At the recent Phacilitate Gene and Cell Therapy Conference (27–29 January 2014 in Washington, DC), BPI’s editor in chief Anne Montgomery and publisher Brian Caine spoke with Richard Grant, executive vice president, life sciences, at Invetech (www.invetech.com.au); and Brian Hanrahan, program manager at Invetech. They and their colleagues were instrumental in advising us how to bring ongoing discussions of regenerative medicines into BPI four years ago for the first Cell Therapy Supplement issue. We asked them to comment generally on how they view progress in this sector since that first issue.
The main topic of our conversation was about continuing efforts toward closing the gaps between research and commercialization — between the science and the business of bringing these innovative therapies to the market.
BPI: What are you noticing about your clients’ awareness of the need for long-range planning?
Grant: We are seeing a range of outlooks across the industry. At Invetech we deal with a broad spectrum of clients, including very early start-ups, more established companies that now have a couple of potential products in development, and those in clinical trials funded by big pharma. Companies that were started by scientific people are primarily focused on their process and product. They tend to be concerned with achieving clinical milestones and eventually having enough data for approvals. But in our experience, many such science-driven companies lack the ability to look at their business from a financial perspective. They need to take a step back to develop their companies as businesses with long-range financial goals in addition to focusing on their science and potential therapy.
It can be different for companies funded by a larger company with broader manufacturing experience. One example is The Kirin Company from Japan, possibly more commonly known for their beer. Kirin invested in Argos Therapeutics with the understanding that it would invest only if Argos could show it the path to production: a consistent and affordable ability to manufacture viable quantities of their product without reliance on manual processes. But it is rare to find a small company with such a powerful partner to direct their focus towards commercial considerations so early on.
Then there is Janssen, a division of Johnson & Johnson, working on a treatment for age-related macular degeneration. Benefiting from their larger company experience, Janssen understands how important it is to manufacture an affordable dose in batches sufficient to service the industry at a consistent quality. This is what an experienced pharmaceutical company understands as a basic requirement, a view not necessarily shared by many cell-therapy start-ups.
Start-up companies need to have a long-term commercial vision for their product and how to get there. Unfortunately, they can get so caught up in the scientific and clinical side of things that is it hard for them to step back and focus on developing as a viable business.
For example, if a small company is interested in reaching phase 2 and then selling to another company to develop the product, it will deliver much greater value for investment if it can demonstrate a path by which it can make 10,000–20,000 doses a year in a manufacturing environment designed to deliver product of a consistent quality and at an affordable price. Some smaller companies however have grasped the importance of longer range, commercial planning right away. The founder of Neuralstem, Richard Garr, understands and appreciates the way we look at developing our equipment to support a company’s processes. Garr immediately understood the need for process equipment and the approach to manufacturing in a way that many scientifically based organizations don’t. He understood that you have to manufacture your product consistently, repeatedly, and affordably — or you have no business.
BPI: Do you think that many companies really don’t know where they are going and what the future steps are going to entail?
Grant: It is understandable that many companies are caught up in the struggle to create material for early trials. But some very smart people out there are bringing various degrees of sophistication to their business modeling. Some companies have been able to raise funds over many years to keep themselves going. They can do that if they have both a solid scientific team and a strong business development group working toward a common goal. But other companies haven’t thought much at all beyond the goal of the cure for the condition they are targeting. And if a company does not know where it is going, then even if it has set its indication, it may not know how to approach the next steps.
An important first question, for example, is, “What annual patient numbers are expected at commercial scale? Is it 10,000 per year or 100,000 per year?” A young company often needs help in forecasting equipment needs and related costs and in defining an appropriate path to commercialization. The solutions are different for each company and depend on the complexity of the product.
Many smaller, science-based groups know their science and understand how their cells are behaving. They may know that they will need to hire a vice president of clinical operations to run a trial, but they may not have looked farther ahead than that. They may also know that they will need to turn a manual process into a production process as part of their scale-up plan — but this issue can be sidelined during the early stages of development. It is, however, a critical aspect to consider: If a company proceeds farther and farther into its clinical process without a clear path to producing at commercial scale, it tends to become less inclined to want to change its process. This can leave it with a process that is inherently manual and therefore both difficult and expensive to automate.
BPI: So would you say that their earlier considerations are primarily logistical ones?
Hanrahan: Yes, and thinking ahead to future needs at larger scale is critical. If, for example, a company is currently running a 14-day incubation and treating 100 patients a week, that means it will have materials specific to 1,400 patients in its incubators at any given time. When the process is eventually brought up to scale, challenges arise. How much more room will those incubators take? What
equipment maintenance will be necessary? Which equipment will need to reside in a clean area? What implications will this have on their business planning?
Grant: So companies do indeed need guidance in logistical thinking, multiplying the number of treatments by the processing time, divided by the expected capacity. That multiplies out into a complex logistical structure very quickly. Other logistical issues around incoming and outgoing patient materials may need to be considered. Do patient materials need to be processed fresh and if so, within what time frame? If they have to store in-process materials cryogenically for periods of time or if outgoing patient materials have to be administered within very short time frames or stored for multiple dosing regimens, then these also become quite difficult logistical challenges.
BPI: Might a company be surprised to find that the equipment does not already exist to perform an existing step at a larger scale?
Grant: If an unplanned equipment change needs to be made at a later stage, a company may experience significant delays in its program while looking for an equipment provider or creating and qualifying/validating an apparatus of its own (if its in-house expertise even allows for that). By contrast, if a process development team is involved throughout the strategic planning to manufacture in a fast and affordable way, the company may already have been able to partner with a company that has experience in commercial-scale equipment. If a cell therapy company has made the effort to investigate its future needs, it may already have changed process steps to be easier and cheaper to automate and functionally closed.
An early partnership with a designer/manufacturer of commercial or custom equipment is also beneficial from a product quality perspective. Invetech for example has supported clients in front of the FDA, and we produce equipment for CGMP environments. We design equipment to satisfy the client company’s requirements. Then we install on site and perform site-acceptance testing. It goes through the IQ, OQ, and PQ processes to ensure that is doing what it is supposed to and that the cells will come out as expected.
BPI: Can you speak more about the benefits of having a dedicated process development team?
Hanrahan: A process development team has a different skill set from those in research and clinical modes. It is important to bring on such people who can help design a process that will be easier to automate. But to prove whether the process is going to work or not, somebody has to try it out and work to optimize it.
Grant: A small company that is vertically focused on its research will probably concentrate on refining its process at small scale for early trials. But many people in such companies tend to be researchers at heart and like to tinker and tweak their process. A best practice in bioprocess development is for companies to have a separate process development team to turn research into a production process. Chemical engineers, for example, can bring a problem-solving approach to the challenge of taking the therapy into manufacturing. Researchers working hand-in-glove with a process development team can be critical to the forward planning that will provide the company with the most efficient, timely, and cost-effective means to take its product to the market.
Hanrahan: A good example in which the process development team adds value is in assessing quality control and in-process testing. An initial laboratory process will have many points at which you take a sample for testing to increase your understanding of the process. But if you fold tests into your production process too early, you may be doing more testing than you need to, incurring extra costs, reduced yield, increased use of disposables, extra staff, and so on. Taking a risk-based approach to reducing testing to a minimum acceptable confidence level ensures that the product is what you say it is. A company needs help from its process development team as well as regulatory/GMP advisors, so that only those tests that are absolutely critical to ensure that the product has the desired characteristics are incorporated into the production process.
BPI: What other logistical issues should start-up cell-therapy companies know about?
Grant: An important aspect about the logistics of manufacturing is that you have to account for pause points in the process and in the logistical delivery at the end of the process. For example, you have to plan for cryogenic storage of your interim and final product so you can reschedule around events such as ice storms or power failures. The pause points are also important for the ability to schedule a product through your facility, sometimes storing it for periods of time. You may need cryogenic storage after manufacture while executing your quality release testing. If you have a progressive dosing regimen, you will need to store that product so you can release it over time. Planning ahead for such points gives you the ability to build a business that can concentrate on its raison d’être, which is manufacturing a cell therapy product, rather than having to build a just-in-time logistics business at the same time that you are building a production business. Additionally, you always take a hit to cell viability through freezing and thawing, so your process has to be robust enough to cope with that. If you are adding a freeze–thaw step to a process, there is a lot of testing to do with yields and viabilities, assessing the impact of the freezing step on the product. This is yet another burden placed on the process development group.
BPI: With that testing, what other issues arise that may be unique to cell therapy bioprocessing?
Grant: One issue is understanding of manufacturing at scale in comparison with other classes of biopharmaceutical products for which companies create test runs of product that will not be used as actual product. In the pharmaceutical industry, a company might build a $400 million pilot plant to make a new small molecule that can be thrown away as soon as the line is characterized.
BPI: What is your take-home message?
Grant: Our advice is that early stage cell-therapy companies need an overall plan that encompasses clinical, process development, engineered equipment, facilities, and logistics — determining where and when movements of product will occur, where any freeze steps may be, where shipments go, and how to handle disasters. All of this comes together into the financial plan, which defines where your revenue is coming from and identifies the operating and capital costs. Basically, it is a six-point plan to take your business to your exit point, or to the point at which you can make money. Most companies we work with only have a couple of pieces of the plan in place.
BPI: Is this in essence an issue of sophistication? Do some of these companies started by scientists without business or process development backgrounds still not know what they don’t know?
Hanrahan: It is still quite a challenge for less-sophisticated companies to recognize what they know and don’t know, and sometimes they are reluctant to ask for good advice and to act on it. Advice can come from a pharmaceutical investor or a corporate partner or consultant, but to address the six points above, you either need internal expertise or to acquire an outside consultant.
Grant: The expertise is available, and the numbers of consultants and service providers with special interest in regenerative medicines is a growing field. We’ve noticed for example that in the past couple years there are a number of cold-chain experts such as Fisher Bio services that are doing a good job of shipping product and helping customers with managing cold chains. There are plenty of good regulatory consultants to be accessed, as well as engineering development consultants specializing in end-to-e
nd equipment. Along with this, more and more experienced people are transferring between companies, bringing in real-life experiences.
BPI: Finally, how do you view the current investment space?
Grant: We see more maturity in investment requirements: There is more at risk and on the table than we saw even just a few years ago. Big Pharma companies are making investments and acquiring companies. They are all circling. Although we have seen limited, highly optimistic investment plays up till now, the cell therapy space is beginning to see an uptick in activity of companies doing genuine process, engineering, and equipment development work to smooth their paths to market.
S. Anne Montgomery is cofounder and editor in chief, and Brian Caine is cofounder and publisher of BioProcess International; firstname.lastname@example.org and email@example.com. Richard Grant is executive vice president, life sciences, at Invetech, Richard.Grant@invetech.us. Brian Hanrahan is a program manager at Invetech, Brian.Hanrahan@invetech.us; 9980 Huennekens St. #140 San Diego, CA 92121; www.invetech.us.