CDMOs snapping up plants – a microtrend in the CGT space?

Various cell therapy firms have sold their inhouse facilities, but is this a trend in industry or just coincidence?

While manufacturing outsourcing is a staple part of the biopharma world, over the past few years many advanced therapy developers – including Pfizer, Astellas, Allogene and Regenxbio – have lauded the decision to invest inhouse. Many have cited inhouse capabilities as necessary to keep full manufacturing control over complex processes, while others cite the lack of third-party capacity and long booking times for cell and gene functions.

But is this changing?

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Resilience acquired Bluebird’s North Carolina lentiviral vector manufacturing facility for $110 million in July. Meanwhile, in the same month, AGC Bio bought a cell and gene therapy facility in Longmont , Colorado from Novartis.

In May 2020 Orchard Therapeutics halted work on a manufacturing plant in Fremont, California after reduced investment in different therapeutic programmes and subleased the plant to Resilience earlier this year.

One year prior to this, contract development and manufacturing organization (CDMO) Catalent – through its gene therapy unit Paragon – took over the leases of two facilities in Rockville and Gaithersburg, Maryland from Novavax.

While the above examples show some firms are now opting to outsource, Anthony Davies CEO and founder of Dark Horse Consulting Group told BioProcess insider “People haven’t decided that inhouse is no good, there have been some similar events, but it doesn’t make it a trend.”

Instead, Davies dubbed the events as a “micro-trend”. However, “the macro-trend is still that the field is growing insanely fast, and the demand for factory space is growing. It doesn’t really matter if they insource or outsource.”

The string of recent events “Is like a see-saw, it changes as night follows day, as summer follows winter, and guess what? It’ll change again,” he continued.

Why?

It would be naïve to suggest that each firm has decided to move to outsourcing for the same reason. Typically, the decision reaps cost and risk reduction benefits.

“The motivation for companies to outsource their manufacturing often has to do with lacking expertise or equipment (for small companies), or for cost reduction (especially for small to mid-sized pharma companies),” Adam Bradbury, analyst at PharmSource GlobalData said.

Novartis told this publication in March that it decided to exit Longmont due to “the evolving dynamics of the gene therapy landscape and progress that we’ve made with process improvements.” The firm said it had established that it can fulfil its long-term demand at its San Diego, Libertyville and Durham facilities with support from external partners.

Bluebird meanwhile did not comment on why it sold its lentiviral vector facility to Resilience, only two years after  acquiring the facility and investing $80 million in the site.

However, the firm has been assessing its strategy over the past six months following issues with a trial, which saw a patient diagnosed with myelodysplastic syndrome, a condition that can potentially develop into leukemia.

The company also scaled back its operations in Europe.

“Often the acquisition of a site is mutually beneficial for both CMOs and pharma companies, with the CMO securing service agreements to supply the former owner with the drugs being produced at the site. For example, Resilience will support vector supply for Bluebird and its spin-off 2seventy bio post facility acquisition,” Bradbury said.

He added: “Modern drug development and manufacture is becoming increasing complex, requiring specialized capabilities and expertise which are costly to acquire and develop. Outsourcing is driven by pharma companies’ divestment of facilities, along with contracts for products that will become generic or non-core, and by new product manufacturing where the pharma company lacks manufacturing capability or expertise.

For clinical dose manufacturing, there is a high risk of failure associated with pipeline drug products and using a CMO mitigates this risk for companies that may otherwise have to invest in equipment and facilities.”