Insider’s wrapped: BIOSECURE, AI, CDMO shakeups shaped 2024

In the 24th year of this millennium, the biopharma sector navigated seismic shifts, from legislative challenges and technological advancements to restructuring and landmark acquisitions. Together, these developments reflect upon the industry's response to operational realignments and technological progress in order to meet the demands of modern healthcare. Here are the main key trends for this year:

BIOSECURE Act

The year began with the introduction of the BIOSECURE Act, a US legislative effort aimed to block “foreign adversary biotech companies of US national security concern”. Initially introduced in January, the bill was passed in the US House of Representatives with strong bipartisan support (306-81). If enacted, the Act will give US firms until 2032 to sever ties with Chinese suppliers.  

The Act's potential impact on the global pharmaceutical sector has been a topic of ongoing debate in the industry. Experts have expressed concern about disruptions, particularly for smaller biopharma firms that heavily rely on Chinese partners.  

One of the companies impacted by the Act's scrutiny is the Chinese firm WuXi Biologics. With vast global reach, WuXi Biologics' removal from the US could cause supply chain disruptions. Recently, the BIOSECURE Act was excluded from the US defense spending bill, leading to a surge in WuXi Biologics and WuXi AppTec shares. However, with the Act’s future now uncertain under the incoming Trump administration, the likelihood of its eventual passage remains unclear. 

Check out some of our conversations on this subject from Biotech Week Boston back in September, here and here.

AI, automation, and robotics

With experts exploring how emerging technologies can streamline operations and improve outcomes, AI and automation were dominant topics throughout pharma events and talks. Microsoft’s Thomas Balkizas pointed out that we’ve reached a “tipping point” for AI, with its integration now poised to revolutionize the industry. As Michelle Vuolo from Tulip Interfaces warned, the adoption of AI in quality control and manufacturing must be approached with careful “risk -management” to ensure safety. There were examples such as Modicus Prime’s mpVision software that strove to make AI more accessible and trustworthy.    

Moreover, several companies integrated AI into their manufacturing facilities this year. In August 2024, Pfizer invested $98 million in its Melbourne facility, followed by AmplifyBio expanding its Ohio, US site to leverage AI for customized messenger RNA (mRNA) vaccines. In November 2024, Amgen incorporated AI at its technology center in Hyderabad, India, and recently, Sanofi opened an AI-powered modular vaccine plant in Singapore investing $595 million.  

Furthermore, firms like Multiply Labs stood at the forefront of integrating automation and robotics into cell therapy manufacturing. The firm has partnered with Stanford Laboratory for Cell and Gene therapy Manufacturing (LCGM), Thermo Fisher, and Legend Biotech to further streamline cell and gene therapy (CGT) manufacturing. Additionally, in October 2024, Cellular Origins collaborated with Fresenius Kabi for the same.

Restructuring operations

In another industry-wide trend, firms have realigned their portfolios to reduce costs. In the wake of the pandemic, many companies made hay while the sun shone, rapidly expanding, hiring, and investing beyond their capacity to meet surging demand. However, as the industry slowed post-COVID, businesses began grappling with the aftermath of this overextension. As a result, mass layoffs and significant restructuring efforts have become prevalent as companies adjust to normalization.  

Several companies have revealed plans to reorganize and streamline operations, including shutting down manufacturing facilities, terminating partnerships, and implementing employee layoffs.   

In May 2024, contract development manufacturing organization (CDMO) Emergent BioSolutions cut around 300 jobs and shut down its facilities in Bayview, Baltimore, and Rockville, Maryland, US. In the same month, German firm Evotec made a “strategic exit” from the gene therapy space. The firm closed its Evotec GT (gene therapy) R&D business in Orth an der Donau, Austria, laying off 40 employees.  

In another such example, US-based pharma giant Bristol Myers Squibb (BMS) severed ties with Eisai and Agenus. At the time of the announcement, BMS told BioProcess Insider, “[We] regularly review and assess our portfolio to ensure resources are allocated to programs with the highest potential impact.”  

In October 2024, AGC Biologics shut down most operations at its Longmont, Colorado facility, resulting in 95 layoffs. That restructuring was attributed to a slowdown in CGT investments.

Novo’s Catalent grab

And when talking of operational changes, there has been none bigger in the past 12 months than the planned acquisition of the big CDMO by big pharma backer Novo Holdings. 

First announced in February, the $16.5 billion buy will take Catalent private and includes a sub-deal that will see three of its drug product manufacturing facilities transferred to Novo Nordisk for $11 billion. 

The deal is largely linked to Novo’s need to secure capacity in the glucagon-like peptide-1 (GLP-1), driven by its diabetes and weight loss blockbusters Ozempic and Wegovy (both semaglutide). While already it has shaken up the supply chain (specifically on the drug product side) – Novo’s competitors are looking to secure capacity for their own GLP-1s – the deal has wider implications across the pharma space, especially in the CGT sector. 

Recently, the acquisition has been given a green light by both the European Commission (EC) and the US Federal Trade Commission (FTC) despite efforts to block the sale by consumer advocacy groups, healthcare unions, and a US senator. Moreover, Novo expects to finalize the acquisition soon, resulting in a low to mid-single-digit negative impact on operating profit growth in 2024 and 2025, and a reduction in free cash flow due to the $11.7 billion price. The deal will be primarily debt-financed, affecting net financial items, and no new share buyback program is planned for 2025.