From The Editor | June 6, 2022

Beware The Manufacturing Bottleneck: Lessons From Inside


By Louis Garguilo, Chief Editor, Outsourced Pharma


Here’s what I love to ask repeat-CEOs when they take the helm at a new biopharma organization:

What specific knowledge will you bring to your new CEO role, specific to development and manufacturing outsourcing, and working with external supply-chain partners?

Answers to this questioning can be of great value to us all. One thing we’ve learned over the years is that among the skills, attributes, and experiences an organization looks for when bringing in a new CEO, outsourcing acumen has grown in importance. 

For Steven Kelly, President & CEO, Carisma, a biotech with a CAR M therapy in phase one and more clinical trials planned, this acumen is critical. Even locating capable partners has been a challenge for Carisma, let alone figuring out how to situate external needs with future internal development and manufacturing growth.

“I’ve had a varied experience, and different functional responsibilities,” is how Kelly starts his reply when I spoke to him recently.

“Specific to your question, I think about manufacturing issues, and two experiences stand out for me.”

One of those was while Kelly was at Amgen; the other, IDEC Pharmaceuticals (now Biogen).

Two Lessons In Building

  • Kelly recalls of his Amgen experience:

“I worked in manufacturing. We were in the midst of trying to get Epogen approved. We still had no idea if or when our planned commercial facility would get approval. I was working in our pilot plant, so we had to contemplate we could be our commercial supplier out of that facility for a while!

“Amgen had decided to invest in that new internal manufacturing plant rather than using a contract manufacturing group. From that point on, this type of decision has been raised to a crucial level of importance for me. Obviously, it needs to be addressed earlier than many anticipate.”

  • On to his IDEC experience:

“This is quite interesting. I was heading marketing for IDEC’s Rituxan. At that time, capacity constraints for monoclonal antibodies were high. We had a small plant in San Diego and our partner Genentech hadn't built their Vacaville facility, and we had not accessed Genentech’s larger capacity yet. We did our best to fill the pipeline out of our warehouse, but were nearly stocked out.

“So there I was again: this acute focus on manufacturing, whether for clinical or commercial supply. I again came to understand manufacturing is never going to be easy. You can’t think, ‘Well, we’ll just have to solve that when the time comes.’”

Today, Kelly sees areas such as cell therapy similar to the monoclonal antibodies landscape in the late 90s: particularly, lack of supply to satisfy demand “anywhere across the board.”

Therefore, he believes when it comes to outsourcing, “We must build strong, long-term relationships. And you do that with your long-term plan.”

Particularly for today’s market, Kelly says, once the industry arrives at the point we can satisfy solid-tumor demand – many times over the current needs – manufacturing will again gain an elevated premium.  

“These two experiences of mine particularly demonstrate how quickly manufacturing can become a realized bottleneck. We need to get ahead of that.”   

Build-Buy Again

And s that’s Kelly’s approach with Carisma – identify well ahead of time where bottlenecks could occur.

Data is a key.

“We are a data-driven company,” he says. “We need to ensure we generate the right data out of our research group to our clinical group to understand clinical supply needs.”

“It's an integrated approach, with three parties – research, clinical, and manufacturing – to make sure we meet our needs, whether that means working with a CRO or CDMO or not. If it is, we need to select the right partners with this in mind.”

Moreover, the abillity to generate that data is the “life blood to secure additional fundraising, and continue to drive technology forward.”

As I reported in detail in part one, Carisma preempted  near-future bottlenecks by signing a contract with Novartis CDMO, but also by “thinking about internal building.”

Readers may be thinking: There it is again; buy-and-build as the key manufacturing strategy for biopharma organizations.

And readers may expect me to ask the question I always ask at this point:

Do investors easily countenance building out assets in earlier stages?

“As usual, earlier stage investors recognize the value in doing that, but think it would be great if the next set of investors paid for it,” Kelly replies with a laugh.

“They recognize the importance, and also that you build at some risk. You have to present that risk profile and the timing of when to pull the trigger.”

He says he’s witnessed smaller organizations build but then not need the facilities. “We've been more conservative on that front, and look at CDMOs as the way to move us along.”

Stage It

Kelly says you need a “staged approach”:

Focus on core technology and basic research you're bringing to the market. Understand your product’s mechanism of action, how it will be applied, and build related internal capabilities.

“You have to do that. It’s sort of boiler plate biopharma,” he says.

Next, “when you start looking at applications beyond,” you can hire more internally, build infrastructure to do different things.

Or you can look at a risk-adjusted approach – work with external partners who have already built out these capabilities and that capacity. Save on the time it requires to hire, build and equip. Manage your company’s growth by external leveraging.

However, says Kelly, “when you arrive at that stage where it makes sense economically, bring it in house.”

“We started our clinical trial with two people in clinical, twenty at a CRO. That makes the most sense. As we start to expand the number of studies, while still leveraging the CRO, we build out our capabilities and shoulder more of the responsibility.

“We’ll follow the same path in manufacturing. We started with two professionals; now we have some 25. The scope of what we're doing internally expands.”

He concludes:

“It’s a staged-growth strategy. And hopefully, that keeps any bottlenecks from ever occurring.”