Emerging Biotechs Judge CDMOs More Harshly

By Louis Garguilo, Chief Editor, Outsourced Pharma

Precisely because the due diligence needed to select the right outsourcing partners was becoming more arduous – and the number of biotechs needing CDMOs continued to increase – in 2011 we endeavored to systematically collect feedback from current CDMO customers to assess which were judged as best in class.

Since then, we announce and celebrate the CDMO Leadership Award winners annually, and prepare a publication for OutsourcedPharma.com readers and others. You can find this year’s here.

 I have the honor of writing the Editor’s Introduction to that publication, and hosting the Awards celebration in Manhattan each spring (watch opening comments).

Herein I'll present some excerpts from both those activities.

Size Matters

Most thought-provoking this year, and frankly, of concern, is how much higher ratings of CDMOs were by large pharma customers when compared to ratings given by smaller customers.

This ran across all five of our Award categories:

Capabilities; Compatibility; Expertise; Quality; Reliability; and Service.

For example:

• In looking at the top scoring category, Service, the average ratings offered by large pharma respondents is nearly double the average provided by non-large pharma respondents.
• This large differential holds true for the Expertise and Capabilities categories.
• Large pharma ratings given to CDMOs for Compatibility are nearly three times those of non-large pharma.
• The average Quality rating given among large pharma is more than four times higher than the average rating given among non-large pharma.

To be clear: We have never witnessed such a divergence.

We certainly have registered the sentiments of smaller biotechs in OutsourcedPharma.com editorials and contributed content over many years.

Executives and professionals at emerging biotechs have informed us of difficulties working with larger CDMOs, including:

• a lack of leverage, and thus flexibility and attention to needs;
• long waits for start times, and large upfront payments to get into production schedules;
• the “B team” and never the “A team” reserved for bigger customers.

Now, to be balanced, much in unison the CDMOs (of all sizes) reply as such:

We openly welcome smaller clients, and treat all our customers the same. In fact, our business relies on gaining relationships with up-and-coming organizations. We can be and are of great assistance to those drug and therapy developers less experienced.

Words well-spoken; intentions well-noted.

But  this year’s CDMO Leadership Awards has us strongly questioning  whether these words are put into practice.

Thus, the question all CDMOs should continue to ask themselves is:

How can we better understand and serve the needs of our smaller biopharma customers today?

Deriving answers from such further investigations, and faithfully implementing those learnings, could achieve the self-programmed worthy goal of ensuring smaller customers are as happy with deliverables as larger customers.

The good news in all this is, of course, those very good scores Bigger Bio and Bigger Pharma have given our CDMO winners this year.

Those customers appear quite happy with their current CDMO performance, and give high grades for both deliverables and relationships/partnerships overall.

It’s time to spread that feeling around.

Questions, And Solutions

Finally, as we now sit here in the middle months of 2024, with plenty of additional outsourcing under our belts since we published this in March, I wonder what thoughts you have today about my From The Editor in our CDMO Leadership Awards issue ... 

“Looking back on 2023, an overall assessment might spring from the thought the year began with a slew of questions that were industrywide and sector-specific, national and global, and micro- and macroeconomic.

Overlapping all those questions for us were these two:

• Are we finally over and done with all the COVID supply-and-demand interruptions?
• Can we, on the other hand, keep up with the increasing pace of scientific and technological advancement now in full force?

Those best positioned to answer these questions are your CDMO partners. Collectively and by-and-large, we can posit their reply over the past year or so.

Demonstrated in labs and facilities where CDMOs plied their trade on behalf of a growing customer base, the answers have been, “Yes, we have turned the corner; Yes, we can handle expanding customer needs.”

Even if there were lingering challenges (and there were), CDMOs were determined to work them out with you – the various drug and therapy sponsors across our broadening biopharma industry.

Still, parts of the past year have been worrisome. I could hear it in the voices of the bio and pharma executives I interview here at OutsourcedPharma.com.

Our readers have been attempting to gain a focus on a still somewhat blurry picture of capacity and costs, timely CDMO access, worker availability and skillsets.

At the same time, you as CDMO customers continue to introduce challenging and emerging technologies and new modalities – e.g., RNA innovations; oligonucleotides; varying cell therapies; and some historic gene-therapy advancements (and approvals).

Thankfully, while you were wrestling with uncertainties and advancing programs through the development and manufacturing phases quicker than ever before, throughout the year the CDMO industry was there with you, hard at work, adapting to your demands and evolving externalities, and adjusting internal operations and management.

Your CDMOs may not have had all the answers, but they did offer you solutions.

And CDMOs providing solutions in the face of uncertainty and rapid change has been key to your success.

Yes, there have been some rough edges as well – e.g., lingering capacity/shortages in some areas; longer start-times and higher costs in others – but it does appear you were able to meet most of your goals through outsourcing, and forging solid external partnerships.”