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Rentschler: experts in contract manufacturing

The company Rentschler from Laupheim in the south of Germany is nowadays one of the biggest biopharmaceutical contract manufacturers in Europe. This has not always been the case. A look at the company’s history shows why the company, which is nowadays run by the third family generation, has become what it is today.

Rentschler started during the Weimar Republic as classical pharmaceutical company, which originated from a pharmacy. Back then, new drugs did not have to undergo complex toxicity testing. “The proof of concept basically developed across the counter,” said Dr. Wieland drawing a brief sketch of the situation that existed at the time. Wolf is a member of Rentschler’s board of directors.

The company’s pharmaceuticals business developed successfully over the years despite the fact that the number of regulations and directives increased. Up until the 1980s, the family-owned enterprise had enough money to invest it in proprietary developments.

More than 30 years biotech experience

Dr. Wieland Wolf © Rentschler
As early as 1974, Rentschler established a biotechnology division and began developing interferons. The company had comprehensive biotechnological know-how from the production of vaccines. Although the products had been sold, the knowledge remained in the company along with the employees. Through contacts with foreign universities, in particular through personal contacts with a researcher at New York University who was working on interferons, the idea of developing interferons for human application emerged. The substance, which had only been discovered shortly before, had demonstrated a strong anti-viral effect in the laboratory. The principal of the company, Rentschler, was excited by the idea of replacing vaccination with an antiviral drug that had a wide-ranging effect.

In 1983, the Laupheim-based biotech pioneer received the first worldwide authorisation to market an interferon (Fiblaferon). Authorisation was granted on the basis of 15 patients who had been successfully treated with the drug. Although the granting of the marketing authorisation was subject to strict legal requirements, the successful treatment of the patients, who would have died without this therapy, was sufficient for it to be granted by the Health Ministry for ethical reaons. At the time, drug development involved a “manageable” level of paperwork, said Wolf, explaining that the application documents filled about a dozen folders. Today, the regulatory authorities require application documents to be submitted in electronic form as they would otherwise be unable to store the huge quantity of paper files.

Costs exploded at the end of the 1980s

Out of 5,000 to 10,000 drug developments only one finally reaches a pharmacy. (Photo: VfA)
At that time, the costs involved in the development, production and safety testing were still manageable for a medium-sized company like Rentschler. Wolf recalls that beta-interferon was developed with a “low double figure million sum”. But this soon changed. Already in 1987, the development costs for drugs shot up, amounting to about 230 million US dollars (Tufts Center for the Study of Drug Development); in 2003, average drug development costs amounted to 800 million US dollars on average, which also took failures into account. In the latest report published by the American Tufts University, the average cost of developing a new pharmaceutical totals 1.2 billion US dollars (https://www.gesundheitsindustrie-bw.decsdd.tufts.edu/InfoServices/OutlookReports.asp).

Clinical trials drive the costs

According to the Association of Research-Based Pharmaceutical Companies, clinical development is a major cause of the cost explosion. More than 50 per cent of the entire expenditure is spent on clinical development. The highest costs are associated with the logistically highly complex multinational Phase-III studies. According to VfA information, in pharmaceutical R&D, the greatest increase in costs was observed in terms of clinical trials. Already at the beginning of the 1990s, companies had to have huge financial resources to be able to develop new drugs.

“We have not been able to keep pace with this development“

Multidish GMP production (Photo: Rentschler Biotechnlogie)
Multidish GMP production © Rentschler Biotechnlogie
Rentschler was surpassed by the runaway development costs. “At the end of the 1990s we had reached a point where the company had to concede that “this was no longer our world”, said Wieland Wolf summarising the situation back then. The high development costs could only be covered through the worldwide commercialisation of the drugs, something only the big pharmaceutical and biotech companies can afford.

Rentschler was unable to achieve a major breakthrough with its proprietary pharmaceuticals. However, the annals still list a number of pioneering achievements (interferon, recombinant gamma-interferon) that are connected with the name Rentschler. As early as the 1990s, the company was faced with severe competition in the biotech market and it became clear that huge amounts of money were necessary to stay in a competitive position. The company would have had to invest a multiple of its revenues (approximately 100 million Marks; approx. 50 million euros) into the development of a new pharmaceutical – a risk the owners were not willing to take because a failure would have put the existence of the company at risk.

Change of strategy at the end of the 1990s

Thus at the end of the 1990s, Rentschler bid farewell to proprietary developments due to the exponential rise of costs and the high associated risks. But this was not a farewell to biotechnology. The company foresaw a different market potential. It was at this time that biotechnology was beginning to emerge in Europe in general and in Germany in particular. The opportunities for strategic new orientation were fairly good because Rentschler possessed what a large number of companies didn’t have: experience in biopharmaceutical product development, clinical testing and approval procedures. In addition, the Laupheim company headquarters were equipped with facilities that enabled the production of biotech products. Rentschler started to offer this expertise to other companies – and the change of strategy had taken place.

Confidence in own strength was decisive

Downstream GMP production suite (Photo: Rentschler Biotechnologie)
Downstream GMP production suite © Rentschler Biotechnologie
Prior to taking this step, the company had overworked a number of consultants by asking them to analyse the market, said Wieland Wolf with a smile. The results the consultants came up with provided Rentschler’s managers with no new knowledge. We therefore did not benefit from much external help in our decision-making processes, said Wolf, describing the beginnings of the change of strategy.

Eventually, Rentschler’s confidence in its technology and own knowledge were decisive in choosing the strategy of contract manufacturing. And the company got off to a good start as it was a well-known biotech pioneer in the industry. The first big order involved the development of a growth hormone which was later taken over by Sandoz. Then the company signed a cooperation contract with Hexal to develop EPO.

Gradually (“In the contract manufacturing business, reputation is enormously important”) further orders came in and the capacity of the production plants grew. At first, the production plant consisted more or less of a single plant, recalls the Rentschler manager. Later, we were able to divide the risk among several smaller plants that could be operated in parallel. At the beginning of its contract manufacturing business, the company produced on a smaller scale, as back then there was high demand for clinical material.

Growth with the market

250-l fermenter for small production batches © Rentschler Biotechnlogie
Production scale increased as the developed product matured. If Rentschler wanted to continue with in-house production, it had to grow along with demand. Hence the company expanded as the demand for products grew.

In 2003, new facilities were put into operation. Rentschler’s production capacity tripled with a 20-million-euro investment. As little as three years later, Rentschler started a 50-million-euro expansion programme.

In 2007, two new 500-l GMP production lines were put into operation. In summer 2008, the first of two new 2500-l multi-process fermentation lines will be put into operation.

Should the production of a product being developed by Rentschler surpass the company’s production capacities, then Rentschler can turn for help to its big neighbour, Boehringer Ingelheim based in Biberach 30 km from Laupheim, with whom a cooperation agreement exists. The two companies have adapted their technological steps to each other, so that a transfer is possible in either direction.

Client base: from start-ups to global players

In Europe, Rentschler is among the big biopharmaceutical CMOs. (Photo: Rentschler Biotechnologie)
Rentschler has an international client base, including small biotech companies such as Maxygen, medium-sized pharmaceutical companies such as Micromet, but also multinational companies such as Novartis or Bayer Schering. Rentschler not only produces biotechnological protein pharmaceuticals using mammalian cell technology, but also offers the production of active pharmaceutical ingredients and their aseptic filling in vials and syringes. Rentschler’s product portfolio includes all proteins, enzymes, cytokines and a number of antibodies, including original pharmaceuticals and biosimilars.

According to Wolf, its investments have propelled Rentschler Biotechnologie into the top league of pure CMOs in Europe, behind Lonza and Diosynth. The Upper Swabian company is one of the few CMOs in Europe. Although Boehringer Ingelheim is among the most important biopharmaceutical contract research organisations worldwide, it is regarded as a conglomerate.

Stability through continuous production

The Laupheim-based contract manufacturer intends to maintain its growth in revenue, facilities and employees. Thanks to the considerable increase in production capacity, the Laupheim company will in future be able to produce more for the market. Thus, the business, which has so far mainly been restricted to development projects, can be stabilised through continuous production. The question as to whether the change of strategy has been successful, is answered clearly by the company’s extensive expansions.

Walter Pytlik, 28th April 2008
© BIOPRO Baden-Württemberg GmbH
Website address: https://www.gesundheitsindustrie-bw.de/en/article/press-release/rentschler-experts-in-contract-manufacturing