Dive Brief:

• Small molecule-focused Shionogi & Co. Ltd. on April 23 unveiled plans to open a new manufacturing subsidiary, aiming to centrally produce its own investigational products as well as offer contract services to other companies.
• The subsidiary will be officially established on Oct. 1, but will not begin operation until April 1, 2019. Though the head office will be located in Settsu, Osaka, Shionogi also named three other manufacturing locations in Japan that will comprise the subsidiary's operation base.
• As a contract services provider, Shionogi will take clients seeking help with the manufacture of investigational drug products and commercial medications; analytical testing services; and pharmaceutical engineering projects.

Dive Insight:

Though it's possible the general public doesn't know the name Shionogi, its highly likely many have heard of the cholesterol-lowering drug Crestor (rosuvastatin), which AstraZeneca plc licensed from Shionogi in 1998. In fact, the Japanese firm discovered the rosuvastatin molecule and owns the '314 substance patent covering the medication.

Shionogi credits the sales success of Crestor as a pivotal reason it was able to grow its scale. But when the patent for Crestor expired in 2016, Shionogi needed to look elsewhere for business opportunities, despite revisions to the terms of its original deal with AstraZeneca that allowed Shionogi to continue collecting royalties on the drug through 2023.

Part of Shionogi's future vision for success will include its role as a manufacturing contractor.

But Shionogi is not jumping into the contract realm blind; it has done some work in this space in the past. It formerly owned Bushu Pharmaceuticals Ltd., which focused on drug production before Shionogi divested it in 2010. And through Nichia Pharmaceutical Industries Ltd. (now known as Shionogi Pharma Chemicals Co., Ltd.), Shionogi gained experience preparing pharmaceutical raw materials. Outside of Japan, the company has a manufacturing operation in Taiwan.

The company's prior contract services know-how may be bolstered by another recent development — in August 2017, Shionogi, PeptiDream Inc. and Sekisui Chemical teamed up to create an active pharmaceutical ingredients (API) group called PeptiStar, a new CMO devoted to the stable creation of non-standard peptide drug precursors.