Biologics Outsourcing: Decision Drivers and Key Considerations

Date Published: Apr 17, 2023

Publication: Pharma's Almanac

A recent survey of 100 decision makers at innovative biologics companies revealed 57% of respondents believe their companies’ outsourcing activities will increase over the next two years, while a further 37% expect levels to remain the same.1 In this article, Scorpius BioManufacturing’s Mike Fiske, Vice President, Manufacturing Sciences, discusses the factors driving this increase in outsourcing activity and the key considerations innovators should explore when choosing an outsourcing partner.

Between 2019 and 2021, venture financing in the biologics industry hit a record high, with a total of $44.1 billion invested into emerging therapeutic companies globally in 2021 alone.2 The combination of a cash-rich environment and industrywide biomanufacturing capacity bottlenecks gave therapeutics companies with promising candidates approaching the clinic pause. Far more so than in previous years, therapeutics companies had scope to consider whether it was in their best interest to partner with a contract development and manufacturing organization (CDMO) for clinical biomanufacturing or to bring this critical step in drug development in-house.

In 2022, the global economic outlook changed considerably, with inflation, Russia’s invasion of Ukraine, and enduring effects of the COVID-19 pandemic all contributing to a sharp slowdown in the global economy.3 This had a corresponding effect on biotech investment, which dropped rapidly to only $16.9 billion globally by the end of Q3 2022.4 This has undoubtedly tipped the scales when it comes to decision-making around outsourcing and influenced therapeutics companies’ decisions to outsource clinical biomanufacturing rather than take on the cost and associated risk of bringing this in-house, especially for companies with early-stage clinical candidates.

Growing Pipelines Reflect a Thriving Market

Despite the uncertain global economic forecast, the biologics market is continuing to thrive. Various market research firms estimate compound annual growth rates (CAGRs) of between 4% and 9.25% and total valuations of over $500 billion by 2030.5–7 This is reinforced by the number of biologics products progressing through clinical trials, and the increasing market share for biologics versus conventional therapeutics.8 Between 2011 and 2020, 683 novel biologic candidates proceeded successfully from phase I to phase II clinical trials, 439 moved from phase II to phase III, 262 proceeded to investigational new drug (IND) application or biologics license application (BLA), and 278 were approved.9 By 2021, there were 2,289 biologics in phase I trials, 3,330 in phase II, and 1098 in phase III.10 Although FDA approvals held steady between 19 and 21 per year for the last five years, 2022 was the first year that the number of biologics approved equaled that of small molecules.11

Overall, this paints a picture of a highly dynamic and rapidly growing market, where demand for manufacturing capacity continues to increase and time to market is a key factor in decision-making. Partnering with an outsourced manufacturing partner is often the fastest and lowest-risk way to advance biologics candidates through the clinic. Another key factor driving the predicted increase in outsourced manufacturing is the sheer volume of R&D ongoing in most small- to mid-size biologics companies.1 In fact, 71% of survey respondents said a general increase in R&D was the main driver of increased outsourcing in their company, which is further supported by the heavy weighting toward R&D in most biologics companies’ budgets (R&D budgets averaged approximately 2.5x more than manufacturing budgets in the companies surveyed1).  

Critical Decisions in Choosing a CDMO

Choosing an outsourcing partner, particularly for manufacturing and testing your biologic, is a crucial decision and one that can make a tremendous difference to the successful and timely delivery of your therapeutic to the clinic. Here, we discuss some of the key considerations that might influence your choice of partner.

The most important factor is also one of the easiest to overlook: fit. This encompasses more than the scientific capabilities of a potential partner. It includes the strength of the relationship you can build with your outsourcing partner. It’s important to consider whether you want a purely transactional relationship or a longer-term strategic partnership.12 For the latter, consider whether your business practices and values are compatible. Ensure that you feel “heard” by the organization you partner with; that they listen to, understand, and respond to your concerns. Finally, consider whether you can establish an open and honest channel of communication that champions transparency, both when everything is proceeding perfectly to plan and, more importantly, when it isn’t.

Another key consideration is the experience of the team you will be working with. The facilities, the equipment, and the quality management systems (QMS) are of course important, but all of these things are staffed by people. It’s their experience and expertise that you must feel confident in. You want the “A” team working on your project. Furthermore, consider the teams’ capacity. Aside from their scientific competency, it’s important to consider whether experienced team members have sufficient bandwidth to prioritize your project and respond proactively on your behalf to any issues that may arise.13

In addition to the teams’ capacity, it’s just as important to consider the CDMO’s manufacturing capacity. If speed to market is your major driver, you need to know (and here again, trust and transparency are key) just how long it’s going to be before your project can get started and where capacity bottlenecks might lead to delays. For example, perhaps your CDMO can get started on tech transfer and process development fairly quickly, but there’s a backlog with cGMP suite availability. Ideally, of course, your CDMO will have the capacity to initiate the project as soon as you’re ready and proceed uninterrupted, according to the agreed timelines. It can also make a big difference if your chosen CDMO employs a team of skilled program managers, who can function almost as an extension of your own staff and keep your project on track throughout.

In the current market, the term “CDMO” is applied increasingly frequently to cover a multitude of different service offerings and capabilities. An early part of your strategic decision-making is likely to include the choice between outsourcing to a single partner who can fulfill all your process development, analytical development, clinical biomanufacturing, and testing requirements, or whether you should instead choose to partner with multiple specialist CDMOs. The obvious advantages of choosing a partner with end-to-end capabilities include reduced tech transfer requirements. An integrated CDMO can also help reduce costs, risks, and delays associated with shipping between multiple sites and multiple site audit requirements. This integrated approach can ultimately result in faster timelines.

Finally, supply chain security has been a hugely important topic since the COVID-19 pandemic and has been exacerbated by rising global political tensions. This is another important consideration to take into account when choosing an outsourcing partner. What steps are they taking to secure your supply chain for clinical and commercial manufacture? Asking questions about how and where they procure equipment, reagents, and consumables, as well as any of the necessary raw materials for manufacturing your biologic and what stock levels of each they maintain, can help reassure you that your product won’t be delayed by supply chain disruption.

Once you’ve made the decision to outsource manufacturing and testing, choosing your CDMO partner is the single most influential decision you’ll make when it comes to accelerating your product to the clinic and beyond. It’s something you should start thinking about as early as possible. Factoring a manufacturing and testing strategy into your research plan from the beginning can help you avoid delays as you prepare to transition to clinical manufacture. Taking the time to consider exactly what you want from your outsourcing relationship and finding the right partner to meet your needs will be time well spent when it comes to transitioning your product from the laboratory to the clinic.

View the full survey 

 

 

References

  1. Trends Shaping the Future of Emerging Biotechs: 2023 Report. Scorpius BioManufacturing. Apr. 2023.

  2. 2020 Biopharma Market Trends and Investment Insights with Real-world Perspectives. Rep. LaVoie Health Science. 1 Oct. 2020.

  3. World Economic Outlook: Countering the Cost-of-Living Crisis. Rep. International Monetary Fund. Oct 2022.

  4. “Emerging Therapeutic Company Investment and Deal Trends.” Biotechnology Innovation Organization. Accessed 6 Apr. 2023.

  5. Biologics Market: Information by Source (Mammalian, Microbial), Manufacturing (In-house, Outsourced), and Region — Forecast till 2030. Rep. Straits Research. 2022.

  6. Biologics Global Market Report 2023 – By Type (Monoclonal Antibodies, Therapeutic Proteins, Vaccines), By Distribution Channel (Hospital Pharmacies, Retail Pharmacies Or Drug Stores, Other Distribution Channels), By Route Of Administration (Oral, Parenteral, Other Route Of Administration), By Drug Classification (Branded Drugs, Generic Drugs), By Mode Of Purchase (Prescription Based Drugs, Over The Counter Drugs) – Market Size, Trends, And Global Forecast 2023-2032. Rep. The Business Research Company. Jan. 2023.

  7. Biologics Market to Experience Substantial Growth of USD 596.65 Billion by 2029, Size, Share, Trends, Key Drivers, Growth and Opportunity Analysis. Rep. Data Bridge Market Research. 16 Jan. 2023.

  8. WORLD PREVIEW 2021: Outlook to 2026… Rep. Evaluate Pharma. Jul. 2021.

  9. 2021 Clinical Development Success Rates. Rep. Citeline. 2023.

  10. “FDA Approvals and Clinical Development Pipeline.” Biotechnology Innovation Organization. Accessed 6 Apr. 2023.

  11. Senior, Melanie. “Fresh from the biotech pipeline: fewer approvals, but biologics gain share.” Nature Biotechnology. 41: 174–182 (2023)

  12. Aylor, Ben, Elliot Vaughn, Chrissy O’Brien, and Eduard Viladesau. “Creating More Powerful Partnerships in Pharma Manufacturing.” BGC. 10 Sep. 2018.

  13. Wall, Kevin. “Choosing A CDMO: If You Can't Answer 'Yes' To These 3 Questions, Walk Away.” Pharmaceutical Online. 30 Jan. 2020.

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