Daiichi Sankyo to beef up ADC production with $135M investment in Japan

Daiichi Sankyo
Japan's Daiichi Sankyo is expanding three plants in Japan to insure it has the capacity for the eventual commercial production of the antibody-drug conjugates it is developing.

Japan’s Daiichi Sankyo has been in cost-cutting mode for several years, but says it will invest about $135 million in its manufacturing operations in Japan as its looks to targeted cancer meds to help fuel its future.

The company announced today that it will initially spend ¥15 billion to build and refurbish manufacturing lines at three of the company’s plants in Japan to produce antibody-drug conjugates (ADC).

The company has six novel ADC candidates in preclinical or early phase testing, and the expansion will more than triple the company’s ADC capacity by 2021, Katsumi Fujimoto, who heads Daiichi’s supply chain division, said in a statement.

“This strategic investment will bolster our leadership and expertise in ADC manufacturing, as we apply our proprietary ADC technology to more than two dozen biologics in preclinical or early stage development,” Fujimoto said.

A spokesperson said in an email that the company does not expect to add workers as a result of the expansion and that it is still working on a timeline for when the projects will start and be completed. 

The Daiichi manufacturing project stands in contrast to the cost-cutting it has done in recent years in the face of patent losses for drugs like blood pressure med Benicar. Before losing exclusivity, Benicar generated about $2.6 billion for the drugmaker.

On the manufacturing side last year, the company closed an API plant in Japan with 150 workers and sold another to Tokyo-based Alfresa Pharma as part of an effort to streamline its supply chain logistics.

Its U.S. commercial operations have taken huge cuts, with 1,000 to 1,200 jobs lost at its Parsippany, New Jersey, headquarters and in the field last year. That was on top of earlier layoffs in the U.S.

In 2015, it shut down its German U3 Pharma antibody R&D subsidiary as part of an R&D restructuring. Daiichi shelled out €150 million in 2008 for U3, where about 40 workers developed antibody treatments for cancer.

But today, Antoine Yver, who heads Daiichi’s oncology R&D efforts, said in a statement that Daiichi Sankyo is committed to its ADC franchise. “Expanding our manufacturing capabilities will allow us to hone and drive our institutional ADC expertise as we progress development and investigation of these complex medicines,” Yver said.