Table talk — industry leaders reveal what they think are the current ‘mega trends’
In this roundtable, four industry leaders from Symbiosis Pharmaceutical Services, Recipharm, Sterling Pharma Solutions and Idifarma, reveal their thoughts on what the ‘mega trends’ are in the current pharma landscape.
The biotech BOOM!
The biotech industry has experienced phenomenal growth in recent years. This has been largely driven by an increase in funding which is, in turn, driving the demand for parenteral manufacturing as biopharma companies continue to advance new drug products to market in what some people would argue is a progressively more efficient way.
In turn, that demand is fuelling an increase in outsourcing to contract manufacturing organisations (CMOs) like Symbiosis with the capability to aseptically manufacture parenteral drugs for use in clinical trials. It can be confidently argued that the contract services industry has directly facilitated the rapid expansion of the emerging biopharma sector, and the ‘biotech boom’, given that 80% of approved parenteral drug products are manufactured by CMOs for those drug developing companies.
As a result, there is a demand for CMO partners who can deliver projects on tight timescales and therefore meet both investor and drug developer expectations. In the area of parenterals, we have witnessed increased demand from biotech companies for flexible, small-scale and specialist aseptic manufacturing capabilities to support first-in-man clinical studies with very stringent timelines and similarly tight budgets.
In addition, we see the US biotech market as particularly buoyant. Symbiosis has experienced significant revenue growth in the US in recent years, and we foresee that continuing as there is an ongoing need to reflect the demand from US-based biotechnology firms looking for small-scale aseptic manufacturing resource. This need is driven by the growing number of active clinical trials that is representative of US-based biotech firms’ collective financial good health, which gives them the means to advance more potential medicines.
Finally, we fully expect the shift towards the development of personalised medicines among emerging biotech companies to continue, bringing with it increasing demand for cytotoxic and specialist biologic products, and therefore, a greater need than ever before for specialist CMOs that can rapidly manufacture small (and often technically demanding) batches for small patient populations. Symbiosis has therefore positioned itself over the last few years to be at the forefront of providing world class sterile GMP manufacturing for small volume commercial medicines which may be patient-specific.
Colin MacKay, CEO, Symbiosis Pharmaceutical Services
Consolidation in contract services
One of the biggest trends that is currently shaping the pharmaceutical contract services landscape is consolidation. The sector is extremely fragmented, with lots of small-scale contract manufacturing organisations (CMOs) operating with very few contracts and slim margins, however these types of companies will not be able to survive in the long-term and will most likely be acquired by larger players and consolidators.
There have also been a few large-scale consolidations in the space with larger companies coming together to take advantage of both cost and perceived commercial synergies. I expect this to continue too especially as much of the industry is private equity owned and, by definition, always for sale.
From a customer perspective, we are increasingly seeing a search for full service providers that can offer support from development to commercial manufacturing, helping to simplify the supply chain. In addition, I also think that customers are beginning to look for a more global solution from their partners. CMOs that can provide solutions across the globe, including supporting market access restrictions such as those in Russia, Turkey and some other countries, are well positioned for growth.
Regulatory changes such as serialisation are also likely to have an impact on the consolidation trend as the large investment that needs to be made may simply be too much for smaller players. Following the implementation of the European Falsified Medicines Directive (FMD) in February 2019, this will result in loss of business in key markets and the need to join forces with larger players to ensure compliance.
Mark Quick, executive vice president of corporate development, Recipharm
East-to-West: Manufacturing movements
Quality has always been the core concern of pharmaceutical manufacturers and regulations continue to tighten to ensure the industry delivers.
In the past, we have seen companies move their manufacturing operations, particularly active pharmaceutical ingredient (API) production, to emerging markets, such as India, in order to generate cost savings. However, quality concerns surrounding the APIs produced in these markets are driving many sponsors to bring their operations back to the west.
While the initial cost savings that can be generated as a result of manufacturing in the eastern market were attractive to many pharmaceutical companies, they are now finding that it is more expensive in the long-run.
Frequent failures to meet quality standards and the long lead times required to deliver the product to market means the overall price of manufacturing and distributing products from an eastern facility is continuing to rise, as their western counterparts find ways to become more competitive.
Whilst the eastern companies will resolve these quality issues over time, going forward I believe western facilities that are able to demonstrate a comprehensive quality and compliance track record, coupled with exceptional service delivery, will dominate the innovator product contract manufacturing sector.
Kevin Cook – CEO, Sterling Pharma Solutions
The rise of niche service providers
The growing trend for outsourcing in the pharma industry will lead to continued demand for niche service providers.
In particular, the growth in the number of products for orphan indications, alongside oncology treatments requiring small quantities and highly potent APIs, are fuelling the need for more niche contract partners, with specialist capabilities.
For example, high potency drug development and manufacturing requires specialist facilities, which are capital intensive and bring strict regulation. Because of this, it is often more economical and practical for pharmaceutical companies to work alongside niche service providers to develop and manufacture their products in a more efficient manner.
As well as the practical and technical capabilities, niche service providers are also experts in their field and offer the flexibility, responsiveness and reliability that are so important when dealing with this type of product.
I see the demand for niche service providers remaining high as long as pharmaceutical companies choose their partners well — choose a niche service provider that is independent, client-orientated and without conflicts of interest and it will continue to be an effective business strategy for long-term success.
Manuel Leal — business development director, Idifarma