Breaking News: Select Your CMO With Three (Well-Known) Attributes

By Louis Garguilo, Chief Editor, Outsourced Pharma

Sometimes, no news is the real news. It’s valuable just to confirm the well-known path is still the right one to follow. If this is so, then here’s your bulletin:

Another experienced source goes on record sharing three basics to selecting the best CMO: credibility, work ethic, and relationships.

The source for the “news” learned of these attributes firsthand. His father founded a CRO – Bangalore-based Semler Research Center – at which he became Senior Vice President. Four years ago he left the management of that now 300-plus-employee company to move to the other side of the table. He founded generics developer Genzum Life Sciences, which has a core expertise in topical drug development and clinical trials. The company chooses to outsource its manufacturing needs.

“I gained experience and understanding of outsourcing from running our own CRO,” says Chris K. Achar, CEO of Genzum, from his company’s headquarters in Los Angeles. “We now apply that same mentality to selecting CMOs to work on our product lines.”

Shared Credibility

Achar places the concept of credibility above all else when picking a service provider.

“I mentioned this in a panel discussion at Outsourced Pharma West in San Francisco,” says Achar. “It’s so important to pick a credible manufacturing partner, because that decision establishes your own early credibility, and can elevate your status. Our mentality is to outsource to the most dependable players we can identify. Of course this has the added benefit of making your entire product lifecycle more conducive to success.”

The definition of credibility starts with regulatory concerns. Achar says at Semler, the CRO he cut his pharma-industry teeth on, “The regulatory creditability of our work came first and foremost when talking with customers.”

Along with passing regulatory mustard is the overall quality of work, and the experience, from the customer’s perspective. “When I was on the CRO side of the table, we would hammer home this anthem of our being the most credible quality-player out there. So now I want that same framework established before deciding where to outsource work on our product lines.”

A track record, regulatory inspection history, and experience are key components that make up the credibility factor for Achar. However, he doesn’t mean to dissuade sponsors from selecting a newer service provider from any potential list of CMOs.

Work Ethic At The New And Old

“Eagerness for the work on the side of the receiving party is vital,” says Achar. “As a new CRO, we were hungry to get business. That hunger drives a positive, can-do work-ethic. It means being willing to go above and beyond client expectations.” He says he looks for that same feeling when Genzum outsources to CMOs. “We don’t necessarily look to go to the most established or the largest players,” he says. “Sometimes they can’t move quick enough, and there may be a lack of urgency surrounding your project. You may need a company that can zig-and-zag along with you the customer.”

Achar says nowadays the search for the best outsourcing partner should have a global component. The best fit for a particular project or relationship might reside offshore. However, care should be taken to assess whether the actual facility – U.S.-based CMOs can have facilities in India, and vice-versa – housing your project has the requisite work ethic, be it in the U.S. or elsewhere, new or old.

Relationships Start Early

Achar also joins the industry mantra for establishing clear working-relationships. You do that upfront, he says. “We take a lot of time and diligence making sure that if we outsource, it’s a tight relationship where everybody knows what they are getting into, and what is on the table. If you do that beforehand, I think everything subsequent is going to be a lot easier.”

We’ve all heard stories of Master Service Agreements (MSA) that appear detailed, but in practice leave too much to interpretation. And while trust is a key component of any relationship, Achar says sponsors need to ask themselves questions such as: “What are you really getting into when you are outsourcing this particular project to this particular service provider? Who owns the IP generated from the R&D phases? Are we enabling a third-party by having the first of a particular kind of product line at a provider who can use the experience for the next customer?”

“Those are all things that worry sponsors,” says Achar. “It’s easy for relationships to take a quick turn south. If you lose your secret formula, you could be finished as a company.”

I ask Achar how valuable it is to have an “all-in-one service provider.” He replies the best way to assess that might be by first considering your own business strategy, and how you prefer to operate. For example, Genzum’s model is to do as much work in-house around its core expertise, up to an ANDA (abbreviated new drug application), before partnering for commercialization. According to Achar, working with a soup-to-nuts CDMO “almost runs counter to our own business model.”

However, he says providers offering a service continuum can certainly be advantageous to companies with few internal resources. “Just be careful,” he adds, “because nobody is an expert in everything. Companies thinking about outsourcing should consider which model works best for them.”

West Coast Learning

Achar tells me he’s encouraged that these lessons learned for selecting service providers are discussed in detail at the Outsourced Pharma West conferences. He’ll be a panelist again this year, at the first conference in San Diego, August 25-26.

“It’s great to have this kind of presence on the West Coast,” he says. “We have more industry players coming to San Francisco, San Diego, and here to Los Angeles. Last year during the San Francisco conference I was really encouraged to see the many start-ups and entrepreneur-innovators looking to take that next molecule or biologic through the development stages.”

He concludes: “I’m also still a young entrepreneur. I’ve been fortunate to have the background, and be in the right place at the right time, so I could put in the work to get a company and compounds through the scaling phases. What brings me back to the Outsourced Pharma West conferences is the opportunity to share those experiences with others. That helps me reinforce what I’ve learned, and helps me further understand where I am at, and where I need to go next.”