By Bernhard J Paul, Ph.D., Principal Consultant, Carinth Consulting LLC
Part 1 of a five-part series
Most biotech and pharmaceutical companies rely on contract development and manufacturing organizations (CDMOs) to access flexible capacity, help better manage their internal R&D and manufacturing resources, or acquire capabilities that are unavailable internally. In an environment where deadlines are becoming increasingly tighter, it is critical that one selects an outsourcing partner who will deliver on time in full, to ensure that material for toxicological studies or clinical supply is available without delay or interruption.
However, choosing a CDMO is a challenging task. While consolidation over the last few years has reduced the number of providers significantly, the market is still highly fragmented, and a large number of domestic and international providers exist. Having an established relationship is one of the most important criteria for selecting a partner. Performance on previous projects is often a good indicator for what to expect in the future, and personal relationships facilitate conversations when course corrections are required. Yet there often is a need to bring in new partners, either to diversify the manufacturing network or to access new capabilities or technology.
Any CDMO selection process will typically include a number of activities such as questionnaires and audits. It is, of course, important to schedule an on-site visit to see the site and meet key staff, ideally those individuals that will be closely involved with a project later on. Site visits present a unique opportunity to get to know a potential partner and consider ahead of time what information you want to gather and which questions to ask.
In this five-part series we will explore several key questions to consider as part of the vendor selection process.
Are You Getting The Full Value Of An Integrated Offering?
Through the aforementioned consolidation, a number of providers have either acquired additional capabilities to strengthen their current offering (“horizontal integration”) or added capabilities that lie upstream or downstream (“vertical integration”). In either case, the proposition to the customer focuses around simplicity and speed, claiming that having multiple parts of a project with a single vendor can reduce the amount of time required for contracts, oversights, tech transfer, and shipments.
While simplicity derived from reducing the number of contractual agreements is certainly desirable, as a customer you should also expect an added technical benefit. Few problems in drug development fit neatly into a single category or department, so close collaboration between different groups can make the difference between achieving a particular milestone or not.
For example, the majority of active pharmaceutical ingredients (APIs) developed today have issues with solubility, resulting in bioavailability problems that put them in class 2 of the Biopharmaceutical Classification System (BCS). How does the company ensure that the API development group and the formulation development group work together effectively to overcome that issue, especially if they are not located at the same physical site?
Another example is the transfer of processes and methods between different groups and sites, which tends to happen frequently in the early stages of development since the manufacturing route is still evolving and capacity at various scales is employed to supply material for different clinical studies. How does your CDMO ensure that knowledge created in one part of the organization is effectively transferred to other groups?
Only if a company’s different services are fully integrated in practice can a potential customer derive full value from having a single company work on multiple parts of a project. Ask your potential partner what processes and structures it has in place to ensure a seamless offering. Inquire about examples of projects where teams have solved problems in a collaborative fashion. What processes does the company have in place to encourage collaboration? How do research groups on different sites work together effectively? Is there a process for experts from other groups to join the project team when a problem is encountered (or ideally, proactively before problems even arise)? Proposals are often issued by specific sites since they tend to be individual profit and loss (P&L) centers for businesses. But as problems become more complex and timelines become tighter, I hope we will see more companies opt for a model where overall staffing is decided based on the project needs and not by how a company has grown historically.
Be Aware Of Potential Red Flags
Always look out for those subtle signs that integration is not yet complete and that teams operate separately from each other. I remember a specific meeting between a potential customer and a CDMO many years ago that was held as part of a site visit. The service provider had different parts of the organization present, yet every person from that supplier had different business cards and used different PowerPoint presentation templates to outline their potential contribution. This by itself does not mean that groups aren't collaborating, but it should prompt you to ask a few additional questions to find out how closely aligned different parts of the organization really are. Only when integrated services work effectively in practice can you as the customer get the full benefit of a broad service offering.
And never underestimate the internal culture differences that can exist within large companies. I’ll always remember when, many years ago, I was approached by a company to help prepare a number of compounds of a specific structural class. When looking at the project, I couldn’t help but wonder why that company approached us to assist with this since they were known as the world-wide expert in this area. Upon my cautious prompting in that regard, the answer was “Yes, we are well known for this, but these compounds would be provided by another division within our company and it’s much quicker and easier for us to get this made externally!”
Large integrated service providers can provide added value in terms of overall offering and simplicity, but make sure the company you choose has the right culture and processes in place to effectively deliver the integrated skills and know-how required to solve the inevitable technical problems along the road and ensure your project will be delivered on time.
Or as the famous quote says: “In theory, there is no difference between practice and theory. In practice, there is.”
Stay tuned for part 2 of this series, where we explore ways to learn from failure.
About the Author:
Bernhard J Paul, Ph.D. is the founder and principal consultant at Carinth Consulting LLC, a drug development consulting firm based in the Boston area. Paul has worked within biotech and for multiple CDMOs in the U.S. and Europe, and he uses his extensive experience to advise companies on all aspects of small molecule development and strategy. Paul is the author of 21 U.S. patents and multiple peer reviewed articles. He holds a Ph.D. from the University of Florida and an undergraduate degree from the University of Graz, Austria. He can be contacted at email@example.com.