Outsourcing A hybrid approach
The biopharmaceutical industry is awash in young entrepreneurial drug companies. Frequently focused on new therapeutic technologies, these companies are often not well funded. Between the options of having to wait for a CMO/CDMO to which they can outsource their production or build their own facilities, a third option is needed. A new business model has emerged and is in its formative stages. Flexible hybrid cleanrooms serve as an effective alternative to either building out a facility or outsourcing work to CMOs or CDMOs. Sometimes known as “cleanrooms on demand”, this option can help pharma companies to speed up the clinical lifecycle without having to build or maintain a facility or outsource. Using flexible hybrid cleanrooms, pharma companies retain control of production and intellectual property, enabling them to accelerate the clinical lifecycle and bring products to market faster. Cleanroom facilities can be customised to meet client needs and follow the standard practice of having unidirectional personnel and material flow. Usually, flexible hybrid cleanrooms are outfitted with equipment commonly used in biopharmaceutical manufacturing as a standard offering. Cleanrooms on demand often provide wraparound support services such as GMP (Good Manufacturing Practice) consulting, IT support and/or advisory services, quality management systems
and/or advisory services, warehouse, and materials storage and more. Source: Datexcorp
$1.3bn
The cost of bringing new drugs to market, strengthening the appeal of CDMOs. LSE
7% The pharma
CDMO market is expected to grow at a CAGR of more than this amount between 2020 and 2027, with growth predictably marked across East Asia. Mantell Associates
50
Taking back the house With over half the global population fully vaccinated, it’s hard to begrudge all this activity. But as lockdowns ease, and life slinks back towards normality, the rush to exploit the immense power of CDMOs is now causing problems. With many contractors understandably hellbent on defeating Covid – both for the good of humanity and company profit margins – other priorities are slipping. Methylprednisolone acetate, for instance, is a medicine used to treat pain and swelling across a range of conditions. But according to one December 2021 survey, the so-called ‘fill rate’ for the drug had dropped to just 80%. Put simply, that means suppliers are likely to soon suffer supply issues, while their clients risk shipping delays. Nor is methylprednisolone acetate alone. As the FDA warns, dozens of medications are currently in short supply. That covers everything from atropine sulphate (used to dilate pupils before eye exams) to digoxin (which battles heart failure). To be fair, not all of this is the fault of CDMOs and their employers. As Thompson notes, shortages existed even before the pandemic, while insiders have long grumbled about a lack of clean rooms, the dust-free spaces vital for safe drug manufacturing. Broader supply chain issues matter too. China’s strict lockdown has slowed the flow of drugs into Western markets, while border clashes with India have also impacted supply. But whatever the cause, a more pressing question is what can be done to remedy the situation. One solution is moving CDMOs back to producing other drugs, an increasingly attractive option as the pandemic relents. But some experts advocate more fundamental changes. NuvOx Pharma, for instance, is an Arizona firm that recently announced it was building a 900ft² clean room for brain tumour and stroke medication.
Bigger players are taking similar steps. Novartis, for instance, recently switched production for its drug PCSK9 inclisiran from Italian CDMO CordenPharma to its own facility in Austria. The company, which is awaiting approval for the cholesterol-lowering RNA therapeutic from the FDA, cited unresolved facility inspection-related conditions as the reason.
Of course, abandoning CDMOs sounds great in theory. In practice, though, how easy is it for a manufacturer to move in-house? Even for big firms, Glajch highlights a number of hurdles. “It can be a challenge,” he says. “First, you have to build a facility, and that probably takes a couple of years, depending on the size. Then you have to validate it, to get it up and running, to make sure you have regulatory approval. Then you’ve got to hire people that can run it.” As noted by Thompson, all of this can come at a hefty price, with the building cost alone for a smaller facility somewhere in the region of $10m, while 100,000ft² sites are approximately $120m.
Shelling out
All the same, the situation is far from hopeless. As Novartis’s experience implies, the largest pharmaceutical firms have the clout to bring manufacturing in-house if the price is right, while smaller companies can manage it too with the right financial backing. For one thing, venture capitalists are normally eager to stump up cash in advance. For another, manufacturers are experimenting with so-called ‘phased’ construction. This means building a ‘shell space’ early in a clinical trial, but not completing the facility until promising results emerge. Another tactic involves multi-modal production. Rather than focusing on a single therapeutic area – vaccines or active pharmaceutical ingredients – companies are instead building facilities that can do it all. Naturally, that means gambling on what the market will need five or ten years down the line, but that sort of risk-benefit calculation isn’t abnormal in this industry.
Where, then, does this leave long-established CDMOs? Thompson believes the direction of travel is clear. Though CDMOs will continue to be vital in the medium term, their importance may drop off as “pharma companies develop a long-term plan for in-house manufacturing.” Glajch isn’t so sure. With regulators being what they are, let alone the exigencies of closed plants or sick staff, he suggests having a broad manufacturing base will always be helpful. “There are so many things that happen in the supply chain – both in the US and around the world – that you cannot even begin to predict.” A fair point, even if the crisis of the last few years finally seems to be receding. ●
World Pharmaceutical Frontiers /
www.worldpharmaceuticals.net
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