Biomanufacturers Seek Innovation and Expertise

Contract manufacturing organizations (CMOs) are taking an increasingly important role in the biopharmaceutical manufacturing industry, and that influence is likely to expand with trends such as biosimilars and global expansion of biologics production. Outsourcing decisions are much more complex.  These decisions are not only a means for smaller start-ups to bring products to market, but also for larger companies to concentrate on core products and development. It is important to examine how the partnership between the CMO and the client can best be fulfilled, and how the competitive differentiators that CMOs bring can be optimized to ensure a long and healthy relationship.

BioPlan Associates has been tracking various areas of the outsourcing market for several years as part of its annual industry studies. BioPlan examines the types of new technologies CMOs are expressing interest in, the factors that lead to performance improvements for them, and the attributes that make both the CMOs and their available technologies most attractive to potential clients. The results of these international surveys further inform the belief that CMOs are at the forefront of innovation, a position based on CMOs’ need to efficiently produce a wider variety of proteins. Indeed, as one industry expert notes in BioPlan’s latest study, “CMOs have been some of the most motivated innovators, as they must repeatedly tackle one new protein after another; their business requires efficient rapid shifting of development and manufacturing from one product to another” (1).

Top 12 Factors in Selecting an Outsource Partner

Industry competitiveness also encourages continuous improvements in platforms and processes; clients have come to expect that CMOs will have prior experience with their platforms and can do the work at least as efficiently as can be done in-house. This may actually explain the decreasing weight being placed on a CMO’s existing platforms as selection criteria--this relevant platform expertise has now become a requirement just to play the game.  

What clients want

Each year, BioPlan asks biomanufacturers to identify the critical issues they consider when outsourcing biomanufacturing to a CMO. From 2006-2014, the biggest declines in “very important” attributes have been for the following:

• Production platforms that are relevant to my product (31% citing as very important in 2014, down from 50% in 2006)

• Demonstrate cost effectiveness of their services (22% in 2014, versus 38% in 2006)

• Demonstrate a track record with products similar to mine (34% in 2014, compared to 47% in 2006). 

When evaluating how factors have changed during this time period, the percentage point drops in these factors suggest the industry now recognizes that factors like cost and available platforms are not as ambiguous as they were. As the industry matures, CMOs have demonstrated specific areas of expertise, they are well differentiated, and the various selection factors are more readily measured (see Figure 1). 

Figure 1: Trends in critical issues when considering a CMO, select issues (issues indicated as “very important”) percentage point change, 2006-2014.

Clients now assume that most CMOs have worked with many production platforms and expect CMOs to invest in the types of technologies and advances that allow for greater efficiency and flexibility. The vast majority (more than 8 in 10) of respondents, however, consider a CMO’s track record to be important--the percentage considering it to be highly critical has been on the decline.  

This may also be an indication of how rapidly the industry is maturing and delineating its service offerings. 

Also surprising is the rapid decrease in the percentage of clients who view a CMO’s cost-effectiveness as a crucial issue. Clearly this will always be part of the CMO selection process, but it is now taking a back seat to issues of quality and sound relationships. That may also reflect clients’ greater confidence and experience in assessing CMOs’ cost-effectiveness themselves. The types of activities being outsourced have gradually shifted from lower to higher value. The less transactional a partnership becomes, the more cost factors take a back seat to long-term partnering and relationship factors. As CMOs take on projects demanding greater technical sophistication and the use of innovative processes, clients are more likely to see them as competing on value and quality, not on price. 

New technologies that excite CMOs

CMOs’ interest in innovation will only increase. Some CMOs have positions involving technology scouting because this can potentially be turned into a competitive differentiator.  It is, therefore, worth tracking the innovative technologies in which CMOs are expressing an interest. 

The overall results of BioPlan’s analysis aren’t too surprising: CMOs are more interested in more new technologies, compared with biomanufacturers; and single-use disposable products are at the top the list. Survey respondents were asked to identify the areas they want their suppliers to focus their development efforts on. BioPlan then compared CMOs vs. biotherapeutic developers.  

Of the 21 different emerging technologies, at the top of the list for both CMOs and developers were better disposable probes and sensors, cited by 67% of the former and 42% of the latter. For CMOs, disposable purification products (56%) were next in line, followed by cell culture media (44%) and chromatography products (also 44%). For developers, though, disposable bioreactors (41%) were next on the list after disposable probes and sensors, followed by cell-culture media (38%) and disposable products, bags, and connectors (37%) (see Figure 2). 

Figure 2: Selected new product development areas of interest: Biotherapeutic developers vs. CMOs.

It’s not surprising to see the gap in interest for disposable purification products.  Developers scale-up fewer products in-house and therefore see fewer issues with purification than CMOs.  Meanwhile, CMOs’ greater interest in disposable products can be traced again to CMOs requiring flexibility in their business model. CMOs expressed higher interest than developers in analytical development, design of experiments, process development (downstream) services, and separation products.

CMOs performance improving 

The single most important biomanufacturing trend last year, per industry respondents, involved improvements in manufacturing productivity and efficiency. For biomanufacturers to remain competitive as cost pressures increase, and for biosimilars to evolve, CMOs will continue to search for ways to cut down time-to-market and streamline their bioprocessing.

Nowhere is efficiency more important than for CMOs. Given that they generally deal with a greater variety of challenging bioprocesses projects, operational efficiency is of utmost importance to their profitability. For example, when respondents were asked to identify the factors that have created “significant” or “some” improvements at their facilities, CMOs reported a more improvements from process-related factors than biotherapeutic developers. Areas in which CMOs saw better performance included: 

• Overall better control of processes (78% for CMOs vs. 72% for developers)

• Better design of experiments (DoE) related to process development (72% and 53%, respectively)

• Optimized cell culture processes (67% vs. 60%)

• Better process development (67% vs. 59%).

Not surprising given the importance they place on downstream manufacturing and single-use devices, CMOs were also more apt to report advances from improved downstream production operations and from the use of disposable/single use devices. It should come as no surprise, then, that CMOs were found to be far more likely than biotherapeutic developers to be investigating a range of new downstream processing solutions, including: 

• Use of high capacity resins (82% of CMOs vs. 47% of developers)

• Membrane technology (73% v. 45%) 

• Disposable ultrafiltration (UF) systems (73% vs. 42%)

• Single use-prepacked columns (64% vs. 30%).

Management expertise: The missing ingredient? 
There’s also a “softer” quality that cannot easily be measured or defined: The ability for management to establish a strong and lasting relationship that considers the strengths (and weaknesses) of both sides of the partnership.  In many ways, a CMO-client marriage that ends in divorce is expensive for both partners. Working hard to ensure long-lasting success is in everyone’s best interest. 

As production platforms standardize-making them less of a critical component--and clients look beyond historical track records, then management responsiveness becomes a more important, intangible criterion for clients. This importance goes beyond the regulatory and compliance experience of management, and into its ability to establish a strong working relationship. 

Ultimately, a CMO relationship requires trust and a leap of faith, which leads to key questions when looking at the management team: Does it inspire that trust? Is management flexible and easy to communicate with, or is it blind to the client’s perspective? How well can the client and CMO coordinate the exchange of information in a controlled manner?  

And just as importantly, on the other side, does the client expect the impossible from the CMO? Are timelines and milestones unreasonable? Who is supposed to communicate what, and when?  Both partners also need be realistic about project costs, and responsibilities for resolving problems that are certain to arise.  

With the CMO-Client stakes so high, the importance of the “right fit” cannot be overstated, and data from BioPlan’s annual studies indicates that the ability to establish a solid working relationship trumps other criteria when clients are considering CMOs. 

Getting the mix right
The future holds promise for CMOs able to expand their manufacturing capabilities through novel technologies, single-use applications, and other differentiated services. The flexibility and decreased capital associated with single-use systems is resulting in their increased use by CMOs and their clients. But far more innovation remains to be done.  As CMOs get the best technologies in place, clients will look deeper into aspects like project management, compatibility of quality and information systems, compliance track record, and efficient technology transfers.  But in the end, it is likely to be relationships, reputation, flexibility, and the CMOs’ willingness to innovate (all of which are reflections of management’s experience in building relationships) will be primary criteria in the years to come. 

Reference
1. BioPlan Associates, 11th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production (Rockville, MD April 2014), www.bioplanassociates.com/11th. 

Article DetailsPartnership Strategies in OutsourcingSupplement to Pharmaceutical Technology
Vol. 39, (2) Supplement
Pages: s6–s12
Citation: When referring to this article, please cite it as E. Langer, “Biomanufacturers Seek Innovation and Expertise,” supplement to Pharmaceutical Technology39 (2)  2015.