Susan Haigney

To foster the development of treatments for undertreated and rare conditions, FDA grants orphan drug designation to drugs and biologics that treat, prevent, or diagnose diseases that affect fewer than 200,000 people in the United States or drugs that meet certain cost recovery provisions (1). This designation comes with incentives such as tax credits, user fee exemptions, and market exclusivity. To receive such designation, sponsors must submit requests and present data to support the request.

 asked Judith Jones, FRSC, Director Regulatory Affairs, Global Regulatory Affairs, Catalent, and Matthew Mollan, RPh, PhD, Regional Head of Operations, Early Phase Development North America, Catalent, about the specific ways contract development and manufacturing organizations (CDMOs) can assist sponsors in developing, applying for, and manufacturing orphan drugs.

What are the criteria for receiving orphan drug designation in the US compared to the European Union?

In the US, to be designated as an orphan drug, sponsors need to show that the disease or condition that the drug is intended to treat has a prevalence of 7.5 or less for every 10,000 individuals, as opposed to five in every 10,000 individuals in the European Union. If this criterion is not met, orphan drug designation could still be granted in both the US and EU if sponsors can demonstrate that there would be insufficient return on investment to cover the cost of development when commercializing the drug in the respective markets. Another additional criterion in the EU is that there is no satisfactory method of diagnosis authorized in the EU for the prevention or treatment of the disease or condition in question.

 How are the processes different in the US versus the EU to receive orphan drug designation?

While the process of orphan drug designation requirements for FDA and the EMA [European Medicines Agency] do not fundamentally differ, they do vary in terms of the precision of evidence required. For example, in the US, sponsors need to provide scientific rationale and proof of efficacy for the use of an orphan drug. When clinical data or an applicable preclinical model is not available, sponsors may justify using data that include the pathogenesis of the disease, mechanism of action of the drug specific to the disease, and supporting in vitro data. Sponsors may also leverage data from published literature during the orphan designation application process. In the EU, justification using only in vitro studies and mechanism of action may not be enough to justify ‘medical plausibility’ and ‘significant benefit’, which is best supported by clinical or preclinical data.

 Is it more difficult to gain orphan drug designation in the US versus the EU?

 There seems to be an increasing trend for more drugs to be designated as orphan in the US than in the EU, as reported by the Regulatory Affairs Professional Society (RAPS) in March 2021. Between 2019 and 2020, there had been an increase of 41% in the number of requests for orphan drug designation in the US, bringing the total to 753 requests, whereas in the EU, the numbers remained steady, with 235 requests for orphan drug designation in 2020, compared with 233 requests in 2019 (2). A recent commentary called for more alignment between the EU and other big markets’ regulatory practices to facilitate the development of medicines for orphan diseases (3). Indeed, there are ongoing efforts to harmonize the approach to assessment of orphan drug designation between FDA and EMA, which one would hope would lead to a more consistent submission package between the different territories.

 What are the challenges when developing an orphan drug? Are there different challenges for small-molecule versus large-molecule drugs?

 Clinical trial design is one of the biggest challenges in orphan drug development and can be driven by difficulties in setting the appropriate efficacy endpoints, as well as challenges in patient recruitment, and often, programs require a wider, global view, compared to more traditional drug development. The challenges in setting appropriate efficacy endpoints stem from the often-incomplete understanding of the disease pathophysiology and natural progression of the disease, which can lead to difficulties in identifying and validating surrogate biomarkers and critical clinical outcomes. By their nature, the relatively low incidence of orphan diseases makes patient recruitment for clinical trials more challenging. The heterogeneous nature of many genetic orphan diseases further diminishes the pool of patients that are likely to see benefits from a new treatment, with many potential patients being children.

 What are the challenges when manufacturing an orphan drug? What types of manufacturing strategies work best?

Because of the unmet medical needs, treatments for rare diseases often qualify for an expedited development program. With that in mind, a limited API supply, shortened timelines, and uncertain formulation requirements are some of the challenges in manufacturing orphan drugs. The limited API supply can impact the development activities that can be performed and places pressure to have Phase I formulations continue to late-phase development. Strategic investment in Phase I formulation development and de-risking the process, while adding a unit operation, such as roller compaction, can save time and reduce risks by ensuring the formulation is ready for scale-up to be processed on automated equipment. A risk-based CMC [chemistry, manufacturing, and controls] plan and communication of the plan with regulatory agencies can help ensure preparation for any unforeseen challenges.

What are some considerations when performing scale-up of orphan drugs?

Most orphan drug product will not see the batch sizes or volumes associated with traditional commercial prescription products, meaning late-stage clinical-scale equipment can often be used for commercial manufacturing of orphan products. While the batch sizes may be smaller, regulatory agencies expect manufacturers to follow regulations and stay in compliance, ensure consistent product supply, and have the product stability data to support expiration dates. The manufacturing formulation and processes should be flexible to allow developers to respond to any changes in demand for the product, as well as being globally acceptable. Oncology orphan drug products can begin the commercial lifecycle as low volume products, but on occasion can experience increased demand as the treatments are studied in additional patient populations for different indications.

How can a CDMO help a sponsor company develop an orphan drug? What specific services and/or facilities can a contractor provide?

 Typically, the manufacturing of an orphan medicine is undertaken at a considerably smaller scale than traditional commercial manufacturing, because of the very limited patient population. When orphan designated drugs receive approval for expanded indications, this might affect the scale of commercial manufacturing. Therefore, a CDMO with the experience of manufacturing at customized scales, as well as the flexibility to respond to changes in the types of products being sold, the volume of sales, and the facilities and equipment needed for production, may be better able to help a sponsor company overcome barriers in terms of cost and timeline during an orphan drug development.

 How can a CDMO help a sponsor obtain regulatory approval for an orphan drug? What specific services and/or facilities can a contractor provide?

 When information is needed on specific technologies, or processes that require alteration, the CDMO’s regulatory team can respond quickly with minimal risk of error. A CDMO is also able to offer sponsors a global network of regulatory affairs experts that have local knowledge, to facilitate successful agency interactions. In addition, CMC activities could be easily and quickly prioritized to ensure that they do not present as bottlenecks to the execution of the orphan development program and submission of application to regulatory agencies. A CDMO should already be intimately familiar with its dosage form(s), which can be customized to potentially address a specific orphan medicine’s need. They are then able to provide complete advice and provide support on the formulation, development, and manufacturing intricacies. Leveraging a CDMO to obtain regulatory approval for an orphan drug may also result in overall improvement of efficiency in orphan drug product development time and accelerate product approval.

 How can a CDMO help a sponsor control the costs, specifically, of the development and manufacture of an orphan drug?

 A major global CDMO could provide access to an international network of technical expertise and state-of-the-art facilities. An integrated CDMO can save costs by accelerating timelines, reducing program risks, and ensuring a smooth transition between early and late-phase manufacturing sites. These benefits are achieved by harmonizing equipment, processes, pharmaceutical excipient vendors, collaboration tools, and project management structure between sites.

 Can a CDMO help a sponsor company determine which medical needs might warrant the development of an orphan drug?

 For the most part, CDMOs do not determine which diseases to target, but can help refine the target product profile and ensure that the final product meets the needs of the target patient population. Developing a formulation and process that can accommodate a very wide range of potential drug loading is a key decision that can significantly de-risk changes in drug loading requirements as more information becomes known. Many factors drive the development of the target product profile, and these include the physicochemical and pharmacokinetic properties of the API, patient considerations such as age and co-morbidities, and manufacturability of the drug product used in the treatment.

FDA, Developing Products for Rare Diseases & Conditions, 

M.E. Schneider, “Orphan Product Designation Requests Climb in the US, Remain Steady in the EU,” Regulatory Affairs Professionals Society, March 11, 2021.

D. Horgan et al., “Time for Change? The Why, What and How of Promoting Innovation to Tackle Rare Diseases – Is It Time to Update the EU’s Orphan Regulation? And if so, What Should be Changed?” Biomed Hub 2020;5:1-11. doi: 10.1159/0005


Supplement: Bio/Pharma Outsourcing Innovation 2022
February 2022
Pages: s26–s29

When referring to this article, please cite it as S. Haigney, “Fostering Orphan Drugs,” 

Articles

CDMOs offer expertise and customization options for sponsors of orphan drugs.

Fostering Orphan Drugs

The pandemic created many challenges in 2021 for both pharmaceutical manufacturers and regulatory organizations. The quality of pharmaceutical products continued to be a focus, but many facility inspections were postponed in 2020, and FDA officials evaluated their inspection programs during the pandemic and issued guidance for remote monitoring and other virtual activities (1–3). From March 2020 through March 2021, FDA conducted 821 mission-critical inspections (49 for human drugs, 10 for biologics) and 777 prioritized domestic inspections (106 for human drugs, 53 for biologics) (4).

In Europe, there were fewer regulatory inspections in 2020 than in previous years (5). Siegfried Schmitt, vice president, Technical at Parexel, feels the limit on in-person inspections might have a long-term impact on the expertise of quality personnel. “The current pandemic limits the opportunities for in-person meetings, visits, and travel. These have proven to be important elements of professional development, particularly for budding quality professionals, as these allow learning and experiences that cannot be conveyed through virtual/electronic means. This may limit the pool of experienced and seasoned quality and compliance experts in years to come,” he says.

These challenges have made the already difficult task of inspecting facilities more problematic. Regulatory agencies, however, worked to get back on track in 2021 (6).

The pandemic created another complication for regulators: a flurry of companies claiming to sell products to treat or prevent COVID-19. A good number of FDA warning letters listed on FDA.gov in 2021 appeared to be directed at facilities manufacturing hand sanitizer or other COVID-19-related products that were adulterated (7). Quality problems occurring within these companies entering the market showcase some of the problems regulators see in quality departments, according to Susan J. Schniepp, distinguished fellow at Regulatory Compliance Associates. “I think many of the observations regarding insufficient quality are directed at this phenomena of companies producing products that are regulated and not understanding those regulations,” she says. Compounding pharmacies also got attention by the agency in 2021, with failures in aseptic and sterile manufacturing procedures a common notation on Form 483s (8–10). Some other common types of citations found in warning letters are listed in 

Table I. Common trends in FDA warning letters in 2021.

Schniepp also sees the typical quality problems continuing in the future, including insufficient investigations, a lack of data integrity controls, not having adequate standard operating procedures (SOPs), and not following SOPs. “These issues have been responsible for the majority of observations in the past, and there is no reason to suspect that industry has solved these issues. I think one of the reasons for this situation is the industry doesn’t necessarily change their approach to certain key functions even as products and processes become more sophisticated and outpace a company’s ability to revise documents to keep pace with the product changes,” she says.

One of the common FDA observations in warning letters is the lack of adequate response to FDA 483 notices. “Effectively responding to a 483 and/or warning letter requires familiarity with processes, systems, and data because a proper response should address how you are going to fix the situation observed, how you are going to prevent the situation observed from recurring, and why the situation observed did not impact the patient safety/product quality of the product that was released before the situation was corrected,” says Schniepp. “I think many people forget to include this historical look back. Without this historical perspective, a response will never be sufficient.”

In Europe, Schmitt points to a lack of quality oversight as a quality issue at some facilities. “European agencies expect senior management to actively engage with the quality department and to drive quality and compliance in the company. To that end, a company must be able to demonstrate regular [documented] meetings between senior management and the quality department. In addition, quality and compliance key performance indicators should be in place,” he says.

As regulatory agencies work to combat COVID-19, facility inspections, either performed in-person or remotely, will continue to be one of the tools regulators use to ensure the safety of medicines. Inspections also provide pharmaceutical companies with the information they need to produce the most effective and safe products possible.

Remote Interactive Evaluations of Drug Manufacturing and Bioresearch Monitoring Facilities During the COVID-19 Public Health Emergency, Guidance for Industry

“FDA Inspections During COVID-19: A Brave New World,” PharmTech.com

Resiliency Roadmap for FDA Inspectional Oversite

GMP/GDP Inspections: Challenges and Opportunities Revealed by the COVID-19 Pandemic,” PharmTech.com,

ORA FOIA Electronic Reading Room, FDA.gov

Form FDA 483, ACRX Specialty Pharmacy Inc


Vol. 46, No. 1
January 2022
Pages: 42–43

When referring to this article, please cite it as S. Haigney, “Quality Still a Priority,” 

As regulators balance pandemic tasks and rethink procedures, quality at manufacturing facilities is still a priority. 

Quality Still a Priority

 asked Cathie Vielle, Head of the European Pharmacopoeia Department and Secretary to the 

 Commission at the European Directorate for the Quality of Medicines & Healthcare (EDQM) about recent and planned updates to the 

), the latest on nitrosamines, and the impact of COVID-19 on the industry.

: What updates or changes were made to the 

 in 2021 that manufacturers should be aware of?

): The new chapter ‘Test for bacterial endotoxins using recombinant factor C’ (2.6.32) describes a bacterial endotoxins test using a recombinant factor C based on the gene sequence of the horseshoe crab and fluorimetric detection. Although not a new topic for the 

, its publication marks a significant step towards reducing the impact on an endangered species.

Regarding particulate matter, two texts should be mentioned: a new chapter ‘Recommendations on testing of particulate contamination: visible particles’ (5.17.2) provides information on visual inspection and control of visible particles in liquid preparations; and the revised chapter ‘Particulate contamination: sub-visible particles’ (2.9.19), which supplements the [Pharmacopoeial Discussion Group] PDG (

https://www.edqm.eu/en/international-harmonisation

) harmonized text. In addition, the revised general monograph Parenteral preparations (0520), published in Supplement 10.5, now describes the tests for particulate contamination—both visible and sub-visible particles—in the test section as release criteria and applies to all liquid parenteral preparations intended for injection or infusion.

Finally, a new general chapter on ‘Multivariate Statistical Process Control’ (5.28) was published in Supplement 10.4. The

 is the first pharmacopoeia to tackle this topic.

 for 2022 that impact small-molecule drug development and manufacturing? For large molecules?

Commission now foresees the complete replacement of the rabbit pyrogen test by suitable 

 alternatives within approximately five years. Revisions to some 59 

 consultation process will start in 2022.

Several new general chapters will enter into force on 1 January 2022 after their publication in Supplement 10.6, including ‘

-nitrosamines in active substances’ (2.5.42), which provides three validated tests for 

-nitrosamine impurities in ‘sartan’ active substances with a tetrazole ring and may also be used for the control of other APIs and medicines, and ‘Balances for analytical purposes’ (2.1.7).

Likewise for the revised General Notices, which include requirements for dissolution and disintegration tests. As of Supplement 10.7, the test for specific toxicity in guinea pigs will be deleted from 17 monographs for vaccines for human use.

: What can you tell us about the following revisions, and have you received any feedback from the industry?

 2.6.16. ‘Tests for extraneous agents in viral vaccines for human use’—The revision of this general chapter will take into account comments received from

 users and clarify requirements for a number of extraneous agent tests. The scope of the avian leucosis virus test has been extended in view of the deletion of chapter 2.6.24.

2.6.40. ‘Monocyte-activation test for vaccines containing inherently pyrogenic components’—This is a new general chapter to encourage the use of the in vitro monocyte-activation test for vaccines containing inherently pyrogenic components.

2.8.2. ‘Foreign matter’—This general method has been revised to include more specific requirements for other foreign elements like moulds and animal contamination such as insects, and now states that any other unwanted matter (e.g., glass, plastic, or metal) should, as far as possible, be absent.

5.21. ‘Chemometric methods applied to analytical data’—Numerous sections of this chapter have been completely rewritten or updated and new sections/sub-sections introduced to take into account developments in data science techniques since its adoption in 2015.

 Can you give us an update on the nitrosamine contamination situation? What specific revisions to monographs have been made?

The five monographs on sartans with a tetrazole ring—Valsartan (2423), Losartan potassium (2232), Irbesartan (2465), Candesartan cilexetil (2573), and Olmesartan medoxomil (2600)—have been revised in line with the latest [European Medicines Agency] EMA [Committee for Medicinal Products for Human Use] CHMP regulatory recommendations. Hence, the control of N-nitrosamines has been moved to the Production section, which now requires a risk assessment and, if necessary, a modification of the manufacturing process and the implementation of a control strategy. They came into force on 1 April 2021.

For the general monographs Substances for pharmaceutical use (2034) and Pharmaceutical Preparations (2619), comments on the revision of the Production section received through 

 Finally, more than a year-and-a-half after the COVID-19 pandemic started, how has the industry changed and how has the pandemic impacted the EDQM?

 The pandemic has definitely highlighted risks linked to the industry’s dependency on suppliers on different continents and to supply chain fragmentation and vulnerabilities. Whether this will change how industry operates remains to be seen.

The EDQM’s priority from the outset has been to ensure continued supply of our products and services, especially of the reference standards required to produce medicines and release them to the market. Staff commitment, our flexibility, and careful production planning has made this possible. We have also further increased our interaction with regulators, industry, and the world pharmacopoeias to ensure good quality medicines are available and support the development of COVID-19 vaccines and medicines.

The lockdowns and increased teleworking have entirely changed our working methods and have made us fast-track digital transformation. 


Volume 33, Number 10
October 2021
Pages: 44-45

When referring to this article, please cite it as S. Haigney, "

 Updates: EDQM Tackles Nitrosamine Impurities," Pharmaceutical Technology Europe 33 (10) 2021.

Updates to Ph. Eur. include validated tests for N-nitrosamine impurities in sartan APIs.

European Pharmacopoeia Updates: EDQM Tackles Nitrosamine Impurities

 asked Vincent Colicchio, vice president, supply chain and external manufacturing at Dr. Reddy’s Laboratories, about how a lack of proper supplier oversight can impact the pharmaceutical industry and the drug supply chain.

 What types of quality issues can be created by insufficient oversight of material suppliers? Of contract manufacturers?

 There are several important materials in the pharmaceutical supply chain such as APIs; key starting materials for API production; excipients; purified water; and packaging materials including bottles, closures, vials, and printed components. The types of quality issues that can be created by insufficient oversight of material suppliers that could impact the supply chain include the following examples:

Material suppliers that manufacture APIs who fail to comply with [good manufacturing practices] GMPs could produce APIs that contain possible contaminants. This can be through dirty equipment and facilities due to poor upkeep, [poor] cleaning, or processing equipment in disrepair. This risk also pertains to the production of excipients.

Printed component suppliers that fail to track and control the latest approved document version of the files for labels, patient information leaflets, and cartons risk printing and shipping an older version of packaging materials to their customers. Failure to print the latest approved version could compromise the on-time packaging and supply of finished goods to customers due to possible mislabeling.

The types of quality issues that can be created by insufficient oversight of contract manufacturers include failure to ensure that the contract manufacturer thoroughly addressed all open observations found in an FDA inspection or other regulatory agency inspection in a timely manner.

While there are a wide variety of potential issues in this category, it is particularly important that the contract manufacturers properly operate and sanitize the purified water system that is used for production operations and cleaning purposes. Prevention of any microbial contamination is a must in any purified water system. It is also critical that the HVAC systems properly function to maintain production room conditions for temperature and humidity control along with differential pressures at all times.

 How is the supply chain impacted by poor oversight of suppliers?

 The supply chain can be impacted by poor oversight of contract manufacturers. For example, in the event that a contract manufacturer fails to properly clean the production equipment or execute its cleaning validation program, it runs the risk of allowing residues or contaminants to enter into the production process and product. If this occurs, analytical testing would reveal the presence of contaminants. The product would be placed in quarantine until such time that the investigation is carried out and completed with the appropriate [corrective and preventive actions] CAPA. The equipment would need to be re-cleaned. Presuming the original batch fails product release, the product would need to be manufactured again and then shipped to the customer. The delayed shipment of the product to the customer would likely impact on-time and in-full product shipment to the customers and subsequently access to the patients.

When referring to this article, please cite it as S.Haigney, “The Impact of Insufficient Oversight,” 

Vincent Colicchio, vice president, supply chain and external manufacturing at Dr. Reddy’s Laboratories, discusses how a lack of proper supplier oversight can impact the pharmaceutical industry and the drug supply chain.

The Impact of Insufficient Oversight

The pharmaceutical outsourcing market has seen a growth in vaccine development and manufacturing activity in the past year, particularly due to the industry’s response to the COVID-19 pandemic. And this growth is likely to continue, according to Mike Kleppinger, chief commercial officer at Curia (formerly AMRI) (1). “If you look at the vaccine developers, much of that production was outsourced. And with its global impact, we would expect COVID to continue to drive growth because you’ll have more treatments, as well as vaccine boosters, different strains, etc.,” Kleppinger says.

Increased demand for new treatments, either for COVID-19 or other much-needed medicines, requires increased production. Many sponsors partner with contract development and manufacturing organizations (CDMOs) and contract manufacturing organizations (CMOs) to scale up and meet capacity demands for the commercial level in order to get treatments to patients quickly, according to Kleppinger. “Not only that, I believe they discovered that contract partners are particularly effective at the application of data, technology, and other innovations. CDMO partners have invested in greater capabilities and sponsors have realized that certain CDMOs have great innovation, great technology, and they have relevant subject-matter expertise. I think they’ve learned that partnering with a good CDMO enables agility, speed, efficiency, and quality,” Kleppinger says.

CDMOs have made investments in capacity and resources to address supply chain challenges, says James Choi, chief information and marketing officer at Samsung Biologics. “More modular construction and expansions, investments in the latest technologies, and process intensification strategies have all accelerated in the CDMO industry,” Choi says.

A continued increase in the need for new medicines is causing growth in the pharmaceutical industry, and sponsor companies will continue to use CDMOs as necessary, according to Andrew Henderson, chief commercial officer at Sterling Pharma Solutions. “Smaller or virtual biotechs rely almost entirely on outsourcing across all disciplines; mid-size pharma invests in core activities internally such as R&D and commercialization, but not manufacturing; and large pharma strategically outsources manufacturing in order to use assets efficiently,” says Henderson.

The industry has seen record highs in investment, according to Joe Sinclair, vice president, corporate strategy and business development at Vibalogics, which has created new companies and expanded pipeline assets. “In addition, requests for CDMO services are tracking in parallel fashion as service demand follows clinical and commercial industry progress. The industry has also seen a renewed focus and surge in demand in infectious disease R&D and cGMP [current good manufacturing practice] manufacturing, accordingly, fueled by the concerns of the COVID-19 pandemic,” Sinclair says.

Sinclair sees a potential for growth in the emerging oncolytic virus therapeutics market. “Much of the market is in preclinical or early-phase trials, but Amgen’s commercial approval of Imlygic here has created a regulatory pathway or template for others to follow in the future. As a result, we are seeing activity picking up due to improved confidence. I think we will continue to see more and more activity in the classes reviewed,” Sinclair says.

Gene Nakagawa, EVP business development at LGM Pharma, says his company has seen an increase in the outsourcing of analytical testing. “Our expectation is that the demand for analytical testing services will continue to be a strong area of growth as FDA elevates its testing requirements for products,” Nakagawa says.

According to Tom Wilson, contract manufacturing lead at Pfizer CentreOne, demand for mammalian drug substance has increased, but he has also seen growth in the outsourcing market in general. “[Sponsor companies] are looking for greater network efficiencies so they can share costs with other companies and ensure demand and supply protection without building redundant facilities. These partnerships benefit all parties involved but most importantly, the patients,” Wilson says. “While there hasn’t been a change in the quantity of business from sponsor companies, there has been a change in the type of business as requirements for outsourcing have changed,” he continues.

Biopharmaceutical development is expanding, according to Choi, and small and emerging biotechs are relying on CDMOs for their development and manufacturing expertise. “The bio/pharma outsourcing industry is actively revisiting its supply chain and investing more to offer the multi-scale capacity required to support increasing demand in the next five to 10 years. Moreover, many leading CDMOs are expanding their capabilities in new modalities such as [messenger RNA] mRNA and cell and gene therapy,” Choi says.

Matthew Barker, corporate strategy at Vectura, agrees that biologics and gene therapies have seen an increased focus recently, but other markets will also see growth in the future. “In addition to biologics, we expect other specialist market areas with a high degree of complexity and barriers to entry, such as inhaled drug delivery, to continue to grow. In contrast, we expect growth to slow in the more commoditized areas of the outsourcing market with lower barriers to entry, particularly for companies without the benefits of scale,” says Barker.

The advancement of next-generation biopharmaceuticals will require consolidation of expertise, capacity, and know-how, according to Kleppinger. “It will be analogous to what we’ve seen in CROs [contract research organizations] buying up niche players to expand capabilities and deliver scale,” he says.

For example, the former AMRI announced several major developments in July 2021, changing the company name to Curia and entering into an agreement to acquire Integrity Bio, Inc., a formulation and fill/finish organization in Camarillo, Ca. (2). The company also agreed to acquire LakePharma, a biologics drug discovery, clinical research, development, and manufacturing company that has facilities in California, Massachusetts, and Texas (3).

In April 2021, Thermo Fisher Scientific announced it had acquired PPD, a clinical research services provider, for $17.4 billion. The acquisition will give Thermo Fisher access to PPD’s drug development platform, patient recruitment capabilities, and laboratory services, Thermo Fisher said in a company press release (4). The collaboration is expected to offer new solutions for customers, while reducing the time and cost of the drug development process.

“M&A in the CMO/CDMO space is definitely ‘hot’ right now,” says Nakagawa. “Valuations are high for both manufacturers and for lab-services companies that are US-based. The partnership model is expected to continue to be strong as companies try and save on development costs. In the pure generic space though, the trend for partnership is decreasing, primarily due to the downward pricing pressure we are seeing in the generic drug space,” he says.

According to Henderson, consolidation in the small-molecule CDMO market is “inevitable” as outsourcing companies invest and expand. “This industry consolidation will include M&A to broaden capacities and capabilities and expanding service offerings within the value chain. It will be driven by the needs of customers and their strategies for partnering with companies: either through integrated service providers, or by using multiple specialized suppliers to meet their developmental milestones,” Henderson says.

Bill Vincent, chairman and CEO at Genezen agrees that consolidation in the CDMO/CMO market will continue during the next five years. “Companies that were in one segment are now looking to expand into other segments and there is continued interest in expanding into other geographic regions as well. I also believe we will also see further development of niche or boutique CDMOs that specialize in unique services or cater to special needs,” he says.

Bio/pharmaceutical companies will be looking to partner with CMOs and CDMOs for technology innovations, risk mitigation, and overflow management, according to Choi. “We’re also going to see more M&A as more CMO/CDMO companies look for opportunities to expand their portfolio of services,” Choi says. “The great thing about strategic CDMO partners is that they can buffer the supply chain. The right ones have higher buying power and supply reliability built in that partners can leverage when trying to secure scarce or high demand raw materials and components. Strong CDMO partners can also help implement more effective supply chain strategies. Samsung Biologics establishing itself regionally in the bio cluster hub in South Korea is a good example of the added value CDMOs are capable of delivering post pandemic,” adds Choi.

“Compared with other sub-sectors in the healthcare industry, the CMO/CDMO competitive landscape remains highly fragmented, with the top 10 companies accounting for around 20% of the $90–100 billion market. This proportion has increased over the past decade and will continue to do so for the foreseeable future,” says Barker. “However, we expect M&A to be more targeted in coming years. Acquiring companies should have a clear rationale if entering an adjacency, with a high value placed on specialist areas of expertise that help customers overcome complex formulation and development challenges,” he adds.

“Acquisitions have been following a trend as CDMOs look to build platform service and end-to-end capabilities. Companies and CDMOs will focus more on platform development, acquiring companies and technologies that will give them advantages across cell line, media, and formulations, upstream and downstream operations and intellectual property. They will be seeking to drive customer benefit by offering both technologically advanced, and diversified services, ultimately saving customers time and money,” says Sinclair.

In addition to market consolidation, Vincent sees capacity as an ongoing challenge for the pharmaceutical industry. “We will see continued physical and technological expansion as a result so capacity will increase through investment in new facilities as well as new technologies that increase throughput and yields on each production batch. These technologies will also lower the overheads and material costs for each batch,” says Vincent.

Assistance with regulatory matters is an area Nakagawa sees potential in. He also believes the need for sterile fill will continue to remain high. “Novel technologies with new delivery systems, sterile fill and high potency products, have been areas of rising demand and growth for CDMOs,” says Nakagawa. “We expect this trend to continue.”

Technology will also be a trend for the pharmaceutical outsourcing market in the future. “For CDMOs, there is a push towards digitization, and exploring the potential value of technologies such as artificial intelligence and machine learning in a way that can improve manufacturing by reducing project timelines, while at the same time enhancing process efficiency and minimizing costs, as well as ensuring product quality,” says Henderson.

As a result of the quick development and production of COVID-19 vaccines, Britton Jimenez, vice president, business development at Metrics Contract Services, anticipates that sponsor companies will be looking at what lessons can be learned from the pandemic to increase speed to market. “Sponsors are going to be much more selective in choosing their partners as they are going to want to ensure risk mitigation plans are in place as well as truly evaluate the region in which they should perform their development work,” Jimenez says. “One thing many companies learned is having a risk mitigation plan is critical to ensure that supply of their therapies does not get interrupted.Many organizations were exposed during this time due to not having risk mitigation plans in place or redundancies built in to ensure continuity of supply.Some sponsors were also put in a very tough place as they had chosen to go into low-cost markets for services, which made it very difficult to get their products out of these markets into primary markets where clinical trials are run due to COVID,” says Jimenez.

Wilson believes outsourcing partnerships will continue to grow in the future. “CDMOs offer a range of expertise and capabilities that are in high demand from sponsor companies to help them meet their goals and ensure that medicines reach the patients who need them. The past year has demonstrated the power of collaboration in the industry and these partnerships are here to stay,” Wilson says.

1. AMRI, “AMRI Becomes Curia,” Press Release, July 12, 2021.
2. Curia, “Curia to Acquire Integrity Bio, Expanding Biologic Formulation and Fill-Finish Capabilities,” Press Release, July 13, 2021.
3. Curia, “Curia to Acquire US-Based LakePharma, Expanding End-to-End R&D Capabilities and Scale for Biologics,” Press Release, July 14, 2021.
4. Thermo Fisher Scientific, “Thermo Fisher Scientific to Acquire PPD, Inc., a Leading Clinical Research Organization,” Press Release, April 15, 2021. PT

Susan Haigney is managing editor of Pharmaceutical Technology.

Pharmaceutical Technology Outsourcing Resources

When referring to this article, please cite it as S. Haigney, “CMOs and CDMOs Adjust to Pandemic Response and Beyond," 

Investments, biologics, and the impact of COVID-19 will continue to shape the bio/pharmaceutical outsourcing industry for the near term.

CMOs and CDMOs Adjust to Pandemic Response and Beyond

After more than one year of rapid development and production of vaccines and therapies to address the COVID-19 pandemic, the bio/pharmaceutical industry is adjusting business practices and priorities as the next phase of response to this global emergency unfolds. Bio/pharmaceutical contract manufacturing organizations (CMOs) and contract development manufacturing organizations (CDMOs) are adjusting to a variety of demands and challenges caused by the pandemic, including ensuring a robust and safe supply chain.

When the pandemic initially began, many companies had to not only prepare for the influx of demand for COVID-19 treatments, but they also had to balance that demand with their existing workload. The CMO/CDMO industry was operating on a reactionary basis during the beginning of the pandemic, according to Tom Wilson, contract manufacturing lead at Pfizer CentreOne. “As it became apparent that we would be in this state for the long-term, we had to change our business processes and develop best practices to ensure we could partner remotely,” he says. Collaboration increased across CDMOs, says Wilson, and requirements were prioritized to meet the needs of patients.

Reevaluating the supply chain and timelines

The pandemic highlighted a variety of issues related to the biopharmaceutical supply chain, and supply chain risk mitigation, especially for APIs, has become increasingly important, says Gene Nakagawa, EVP business development at LGM Pharma. “In 2020, we saw an increasing focus on outsourcing of products directly related to COVID-19, such as Midazolam for intubation, antivirals, etc. Drug shortage lists have also been growing, partially due to demand but more often due to supply chain issues. In particular, starting materials for APIs have been hit with shortages,” Nakagawa says. “Supply chain has been difficult for many companies and continues to be. This has heightened the importance on safety stock and applies to both excipients and APIs.”

Joe Sinclair, vice president, corporate strategy and business development at Vibalogics, agrees the pandemic caused a global trade disruption, and supply chain management is crucial. “For many, this has meant evaluating alternative sources of raw materials, consumables, and suppliers for contract manufacture and product quality control testing,” Sinclair says. “Companies are actively focusing on mitigating risks by evaluating the expansion of their network of suppliers, and often onshoring activities or searching for domestic sources due to supply complexity, and the risks of being reliant on a single supplier, or a single region.” Vibalogics has optimized the security of its own supply networks and expanded its operations in the United States and Europe to address supply chain concerns, according to Sinclair.

The expectation of accelerated timelines also is a significant impact of the COVID-19 pandemic on the bio/pharmaceutical outsourcing industry, according to Mike Kleppinger, chief commercial officer at AMRI. “There has been a compression over the past 18 months that demonstrates the ‘art-of-the-possible’ in a crisis. We didn’t have the luxury of months-long contractual obligation discussions. COVID brought about a common purpose that drove more efficient timelines and was very outcomes-driven,” Kleppinger says.

“When it comes to clinical trials, market demand is high for products being manufactured by CDMOs. It’s a critical juncture where capacity is being challenged as trials that were delayed last year by COVID are now starting back up just as new trials are commencing with products that were in the preclinical phase a year or so ago. Those combined have accelerated demand for product,” says Bill Vincent, chairman and CEO at Genezen. In addition, approval requests for COVID-19 vaccines have increased the wait time for approvals for clinical trials for gene therapies, agrees Geraldine Guerin-Peyrou, director of Marketing and Communications at Polyplus.

“Add to this the continued trend of new, and often well-funded, start-up companies entering the cell and gene therapy space and there are even more products vying for limited capacity in the CDMO industry,” Vincent says. In addition, he says, demand has been compounded by the limited supply of raw materials and disposables caused by the need to produce COVID-19 vaccines. “It is likely that manufacturing capacity and supply of raw materials will be constrained for at least another year, but CDMOs (including Genezen) are investing in new facilities to address this,” Vincent says.

The surge in demand for specific APIs to treat COVID-19 patients, or investigate the use of existing drugs as treatments, in some cases impacted availability.

Wavelength Pharma, an API custom developer and manufacturer, saw an increase in demand during the pandemic due to the need for drugs to treat respiratory conditions in patients on ventilators for lengthy periods. “This sudden requirement to significantly boost production has emphasized the importance of adaptability for API CMO/CDMOs to maintain an uninterrupted drug supply, with some organizations proving better able than others to handle the pressures of rapid scale up to respond to the surging global demand,” says Ilan Avni, VP business development, marketing and IP, Wavelength Pharma.

“When it comes to new developments, a few bio/pharma companies are developing, or repurposing, molecules for COVID patients, and we are in discussions with a number of key players in the field. We have seen a number of innovators rejig their portfolio—speeding up drugs with a focus on COVID-19 while slowing down some of the other developments. We have seen an increase in outsourcing and have benefitted from the trend even as we continue to invest in capacity to meet customer needs,” says Saharsh Davuluri, vice chairman and managing director at Neuland Labs.

The pandemic also impacted the way the industry conducts business, says Britton Jimenez, vice president, business development at Metrics Contract Services. Virtual audits and site tours are now more common, as well as virtual internal and external meetings. “Many of these new practices that have been implemented will remain, but I do see the face-to-face engagement returning back to pre-pandemic state,” Jimenez believes.

“Video conferencing and remote communications dominate the way we perform internal and external communications. Since there is no way to visit facilities for an audit, at least in India for the time being, CMOs who have good track record will continue to get recommendations from fellow clients,” says Davuluri. Utilizing virtual technology has alleviated disruption and created more time for important tasks, according to Davuluri, but it also highlighted the importance of face-to-face interaction.

The industry as a whole has also continued to learn and connect virtually. “The virtual international conferences have also allowed for scientists that usually don’t travel to participate and to hear about the latest innovations, hence we may see a rush of scientific outbreak in the next few months due to this,” states Guerin-Peyrou.

New parameters created by the pandemic caused business challenges for some companies, and attracting new clients became difficult. “Without the traditional methods of in-person meetings and audits, sponsors have adopted and accepted the need to use virtual methods of communication and remote technologies to access and assess potential partners,” says Andrew Henderson, chief commercial officer at Sterling Pharma Solutions.

To adjust to these challenges, companies have taken stock of their processes and strategies. “COVID-19 has made everyone in the industry revisit their sourcing strategies and risk management; even companies with stable in-house facilities have reassessed their risk profiles and vulnerabilities in supply chain, and sought after CDMO partnerships,” says James Choi, chief information and marketing officer at Samsung Biologics.

Choi sees the company’s investments as important to enduring the trials of the pandemic. “For example, our investment into Plant 4 expansion, the opening of our San Francisco R&D Center, and providing mRNA vaccine fill and finish, are few of our preemptive approaches in response to the shifting industry,” he states. “Our sustainable and robust business management systems, in which we have invested proactively to be ISO 22301-certified across all of our business areas, have been central to withstanding market disruptions over the last 18 months amid the COVID-19 pandemic.”

“For Vectura, there have been two areas of focus: keeping our people safe, and minimizing disruption to the supply of medicines and to our customers,” says Matthew Barker, director, Corporate Strategy at Vectura. “Our team has embraced new ways of working, which include adhering to new health and safety protocols across sites; showcasing our inhalation expertise virtually at conferences; and navigating the sales and supplier audit processes remotely.”

Adapting became key to meeting demand. “We embraced technology, looking for new ways we could communicate effectively and developed innovative audit processes which enabled us to meet obligations,” says Wilson.

In 2020 and 2021, CMOs and CDMOs found themselves needing to balance the demand of the development and manufacture of treatments of COVID-19 with the projects in the pipeline and new non-COVID-related products. Some companies expanded capacity and resources to meet these priorities.

While noncritical therapies were de-emphasized for a few months because of COVID-19, according to Kleppinger, manufacturing these products was still necessary during the pandemic. “We didn’t experience a disruption in our traditional business demand because of COVID; what we found was COVID was additive to our workload,” he says.

“CDMOs, such as Vibalogics, have taken steps to expand their capacity, and to use their existing resources to adapt their business to not only the vaccine service market, but also to build strength in capability for the classes of next-generation modalities,” says Sinclair.

“CDMOs are waiting for consensus on vaccination guidelines, as tied to future demand for COVID-19 vaccine production. Currently, the focus is on addressing lingering supply challenges for first-round vaccinations, while building further strength into ongoing future supply demands. There are still many drug development companies optimizing their approach, initiating Phase I clinical trials, and looking to bring further benefit to market by building supply security with additional approved and technologically advanced modalities,” says Sinclair.

“Away from the now-established supply chain of COVID products, there remains the need to support innovation and research in the existing development pipelines as pharma companies concentrate on their core indications,” says Henderson. “This remains as strong as ever, so the need for CDMOs to be flexible and to be able to support these is crucial. This does not mean that there is a shift in focus, but companies need to have the capabilities to support the evolving needs of innovators.”

Oncology’s place at the top of the contract manufacturing industry’s focus was shifted to treatments for infectious diseases, says Vincent, citing market research data (1). Because COVID-19 vaccines are now getting approved, the shift in focus has turned back to non-COVID products. “The immuno-oncology market particularly is expected to continue growing and witness minimal impact from the COVID-19 pandemic, with 2020 accounting for a momentary decline (2). Given the complexity of products and the prevalence of small biotechs involved in the market without the necessary infrastructure to scale and manufacture products, reliance on CDMO partners will be a key requirement for the foreseeable future,” Vincent says.

“A lot of potential opportunities for CDMO services are focused on ANDA/OTC [abbreviated new drug application/over-the-counter] products not related to COVID-19. There is also an anticipation that cough/cold will come back as the economy starts to open up and kids are back in school,” says LGM Pharma’s Nakagawa.

“Non-COVID products are back in demand, but timelines have shifted,” says Guerin-Peyrou. "For gene therapy, delays to get GMP AAV manufacturing slot can be from 12 to 18 months today.”

While the demand for COVID-19 treatments will continue for a while, according to Wilson, most CMOs/CDMOs “are now re-establishing their operating levels and delivering on all obligations.”

COVID-19 hasn’t been the only thing to change and shape the bio/pharma outsourcing industry in recent years. Phil Vanek, CTO at Gamma Biosciences has seen some interesting developments in the cell and gene therapy field. “We’ve seen a number of trends that are very interesting in particular within the cell and gene therapy space. The first is the continuing consolidation of a number of the CDMOs that is reshaping the manufacturing landscape—MaSTherCell and Paragon acquired by Catalent, Brammer Bio being acquired by Thermo Fisher Scientific, and the interesting move of Charles River Laboratories acquiring Cognate (which in turn had recently acquired Cobra) thereby doubling down on their cell banking and supply services,” says Vanek.

1. Global Data, “COVID-19 is Driving More Supplier Redundancy,” Press Release, Nov. 4, 2020.
2. Research and Markets, “Global Immuno-oncology Market Report 2020: I-O Market is Expected to Reach $132.66 Billion by 2025, Growing at a Rate of 11.6% and Witness Minimal Impact From COVID-19,” Press Release, March 1, 2021.

When referring to this article, please cite it as S. Haigney, “Balancing Pressing Priorities,” 

Editor's Note: This is a revised version of the article published in the July 2021 issue of 

CMOs and CDMOs adjust business processes as demand for COVID-19 treatments and non-pandemic related therapies puts pressure on the bio/pharma industry.