Fujifilm, Samsung ops notion misguided

Two consumer electronics giants are buying their way into the drug-making business. Perhaps they haven't listened to big pharma explain its massive layoffs over the past few years--or read between the lines of seemingly upbeat CEO pronouncements for 2011.

Fujifilm is buying the Merck BioManufacturing Network, with two manufacturing plants. That's a big departure from its film and digital camera businesses, and even its medical scanning equipment enterprise.

Samsung wants to go into the biosimilars manufacturing business. And it has gone to Quintiles, a contract researcher, to take it there.

One theory of the business rationalization here holds that the strength of the yen currently promotes acquisitions by the Japanese, and acquisitions related to healthcare products have a surer demand base than do their core businesses. So perhaps by that logic biosimilar and drug manufacturing appear a great way to offset business declines.

But not so fast, says Charley Beever, head of the pharmaceutical practice at consultancy Booz & Co, in a phone interview. He's not involved in these deals, but has talked to execs about biologics and biologics manufacturing as new business avenues.

"I think there's a lack of understanding of the biologics business," he says. The conglomerates may "see the attractive elements, but not the challenges."

Beever speculates the executives believe that if they get a manufacturing advantage, all will be well; they can win based on operational excellence. To compete on manufacturing ability alone, however, is going to be tougher than they think.

Regulators aren't likely to approve biosimilars for substitution by pharmacists in most markets. "They will have to be prescribed by brand," says Beever. "So an understanding of the full value chain is required. They don't have the expertise to make the inroads."

- here's the Fujifilm release
- see the Samsung release

Suggested Articles

In a first, the FDA and Indian oversight agencies worked together to block illegal drugs from entering the U.S. 

After months of delay for ultra-pricey gene therapy Zynteglo, Bluebird Bio is hoping to dose its first German patients in the first half of the year.

North Carolina is providing some financial assistance for the construction of Audentes gene therapy facility in Sanford, North Carolina. (Astellas)