The Irish Cluster is Delivering
Barry Heavy, , Head of Life Sciences, IDA Ireland

In order to bring down healthcare costs, the EU market is slowly welcoming the generic drugs, a forte for Indian pharma companies. The European pharma sector is currently pegged at USD 48 billion out of which USD 16 billion is held by generic drugs alone. Biosimilars is another segment that the EU government has slowly begun to accept, which spells an untapped opportunity that can be leveraged. Given these facts, Ireland makes for an attractive destination for pharma companies to expand their operations or set up their EU base. Additionally, Ireland's high level of expertise in the high-end nuance of the industry further makes it an ideal destination to establish and expand operations in the EU region.

October started on a very positive note for the City of Waterford in the South East of Ireland. Long known for its history in production of high quality crystal, the city is now establishing itself as a location of choice in the life sciences. On October 2nd, the CEO of West Pharmaceuticals announced plans to build their largest integrated manufacturing facility on a 44 acre site with a planned investment of EUR 100 million and potential to employ up to 300 people. The new facility is expected to produce components for insulin injector cartridges and other high value packaging components, in order to meet growing demand from pharmaceutical and biotech customers. This is West Pharmaceuticals second investment in Ireland, it has had a manufacturing and development centre in Dublin since 2005. That centre , which employs more than 230 people, also serves as European headquarters for the company's The Tech Group subsidiary.

The West investment is just the latest of a string of exciting investments in Waterford and across Ireland. In March 2014 the medical device company Nypro establish a 200 person manufacturing facility in Waterford, complementing their medical device R & D centre of excellence near Dublin. In February 2013, Sanofi announced plans to diversify activity at the Sanofi - Genzyme drug product site in Waterford, bringing in manufacturing of their blockbuster Lantus product, to complement the suite of Genzyme biologic drugs already fill finished at the site. Teva also have a significant presence in Waterford, where the site is a strategic centre for respiratory product development and manufacturing. A common theme between these investments is that they are all at the interface of bio-pharma and medical devices.

Behind this pocket of investments in Waterford is a wider global trend - closer interplay between the biopharma industry and the medical device industry. The pharma industry has become the bio-pharma industry as more and more of the world's top drugs are biopharmaceuticals (drugs developed and manufactured using the tools of biotechnology, such as monoclonal antibodies ). These biopharmaceuticals are complex, fragile and require injection, but their efficacy in treating disease has resulted in sales growth of 353 percent to EUR 163 billion between 2001 and 2012. The global biotech R & D budget has jumped from USD 10.5 billion in 2001 to USD 103 billion in 2012 and the biotech pipeline swelled 155 percent, up from 355 treatments in 2001 to 907 in 2012. Bio-pharmaceuticals now dominate the list of the world's top blockbusters and account for over 70 percent of the annual sales of the world's top ten most successful drugs.

A significant area of innovation in the biopharmaceutical space is in development of devices that can improve the storage and delivery of biopharmaceuticals. The materials and surfaces in the device that contact the drug must be designed to avoid impacting on the quality of the delicate biopharmaceutical. The design and features of the device can assist in patient compliance by making it easier to inject the drug. This trend in "drug device combinations" is also seen with more traditional small molecule pharmaceuticals, where for example, devices that enhance inhalation of small molecule drugs for diseases such as COPD have help to differentiate the drug and supported enormous growth in sales. Large generic companies (such as Mylan and Teva) are active in this area of drug-device combinations as device innovation is an area they can invest in to differentiate their products from other generic players

Waterford is not the only place in Ireland benefiting from this trend. Limerick is a University city on the River Shannon in the west of Ireland and has faced challenges in recent years with the closure of a major manufacturing facility by Dell. However in August 2013 biopharmaceutical company Regeneron announced that it would acquire the 400,000 ft2 Dell facility and invest over EUR 240 million in retrofitting the facility to become a biopharmaceutical manufacturing facility.

In April 2014, J & J subsidiary Ethicon bio surgery invested EUR 80 million and created 270 jobs in Limerick, in development & manufacturing of a highly innovative drug-device combination for wound healing. J & J already have significant investment in Ireland in development and manufacturing of biopharmaceuticals and medical devices and when announcing their decision to invest in Limerick in April 2014 Dan Wildman the Worldwide President of Ethicon Biosurgery said "The decision to manufacture EVARREST Sealant Matrix in Ireland was due to the unique clustering of medical device manufacturing, automation and biomanufacturing skill sets across the Johnson & Johnson companies already operating in Ireland."

On October 1st 2014 Optel Vision, a leading Canadian company specialising in Track & Trace and vision inspection solutions for the manufacturing industries, is to create 140 new jobs in Limerick as part of a new European expansion. Optel Vision develops and installs packaging line vision inspection and control systems for the pharmaceutical, medical devices and chemical industries. These sophisticated automated vision systems significantly reduce the health risks associated with mislabelled products, dosage errors and product mix-ups, while protecting genuine manufacturers against illegal counterfeiting. The presence of Regeneron, Ethicon and other companies in Limerick as well as the wider biopharmaceutical and medtech sectors in Ireland was a major driver for attracting Optel Vision to Limerick.

Ireland has a long history in both the medical device and pharmaceutical industry. 25,000 people are employed in the medical device sector, with particular strength in areas such as vascular, orthopaedic and ophthalmic devices. The Ireland pharmaceutical sector has also evolved into the Irish biopharmaceutical sector in recent years, with over EUR 7 billion in capital expenditure on new biopharmaceutical manufacturing facilities announced in the last 10 years from companies such as Pfizer, Lilly, J & J and Regeneron. These sectors are now coming closer together as the demand for "drug device combinations" gets stronger and Ireland is recognised as having the skills base to deliver in this convergent area. Recent investments include:
  • Forest labs: establishing manufacturing of respiratory drug delivery devices in Dublin.
  • Aerogen: Irish company developing next generation drug inhalation technology in Galway.
  • Mylan: EUR 400 million investment in development and manufacturing of inhaler technology in their Dublin site and injectable products in their site in Galway.
  • Contract research organisation PPD have established a GMP analytics lab in Athlone, offering specialised analytical services to companies producing respiratory drug device combinations and biopharmaceuticals.
A key aspect of Ireland's value proposition is the combined skill sets of medtech and biopharma. The critical mass of medical device and biopharma industry scientists, engineers, quality professional and management provides a very strong talent pool that companies can tap into. Ireland has an exceptionally strong regulatory track record in both sectors which provides real comfort to companies as they seek to mitigate risk. Biopharmaceuticals are extremely complex, expensive to manufacture and subject to intense regulatory scrutiny. While packaging these products in an innovative device has the potential to drive sales through improving adoption and compliance, it also adds further complexity to the product and the supply chain, thereby increasing risk. Ireland's track record in regulatory excellence in both sectors serves to significantly mitigate this risk. Adding complex and innovative devices to an already expensive drug also drives up COGS, but again Ireland's medical device space has a tremendous reputation in managing cost through continuous improvement and operational excellence, while still maintaining an intense focus on quality. In the last year, four Irish medical device manufacturing have won the prestigious international Shingo Gold award for operational excellence.

The Irish Government is also actively supporting this trend of the interface of medical devices and biopharmaceuticals and both sectors have been prioritised as areas for research investment as part of a government review of overall state investment in research. In 2004 Ireland was predominantly a location for small molecule pharmaceutical manufacturing (drug substance and drug product). At that time there was only one site in active production of a biopharmaceuticals, employing about 400 people in Cork (Merck-legacy Schering facility). In 2013, after EUR 7 billion of capital investment there are biopharmaceutical manufacturing sites spread across the country, including new sites in development from Alexion, Regeneron and Jazz Pharmaceuticals (see map below). Employment in these new sites has grown to over 5,000 people and looks set to expand further. In response to this growth in biopharma manufacturing, the Government invested EUR 57 million in the creation of the national Institute for Bioprocess Research and Training, a unique facility that was designed to mimic a state-of the art biotech Drug substance and drug product manufacturing facility with state of the art analytics/quality labs. This allows research to be conducted on biopharmaceutical manufacturing processes in a real world environment. It also provides an environment for practical training of staff in a real-world biopharmaceutical manufacturing environment with access to state-of-the-art industry relevant equipment. In 2013 NIBRT provided practical training to over 2,000 people, providing a strong supply of talent into the growing industry. NIBRT has recently announced collaboration with the Irish Medical Device Association, who have a very active program in development of training programs for the medical device industry, working with the Government training agency Skillnets.

Such initiatives have the potential to underpin further growth in this exciting interface area of medical devices and biopharmaceuticals as the supply of highly specialised talent is maintained through highly focused and practical training programme+s. Ireland is a small country but punches significantly above its weight in these sectors. The close proximity and strong working relationships between industry sectors, government agencies and research and training centres creates the basis for an exciting and vibrant cluster.