Competitive Edge of Antibiotic Intermediates Needs Improving

By Tao Jianhong   

The pharmaceutical technical sector in China has developed
rapidly in recent years. The output reached 1.238 million tons
in 2005, an increase of 40.2% over 2004. The export of
pharmaceutical technical has increased drastically. The export
amount was 790 thousand tons in 2005, an increase of 27.4% over
2004. The production of pharmaceutical intermediates has
therefore also rapidly.
   The development of the pharmaceutical intermediate sector in
China has the following features. (a) Most producers are private
companies with flexible operation and small investment scale.
(b) The producers are mainly distributed in Taizhou of Zhejiang
province and Jintan of Jiangsu province. (c) With the greater
attention paid by the state to environmental protection, the
pressure of requesting producers to construct environmental
protection facilities is increasing. (d) Products have rapid
upgrading, the profit rate reduces drastically 3-5 years after
products are put into market and producers are therefore forced
to develop new products and improve new processes. (e) As the
profit of pharmaceutical intermediates is higher than
conventional chemical products, more and more chemical
companies have started to produce pharmaceutical intermediates
and the market competition has become increasingly fierce. (f)
Compared with pharmaceutical technical, the profit rate of
pharmaceutical intermediates is relatively low. The production
process is identical for pharmaceutical technical and
pharmaceutical intermediates. Some companies therefore produce
not only pharmaceutical intermediates but also pharmaceutical
technical.
   To reduce the production cost and meet the requirements on
environmental protection, many large pharmaceutical companies
in the United States and Europe import pharmaceutical
intermediates with reliable quality from developing countries.
An excellent opportunity has therefore been provided to
pharmaceutical intermediate producers in China. Chemical raw
materials and intermediates needed in the pharmaceutical
production are basically self-sufficient in China today. Only
a few varieties need to be imported from abroad. Owing to
relatively rich resources and low raw material price,
pharmaceutical intermediates produced in China have
considerable competitive edge in the international market.

Market analysis to major varieties

Cephalosporin antibiotics hold quite a big share in the
antibiotic market and their related intermediates also display
considerable market potential. Varieties of cephalosporin
antibiotics with large sales amount include ceftriaxone sodium,
cefazolin sodium, cefetaxime, ceftraxone, cefoperazone and
cefuroxime. Related intermediates include 7-ACA
(7-aminocephalo-sporanic acid), 7-ADCA (7-aminodeacetoxyl),
aminothia oxime acid, AE-active ester, thiotriazinone,
tetrazole-1-acetic acid, methylthiotetranitrazole,
methoxylamine hydrochloride and 2-Methoxyimino-furyl-acetic
acid amonium salt (SMIA).

    (1) Price rebound of aminothia oxime acid, AE-active ester
and thiotriazinone

Aminothia oxime acid and AE-active ester are major raw materials
for the production of cephalosporin antibiotics including
cefetaxime, ceftraxone, cefetamet and cefodizime.
Thiotriazinone is a major raw material for the production of
ceftraxone. After a reshuffling in the past few years, only
several pharmaceutical factories with a monthly output of over
30 tons still maintain the production of these intermediates
today. Due to the impact from the price rise of petroleum and
chemical products, these intermediates are in short supply and
their price has also rebounded considerably. Aminothia oxime
acid as a typical intermediate for cephalosporin antibiotics has
entered a relatively stable development stage after many years'
development and fierce market competition. Aminothia oxime acid
has broad application coverage and can be used to synthesize
quite a few antibiotics such as cefataxime and ceftraxone. These
antibiotics are basic pharmaceuticals in China and are used in
clinic treatment in great quantities. The output of aminothia
oxime acid is already close to 2 thousand tons a year in China
today.
    (2) Sales amount of tetrazole-1-acetic acid and
methylthiotetranitrazole will hopefully increase

Tetrazole-1-acetic acid and methylthiotetranitrazole are
important raw materials for the production of cefazolin sodium.
Cefazolin sodium has a stable price, but its sales amount is
quite large. Major producers therefore all had expansion plans.

   (3) Import dependence of methoxyamine hydrochloride and SMIA

Methoxyamine hydrochloride and SMIA are important raw materials
for the production of third-generation cephalosporin
antibiotics cefuroxime. Owing to its remarkable curing effect
and small side effect, cefuroxime holds a leading position in
cephalosporin antibiotics in terms of global sales amount. As
the product requires complicated synthesis technology, the
output is still quite small in China and the market demand is
mainly satisfied by imports. Due to the small sales amount in
the domestic market, methoxyamine hydrochloride and SMIA
produced in China are mainly for export and the export amount
is 30-50 tons a month. Due to the complexity in production, only
Zhejiang Huangyan Sifang Chemical Factory and Zhejiang Yongning
Pharmaceutical Factory can make the batch production of these
two intermediates. With the mastering of the cefuroxime
production technology by domestic pharmaceutical factories, the
demand of these two intermediates in China will also increase
considerably.

    (4) Rapid output growth of 7-ACA

7-ACA is produced through the chemical cracking of cephalosporin
C sodium salt. It is an important intermediate for the production
of semi-synthesized antibiotics such as cephalosporin V and
cefoperazone. The rapid development of third-generation
cephalosporin antibiotics has promoted the demand of 7-ACA in
China. 7-ACA producers have made large-scale capacity expansion
and the output reached 2 651 tons in 2005, an increase of 79.1%
over 2004.

   (5) Demand increase of 7-ADCA

7-ADCA is an important intermediate for the production of
semi-synthesized antibiotics such as cefalexin and cefradine.
The sustained price drop of penicillin has led to a cost
reduction of 7-ADCA. Besides, 7-ADCA is mainly used in the
production of oral cephalosporin antibiotics with convenient
use and good sales. The market demand of 7-ADCA will therefore
increase further. With the impact from low-priced products from
India and Western Europe, the output of 7-ADCA in China reduced
drastically in the first half of 2005. In spite of an output
increase in the whole year, the growth was much lower than that
had been expected. Main reasons include outdated technology and
high production cost in domestic producers.

    (6) Stable output growth of 6-APA

6-APA (6-aminopenicillinic acid) is an important intermediate
for the production of semi-synthesized penicillin antibiotics
such as cefalexin sodium and amoxicillin. The output has
increased stably in recent years. The output of 6-APA in China
reached 5 968 tons in 2005, an increase of 2.7% over 2004.
   Antibiotic intermediates and pharmaceutical techn