2–4 and 10–20 days, respectively), they are even more pronounced between mammalian and synthetic chemical technology (see table 1). table 1: key characteristics of biotechnological and chemical api manufacturing (all figures are indicative only) mammalian cell technology chemical technology worldwide reactor volume≈ 3000 m3 (fermenters)≈ 80,000 m3 investment per m3 reactor volume≈ $5 million≈ $500,000 production per m3 reactor volume and yearseveral 10 kgseveral 1000 kg sales per m3 reactor volume and year≈ $5 – 10 million≈ $250,000 - 500,000 value of 1 batch≈ $5 million (20,000 liter fermenter)≈ $500,000 product concentration in reaction mixture≈ 2 - 6 (-10) g / liter≈ 100 g / liter (10%) typical reaction time≈ 20 days≈ 6 hours process development time≈ 3 years (one step)2 – 3 months per step capacity expansion projectsmany, doubling of actual capacityfew, mainly in far east governing rulescgmp, bla cgmp, iso 14000 scale-up factor (1st lab process to industrial scale)≈ 109 (μg → 1 ton)≈ 106 (10 g → 10 tons) plant construction time4 – 6 years2 – 3 years share of outsourcingearly stage55%25% of chemical production commercial20%45% of chemical production the mammalian cell production process, as used for most biopharmaceuticals, is divided into the four main steps: (1) cultivation, i.e. reproduction of the cells; (2) fermentation, i.e. the actual production of the protein, typically in 10,000 liter, or multiples, bioreactors; (3) purification, i.e. separation of the cells from the culture medium and purification, mostly by chromatography, (4) formulation, i.e. conversion of the sensitive proteins to a stable form. all steps are fully automated. the low productivity of the animal culture makes the technology expensive and vulnerable to contamination. actually, as a small number of bacteria would soon outgrow a larger population of animal cells. its main disadvantages are low volume productivity and the animal provenance. it is conceivable that other technologies, particularly plant cell production, will gain importance in future. given the fundamental differences between the two process technologies, plants for mammalian cell culture technologies have to be built ex novo. the pro's and con's of an involvement of a fine chemical company in cell culture technology are listed below: pros: strong growth of demand: today, biopharmaceuticals account for about $55–$80 billion, or 15% of the total pharmaceutical market. they are growing by 15% per year, i.e. three times faster than lmw drugs and are expected to pass the $150 billion per year threshold by 2015. whereas just one out of the world's top ten drugs was a biopharmaceutical in 2001, the number went up to five in 2010 (see table 6) and is expected to increase further to eight by 2016 (see table 2). table 2: top ten drugs by 2016 proprietary name generic name company small molecular weight (conventional chemical) 1crestorrosuvastatinastrazeneca 2advair/seretidesalmeterol /fluticasoneglaxosmithkline high molecular weight (biopharmaceuticals) 1humiraadalimumababbvie (before: abbott) 2enbreletaneceptamgen 3proliadenosumabamgen 4rituxanrituximabroche/biogen idec 5avastatinbevacizumabroche 6herceptintrastuzumabroche 7remicadeinfliximabj&j/merck & co. 8lantusinsulin glarginesanofi-aventis the likelihood of developing a new biopharmaceutical successfully is significantly greater than in traditional drug development. 25% of biopharmaceuticals that enter phase i of the regulatory process eventually are granted approval. the corresponding figure for conventional drugs is less than 6%. the traditionally large share of outsourcing. small number of custom manufacturers with industrial-scale manufacturing capabilities in this demanding technology. in the western hemisphere, primarily boehringer-ingelheim of germany and lonza of switzerland; in the eastern hemisphere nicholas piramal of india (through the acquisition of a former avecia operation) and the joint ventures between autekbio and beijing e-town harvest international in china and between biocon in india and celltrion in south korea. same customer category: life science, especially the pharmaceutical industry. similar business types: custom manufacturing of proprietary drugs; opportunities for generic versions, called biosimilars. similar regulatory environment: fda regulations, especially gmp. existing infrastructure (utilities, etc.) can be used. cons: high entry barriers because of demanding technology. the construction of a large-scale plant for the production of biopharmaceuticals by cell culture fermentation costs around $500 million and takes four to six years. as the specifications of the plant and process types for biopharmaceuticals differ substantially from traditional chemical synthesis, they cannot be produced in conventional multipurpose fine chemical plants. high financial exposure: (1) high capital intensity ('massive investments are needed at a time when chances of success are still very low' and (2) risk of batch failures (contamination). unlike the biopharmaceutical start-ups, the emerging big biopharmaceutical companies are adopting the same opportunistic outsourcing policy as larger pharmaceutical companies. thus, amgen, biogen idec, eli lilly, johnson & johnson (j&j), medimmune, novartis, roche/genentech and pfizer are investing heavily in in-house manufacturing capacity. with three plants in the us, two in japan and one each in germany and switzerland, roche has the largest production capacity. new developments in expression systems for mammalian and plant cell technology could reduce capacity requirements substantially. actually, the titer in large-scale mammalian production, actually 2–3 grams/liter. is expected to double to 5–7 by 2015 and once more to 10 by 2020. furthermore, the widespread application of 'single-use disposable bioprocessing technology', considered by experts as 'the hottest buzz in town'. it advantageously substitutes for stainless steel production trains, at least for short production campaigns. new transgenic production systems are emerging. they (e.g. transgenic moss, lemna, fungal or yeast expression systems, transgenic animals and plants, such as tobacco plants possess the potential to become economically and industrially successful. legislation and regulation of biotechnology is not well defined yet and leads to differences in interpretation and other uncertainties. in the us, legislation is not yet in place for biosimilars, the generic counterpart of generics in small molecule pharmaceuticals. the inherent risks of the mammalian cell technology led several companies to opt out of mammalian cell technology or to substantially reduce their stake. examples are cambrex and dowpharma in the us, avecia, dsm and siegfried in europe and wuxi app tech in china. in conclusion, biocatalysis should be, or become, part of the technology toolbox of any fine chemical company. mammalian cell culture fermentation, on the other hand, should be considered only by large fine chemical companies with a full war chest and a long-term strategic orientation. the industry within the chemical universe, the fine chemical industry is positioned between the commodity, their suppliers, and specialty chemical industries, their customers. depending on the services offered, there are two types of fine chemical companies. the fine chemical companies are active in industrial scale production, both of standard and exclusive products. if the latter prevails, they are referred to as fine chemical / custom manufacturing organizations (cmos). the main assets of the contract research organizations (cros) are their research laboratories. crams; contract research and manufacturing organizations are hybrids (see section 4.2). fine chemical / custom manufacturing companies fine chemical / custom manufacturing companies in the narrower sense are active in process scale up, pilot plant (trial) production, industrial-scale exclusive and non-exclusive manufacture and marketing. their product portfolios comprise exclusive products, produced by custom manufacturing, as main activity, non-exclusive products, e.g. api-for generics, and standard products. characteristics are high asset intensity, batch production in campaigns in multipurpose plants, above-industry-average r&d expenditures and close, multi-level and multi-functional relationships with industrial customers. the industry is very fragmented. 2000 – 3000 fine chemical companies exist globally, extending from small, "garage-type" outfits in china making just one product, all the way to the big, diversified enterprises, resp. units. the main reason for the fragmentation is the lack of economy of scale (see below). the industry is subject to a high degree of regulation even more so than the chemical industry as a whole, particularly if pharmaceutical fine chemical production is involved. the most important regulatory authorities are the (us) food and drug administration (fda) and (chinese) state food & drug administration (sfda), respectively. their main responsibilities comprise formulating comprehensive supervision policies ("good manufacturing practice") and control the implementation, to be in charge of drug registration, draw up criteria for marketing authorization and formulate national essential medicines lists. the european correspondent is the european medicines agency (emea), which is manly responsible for the scientific evaluation of medicines developed by pharmaceutical companies for use in the european union. the role of reach (registration, evaluation, authorization and restriction of chemicals) is self-explanatory. the u.s. pharmacopeia codifies quality standards for active pharmaceutical ingredients. as these standards are observed worldwide, they contribute also to the emergence of a uniform worldwide set-up of the top tier fine chemical companies. in terms of size, resources, and complexity of the chemical process technologies mastered, the fine chemical companies can be broadly divided into three segments, each of them accounting for approximately the same turnover, namely about $10 billion. the top tier, about twenty, has sales in excess of $250 million per year (see table 3). most are not pure players but divisions or b.u.'s of large, multinational companies. their share varies between one percent or less for basf and pfizer, all the way to 100% for cambrex, usa; divi's laboratories, india, and f.i.s. italy. all have extensive resources in terms of chemists and other specialists, plants, process knowledge, backwards integration, international presence, etc. table 3: leading fine chemical companies (resp. units) company location sales 2009 ($ million) f.c. unit sales 2009 ($ million) remarks 1lonzaswitz.2600custom. manuf.1370hmw/lmw~55/45 2boehringer-ingelheimgermany18,300fine chem.1950hmw/lmw=84/16 3dsmthe netherlands11,300fine chem.1850ae 4sumitomo chemicaljapan17,420fine chem.1730incl. some polymer additives 5merck kgaagermany11,200life science solutions580#1 in liquid crystals 6sigma-aldrichusa2148safc570e 7basfgermany73,000fine chem.15502eincl. some excipients 8cspc shijiazhuang pharmaceutical groupchina1500fine chem.1550eapi-for-generics, e.g. hiv / aids, sartans 9lanxessgermany7280saltigo550ea.o. agrochemicals 10albemarleusa2005fine chem.15002a.o. ibuprofen total top ten~7200 1 as per author's definition 2 part of the sales do not derive from fine chemicals, e.g., generics, catalysts, excipients e author's estimate (non figures published by the company) hmw, high molecular weight, lmw, low molecular weight fine chemicals 11.-20.: jubilant organosys. india,800e/470; dr. reddy's, india, 1370/370; evonik-degussa, germany, 18,900/350e; johnson matthey, uk 12,500/350; aurobinda, india 665/340; ncpc, north china pharmaceutical, china, 718/300e; divi's laboratories, india, 250/250; pfizer, us, 50,000/250e; cambrex, us, 235/235; f.i.s., italy, 230/230 σ11-20 ~ 2,900 million; σς1-20 ~ $10,000 million note: the first number refers to the total sales, the second one to the fine chemical sales. both are in $ million the combined revenues of the top 20 fine chemical companies amounted to $10 billion in 2009, representing about 30% of the figure for the whole industry. the leading companies are typically divisions of large, diversified chemical companies. in terms of geography, 9 of the top 20 are located in europe, which is recognized as the cradle of the fine chemical industry. this is e.g. the case for the world's #1 company, lonza, headquartered in basel. switzerland. custom manufacturing prevails in northern europe; the manufacture of active substances for generics, in southern europe. the second largest geographic area is asia, housing 7 of the top 20. with 4 large companies, the us rank last. whereas the european and u.s. pharma industry constitutes the main customer base for most fine chemical companies, some have a significant share of products and services for the agrochemical industry. examples are archimica, cabb, saltigo (all germany), dsm (the netherlands) and hikal, india. several large pharmaceutical companies market fine chemicals as subsidiary activity to their production for captive use, e.g. abbott, usa; bayer schering pharma, boehringer-ingelheim, germany; daiichi-sankyo (after the takeover of ranbaxy), japan; johnson & johnson, usa; merck kgaa, germany; pfizer (formerly upjohn), us. large fine chemical companies, in contrast to mid-sized and small ones, are characterized by a lack of economy in size. as most fine chemicals are produced in quantities of not more than a few 10 tons per year in multipurpose plants, there is little or no economy of size. the reactor trains of these plants are similar throughout the industry (see production train of a multipurpose plant). regardless of the size of the companies, their main constituents, the reaction vessels, have a median size of the 4–6 m3. various products are made throughout a year in campaigns. therefore, the unit cost per m3 per hour does practically not vary with the size of the company. a dichotomy between ownership and management. the company's shares are listed on stock exchanges, and their performance is scrutinized by the financial community. postponement of a single important shipment can affect a quarterly result. in the small and mid-sized companies the owners typically are the major shareholders, often members of the same family. their shares are not traded publicly and fluctuations in their financial performance