Making the Correct Outsourcing Decisions

A BPI Theater Roundtable at the 2016 BIO Convention

On Wednesday, 8 June 2016, Gil Roth (president of the Pharma and Biopharma Outsourcing Association, PBOA) chaired a lunchtime roundtable titled, “Making the Correct Outsourcing Decisions.” He brought together a panel of four experts:

Introductions

Roth began by describing his nonprofit trade group. PBOA represents contract manufacturing organizations (CMOs) and contract development and manufacturing organizations (CDMOs) in working with the United States Congress and the US Food and Drug Administration (FDA), as well as on issues within the outsourcing industry.

Lewis said that Cook Pharmica (located in Indiana) provides contract manufacturing services for biologics manufacturing as well as vial and syringe filling. The company offers a full range of packaging and medical device solutions, as well.

Sanford said that Catalent works on bulk manufacturing of large molecules. He also talked about the GPEx platform for cell line development.

Powell said that Pfizer CentreOne is a newly formed organization combining Pfizer CentreSource with the Hospira One 2 One CMO. It has global facilities and a global focus.

Finally, Puri described Therapure Biomanufacturing as a Canadian CDMO focusing on early stage development work and manufacturing and specializing in downstream processing.

Discussion

Roth began by asking his panelists to talk about the market’s desire for biomanufacturing services. They described drug substance production, drug product formulation, and packaging as the three branches of their business. Most growth presently is happening with biologics and biosimilars, with a shortage of capacity for both clinical and commercial manufacturing. Many CMOs are aggressively expanding to provide greater capacity for biologics manufacturing.

What area would you like to see your company add capacity in? The panelists are interested in fill–finish capacity, assay development, cartridge and prefilled syringe manufacturing, expanded biomanufacturing overall, and assisting companies with biosimilar development.

What impact are biosimilars having on the rest of your businesses? Catalent has been primarily developing cell lines for the biosimilar business. CMOs in the United States are beginning to see requests from international companies who want US partnerships.

Have client expectations become more sophisticated? Expectations for quality are high, and clients want a great deal of oversight. They are concerned about having access to future capacity. They don’t want to spend money early, which puts more pressure on the supply chain and schedule later on. There is more collaboration (e.g., with joint steering committees). The investment community has become more sophisticated as well, which is leading to better planning.

Do joint committees border on risk sharing, or are both clients and CMOs retaining their own risk? The latter is true, but companies simply want to be more involved. Joint committees aid in communication and make sure that both client and CMO are on the same path. The risk to CMOs is in generating enough capacity to meet the needs of their clients.

How has the customer mix changed in the past five years? The panelists’ companies are still supporting all client sizes. They are seeing more international clients. More Asian customers are coming to the United States for support and manufacturing because they appreciate US companies’ experience. One panelist pointed out that companies are refreshing older drugs or picking up those that were never commercialized. Such clients are looking for help because more work needs to be completed to get to market than they first realized.

What do you see as the biggest regulatory change/challenge lately? The panelists listed compliance challenges, serialization, and higher analytics required for release testing of biologics.

What degree of preparedness that have you had to reach? There is a significant amount of work and time involved to meet requirements before products can be launched. The panelists’ CMOs know what is needed and are ready and able to move their customers through the regulatory requirements.

Roth posed one question to Powell directly: Now that Pfizer CentreOne is a combined CMO, what have you learned from merging companies? Do you have a changed idea of what a CMO should be? “Our model follows the One 2 One model,” Powell said. “We are growing a strong manufacturing business. By taking advantage of Pfizer’s technical personnel, we plan to grow a strong service business as well.”

When Roth asked him to compare running a product development business with a commercial service, he said, “Development programs can take longer than expected. Once commercial processes are validated, there is consistency, and the time line is known. In clinical work, expect the unexpected; in commercial work, plan against the unexpected.”

How are new technologies affecting what you are doing? Most clients’ number-one goal is to get their products through clinical testing; they are not particularly interested in new technologies that could raise regulatory questions. Biosimilars might be an exception. A few companies are willing to take risks, especially if the new technologies increase efficiency.

Are clients looking for a one-stop shop or multiple-company contracts covering specific processes? Even one-stop shop CMOs look at different steps as different projects. The main driver for this decision is a company’s need for the best expertise in each segment of a process. An advantage to staying with one company is that the supply chains remain the same throughout the entire process. Also, it is easy to move a product on to the next step because product doesn’t need to be shipped elsewhere.

What sort of ancillary services do clients want? Product-sponsor companies want to make drug applications easy for patients. They want autoinjectors, wearable injectors, devices with safety features, and combination products. New formulations require different delivery devices and delivery approaches.

What has changed most significantly in the past few years? The panelists agreed on single-use technology, smaller batch sizes, and human-resource issues. With single-use technology, they are seeing low failure rates, their companies are able to expand rapidly, analytical advancements are being made, and turn-around is faster than with reusable approaches.

Do you see a particular technology that will provide entry points for new companies? Panelists reported a driving need to make smaller volumes as personalized medicine moves forward. Advice for new companies is to hire good people and to produce quality systems.

What are the biggest staffing challenges? How do you build a successful team? A great team can work independently and allow managers to focus on other areas of a business. CMOs need staff with both technical skills and the ability to work well both with customers and as a team. Employees with those skill sets are in demand and can be hard to retain. One way to find good individuals is to work collaboratively with universities and community colleges.

How has the Biotechnology Industry Organization’s (BIO’s) annual convention changed for you over the years? Although the show has gotten smaller, the panelists said, it is diverse. One panelist considers it to be an “energizer” because it “brings the big picture into view.” It is an industry show, not just a technical show, so it provides attendees with a good overview of the industry as a whole.

Where do you see things five years from now? The panelists thought that consolidation of companies will continue, investments will increase, modular manufacturing will continue to evolve, and the industry will need increased capacity and talented staff. However, there will be a place for all sizes of companies.

In return, the panelists asked Roth for his perspective. Claiming theoretical but no practical experience (he ran a magazine before launching the trade association), Roth likes his job because he enjoys talking to Congress and working with the FDA. He feels that it has become easier to enter the biotech outsourcing market because of new technologies available and a push to make smaller batches. He is interested in seeing how the biosimilar market is going to turn out.

BPI Questions

BioProcess International’s publisher, Brian Caine, posed a few questions from the magazine.

Recently, we have seen big companies buy small companies and two big companies merge. What is the benefit to the market/clients if consolidation continues? Clients gain a broader band of expertise and services and a simplified supply chain, with a better chance to gain investment. But consolidation doesn’t solve the lack of capacity. Some companies want to merge because it is a chance to gain technology.

How do you adapt your infrastructure to smaller platforms? Do you get rid of old technologies or large spaces? How do you forecast and decide whether/when to use new technologies? Some companies never went to a giant scale but stayed at a moderate scale and are now well placed. Most CMOs are gearing towards smaller biologic programs. Luckily, equipment manufacturers correctly predicted the trends and made the necessary equipment available. A CMO needs to be able to scale from small to huge depending on each client’s product and needs. A good strategy is to design facilities for single-use technology and have a modular, flexible approach.

What is the CMO opinion on continuous processing? Some of the panelists were extremely excited about this topic. It could reduce scale requirements and boost productivity. Continuous processing could change the landscape of the industry if it can be proven to work consistently. •

Alison Center is editorial assistant ([email protected]) for BioProcess International, PO Box 70, Dexter, OR 97431. Recordings of many of these full presentations are available online at www.bioprocessintl.com/BIO2016.