Guest Column | February 24, 2020

3 CMC Mistakes That Could Cost You Billions

By Kevin Wall, principal consultant and owner, Cincero Consulting

Faucet broke the money and leaked out

Compliance is not the only reason for development firms to have robust systems and documentation in place. I submit due diligence by prospective buyers is the prime reason firms should take care how their development process is planned, executed, and documented. With biotech mergers and acquisitions growing for 25 years, companies need a robust process to prepare for due diligence assessments on both the buying and selling sides.

The end game for many small biotech startups is acquisition by Big Pharma. How do small biotech companies prepare their chemistry, manufacturing, and controls (CMC) documentation for due diligence review? What are the mile markers that measure how far product and process have developed? Understanding the level of scientific knowledge provides key insight into how much time and development dollars will be needed to get the product commercialized. While the CMC section may not add zeros to the sales price, poorly documented development can remove them. This article will discuss three main areas for CMC due diligence from a science perspective and examine quality risk assessments through the lens of due diligence. The due diligence process is equally applicable to drug products and drug substances. Assessment of supply chain readiness is a topic for a different article. The three focus areas of this article are:

  1. Are there critical holes in product definition?
  2. Are there critical holes in process definition?
  3. Are there critical holes in analytical preparedness?

The year 2019 was an M&A feeding frenzy in biotech. Big Pharma was eager to find new blockbusters to fill their pipelines, while a host of small startups were working diligently to fill that need. The New York Times reported in February 2019, “Just two months into the year, the value of deals for biotech and pharmaceutical companies in the United States has reached $146 billion, according to Dealogic. That is more than what was announced in all of 2018, 2017 or 2016, and it accounts for 40 percent of all takeover announcements in the United States so far.”1 Investor’s Business Daily (IBD) reported the acquisition total had reached $195 billion by September and predicts 2020 will see focus on gene therapy and oncology.2

The stakes are high for those vying to cash in on the billions of dollars in biotech gold. From a CMC due diligence perspective, the path is straightforward. The key question is how well have product and process variations been characterized and controlled? What data supports the conclusions? Variation is the enemy. In Vegas, if you roll the dice long enough, the house will win, as the odds are stacked in its favor. Likewise, firms can get on a lucky streak without characterizing and understanding variation. Firms can push the project forward, making bets the project will come out fine. It is tempting to cut development to the bone to keep a project on time. However, if left uncharacterized and uncontrolled, variation will eventually strike unexpectedly and with a vengeance. The biggest sin is to get a drug approved that cannot be manufactured. Due diligence is the process by which a potential buyer determines how much risk the development project is carrying. Big Pharma wants to understand the gaps in development and confirm the projected launch date. The need for project remediation, and the associated delay, is an opportunity for them to strike a better deal. Here’s how to ensure your project assesses well.

Factors For Due Diligence Success

The assessment presented in this article assumes the project team is in Phase 3 clinical trials and has either finished their registration campaign or it is about to start. While the article is not a checklist, it provides enough detail to be directionally helpful as to the level of detail.

1. Are there critical holes in product definition?

The first mile marker is identifying the critical quality attributes (CQAs) of the drug product and drug substance. A project team proceeding into Phase 3 clinical trials should have some degree of understanding of critical product performance. If a firm does not have the CQAs identified, commercialization is down the road. Understanding the CQAs is fundamental to understanding product robustness, and describing the impact of variation on the CQAs is the heart of risk assessment and communicating product knowledge. Firms need to document the rationales for their product development decisions — and these rationales should be science- and risk-based. Examples of rationales needed by Phase 3 include:

  • The drug substance specification should be justified, with particular attention paid to selection of the API salt form, polymorph, and particle size. Impact on the drug product is tentative.
  • The synthetic pathway is locked in terms of intermediates. Drug substance critical impurities should be identified, characterized, and specification levels justified. The origin of drug substance impurities should be known, with potential genotoxic impurities identified and justified.
  • The proposed registered starting materials are identified, characterized, and justified.
  • The drug product formulation is set with respect to which excipients are used. Excipient selection and compatibility are justified with a strong rationale for what is selected.
  • The impact of each excipient on individual drug product CQAs is known.
  • The degradation impurities should be characterized with toxicological assessments. A working hypothesis of the degradation pathway can be described.

Best Practice:
The project team should document their basic understanding of the science in quality risk assessments. The documentation should have a logical flow from the CQAs of the drug product back to the proposed drug substance starting materials. The gaps in knowledge are identified with a well-documented plan to close the gaps. Rationales for project team decisions are documented and data-based.

2. Are there critical holes in process definition?

For both the drug product and drug substance, the team should have a basic understanding of how each process step or synthesis step influences each CQA. For drug products, the manufacturing process and formulation are intimately linked. While process characterization will continue up until validation, the firm should be able to describe the impact of each process step on each CQA.

  • How well can the firm explain the gaps and provide a logical explanation for the required development activities leading to commercialization?
  • How does the firm intend to characterize formulation robustness and process robustness?
  • Which process steps and parameters are the most concern and why?

The drug substance should have proposed controls for the intermediates, and the linkage of these controls with the drug substance CQAs should be justified. The firm understands where impurities originate and where they end up. The full fate and purge studies are probably not yet completed; however, the impurity profile of each step is understood. Linkage of process parameters to CQAs should be described even though the design space or proven ranges have not been fully investigated or defined.

  • Which steps in the synthesis have the greatest risk and why?
  • Which process parameters need the most characterization?

Best Practice:

Quality risk assessments are in place that reflect the level of process understanding. The documentation points to the source data that supports the conclusions. The project team documentation clearly shows what is known and what is still in process. The project plans show how and when gaps will be closed. The source documents are readily retrievable and are complete.

3. Are there critical holes in analytical preparedness?
Analytical diligence is the most important of all factors, as the analytical data underpins every decision. Analytical review is so important, it is wise to have an analytical expert conduct the due diligence assessment. Analytical development presents the greatest potential risk on a project, and it often comes down to how much analytical development risk the project can sustain. The mountain of development documentation needed is daunting and expensive. Moreover, much of the work is required early in the project, before Phase 2 results arrive. Analytical development takes time because some methods are difficult to develop.

Contract laboratories are not created equal. Some excel at validation and transfer, and the documentation proves it, while others struggle to meet the bare minimum, with documentation full of errors and unresolved investigations. To compound matters, there is no accepted industry consensus on the level of analytical validation required at each stage of development. For example:

  • Does the method need to be qualified or validated at a certain stage?
  • When do chemical markers need to be available?
  • When should methods move from area percent to weight-weight?
  • When do in-process control and intermediate methods need validation?

Best Practice:

The project documentation tells a clear and concise story. That means the project team has documented what validation criteria were conducted at each phase and what was not done. Planned development activities are based on gap assessment and mitigation. The project documentation shows a robust change history with proper method validation and transfer at each stage per the defined plan. Most of all, the documentation shows the firm has control of the analytical activities across the supply chain. Each vendor lab has qualified methods and is on the same revision. I like to see a trace matrix, which aids in keeping the project deliverables clear and makes gaps obvious.


Due diligence assessment can be the most important reason to have well-planned and well-documented development activities. Firms that invest in proper control of the project execution and oversight of the CDMO have the greatest chance for success. Since everything cannot be given the same level of attention, quality risk assessments embedded in the development process allow for allocating resources to the variables with the highest impact. The benefit is twofold: the development process runs smoother and presenting the project to a potential buyer is easier. How much would you spend to sell the project for a few billion more? Don’t be penny wise and dollar foolish.


  1. Grocer, Stephen, “Big Pharma’s Hunt for New Drugs Is Pushing Up Cost of Deals, New York Times,” New York Times, Feb. 28, 2019.
  2. Gatlin, Allison, “Biotech Stocks Burn A Hole In Big Pharma's Pocket; Look For More Mergers In 2020,” Investor’s Business Daily, Dec. 13, 2019.

About The Author:

Kevin WallKevin Wall is principal consultant and owner of Cincero Consulting. He has worked with five virtual pharmaceutical companies to move eight of their drug substance and drug product projects through development. He applies “fit for phase GMP” from Phase 1 to commercialization. Wall’s process for identifying critical quality attributes (CQAs) and critical process parameters (CPPs) forms the basis for the CMC section of the regulatory submission (ICH Q11). He led the Johnson & Johnson development and global deployment of quality by design (ICH Q8) and quality risk management (ICH Q9) in pharmaceutical development and operations. He helped define and deploy Janssen’s risk-based qualification and process validation systems (ICH Q7). You can contact Wall at 817-915-0822 or, or visit his YouTube channel, cGMP Made Easy.