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Cambrex looks to fill ‘onshore’ API manufacturing demand with $50M expansion in Iowa

With the COVID-19 pandemic nearing its second year in the U.S., lawmakers have banged the drum on boosting “onshore” production of key pharmaceuticals and ingredients to ensure supply-side security. Now, a New Jersey-based contract manufacturer is dropping more money into its Iowa site to support the effort. 

Cambrex will invest $50 million to add four active pharmaceutical ingredients (API) facilities at its Charles City, Iowa, small-molecule drug site and expand capacity by 30%, the company said Tuesday. 

The new facilities—three of which will handle “large-scale” manufacturing, with the fourth dedicated to “mid-scale” production—are set to go online in early 2022, Cambrex said in a release. In total, the Charles City site will eventually employ 400 workers. 

The $50 million down payment is the sixth investment round Cambrex has made in Charles City in the last eight years, the company said, and it continues the CDMO’s play at offering stateside API production to drugmakers looking for a “reliable” supply chain. 

The COVID-19 pandemic has cast new light on a pharmaceutical supply chain that has grown increasingly global, with much of the world’s API and drug intermediates produced in China and India. 

U.S. lawmakers in particular, concerned about access to needed drugs amid the pandemic and geopolitical tensions with China, have called for more investment into U.S. drug production as a bulwark against potential shortages and political targeting. 

In October, Fujifilm Diosynth Biotechnologies CEO Martin Meeson forecast that the aftermath of the COVID-19 pandemic could lead to a wave of domestic investment in pharmaceutical manufacturing that would “lengthen” the global supply chain for medicines. 

Meanwhile, the U.S. government has dropped more than $1 billion to drive onshore drug production, including a couple of deals that drew skeptical eyes at the time.

In May, the Trump administration floated a four-year, $354 million contract with a fledgling company, Phlow Corporation, to build a generic medicine and API plant in Richmond, Virginia, and supply COVID-19 treatments produced there. Little known before the administration’s interest, Phlow’s deal can be expanded up to 10 years and to a total of $812 million.

Later that month, The government’s investment arm, the U.S. International Development Finance Corporation (DFC), plotted a $765 million loan for camera maker Kodak to fuel its entry into generic pharmaceuticals. A series of questionable stock moves around that loan spurred an investigation by House Democrats and the Securities and Exchange Commission, but Kodak cleared itself of those allegations in September.

Despite the DFC halting the loan, Kodak intends to keep pursuing its entry into generics, CEO Jim Continenza told investors on an earnings call earlier this month.