You Still Can't Find Your Providential CDMO?
By Louis Garguilo, Chief Editor, Outsourced Pharma
Many moons ago, Ken Shultis helped me understand what it takes to serve customers at a contract manufacturing facility.
Back then, I brought in biopharma clients from Japan to our API facility in Rensselaer, NY; Shultis was the VP and GM.
Today, he’s CEO of Rondaxe, a pharmaceutical CMC consulting and software firm. But he’s still providing guidance on the sponsor-CDMO dynamic.
A recent conversation with Shultis centered on this fundamental question:
Why does it remain problematic for sponsors to select the appropriate external manufacturing partners?
Are You Experienced?
But he has something else on his mind this day.
After recently undertaking an inventory of all the needs clients present to Rondaxe, “we were again struck by the amount of work we do for their CDMO selection,” he says.
“All of us kind of roll our eyes when the subject comes up at yet another conference or in another article, but guess what we’ve been doing for clients in 2024? Helping them find contract manufacturers.”
This perplexes me as well as.
Why haven't we got this figured out? Why isn't it easier to connect sponsors and providers? So much more information is out there. There're more options for sponsors. People have been at it for so many years ...
Shultis stops me.
Regarding that last comment, he interjects, “They are not the same people.”
He continues:
“That’s not necessarily a bad thing. You have so many companies, new and existing, growing at the same time, but the people there have never done manufacturing outsourcing. They come from different functional areas. They've never been responsible for this before.
“Biotechs might hire folks with some purchasing experience – they know how to place a PO. But do they really know how to qualify a vendor, or what that even actually means when it comes for manufacturing?
My turn to break in:
Wait a minute – aren’t professionals starting up biotechs today more industry-experienced than ever? Many are often ex-pharma. Investors, board members – they all seem more knowledgeable.
Ken retorts:
“They are smart and talented professionals, but the point is they just are not experienced in certain areas. These biotechs don't have people with the full range of experience.
“When I worked at BMS, we saw people with five, six years of incumbency in manufacturing working with people who had 10, 15 years of incumbency in manufacturing who were then just going on to other areas of the business.”
Broken Model?
The prevailing biotech-industry hypothesis states that many of those long-tenured pharma workers would join emerging companies. And their experience would include knowledge for finding, selecting and working with external development and manufacturing partners.
While plenty of that does seem to transpire, as I’ve learned talking with industry professionals and writing editorials based on those conversations, finding and contracting with the best-fit CDMOs is a daunting task.
Part of the reason for all this, says Shultis, is when transitioning from development stages to manufacturing, companies “don't adequately manage their CMC at all.”
“Actually, big pharma doesn't either!”
Therefore, the ex-Pharma executives “teach” the biotech such things as how to just send out your manufacturing requirement and a description of the process to CDMOs, and see what comes back.
“That’s considered outsourcing,” laughs Shultis. “So I agree, new biotechs are peopled by experienced pharma folks more than they were in the past, but those often are not the right professionals to be figuring out what CDMO to use.”
“In fact, overall,” he says finishing up here for us, “I fear we have so degraded our CMC capabilities in Big Pharma that their lessons are bad for the biotechs starting out today.”
Focus On API
Shultis believes biopharma professionals only really focus on who they should work with “when they're finally getting down to the API.”
“They recognize they do not want to be enhancing any worries at that stage,” he says. “So they're much smarter about that at least from that point.”
And that often puts an end to what Shultis sees as has been on automatic pilot to that point: outsourcing early on to China.
Of course, recent events emphasize that may be about to change drastically. (see BIOSECURE Act)
“Nonetheless,” Shultis says, “sponsors buy so much of their critical key intermediates from China, and then perhaps secondly in places like the U.S., Germany, or France, mostly based on price considerations.”
It's been somewhat hard to argue with that calculation, he says, but more so today than ever, you have to think:
What about the stability of my entire supply-chain? Shouldn’t I be more concerned about inherent risks? Who specifically should we select as external partners today?
“Frankly,” Shultis says, “that type of strategic thinking has not been a focused or serious subject of discussion until maybe the last handful of years.”
“‘Shorting’ the market because of a failure of supply is the biggest cost the manufacturing function can ever incur.
“It’s not just a loss of sales during a shortage, it can stunt demand for a product over the long term. Reliability of supply must be an integral factor in deciding on your sources of production.”
Late Realizations
Today we have collectively come to the rather sudden realization there is a critical need to reassess providers more by location than ever before.
“So now,” says Shultis, “with everyone in the same boat after COVID and the current geopolitical environment, good luck with that,” because it circles us right back to our seemingly never-ending need for help in finding and securing CDMOs.
“And again, the people in charge of that early-end discovery and development are not those who have outsourcing supply-chain knowledge as such,” iterates Shultis.
Thus, consultants see no downtick in biotech customers looking for assistance, and why we won’t stop providing readers with best practices and strategies for CDMO selection.