Hong Kong: As drug-makers attempt to move up the value chain to manufacture sophisticated new medicines in China, General Electric Co. wants to sell them factories: right off the shelf.

GE shipped its first pre-made bio-pharmaceutical factory from Germany to China in September. The building made its way to a bio-technology zone in the central Chinese city of Wuhan, bundled in 62 containers, travelling along the Rhine and Yangtze rivers and going by sea in between. In China, the factory was assembled and built in 11 days.

The idea is to help pharma companies gain a head start in China as they navigate a lengthy approval process for new drugs. GE says the pre-made factories help them cut costs and timing by about half when compared with traditional facilities. As health-care costs soar, there’s rising demand in China for cheaper access to more complex drugs called biologics and their more affordable generic cousins, called biosimilars.

Because these medicines usually contain live ingredients, the manufacturing process is also more complex. GE’s factories were developed after consultation with officials at China’s food and drug administration, and that could help during the audit process, said Olivier Loeillot, GE Healthcare Life Sciences’ Asia general manager.

“It’s one single manufacturing concept that we can replicate around the world," said Loeillot. “As the pharmaceutical industry goes from big-volume blockbuster drugs to tailored, smaller-scale drug manufacturing we want to meet that demand." China is the first country in which the GE prefab factories are being built and the company hopes to eventually take them around the world. It’s seen interest in countries ranging from Turkey to Brazil, Loeillot said.

In other industries, prefabricated buildings have been used to reduce the time to market: For example, some McDonald’s restaurants have been pre-built.

The GE factories, called KUBio, could also help the Connecticut-based company build on its presence in the bio-pharmaceutical supply chain. GE Healthcare says that 90% of global FDA-approved biologic medicines are made using its technology, and its life sciences business unit has been logging double-digit revenue growth.

That demand could accelerate further as the patents on more drugs like AbbVie Inc.’s Humira and Roche Holding AG’s Avastin expire in the coming years, and companies around the world begin to make cheaper copies of such treatments.

No Chances

Building a traditional plant can typically cost upwards of $200 million and costs are sometimes well in excess of $500 million, Loeillot said. Depending on the factory design and the drug being made, an equivalent KUBio from GE could reduce costs by as much as 45%, the company estimates. It’s cheaper partly because it uses disposable equipment that saves days of cleaning and steaming -- instead of stainless steel components.

The pre-made factories include “clean rooms" where the environment is controlled for dust and other particles, and also piping, heating and ventilation. Even the toilets are pre- installed. So, for workers in China, assembling the plant would be much like working with ‘LEGO’ toy blocks.

As the first factory was being built in Stuttgart, Germany, the buyer, a start-up company called JHL Biotech Inc. was preparing the ground and infrastructure in China.

JHL, backed by Silicon Valley venture capital heavyweights Kleiner Perkins Caufield& Byers and Sequoia Capital, plans to manufacture bio-pharmaceuticals in China, said Racho Jordanov, JHL’s chief executive officer. Manufacturing costs in China are cheaper, but JHL aims to meet European and US standards.

The company will file its first application in December in Europe to begin clinical trials, and will follow with applications in China, said Jordanov, a 20-year veteran of the US bio-tech company Genentech. GE says its second order is coming from a big pharma company that is looking to broaden its production in China.

“If I was building the same thing in San Francisco, I would totally build it myself but with this, I’m not going to take any chances," Jordanov said of the pre-made factories. “With this option, even if an inspector was blindfolded and put on air-plane -- if they walk into our plants they wouldn’t be able to tell if she was in Basel, Switzerland or Wuhan, China." Bloomberg