Observers predict another tough year overall. The U.S. economy still ails, and it appears that a robust recovery must await resolution of the prospective war against Iraq. But because customers can be served in various ways, suppliers have multiple avenues for growth. As Marc A. Hennebert, a partner in the London office of Strategic Decisions Group (SDG), a global strategy firm specializing in decision analysis and risk management, puts it: "The challenge for every company is to identify the business model from which it can extract the most value-creating opportunities."

Hennebert noted last November at Fine Chemicals Conference 2002 that in the early and mid-1990s, pharmaceutical fine chemicals offered a platform for growth and diversification with attractive margins. But after peaking in the late 1990s, the segment's performance has deteriorated. And according to an SDG survey, pharmaceutical custom manufacturing executives anticipate that profitability will continue to decline in the near term.

The market forces squeezing custom manufacturers are well known: Demand dropped as drug companies merged, while supply rose with overenthusiastic investments in cGMP (current Good Manufacturing Practice) assets. Meanwhile, the Food & Drug Administration (FDA) has ruled against an unprecedented number of new drug applications, while R&D has yielded fewer new products.

Even when market conditions are good, however, custom manufacturers must grapple with a conundrum: Their customers are often their competitors. According to Joseph R. Colleluori, director of strategic outsourcing for Merck & Co., companies like Merck, Pfizer, and GlaxoSmithKline consider manufacturing as a core activity and routinely produce their active ingredients. That allows better control of quality and schedules as well as more effective use of manufacturing assets, he says.

Drug companies still consider outsourcing to be a tactical rather than a strategic move, says James C. Miller, president of PharmSource Information Services, Springfield, Va. "Decisions are price driven and done on a product-by-product basis. The attitude is, 'We will satisfy our needs internally as much as possible and outsource only the odd project.' "

Miller says this stance has been fostered by historically high profit margins: Gross margins--price received minus cost of goods--typically have been 80%. "Every sales dollar lost because of a supply interruption means 80 cents off the bottom line," he explains. "For this reason, pharma's principal consideration in manufacturing has not been cost but security of supply. In most other industries, cost is often part of the competitive environment and manufacturing efficiency is important."

 INGENUITY Expanding the technology toolbox through internal R&D is key to staying ahead of the competition. DSM PHOTO

ALTHOUGH DRUG companies are becoming more sensitive to cost, it has resulted not in more outsourcing but in a tighter squeeze on suppliers. For example, Steven R. Johnson, vice president for fine chemicals sales at Degussa, notes the increasing "commoditization" of the market. Sourcing used to be more selective and based on knowledge of companies, relationships, and performance, he says. "Now, requirements are broadcast over a spectrum of producers. That automatically intensifies the competition."

What may tilt conditions in favor of custom manufacturers is sustained pressure on drug companies to further reduce costs. "Some pharmaceutical companies continue to ignore the risks associated with empty plants resulting from late-stage product failures," says Rudolf Hanko, head of Bayer's fine chemicals business unit. "We must make the case that fine chemical companies can better hedge this risk because the portfolio of potential replacement products available to us is larger than that available to a drug company from its own pipeline. We must also convince pharmaceutical companies that we can offer them absolute reliability."

In the meantime, market realities are forcing custom manufacturers to make painful adjustments, says Peter Pollak, a fine chemicals business consultant based in Switzerland. Some companies, such as Eastman Chemical and Lonza, have shut down plants; others, such as Great Lakes Chemical and Cambrex, are trying to sell assets. Noting that the Swiss company SF Chemie is for sale, Pollak says, "Absolutely, some businesses will be closed."

Yet reasons for staying in the market remain strong. Analysts forecast demand for advanced intermediates and active pharmaceutical ingredients (APIs), as well as electronic chemicals, to grow at an annual rate of 7% until 2005. Other fine chemicals segments are expected to grow at rates of 2 to 5% only.

Furthermore, demand for drugs will continue to grow, driven by aging populations, development of new drugs for unmet needs, and direct advertising to consumers. In the U.S. alone, according to IMS Health, pharmaceutical sales are expected to reach $330 billion in 2006, nearly doubling the $175 billion worth of drugs sold in 2001.

Custom manufacturers are adjusting in different ways. In the past year, several companies have reorganized pharmaceutical assets to better respond to the demands of drug development.

For example, Clariant Pharmaceuticals is the new business unit that emerged from Clariant's life sciences and electronic chemicals division after the acquisition of BTP in 2000. At Fine Chemicals Conference 2002, the division's president, Joachim Mahler, said that integration of BTP was guided by two principles: achieving a structure responsive to market and customer requirements and organizing assets to optimize technology development, plant utilization, and productivity.

Similarly, integration of ChiRex, which Rhodia acquired in 2000, has given birth to Rhodia Pharma Solutions. According to Jean-Pierre Clamadieu, president of Rhodia's pharmaceutical and agrochemicals division, the enterprise combines Rhodia's drug development, custom manufacturing, and bulk actives operations. It can support drug development from the early stages to launch and maturity. And it can provide materials through the whole range of the value chain, from building blocks to advanced intermediates and bulk active ingredients.

SDG's Hennebert notes that BTP and ChiRex were acquired at steep prices. The expected immediate returns on those investments did not materialize, and perhaps only now will those assets start to generate cash for their owners, he says.

CUSTOM SYNTHESIS providers also are eyeing the biopharmaceutical market for opportunities (C&EN, Jan. 27, page 27). Biopharmaceuticals, which are therapeutic proteins produced by microbial fermentation or mammalian cell culture, offer a market landscape in sharp contrast to that of small-molecule drugs. The pipeline is rich, and capacity is short. According to Enrico T. Polastro, vice president and senior industry analyst at Arthur D. Little Benelux, "Compared with traditional small molecules, biopharmaceuticals appear to be a dream area for service providers."

However, the prospect of a biomanufacturing mania is worrisome. "People may see biomanufacturing as the pot of gold at the end of the rainbow," says Malcolm J. Braithwaite, chief executive officer of Exchem Organics. "A lot of money will be spent, venture capitalists will pile in with promises of huge earnings, and they'll be disappointed. If we're not careful, we'll have overcapacity just as we did in the cGMP area."

Hennebert makes a similar point. "The current hype around biopharmaceuticals strangely looks like the hype around fine chemicals just a few years ago," he says. But he thinks people are being cautious because biomanufacturing is very different from chemical manufacturing. "Those thinking of investing must have a clear understanding of the risks and rewards, which are very different from the risk-reward profile for fine chemicals," he says.

In terms of rewards, Pollak observes that the demand for biopharmaceuticals is still small and is going to stay so for a while. The most optimistic projections indicate that the value of outsourced biopharmaceuticals in 2001 is only 12.5% that of outsourced small-molecule drugs. "Even if biopharmaceutical outsourcing doubles every four to five years, it will remain small compared with small-molecule API markets," he says.

Hanko agrees, saying that small molecules will remain a major focus of the pharmaceutical industry for the medium term. And talking about risk, Hanko points out the significant challenges associated with development and production of biopharmaceuticals. "The increased cost in the production, formulation, and administration of biopharmaceuticals will put pressure on these therapies and may limit their future acceptance for some indications," he says. "Also, because each biomanufacturing process is unique, workup and product isolation vary widely. It becomes very difficult to build a multipurpose plant that can switch between products quickly, and this partially negates a major argument for outsourcing."

Furthermore, the body of knowledge and experience for biomanufacturing is much less well developed than with organic synthesis, Polastro notes. "Biopharmaceutical processes are still much like black boxes, where the cause-effect relationship between a process variable and product quality is poorly understood. A prevailing dogma is that the process makes the product."

Polastro points to the example of the anemia drug erythropoietin. A severe blood condition called pure red cell aplasia has been observed among patients taking the version produced by Johnson & Johnson, called Eprex, but not among those using the theoretically identical version from Amgen, called Epogen. Experts attribute the difference to variations in the processes used, he says. Such a variance would be precluded by total chemical synthesis, which now seems a reachable goal, as demonstrated by the recent assembly of a version of erythropoietin [Science, 299, 884 (2003); C&EN, Feb. 10, page 9].

Another risk is that the biopharmaceutical pipeline may not be as robust as expected. "Much of it is due to companies that have never had a product approved by FDA," Miller says. "High-profile products have failed in clinical trials or have been rejected by FDA. That adds a high level of uncertainty to the pipeline."

Miller adds that many small biopharmaceutical companies are cash-deprived. "They depend on public offerings to finance late-stage development and product launches, and they can't get any money right now," he says.

Fortunately, biomanufacturing is not the only opportunity for custom manufacturers. Hennebert says that a range of alternatives exists: what segment to serve, what stage of drug development to focus on, what type of services to provide. Indeed, C&EN finds that life outside the multiton-per-year blockbuster-API arena is just fine.

"It is important to differentiate between the larger groups, such as Clariant, DSM, and Lonza, and the more numerous small and midsize companies," says Roger LaForce, director of marketing and sales at Helsinn Chemicals, a medium-sized producer of active pharmaceutical ingredients and advanced intermediates based in Biasca, Switzerland. "The real problem is with companies that added a lot of capacity in anticipation of blockbuster projects."

LaForce says Helsinn Chemicals' strategy has been to focus on production under very specific manufacturing conditions, such as containment for highly potent active ingredients. The requirements of containment manufacturing allow a maximum of only five projects per year, he explains. A typical campaign for a compound that requires four to six chemical steps takes up to four months. Then the facility must be cleaned, validated, and prepared for the next campaign. A project may range in value from a few hundred thousand dollars to a million dollars.

The niche is ideal for a medium-sized company. "Is it interesting for a large manufacturer to have two or four high-potency plants, with all the people involved and the analytical work, and just generate sales of $2 million to $4 million? I don't think so," LaForce says.

Compounds entering Phase I clinical trials are another attractive segment. Using biotechnological tools, emerging pharmaceutical companies are rapidly identifying small molecules for specific pharmacological actions. "We can supply the building blocks for these molecules, while others with cGMP capacity can make the active molecule," Exchem's Braithwaite says. "And that's where the fine chemicals sector will find its salvation, I believe."

Up to 15% of Exchem's sales are devoted to supplying kilogram quantities to emerging pharmaceutical companies. "It has grown significantly in the past 18 months," Braithwaite says. "As soon as the compounds become of clinical interest, that's where we see the opportunity."

And so do the big companies, which are touting one-stop shops for the chemistry needs of drug development. For example, Raylo--Degussa's multikilogram facility in Canada--focuses on serving small virtual drug companies. Historically, these companies enter into collaborations or joint ventures with, or are even acquired by, global drug companies, Johnson says. "Being involved in this marketplace through Raylo means that we are present if and when a small company succeeds."

For AllessaChemie, not solely targeting the pharmaceutical industry works well. "Our business model is different," says R. Helmut Rupp, the company's chief technology officer. "We supply any industry that requires materials. Materials for pharmaceuticals attract the highest margins, but we have consciously decided to also take the high-volume but low-margin businesses that others do not want or cannot afford to take."

Rupp says AllessaChemie must compete with low-cost manufacturers in India and China and succeeds by choosing projects that need significant technological input, for example, those requiring multistep synthesis. "Besides, European suppliers that can offer competitive prices are still preferred by European and U.S. customers, especially those for whom the environmental, safety, and health aspects of manufacturing are important," he adds.

Moving forward, exclusive synthesis providers have room to improve their bottom lines, according to several speakers at Fine Chemicals Conference 2002. One area is supply-chain management, which is management and control of all materials, funds, and information related to a product, from acquisition of raw materials to delivery to the end user.

That supply-chain management contributes to the bottom line is not yet well appreciated in the chemical industry. "The supply chain is not perceived as part of the core business," noted Gerald D. Sturm, a senior manager at Accenture, Amsterdam, at Fine Chemicals Conference 2002. "Many companies do not even know what their supply chain is. They have departments responsible for transportation, procurement, and logistics, and those departments are working autonomously and not solving issues across the total chain of responsibility. Many fine chemicals companies are still in this state, unfortunately."

THE GOOD NEWS is that people in the fine chemicals industry are paying more and more attention. According to Sturm, many benefits derive from a well-managed supply chain: lower inventories, fulfillment cycle time, staffing requirements, and supply-chain costs; higher sales, savings, and productivity; and better forecasting and on-time delivery. Supply-chain management in the chemical industry can raise revenues by up to 2.5%, he says.

Sturm predicts that as fine chemicals companies optimize supply-chain operations, they will increasingly collaborate in operations that do not compromise secrecy and intellectual property--for example, in distribution and transportation. He can't name names, but he says the industry has exemplars in this area. Such companies, he says, view collaborative supply-chain planning, strategic sourcing, and sales and operations as capabilities that give a competitive advantage.

Another area for improvement is portfolio optimization. Companies do not always have a clear reason for their mix of technology or products, Hennebert says. Historically, some companies develop more in one area than in others. Often, a new technology is acquired because an important customer asks for it, without consideration for how it fits with how the industry is evolving and what area the company aims to serve. According to Hennebert, analyzing the portfolio and optimizing the allocation of resources among projects and technologies can add up to 20% to the bottom line.

Whereas supply-chain management and portfolio optimization may just be appearing on the radar screens of some fine chemicals producers, the importance of an ever-improving technological toolbox is widely accepted. As David Moody, director of new technology ventures for Avecia Pharmaceuticals, said at Fine Chemicals Conference 2002, companies that are standing still with respect to technology will lag behind and be forced to exit.

At Informex 2003, custom manufacturers will be touting improvements in their technology toolboxes. The developments range from new reagents to new synthetic routes and industrial processes, all enhancing the ability of custom manufacturers to serve pharmaceutical customers.

Among companies offering novel reagents are Albemarle, Rutherford Chemicals, and Simafex.

Sodium aluminum hydride (SAH) is now available from Albemarle as a cost-effective alternative to lithium aluminum hydride (LAH). Use of LAH in large-scale reductions is inhibited by the reagent's high cost. At present, SAH is up to 20% less expensive than LAH, according to John M. Power, a customer technical service scientist.

SAH has the same reactivity profile as LAH, but in some cases it is less reactive but more selective, Power says. For example, cinnamaldehyde reduction with LAH proceeds completely to hydrocinnamyl alcohol, whereas the reaction with SAH proceeds partially--to cinnamyl alcohol--or fully, depending on the stoichiometry. Furthermore, when the reactivity of SAH is lower than that of LAH at low-temperature conditions, usually a modest increase in temperature gives suitable results. "In such cases, the combination of a lower cost reagent and lower cooling costs can bring significant cost advantages," he adds.

Rutherford Chemicals has developed heterocyclic boronic acids for use in biaryl couplings that do not require low-temperature conditions. Lab volumes are available through Lancaster Synthesis, but quantities greater than 1 kg will be supplied directly by Rutherford. Available compounds include 2-methoxypyridyl-5-boronic acid, pyridyl-3-boronic acid, and 2-bromopyridyl-5-boronic acid propylene glycol ester.

Simafex has formulated 2-iodoxybenzoic acid (IBX) for use in industrial-scale selective oxidation of primary and secondary alcohols. IBX is of great interest as a mild oxidizing agent for synthesis of carbonyl compounds because of its reactivity and selectivity. Compared with metal-based oxidizing reagents, it is also safer environmentally.

However, even when very pure, IBX has a tendency to explode, says Dominique Depernet, director of research. That property has precluded IBX's industrial use. But now, Simafex is making available IBX stabilized by a mixture of benzoic acid (22%), isophthalic acid (29%), and iodoxybenzoic acid (49%). Called SIBX, the reagent is easier to handle and can be produced and used safely at industrial scale. Simafex has used it to make aldehydes (for example, farnesal, nicotinaldehyde, and 3,4,5-trimethoxybenzaldehyde) and ketones (for example, cyclooctanone, menthone, and adamantanone) from corresponding primary and secondary alcohols.

In process development, SK Energy & Chemical has designed a continuous catalytic process for making (S)-3-hydroxy- -butyrolactone (HGBL) from malic acid. HGBL is a precursor to intermediates of cholesterol-lowering drugs such as Pfizer's Lipitor (atorvastatin calcium)--the largest-selling prescription medicine worldwide--and AstraZeneca's Crestor (rosuvastatin), which not been approved by FDA.

Batch production of HGBL requires hydride reductions, which involve expensive reagents, difficult-to-handle high-pressure conditions, and tedious workup. In SK's continuous process, catalysts are held in fixed-bed tube reactors, so they do not need to be separated from the product. And because the volume handled at any given time in a continuous process is much less than in batch reactions, working at high pressure is easier. A commercial plant with a capacity of 120 metric tons per year will begin operation in April in Daeduck, South Korea.

In several technologies, companies will be emphasizing their deepening expertise.

Clariant will play up its know-how in nucleosides, which are of interest for their antiviral and anticancer activities. Its involvement in this chemical class goes back to the early 1990s, and its current production of antiviral drugs such as ribavirin and doxifluridine reflects its success.

Nucleosides are prepared by the coupling of sugars and nucleic acid bases. Clariant offers building blocks, particularly unusual bases and sugars. "What's not known is that the coupling reactions have very different specificities depending on the structures of the base and the sugar," according to Manfred Koch, head of technology at Clariant's life sciences and electronic chemicals division. "The projects in our pipeline are centered around how to join those parts most efficiently. Coupling has to be optimized for each new nucleoside."

Current research is focused on 39-thionucleosides and nonnatural l-nucleosides. Clariant has developed an enantioselective route for a building block to sulfur-containing antivirals such as lamivudine, beginning with mercaptoacetaldehyde and menthyl glyoxalate. And it is developing a series of L-nucleosides, which, Koch says, have better activity and milder side effects than the corresponding D-nucleosides.

A number of L-nucleosides are in clinical trials for treatment of patients infected with hepatitis B virus or HIV. For example, Achillion Pharmaceuticals is evaluating elvucitabine in clinical trials, and Triangle Pharmaceuticals, now a part of Gilead Sciences, has filed marketing applications for emtricitabine in Europe and the U.S.

Likewise, Sigma-Aldrich will emphasize expertise in manufacture of polyamino acids based on years of experience. Use of polyamino acids as drug delivery vehicles has been rising lately, as more and more water-insoluble drugs are being attached to polyamino acids to improve solubility.

Particularly for anticancer agents, conjugation to a water-soluble polymer can improve not only solubility but also selectivity to tumors. Various polymer-drug conjugates are in clinical trials as anticancer treatments. Among them are Xyotax and CT-2106. These are polyglutamate conjugates of paclitaxel and camptothecin, respectively, that are being developed by Cell Therapeutics. Xyotax is 80,000 times more soluble in water than paclitaxel and elicits fewer side effects than paclitaxel. Similarly, CT-2106 is much more water soluble and efficacious than the free drug.

THE PRIMACY of chiral technology will be on display again at Informex, with many companies giving prominence to their advances in this field.

For example, Dow Chemical has expanded its collection of ligands for asymmetric hydrogenation. For olefin reduction, 1,2-bis(diphenylphospholanoethane) has been prepared. According to Ian C. Lennon, technology leader of pharmaceutical services from Dow, hydrogenation of dimethyl itaconate with the rhodium complex of this ligand at a molar substrate-to-catalyst ratio of 100,000 yields a product with an enantiomeric excess of 99%.

For ketone reduction, a new biaryl phosphine ligand called Xyl-TetraPHEMP has been designed. Lennon says the framework of the racemic ligand is constructed in one step by the coupling of two identical fragments.

In a related advance, Dow Chemical process chemists have developed an efficient catalytic asymmetric hydrogenation of prochiral ketones with a diphosphine ruthenium diamine catalyst, based on technology licensed from the Japan Science & Technology Corp. At the kilogram scale, they have completely converted 49-fluoroacetophenone to (S)-1-(4-fluorophenyl)ethanol in less than two hours at a molar substrate-to-catalyst ratio of 100,000. The chiral alcohol was obtained in 98.5% enantiomeric excess [Org. Process Res. Dev., 7, 89 (2003)].

Dow Chemical also has broadened its range of catalytic asymmetric carbon-carbon bond-forming reactions with the licensing from Stanford University of asymmetric aldol chemistry developed by chemistry professor Barry M. Trost. Based on dinuclear zinc catalysts, the technology enables stereocontrolled synthesis of polyhydroxylated chiral building blocks, as well as chiral nitroalcohols, which are readily convertible to chiral amino alcohols.

Also in the area of chiral alcohols, Jülich Fine Chemicals has devised a microbial route from inexpensive diones to enantiomerically pure diols that can be used to prepare chiral ligands. Examples are (2S, 5S)- and (2R,5R)-2,5-hexanediol from the readily available substrate 2,5-hexadione.

THE ROUTE to the R,R-diol is based on asymmetric reduction by Lactobacillus kefir. According to Thomas Daussman, managing director, the process is competitive with current methods. For example, yield and enantiomeric excess for reduction using a ruthenium-BINAP complex are 80–90% and 99%, respectively, compared with 80% and 99.5% for the microbial route. Corresponding values for lipase-based kinetic resolution are 75% and 99%. Daussman adds that the microbial route is more environmentally friendly, as it uses much less organic solvent and no heavy metals.

Meanwhile, at Wacker-Chemie's central research facility in Munich, research fellow Klas Sorger has developed new asymmetric Reformatsky chemistry for synthesis of optically active -hydroxy esters. In the presence of a proprietary chiral amine auxiliary, aldehydes and bromozinc esters condense to -hydroxy esters in high yields and enantiomeric excesses of 85 to 92%. Recycling of chiral auxiliary and recovery of zinc under nonaqueous conditions are integral to the process. It has been run at pilot-plant scale to make a chiral drug intermediate, according to Joern Winterfeld, Wacker marketing manager.

Also at Wacker-Chemie's Munich facility, research fellow Dieter Heldmann has devised a way to make -alkylated functionalized amino acids. It involves low-temperature alkylation of an amino acid in the presence of a nonnucleophilic silazane base. The process now allows access to -alkylated cysteines and serines, Winterfeld says. It has been scaled up for a pharmaceutical project, he adds.

Many other advances in synthesis of amino acids and related compounds were achieved last year. DSM's crop is notable.

"Unnatural amino acids and derivatives are an important and growing class of chiral building blocks, and we plan to offer a range of enantiopure products," says Rinus Broxterman, competence manager for chiral technologies and unnatural amino acids. Technology in the field is developing rapidly, fueled by DSM's R&D program.

For example, DSM researchers have extended use of d-phenylglycine amide (PGA) as a chirality-transfer agent. PGA adds to carbonyl compounds to form PGA imines, which are convertible to amines, amino alcohols, and amino acids. PGA is later removed by palladium-catalyzed hydrogenation of a benzylic carbon-nitrogen bond.

With researchers at Syncom, an R&D company in Groningen, the Netherlands, DSM chemists have devised an alternative way to remove PGA for use when the standard method does not work well, for example, when two benzylic carbon-nitrogen bonds with similar reactivities are reducible. Thus, to convert 1-indanone to (S)-1-aminoindane, the PGA imine is stereoselectively reduced with Raney nickel and then the PGA group is converted to an amino nitrile. A reverse Strecker reaction liberates the free amine.

In collaboration with chemists S. H. van Leeuwen and R. M. J. Liskamp at Utrecht University, DSM researchers also have progressed in solving an age-old problem in peptide chemistry: how to simultaneously protect the nitrogen functionality and activate the carboxylate functionality of an amino acid for coupling to form amides. Syntheses would be shorter and cheaper, Broxterman points out, if the need to separate coupling and protection/deprotection steps in peptide syntheses could be avoided. DSM's solution lies in dichlorodialkylsilanes [Tetrahedron Lett., 43, 9203 (2002)]. The strategy also works with -amino acids, N-alkylated amino acids, and the dicarboxylic amino acid L-aspartic acid.

Another development relates to 4-hydroxypiperidines. Functionalized piperidines are substructures of many bioactive compounds, but efficient routes to this type are few. In collaboration with chemists Mandy K. S. Vink and Hans E. Schoemaker at the University of Amsterdam and Floris P. J. T. Rutjes at the University of Nijmegen, DSM chemists have worked out a stereodivergent approach [J. Org. Chem., 67, 7869 (2002)].

The route begins with enantio-pure starting materials prepared by biocatalytic desymmetrization of hydroxy-, alkoxy-, or aryloxypentanedinitriles using whole cells of Rhodococcus erythropolis. This yields the S-enantiomer of the corresponding cyano acid, which can be worked up to the (S)-4-hydroxylactam. Chemical and electrochemical treatment of the lactam yields different N,O-acetals, which can be alkylated to cis- or trans-substituted (S)-4-hydroxypiperidines.

Other related achievements include use of enantiopure acetylene-containing amino acids as starting materials for synthesis of oxygen and nitrogen heterocycles by palladium-catalyzed reactions [Adv. Synth. Catal., 344, 70 (2002)] and use of the monodentate phosphoramidite MonoPhos in rhodium-catalyzed hydrogenations of enamides to prepare primary amine derivatives at high enantiomeric excesses [Adv. Synth. Catal., 344, 1003 (2003)].

The latter is noteworthy because it had been thought that such reactions require bidentate ligands, says David Ager, DSM competence manager for homogeneous catalysis. The ligand MonoPhos is also easy to prepare and relatively inexpensive. In a similar manner, enamines have been converted to -amino acids [J. Am. Chem. Soc., 124, 14552 (2002)].

Meanwhile, focusing on nonnatural D-amino acids, Isochem, the fine chemicals business unit of SNPE, has gained access to difficult-to-prepare compounds through chiral induction with camphorsultam. According to Dominique Gibert, director of marketing intelligence, although the method is expensive and laborious, sometimes it is the most efficient means available, as in the preparation of D-naphthylalanine.

ASYMMETRIC HYDROGENATION of dehydroamino esters is currently Isochem's preferred route to D-amino acids, Gibert emphasizes. Recently, for example, Isochem scaled up synthesis of amino-protected D-3-pyridylalanine, based on hydrogenation with a chiral rhodium complex. The camphorsultam method is "reserved for very specific cases," he says.

On the other hand, capitalizing on a long tradition of preparing, handling, and working with -amino acids, Degussa Fine Chemicals is forging into the arena of -amino acids. "We have seen from customer requests and the literature that -amino acids are becoming increasingly interesting to the pharmaceutical industry," says Michael Schwarm, head of R&D for pharmaceutical intermediates and exclusive synthesis. "We are well positioned to handle such compounds."

Degussa's approach is based on lipase resolution of -amino esters derived chemically from aldehydes. The approach is general, Schwarm says. "Our unique position is in the enzyme application."

Several custom projects are in pilot-plant development, Schwarm says. But Degussa already offers in its catalog both (R)- and (S)--phenylalanine. Methoxy-, chloro-, and bromo-substituted -phenylalanines will be added soon.

At Synetix Chiral Technologies, which is now a part of Johnson Matthey, access to chiral building blocks has been expanded through chemistries developed by academic chemists.

According to product manager Fred Hancock, the chemistry of Yale University chemistry professor John F. Hartwig for preparing chiral amines by hydroamination of aryl alkenes with a biphosphine-palladium complex has been extended. Now the chemistry can be used to make -phenylalanine derivatives from inexpensive cinnamate precursors. Hancock says -phenylalanines are "an increasingly important feature of many pharmaceutical compounds currently in development."

Synetix Chiral Technologies also has scaled up chemistry developed by chemistry professor Erick M. Carreira at the Swiss Federal Institute of Technology, Zurich, for preparing chiral alcohols by alkyne addition to aldehydes. Enantiomeric excesses of 98% have been achieved with a wide range of aldehydes, Hancock says.

And at Takasago, research chemists have applied ruthenium-based hydrogenation chemistry to unprotected enamines, according to Yoshinori Kawai, associate director for fine chemicals at Takasago's Rockleigh, N.J., office. Ruthenium complexed with the Takasago chiral diphosphine ligand SegPhos catalytically converts enamine esters directly to -amino acids with up to 95% yield and up to 99% enantiomeric excess. Direct conversion prevents the yield loss associated with protection and deprotection, as well as side reactions that can occur with these steps, Kawai says.

Takasago also has developed a route to the active enantiomer of Ritalin (methylphenidate hydrochloride). With sales of up to $400 million per year, methylphenidate hydrochloride is widely used to treat attention deficit hyperactivity disorder. The racemate is in most formulations of the drug. The exception is Novartis' Focalin, which contains only the d-threo-enantiomer, called dexmethylphenidate hydrochloride. Novartis isolates the active enantiomer from a racemic mixture by chiral resolution. But now Takasago has devised a completely synthetic route that gives product in 99% enantiomeric excess.

Tough times may still lie ahead. But that's not going to stop innovation in one of the most creative sectors of the chemical enterprise.

MORE TO COME

In C&EN's Feb. 24 issue, Senior Editor A. Maureen Rouhi will discuss crystallization and polymorphism issues in pharmaceutical production.

CUSTOM CHEMICALS
Custom producers of pharmaceutical active ingredients and advanced intermediates continue to adjust to challenging economic conditions

CUSTOM SYNTHESIS FOR DRUG DISCOVERY
Companies providing exclusive synthesis for early drug development are upbeat about 2003

OVERHEARD
What Customers Seek

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