Inhouse vs external capacity? Choose both, says Bayer

Inhouse and outsourcing comes with risks, but according to Bayer a mixture of both capacities is needed. 

Presenting at BPI Europe 2023 in Amsterdam, Ulrich Ruemonapp, head of launch preparation and coordination at Bayer discussed the pros and cons of outsourcing and provided delegates with information on how to navigate the selection of and relationship with your chosen contract manufacturing organization (CMO).

He outlined how both options come with potential risk and reward. If you decide to stay inhouse – as you have existing capability and capacity for your product – then this can lead to a lower risk for your product launch due to life-cycle project management. However, it can also bring technology and IP-related issues, as well as high revenue expectations.

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The outsource option works well when your company lacks manufacturing capacity or expertise, said Ruemonapp. Additionally, you have the ability to focus on development instead of manufacturing operations. While there is a lower revenue expectation when using external capabilities, there is a higher risk of bringing the product to market.

With pros and cons associated with both models, Ruemonapp told the audience “the point is you need a good mixture of external and inhouse.”

Outsourcing

Bayer uses a mixture of inhouse and outsourcing capabilities, but there is not much available in the public domain regarding their biomanufacturing outsourcing deals. Ruemonapp referenced when Bayer teamed with GE Healthcare and Fluor to build a single-use clinical manufacturing plant in Berkeley, California to support its biologics pipeline in May 2019.

Additionally, Bayer itself is a player in the outsourcing space. The firm added contract development manufacturing organization (CDMO) Viralgen and its Pro10 AAV platform through its $2 billion acquisition of Asklepios BioPharmaceutical (AskBio) in October 2020. In July 2021, Viralgen opened a $83 million AAV production site in San Sebastian, the first gene therapy production facility in Spain.

A crucial factor you must think of when selecting a CMO “is always going to be time to market.” Moreover, it is essential that you “make sure your product also fits to the CMO’s profile, and you must never compromise on quality.”

Challenges can arise because the company and CMO “can be very different as you have different financial backgrounds and different approaches to risk management.”

With this in mind, “you have to have a strategy in place and start with the right thinking at the beginning.” Additionally, you must ensure that your product and your company “fits with the CMO’s profile,” he added.

While outsourcing has its clear benefits, Ruemonapp said you still “need inhouse expertise to be able to lead the CMO.” He placed significant importance on communication and told the audience Bayer “leverages product dedicated teams to implement product management work.”

He concluded by explaining to delegates thinking of or currently outsourcing that “you are not alone. In 2023, nearly half of the biopharmaceutical companies outsource part of their biomanufacturing.”