From The Editor | January 10, 2019

New Data And Analysis On Biopharma Capacity

Louis Garguilo

By Louis Garguilo, Chief Editor, Outsourced Pharma
Follow Me On Twitter @Louis_Garguilo

New Data Louis and Kate

Readers may recall some spirited back-and-forth between me and Industry Standard Research (ISR) Vice President Kate Hammeke, over drawing conclusions on biopharma capacity at CDMOs from an ISR report that had just been released.

Now we have more precise data.

To measure more adequately and get us on the same page, Hammeke had agreed to insert some specific questions on this subject into ISR’s next survey. That data is in, and exclusive to Outsourced Pharma readers.

Little Concern For The Many

Kate Hammeke
Respondents to the survey were professionals directly involved in the outsourcing of drug development and manufacturing for their biotech or pharma company. (The respondents self-identified whether they were a biotech or pharma).

Let’s get right to it:

Hammeke asked specifically: “Are you or is your company concerned that there won't be sufficient, available bioprocessing capacity to meet your outsourced manufacturing needs?”

Even I – who readers know has been saying capacity isn’t a concern and won’t be – was surprised that a full 40% of respondents gave a flat out answer of “No.”

Among the remaining responders to this question about a concern for bioprocessing capacity at CDMOs, 37% answered “Maybe.” Only 23% replied “Yes.”

I ask Hammeke if she reads this any differently than I do, that is to say there’s little to worry about industrywide when it comes to outsourcing for biologic-drug development and manufacturing.

“No, I read that the same as you – those concerned are definitely in the minority,” she replies. “People at this point are saying that any idea of a ‘capacity crunch’ is not a concern.”

Moreover, says Hammeke, “I even read into those folks in the ‘Maybe’ zone as actually saying, ‘We are not at all impacted yet,’ although they leave open the possibility they could be in the future.”

Actually, Hammeke teases this out in a follow-up question. (These survey-question creators are so creative.) She next asked: “When do you anticipate the lack of available bioprocessing capacity will impact your organization?”

For this question – which to me leads responders to feel challenges are already out there – nearly one-third (32%) said, “It is unlikely to impact our organization at all.”

A combined 53% said they could anticipate capacity impacts within the next 1-5 or 5-10 years. But when you think about it – and here I go interpreting again – aren’t these respondents the people hired to always worry about capacity? Not anticipating supply-chain impacts could be considered a dereliction of duty. (I’m just saying …)

To this, Hammeke patiently replies: “We have a third of respondents effectively telling us capacity as an issue is unlikely to impact them at all. That’s a pretty clear look into our crystal ball.”

But of course, there’s more to it than that. Read on.

Selecting The CDMOs

Could we relate these responders more closely to the selection of CMOs? We tried.

Fifty-seven percent replied that “a lack of available capacity influenced our company's use of CMOs.” We asked those responders to tell us more about this in their own words.

“What I’ve realized in reading through those comments,” says Hammeke, “is that question was taken quite a few different ways. A lack of available capacity was read by some as a lack of internal capacity, as in ‘We have to use a CMO because we don’t have capacity,’ or on the other hand, ‘Our CMO has capacity, but not all that we need, so we contract with multiple CMOs.’”

“Unfortunately,” she continues, “we learn this every now and again in market research. Question interpretation can give the responder different ways of responding.”

But some ambiguity can be good. (That’s me talking, not researcher Hammeke.) Here, it helps us introduce, and contemplate, the many factors involved in this discussion – many of which I’m sure you have in the back of your mind as you are reading this.

Such as: Some bigger pharma respondents are less worried about capacity because they’ve been able to effectively capture it at preferred CDMOs (see this yearend editorial), or because they’ve gone ahead and built out capacity themselves. (Forty-two percent of respondents self-identified as “pharmaceutical company with over $1 billion in sales.”)

Hammeke tells me she did find some market enlightenment in this question regarding other critical factors.  

“Some of the more interesting responses came from those who mentioned there’s currently a limited segment of CMOs they can use, based on their need for special technologies, equipment or knowhow,” she explains.

“When those CMOs are at capacity, some biopharma are getting edged out. For example, one comment says, ‘Our process for drug substance requires equipment that's not common in most CMOs.’ Some of these folks experiencing a capacity issue right now already start from a limited pool to select from, because they are in more of a niche. For example, equipment to make biologic API isn't common among many CMOs.”

What About The Other Ones?

Which brings us back to the first question we asked. Although above respondents strongly suggested capacity today (or perhaps even well down the road), is not a critical concern, 13% of responders did reply that a lack of available capacity “is currently impacting our organization.”

So before I had time to take further satisfaction in having my stance confirmed, Hammeke reminds me we are still left with this segment of responders who are indeed facing capacity issues. And, come to think of it, this may be a growing cohort. Who are these folks? How can we learn of their concerns and identify where, for them, issues contracting with CDMOs exist?

Hammeke has agreed to take this up for Outsourced Pharma, via a series of articles. So look for her further, data-based analysis in these pages throughout 2019. (I may opine some more, too.)  

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… and be on the lookout for the soon-to-be-released, ISR’s 2019 Biologic API CMO Quality Benchmarking Report