Demand Uncertainty? Why More Pharmaceutical Companies are Turning to More Flexible CDMOs

The smart way to manage manufacturing capacity

Posted: December 28, 2019

API Manufacturing and Pharmaceutical Manufacturing

For decades, TV networks NBC, CBS and ABC news programs informed the entire country. When important national news broke – such as the assassination of President John F. Kennedy or when Apollo 11 landed on the moon, the nation turned to Walter Cronkite’s broadcasts in large numbers. He commanded an audience of 25 million to 29 million.

These so-called mass media stations gave way to a fragmented media landscape with hundreds, if not thousands of news channels across networks, cable TV, radio and the Internet, each monitored by a smaller audience.  In the therapeutics world, the rise of personalized medicine is impacting the pharmaceutical industry likewise. As well, developing niche therapies for smaller groups of people is resulting in greater competition among pharma companies to stay ahead and be first or second to-market with a treatment for a specific indication.  

Numerous established and emerging pharma companies are attempting to develop therapies for unmet medical needs to treat diseases affecting small to modest-sized populations, hoping their orphan drug will become another blockbuster. Federal law incentivizes development of therapies for conditions affecting fewer than 200,000 people:  drug companies are given an additional seven years of market exclusivity for that indication, providing drugmakers with a more compelling business opportunity.

TECH TRANSFER

The more fragmented market increases competitive pressure on sponsors as they race to bring targeted therapies to market, hoping to reap first-to-market benefits.

Targeted therapies on the rise

Targeted therapies have been on the rise for more than a decade. They have been most prevalent in the fields of oncology, immunology and rare diseases.  However, as medical science unravels how human genetic variations impact responses to drugs, the fragmentation caused by “precision medicine” and “personalized medicine” (they’re not quite the same), will likely result in a reduced number of beneficiaries for targeted therapies. What works for one group of patients may not work for another with the same clinical diagnosis. As a result, last year the FDA approved a record number of personalized medicine drugs – 42% of all new drug approvals, a trend that is likely to continue.

This article will focus on the demand uncertainty pharmaceutical companies face in manufacturing targeted therapies.

Manufacturing capacity decisions need to be made earlier—but how early?

Practically speaking, the ascent of personalized medicine means pharmaceutical companies no longer have the luxury of waiting for full clinical trial data analysis, or to see how their drug is doing on the market, before making manufacturing capacity decisions.  Today, capacity decisions need to be made earlier in the process in order to reduce risks at both ends of the spectrum -undercapacity and overcapacity. 

But how early? We had a customer whose Board decided to move ahead with preparations for commercial API manufacturing while their Phase 3 clinical trial was in early progress. They were confident and wanted to assure the manufacturing capacity would be there for commercial quantities. We tried hard to dissuade them, but they were insistent. They provided a sizeable deposit, with which we purchased the raw materials for the project.  Then a new Board was elected – and shut the project down.  The bottom line: too early capacity decisions can waste money. The company might have been wiser to wait for strong interim results before proceeding.

Flexibility in API manufacturing for targeted therapies

Sponsors are adapting to the uncertainty by outsourcing to contract development and manufacturing organizations (CDMOs) that are flexible and able to scale to varied batch project needs, whether 5 gm or 50 kg.  CDMOs such as Seqens North America can easily accommodate them while the largest CDMOs, which are adept at manufacturing large quantities for drug giants such as Pfizer or Lilly, tend to favor their most profitable, large quantity customers – as they should. They are simply not geared for small batch manufacturing.

Instead, for smaller batches, pharma companies are looking beyond their traditional CDMO, choosing a CDMO that is flexible, accommodating, and that would welcome their business, large or small.  The key is to find right-size API manufacturing resources to better align with today’s realities.

We have previously written about how to choose a right-sized CDMO, one with the seven most important GMP manufacturing capabilities.  These include having the range of equipment needed for small- or large-sized manufacturing, bridging the gap between Phase 1 and the increased material required for Phase 3 trials and commercialization.

As well, the CDMO should insist on a scale-up process to minimize expensive surprises in the GMP manufacturing suite.  Experience and expertise remain other important variables to consider.

Summary

In order to adapt to the rise in precision medicine and targeted therapies, pharmaceutical companies are revamping their manufacturing strategies to work with flexible, right-sized CDMOs that are equipped to manufacture APIs in small or large batches. By shifting API manufacturing to smaller, more flexible CDMOs that will prioritize smaller projects, pharmaceutical companies can bring products to market faster to take advantage of sizeable first-to-market benefits.

About the Author

Ed Price CEO of PCI Synthesis
Ed is President & CEO of SEQENS North America (formerly PCI Synthesis). He serves as a co-chair of the New England CRO/CMO Council and sits on the Industrial Advisory Board for the Department of Chemical Engineering at UMass, Amherst. Ed is also a long standing member of the American Chemical Society and advises the Bulk Pharmaceutical Task Force of the Society of Chemical Manufacturer’s and Affiliates (SOCMA)...

Do you have questions? Talk to Ed.