The Evolving Role of the Outsourcing Manufacturer: Why CDMO Is the New Normal

Dan Stanton (BioProcess Insider), with Magnus Schroeder (Avid Bioservices) and Daniel P. Slone (Samsung Biologics).

Moderator Dan Stanton, with Magnus Schroeder and Daniel P. Slone

In the biopharmaceutical industry, manufacturing partners always have served as more than mere suppliers. But they increasingly are expanding their technologies and capabilities with the goal of offering end-to-end services. In this online panel for the 2020 BIO conference, Dan Stanton asked Magnus Schroeder and Daniel P. Slone, both vice presidents at major contract development and manufacturing organizations (CDMOs), “how manufacturers put the D in CDMO” and how biologics development services will continue to shape the outsourcing landscape.

Different Journeys
Stanton observed that Avid Bioservices and Samsung Biologics took different paths but found their strides as development partners as well as manufacturers. Slone explained that Samsung “took it slow” when entering the CMO industry in 2011, carrying only six 5,000-L bioreactors. “As our company matured, we saw that we needed other areas to help our clients. Over the past two to three years, we have expanded to an almost completely end-to-end operation,” including services for cell-line development (CLD), fill–finish (FF), and complete viral testing.

Avid, on the other hand, launched in 2002 as a supplier for end-user Peregrine Therapeutics. Avid continued in that role for 17 years but grew immensely after adding a clinical facility in 2017. In 2018, Peregrine rebranded as Avid Bioservices and dedicated itself to CDMO activities. It now provides commercial clinical supply and early to late-stage manufacturing of mammalian-cell–derived therapeutics.

Different Clients, Different Needs: Both panelists observed that their companies entered the development business upon recognizing critical gaps between sponsors’ and manufacturers’ capabilities. Slone remarked that sponsors sorely needed CLD programs. “People were having to transfer in at some early or late stage, so we were doing multiple technology transfers and multiple types of operations to confirm [process comparability].” In-house CLD services can minimize transfer concerns and inspire confidence about consistent process and product performance. CLD capabilities also can be a boon to small biotechnology companies that have compelling molecules but need space and resources to develop clinical supplies.

Schroeder agreed that select clients can benefit from CLD offerings but pointed out that CDMOs can serve sponsors well without installing such programs in house. Clients sometimes want to transfer in their own materials and processes. Biologics also are evolving beyond monoclonal antibodies (MAbs). “With sophisticated constructs,” Schroeder explained, “specific technologies might be needed that only some of our partners can supply.” Thus, Avid prefers initiating strategic partnerships for specialty services such as CLD. “That is a better model for us because we can choose to partner with the best and tailor processes to what our clients need most.”

Think Globally, Act Locally: Both panelists characterized geography as integral to their companies’ strategies. Schroeder explained that Avid leverages its location in the San Francisco Bay area to partner for biologics development services. Thus, activities such as CLD proceed “as if we were doing it internally” and are customized to client needs.

Slone added that proximity to clients becomes critical as CMOs move into the development space. Early CLD activities require close collaboration between manufacturers and clients, and face-to-face interaction can expedite important discussions. Like Avid, Samsung hopes to build facilities and partnerships in the Bay area and along the US Pacific coast.

Sustaining End-to-End Services
Noting that CMOs overwhelmingly are moving into the development space and offering services across the bioprocess spectrum, Stanton wondered whether contract organizations could survive strictly as manufacturers going forward. Slone affirmed that they can. Biologics development services often are nascent programs at CDMOs, he pointed out. For instance, June 2020 marked the first time that Samsung transferred a 1,000-L CLD program into a 5,000-L operation. Thus, manufacturing is likely to remain the bulk of the CDMO’s business for the foreseeable future.

Schroeder valued a middle ground between pure manufacturing and end-to-end service. “When you are talking about early and late-phase projects, you will need some development laboratories on site to accelerate those programs to both first-in-human (FiH) studies and commercial supply.” Thus, companies that focus on drug substance (DS) have good reasons to bring in such capabilities. However, technical reasons make it prudent to pass drug product (DP) manufacturing and FF to other entities. In such cases, a CDMO can help clients arrange end-to-end service through strategic partnerships with local vendors.

DP–DS Divide: Slone agreed with Schroeder about the difficulty of producing DS and DP on the same campus. Samsung’s original facility housed distinct DS and FF operations. As the company matured, it learned to cultivate a “cell-to-vial” process. Orchestrating that required Samsung to develop dedicated crossfunctional teams. Samsung also learned to scrutinize its raw-materials and shipping supply chains carefully.

Research and Regulatory: Proliferation of biologics development services also seems to be expanding the idea of “end-to-end” itself. Schroeder indicated that sponsors often are asking CDMOs to work at the bioprocess extremes. Avid negotiates such requests — e.g., for clone screening — by tapping into its partners’ expertise. Sponsors also are seeking out CDMOs with sophisticated analytics (e.g., mass spectrometry for host-cell protein detection) to bolster regulatory filings. Again, Schroeder stated, the question is whether a CDMO should develop such capabilities or leverage partners.

Requests for regulatory assistance typically come from new companies, Slone added. Samsung has responded to such queries by expanding support from pre-IND activities through to submission of biologic license applications (BLAs) and regulatory inspection.
Drawing the Line: With such expansion of services, Stanton wondered about what activities CDMOs still cannot undertake. Panelists concurred that contract organizations must draw the line at the target molecule. Schroeder explained that when a sponsor recruits a CDMO, “There is clear understanding that our clients will own some things, because [the molecule] is their baby, which we essentially nurture through.” Slone echoed this sentiment, focusing on critical decision-making: “CDMOs are offering a service to get products to where they need to be and at the quality that they need to be. But it is 100% the client’s product and decision on how to deal with it.”

For now, that boundary seems to be firm. Neither panelist believed that CDMOs would develop originator molecules. Schroeder reported Avid’s contentment as a CDMO, and Slone highlighted that Samsung Biologics’s business remains distinct from that of Samsung Bioepis, the corporation’s drug-development subsidiary. Manufacturing remains primary.

Speed Is the Next Step
Although CDMOs probably will not encroach on drug-discovery territory, they are likely to drive technological advances that increase speed to IND. Recent trends in mergers and acquisitions suggest that CDMOs will continue scouting out technology vendors.

But increased implementation and standardization of prebuilt and single-use components have streamlined facility construction and expansions, Schroeder pointed out. And single-use technologies are beginning to scale well, easing capacity-availability concerns. Speed is the next step: novel cell-line, media-feed, and high-throughput technologies.

Slone added that in pursuit of speed, CDMOs are likely to acquire capabilities that complete their end-to-end services. “That was part of our strategy in opening through to FF so that we could ‘go through the snake’s belly’ and move products forward without having to transfer them to another facility or country.”

What CDMOs Need Now
Stanton wrapped up discussion with questions about what CDMOs need most in the short and long term. Panelists pointed out that the pandemic has affected supply chains and near-term production priorities. Samsung’s strategy thus far has been to increase expenditures on raw materials to ensure capacity for projects in late 2020 and early 2021. Both Avid and Samsung have kept close tabs on supply chains.

Slone also expressed concerns about regulatory inspections. Auditors are shifting activities to virtual formats, yet interactions with regulators still feel quite different. And despite everyone’s best efforts, inspections probably will experience significant delays.
But panelists agreed that once the CDMO industry emerges from pandemic conditions, it can work to recruit a new generation of technicians. The industry remains susceptible to talent shortages for process engineers. Both panelists asserted that recruitment will be critical for CDMOs’ continued success. New hires will benefit from strong onboarding and meaningful, well-documented training. Companies also should ensure that existing employees encounter new opportunities in their facilities. As Schroeder stated, “Despite all the new technology that is out there, people move products to the finish line.”

Watch the complete presentation now.

Dan Stanton is founding editor of BioProcess Insider and managing editor at Xconomy; [email protected]. Magnus Schroeder is vice president of process sciences at Avid Bioservices. Daniel P. Slone is vice president and head of downstream manufacturing at Samsung Biologics.