Big Pharma Advises Biotech On Outsourcing
By Louis Garguilo, Chief Editor, Outsourced Pharma
They say biotech taught pharma how to outsource.
So what’s someone who has spent 31 years working in Big Pharma know about outsourcing from the vantage point of smaller organizations?
A lot, it turns out.
Francis Dumont spent the lion's share of his time during the second half of his career at Pfizer on “due diligence and integration of biotech acquisitions.”
Those acquisitions were often knee-deep in development and manufacturing outsourcing, and had selected their CDMOs – some wisely, some not so.
Here’s the difference.
First, The Last
Located in Pfizer’s La Jolla facilities the last several years of his career, Dumont was also a frequent speaker, presenter, and biopharma conference attendee, focusing his thoughts for biotechs on those long-term plans and, for example, topics such as “Should you go it alone or position yourself for acquisition?”
“Understanding your long-term plans drives so much of what comes next,” he says.
Should your molecule make it to an approved drug, are you planning to position yourself for acquisition by a larger organization, hoping your drug or your lifesaving technology gets distributed as fast as possible?
Or do you believe you can effectively commercialize and launch it yourself? Even if this is the plan, in the meantime, who are the partners you will need to work with?
Planning to go alone (or relatively alone) or get acquired involves variables such as who are your investors and what is your financing, your product's markets and patient populations, and of course, all that drives drug/therapy development and manufacturing outsourcing approaches.
“Nonetheless,” avers Dumont, “the starting point is understanding the value you as a company, and you as the individuals in that company, bring to the table – and want to continue to bring.”
“Are you going to dilute that value by trying things that frankly you have no business doing? For example, why bring a tablet press into your facility, and hire professionals to run it, rather than leverage the right sourcing companies?”
“Having an honest and clear approach to make-versus-buy, and go-alone (with partners as needed) versus a desire to be acquired (so fully outsource), is absolutely fundamental.”
At the beginning of the day, it’s about the end of the day.
Careful Selection
Dumont estimates he’s been involved with some 20 acquisitions in the last decade and a half. Most of those were outsourcing nearly everything related to clinical trial supply.
“These biotechs come with a variety of hugely positive attributes, and some challenges,” he says.
Many of the challenges stem from initial CDMO selection, and less than optimal contract negotiations and contractual commitments that, says Dumont, “a future acquiring partner may wish hadn't been committed to.”
“My primary advice – and I read something in Outsourced Pharma you published not that long ago – is seek advice from people that actually know how to deal with CDMOs.” Ensure these professionals understand your commercialization strategy from the very beginning.
The following, he avers, is not an example of acquiring a deep understanding:
Someone in your organization – it could be at a project or executive level – attends a conference or other industry gathering, “and gets wowed by a vendor or supplier.” They come back with the message you absolutely need to send your project to this company. Moreover, you are told, his new contact says they can schedule it quickly.
Perhaps it is something to calmly look into, says Dumont, but there's always a story behind that glossy representation.
More often than not, he says from experience, “we were already well aware of the company. We had done the evaluation to understand why we were going in a different direction.”
“In other words, we had seasoned professionals in our sourcing, CMC, and other groups who had done the due diligence before we had decided on the right CDMO and the best terms.”
If you don’t have that expertise when you start out as a biotech, says Dumont, tap into it, and that may mean hire it in, or use external consultants.
“That's one of my pieces of advice that I give people at biotechs,” Dumont says. "There is a lot of knowledge to tap into. Yes, you pay for it, but you pay for it one way or another. Making bad decisions early on can propagate themselves down the road.”
Really Rigorous?
“My other piece of advice is to put more rigor into the actual sourcing process,” says Dumont.
“I remember one of the first round tables I led in industry, on sourcing practices. Most of the professionals around the table were at emerging biotechs. I asked this simple question, ‘Can you explain why you're using vendor X to do Y?’
"In reply, they offered much less than clear analysis of their decisions," says Dumont, leaving some red-faced ... and setting themselves up for a lack of outsourcing success.
“On the other hand,” he says, “I can’t count the number of times where having a clearly laid out matrix, detailed slide deck, or whatever considered thought process, helped us at Pfizer make the right sourcing decisions – for the right reasons.”
As important, he says, this provided the decision-makers "the tools to substantiate the sourcing approach to key leaders who are not directly involved in the process.”
But Dumont insists the selection process doesn't have to be an overly complex evaluation, but whatever the process you implement, ensure it is one that clearly informs you quantitatively, as your team’s experiences add important qualitative factors, such as cultural fit, communication style, location, etc.
And one more thing.
Dumont says you need to “refresh that thinking regularly at a timeframe you choose.”
To sum up: If you're not experts in the field of outsourcing, find those who are, and install a robust approach for CDMO selection that will pass the red-face test.
So, I’ll put it to readers: “Why are you working with CDMO X to do Y?”
I hope you’re not blushing.