilead's latest step in building an in-house manufacturing base. A visitor entering what appears to be a typical office building in Foster City, Calif., soon comes across the small

    pilot chemical facility that the company built 15 years ago. "Like many other pharmaceutical companies, we realized that early availability of APIs is often the bottleneck to getting preclinical studies going," Prisbe explains.


    it enjoys a sizable product list, an active pipeline, and immense profits.

    Finding the right balance between in-house and outsourced manufacturing is an ongoing challenge. At no point, however, has Gilead considered scaling up toward commercial drug production, which Prisbe likens to running a chemical business. "Our pretax profit margins for the past four or five years have been running at about 50%," he says. "For chemical companies, it's at about 15%. It's never an attractive choice to build your own plant."

    THE BALANCE worked well over the years, Prisbe says, although the occasional spike in activity did send the company into contingency mode. In 1996, for example, Gilead had to rent reactor space from its neighbor at the time, Catalytica in Moun-tainview, Calif., to handle production of Tamiflu for Phase I and II trials.

    Gilead began contracting with Raylo at about the time it built its pilot plant. "They were already qualified to manufac-ture four of our products, including two major ones," Prisbe says. Over the years, Gilead and Degussa, which bought Raylo from Laporte in 2001, developed a close relationship, and Degussa will continue to manufacture for Gilead under a contract negotiated as part of the sale.

    But in recent years, the number of new drugs in development at Gilead was such that it made sense to take control of a plant with Raylo's capabilities. Gilead's acquisi-tions of Myogen and Corns Pharma last year brought in three candidates in Phase III clinical trials: aztreonam lysine, which is an inhalable cystic fibrosis therapy from Corus, and the hypertension drugs ambris-entan and darusentan from Myogen. And the company was in the midst of launching Atripla, an HIV drug that includes emtric-itibine, which Gilead acquired from Tri-angle Pharmaceuticals in 2003.

    Shepherding products toward commer-cialization was creating a risk management challenge for Gilead. "As we brought in out-side compounds through acquisition, there was often a need to move toward commer-cialization with launch quantities of mate-rial," Prisbe says. "And to mitigate the risk of relying on the company that we acquired, we felt it would be good to have the capability in-house to quickly take over the API manu-facture of these new products."

    The small plant in Foster City was insuf-ficient to handle the chemical production work. Gilead was also anxious to fortify

    its process research group as the pipeline filled, Prisbe says, adding that "the Raylo ac-quisition solved many of these problems."

    Gilead is investing in its new Edmonton site, including a pilot plant that will bring total reactor capacity there to approxi-mately 22,000 gal. Prisbe notes that one of the most important features of the site is its ability to rapidly accommodate sudden surges in demand for a particular API.

    But the value of the facility goes beyond the capacity to produce initial launch quan-tities of several APIs at one time, Prisbe says. "The facility provides R&D services and lowers our regulatory risk because we know the compliance situation," he says. "Once a product matures and we need greater volume, there is enough capacity out there through our contractors to take over."

    Noting that Gilead is awaiting final ap-proval on a New Drug Application filed last year for ambrisentan, Prisbe points to yet another potential benefit of the Edmonton plantit can serve as manufacturing back-up to its outside contractors. "If you have a second source, you essentially double your chances of having a successful preapproval

    inspection," he points out. "It is the same as you go forward with your launch quanti-ties; controlling manufacturing in-house will essentially guarantee that we are going to have enough material."

    Bruno says the timing of the acquisition was ideal, given the recent influx of new drug candidates at Gilead. "They have a number of complex molecules in their pipe-line, and this helps get them into the clinic," he says. "But it is not such an overwhelm-ingly large asset that Gilead can't manage it. These are the right assets at the right time."

    Gilead seems well-positioned for future growth. In addition to its new process development and pilot production base in Canada, construction is underway on a new research facility at its headquarters that will increase discovery and biology R&D by up to 40%.

    'We're expanding all areas of research continually. This is an absolute necessity for pharmaceutical companies," Prisbe says. The company isn't ignoring its pro-cess research capabilities, he points out, "but we are in good shape right now with the process research in Edmonton."

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