The Situation

Dependent on a single supplier for diogesinin, a precursor to the API used in its developmental pharmaceuticals in China, Humanetics needed to diversify its supply and retained Tractus to conduct an Asia-wide search for alternative supply sources.

  • Humanetics Corporation is a privately held, clinical stage pharmaceutical company located in the Minneapolis, Minnesota metropolitan area that develops commercial products to enhance human health and well-being.
  • Humanetics develops radiation modulator pharmaceuticals and has progressed this program into multiple clinical uses with a primary focus on improving treatment of solid tumor cancers.
  • One of the key precursors to the development of the active pharmaceutical ingredient in its developmental drug is diogesinin, a chemical found in certain species of wild yams throughout Asia.
  • With the prices of APIs increasing in China, the company needed an alternative supplier of diogesinin that could meet its high volume demand at competitive prices.
  • Tractus was engaged to undertake an Asia-wide search for a source of specific varieties of wild Asian yams that could be harvested in commercial quantities and with sufficient concentrations of diogesinin.

The Project

We applied our systematic, objective research-based screening methodology for site location assignments to identify which of 8 countries in Asia had the appropriate yam varieties available in commercial quantities.

  • Tractus undertook research to identify suppliers of diogesinin, a biologic-derived plant hormone used as an active pharmaceutical ingredient (API) in one of Humanetics pharmaceuticals.
  • The assignment required us to identify and interview cultivators and processors of the wild yams that are the source of the diogesinin compound in 8 countries throughout Asia.
  • The search area included Vietnam which has similar geography and climate conditions as China; India and Thailand, where there are strong herbal and general medicine pharmaceutical industries; Laos, Cambodia and Philippines which are close in proximity to the aforementioned countries and are considered potential markets.
  • The research revealed that suppliers of diogesinin in India had discovered alternative sources of commercial quantities of diogesinin in addition to the diascorea yams from which it is typically derived.
  • After India was short-listed as having the highest potential as an alternative supply source for diogesinin, we organized and managed a familiarization trip to India for the company’s managing director to meet with leading companies producing diogesinin and initiated discussions with these companies about partnering with Humanetics.

The Solution

An alternative supplier in India saved Humanetics about US$2 million annually in sourcing costs.

  • Tractus arranged visits for the American client and their Chinese partner to the Indian facilities and was instrumental in reaching a cooperative agreement.
  • After tough negotiations, a contract was signed between the three parties to upgrade the facility, secure the raw materials, and incorporate the latest production flow and quality control mechanisms.
  • Since the financial situation of the Indian company was not very strong, Tractus advised their clients in structuring an agreement to secure a long-term supply with a minimum investment.
  • Due diligence by Tractus at the factory over a six-month period, verified contract execution assuring that the US client that the supplier had renovated the warehouse, upgraded the production facility and was complying with the terms of its supply contact.
  • The partnership with the Indian company reduced Humanetics’ total API cost by US$2 million annually.

The Evidence

“We are very pleased with Tractus. The price/result relationship has been excellent and Tractus has performed to and above our expectations”. John Dykstra. Chief Operating Officer at Humanetics