More and more companies are looking for the best way to capture a piece of the expanding Chinese market, and Catalent Pharma Solutions intends to be among them. It has nailed down two deals that will give it manufacturing capacity there.
It will buy Haining-based Zhejiang Jiang Yuan Tang Biotechnology. The Chinese company manufacturers softgel nutritional products for the Chinese and Asia Pacific market, but Catalent intends to seek regulatory approval to expand its business into prescription and over-the-counter products while tapping its local knowledge to build out the business. Terms of the deal were not given, but Zhejiang has about 120 employees and says it produces about 3 billion capsules a year.
Catalent's move into capsule production in China comes at an auspicious time.
Last year, Chinese authorities cracked down on companies that were making capsules using waste products from tanneries that contained high levels of chromium to get their gelatin. They closed 80 "illegal production lines" and seized 77 million contaminated capsules. Seven people tied to those operations were recently sent to jail.
Separately, Catalent has formed a joint venture with ShangPharma, which they have named Catalent (Shanghai) Clinical Trial Supplies. As part of that arrangement, the JV partners will open a new 31,000-square-foot plant in Shanghai. Construction is already under way, Catalent said. The joint venture intends to provide "end-to-end" clinical trial services, everything from comparator sourcing to packaging, labeling and distribution.
Catalent CEO John Chiminski said, "As part of our growth strategy, these initial steps enable us to better serve the important Chinese market for both global and domestic customers." But not all of Catalent's expansion is overseas. In January it said it would invest $20 million in its plant in Research Triangle Park, NC, primarily for inhalation drugs.
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