From CMO To CMO: A Biopharma With All The Right Moves
By Louis Garguilo, , Chief Editor, Outsourced Pharma Follow Me On Twitter @Louis_Garguilo
There’s a quotidian calculation to outsourcing at Allena Pharmaceuticals that is well worth studying.
Allena is a Newton, Mass.-based biopharma with 25 employees. It is developing “oral enzyme therapeutics” to treat patients with rare and severe metabolic and kidney disorders. Allena’s lead candidate (ALLN-1770) enters phase three study this year; it is a first-in-class, oral enzyme therapeutic to treat a metabolic disorder know as hyperoxaluria, as well as other kidney diseases.
“The nature of the product we produce – an oral enzyme intended to be a therapeutic – requires the patient dosing regimen be somewhere around a gram, to a gram and a half, per patient per day,” explains Hugh Wight, VP of Technical Operations. “So even though we’re a somewhat typical virtual biotech, our phase-three clinical demand exceeds a thousand kilos – that’s a metric ton of product.
“And so,” says Wight, “we access contract manufacturing in a different way.”
Flashing Red Lights
Allena was founded in 2011 with series A funding form Third Rock Ventures, Frazier Healthcare, and Bessemer Venture Fund. It completed a successful IPO (NASDAQ: ALNA) in November 2017, raising approximately $75 million.
And according to Wight, Allena’s approach to outsourcing “starts with cash.” He says that as any biotech “navigates through its A, B and C rounds – because cash is king – you can’t necessarily camp out at the ‘premier places.’ You can’t spend all your dollars at the large, brand-name large CMOs.”
After funds, according to Wight, is capacity – specifically capacity that can meet tight production timelines.
“This is an area we have to navigate and revisit regularly,” he says. “Our perspective has to include the realization that as a small biotech without the kind of cache of a Lilly or a Pfizer, for example, we are often viewed by CMOs as a ‘schedule filler.’ From a scheduling perspective, we feel we could get kicked to the curb because somebody else comes in with more dollars, and can occupy for a longer period of time those assets at a CMO that we need. So while we rely on that CMO to produce enough material for the next value point in our production process, our situation necessitates preparation for the decision to take our work somewhere else.
“Because of this, we’ve evolved a concept of portability for our manufacturing process, one that may be anathema to a lot of companies,” continues Wight. “It is now built into our development DNA: Everything we do in our unit operations must be so well considered at such an early stage that we can go anywhere we need to if it makes sense. When one of those lights on our CMO dashboard goes red, and it’s time to pack up and find another place to go, we are prepared and able to move quickly. Ultimately, that decision is based on: ‘What is the balance between cost, quality, and deliverable that will work best for our patients, our company, and our investors?’”
Negotiations Before The Next Move
For any biotech, Wight says that before opening any negotiation with a CMO, there’s the need to “first have a clear internal understanding of what you want, and what your tolerance limits are.”
“Setting upfront, internal expectations carefully, in terms of success and failure analyses, timelines, and yield, allow a biotech to then enter into a negotiation that can evenly balance initial CMO and company risk.”
Wight says it is unrealistic for any drug sponsor to expect that a CMO will move any faster than their processes will allow, that the CMO will have all of the processing equipment that a process demands, or that a drug owner will get everything you want from a timeline or yield perspective in the first round of production.
“By understanding limitations and accepting the existing parameters, you can bake realistic timelines, future capital investment, and production requirements into that initial scope of work, which opens the door to an amicable negotiation,” explains Wight.
Key to those negotiations is “the pairing of the scope of work with a robust master-service and quality agreement that frame the rules of play for the relationship.”
“I invest time in establishing an equitable master-service agreement that will accommodate several rounds of appended work scope,” explains Wight, “but one that also sunsets at the time when both sides will benefit from revisiting the original terms – often after a product has cleared a critical clinical development hurdle.”
Making The Move Easy
Wight informs me that Allena’s lead product “has moved at each stage of clinical development, with pre-clinical and phase one production at one CMO, and then phase two and phase three at two, subsequent CMOs.”
“Along the way,” says Wight, “we’ve scaled from 100L to a 25m3 fermentation scale, while advancing toxicology and human clinical development. In each instance, the reason for the change in CMO was understood and anticipated on both sides, and resulted in no gap in the ability to support clinical demand. The need to be able to make these types of moves is actually incorporated into everything from the MSAs that we ink with our CMOs, to the characterization package that we set forth in our IND.
“Therefore, from a contractual perspective, we include all relevant and specific contract terms, milestones, and pricing for CMO technical support for a technology transfer in the event of a move. This keeps the CMO whole over the course of a move, and provides a financial kicker for actively participating. We’ve been fortunate that the technical teams at our CMOs have viewed our moves like a parent sending their child off to college – our product has simply outgrown the services that they can reasonably provide.”
For the changes of venue Wight mentions above, and as common practice, Allena executes a “comparability exercise” that directly compares the API from the previous supplier to the API produced after feasibility and engineering batch production. “This battery of 20+ assays, started in early clinical development, provides Allena the confidence that the new supplier, equipment, scale, and yields match the product from the previous source. There is also an array of supporting toxicology data, and human clinical data. Timely and full IND updates make this fully transparent to FDA as well.”
Taken together, it does appear Wight and Allena have all the right moves … and have changed what many biotechs dread – having to switch service providers – into an organized opportunity for biotech growth.