Chemical Process Technologies (CPT): Local API Manufacturing One Step Closer

Dr Hannes Malan, CEO of Chemical Process Technologies (CPT) – the Pretoria-based chemical synthesis company – is looking forward to turning the company’s ambition for producing active pharmaceutical ingredients (APIs) locally in South Africa into a reality within the next five years.

 In 2020, the company received its licence from the South African Health Products Regulatory Authority (SAHPRA) to manufacture APIs for use in human medicines. Financial Director Anton Steyl told Enterprise Africa in December that the company was entering a very exciting period after much preparation. Malan agrees, explaining that the pandemic has cast the spotlight on local producers as the need for affordable medicines is now more obvious than ever. APIs, the component of a medicine that provides the medical benefit, are currently manufactured mainly in China and India – and with borders and transport links closed for long periods as a result of various national lockdowns – imports slowed.

 “We did not see any delays in our development work and, because we are not in production yet, we did not see any slowdown or anything like that,” he says. “It certainly increased the interest in local manufacturing and we were approached by a number of smaller companies that were looking for APIs that they could no longer get from India and China because of the pandemic. It put us on the radar and that was a positive.”

 Currently, CPT is focussed on synthesising five different APIs for various uses. The first stage is to produce the molecules in the company’s pilot plant in Watloo, East of Pretoria. Next is to create technical documents or drug master files which are then registered, licensed and trialled. Then, the company shares these files with clients so that further testing can be completed. Finally, commercial production is started, where CPT produces APIs at scale. It’s a long process, with many inputs, but receiving the license from SAHPRA is a major step which allows for the company to plan serious progression for the future.

 FULLY LICENSED

 “We are very excited about gaining the license – it was a big hurdle in this whole project,” admits Malan. “It’s the first time we have done anything like this, and one of the things about SAHPRA is that they have really high standards and operate to the European system of Pharmaceutical Inspection Co-Operation Scheme (PIC/S). We are confident that everything is done to a good level and there are no shortcuts. To get our license after the first audit was very exciting as we put a lot of effort preparing for the audit. Obviously, we had some recommendations, and we are busy putting those into place, but they are not insistent about coming back to audit us again.”

 The hope for now is that commercial production of APIs will start at CPT’s facility as soon as possible. The company has its initial focus planned, but a wide range of APIs in the pipeline for production as expansion activity increases.

 “The way that we have put the project together is to identify the first five APIs. Now that we have the Good Manufacturing Practice (GMP) license means we can start putting together common technical documents or drug master files. We have a pipeline of 12 APIs that we are looking at – two of them are ARVs and one of them will go into the pilot plant this year. The second will be optimised in our laboratory now before going to the pilot plant.

 “We started with Phase 2 of the project which is the commercial manufacturing of the APIs. We started with the design for our expansion, it will be on the same site, and we have obtained funding from the IDC for that expansion. We expect that expansion to be complete by the end of 2023 and we hope to manufacture of two further APIs then,” explains Malan.

 PROUDLY SA

 The 10,000m² site in Pretoria is ISO 9001:2015 certified, and CPT is closely tied in with the Industrial Development Corporation (IDC) and the Technology Innovation Agency (TIA) as a division of the Department of Science and Innovation. A cornerstone of South African government policy is to boost local manufacturing capability thanks to its job creation potential. This concept, tied in with health and human medicine, is especially attractive given the current global environment.

 “We are still on the journey; we haven’t manufactured APIs commercially yet. Looking at the boxes we have ticked since we started, we are confident that we will be successful in what we set ourselves out to do. Personally, I believe that once we have the first successes on the table, it will be easier for people to look at it and realise what is possible. From a government perspective, it has been on the list for a long time, and they have received a large number of presentations and options for how to establish it but a lot of the proposals came from abroad and they had varying interests in access to the market. We are saying ‘we are local, we have invested a huge amount of money and resources into the project’ and so people are waiting to see what will happen,” details Malan.

 CPT will aim to supply around 30-50% of the local market while learning the market and understanding more about the differences between animal and human medicines. Operation of the plant and constant feedback between CPT, customers and regulators will leave a constant learning curve, for which the company has appetite.

 LOCALLY MADE

 Production of APIs is limited on the continent and local manufacturing comes with major benefits. CPT’s input will be small to begin with, but over the long-term the company will build major influence as customers across the continent begin to realise the potential of shorter lead times, improved logistics, and easier quality control.

 “There is almost nothing else like this happening in Africa so we are very excited,” admits Malan. “For a long time people have been saying that you cannot manufacture APIs outside of India and China, and we’ve been saying all along it can be done as long as you have the technology. The molecules that we are using are old and our competitors in India and China are not driven to invest new capital in these molecules so we believe can improve on the technology and look at our costing so that we can manufacture the APIs cost competitively.

 “Because no one else is manufacturing locally, there are no import duties for these specific APIs. The biggest benefits for local manufactures will be having a local supplier in terms of logistics, length of the chain, cost of quality control, language and other factors. There is a saving from a quality control point of view and there is a shorter supply chain as products are not shipped over water for three months – you can have an order period of a single month. The customers that we have spoken to are saying that if we can produce for the same price then they will be willing to buy because of the logistics and quality savings they will generate.”

 Of course, a very important factor in the entire concept is cost competitiveness. CPT does not want to rely on subsidies or price premiums as long-term sustainability cannot be built when relying on assistance which is out of the company’s control.

 The future outlook for CPT is now very positive. While there has always been optimism, the awarding of the license makes things very real, and the interaction with customers and discussions around production bring the future commercial rollout to the fore. For Malan, achievement of a long-held vision feels closer.

 “Getting the next stage up and running and getting the first APIs manufactured commercially is absolutely critical,” he says. “The objective at this stage is to have the expansion completed by 2023 and get into production in 2024. There is still time to go, and a few more hurdles to overcome – the challenge is to get the drug master files submitted. We then have to provide samples to potential customers as they have to go through the processes with their final product when using us as a supplier. From a regulatory point of view there is still a lot of work to be done but we are confident from the results that we have been able to generate from the pilot plant that the product quality and costing is acceptable.”

 For CPT, 2020 will be a year to remember for mostly the right reasons. The major milestone of achieving a license from SAHPRA has been realised and this South African success story can continue to write its future.  

 “So far, it’s all good, but these things take time. We are proving that it can be done, and we are hoping that we can encourage other companies to get involved in the industry as the opportunities are large and there is so much happening because there is a real need,” Malan concludes.