SOCIO-ECONOMIC ANALYSIS (SEA) - Europa

SOCIO-ECONOMIC ANALYSIS

Socio-Economic Analysis Use number: 1 Laboratoires Expanscience 1


(SEA)

Legal name of applicant(s): Laboratoires Expanscience

Submitted by: Laboratoires Expanscience

Substance: 1,2-dichloroethane (EDC) – CAS No. 107-06-2

Use title: Use as process and extracting solvent in fine chemical

processes

Use number: 1



CONTENTS

DECLARATION .......................................................................................................................................................... 5

1 SUMMARY OF SOCIO-ECONOMIC ANALYSIS .............................................................................................. 6

2 GENERAL INTRODUCTION – PRESENTATION OF EXPANSCIENCE ......................................................... 7

Presentation of the Company .......................................................................................................................... 7 2.1.1 Organization & products ..................................................................................................................... 7 2.1.2 International business .......................................................................................................................... 9

Focus on the production site ........................................................................................................................... 10

3 AIMS AND SCOPE OF SEA ................................................................................................................................. 13

Aims of SEA ................................................................................................................................................... 13

Geographical scope ......................................................................................................................................... 13

Scope related to timelines ............................................................................................................................... 13

Scope related to impacts ................................................................................................................................. 14

Stakeholders included in the impact assessment ............................................................................................ 14

4 DEFINITION OF “APPLIED FOR USE” SCENARIO ......................................................................................... 16

Presentation of Piascledine® 300 ................................................................................................................... 16

Piascledine® 300 production process description – From raw materials to patients ...................................... 17

Employment data ............................................................................................................................................ 18

Supply chain analysis ..................................................................................................................................... 19

Distribution network ....................................................................................................................................... 20

Rheumatology sales and profit forecasts (2015 – 2029) ................................................................................. 21

5 DEFINITION OF THE “NON-USE” SCENARIO AND THE “SHORT AUTHORISATION” VARIANT ........ 23

“Non-use” scenario: Closing of the Rheumatology Business ......................................................................... 24

“Short Authorisation” scenario: Relocation of Avocado and Soybean oil unsaponifiables production outside

E.U. ................................................................................................................................................................. 25

6 INFORMATION ON THE LENGTH OF THE REVIEW PERIOD ...................................................................... 27

7 ANALYSIS OF IMPACTS – “APPLIED FOR USE” SCENARIO – HEALTH AND ENVIRONMENTAL

IMPACTS ..................................................................................................................................................................... 28

Hazard profile of EDC .................................................................................................................................... 28

Exposed populations ....................................................................................................................................... 31 7.2.1 Worker population ............................................................................................................................... 31



7.2.2 General population living nearby the Épernon production site ........................................................... 31

Human health impacts on Expanscience’s workforce .................................................................................... 32 7.3.1 Exposure scenario................................................................................................................................ 32 7.3.2 Exposure levels ................................................................................................................................... 33 7.3.3 Calculation of excess cancer cases ...................................................................................................... 34 7.3.4 Distinction between potential number of additional fatal and non-fatal cancers among Expanscience’s

workforce ............................................................................................................................................ 36 7.3.5 Economic valuation of additional fatal and non-fatal cancer cases among Expanscience’s workforce 37

Human health impacts on general population ................................................................................................. 41 7.4.1 Exposure levels ................................................................................................................................... 41 7.4.2 Calculation of excess cancer cases ...................................................................................................... 42 7.4.3 Economic valuation of additional fatal and non-fatal cancer cases among the general population ..... 43

Environmental impacts ................................................................................................................................... 44 7.5.1 Monitoring and emission of EDC to the environment ......................................................................... 44 7.5.2 Aquatic releases ................................................................................................................................... 44 7.5.3 Atmospheric releases ........................................................................................................................... 46

Conclusion on health and environmental impacts .......................................................................................... 47

8 ANALYSIS OF IMPACTS – “NON-USE” SCENARIO: CLOSING OF THE WHOLE RHEUMATOLOGY

BUSINESS ................................................................................................................................................................... 48

Economic impacts of the closing of the Rheumatology business ................................................................... 48 8.1.1 Impact on Sales ................................................................................................................................... 49 8.1.2 Impact on profitability ......................................................................................................................... 50

Social impacts ................................................................................................................................................. 52 8.2.1 Impact on Expanscience’s workforce .................................................................................................. 52 8.2.2 Impact on suppliers ............................................................................................................................. 52 8.2.3 Impact on distributors .......................................................................................................................... 52

Wider economic impacts ................................................................................................................................ 53

Conclusions of the “Non-Use” Scenario (i.e. the closing of the Rheumatology business) ............................. 54

9 ANALYSIS OF IMPACTS – “SHORT AUTHORISATION” VARIANT: RELOCATION OF AVOCADO AND

SOYBEAN UNSAPONIFIABLES PRODUCTION OUTSIDE E.U. ......................................................................... 55

Economic impacts ........................................................................................................................................... 55 9.1.1 One-off costs ....................................................................................................................................... 55 9.1.2 Operating costs .................................................................................................................................... 56

Social impacts ................................................................................................................................................. 58 9.2.1 Impact on Expanscience’s workforce .................................................................................................. 58 9.2.2 Impact on third parties (suppliers & distributors) ................................................................................ 59

Wider economic impacts ................................................................................................................................ 59

Conclusions of the “Short Authorisation” variant (i.e. the relocation of the Avocado and Soybean

unsaponifiables production outside E.U.) ....................................................................................................... 60

10 COMBINED ASSESSMENT OF IMPACTS ......................................................................................................... 61



Comparison of impacts ................................................................................................................................... 61

Uncertainty analysis ....................................................................................................................................... 62 10.2.1 Health Impacts ..................................................................................................................................... 62 10.2.2 Economic Impacts ............................................................................................................................... 62

11 CONCLUSIONS ..................................................................................................................................................... 63

ANNEX – JUSTIFICATIONS FOR CONFIDENTIALITY CLAIMS ........................................................................ 64

APPENDIXES .............................................................................................................................................................. 65

APPENDIX A – Detailed process description ........................................................................................................ 65 A.1. Process description: used as a process and extracting solvent in fine chemical processes (i.e.

pharmaceutical) ................................................................................................................................... 65 A.2. Transport ................................................................................................................................................. 68 A.3. Storage .................................................................................................................................................... 69 A.4. Recycling ................................................................................................................................................ 70

APPENDIX B – Other pictures of the existing facility ........................................................................................... 71

APPENDIX C – Details on past investments on the new HEQ building ................................................................ 72

APPENDIX D – Details on hypotheses for Piascledine® 300 sales forecasts ........................................................ 72

APPENDIX E – Overview of Expanscience’s substitution strategy ....................................................................... 73

APPENDIX F – Details on labour costs outside E.U. ............................................................................................. 74

APPENDIX G – Measures taken to limit workers’ exposure to EDC .................................................................... 75

APPENDIX H ......................................................................................................................................................... 76 H.1 Methyl iso-butyl ketone (MIBK, CAS 108-10-1) .................................................................................... 76 H.2 Human Health .......................................................................................................................................... 77 H.3 Ecotoxicity ............................................................................................................................................... 81



DECLARATION

We, Laboratoires Expanscience, request that the information blanked out in the “public version” of

the Socio-Economic Analysis is not disclosed. We hereby declare that, to the best of our knowledge

as of today (July 2nd, 2015) the information is not publicly available, and in accordance with the due

measures of protection that we have implemented, a member of the public should not be able to

obtain access to this information without our consent or that of the third party whose commercial

interests are at stake.

Signature: Date, Place: July 2nd, 2015, Courbevoie

JP. Berthomé, CEO of Expanscience



1 SUMMARY OF SOCIO-ECONOMIC ANALYSIS

Expanscience is a laboratory active in different complementary fields, ranging from osteoarthritis

treatment to skin care.

In particular, Expanscience launched in 1992 Piascledine® 300 in its Rheumatology business, a

drug to treat osteoarthritis which currently accounts for ca. % of Expanscience turnover and is

commercialized in 42 countries (see section 2.1 of the SEA). Piascledine® 300 is produced in

Expanscience’s only manufacturing facility in Épernon, France, and involves different steps of

production. One key step in this process requires the use of EDC as a major extraction solvent in a

liquid/liquid extraction unit operation. The company has already invested more than 23 M€ in 2010-

2012 to build a modern production tool including a HEQ building limiting risks for environment

and for workers linked to the use of EDC.

As mentioned in the Analysis of Alternatives (AoA), one substance appears as a potential candidate

to replace EDC but the technical and economic feasibility of this substitution are critical points

where some uncertainties remain to be lifted (see section 5.2 of the AoA).

In order to comply with the new REACH regulation and to substitute EDC, Expanscience requests a

12-year authorisation (“Applied for Use” scenario) after the sunset date (November 22nd, 2017) to

be able to use EDC in the production process of Piascledine® 300 until 2029, when the substitution

candidate will be fully qualified and when the new process should be fully deployed (see section 5.7

of the AoA). Substituting EDC will mean investing an additional ca. 51 M€ in the next few years.

Consequently the analysis of the socio-economic impacts was led for the 12-years period running

from 2018 to 2029. We considered a “Non-Use” scenario and a “Short Authorisation” variant,

which we compared to the “Applied for Use” scenario.

In the “Non-Use” scenario, Expanscience would have to close its Rheumatology business because

it would not be able to produce nor to sell Piascledine® 300 for 12 years in all the markets where

the product is currently sold. Piascledine® 300 indeed accounts for nearly % of Expanscience

Rheumatology sales (2014). This scenario would impact all Expanscience employees dedicated to

the Rheumatology business, as well as suppliers’. Therefore, we estimate that the closing of the

Rheumatology unit would mean suppressing 282 jobs at Expanscience and 27 at suppliers within

the European Union (plus a total of 120 workers outside EU). The NPV of EBIT losses for

Expanscience would be M€ over the 2018-2029 period. The scenario could possibly lead to the

bankruptcy of the whole Company, as the Rheumatology business generates roughly % of

Expanscience EBIT and 40% of its sales (see section 5.1 of the SEA).

The “Short Authorisation” variant has been considered in the case where Expanscience would

only be granted a 5-year authorisation. In that variant, Expanscience would have to relocate the

extraction step of the production (using EDC) in a country outside E.U. The 5-year authorisation

would allow for the set-up of a new site abroad and to obtain regulatory approvals while

maintaining the production in Épernon, France. In this variant, the social and economic impacts for

Expanscience and its suppliers would be limited to the extraction step representing a NPV of EBIT

losses of M€ over the 2018-2029 period (see section 5.2 of the SEA). The workforce reduction

would amount to 21 employees at Expanscience and 9 at suppliers within the European Union.

In parallel, we led a comprehensive cost analysis to monetize the health impact of additional cancer

development linked to the continued use of EDC after the sunset date. We demonstrated that, in the

“Non-Use” scenario, the socio-economic impact ( M€ over the 2018-2029 period) is about

M€ higher than the 0.0126 M€ of monetized benefits of avoiding potential additional cancer

cases over 12 years. In the “Short Authorisation” variant the socio-economic impact would be

M€ over the 2018-2029 period including the cost of additional cancer cases over 5 years.



2 GENERAL INTRODUCTION – PRESENTATION OF EXPANSCIENCE

Presentation of the Company

2.1.1 Organization & products

Founded in 1950, Expanscience is a French, independently-owned pharmaceutical and dermo-

cosmetics laboratory. In 2014, the Company generated a turnover of € 272 million, 45% of which

was through export, and employed 893 people (770 in France).

Expanscience is structured around 3 main business units (see Figure 1 hereafter):

a) Pharmaceuticals including Rheumatology and Dermatology

b) Dermo-cosmetics

c) Cosmetic Active Ingredients

Figure 1 – Expanscience main business units

In 2014, Rheumatology & Dermo-Cosmetics accounted for around 95.5% of Expanscience total

sales.



a) Pharmaceuticals including Rheumatology and Dermatology

Rheumatology (~40% of sales in 2014) is one of Expanscience key area of expertise.

Piascledine® 300 is Expanscience flagship brand in Rheumatology. Initially

a leading brand in France, it is today marketed in 42 countries, in particular

in Latin America and Asia. In 2014, Piascledine® 300 accounted for nearly

% of total Rheumatology sales.

Expanscience’s osteoarthritis product range also includes a number of other medicines, namely

Hyalgan®, Flexea®, Fixical®, Takadol® and Nabucox®.

In addition Expanscience’s dermatology portfolio includes the following products: Doxylis®,

Procuta®, Effizinc® and Finhair®.

b) Dermo-cosmetics

Dermo-Cosmetics is another core business of Expanscience (~56% of sales in 2014), with two

marketed brands: Mustela® and Noviderm®.

Mustela®

As one of the European leading brands for baby care and stretch-mark

treatment commercialized through pharmacy distribution networks,

Mustela® has supported parents and baby care professionals for more than

60 years. Mustela® is designed to meet the needs of babies, young mothers

and mothers-to-be.

Noviderm®

Noviderm® is a specialty dermatological product which has helped

teenagers and adults tackle skin problems for over 15 years. Innovation and

continuous improvement have made Noviderm® more pleasant and

effective, winning the trust and acclaim of users and healthcare

professionals.



c) Cosmetic Active Ingredients

Based on its expertise in lipid chemistry, molecular distillation and plant extraction, Expanscience

is a supplier of Cosmetic Active Ingredients to leading cosmetic brands in France and abroad. The

Company also produces Plant Extracts (plant oils, powders and butters) for other industry players.

2.1.2 International business

The Company has built up a solid international reputation as an innovator and as a specialist in skin

care and in the treatment of osteoarthritis. Expanscience products are sold in 97 countries, through

12 subsidiaries (Australia, Belgium, Brazil, France, Italy, Mexico, Poland, Portugal, Spain,

Switzerland, Turkey and USA), and through independent distributors in the other 85 countries.

In 2013, the International business accounted for ~45% of Expanscience revenues (see Figure 2

hereafter), and represents in the next years a major growth lever for the Company.

Figure 2 – Global turnover by geographical area (2013)

International (44.9%)



Focus on the production site

Expanscience has integrated the major part of its value chain – from research to production and

distribution. Ever since it was founded, Expanscience production facilities and R&D resources have

been based in Épernon, a small town of about 5,500 people in Eure-et-Loir, France.

The six activities that constitute Expanscience manufacturing facility are still located on the same

site in Épernon (see Figure 3 hereafter).

In 2013, nearly 57.8 million pharmaceutical and dermo-cosmetic products were manufactured in

Épernon, up from 56 million in 2012.

Figure 3 - Schematic view of Expanscience production facility in Épernon, France

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The Épernon facility encompasses the following activities:

R&D centre

Scientists from different backgrounds discover new active

ingredients and develop the innovative formulas of the future.

The safety, quality and efficacy division is responsible for

making sure products comply with regulatory and internal

requirements. There is one guiding principle: priority to

naturalness, safety and efficacy.

The R&D centre is located nearby the production site.

The production site itself is composed of 5 main units (see details below):

Naturally-sourced active ingredients production unit

This production unit ensures the industrial extraction and

production of the Active Pharmaceutical Ingredient (API) of

Piascledine® 300. Avocado and soybean unsaponifiables are

produced using an exclusive plant extraction process. This

production step uses EDC as a major extraction solvent in

a liquid/liquid extraction unit operation. This is the only

place in the whole plant where EDC is used.

As a part of its CSR (Corporate Social Responsibility) strategy, the Company invested more than

23 M€ in 2010-2012 to build a modern production tool, including a HEQ building limiting the

impact of production activities on people and on the environment (certification ISO 14001). Please

refer to Appendix C for more details on the investment costs.

In the same plant, but in a different facility, active ingredients are produced for other players in the

cosmetics industry.

Pharmaceutical production unit

This manufacturing facility produces the pharmaceutical

blisters and packs used for the packaging of

Piascledine® 300.

The production of Piascledine® 300 capsules (mixing, filling

and capping) is also performed within this unit.

In 2014, 337,500,000 capsules (22.5 million of boxes containing 15 caps each) of Piascledine® 300

were manufactured.

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Dermo-cosmetic production unit

This unit ensures the manufacturing of Mustela® and

Noviderm® dermo-cosmetic products.

Expanscience product range is very diverse and includes both

creams and liquids, representing 70 formulas altogether.

The packaging is performed in a separated unit (see activity

n°5 hereafter).

Dermo-cosmetic packing units

160,000 products (i.e. 32 tons of products) come out of eight

dermo-cosmetic packaging lines every day.

Quality and safety checks are carried out at every stage.

Warehousing and dispatching platform

Reception:

Every day, four trucks deliver 110 pallets to this platform.

Dispatching:

Six trucks leave every day, transporting 160 product pallets

to more than 70 countries.

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Socio-Economic Analysis Use number: 1 Expanscience 13

3 AIMS AND SCOPE OF SEA

Aims of SEA

Expanscience applies for a 12-year authorisation for the continued use of 1,2-dichloroethane

(EDC) after the sunset date (November 22nd, 2017) as defined in REACH Annex XIV.

The aim of this document is to assess and balance the overall socio-economic benefits of continuing

to produce Piascledine® 300 with EDC in comparison with the risks to human health and the

environment that would be associated with its continued use.

The Analysis of Alternatives (AoA) has shown that there may be a potential suitable substitute (i.e.

MIBK) for the use of EDC as an extraction solvent in the manufacturing of avocado and soybean

oil unsaponifiables (see section 5.6 of the AoA). Some critical technical and economic questions

remain to be answered about MIBK, which are currently investigated by Expanscience. In the

meantime, Expanscience is currently following a substitution plan that will end in 2029, should

every critical point be addressed (see section 5.7 of the AoA).

Geographical scope

EDC is used during the extraction step of the Active Pharmaceutical Ingredient (API)

manufacturing process of Piascledine® 300 in Épernon, France. The Company headquarters are

located in Courbevoie, France. If most of Expanscience employees are therefore located in France,

Piascledine® 300 is marketed all around the world, with specific marketing authorisations for each

country. The Company also deals with key suppliers in South Africa, Mexico and Peru. The

geographical scope of the SEA impact assessment is therefore global.

Scope related to timelines

The substitution plan detailed in the Analysis of Alternatives presents an estimated end date of the

substitution project in 2029 (see section 5.7 of the AoA). The Company is therefore requesting a 12-

year authorisation (after the sunset date on November 22nd, 2017) to complete the overall

substitution project. As a consequence, the period of time covered by the impact assessment ranges

from 2018 to 2029.



Scope related to impacts

This socio-economic analysis will assess the following categories of impacts: economic, social,

wider economic, and health & environmental impacts.

Stakeholders included in the impact assessment

Expanscience has many suppliers, subcontractors and distributors all over the world, but not all of

them are affected by the scenarios defined in this SEA (see sections 5.1 and 5.2).

Throughout this socio-economic analysis we have considered the impacts on the following

stakeholders only:

- Departments of Expanscience involved in the Rheumatology activity (production, sales,

etc.)

- Suppliers, subcontractors and distributors who do more than 5% of their turnover with

the Expanscience Rheumatology activity, and/or have one or more employees dedicated to

the Expanscience Rheumatology activity

Figure 4 below shows key stakeholders of the Expanscience ecosystem taken into account in the

impact assessment.

Figure 4 - Mapping of stakeholders included in the impact assessment



Piascledine® 300 production process description – From raw materials to patients

Expanscience is using EDC as a major extraction solvent in a liquid/liquid extraction unit

operation. The active substance (Active Pharmaceutical Ingredient) of our drug corresponds to a

blend of highly purified avocado and soybean oil unsaponifiable compounds. These families of

molecules obtained through extraction are purified separately from the two independent sources of

oil: avocado oil on one hand and soybean oil on the other hand. To reach adequate purity of

unsaponifiables, a specific proprietary and highly selective extraction and purification process has

been designed. This process involves a key liquid/liquid extraction step using EDC.

The overall Active Pharmaceutical Ingredient (API) manufacturing and distribution process is

described in Figure 5 hereafter.

Figure 5 – Piascledine® 300 – From raw materials to patients

Please refer to Appendix A of the present document for more details on the extraction process, and

also to section 2.1 of the Analysis of Alternatives (AoA) document.



5 DEFINITION OF THE “NON-USE” SCENARIO AND THE “SHORT

AUTHORISATION” VARIANT

The purpose of this section is to present what would happen if Expanscience had to stop using EDC

after 2017, or would not be granted a 12-year authorisation. The most likely scenario is that

Expanscience would no longer be able to extract the unsaponifiables required in the manufacturing

of Piascledine® 300. As described in the Analysis of Alternatives, Expanscience uses EDC as an

extraction solvent during a key step of the overall manufacturing process of Piascledine® 300

(please refer to section 4.2 or to Appendix A for more details on the extraction process).

The substitution of EDC with a new extraction solvent will not be presented in this document. This

project is indeed described in detail in section 5 of the Analysis of Alternatives (AoA) document. A

global substitution plan has been designed with an end date in late 2029. This substitution scenario

therefore requires a 12-year authorisation. Please refer to the AoA document for more details.

In this context, two scenarios have been considered:

“Non-use” scenario: Closing of the Rheumatology business (potentially leading to the

bankruptcy of Expanscience)

“Short Authorisation” variant: Relocation of the Active Pharmaceutical Ingredient

(API) production in a country outside E.U. This variant would imply that Expanscience is

granted a 5-year authorisation to have time to set up a new site abroad (see section 5.2)

Figure 9 - Illustration of the two scenarios analysed in this document



“Non-use” scenario: Closing of the Rheumatology Business

If no authorisation is granted to Expanscience for the use of EDC, the only potential “Non-Use”

scenario is that the Company will shut down the Rheumatology part of its production site in

Épernon, France.

This scenario would therefore result in the closing of Expanscience Rheumatology business.

The Company would maintain its activity in dermo-cosmetics but all functions and operations

related to Rheumatology would be closed and corresponding buildings destroyed. The destruction

of buildings and equipment would indeed be required to write-off the corresponding assets in the

Company’s books.

Figure 10 – Buildings to be dismantled in the Épernon facility in case of shut-down of the

Rheumatology business

Further details about impacts are discussed in section 8.

Destruction of all

Rheumatology-related

facilities



“Short Authorisation” scenario: Relocation of Avocado and Soybean oil

unsaponifiables production outside E.U.

The other variant scenario considered in this impact assessment is the potential relocation of the

extraction step (using EDC) in a country outside E.U. to be able to continue to use EDC. EDC is

indeed involved in a crucial but limited step of the overall Active Pharmaceutical Ingredient (API)

production process. We have therefore only considered the relocation of the step involving EDC.

All other manufacturing steps would remain in Épernon, France (see Figure 11 hereafter).

Figure 11 - Step of the Active Pharmaceutical Ingredient (API) manufacturing process of

Piascledine® 300 to be relocated outside E.U.

Based on its previous experience with the construction of its new HEQ building (see details in

section 2.2), Expanscience has estimated that at least four years would be required to implement a

new production site abroad. Assuming a starting date of the construction work in 2017, the new

production site would not be fully operational before 2021.

In addition, Expanscience would have to file all the necessary variations requests to local healthcare

authorities to validate that the Active Pharmaceutical Ingredient (API) production outside E.U. does

not change the characteristics of the final drug. These filings would have to be done independently

in 42 different countries having independent health authorities. However, this variation process

would be less complex and time-consuming than for the substitution of EDC with MIBK (see

section 5.7 of the AoA). We have estimated that about 2 years on average (15-39 months) would be

required to obtain the approvals of our regulatory dossier amendment before the 42 local Health

Authorities (see Figure 12 for more details).



6 INFORMATION ON THE LENGTH OF THE REVIEW PERIOD

Expanscience is applying for an authorisation to use EDC for 12 years as from the sunset date

(November 22nd, 2017).

This period is justified by the time needed for the necessary R&D, industrial and regulatory work to

substitute EDC with MIBK as an extraction solvent. At this stage of investigation, the technical and

regulatory suitability of MIBK is not fully proven. The first results are encouraging but lab trials

revealed critical points that still need to be fixed:

- Low selectivity of MIBK regarding avocado oil unsaponifiables (impact on quality and

yield)

- MIBK and ethanol recyclability

- Stability of MIBK in alkaline conditions

Time is therefore required to fully validate its compatibility with all acceptance criteria and then

implement it at industrial scale while modifying our pharmaceutical dossier.

The detailed timeframe of the substitution plan is discussed in sections 5.3 and 5.7 of the Analysis

of Alternatives (AoA). Please refer to this document or to Appendix E for more details.



7 ANALYSIS OF IMPACTS – “APPLIED FOR USE” SCENARIO – HEALTH

AND ENVIRONMENTAL IMPACTS

In this section we will monetize the potential human health and environmental damages

caused by the use of EDC.

Hazard profile of EDC

EDC is classified as Carc. 1B (H350) and was proposed for inclusion in REACH Annex XIV

for this reason. Similarly, IARC categorised EDC as “possibly carcinogenic to humans

(Group 2B)” (IARC, 1999).

In general, the epidemiological evidence for carcinogenic activity in humans is considered

inadequate. Therefore, the classification and risk quantifications (see below) rely on

experimental data from rodent carcinogenicity studies. Three reliable long-term

carcinogenicity studies are available:

The chronic gavage study of NCI (1978) in mice and rats

Dermal study of Van Duuren et al. (1979) in ICR/Ha Swiss mice

The chronic inhalation study of Nagano et al. (2006) in mice and rats.

According to the RAC paper on the exposure-risk relationship of EDC, mammary gland

tumours as well as subcutaneous fibromas were consistently found in both species via the

different exposure routes applied. Furthermore, Nagano et al. (2006) detected liver and lung

tumours in mice and further tumours at several other locations. In the NCI (1978) study,

lymphoma, liver tumours, uterine cancer, and benign lung tumours were found in mice, and

hemangiosarcoma1 and forestomach tumours in rats. Van Duuren et al. (1979) detected

benign lung papillomas in ICR/Ha Swiss mice dermally exposed to EDC.

The toxicological evidence suggests that the carcinogenicity of EDC is dependent on

metabolic activation into genotoxic intermediates, by catalysis via cytochrome P450 and

glutathione S-transferase enzymes or conjugation with glutathione. The mutation frequency

of EDC in human cell lines in vitro has been correlated with glutathione S-transferase

activity, which is believed to be the most significant pathway. Formation of DNA adducts

with S-(2-chloroethyl) glutathione in B6C3F1 mice has corroborated this hypothesis.

IARC (1999) concluded that EDC induces gene mutation, micronuclei and unscheduled DNA

synthesis in mammalian cells in vitro. However, a clear picture for the mutagenic potential of

EDC is lacking, and a GLP-compliant in vivo OECD TG 489 Comet assay conducted by Dow

Chemical Company does not support a genotoxic/mutagenic mode of action for EDC. In lieu

of a historical database of demonstrated proficiency, the RAC excluded the contradictory

results of the Comet assay from the evaluation of EDC.

1 Hemangiosarcoma is a rapidly growing, highly invasive sarcoma arising from the lining of blood vessels.



Exposed populations

We will consider the impact of the use of EDC over two main groups of people:

1) Expanscience’s workers

2) The general population living nearby the facility (population of Épernon)

7.2.1 Worker population

EDC is only used at Expanscience, Épernon site. Therefore, only workers operating in this

plant might be exposed to the substances. However, only a few production steps may expose

workers to EDC. In total, the worker population potentially exposed to EDC is estimated at

49 employees. Please refer to Table 9 for more information on the number of workers

exposed for each exposure scenario.

7.2.2 General population living nearby the Épernon production site

In addition to Expanscience’s workforce, we might also consider the impact on general

population. Indeed, low levels of fugitive and vented EDC emissions from the production site

may expose inhabitants of Épernon and the general population around the site to a limited

potential additional cancer risk.

The village of Épernon where the production facility is located has a population of 5,451

inhabitants. As shown in Figure 13, the plant is located in a rural area with only a small

population surrounding the facility. As a conservative approach we have taken the total

population of Épernon even if the size of the village extends well beyond the 100m radius for

which inhalation daily dosage has been estimated (see section 7.4).

Figure 13: Aerial view of Épernon (source: Google Maps)

Exposure of patients is considered as non-relevant, as there are no consumer-related uses of

EDC and no discernible concentration of EDC is contained within the final Piascledine® 300

product (the concentration of EDC, if present at all, is under 5ppm as per the Marketing

Authorisation). This application for authorisation focuses on the industrial use of EDC as an

extraction solvent. Patients will therefore not be addressed in the calculation of the number of

potential additional cancer cases.



Human health impacts on Expanscience’s workforce

7.3.1 Exposure scenario

Expanscience uses EDC in a closed batch process continuously, all year round (with only 3

weeks/year annual maintenance break). The process using EDC are taking place in closed

systems without direct handling of EDC by operators except for EDC sampling for quality

control, raw material unloading from road tankers (connecting/disconnecting flexible hoses)

and maintenance. In this SEA, we have considered 4 contributing scenarios (CS). Please refer

to the CSR document for more information on exposure scenarios:

CS1 – Production process, including storage, transfers, sampling, recycling,

waste transfers (PROC 2): this CS covers the complete operators shift working in

the plant production unit Building B2. The tasks done by operators are facility

supervision, control from the room panel control (most of the activity = 70%), visual

control routine on unit (1 or 2 per shift), EDC sampling for QC (1 per shift), final

product packaging (EDC < 5ppm in product). CS1 covers all tasks where EDC is used

or transferred in closed system equipment:

transfers from storage tank to first liquid/liquid extraction reactor

washing solvent reactor

falling film evaporator

transfers to skid unit

transfers from skid unit to recovered EDC storage tanks

There is one task during the entire shift that involves direct handling of EDC, which is

EDC sampling for quality control (QC)

CS2 – Receipt of EDC from road tank (PROC 8b): this CS covers the specific

operation of road tank EDC unloading. This operation is done once a year. Only

unloading team operators are involved in this operation

CS3 – Non-routine maintenance and cleaning (PROC 8b): this CS covers the

specific operation of small repairs in case of equipment malfunction (e.g. a pump)

CS4 – General maintenance and cleaning (PROC 8b): this CS covers the specific

operation of maintenance and cleaning of general equipment (e.g. reactors, vessels).

Regarding EDC, only the exposure to the substance itself is relevant. Other reaction products

originating from the presence of EDC are not taken into account. The most relevant route of

exposure for EDC is through inhalation. Oral uptake for workers is not relevant in general

and thus was not assessed. Dermal exposure via direct contact of liquid EDC has been taken

into account for workers. However, this risk is very limited due to applied risk management

measures like chemically resistant gloves or masks. Please refer to Appendix G for more

details on the measures taken by Expanscience to limit workers’ exposure to EDC.



7.3.3 Calculation of excess cancer cases

Under the “Applied for Use” Scenario, the use of EDC in the production of Piascledine® 300

will continue after the 2017 sunset date for a total of 12 years (5 years in the “Short

Authorisation” variant scenario). Using the information presented in Table 7 (and the analysis

provided in the CSR document), the excess risk of cancer can be calculated using the ERF

(exposure response function, cf. CSR table 3 and 4) published by RAC. Some key

assumptions are made here:

Inhalation is the key route of exposure. As can be seen from the contributing scenarios

developed in the CSR and summarized in section 7.3.1, workers wear appropriate

Personal Protection Equipment (PPE) with a 95% efficiency value in those scenarios

where exposure of the skin is expected. Taking account the 50% dermal absorption

value for EDC as well as the low frequency of some of the contributing exposure

scenarios, it can safely be assumed that this exposure route is of negligible concern

when compared to inhalation exposure; nevertheless, as a conservative approach,

dermal exposure is considered in this comprehensive evaluation of worker health

impacts

The RAC utilized the Nagano et al. (2006) study to calculate the exposure-response

relationship for cancer incidence, which focused primarily on mammary gland cancer

as the most sensitive endpoint

However, it was accepted that systemic EDC exposure in humans may manifest itself

as alternative cancer endpoints. Indeed the RAC paper on the exposure-response

function, notes, “Therefore, the choice of mammary tumours for this risk assessment

is based rather on genotoxic potential and the best dose-response rather than its

relevance to a specific human cancer”. It is worth noting that beyond breast cancer,

hemangiosarcomas and forestomach tumours in rats, in addition to lung, reproductive

and liver tumours in the mice model have been reported in the relevant scientific

literature. Therefore, to err on the side of caution, a general approach utilizing collated

cancer mortality statistics has been used in this analysis (breast cancer is associated

with a relatively low mortality, compared to other forms of cancer). It is also the case

that breast cancer morbidity and mortality data tend to focus on females, while the

exposed worker population in Épernon is predominantly male

The excess risk estimates for workers exposed to EDC can be calculated as follow: RAC

ERR = RAC ERF*Exposure. It means, for inhalation and dermal route, respectively

RAC ERR (inhalation) = 6.0×10-7 per µg/m3 x concentration [µg/m3]

RAC ERR (dermal) = 2.1×10-6 per µg/kg bw/day x concentration

[µg/kg bw/day]

These RAC ERFs are computed on a basis of 40 years. In order to calculate the number of

additional cancer cases per authorisation period (5 and 12 years) it was necessary to weigh

the function by the relevant period. The following table presents the above dose-response

functions (the ERF) in terms of assumed assessment period of 1 year.



7.3.5 Economic valuation of additional fatal and non-fatal cancer cases among

Expanscience’s workforce

The aim of this section is to assess the economic benefits of avoiding the possible excess

cancer cases that would be associated with the use of EDC over additional periods of 5 and

12 years in the manufacturing of Piascledine® 300.

In addition to the human toll of cancer, its financial cost is also to be taken into account. The

economic valuation of the total health impacts takes into account two important welfare

components, namely the costs associated with Mortality and Morbidity:

• Mortality is the term used for the number of people who died within a population

It comprises the lost earnings after premature death.

• Morbidity refers to the state of being diseased or unhealthy within a population.

It comprises both the costs associated with individuals taking sickness leave for a

defined period of time (temporary absence), and the costs of individuals being

declared incapacitated or disabled because of cancer (permanent absence).

7.3.5.1 Reference values used to monetize chemicals-related Mortality and Morbidity

a) Reference values used to monetize chemicals-related Mortality

For fatal cancers, there are alternative ways of estimating a monetary value. In this SEA, we

have applied a value of a statistical life (VOSL). VOSL is the aggregation of individuals'

willingness to pay for fatal risk reduction and therefore the economic value to society to

reduce the statistical incidence of premature death in the population by one. This approach

offers the advantage to be directly applicable to value the number of additional cancer cases.

Other methods would have required much more detailed data/assumption on when the worker

might get cancer and how many years they would live with the cancer before premature

death.



8 ANALYSIS OF IMPACTS – “NON-USE” SCENARIO: CLOSING OF THE

WHOLE RHEUMATOLOGY BUSINESS

Economic impacts of the closing of the Rheumatology business

This section estimates the economic impacts over the 2018-2029 period of the closing of the

Rheumatology business of Expanscience.

We have considered two dimensions of costs:

1) One-off costs correspond to non-recurring charges that will only occur once and are

therefore considered as extraordinary items. For example, one-off costs include the

following:

Severance costs associated with workforce reduction

Asset write-offs following the destruction of buildings or equipment

Local workforce training costs in the scenario of relocation

2) Operating costs are recurring costs related to business operations. These include production

costs but also all costs not directly associated with production such as wages, employee

benefits and pension contributions, transportation and travel, amortization and depreciation,

rent, maintenance, …



Social impacts

8.2.1 Impact on Expanscience’s workforce

As mentioned in section 4.3, Expanscience has identified 332 employees who would be affected by

the closing of its Rheumatology activity (please refer to Table 3 in section 4.3 for more details on

impacted employees).

Based on an average severance package of 80 k€ / employee, the total financial burden for lay-offs

would represent ca. 27 M€ for Expanscience. This provision would represent a real threat for the

future of the Company.

8.2.2 Impact on suppliers

A closing scenario would impact all the players of the Rheumatology supply chain (suppliers and

subcontractors). Expanscience has identified 97 employees who would be indirectly affected by the

closing of its Rheumatology activity (please refer to Table 4 in section 4.4 for more details on

impacted suppliers).

As described in section 4.4, the three avocado oil suppliers of Expanscience have designed specific

patented production processes to comply with the Company’s expectations in terms of oil quality.

The avocado oils obtained through their specific processes cannot be sold to other clients even in

the pharmaceutical industry since these processes are patented by Expanscience.

A closing scenario of Expanscience Rheumatology business would therefore result in the

bankruptcy of its avocado oil suppliers (70 job losses outside E.U.).

8.2.3 Impact on distributors

The impact on distributors in France (large pharmaceutical wholesalers and pharmacies) and in the

rest of the world (large pharmaceutical wholesalers) would be low as their activities with

Expanscience represent less than 5% of their total turnover.

Still, we did not take into account in our analysis the potential legal risks linked to the inability for

Expanscience to fulfil its contractual obligations to supply the product to its distributors.



Wider economic impacts

In this section, we will evaluate the wider economic impacts (i.e. impacts that have macro-

economic implications) to assess the full implications of the closing of Expanscience Rheumatology

business.

We have identified that the closing of these activities would result in serious tax revenues losses

for the E.U. and the French government.

Expanscience is paying 2 main types of taxes in the E.U. and most of its profits come from its

Rheumatology business. The discontinuation of Expanscience Rheumatology activities would

mechanically result in a loss of tax revenues for the E.U.

Based on the taxes paid by the Company in 2014, we have assumed these proportions would remain

constant over the 2014-2029 period for the operating income tax and the added value tax, but that

the pharmaceutical tax would not be paid anymore:

- Tax on operating income: % of Rheumatology EBIT

- Tax on added value: % of Rheumatology sales (weighed average of French

and international values)

We have estimated these annual losses in Figure 16 hereafter over the 2018-2029 period.

Figure 16 - Taxes paid by Expanscience for its Rheumatology business

The Net Present Value (NPV) of the losses in tax revenues for the period 2018 – 2029 amounts to:

- NPV of tax losses for E.U. = ca. M€



In addition to the taxes directly paid by Expanscience, we should also consider all the taxes paid by

its suppliers and distributors. This amount is difficult to estimate and was therefore not quantified in

this SEA. The current estimates are therefore under-estimating the overall tax impact of the “Non-

Use” Scenario.

Conclusions of the “Non-Use” Scenario (i.e. the closing of the Rheumatology business)

Given the limited number of workers exposed to EDC in the “Apply for Use” Scenario, especially

when taken in combination with the low risk of contracting a cancer, the estimated economic

burden of the possible excess cancer cases (~12.6 k€) would be low. Indeed, the disruption of the

operations of Rheumatology will result in a significant reduction of the Company’s workforce (332

job losses) and of its suppliers’ (97 job losses; see Figure 17 hereafter).

Figure 17 – Comparison of impacts of a continued use of EDC during 12 years vs. the closing of

Expanscience Rheumatology business

Expanscience top management has also expressed serious concerns regarding the ability of

Expanscience to support such a heavy financial burden. Indeed, the closing of the Rheumatology

business could lead to a worst case scenario that would be the bankruptcy of the whole Company.

The social impacts would be significant for both Expanscience employees and third parties (sub-

contractors, suppliers, and the town of Épernon). We have estimated that the bankruptcy of

Expanscience would result in about 1,000 job losses (considering 893 employees for Expanscience

and at least 97 employees for its suppliers).



9 ANALYSIS OF IMPACTS – “SHORT AUTHORISATION” VARIANT:

RELOCATION OF AVOCADO AND SOYBEAN UNSAPONIFIABLES

PRODUCTION OUTSIDE E.U.

Economic impacts

In this variant, we consider the relocation of the extraction step (using EDC) of the API

manufacturing process to a country outside the E.U. We have assumed a 5-year authorisation for

Expanscience to use EDC to make that variant scenario realistic. This period would allow

Expanscience to achieve the construction of the new site abroad and obtain approvals of our

regulatory amendment while maintaining production in Épernon, France. Sales would therefore not

be impacted by the relocation.

As for Scenario 1, we have considered two dimensions of costs:

- One-off costs

- Operating costs

9.1.1 One-off costs

The Company will have to support the following one-off costs:

- Destruction of the building where the extraction step is performed in Épernon, France:

This cost is estimated at 3 M€ and will be supported in 2023 when the extraction step would

be closed in Épernon, France

- Assets write-offs: Write-off of all assets related to the extraction step of the Épernon facility

(building, equipment and other assets) – These costs would also be supported in 2023 when

the extraction step would be closed in Épernon, France

– Net book value (as of end of 2022) = ca. 8 M€

- Severance costs: 21 employees concerned with an average severance package of 80k€ /

employees – These costs would be supported in 2023 when the extraction step would be

closed in Épernon, France – Total costs = 1.7 M€

- Training costs: development and training of local workforce by Expanscience staff in

Épernon – 100 k€ / year in 2021 and 2022 representing a total cost of 200 k€ for the

Company

These extraordinary items represent one-off charge of 12.9 M€ for the Company.

In addition to these one-off costs, Expanscience will also have to support a 26 M€ expense

corresponding the different investments in the new facility (i.e. purchase of land, buildings,

equipment). This investment would be amortized over 15 years and is therefore included in the

Depreciation and Amortization (D&A) forecasted in the next section (see Table 26).



Conclusions of the “Short Authorisation” variant (i.e. the relocation of the Avocado and

Soybean unsaponifiables production outside E.U.)

In the “Short Authorisation” variant, the cumulated EBIT loss would be M€ over the 2018-2029

period.

The social impact for Expanscience employees and its suppliers would be limited to employees

working on the extraction step. Indeed, the relocation of the extraction step abroad would result in a

reduction of the Company’s workforce (21 job losses) and 9 job losses for its suppliers (see Figure

19 hereafter). In parallel, 40 new functions would be created to run the new facility abroad.

Figure 19 – Impacts of the “Short Authorisation” Variant

This variant scenario is not the preferred option of Expanscience top management. The

Company is committed to maintaining all its operations in Épernon, France when possible. In

this context, Expanscience has designed a global substitution plan to produce Piascledine®

300 through a new process with an alternative solvent (MIBK) and sell it in all the countries

where the product is currently sold by 2029 (please refer to section 5.7 of the AoA document

for more details).



10 COMBINED ASSESSMENT OF IMPACTS

Comparison of impacts

The previous sections have highlighted the main costs and benefits of the «Non-Use» scenario (i.e.

the closing of the Rheumatology business) and the “Short Authorisation” variant (i.e. the relocation

of the API production in a country outside E.U). These impacts vs. a continued use of EDC are

summarized in Figure 20, and the impacts of the “short authorisation” variant are summarized in

Figure 21 hereafter.

Figure 20 – Comparison of impacts of the continued use of EDC vs. the “Non-Use” scenario

Figure 21 – Impacts of the “Short Authorisation” variant



Uncertainty analysis

10.2.1 Health Impacts

This section describes the key sources of uncertainty that can be identified in the above analysis,

with a particular focus on those that might have an impact on the final outcome of the SEA.

RAC’s paper on the exposure-risk relationship, breast cancer was the most sensitive endpoint in the

rat study used to calculate the human exposure-risk estimate. However, as exposure is systemic, it is

possible that breast cancer would not be the endpoint observed in exposed individuals. Furthermore,

use of breast cancer as an endpoint will tend to lower the mortality risks as there is a high level of

survivorship. Whether or not breast cancer is a potential risk to men, is linked to the aforementioned

point. The applicant’s workforce primarily comprises male workers; to address this complexity, this

SEA adopts a more general approach, utilising overall cancer risk with overall mortality and

morbidity statistics. Clearly, this approach is more conservative than considering breast cancer

alone, as the latter has a high survival rate (ca. 75%), while other cancers will have a much lower

survival rate. The human health impact costs could thus be overly conservative.

10.2.2 Economic Impacts

Economic uncertainties are linked to the hypotheses taken in the “Non-Use” scenario and the “Short

Authorisation” variant.

In the “Non-Use” scenario, uncertainties come from the estimation of Rheumatology sales and more

specifically of Piascledine® 300 sales. We adopted a conservative approach by taking sales

projection below the current actual trend. As Piascledine® 300 currently accounts for nearly %

of Rheumatology sales and that Rheumatology generates % of Expanscience EBIT, we

estimated that the end of production of Piascledine® 300 would lead to the closing of the whole

Rheumatology unit and potentially to the bankruptcy of Expanscience. The capacity of

Expanscience to bear the impact of the closing of its Rheumatology business is indeed hard to

evaluate.

In the “Short Authorisation” variant, we may have underestimated the relocation costs. Indeed, the

Company has not yet selected the country where it would implement its new production site.

Consequently, the investment required to build a new production site abroad were based on

Expanscience past experience with the construction of its new building in Épernon, France.

Assumptions on operating costs were based on countries benchmarks. In this context, operating

costs constitute the main source of uncertainties as these costs could significantly vary depending

on the new country of production. In this variant we have also made the assumption that the

structure of taxes would remain unchanged in the new country, which will probably not be true.



11 CONCLUSIONS

This Socio-Economic Analysis aims to quantify the relevant health, economic and social impacts of

the continued use of EDC after the sunset date of November 22nd, 2017 vs. the “Non-Use” and the

“Short Authorisation” variant scenarios (i.e. closing the whole Rheumatology business in France –

(“non-use”) and relocating of the extraction step involving EDC outside E.U. (“Short

Authorisation”)).

From the human health perspective, the excess cancer risk associated with the continued use of

EDC after the sunset date has been monetized on the basis of three main cost components: direct

costs of treating patients, productivity losses and hidden costs (health insurance premiums,

nonmedical expenses, informal care …). Given the limited number of workers exposed to EDC and

the safety measures put in place by Expanscience, the additional risks of contracting cancer

(“excess cancer risk in workers”) and the estimated economic burden of the potential additional

cancer cases associated with the continued use of EDC (of ~12.6 k€ over 12 years) clearly appear

very low when compared to the economic impact of M€ over the 2018-2029 that Expanscience

would experience in the «Non-Use» scenario. The “Short Authorisation” variant would have a total

economic impact (including profit losses and costs of excess cancer cases in France) of M€ over

the period 2018-2029. Please refer to the sections 9 and 10 of the CSR document for more data on

potential excess cancer cases.

The “Non-Use” scenario would have a significant social impact since it would imply suppressing

282 jobs at Expanscience and 27 at suppliers’ within E.U., and 120 jobs outside E.U. (50 at

Expanscience and 70 at suppliers’). In the “Short Authorisation” variant, 21 workers at

Expanscience would be laid off within the E.U and 9 at suppliers’. In the worst case scenario, the

closing of the Rheumatology business could lead to the bankruptcy of Expanscience, since

Rheumatology generates % of the Company’s EBIT. The social and economic consequences of

such a worst case scenario would be even more dramatic but have not been monetized in the current

document.

In conclusion, this application for authorisation has demonstrated that from the point of view of

Expanscience, a 12-year authorisation should be granted to enable the full deployment of the

alternative production process. It has been demonstrated that the socio-economic benefits of

continued used outweigh the potential costs of the risk of a continued use of EDC.



APPENDIXES

APPENDIX A – Detailed process description

A.1. Process description: used as a process and extracting solvent in fine chemical processes

(i.e. pharmaceutical)

Expanscience is using EDC as a major extraction solvent in a liquid/liquid extraction unit

operation. The active substance (Active Pharmaceutical Ingredient) of our drug corresponds to a

blend of highly purified avocado and soybean oil unsaponifiable matters. These families of

molecules obtained through extraction are purified separately from the two independent sources of

oil: avocado oil on one hand and soybean oil on the other hand. To reach adequate purity of

unsaponifiables, a specific proprietary and highly selective extraction and purification process has

been designed. This process involves a key liquid/liquid extraction step using EDC.

The overall Active Pharmaceutical Ingredient (API) manufacturing process is described in figure

hereafter.

Different steps of the overall API manufacturing process



The extraction process can be divided in 5 main steps (as described in the figure hereafter):

Saponification of the oil in a mixed vessel containing the oil, water, ethanol and a strong

base and dilution

First liquid/liquid extraction of the unsaponifiable compounds from the saponification

reaction mixture, using EDC in a counter-current agitated column

Washing of the solvent phase (EDC + unsaponifiable compounds) with water to remove

ethanol and soap traces (second liquid/liquid extraction)

Evaporation of the solvent in a falling film evaporator, and recycling

Deodorisation of the extract through water vapour stripping to remove remaining solvent

traces and other minor contaminants to obtain a pure unsaponifiable fraction

1

2

3

4

5



The EDC evaporated during step 4 can be directly re-used in the extraction process. In addition, the

EDC collected after step 2, step 3 and 5 is purified in a specific process on our industrial site

(reactivation process) in order to be recycled and re-used in the extraction step (batch process

performed continuously 7/7). The ethanol engaged in the process is also collected (from the

aqueous phase), purified and recycled.

Schematic overview of the extraction process

NB: Avocado and soybean oil are processed separately; the blend of avocado and soybean oil

unsaponifiables is made when filling the capsules. The dotted pink line shows the limit within which

EDC is used.



The detailed process is described in our Marketing Authorisation file granted by health authorities

(AMM in France). Initial raw materials (soybean and avocado oils) are from plant origin. Their

composition may vary depending on climatic conditions and geographic location of the culture.

The avocado and soybean oil unsaponifiables extracted as such separately, are transferred in an

independent part of the facility and integrated in capsules. No EDC is used in this second part of the

plant (see more pictures of the plant in Appendix B).

Historically, EDC has been used for avocado and soybean oil unsaponifiables extraction because of

its selectivity towards the targeted molecules, enabling to get active substance (Active

Pharmaceutical Ingredient) matching quality requirements in a robust and reproducible way (to

obtain the same quality and yield whatever the origin of the oils).

The targeted molecules (the oil unsaponifiables) are a blend of various molecules exhibiting a large

spectrum of polarity, ranging from non-polar such as hydrocarbons and furanic compounds, to

highly polar, like tocopherols or aliphatic alcohols. EDC enables to extract the whole spectrum of

molecules in one step with a very good selectivity. The clinical activity of our drug substance is not

linked to a given specific molecule but to the whole extract: its composition is fundamental for its

pharmaceutical activity.

A.2. Transport

EDC is shipped to the production facility as a bulk using 24 m3 tanker trucks. The containers and

tankers used for bulk EDC are compliant with the European Agreement of Road Transport of

Dangerous Goods (ADR standards). The tankers are certified by an approved third party inspection

body and comply with the French National Standards for transportation. Road Transport Operations

are carried out safely in compliance with all the transportation requirements. Under the approved

standards, the tank farm and tank container undergo periodic inspections.

Ground floor Upper floors



A.3. Storage

EDC is stored in a specific zone of the manufacturing plant in above ground storage tanks of 30 m3

capacity. These tanks are under controlled atmosphere with nitrogen. The storage area is equipped

with secondary containment. As this area is classified “Ex-zone”, the facility is totally fenced-up

and surrounded by humps. All transfer lines are aerial while all roads and operating areas are paved

with either concrete or asphalt. The storage tanks are used through a thermal oxidizer unit to

prevent from any air emission. The tanker transfer area is also equipped with a basin to retain any

possible leaks from the discharge pipe. The retention capacities are designed to retain the total

capacity of a tanker truck.

The storage area is also fully equipped for enhanced security:

- Specific fire protection

- Leak detection and warning devices

- Emergency scrubbing systems for storage of toxic gases

- EDC tank is filed with nitrogen gas atmosphere “inerted” to minimize explosion risks

All liquid transfer operations follow detailed written procedures to minimize the risks of accidental

spillage. Storage tanks are venting to a thermal oxidizer system (incinerator) to prevent from air

pollution.

Wastewaters generated during the process (steps 1,2 and 3) are first collected, treated in a specific

unit (Proscon) to remove any traces of solvents and then directed to the on-site biological treatment

facility. After this biological treatment, wastewaters are discharged into a common wastewater

treatment plant. Before reaching the discharge point, wastewaters are continuously sampled,

monitored for pH, Chemical Oxygen Demand (COD), flow rate and temperature and subjected to

daily analysis.

Pictures of solvent storage tanks



Pre-treatment facility for sulphate-rich wastewater

from the molecular distillation and plant extraction

unit

Wastes generated from EDC use are disposed and

handled by authorized waste disposal companies. All

wastes are incinerated at an agreed waste treatment

facility. A file of hazardous waste shipment and

disposal records is being held to certify that wastes

are properly handled. A summary of these records is

sent every year to the competent authorities

(DREAL) as required.

A.4. Recycling

EDC is entirely recycled on site by evaporation and distillation within a dedicated solvent recovery

plant. Expanscience has achieved a recovery yield of 99% during 2014. This high performance

recycling process allowed us to recover and reuse 1,650 tons of EDC versus a waste of only 13 tons

of lost EDC over 2014.

This performance is explained by two main technical aspects:

1) The very low solubility of EDC in water

2) The EDC / alcohol / water azeotrope chemical feature making it easy to separate EDC from

alcohol and water (ethanol is fully recycled at the end of the process)

Chemical plant and its solvent regeneration unit



APPENDIX B – Other pictures of the existing facility

Aerial view of the site in Épernon, France

Transport of EDC in a confined and controlled environment – all equipment is under controlled

atmosphere (nitrogen)

Unit dedicated to the treatment of Volatile Organic Compound (VOC) emissions

Carbon filter unit Thermal oxidiser



APPENDIX H

H.1 Methyl iso-butyl ketone (MIBK, CAS 108-10-1)

Classification of MIBK is shown in the figure below.

Source: http://echa.europa.eu/web/guest/home



The chronic progressive nephropathy (CPN) is common in older rats, with a high background

incidence in controls. It was increased in incidence (at all exposure concentrations, with a clear

dose-response from the mid to the high dose) and severity (increased only at the highest exposure

concentration) by MIBK. Although an increase in incidence (but not severity) was observed already

at the lowest concentration tested in this chronic inhalation study, this concentration is considered

the NOAEC of this study for non-neoplastic effects (450 ppm, 1868 mg/m3).

A subchronic inhalation study by Phillips et al. (1987) exposed rats and mice to 50, 250 and 1000

ppm (6 h/d, 5 d/w, 90 days). Hyaline droplets in the kidney of male rats and increased liver weights

in mice were observed at ≥ 250 ppm (1038 mg/m3), and at the highest concentration there were

increased liver weights in both species. The renal effects in male rats are considered to be specific

to the male rat (see above). A further subchronic rat inhalation study by David et al. (1999) reported

transient reduced activity and increased relative liver and kidney weights in combination with

increased terminal body weights at ≥ 750 ppm, 3113 mg/m3).

Exposures of rats and mice to up to 1000 ppm (4150 mg/m3) for 6 h/day, 5 days/week for 14 weeks

did not affect testicular weights or the histology of male or female reproductive organs. A 2-

generation study was performed in rats with exposure concentrations of up to 2000 ppm (8300

mg/m3). A NOAEL of 1000 ppm (4150 mg/m3) was determined, based on parental toxicity in form

of reduced body weight gain and food consumption and increases in liver and kidney weights and

neonatal toxicity (anesthetic CNS effects observed during exposure on post-natal days 22 and 28).

No effects were observed on reproduction (Nemec et al., 2004). Developmental toxicity studies on

rats and mice with exposure concentrations of 300, 1000 and 3000 ppm on gestation days 6-15

caused maternal toxicity and fetotoxicity (reduced pup viability and weights, delayed ossification)

at the highest concentration (3000 ppm, 12450 mg/m3) in both species. No effects were observed at

1000 ppm, 4150 mg/m3 (Tyl et al., 1987).

Most of the available studies on genetic toxicity showed negative results, e.g. Ames-Tests,

mutagenicity tests in yeast, a chromosome aberration test in rat liver cells in vitro, an unscheduled

DNA synthesis assay in primary rat hepatocytes in vitro, a cell transformation assay with

BALB/3T3 cells, and a mouse bone marrow micronucleus test. Mouse lymphoma tests were

negative with metabolic activation; however, without metabolic activation equivocal results have

been obtained (significant effect without dose-response relationship). In a transformation assay with

mouse embryo cells, significantly increased frequency of morphological transformations were

observed at the highest exposure level in the absence of metabolic activation (Greim, 1996; OECD,

2009; WHO, 1990).

MIBK induced kidney tumours (renal tubule adenoma and carcinoma) in male rats and liver

tumours in male and female mice (Stout et al., 2008, identical to NTP TR 538, 2007), leading to

NTP’s conclusion that there was “some evidence” of carcinogenic activity of methyl isobutyl

ketone in male rats and in male and female B6C3F1 mice. The authors concluded that there was

“equivocal evidence” of carcinogenic activity of methyl isobutyl ketone in female F344/N rats,

based on the occurrence of two renal mesenchymal tumours in the 1800 ppm group. The increases

in tumour incidences in male rats may have resulted from the increased severity of CPN, either

through alpha-2-µ-globulin-dependent or -independent mechanisms. An alpha-2-µ-globulin

accumulation in the male, but not female rat kidney was reported by Borghoff et al. (2009),

indicating that the renal effects in male rats are species- and sex-specific. However, IARC (2012)

discussed that a dose-response relationship was not evaluable in this study by Borghoff et al.

(2009), and the incidence and severity of the observed chronic progressive nephropathy suggest the

involvement of alternative mechanisms. IARC (2012) concluded that the “alpha-2-µ-globulin-

induced nephropathy may contribute to the renal tumour response, but the critical component(s) of

the nephropathy most closely associated with the development of tumours has not been identified”



and therefore the evidence for an alpha-2-µ-globulin-mediated mechanism is weak. According to

IARC (2012), the relevance of the tumour response in the rat kidney to humans cannot be excluded.

The liver tumours in mice were not associated with cytotoxicity (regenerative cell proliferation) and

there is only weak evidence for a nuclear receptor-mediated mechanism (IARC, 2012). The

histologic appearance of the hepatocellular proliferative lesions was consistent with those that

develop spontaneously in control mice. IARC stated that therefore the relevance of the tumour

response in the livers of mice to humans could not be excluded. Based on this evaluation, IARC

concluded in deviation from the authors of the NTP study, that there is “sufficient evidence” for

carcinogenicity in experimental animals, resulting in a 2B classification (“possibly carcinogenic to

humans”).

A new study by Borghoff et al. (Borghoff et al., 2014; Borghoff et al., 2015) investigated the mode

of action for renal tumours caused by MIBK. In this study, exposure conditions as used in the NTP

cancer study with rats were applied with inhalation exposure duration of 4 weeks and various

endpoints related to renal toxicity and an alpha-2-µ-globulin accumulation-mediated mechanism

were investigated. The authors found that CPN was increased after four weeks of exposure in male,

but not in female rats. Alpha 2-µ-globulin concentrations, hyaline droplet accumulation and

proliferation of cells of the renal cortex were increased with dose in male rats, but were not

observed in female animals. The authors consider this sufficient evidence to conclude that renal

tumours are caused by MIBK by an alpha-2-µ-globulin-dependent mechanism, unique to male rats.

The reference concentration (RfC) derived by the U.S.EPA for inhalation exposure is 3 mg/m3

(EPA, 2003b; 2015). This is based on the fetotoxic effects documented in the study by Tyl et al.

(1987) with a NOAEC of 1000 ppm (4150 mg/m3), adjusted for continuous exposure and applying

an extrapolation factor of 300 (3 for interspecies, 10 for intraspecies variances, and 10 for

deficiencies of the data base). As the assessment factor for data base deficiencies is not included in

the ECHA guidance R.8 methodology (ECHA, 2012a), an analogue guidance value would be 30

mg/m3 for the general population. For workers, this value can be converted to 168 mg/m3, under

consideration of 5 working days per week, a reduced intraspecies variance factor of 5 in workers

(instead of 10 for general population) and an additional factor of 2 (10 m3 respiratory volume/shift

vs. 20 m3/day) according to ECHA (2012a).

The German Ad-hoc Working Group for Indoor Air Guide Values derived a health hazard guide

value (RW II) of 1 mg/m3 and a precautionary value (RW II) of 0.1 mg/m3 (Ad-hoc-AG, 2013).

Both are based on the NTP study with renal effects in female rats with a benchmark-dose (BMDL10)

of 320 mg/m3, corrected for continuous exposure: 57 mg/m3. The RW II was derived applying a

total extrapolation factor of 50 (2.5 and 10 for inter- and intraspecies variances, respectively, and an

additional factor of 2 to account for a higher respiratory rate of children). The RW I is per definition

0.1 x RW II. The conversion of the RW II for workers would result in a DNEL of rounded 13

mg/m3 (320 mg/m3 on 6 h/d in rats correspond to 161 mg/m3 for workers with 10 m3 respiratory

volume per shift, extrapolation factors of 2.5 for remaining interspecies and 5 for intraspecies

differences).



H.2.2 Discussion of suitability of reference values for comparative assessment

Inhalation exposure

Most occupational exposure limits are 20 ppm = 83 mg/m3 (ACGIH, 2014; AGS, 2012; DFG, 2014;

IFA, 2014; SEG, 1991), mainly based on the irritative and neurotoxic properties of the substance.

The basis for derivation of the DNELs for inhalation exposure in the registration dossier is not

apparent from the given information. The value of 83 mg/m3 for workers points to an adoption of

the OEL.

Other reference values were derived for the general public and are not directly applicable for this

assessment.

A NOAEC of 450 ppm (1868 mg/m3) is derived from the NTP study in this document, based on

renal effects in female rats and the slightly reduced body weights. According to ECHA guidance

R.8 (ECHA, 2012a), this experimental NOAEC (6 h/d) is converted into a human equivalent

workplace concentration

by correcting for 6 h exposure in the experimental study compared to an 8h shift

by correcting for physical activity (6.7 m3/ 10 m3)

of 939 mg/m3.

Using assessment factors of 2.5 for further interspecies differences and 5 for intraspecies variance

in workers, a DNEL of 75 mg/m3 results.

The same NOAEC of 450 ppm (1868 mg/m3) was derived from the same study in the registration

dossier based on the non-neoplastic lesions observed in the kidneys at higher dose levels.

Dermal exposure

The dermal DNEL presented in ECHA-CHEM cannot be used for comparative assessment without

a full understanding of its origin.

As with EDC, this exposure route is considered to be negligible compared to inhalation exposure,

due to the substance’s high volatility. Therefore, the dermal exposure route is not considered for

this comparative assessment.

Recently, IARC (2012) classified MIBK for carcinogenicity in Group 2B (“possibly carcinogenic to

humans”). In absence of evidence for genotoxic activity of the substance the carcinogenicity of

MIBK for humans is unclear and cannot be finally evaluated, but recent research on the mechanism

for the renal tumours observed in male rats indicates that these tumours are caused by a sex- and

species-specific mechanism.

H.2.3 Conclusion: Tentative DNELs for comparative assessment

A tentative DNEL for inhalation exposure of methyl isobutyl ketone is 75 mg/m3 for workers. This

value is similar to the DNEL reported in the registration dossier and most OEL.

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