The perfect partnership — looking at the growing need for strategic partnerships
Strategic analytical partnerships are important in the development of new pharmaceutical products, especially biologics. Here, Michael Merges, Catalent Biologics, and Brian Fahie, Biogen, discuss the growing need for partners who can provide niche technologies to accelerate development projects.
Contract research organisations (CROs) and contract manufacturing organisations (CMOs) play an important, and growing, role in the development of new pharmaceutical products, especially for biologics. Big pharma companies are increasingly shifting key internal resources from small molecule programmes to biologics programmes. As a part of this shift, many companies are becoming more reliant on outsourcing for a range of operations from analytical science to product manufacture. Start-up biotech companies can be entirely virtual, with all practical functions performed by experts elsewhere.
The market for biopharmaceuticals is growing dramatically, with the increasing penetration of protein therapeutics such as antibodies, and the development of more esoteric treatments such as gene therapy and cell-based products. A 2016 Frost & Sullivan report highlights that annual sales across the board for biologics have now topped $200 billion, and with an annual growth above 15%, it is currently the fastest growing sector of the healthcare industry.1
As a result, CMOs have been expanding their reach towards partners, investing in capacity and new technologies to meet the changing demands of pharma companies. However, a never-ending stream of mergers and acquisitions continues to reshape and consolidate the biopharma landscape, which poses a threat to the contractors; and M&A activity has been occurring on their side of the business, too, which remains very fragmented.
This may, on the face of it, appear to be an extremely optimistic biopharma growth rate but in reality, while the CMO market for small molecules is extremely well developed, the same is not true for biologics. There remains a lot of scope for expansion in the market for protein therapeutics and more complex biologic products, and estimates put the market for this sector as large as $60 billion in 2020. This will involve CMOs investing heavily in both the technology and expertise that will be required to make these products efficiently and effectively, and in full compliance with all requirements of the regulators.
Within the overall market, mammalian cell culture in particular represents a huge opportunity, and bioassays are currently the fastest growing individual analytical function to be outsourced. The high growth rate across the board for pharmaceutical manufacturing outsourcing, and for biologics specifically, will require a combination of skills and capital investment for companies to succeed in this space.
Companies engaged in providing contract development and manufacturing services are increasingly looking further up the value chain, into earlier developmental projects. Increasingly, CROs and CMOs are also becoming broader organisations by integrating development and manufacturing capabilities. These contract development and manufacturing organisations (CDMOs), can now work across all phases of development from the early stages of lead discovery, right through to the production of final packaged dosage forms.
Creating a successful model
The drivers behind outsourcing were originally to either save money, gain access to a new technology, or meet a changing business environment. Often, decisions needed to be made quickly, such as to react to a changed sourcing model demanded by a merger or acquisition, or to provide a rapid increase in capacity for a project whose importance has been reprioritised. Although all these instances could meet a short-term requirement, in the long term they are inefficient, and thus unlikely to offer optimum scientific success or maximize investment returns.
The most successful relationships between pharma companies and contractors are now operated as strategic partnerships. At the outset, the two (or more) partners will need to discuss the process openly and candidly, and fully integrated teams that include people from both sides are developed to manage and run the project.
The operations involved in developing and bringing a drug product to market fall into four groupings, in terms of where that work is best done. In-house at the pharma company — as long as the capabilities are present — is usually the best place for any processes that are urgent and provide a strategic advantage. Strategic projects include anything that might be classed as a novel application or emerging technology, or a step for which the turnaround time or proximity is rate-limiting and could cause delays and hold-ups to other important operations.
When internal resources become limited, a CDMO can be the appropriate choice for strategically urgent work. The best option from the pharma perspective is a suitably sized CDMO full time equivalent (FTE) team. This strategy of outsourcing non-predictable work limits the number of people on the project, and the FTE team priorities can be adjusted quickly, for example to stay in line with the manufacturing functions.
In contrast, a fee-for-service outsourcing strategy to a CDMO is the best option for more mature and predictable work which, while it is important, is not urgent. This predictable work is likely governed by qualified or validated methods tied to protocols, which determine how much work will be required, and by when the results are due. By its nature, although this work is predictable and non-urgent, it is not routine.
There is likely also to be the case for niche or specialty processes that are time-dependent but non-strategic, and require the input of experts with very specific talents or that are driven by meeting the needs of compliance. Many operations that fall into this category are likely to be governed by regulatory requirements and thus require specific expertise; examples include analysis of trace metals, extractables and leachables and now even bioassay. Such analytical techniques require very experienced scientists and often require expensive analytical equipment, and thus would represent a significant investment to the pharma company if they were done in house.
Future outlook
The growth in outsourcing is not showing any signs of slowing down, inclusive of more complex products getting closer to the market. As this pattern continues, the need will increase for partners who can provide niche technologies as pharma recognises it will be uneconomic for them to implement the niche capabilities in-house. This is yet another example of an evolving contract market where success is far more likely to be achieved through the formation of strategic partnerships, and individual transactional agreements will become less important.
Contract development and manufacturing organisations have invested in the same high quality equipment, scientists and engineers as pharma and biotech companies. Working closely together in strategic partnerships and building strong relationships will lead to significant benefits for both parties in terms of speed, cost, efficiency and overall risk reduction.
Case study: Catalent and Biogen
The first step for implementing the strategic partnership at Catalent Biologics was to agree on what was meant by all of the standard terminology used within the collaborative model. Teams of subject matter experts were then put to work to pin down which work streams were strategic, predictable, non-predictable and niche. In the first instance, this was done across two specific work streams — gene therapies and antisense oligonucleotides.
It rapidly became clear that almost nothing fell cleanly into a single category, so the best match was applied for each task, and a potential work stream collaboration for antisense oligonucleotides was progressed with Biogen. As the appropriate Catalent facility was geographically very close to the Biogen manufacturing plant, this enabled important and urgent work to be shifted into a programme that is appropriate for an FTE resourcing model — from sample receipt to quality review within 48 hours — providing flexibility and the ability to respond to changing priorities.
Over the subsequent few months, additional work streams for proteins and peptides were added into the collaboration discussion. It became apparent that it could be appropriate for Biogen to outsource its non-strategic work in these areas as the technology was mature, but its more recent moves into the gene therapy field would strategically be best kept in-house, at least for the time being.
After eight months of discussions, a host of opportunities for partnership had become apparent. Automation was an important topic of conversation from an early stage, and as the two organisations were already using common platforms for bioassay and molecular assays, plans for manual method transfer and development projects that moved manual operations to automated ones were proposed. The next step was to consider platforms for data transfer, and collaborations with vendors of data analysis technology. It was already clear that shorter turnaround times should be possible across the board.
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