In the structure of a successful drug, active pharmaceutical ingredients (APIs) serve as the medicine’s foundation. When outsourcing API development, pharmaceutical companies look for a service provider that can deliver a combination of expertise, technique, and flexibility.
With a focus on small-molecule APIs and pharmaceutical intermediates, Cedarburg Hauser Pharmaceuticals, a Grafton, WI-based contract development and manufacturing organization (CDMO), strives to deliver this combination of qualities to pharmaceutical and biopharmaceutical manufacturers in search of APIs for their products.

Cedarburg’s Early Development

Cedarburg Hauser Pharmaceuticals was founded in 1997 as Cedarburg Laboratories, changing its name to Cedarburg Pharmaceutical in 2000. With the 2009 acquisition of InB: Hauser Pharmaceutical Services and its Denver, CO facility, the companies merged to form Cedarburg Hauser Pharmaceuticals.
Since its inception, the company has specialized in complex APIs and applied a team-based approach to all of its projects. “We leverage a talented group of scientists and supporting staff, and a centralized approach to project management, to ensure on-time and on-budget completion of API development projects for both clinical trials and commercial supply,” explains Bob Forner, marketing manager.
The company’s Grafton facility houses four GMP labs and four GMP manufacturing suites, in addition to office and warehouse space. Extra office and warehouse space is located across the street from the facility, and an additional non-GMP lab is located 30 miles southwest of the facility in Milwaukee. Additionally, the Denver facility houses four GMP labs which accommodate early development work and other specialized projects.
All in all, the facility can offer a wide range of services, but the company hopes to eventually consolidate all of the Wisconsin facilities into one structure. The existing Grafton manufacturing facility has filled up quickly as demand for the contract manufacturing of APIs has grown, and while the company just recently expanded its API manufacturing capabilities — adding a reactor and chiller that allow for cryogenic reactions and increasing total reactor capacity by almost 50 percent in September of 2012 — further expansion is imminent. The Grafton facility’s long-term plans involve expanding the facility so all of the warehouse, manufacturing, lab, and office spaces can be housed together.

The API Market for CDMOs

As a specialized API provider, Cedarburg Hauser Pharmaceuticals has a front-row seat to watch the API market evolve.
According to Forner, the API manufacturing market has undergone notable changes since the company was founded. “Price pressure from low-cost manufacturers in Asia has forced North American- and western European-based CDMOs to differentiate themselves from their Asian counterparts. Specializing in complex chemistry and compound classes that require strict regulatory and safety controls, such as potent compounds and controlled substances, helps accomplish this.”

Cedarburg Hauser's staff use a team approach to speed up API development
and keep projects on budget.

“CDMOs have also turned to some overseas suppliers to provide advanced intermediates in an attempt to reduce costs and remain competitive,” Forner notes.
Cedarburg Hauser sees a promising future for the API manufacturing market, especially considering its niche in highly regulated and often hazardous compounds. “There is still significant room for growth in the future. Small and virtual pharmaceutical companies continue to outsource most of their Chemistry, Manufacturing, and Controls (CMC) work, and large pharmaceutical companies are outsourcing in increasing numbers as they focus more on their core competencies of discovery and marketing.”

Like other markets, regulations and agency guidance greatly influence fluctuations. Forner believes that “The recently enacted Generic Drug User Fee Amendments (GDUFA) legislation should also have a positive impact on U.S.-based CDMOs. The revenues generated from these fees will allow the FDA to increase their audit frequency of oversea CDMOs and will hopefully level the playing field for U.S. CDMOs.”

A Multipurpose Approach

Cedarburg Hauser Pharmaceuticals has responded to the changing API contract manufacturing market by both specializing and diversifying. As Forner notes, the market has motivated contractors to focus on potent compounds and controlled substances, and the company has taken heed. The company’s niche is in targeted compounds, yet its flexible manufacturing suites and range of equipment allow it to be malleable when necessary.
The company’s use of flexible manufacturing suites has allowed the Grafton facility to offer a wide range of capabilities within its existing manufacturing space, letting it make do with its current structure until the facility’s expansion can be completed.  “The suites are not designed for one product — they can be used for anything,” explains John Flahive, director of operations. “We have full flexibility to make almost any product because we’re not dedicated, we’re not hard-piped.” Because of this flexibility, cleaning between processes is paramount: “We have thorough, validated cleaning procedures in place that we implement before switching over to another product.”

Batch sizes and the material being handled determine where each batch is processed. The facility’s capabilities range from lab-scale to manufacturing plant, with reactor sizes from 30 to 500 gallons. The Grafton plant was designed with complementary suites: Suites A and D and suites B and C complement each other. For instance, a process that uses smaller reactors for the reaction begins in suite B and then is transferred to suite C. 

Accurate record-keeping on an Emerson DeltaV system keeps operators informed as processes change. For each process, operators have master batch records that tell them, step by step, how to charge and how to do the reaction, and often also detail crystallization, filtration, and isolation.
Data from the facility’s reactors are taken throughout the processing time from the data historian. “At the end of each batch we print out the charts so that our quality assurance (QA) professionals can review them to make sure we’re in the right temperature ranges for the batch records,” says Flahive. While jacket services on the glass-lined steel reactors are automated to regulate temperature, the plant is keeping other processes manual as long as the suites remain flexible. “There’s a lot more potential here … if we had a more dedicated process, we certainly could automate it, but for now, it’s totally flexible.”

A Targeted Niche

Cedarburg Hauser Pharmaceuticals has carved out a niche for itself in the targeted compound market, offering capabilities for compounds including potent compounds, controlled substances, and peptide/polymer conjugates. 

“Our Denver, CO facility just completed its registration as a manufacturer of Schedule II-V compounds, supplementing the same registration at the Grafton, WI facility,” explains Forner.  “Controlled substances are a big focus for us right now. Controlled II substances are nice because as long as there are U.S.-based suppliers, the compound must be sourced in the U.S.”

The company’s specialization makes extra security and safety measures necessary. A dedicated controlled substance lab is monitored by high-megapixel cameras that broadcast four different views of the room to a high-definition flatscreen, which hangs above the lab’s doorway. The controlled substance vault is also monitored by cameras and protected by a security system. Safes are also used within the vault for Schedule II substances.
The facility employs 20 cameras total, with 12 more queued for installation, and plant operators can access the 30-day camera loops from their iPhones or any computer. “The camera system was put in place primarily for safety, but it’s also helping with security for Drug Enforcement Administration (DEA) licensing,” explains Flahive. “These are potent chemicals. If somebody got exposed to one, you want to know what’s going on in the lab.”

Scientists in Cedarburg Hauser’s labs attempt to tailor projects to customers’ needs.

Security is an important consideration given the company’s focus on Schedule II controlled substances. “We have drug master files (DMFs) for multiple controlled substances, including two Schedule II controlled substances: fentanyl and fentanyl citrate, which we sell both domestically and internationally. Selling internationally adds another layer of complexity, as we must be aware of and comply with international controlled substance regulations,” explains Mark Millar, director of project management.
For these substances, safety is just as important as security. Operators wear supplied air hoods and Tyvek suits while present in the controlled substance lab, an important step given the substance’s nature. “This stuff is potent enough that any exposure, even exposure not detected visually, would require an antidote,” warns Flahive.

An Expansive Future

Facility expansions are planned for both the near future and further down the line.
Construction for the GMP lab renovations in the Grafton, WI facility will likely start in the second half of 2013. “We have design plans in progress to upgrade the labs, totally gutting them and starting over with new case work and new hoods. We’ll be adding entrance vestibules and air locks, with an entry for putting on the personal protective equipment (PPE) and then an exit airlock for taking off the PPE. We’ll also be adding new air-handling units on the roof,” explains Flahive. These changes will offer greater control over the flow of materials and also reduce the potential for cross-contamination. The facility is currently building up inventory to make up for any downtime that will occur during the renovations.
The facility mainly uses tray drying, and the rooms that house the drying equipment will also be upgraded. “We have plans to upgrade the drying space — the floors, walls, ceiling, entry vestibules, etc.,” notes Flahive. “That’s part of our longer-term plan to elevate our service level. We’re also looking at replacing one dryer with a new one and having a second dryer suite, which would give us another place to dry.”

The labs, suites, offices, warehouses, and controlled substance vaults will all be expanded in the long-range plan. “We have a master plan to increase the square footage by about 75 percent,” Flahive says.
In the meantime, any upgrades that can be accomplished within the existing space are being carried out. “We are continually making upgrades to our facility to ensure that it meets the rigorous requirements demanded by both our customers and the FDA.”

Looking Ahead

Cedarburg Hauser values strong relationships with clients, and believes that this approach has contributed to the company’s success.
“We have pretty outstanding customer service with our project management department,” says Forner. “We have a centralized project management team, so they’re the single point of contact for the customer, and that really helps build relationships and foster effective communication. At the end of the day, communication’s really important in our industry. Especially in outsourcing relationship, effective communication is pivotal.”

The company also takes a specialized approach — attempting to tailor each project to the customer’s needs. “Whether it is a virtual company that is looking to Cedarburg Hauser to supply CMC/regulatory expertise in addition to product, or a large international pharmaceutical company that is looking for a company that can follow its strict requirements, Cedarburg Hauser has the experience to recognize the needs of our customers and act accordingly.” To this end, the company recently created a new “internal advocate” position so that a staff member is always on hand to identify potential problems and areas where additional value can be created.
“Cedarburg Hauser will continue to grow as a result of positive customer experiences and a continued reinvestment of capital,” says Forner. “We will also take note of the latest trends in the industry, through participation in tradeshows, to make sure that our offerings continue to meet the evolving needs of our clients.”

As the company looks ahead, it hopes that these strategies, combined with its niche focus on targeted compounds, will ensure future success.