Novartis Invests Over $200 Million to Expand Radiopharmaceutical Manufacturing Capacity with New U.S. Facilities

On September 4, Novartis announced that to meet the growing demand for radiopharmaceutical therapies in cancer treatment, the company is expanding and upgrading its production facility in Indianapolis, USA, and plans to build a new factory in California.

Novartis stated that its new facility in Indianapolis has broken ground, with plans to produce radioactive isotopes, a key component in nuclear medicine. Earlier this year, the company received approval from the U.S. FDA to manufacture the Pluvicto therapeutic drug at its 70,000-square-foot plant in Indianapolis.

Meanwhile, Novartis is expanding to the U.S. West Coast, establishing a new production base in Carlsbad, California. Novartis stated that the plant will strengthen its radiopharmaceutical manufacturing network and address drug distribution challenges for patients in this region of the United States.

It is reported that Novartis has invested more than 200 million US dollars in building the plant this time. The qualification and regulatory approval of the new plant are expected to be completed by 2026. The Indianapolis plant will become the first radioisotope production base owned by Novartis in the United States, while the new plant in California will become the third radiopharmaceutical production plant laid out by Novartis in the United States.

In mid-July this year, Novartis released its 2024H1 financial report. The highly anticipated nuclear medicine Pluvicto achieved a 45% growth in the first half of the year, with sales reaching $655 million. Another nuclear medicine, Lutathera, achieved sales of $344 million. The total revenue from the two nuclear medicines was nearly $1 billion.

Pluvicto is used to treat patients with metastatic castration-resistant prostate cancer (mCRPC) who are positive for prostate-specific membrane antigen (PSMA). The product achieves precise targeting of cancer cells by combining the radioactive isotope lutetium-177 (177Lu) with a small molecule peptide that specifically binds to PSMA.

Lutathera is a Peptide Receptor Radionuclide Therapy (PRRT) drug used to treat gastroenteropancreatic neuroendocrine tumors (GEP-NETs) that are positive for somatostatin receptors (SSTR). This medication combines the radioactive isotope lutetium-177 (177Lu) with the somatostatin analog DOTA-TATE, delivering radiation energy directly into tumor cells by specifically binding to somatostatin receptors on the tumor cell surface, thereby killing the tumor cells.

In 2018, Lutathera was approved by the FDA for marketing to treat patients with SSTR-positive gastroenteropancreatic neuroendocrine tumors. Pluvicto was approved by the FDA in March 2022 for the treatment of patients with castration-resistant metastatic prostate cancer. Radiopharmaceutical conjugates (RDC) represented by Lutathera and Pluvicto have widespread significance for the nuclear medicine market, accelerating the transition from diagnostic to therapeutic nuclear medicines.

The strong market competitiveness of Pluvicto and Lutathera has also driven Novartis to deepen its radiopharmaceuticals layout.

In May 2024, Novartis acquired Mariana Oncology, a radiopharmaceutical company, for $1.75 billion. Unlike Novartis' use of the radioactive isotope lutetium in its radiopharmaceuticals, Mariana focuses on the radioactive isotope actinium, with a portfolio of nuclear medicine projects covering a range of solid tumor indications. Novartis' Pluvicto and Lutathera have been approved for the treatment of prostate cancer and neuroendocrine tumors, respectively, while Mariana's pipeline targets a broader array of cancer types and therapeutic targets.

In addition to acquiring Mariana Oncology, in the first half of 2024, Novartis signed an $180 million licensing agreement with PeptiDream, expanding its peptide collaboration with PeptiDream for radiopharmaceutical conjugation research. The core objective is to broaden the scope and range of targets to benefit more patients.

In recent years, the sales of nuclear medicine have shown a significant growth trend worldwide, especially under the leadership of Novartis, the development momentum of the nuclear medicine market is very strong. However, this also brings about the challenge of production and supply shortages.

For example, after Pluvicto was launched, analysts predicted that its sales in 2023 would easily exceed $1 billion. However, Pluvicto's actual sales in 2023 were $980 million. The reason lies in the supply.

At the same time, in June 2024, BMS suspended the recruitment for the Phase III clinical trial of RYZ101 due to a lack of the alpha-emitting isotope Actinium-225. This trial is the core project of RayzeBio, which BMS acquired for $4.1 billion.

For the research, development, and production of radiopharmaceuticals, challenges such as supply chain, selection of appropriate isotopes, drug efficacy, and logistics during transportation need to be addressed. Among these, the supply chain is one of the key factors affecting the sales of radiopharmaceuticals. Unlike regular drugs that can be stored for extended periods, the half-life of radionuclides in radiopharmaceuticals is extremely short, resulting in a shelf life of only a few days. For instance, Lutathera has a validity period of only three days starting from the time it is packaged at the factory, posing significant challenges to the distribution and transportation of the drug. Delays caused by customs inspections or transportation disruptions may render the drug ineffective. Therefore, pharmaceutical companies must not only possess production capabilities but also have robust distribution networks.

At the same time, there are many factors contributing to the shortage of radioactive isotopes. Canada's Chalk River, one of the largest producers of medical radioactive isotopes in the world, temporarily shut down its NRU (National Research Universal) reactor in 2007 and 2009. Since the NRU reactor produced about one-third of the world's medical isotopes, this directly led to a severe global shortage of medical isotopes. The NRU reactor was permanently closed in 2018.

Moreover, the ongoing international conflicts and the increasing demand for isotopes used in diagnostics and treatment have also led to a tight supply of nuclear medicines.

To address the supply shortage, Novartis is establishing a radioactive isotope production system to tackle the global shortage of nuclear medicines.

Currently, Novartis has established three radiopharmaceutical production bases in Millburn, New Jersey, USA, Ivrea, Italy, and Zaragoza, Spain. However, in 2022, Novartis had to suspend the production of Pluvicto and Lutathera at its plants in Italy and New Jersey due to potential quality defects. To learn from this experience, Novartis decided to upgrade existing facilities and build new ones in the United States, ensuring that even if issues arise at one of the three plants, any disruptions in the supply of radiopharmaceutical products can be prevented or mitigated.

Novartis also explained the reason for choosing to expand the Indianapolis plant: the Midwest was selected because it is within a 12-hour drive of nearly 50% of the U.S. population.

This means that after the products are manufactured at the Novartis plant, they will be distributed across the country. Approximately 50% of the regions in the United States are within a 12-hour drive from the Indianapolis plant. If necessary, medications can be transported by air as the Indianapolis facility is less than a 10-minute drive from the airport. This ensures, to a great extent, that the drugs can safely reach the medical teams of patients and be administered.

In addition to the construction of a new radiopharmaceuticals plant in the United States this time, Novartis announced at the end of 2023 the establishment of a radiopharmaceutical production base in China. This production base is located in the Nuclear Technology Application (Isotope) Industrial Park in Haiyan County, Jiaxing City, Zhejiang Province, with an expected total investment of over 600 million RMB and projected to commence production by the end of 2026. Once completed, this new radiopharmaceutical production base will become Novartis' second innovative drug production base in China. Currently, Novartis’ production base in China is located in Changping, Beijing, which was founded in 1987 with a total investment exceeding 700 million RMB, and has a maximum annual production capacity of 3 billion tablets and 400 million packages.

Novartis' international layout of its nuclear medicine production base is ongoing. In November 2023, Novartis Japan announced that it would invest $100 million to establish a production base in Sasayama to support the production of radioligand therapies.

Novartis aims to supply at least 250,000 doses of Pluvicto annually by 2024 and beyond.

Reference Article:
1. China's First! Novartis Invests 600 Million in Radiopharmaceutical Production Base

2. Valued at $4.1 Billion, the Most Expensive Nuclear Medicine Halted