Sanofi recently announced its intent to demolish a small-molecule plant in Montpellier in France. Demolishing an unneeded plant is nothing unusual – some facilities are simply too old or expensive to repair. But the Montpellier plant (named DI 50) is new – it was completed in 2012 and has never been used. Why? The times – and Sanofi’s needs – have changed. The decision to build the plant was made in the early 2000s, and in recent years Sanofi has focused more on biologics than small-molecule drugs. Attempts to sell or lease the facility have been unsuccessful and with property tax on the building estimated at one million euros per year (1), Sanofi had to take action. The equipment will be salvaged but the plant itself is likely to be demolished by the end of 2017. The whole scenario has been labeled as a huge waste by the French media, with some calling to have the building repurposed so that local universities can use it for training (2).
It’s not the first time that a facility has run into issues shortly after construction – and it’s unlikely to be the last. In the 2000s, Genentech constructed a biologics plant in Vacaville, California, but the plant was closed in 2010, once again because of shifting needs. In 2013, Genentech decided to resurrect the plant, but it needed a significant amount of work (and investment) to bring it up to date (3). The plant reopened in 2015 – and was the overall winner of ISPE’s Facility of the Year awards in 2016. A happy ending. Planning (bio)pharma capacity requires a skill that is impossible to fully master: predicting the future. Although analysts do their best to divine the demand that lies ahead, the process is more art than science – just like any other forecast; a 2016 survey of 50 pharmaceutical industry senior managers found that many companies had over- or underestimated demand for new drugs by up to 25 percent, with some being off by more than 50 percent (4). For Sanofi, writing off a new facility and an investment of more than 107 million euros can’t have been easy, but given 2016 revenues in excess of 33 billion euros (5), it’s unlikely that too much sleep will be lost over the matter. But for the dozens of smaller companies that have got it wrong over the years? That’s a different story.
Stephanie Sutton
Editor
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References
- Midi Libre, “Sanofi : l’usine neuve de Montpellier à 107 millions d’euros démolie!” (2017). Last accessed June 14, 2017. Available at: http://bit.ly/2rqcWpH. France Bleu, “La démolition d’un bâtiment flambant neuf ne passe pas chez les salariés de Sanofi Montpellier,” (2017). Last accessed June 14, 2017. Available at: http://bit.ly/2szFTPo. S Sutton, “Facility Innovation by Design,” The Medicine Maker, 12 (2016). http://bit.ly/2sA5yYx Patheon, “Flexible Manufacturing Can Help Pharmaceutical Industry Avoid High Costs Of Inaccurate Demand Forecasts,” (2016). Last accessed June 14, 2017. Available at: http://bit.ly/2ruOlv2. Sanofi, “Q4 and Full Year 2016 Results,” Last accessed June 14, 2017. Available at: http://bit.ly/2s00Phu.
