The pharmaceutical contract manufacturing industry is undergoing some important changes that reflect the current evolution of the pharmaceutical industry. An emphasis on cost control, a shift in growth from mature to emerging markets, the rising importance of generics and other low-cost drugs, the switch from large-volume blockbusters to small-volume targeted therapies, and the increasing potency of many new candidates are all driving the use of contract development and manufacturing services. At the same time, and not surprisingly, pharmaceutical and biotech companies are increasingly more selective when choosing service partners, and this is even more pronounced with new chemical entities (NCEs).

Thus, while the pharmaceutical contract manufacturing market is growing, competition is fierce, and only contract manufacturing and development organizations (CDMOs) with a strong financial position and an established track record of performance, state-of-the-art production capabilities, specialized areas of expertise — particularly the manufacturing of highly potent compounds — and a demonstrated commitment to safety and sustainability will benefit. Fermion Oy, a wholly owned subsidiary of Finnish pharmaceutical developer and manufacturer Orion Corporation, is ready to meet this challenge.

Established Track Record

Outsourcing provides numerous advantages to sponsor companies, primarily reduced need for capital investments and increased access to specialized technical expertise. The potential also exists for increasing efficiency and lowering operating costs. However, outsourcing also carries substantial risks. As pharmaceutical companies face increasing cost pressures and as the complexity of drug candidates rises, they are therefore turning to outsourcing partners, but only to those with the necessary expertise and a demonstrated history of performance in terms of product quality, on-time delivery, regulatory compliance, safety, and value.

Fermion Oy has been producing cGMP-compliant pharmaceutical intermediates and active pharmaceutical ingredients since 1970, when it was established as a 50-50 joint venture between Rikkihappo Oy (now Kemira Oy) and Orion. Today, generic active pharmaceutical ingredients (APIs), approximately 25, and NCE APIs for both Orion and external customers are developed and produced by a staff of 330 people at its facilities in Finland, which have been FDA inspected and approved since 1979. To date, a total of 10 innovative APIs, including oncology products, have been commercialized worldwide or are currently awaiting regulatory approval (regulatory filings in the US, Canada, EU, Japan, Taiwan, China, Brazil, and Australia). As a strategic partner to innovative pharmaceutical companies, our focus is on providing cost-efficient, well-engineered synthesis, process development, and lifecycle management solutions. 

Financial Stability and More

To attract new business, CDMOs must, in addition to having an excellent performance record, be financially stable. Pharmaceutical companies struggling to reduce costs are only interested in dependable third-party service providers that are committed to the industry and have the financial wherewithal to offer long-term supply security and partake in risk-sharing. As a wholly owned subsidiary of a public pharmaceutical company founded in 1917, the financial strength of Fermion is assured. In addition, we are committed to contract manufacturing and continually invest in state-of-the art technologies. Furthermore, as a manufacturer of generics we have gained extensive experience in the development and continual improvement of highly efficient processes, which allows us to provide our customers with very high quality products and services at very competitive prices. Working in close partnership with Orion, Fermion can also offer end-to-end drug development and manufacturing services.

Both of Fermion’s API production facilities with a total reactor volume of 320 m3 at Oulu and Hanko are highly automated.

Use of Advanced Technologies

Although the pharmaceutical industry has historically been slow to adopt newer technologies, the advantages of innovative technical solutions, particularly those that increase efficiency and productivity and reduce costs, have become more appealing. Single-use solutions for biopharmaceutical manufacturing and continuous manufacturing of both small- and large-molecule drugs are two examples. Automation, which has the potential to improve all aspects of pharmaceutical development, manufacturing, and analysis activities, is another. Automation not only allows for time and cost savings by replacing inefficient manual processes, but consistency and reliability are often improved by the reduction (or in some cases elimination) of human interactions and thus opportunities for human error.

Both of Fermion’s API production facilities with a total reactor volume of 320 m3, at Oulu and Hanko, are highly automated. These production units have process management systems that are controlled by automation, and Fermion continues to make investments increasing the level of automation. The newest production unit in Hanko requires 50% less manual intervention compared to an older unit with less automation. In general, automation has decreased the need of manual intervention by 15% to 20%.

Automation enables the exact reproduction, for example, of a certain particle form and size from batch to batch. Automation also provides access to electronic reports on the flow of each production batch from which certain parameters can be chosen to be graphically displayed and printed as an attachment to a batch report. These graphs can then be used for reference in test runs as well as in process and quality optimization.

These process management systems at Fermion are connected to the resource management system and enable the optimization of the supply chain with real-time raw material demands and consumption levels. These automation systems have been validated according to FDA standards. In conjunction with process development initiatives, investing in automation has enabled significant increases in the production volumes of products. Cost-of-Goods (COGS) have decreased and production times have shortened.

Specialized Expertise

The complexity of drug compounds is increasing as pharmaceutical companies seek new classes of drug substances. Two particular aspects are challenging the production capabilities of many manufacturers: poor solubility and very high potency. Many new drug candidates are highly efficacious when properly delivered in the body, but suffer from low water solubility and thus limited distribution in the human body. A wide variety of solutions are being developed for these solid dose drugs, many of which require a thorough understanding of particle morphology and the ability to engineer appropriate particle designs. Separately, the manufacture of highly potent APIs (HPAPIs) requires specialized faculties and equipment in order to ensure the protection of operators, the surrounding community, and the environment.

Fermion has advanced capabilities in both of these areas. Leading experts apply their knowledge to the development of appropriate crystallization, drying, and milling processes that yield particles with the most desirable properties (stability, processability, etc.) and greatest impurity control. The development and manufacturing of OEL class IV (1 - 10 µg/m3) and V (0.1 - 1 µg/m3) HPAPIs (cytotoxic and noncytotoxic) in quantities from grams to tens of metric tons proceeds in dedicated, state-of-the-art facilities. In fact, a new pilot-scale unit at the Oulu site was inaugurated in March 2015. This dedicated module is equipped with one 250 L and two 400 L reactors with split valves, glove boxes, and isolators, plus a filter dryer equipped with a mill inside and an inverting filter centrifuge.

Safety and Sustainability Performance

The safety of Fermion employees and our ultimate customers — the patients that depend on medicines made with active ingredients produced in our facilities — is of paramount importance. Fermion operates multipurpose facilities, and therefore the potential for contamination (mechanical, microbiological, or cross-contamination) is minimized through the use of strict, established standard protocols built into the procedures for all production and final handling operations. In addition, the facilities have been designed to allow for the use of dedicated areas and closed systems wherever possible, and contamination risk analyses are performed for any new equipment.

Sustainability is a primary concern at Fermion, and we have made significant progress in reducing our environmental impact. Wastewater at the Hanko plant is treated in its own activated-sludge wastewater treatment plant. Fermion’s solvent recycling units serve the entire chemical production process with an annual solvent recovery capacity of approximately 8,000 tons. Although production increased in 2014, solvent consumption decreased by approximately one-third due to recycling. Fermion’s energy and water consumption also decreased by approximately 8% and 20%, respectively, in 2014 due to conservation efforts. All hazardous waste is sent to an independent incineration plant designed specifically for this purpose, where it is used as fuel for energy generation. Significant efforts have also been made to minimize the carbon footprint of Fermion operations. Fermion and parent Orion are committed to Responsible Care®, and also the EK Energy Efficiency Program launched by the Confederation of Finnish Industries. Fermion has already met its energy savings target for 2016, but continues to invest in additional improvements. All together, a total of M€5 has been invested in sustainability-related programs at Fermion over the past five years, and further investments in new technology for wastewater treatment are planned.


Major trends in the pharmaceutical industry are leading drug companies to outsource a wider range of activities to third-party service providers. Those same trends, however, are also driving sponsor companies to partner with financially stable, reliable CDMOs that offer measurable added value in the form of comprehensive capabilities combined with specialized expertise.