High-ranking executives from AIAC, better known as the American Industrial Acquisition Company, arrived to Puerto Rico on Monday to make the company’s official debut in the island’s pharmaceutical industry, following its acquisition of the former Merck plant in Arecibo earlier this year.
As part of the transaction, AIAC vowed to retain some 200 former Merck employees.
During a ceremony at the plant, company officials said the addition of the Arecibo plant is the first step in a planned expansion of AIAC, which already has operations in 18 countries and $1.5 billion in annual revenue.
The Arecibo plant is now part of a new division, AIAC International Pharma, LLC, and will be transformed into a modern center for the manufacture of pharmaceuticals and bio-pharma products to be leased by pharmaceutical across the globe. The roster includes Merck Pharmaceuticals, which AIAC announced would be its first customer, approving the production of some of its blockbuster lines of medications.
Jim Scandura, the new chief operating officer of AIAC International Pharma, LLC, said the multinational company has been a reliable supplier to the largest companies in the world such as: DOW, ABB, GE, Shell, DuPont and many others.
“Puerto Rico and Arecibo are the cornerstones of this new business and we will acquire six to eight additional properties on the island,” he said. “We’re well-known for delivering high quality and continuity of supply, in highly regulated industries where quality and safety are non negotiable.”
“Today, we’re committed to a successful pharmaceutical division. AIAC Pharma is the newly established entity and the Arecibo plant our first acquisition specially designed for the Contract Manufacturing Organization sector,” the executive said. “We will develop both manufacturing and packaging capabilities to service both pharma and biotech sectors and aggressively seeking additional acquisitions.”
AIAC International Pharma, LLC, has already begun developing a marketing plan that will be adopted to promote the Arecibo facilities worldwide. The company expects to soon make public the other pharmaceutical products that will be manufactured at these facilities.
“This transition marks the final step in a very important transaction for Puerto Rico’s bio-sciences segment with the arrival of AIAC to the plant that belonged to Merck in Arecibo,” said Antonio Medina, executive director of the Puerto Rico Industrial Development Company.
“We retain a major pharmaceutical operation and protect the jobs of people working in the facility. In addition, we demonstrate Puerto Rico’s capabilities as a manufacturing destination and open the doors to the contract manufacturing market,” Medina said.
At present, the CMO market is offering favorable dynamics, with a total addressable market for dose manufacturing estimated to be around $50 billion, with a 28 percent outsourcing penetration representing a $14 billion market, Scandura said. Furthermore, the market is expected to grow more than 34 percent, or $20 billion, by 2020. Supply contracts are typically long-term, as switching costs are quite high since it forces the sponsor to secure a new regulatory review.