Examples of genuine strategic partnership agreements between end users and vendors are relatively rare in custom synthesis. The chemical synthesis industry is a dynamic, highly segmented, and growing component of the overall outsourcing business. It has a distinctive service platform and customer base compared with chemical suppliers, thus requiring a clear understanding of key success factors, expectations from pharmaceutical company customers, and changing global economic environments.
This article describes the current extent and scope of the chemical synthesis business within the framework of increasing regulatory compliance demands and a growing number of pharmaceutical firms that are requesting contract services for their chemical operations.
Custom synthesis is a business operation conducted by a third-party vendor to build molecules on the behalf of a specific customer that typically has no legal affiliation with the service provider. Custom synthesis is one of the multiple segments within the outsourcing space. Although it is defined as covering only molecule-building activities, custom synthesis represents in of itself a very complex field made by a multitude of segments and subsegments see Figure 1 , which reflect the situations and variants that can be observed, including:.
Extent and scope. Both the customer and the vendor slate in custom synthesis are very broad, reflecting the extreme fragmentation of this arena and the number of situations encountered. Similarly, contractual conditions associated with custom synthesis range widely depending on the scope of the vendorβcustomer agreement. As an example, the agreement can be either restricted to the conversion on a cost-plus basis of a raw material supplied by the customer or it can cover the vendor's development of the technology processes required to effectively produce the end molecule expected by the customer.
It is therefore no surprise that, given this extreme fragmentation, the precise boundaries and size of the custom synthesis space are ill defined. Some traits clearly differentiate custom synthesis from other segments of the chemicals industry. These include:. Although it is often associated with fine chemicals and the life science industry, custom synthesis covers all segments of the chemical industry. Custom-synthesis agreements pertain to both large-volume commodity chemicals, supplied in hundreds or thousands of tons as well as to molecules produced at the microgram scale.
