CMOs


Biopharma Vendors Off ering


Services Bundled With Products Vendors see opportunities as outsourcing demand rises; may compete with CMOs


Eric S. Langer


Managing Partner BioPlan Associates, Inc.


Vendors to the biopharmaceutical manufacturing industry are seeing an opportunity to off er valuable services that complement their products. This is increasingly a strategic priority for introducing new products, according to BioPlan Associates’ latest annual industry study, the 13th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production.1


This could be seen as a response to rising demand for


outsourced services, and comes as vendors are seeing growing business from off ering services.


Based on our survey of 191 vendors to the biopharmaceutical manu- facturing industry, our study shows that more than eight in ten vendors are either very likely (23.1%) or likely (59%) to off er more services that complement their existing products. In fact, they’re about equally as likely to plan more complementary services as they are to plan the introduction of more products (82.1% and 81.9%, respectively). In another nod to their services plans, more than seven in ten are likely to introduce more service off erings. This may put them in direct competition with contract manufacturing organizations (CMOs).


Vendors’ Services Growth Rivaling


Equipment Sales The continued attention paid to services is likely due in part to the prior success vendors have had experienced. When we asked suppliers to estimate their sales growth across various segments, we found them averaging services (e.g. engineering, validation, CRO) growth of 14.4%, up from 12.1% in last year’s survey and 11.8% the year before. In fact, services growth is now above the levels seen from 2007 through 2011, when they ranged around 12%.


Yet, sales growth for equipment and instrumentation remains the most buoyant, at 17% this year. Although sales growth has receded in recent years, down from 18.7% in last year’s study and 19.7% in 2014, the growth continues to demonstrate the vibrancy of this market segment.


Technological improvements in cell culture technology may be im- pacting vendors’ consumable sales both negatively and positively. The various technological improvements in bioprocessing have led to increased upstream titers, but also decreases in volume of culture media usage, with many bioprocesses simply being operating at lower scale. Continued improvements in expression systems and culture media


1


Figure 1. Biophama Suppliers’ Business and Marketing Plans, 2016


Our company is planning to do the following within the biopharmaceutical manufacturing sector, 2016


"% Very Likely or Likely" '-!-%1 &,!*%1 " ((!&%1 ')!+%1 (*!)%1 '(!&%1 ))!)%1 1 Data Source: 13th Annual Report and Survey of Biopharmaceutical Manufacturing, April 2016


supplements are key technological factors supporting reduced growth in sales, such as culture media. But on the other hand, the increased use of more expensive serum-free and bioprocess-specifi c-optimized culture media has likely enhanced this market sector’s sales growth, in terms of revenue. Similarly, prices for basic bioreactor bags may be reduced, but users are increasingly customizing these, such as adding their own custom manifolds, ports, imbedded sensors, etc., which adds signifi cantly to base prices.


As such, comparing sales growth for various segments of vendors’ business shows that services growth (14.4%) is about on par with


Pharmaceutical Outsourcing | 12 | July/August 2016 )'!)%1 *,!&%1 )(!'%1 *)!-%1 )+!*%1 *.1 *%!(%1


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54