From The Editor | March 7, 2022

If You're Outsourcing, Your CTO Probably Needs A Hug


By Louis Garguilo, Chief Editor, Outsourced Pharma

Business Successful GettyImages-1137760581

You might want to check in on your Chief Technology Officer. How are they doing?

“They’re at the center of the storm,” says Peter Gallagher, a biopharma-industry consultant at Egon Zehnder who is focused on the modern-day CTO. “The role has become critical to a company’s success, and has an impact across the enterprise – from R&D to commercial – and at every level of the organization.”

CTO roles have expanded, deepened, and pressurized – particularly at drug sponsors reliant on outsourcing development and manufacturing capabilities.

Now CTOs are actively seeking ways to improve their leadership skills so they can better handle the transforming environment.

Over a three-editorial series, we’ll dive into what CTOs face today, why they are in the situation they find themselves, and discuss steps they are taking to excel at all that’s being asked of them.

The Black Box

Peter Gallagher
Gallagher, who among other experiences has served as a lieutenant in the U.S. Navy’s nuclear-power program, and held various roles in pharma, such as at Merck – including in global supply chain management – documented for me what his research and countless conversations regarding the role of the CTO have uncovered.

(Note: Depending on the organization, the “CTO” title may differ, sometimes as “SVP Supply Chain” or “Chief Technical Officer”, or “Head CMC.”)

The span of an organization’s supply chain ranges from early development to commercial manufacturing, but to those not directly involved, it can feel what Gallagher describes as a “black box.’’

The CTO can own much of what’s within that black box – including partnering with CDMOs.

It’s “an incredibly diverse portfolio,” pushing CTOs into the depths of technical aspects of the drug or therapy, as well as the practical assembly, integration, and implementation of the end-to-end supply chain.  

“There's a depth and a breadth to the functional role, which makes it particularly unique and challenging,” says Gallagher.

Consider first a larger, established biopharma organization.

You'll have someone at the highest level – perhaps the chief supply chain officer (CSCO) with end-to-end oversight, typically picking up a molecule around development/tech transfer, through the supply chain to the market.

Under the CSCO, there may be a professional leading in-house manufacturing, one overseeing external manufacturing and managing CDMO relationships, another leading supply/distribution, and often a technical services group to program-manage and execute tech transfers between sites.

All this may be splintered across functional verticals, such as tech ops, internal manufacturing, external manufacturing, and then supply chain overall, and distribution.

“Think about how different those verticals are,” suggests Gallagher. ‘’You need to have expertise in each area.’’

Now downsize the organization to today’s clinical-stage start-up, and all those roles and verticals are under a single person – the CTO.

“That's where the intensity comes from. Its why it can feel they’re leading from the center of a storm. There’s the breadth and complexity, and in a smaller organization, the hands-on responsibility required as well.”  

Including with the partnering CDMOs.

“In a large biopharma, the chief supply-chain officer has layers between them and the CDMOs,” explains Gallagher. “As you get to these mid- or small-sized companies you don't need the layers, frankly, but that also intensifies the impact on the CTO, who are now only a layer or two from the shop floor.’’

Even if the CTO doesn’t have direct management of CDMOs, the broader point, says Gallagher, is how important it is to build a multi-level partnership so “the organizations are aligned from the timeline to the technical requirements, to even how the cultures of the organizations match up.”

Accordingly, the CTO must have a direct “line-of-sight” to all the company’s outsourcing partnerships. Typically, this can be achieved at the higher levels – perhaps a steering committee.

Nonetheless, “it’s implausible for the CTO to be far removed from that day-to-day interaction with each CDMO or other partner.”

They are challenged says Gallagher, to maintain this constant connection – and do so, we learn next, on behalf of some higher authorities.

The Board Wants Light

Gallagher says that typically, the CTO won't have direct contact with investors.

“But what's interesting,” he adds quickly, “we're seeing an increase in boards wanting a deeper understanding and appreciation of the technical pieces behind these advanced therapies small companies are developing.”

In other words, the board won’t abide by any black boxes.

Members increasingly look for technical expertise to sit at the boardroom table, and help them understand the science and investment needed to progress through the development and supply chain.

“This can be dizzying for the CTO,” an empathetic Gallagher says.

“Start with cutting-edge science that hasn't been scaled up or clinically proven yet. Then consider new equipment and manufacturing technologies embedded in a young organization without depth of technical or leadership talent to lean on.

“Add in today’s pace of scientific progress, and CTOs – owners of the “black box” activities – are relied on to have the keys to it all.”

 Gallagher continues:

“The development, scale-up, and manufacturing – the CMC [chemistry, manufacturing and controls] components – are especially crucial for these advanced therapies.

“Risks at this stage could be those threatening ultimate commercial viability. That’s a big deal – it could impact the company’s survival.”

Responsibility for understanding, and then disseminating, much of this comes down to the CTO, who therefore is emerging as a critical leader in the C-Suite of biotechs.

Meanwhile, “they’re being compressed from all sides – they need to deliver on the science and technology, assist in developing new talent, and lead their teams through unprecedented journeys,” says Gallagher.

“The CTO could very well be carrying the weight of the company’s success on his or her shoulders.”

All this leads us to some questions of primordial interest to readers at Outsourced Pharma, including these three:

  • How can CTOs develop their own leadership capabilities to excel at what’s being asked of them today?
  • How can a partnering CDMO help the CTO in their increasingly pressurized position?
  • When and who should you hire as your CTO?

Answers to these are taken up next.