A High-Potency Biopharma-CDMO Model Working … As Planned
By Louis Garguilo, Chief Editor, Outsourced Pharma
Tough to admit – after all, editors are supposed to be good at editing – but I didn’t know where to start this narrative. (And don’t murmur, “Try at the beginning,” because you’d be reading ‘till Christmas.)
But let’s first mention the now years-long, still growing, but rarely satisfied need of biopharma for fully competent high containment and high potency (HP) services at all scales of development and manufacturing.
Next we’ll reference Outsourced Pharma’s investigations into the ever-varying business and service models of both biopharma companies and CDMOs. We’re keeping up with changes that can aid or otherwise impact your drug development and manufacturing supply chains and external relationships.
To deliver that instruction, Carney, via a wonderful Irish brogue, says that indeed some background is called for. He then tells me:
“This will take a slight part of history to explain, and then you’ll write an article saying it was perfect strategy all along, and exactly what we meant to do. Which in truth it never is, but every management story on CEOs makes it seem clever and as planned in rewrites of history.”
I’m game.
The Perfect Business Strategy
While Carney goes back 30 years in the biopharma industry, he started circa-2005 with the idea to take advantage of a niche he saw emerging in “high containment or high potency generic products.” (Also see “High Potency Service Providers: The Contenders And Pretenders.”)
EirGen was established as an innovative generics organization, developing, commercially supplying, or out-licensing highly potent, oral solid dosage (OSD) specialty medicines to customers from “Big Generics” to much smaller niche entrepreneurs or global health organizations.
Fast forward to 2015. The business is growing, and EirGen gets acquired by OPKO Health, a Florida-based, diversified healthcare company, mostly operating in the field of diagnostics and genetic testing, but also in pharmaceuticals. It’s first commercially marketed drug, RAYALDEE (calcifediol), is targeted at hyperparathyroidism.
Since the acquisition, a significant segment of EirGen has been given a new task, that of focusing on meeting the R&D and CMC requirements for OPKO’s growing portfolio of NCEs.
Carney and team, therefore, is now implementing a three-fold strategy: (1) originator and supplier of OSD and generics to the broader biopharma and healthcare markets; (2) traditional CDMO serving existing, and bringing in new, clients; and (3) serve its new owner’s internal drug development.
But there’s more (all planned, of course): The company has added to its existing development and manufacturing facility for HP products, by building out a $40 million R&D facility for fill finish services. (For more on fill finish, also see “Challenges With Fill Finish Services Not Finished.”)
Here’s how it all fits together.
Quality Operations Are The Glue
I suggest to Carney that EirGen must have quite a few erudite regulatory and quality people. All three of their businesses (generics originator/supplier, CDMO, R&D arm of OPKO) come with complete CMC, quality and regulatory support.
“You can leverage a bit,” he replies, “whether with our own OPKO, or depending on the biopharma company we’re engaging. You come to an understanding as to the capability and responsibilities of each organization
“But when you’re exporting to some 50 markets, you have no choice but to have the capability of taking projects all the way through. Your quality management professionals and system need to be best in class. If you are dealing with the PMDA in Japan, FDA, or European agencies … the standard doesn’t ever drop. In fact, it’s always getting higher, and there’s always new requirements coming in.
“So our compliance record has been a big part of what we do. When we look at the values of the organization, or what we regard as our critical success factors, yes, I’ve got to develop and commercially supply products in the market. But they’ve got to be fully compliant, this has to be a safe place to work, and we’ve got to develop our people. Those critical success factors are on every wall around here, and there’s a series of values associated with those.”
Planned Project Management
How does this three-pronged organization get managed, from senior-executive level decisions to specific project management? For example, isn’t Carney as CEO pulled in different directions regarding which projects to move forward? How do project managers allocate equipment and facilities, or understand which personnel do devote where, and what timelines can be committed to?
Carney’s answer takes me by surprise. He says only in the last year has EirGen implemented a more formal project management organization (PMO).
“We did have a less formal organization,” he replies, “but we’ve become more focused on this now we are up to 200 people, and we’ve made the decision to operate as a single management unit, on a single campus with two sites.” Previously, EirGen’s entire management team was involved in running projects, “with sleeves rolled up.” That’s no longer sustainable, also because of “the diversity of projects today.”
Carney says the new approach runs through a consolidated office of project management, which utilizes designated program managers, and certain methodologies as to how to roll out projects, manage them on a day-to-day basis, “and get more engagement cross-functionally throughout the businesses, and up and down.”
EirGen is also on a “lean journey that manifests in terms of tiered accountability.”
“Again, it’s putting formality around this high-energy organization, trying to channel the precious resources we have, and manage the capacity. It has always been a complex organization, a challenging one to run. But having these structures and processes in place now means that, as a leadership team, we can get our arms around it and manage properly.”
“We’re on a constant journey. You’re never happy with where you are. You always want to make it better than what it was, and this is the next phase of growth for the organization.”
All according to plan, of course.
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We’ll discuss generics pricing and customer-relationship building in our next installment with EirGen Pharma’s CEO, Patsy Carney.