By Rob Wright, editor in chief, Life Science Leader
The global CMO market was valued at $26 billion in 2010 — growing from 2008 at a CAGR of 10.7%. The main factor driving this market is the increase in sourcing of biologics and generics. Forecasts anticipate the market reaching revenues around $60 billion by 2018 – CAGR of 11%. The trend of pharmaceutical and biotech companies outsourcing their product manufacturing has no end in sight, even though many recent and very public recalls have involved CMOs. As this trend continues, so too must the trend of both parties to be vigilant during the process of developing strategic partnerships. In a recent article, Jeffrey Baker, Ph.D., deputy director, office of biotechnology products at the FDA’s Center for Drug Evaluation and Research (CDER), stressed the importance of differentiating between outsourcing and strategic partnerships saying, “In strategic partnering, there is shared pain and shared gain. You can contract out activities, but you cannot contract out responsibilities.” With this in mind, Life Science Leader magazine posed a series of questions to industry experts in order to gain their insights on how they assess CMO attributes, as well as to uncover potential growth opportunities in the CMO space.
Firelli Alonso-Caplen, Ph.D., is the senior director of Pfizer’s biotherapeutics and vaccines outsourcing group within the BioTherapeutics Pharmaceutical Sciences organization of worldwide R&D. Dr. Alonso-Caplen has 27+ years of combined experience in research, development, and cGMP production of biological products and vaccines, with more than 7 years specific to outsourcing, project/contract management, and technology transfer to qualified third parties. Barry Rosenblatt, Ph.D., is a subject matter expert in chemistry and manufacturing controls (CMC) of biotheraputics. Dr. Rosenblatt is the president of SME Biotech Consulting. He has 27+ years of experience in the biopharmaceutical and contracting industry, which include previously held positions with Centocor, J&J, and Charles River Laboratories.
rank the following CMO attributes: innovation, productivity, quality, regulatory, and reliability
Firelli Alonso-Caplen of Pfizer: Quality is always number one, followed by regulatory, reliability, productivity, and innovation. For my group — biotherapeutics and vaccines outsourcing — quality refers to the quality of the deliverables (e.g. clinical trial materials) made in compliance with cGMP (regulatory), ahead or on schedule (reliability), at reasonable costs and meeting success criteria (productivity). Innovation is important when generating better or more effective processes, products, or services, as in an R&D environment.
Barry Rosenblatt of SME Biotech Consulting: In my estimation, reliability should be ranked the highest because in order for a CMO to be reliable, it must have elements of all of the other attributes. A CMO that is not productive has questionable quality, does not maintain adherence to the regulatory requirements, cannot demonstrate innovation when required, and cannot be reliable. Solid quality and quality systems would be next on my list, especially in light of the current emphasis by both the FDA and EMA (European Medicines Agency) on CMO compliance. Following close behind would be regulatory adherence, for the same reason. Productivity is easier to attain, assuming the CMO has all of its other systems in place. Innovation can be a double-edged sword in a CMO. If applied to improved operational systems and problem solving, innovation is a positive attribute. If the CMO tries to innovate on a client’s process, however, it can lead to delays and unforeseen changes in a transferred process.
How do you assess a CMO as possessing the attribute of innovation?
Alonso-Caplen: A CDMO (contract development and manufacturing organization) would score high on innovation when the organization can offer practical solutions to improve processes, products, technologies, or services needed by their client, on top of continuing to meet quality, regulatory, reliability, and productivity attributes.
Rosenblatt: A CMO that has the ability to adapt its internal procedures to meet the sponsor’s needs (i.e. introduction of a novel technology or piece of equipment into its facility) is one good indicator of innovation. Companies that can offer suggestions on operational practices to increase efficiency/decrease costs of goods (i.e. use of bar coding for tracking raw materials/samples/products) demonstrate innovative thinking.
Describe a situation of a CMO demonstrating the ability to be innovative?
Alonso-Caplen: A CMO that is able to significantly decrease the number of purification steps of a product, with concomitant increase in overall yields, is an example of innovation.
Rosenblatt: In one project, the process required the use of multiple bioreactors feeding into a common capture step in a semicontinuous process. The CMO room design was originally set up for contiguous USP/DSP suites using dedicated feed lines between the rooms. The CMO used an innovative modification of the feed lines to redirect the feed stock from two rooms into a single DSP suite, bypassing the intermediary rooms.
What is the best way to measure a CMO’s productivity?
Alonso-Caplen: Typically, when drafting a service agreement for a late-stage product, a list of success criteria is included. Delivery of the required number of engineering and GMP runs on time, within budget, and meeting all of the success criteria, exemplifies a CMO’s excellence in productivity.
Rosenblatt: Productivity is linked to capacity, quality systems, adherence to regulatory requirements (no citations or 483 notices), and delivery of product on schedule with minimal or no deviations. Examination of deviation history, regulatory inspections, and plant utilization, measured against the total number of past projects, will result in a reasonable estimation of the productivity of the operation.
How do you assess a CMO’s quality?
Alonso-Caplen: The CMO has to undergo a two-to-three day audit by our QA auditors, depending on the complexity of the project that will be outsourced. A team of two to three auditors, including an outsourcing SME (small to medium enterprise), will assess the CMO’s quality systems. A typical starting point for an audit is the warehouse, where raw materials and components are received, go through the production and testing process flow and associated quality systems and facilities, and end with storage areas for either bulk drug substance or for drug product.
Rosenblatt: Assessment of the quality of a CMO is focused on the quality systems in place. Reviewing the SOP structure during an audit (i.e. policies, SOPs, batch records), as well as the content of each is essential for establishing trust in the CMO’s understanding of quality. Other essential pieces include a change-control system, OOS (out of specification)/deviation system, sample tracking system, external vendor audits, process/equipment/people flow procedures, and personnel training. Every audit should contain a spot check of documentation to determine whether SOPs are being followed. Inspection records from regulatory agencies (observation and/or 483 letters) should also be examined. Lastly, philosophy of the quality group and CMO management should be compared to the philosophy of the sponsoring company, with any disconnects covered in a quality agreement.
What is the best predictor of a CMO’s reliability?
Alonso-Caplen: Reliable CMOs will meet all project milestones and deliverables. A CMO that has a project management group separate from its science and technology lines reflects a CMO that is well experienced in contract work. The project manager oversees the daily coordination and execution of all activities, as well as the key performance indicators for each project. Monitoring and tracking functions are crucial for keeping projects on time, within budget, and meeting the highest quality standards. Those functions also offer the opportunity to routinely evaluate risks or identify gaps.
Rosenblatt: Reliability of a CMO can be measured in its consistency of on-time delivery of the promised amount of product with a minimum of deviations. Warning signs of less reliability include a large number of deviations, unusually long lead times, and a lack of milestones presented in project plans.
What is a commonly used CMO assessment tool that brings little or no value to the selection process, and why does it continue to be utilized?
Alonso-Caplen: All the tools we currently use for the assessment of a CMO are currently utilized, otherwise these would be eliminated. However, the selection criteria are weighted, and CMOs are scored and ranked on predetermined weighted criteria based on their responses to RFPs and after their successful completion of a technical evaluation, a quality/compliance audit, and an environmental health and safety audit. Cost competitiveness is not a weighted criterion. However, it can become the tiebreaker when faced with choosing between CMOs that are equal in all other weighted criteria.
Rosenblatt: Many sponsors place a great deal of emphasis on the experience of the senior most staff, without assessing the experience of the technical staff. Since quality in any organization should come from all segments of the organization, not just from the top, this tends to overestimate the quality of the CMO. It is commonly utilized as a selling point for the CMO, embedded in their sales presentations.
Where do you see growth opportunities for the CMO market?
Alonso-Caplen: More CMOs that can offer “soup-to-nuts” capabilities (i.e. an integrated service model) for various technologies are areas for growth opportunities. A CMO that can produce drug substance and drug product, and be able to perform release and stability testing of antibody-drug conjugates, is a specific example of a desired CMO. This simplifies the supply chain and reduces the occurrence of a technology transfer with oversight by a single team.
Rosenblatt: There are several potential growth areas for CMOs in the current economy.
Service offerings: With Big Pharma often reducing or shutting down its research and early-stage development groups, CMOs with the ability to develop early-stage production and purification processes, as well as GMP production, will likely see an uptick in business as these companies increase outsourcing. In addition, many pharmas are looking for “one-stop-shops” to meet their outsourcing needs. Partnering or implementing CRO offerings, especially as package deals, will shift some business away from stand-alone CROs.
Cost of goods reduction: CMOs partnering with technology companies (disposables, high-throughput purification systems, etc.) to reduce the cost of goods will be attractive to both the innovator companies and biosimilar companies.
International markets: As markets grow in areas outside of the U.S. and Europe, and as pressures increase to reduce costs, expansion into “developing” areas will be attractive for the next few years.
What tools do you use to assess a CMO in the area of regulatory compliance?
Alonso-Caplen: We typically ask a CMO to fill out a technical site previsit information questionnaire a couple of weeks prior to a scheduled technical evaluation. This template includes questions on regulatory submissions history, if any. Depending on the phase of the project to be outsourced, lack of experience with preapproval inspections could be a deal breaker.
Rosenblatt: Assessment of the quality systems for adherence to regulatory guidelines is a common tool. Looking for references in documentation concerning adherence to U.S. (21CFR, points to consider, and USP), EU (CPMP [committee for proprietary medicinal products] documents, EP [European Pharmacopoeia]) and, most notably international (ICH [International Conference on Harmonization]) regulatory compliance documents, coupled with a cross examination of the procedures and the regulatory documents are good indicators of compliance. Inspection history (e.g. warning letters, 483 history), is also a key indicator of company compliance.
What important CMO attribute not previously discussed often gets overlooked and why?
Alonso-Caplen: Flexibility of a CMO is an important attribute that typically gets overlooked, perhaps because it is difficult to measure. Timelines are quite dynamic, particularly in the precommercial landscape, where processes and control methods are not quite fully established. Typically the timing of clinical trials drives the needs for clinical trial materials and other associated supplies. In R&D, the faster you get to the clinic the better, without sacrificing quality, and at the lowest cost. Balancing these three parameters can become a “mission impossible,” but a flexible CMO can definitely help.
Rosenblatt: There are two attributes that are commonly overlooked by companies. The first is the ability to retain personnel. The turnover rate of employees is often overlooked in favor of the overall industrial experience of the technical staff. It is a common misconception that overall experience is more important than experience in the current position or company. This can be problematic, especially in cases where extensive technology transfer is required. There is nothing that cuts into productivity more than having to train new personnel. The second attribute is the CMO’s analytic capability. This is usually overlooked as it is frequently considered a lesser concern than production capabilities. Without sufficient analytic capability, in-process and lot-release testing can suffer delays and lapses in quality, resulting in potential loss of product.