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An industry development success story
Attracting global CMO Patheon to Brisbane
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A CASE STUDY OF THE SUCCESS
STORY
Attracting global CMO Patheon to Brisbane
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Front entrance of the CMO facility
Translational Research Institute adjacent (right)
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Cell culture suite from visitors’ viewing corridor
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View of cell culture cleanrooms from production space
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2005-2006 - setting the scene in Australia:
origins of the BPA deal
• Big pharma present; but small molecule (imported API) with product packaging focus
• CSL providing well trained bio cGMP workforce
• Multi billion biomedical R&D investment by government …. but how to translate to economic benefit?
• Clinical research strength but fledgling biotech industry (especially biologics)
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2005-2006 - setting the scene in Australia:
origins of the BPA deal • State and Federal governments wanted a mammalian
cell facility
• ‘Capability gap’ argument in developmental supplier chain
• Queensland government provided $7M seed money
• Initial activity – develop business case – BPA spin-out
• Federal government offered $10M special purpose grant
• Iconic new translational institute sought cGMP capability
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Business model issues
Government perspective
• Wanted inclusive clinical network focus
• Had considered incubator model; not self-sustaining
• Leery about running risky businesses
• Only had AU$7M committed
• Self-funding project implementation vehicle if possible
• No trailing operational financing risk for facility operation
• Arms-length from project implementation vehicle (hence BPA Pty Ltd)
• Project implementation decisions independent of government (fallout protection)
• Independent Board of Directors (no government directors)
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Business model issues
BPA perspective
• Globally attractive/competitive or not at all
• Must cater for preclinical to market launch
• CMO solution to avoid commercial risk to government
• CMO calls the shots regarding design and operation; forget quasi public incubator
• Structure deal to provide operational funding for BPA
• Local networking synergies = nice-to-have
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Why a CMO model?
• As at 2006 - clear market trend over 5+yrs to using CMOs, why…
• Time-to-market pressure – CMO’s offer faster route
• Offset capital investment risk – test the market first
• Focus capital on clinical development – basis for asset value
• Allow developers to focus on areas of strength• IP generation• Clinical trials
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Business model issues
CMO side
• 100% contract manufacturing facility, not in-house (product conflict-of-interest)
• BPA was agnostic to technical platforms beyond mammalian cell culture
• All operational matters to CMO
BPA side
• Leverage other clinical development capabilities (egcollaborative marketing)
• Had to find funds beyond AU$7M
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Funding
• BPA forecast requirement for AU$50M to build a facility
• Queensland government committed AU$7M for capital plus AU$3M for BPA’s operations
• BPA bid for AU$10M federal government grant• Secured AU$33M commitment from
Translational Research Institute project + land (government owned)
• Quid pro quo for latter was leasehold structure and future rental flow from CMO
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Partnering Strategy
• Expressions of Interest invitations issued widely
• Request For Proposals issued to EOI respondents
• RFP structured, with deadline
• USA pitching tour to shortlisted RFP respondents
• Pitch
• we design and build for you .. up to AUD50M
• Highlight the ‘Australian advantage’
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• 27 years experience as mammalian cell CMO
• Not interested in microbial manufacture
• Excellent audit record
• Experienced with broad range of mammalian cell-lines
• Backed by big corporate parent
• BPA pitch aligned with DSM’s expansion strategy
• Process technology IP – XD, EBA
• DSM accepted long lease terms
Partnering outcome – DSM Biologics Patheon
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Snapshot 2016
• DSMB Patheon Brisbane – 100+ staff and growing• Clients from preclinical to phase 3; mostly N American origin• AU$1.8M in post-handover BPA support grants awarded• 3 US biotech companies incorporated in Queensland• Over AU$100M total economic return in less that 3 years
post-handover• National scene – synergistic biologics sector impact with CSL
and Pfizer plants• Major new government funding for commercial translation –
priming local pipeline• BPA mission complete; scaling-down activities
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Key lessons
• Secure deal funding before partnering• Keep academia and CMO separate• CMO drives design and commercial strategy• Keep government out of CMO’s operation • Devise sustainable dividend model • Keep it simple; landlord model is a good one• Make sure CMO partner plans enough resources for
design and handover
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Thank you