Europe’s up-and-coming CDMO for API manufacturing: Interview with AGC Pharma Chemicals Europe CEO Akihiro Kadokura
AGC Pharma Chemicals, a business division of Japan´s AGC Group, has more than 40 years of CDMO experience in the small molecules business. With the recent acquisition of an API manufacturing site in Magrat, Spain, the CDMO has now launched fully global operations with the goal of becoming the number one choice for API and intermediates manufacturing in Europe.
The company’s rapidly expanding capabilities in Spain, combined with AGC’s long heritage in the chemicals industry and its record for quality, innovation, and sustainability, put AGC Pharma Chemicals well on track to meet this goal over the coming years.
Akihiro Kadokura, CEO of AGC Pharma Chemicals Europe, talks Pharmaceutical Technology through the plan.
Q: Who is AGC, and why did it decide to get into the CDMO business in Europe?
Akihiro Kadokura: AGC is a €12bn company, headquartered in Tokyo, Japan. Originally, the name was Asahi Glass Company. AGC is a global material provider, but the business started out producing glass for the construction and automotive industries. We still have a leading market share in those businesses, as well as 100 years of history in chemicals production, which began when AGC started producing its raw materials in-house.
AGC Chemicals is well-known for its chlor-alkali and fluorochemicals businesses. As close to 40% of all APIs include fluorinated compounds, AGC Pharma Chemicals offers the advantage to be back-integrated with fluorinated building blocks.
In 2016, AGC identified three strategic areas for future growth: mobility, electronics, and life sciences. AGC had already small molecule CDMO activities in Chiba (Japan). Expanding these CDMO activities by acquisition of a plant in Europe was a logical step forward to achieve the growth in the Life Science business.
Within the Life Science business, we have a Biologicals CDMO and the Small Molecules CDMO. The Biologicals CDMO is headquartered in Seattle, with very large worldwide operations. For the Small Molecule CDMO, AGC acquired this manufacturing site in Malgrat from Boehringer Ingelheim in 2019.
The plant itself has about 60 years of history purely producing APIs, as well as an excellent track record for its quality management system. There has not been any 483 observation from the FDA since 2004, nor any critical observations from the EMA and PDMA. We are very proud of the history of this plant.
Q: What is AGC Pharma Chemicals’ mission?
The mission is to improve people’s lives by bringing our best quality products. APIs are the key ingredients that will touch people’s lives. That means we are absolutely responsible for the quality and continuous supply. This mission is really important for all of us.
After we acquired the Malgrat site, our vision is to become the first choice CDMO in Europe. We are a newly born business, but we have very strong experience from AGC’s 100 years in chemicals production and the 60 years of API production at this site, as well as 40 years CDMO business experience. By leveraging all our strengths, we would like to be the customers’ first choice.
Q: What services and capabilities does the company offer?
We deliver CDMO services from gram, to kilo, to tons. We can handle the lifecycle management of the customers’ API and intermediates from clinical phase to commercialisation. Whether it’s R&D, analytics, clinical phase and process validations, to securing commercial quality, scaling up, and delivering product supply, we offer a full service to the customer.
Technology wise, we have capabilities for hydrogenation, cryogenics, and micronisation. We are going to have some HPAPI assets and we are also working on continuous flow technology. So we can not only do the ‘simple’ reactions; there are specific technologies that are ready (or that we are working on) for our customers.
Q: How is AGC Pharma Chemicals strategically located to serve its customers?
Our manufacturing sites are located in Spain and Japan – both in developed countries and with very large pharma markets. The most important benefit of this is that we are conveniently located to the customer. During the tech transfer, we can discuss in the same time zone. From Spain, we can communicate in English, Spanish, French, and Japanese.
Our Malgrat site is conveniently located close to Barcelona, and if you drive 90 minutes you can reach the French border. Catalonia is well known as the center of Spain’s chemical and pharmaceutical industries. There is an excellent talent pool in the region, and the people working here are very experienced and customer-focused. It is difficult to develop talent who have such strong experience, and we are very proud to have that in our posting in Japan and here in Spain too. Having these two sites also means we have very strong backup.
Q: How is the AGC Pharma Chemicals Europe plant going to develop over the next five years?
As a CDMO, it is very critical to have enough R&D capability to support our customers for their development of new APIs. Therefore, after the acquisition, we felt the urgent need to expand our R&D facility. The new building started operations at the beginning of this year, and we are now adding an OEB4-grade kilo laboratory in that new building.
Next to our site, we have 50,000m2 of land owned by the company and ready for industrial use. It gives us great potential for capacity expansion. We are now planning to install a new building there and have already decided the basic design. HPAPIs will lie in the new site and the reactor size is medium to meet the current API trend. Because that site will be next to the current plant, we can utilise many of the utilities. Currently, the plan is that we are going to be ready to operate in the beginning of 2024.
On top of that, we are aggressively investing in micronisation capability (ready in December 2021) and expanding our R&D offering and continuous flow technology. We still have plenty of land for future expansion, so that is a great advantage.
Q: Why is AGC Pharma Chemicals so well-placed to become the number one CDMO in Europe?
We have a very long history and deep-rooted gene as an API manufacturer, as well as strong technical knowledge as a global chemical company. Most importantly, we have excellent talent and a very rich experience of operational excellence. At this Malgrat site, all employees are continuously trained with the Six Sigma model, which we have been following for 18 years. Operational excellence is really embedded in all processes so that we can provide the most optimized solution to the customers. We are also getting ready for digital transformation and Industry 4.0 by shifting to a paperless manufacturing solution by integrating the Electronic Batch Record into the Distributed Control System (DCS).
I don’t see many CDMOs who know both the Japanese and European markets, so it is quite a unique positioning. On top of that, we have procurement offices in China and India, and sales teams located in Spain, Belgium, Japan and Pennsylvania, US. We are very ready to serve the global customer.
Last but not least, quality and sustainability. This plant, for example, is located on a public beach. As a company, we are very responsible for how the plant is operated – it has to be environmentally friendly. We received a Gold certification last year and this year from EcoVadis. The Japan plant also has Gold, and AGC overall is very keen for sustainability.