Biogen taking on Eisai plant to make drugs for both
Biogen Idec ($BIIB) is leasing part of an Eisai manufacturing facility in Research Triangle Park, NC, to produce oral solid dosage forms for both companies. And Biogen could eventually swallow the rest of the facility, too, if it takes up the option to buy written into the 10-year lease.
With Biogen developing solid oral dosages--such as its multiple sclerosis candidate BG-12--it needs manufacturing capabilities beyond injectables, its traditional area of focus. Eisai's RTP plant is a ready-made solution, giving Biogen capacity near its existing operations ahead of a possible FDA approval of BG-12. In the near-term Biogen will manufacture drugs for Eisai, too, but over time expects its portfolio to take up most of the capacity.
Eisai can afford to lease the space because of recent changes to its product portfolio. The RTP plant was the engine room of Aricept production, but since generic competition began eating into sales, Eisai has had excess capacity. The Japanese drugmaker laid off 70 workers at the plant last year, spokesperson Suzanne Grogan told The Herald Sun, and will transfer 50 employees to Biogen as part of the lease agreement. Eisai is also providing vial-filling services to Biogen as part of the deal.
Details of how much space Biogen is leasing at the 190,000-square-foot oral dose facility--which Eisai opened in 1997--are yet to emerge. Eisai is to retain control of the packaging operation at the plant and use it to provide services to Biogen. The lease agreement includes an option for Biogen to take control of this space, too, in a deal to buy the plant outright.
Pipelines suggest that the plant could be of more use to Biogen than Eisai in the coming decade. Injectables now make up a decent chunk of Eisai's drug development pipeline, and the pills it does have--like epilepsy treatment Fycompa--look set to be made at its U.K. plant. Biogen meanwhile is taking a closer interest in solid oral dosage forms as it tries to develop more convenient treatments for MS patients.