successfully managing biopharmaceutical manufacturing ... · successfully managing...

Successfully Managing BiopharmaceuticalManufacturing Outsourcing

Pre-Conference WorkshopIQPC 4th Annual Contract Manufacturing Forum

May 22, 2006

Patricia SeymourBioProcess Technology Consultants, Inc.

Acton, MA

From Clone to Clinic®

Introduction – What is a Biopharmaceutical

Developing Biomanufacturing Processes

Developing a Manufacturing Strategy and the

Availability of Bio-manufacturing Capacity

Identifying and Qualifying the Right CMO


What is a Biopharmaceutical Product?

Products made by or composed of viable organisms− Natural & rDNA Proteins, Monoclonal Antibodies− Vaccines, Cell and Gene Therapy− Blood and Blood Derivatives

Traditional Biologics Defined by Manufacturing Process• Difficult to demonstrate purity, identity, potency & consistency

Early biopharmaceutical products included simple proteins, typicallyreplacement for existing natural products, e.g., insulin, alphainterferon

Today’s biologic products more complex proteins with significanttertiary structure and post-translational modifications

Current biologics can be manufactured, characterized, and assayedwith drug-Like control and resolution• Tightly defined production processes with high-resolution

analytical methods


Biopharmaceutical Development Timeline

Costs $0.5-5 Million $25-200Million

Product Concept

Development

Laboratory &Animal Studies

IND/CTASubmission

Human Studies

NDA-PLA/EMEASubmission

Preclinical 30-DayWait

Clinical Development BLAReview

ProductMarketing

Treatment IND

Manufacturing

IND Preparation Initial Review Supplemental Reporting & Review

Phase IV ?Phase I Phase II Phase III

1-5 yrs 1-3yrs0.5-2yr 1-3yrs 1-5yrs

RTF / Non-approval

Short Term Long Term

Basic Research

Benchtop SecondaryClinicalPilot Commercial

R&D Reg. Strategy Product & Mfg. Development Finalization

Drafting Review & Approval Supplements

total 5-12yrsTime

$50-500Million


99.2 9.4 9.2

7.8

6.9

5.24.4

5.7 5.5 6

7.4

0

10

1984-1986 1987-1989 1990-1992 1993-1995 1996-1998 1999-2001

Biopharms Drugs

Biologics vs. Drug Development: Mean ClinicalDevelopment and Approval Time

Reference: DiMasi, 2003

Year

s


Cost of Manufacturing of Biopharmaceuticals

Processes are fixed-cost driven Manufacturing costs typically 15 – 25% of COGs Basic cGMP background identical to chemical drugs Complexity of products results in demanding technical

processes and high capital investments Factors influencing manufacturing costs

• Process design and plant capacity• Operating Strategy• Equipment and Facilities Costs• Materials Costs• Labor Costs• Overhead Structure


Breakdown of Manufacturing Costs

1000 kg/year

Capital

29%

Direct Labor

16%Materials

29%

Quality & Indirect20%

Utilities & Waste

6%

100 kg/year

Capital

40%

Direct Labor

16%

Materials & Consumables

13%

Overhead/Indirect

Labor22%

Utilities & Waste9%

Typical mammalian cell culture monoclonal antibody process

In collaboration with BioPharm Services, Inc.


Production Hosts Influence Manufacturing Costs

Bacteria Yeast Mammalian cells

Simple proteinsNo post-translational modifications

Relatively simple fermentationGenerally lower COGs

Complex ProteinsPost-translational modifications

More complex fermentationRelatively high COGs

Production host will determine…• Quantity of product produced• Quantity and type of contaminants• Post-translational modifications, i.e., glycosylation• Economics & regulatory issues


General Considerations for Host Selection

Overproduction may cause aggregation or degradation byhost, toxicity to host cell, inaccurate or incomplete processingof product.

For each product, it is necessary to evaluate source so thatmaximum amount of biologically active product can beobtained.

Availability of appropriate expression vectors• Inducible expression for potentially toxic proteins• Proven technology for selecting cell lines with high

expression levels• Access to reasonable licenses for use of existing technology

COGS analysis for production of clinical and commercialmaterial consistent with predicted dose and price of finalproduct


General Considerations for Host Selection

Proven track record with regulatory authorities• Untested production organism require higher burden of

proof of safety and reproducibility Anticipated expression levels and ease of downstream

processing• Secreted product often easier to process than intracellular

Approximate productivities• Mammalian cell culture: 0.01 - 3 g/L – MAbs at high end

(~1+ g/L); rProteins lower; Expression levels likely to rise to~10 g/L by 2015

• Microbial fermentation: 1 - 10 g/L – dependent on product,formation of inclusion bodies, secretion of product, etc.


Bacteria

Advantages• Well understood molecular biology; Simple vector construction• High intracellular expression levels; periplasmic secretion

possible• Simple cell bank characterization• Rapid cell growth in inexpensive media• Established regulatory track record

Disadvantages• Protein refolding & separation of incorrectly folded from

properly folded product• Proteins lack post-translational modifications• Micro-heterogeneity, including N-terminal methionine• Fusion partner may be required• Removal of endotoxins from product (Gram-negative)


Yeast

Advantages• High expression levels & rapid growth• Established large-scale fermentation technology; Low media

costs• Genetics well understood; natural secretor• Proteins properly folded• Lack endotoxins

Disadvantages• Heterologous proteins may be incorrectly glycosylated and

folded; often over glycosylated• Complex vector construction• Difficult to lyse


Mammalian Cell Culture

Advantages• Correct post-translational modifications• Properly folded proteins• Easily secreted• Good regulatory track record

Disadvantages• Expensive• Require expensive media• Slow growth & low production levels• Potential oncogene contamination• Extensive cell bank characterization


General Scheme for Biomanufacturing

Working Cell Bank (WCB)

Formulation

Polishing

Purification

Primary Recovery

Production Bioreactor

Innoculum Preparation

Drug Substance (API)

Drug Product

Aseptic Processing

Formulation (optional)

Drug Substance (API)


Drug Substance Manufacturing

Innoculum preparation• Thaw vial from Working Cell Bank• Expand culture to desired production volume

Production bioreactor• Maximize cell density• Maximize product expression

Primary recovery• Separate cells from culture media• Concentrate and stabilize product for ease of handling

Purification• Removal of majority of host cell contaminants, media components,

product-related impurities Polishing

• Removal of final traces of host cell contaminants, product-relatedimpurities

Formulation• Transfer product to final storage conditions• Prepare for Drug Product manufacturing


Drug Product Manufacturing

Formulation• Adjust protein concentration• Add additional excicipients and/or stabilizers

Aseptic Processing• Most biologics can not be terminally sterilized• Sterile filtration required to achieve sterile product

Container/closure Considerations• For early-stage clinical trials, glass vial with rubber stopper most

common• Lyophilization often required for stabilization• Late-stage and commercial products, alternate container/closures

for added patient compliance/ease of use− Pre-filled syringes− Dual chamber vials


Developing a Manufacturing Strategy and the

Availability of Biomanufacturing Capacity


Developing a Manufacturing Strategy

“We will not get this perfectly right”- Art Levinson, Genentech, SF Chronicle 12/21/03

Inadequate Capacity Cost of Lost Sales

• Estimated loss of operating profit (50%shortage): $40-45 M/mon

• Does not include other costs(reputation, competition, etc.)

Example: Immunex (Enbrel)

Excess Capacity Carrying Cost of Facility and

Organization:• Estimated carrying cost of a

facility operating at 50% capacity:$2-3 M/mon

Example: Synergen (Antril)

What’s the cost of being wrong?

Estimating the range of probable outcomes is important

See also: Mallik, A. et al, The McKinsey Quarterly, 2002 Special Edition: Risk & Resilience


Developing a Manufacturing Strategy

Company pipeline• Technology biased towards a certain product type or production

technology? Development stage

• Does company require early stage, clinical, and/or commercialmanufacturing capacity?

Manufacturing technology/growth objectives• Does company own or control proprietary manufacturing or

process technology?• Would internal manufacturing capabilities provide a competitive

edge?• Would ability to expand pipeline by in-licensing be enhanced by

controlling manufacturing capacity? Manufacturing strategy must address needs throughout the product

life-cycle from R&D through production of clinical trial materials tocommercial manufacturing


Build, Outsource, or Acquire Capacity?

Can we afford it?Will our needs

justify theinvestment?

Is it a strategicinvestment for our

company?

Is supply riskcritical?

Key Issues

A Manufacturing Strategy Is not an All-or-Nothing approach butis based on sound evaluations of key issues and opportunities

Is a suitable facilityavailable to

acquire?


Drivers for Build vs. Buy Decision

Core CompetencyAssessment• We’re Good At It• Not Many Others Are

Is “Buy” an Option?• Technology

Requirements• Scale• Capacity Availability –

Supply vs. Demand

Strategic Fit• Pipeline• Competitive Advantage• Development Stage

Risk Management• Control• Cost and Probability of

Failure Financial Considerations

• Return on Capital• Cost of Capital• Operating Costs


Managing Risk


Mammalian Cell Culture Capacity

Distribution by Company – 2004

Contract ManufacturersTotal installed capacity ~400,000 L

Product Development Cos.Total installed capacity ~950,000 L


Capacity Utilization – What is “Full Utilization”

“What is the current industry-wide level of capacity utilization”

Ref: BioPlan Associates, “A Survey of Industry Capacity,” 2003Survey of 100 biopharmaceutical manufacturers


Future Availability of Biomanufacturing Capacity

Named for the casinos of Monte Carlo, Monaco Mathematical simulation based on distribution of values

for each input variable rather than single fixed value Calculates a probable range of output scenarios based on

multiple iterative calculations using random values fromwithin the defined probability ranges for each inputvariable

Useful in identifying and quantifying risk in complex multi-variable problems


Total Capacity Demand – Distribution By YearRea

ctor

Vol

ume

(‘000

L)

Year

5,000

4,000

3,000

2,000

1,000

0

2003 projection2005 projection

See also: Brastow, and Rice, BioProcess Intl., 1 46 (2003)


Let’s walk through the build or acquire scenarios


Mammalian Cell Culture Facility Costs

Ref: Barnett International’s BioManufacturing Conference, Boston, 2002


Cost of Capital vs. Return on Capital

A company’s Cost of Capital defines the scaleof investment in capacity that makes economic sense

Can/will Return on Capital beshifted higher from… more products higher throughput more efficient technology

So that Cost of Capital is lessthan the Return on Capital?


Typical Facility Staffing Levels

Category Low Mid High

Plant MGMT: 4 5 5

Admin 3 4 4

Reg. 1 2 3

Quality 13 16 19

Plant controller 5 7 8

MFG Ops 17 23 29

Eng/IT 10 15 19

TOTAL 53 70 87NOTE: Staffing Estimate example developed for intermediate scale late-stage clinical single-product manufacturing facility


Phase I(12 months)

Phase II(24 months)

Phase III(24 months)

Filing & Review (18 months)

• Dose Finding • First Efficacy

• Safety

• Pivotal Trials

Lead-Time for Building a Commercial PlantLead-Time for Building a Commercial Plant(~4 years)(~4 years)

Design(12 months)

Construction(24 months)

Validation(12 months)

Clinical Development Timeline(6-7 years)

ProductLaunch

Plant investmentdecisions must be madelong before productapproval

Are product forecast data robust enough to provide confidence to follow “Build” strategy?Can organization support “Build” strategy if product fails?

Timing of Plant Construction vs. New Product Launch


Acquiring Existing Capacity

As the biopharmaceutical industry matures, oldermanufacturing facilities may become available for acquisition

Examples:• Amgen acquires Synergen

− Primary motivator for acquisition not manufacturingcapacity

• Centocor acquires plant from Wyeth− Plant history:Invitrogen Centocor Chiron Wyeth Centocor

• Cephalon acquires Bio Science plant #1− Converts CMO capacity to captive capacity

• Cambrex acquires Bio Science and Marathon− Allows Cambrex’s entry into biologics CMO business


Acquiring Existing Capacity

Additional examples:• Dow acquires Collaborative BioAlliance

− Allows Dow’s entry into biologics CMO business− Dow has exited the CMO business; facility may be

available• Genentech acquires Porrino plant

− Establishes European manufacturing capacity• Tanox acquires Biogen Idec Torreyana facility

− Allows shift from outsourced manufacturing to in-housesupply

• Genentech acquires Biogen Idec NIMO facility− Additional manufacturing capacity to support Avastin

production


Let’s walk through the outsourcing scenarios


Benefits of Outsourcing

Capital Conservation Speed to Market Redundancy Available capacity/optimized technology Flexible production schedule to suit client’s timing needs Qualified cGMP-trained staff Full documentation, regulatory and quality systems in place Captive technical and regulatory “consultants;” access

additional expertise Maintain low overhead and minimize cash flow Release capacity required for other products Lower price of product Minimize risk


Risks of Outsourced Manufacturing

Lack of Control

Avoiding capacity crunches

Monitoring remote site(s)

Technology transfer

Ensuring schedules

Protecting technology

Documentation

Compliance

Underestimating internal resource requirements


When Outsourcing Makes Sense

Limited technical and monetary resources Product development efforts focused Product pipeline small and/or very diverse Need for Process Development assistance Need to meet milestones to obtain additional financing Availability of capacity/capabilities No in-house capacity Technology outside core competence and readily available


Let’s walk through the trade-offs


RIS

K

Product Launch

DevelopmentUncertainty

MarketUncertainty

Maturity

Manufacturing costsset at decision point

Make

Make or Buy

Product Life Cycle

Product Lifecycle Drives Make vs. Buy Decisions

Primary Driver:Maximizing Control

“Make” strategy duringhighest risk period tomaximize control of supply

“Buy” strategy may makesense once product lifecyclestabilizes, risk decreases,and control less important

Example: Genentech outsources Rituxan• Easier to transfer mature process• Minimize impact of “know-how leaks”• Retain control of less mature process (Avastin)


Product Launch

DevelopmentUncertainty

MarketUncertainty

Maturity

Manufacturing costsset at decision point

Buy

Buy or Make

Product Life Cycle

Primary Driver:Conserving Capital

“Buy” strategy during highestrisk period to conserve capital

“Make” strategy may beattractive once productlifecycle stabilizes, capitalbecomes more available, andrisk reduced

RIS

K

Product Lifecycle Drives Make vs. Buy Decisions

Example: Imclone outsources through clinical supply and launch then switches to in-house production

• Outsourcing minimizes capatial expense during risky development phase• Following successful product launch capital is more available to build its own

facility


Summary - Tying It Together

Clear “Make”• Technology requirement not

available in marketplace• Significant ROI• High degree of control

needed

Clear “Buy”• No in-house capacity• Limited pipeline• Limited access to capital• Technology outside core

competence and readilyavailable

It Depends... ROI on edge of economic sense Manage risk of product lifecycle Need for strict control unclear Mfg strategy directive


Summary

Decisions related to manufacturing biopharmaceuticals arestrategically significant and involve significant capital andresources

A range of analysis should support a company’s make vs. buyvs. acquire decision, including:• Assessment of the company’s pipeline and development

stage• Determination of strategic fit with business• Risk assessment• Evaluation of the industry environment for manufacturing

capacity and external buy/acquire options


Identifying and Qualifying

the Right Contract Manufacturer


Selecting a Contract Manufacturer

Single most important decision to be made

Make a detailed list of your requirements

Prioritize and weight the requirements

Rank each of your needs for each contractor

Cost should not be the number one priority


Identifying Vendors for Process Development

Experience in desired host organism• i.e., Microbial expertise does not automatically mean

capability in both bacteria and yeast Availability of proprietary host cell lines or cell line construction

methodology that can enable more rapid progress towardclinical trials• Review all applicable IP associated with proposed

production system and determine fees in advance Ability to continue to develop manufacturing process

• Availability of manufacturing capacity at anticipated scalefor the program


Outsourcing Process Development & GMP Production

Ability to develop processes and availability of GMP compliantmanufacturing facilities and quality systems• Pre-selection compliance audit of candidate vendors

recommended Track record in process development at similar scale and for

similar product types• For antibody products, previous antibody experience

desirable GMP manufacturing capacity at anticipated scale and timeline

• Flexibility in scheduling desirable in case processdevelopment is delayed

Supporting analytical capability to support processdevelopment and manufacturing


CMO Selection Process

Define critical parameters and create list of suitable vendors Contact vendors to determine interest and availability Create short list of vendors and sign CDAs

• CMOs will insist on CDA prior to submitting proposals withtimeline or financial information

Prepare and circulate Request for Proposal (RFP) to vendors Compare proposals Site visits to top 2 – 3 vendors Selection

Entire selection process takes 2-3 months per major activity


Example of Critical Parameters Definition

Technical• Mammalian cell culture experience, preferably including

some non-antibody products• Process Development and scale-up experience• 500L clinical GMP manufacturing capacity• Analytical development capability

Other• Location?• Availability of PD and manufacturing capacity• Perceived cost• Responsiveness to customer inquiries and requests


Use Detailed RFP to Select and Evaluate CMOs

RFP will ideally outline all activities for which a time and costestimate is required• Omission of desired SOW in RFP leads to proposals that

are not easily comparable RFP should be sent to candidate vendors at same time, with

same deadline for response• Ability to meet the initial deadline indicative of future

responsiveness of CMO• Deadline must be realistic and allow time for CMO to

prepare project-specific timeline and budget Decision making mechanisms should be in place and process

and timing of final decision should be known


Biopharmaceutical Manufacturing Vendors

Manufacture of Bulk Drug Substance (DS)• GMP suites will contain bioreactors and harvesting

equipment• Downstream processing equipment in separate suite• Analytical methods to support all stages of manufacture

Manufacture of Final Drug Product (DP)• Fill/finish facilities will contain compounding rooms for

formulation (dilution, addition of excipients)• One or more GMP filling lines for aseptically filling product

into final containers (vials, syringes)• Potentially will contain lyophilization capability

Analytical Methods Development and Stability Testing• Usually performed by the DS or DP vendor


Biopharmaceutical Manufacturing Vendors

Formulation Development• Must have strong analytical capability to support

formulation decision making experiments• Must have stability chambers for forced degradation and

accelerated stability Packaging, Labeling, and Distribution

• May be provided by Drug Product CMO• Offered by some vendors as separate service• Capability to distribute within countries targeted for clinical

trials or commercial license essential


CMO vs. In-house ManufacturingAvailability and Capabilities

S. Fox, American PharmaceuticalOutsourcing, 1: 17-24 (2000)

Directory of Contract Services, Vol. II, H.Levineand J. Miller, eds. Pharmsource InformationServices, Inc. (2001).


Who Are The Contractors?

Small R&D laboratories

Small scale development companies

Phase I/Phase II manufacturers

Full service contract manufacturers

Companies with excess capacity


Preparing a Request for Proposal

Content of RFP depends on activity being outsourced and clinicaldevelopment phase of program• RFP for cell line and early stage program contains desired

process yields, timelines, and scale• RFP for clinical distribution contains complete description of

clinical program for blinded labeling and coding RFP may be composite or single focus

• Analytical and formulation development often performed at sameCMO

• Benefits to single RFP and proposal but may take more time tonegotiate

• Fill/finish and distribution may be combined• Vendor can provide quotation on those areas that are within the

CMO’s capability


Outsourcing Early Stage Activities for DrugSubstance Production Construction of expression vector and isolation of production

cell line• Often performed in-house, prior to outsourcing• May not be a strength of late stage manufacturing

organizations Develop initial cell culture and purification process

• Benefit to outsource for “platform” products such asantibodies− Utilizing a generic process at an experienced CMO often

saves time and money• For unique products with unknown performance, in-house

early development activities can be more cost-effective


Outsourcing GMP Manufacturing of DS

Cell line and process already developed in-house• CMO and client often disagree on definition of a “developed

process” Outsource GMP production

• Minimal development activities necessary at CMO• Technology transfer through documentation and in-person

transfer meetings• Adapt process to run using equipment at CMO

− Different scale bioreactors− Alternate instrumentation for HPLC, pH, etc.

Deliverable is fully released active DS, ready for fill/finish


Analytical Methods Development Outsourcing

Key component necessary to support process development andmonitor product stability• In process assays to monitor yield and performance critical for

effective decision making during process development• Determine key product release assays• Analytical development usually initiated in-house with methods

transfer to CMO for final development and qualification (orvalidation)

Some methods are routine and CMOs have generic SOPs• pH, osmolality, appearance, endotoxin, particulate matter

Analytical methods different for different products• Specific binding to therapeutic target• Bioassay is essential to determine potency


Formulation Development Outsourcing

Knowledge of protein properties essential to initiate formulationdevelopment• Observed stability at various pH, temperatures, other

conditions• Tendency to aggregate, dissociate (multimers), oxidize, or

degrade through proteolytic cleavage Stability analysis performed rigorously by CMO using existing

knowledge as a basis for experimental design• Prior formulation development experience essential• Proper stability testing will insure selection of optimal

formulation Analytical method development and execution essential


Drug Product Manufacturing Outsourcing

Fill/finish is often outsourced even when DS produced in-house

Selection criteria based on desired presentation of finalproduct• Lyophilized or liquid• Vial or pre-filled syringe• Storage temperature

Analytical capabilities essential for DP manufacturing CMO Deliverable is product in final configuration, ready for shipment

to distribution facility or clinic• DP vendors may provide packaging and distribution

services, or this may be outsourced to a third vendor


Preparing an Effective RFP: A DS Example

Expected deliverables• When material needed and how much?• Analytical methods development, qualification, or validation?• Overall program timeline• Desired scale of final process

Process details• More detail will enable vendors to provide accurate pricing and

timelines• Information about desired product and potential variants essential

− Yield and purity obtained thus far in process development, ifknown


DS Manufacturing Decisions

Prior to preparation of RFP for DS GMP manufacturingservices, customer must determine the following:• Production host

− Different CMOs have experience in mammalian cell culture,microbial fermentation, or both

• Desired product quantity to support preclinical and clinicalactivities− Determines scale and number of GMP runs; therefore

determines which CMOs can meet the demand• Timing of preclinical and clinical activities

− Customers often unrealistic about necessary developmenttimes

− CMOs often offer timelines that are difficult to achieve, inorder to obtain the business


Effective Project Description

Statement of work with specific tasks and goals outlined• Prepare CHO production cell line using vector provided by

client− Deliverable: Fully characterized MCB (and WCB?)

• Develop cell culture process with yield of at least 1.0 g/L− Deliverable: Master batch record defining process

• Develop purification process with acceptable viralclearance and >50% product yield− Deliverable: Master batch record, results of scale-down

viral clearance study• Scale process to >200L scale; provide material from

engineering run to client for tox studies− Deliverable: 100 gm Bulk Drug Substance


Ineffective Project Description for Drug Substance

Describe product and clinical approach in detail General statement of work with no delineated activities,

deliverables or timelines: “We need the product to support ourpre-clinical tox studies in June 2007 and to support humanclinical trials in Dec 2007”• Is there a cell line?• Desired (realistic) yield and purity of process?• Analytical methods?

Minimal process details: “The product is produced in CHOcells and purified by a two column procedure”• Scale and yield thus far?• Perfusion or fed-batch?• Type of columns?


Sample RFP Table of Contents

1. Background and Objectives2. Scope of Services Requested

a. Analysis of Product Provided Materialb. Construction of Expression Vector, Cell Line, and RCBc. Preparation of Master (and Working) GMP Cell Banksd. Development and Scale-up of Cell Culture Processe. Development and Scale-up of Purification Processf. Quality and Analytical Support Servicesg. Production of DS for Tox Studies and Phase 1 Trialsh. Documentation Required

3. Project Estimates and Fee Schedule4. Qualifications5. Deadline for Submission of Proposals6. Appendices


Process Information for RFP

Production cell line• Host cell system• Current productivity and conditions in which that

productivity is obtained (shake-flask, small bioreactor?)• Factors known to influence productivity

Purification methods• Number and types of chromatography steps utilized• Any information on viral clearance using existing process• Filtration or other steps currently used

− Scaleability of filtration and centrifugation steps


Analytical Methods Information for DS RFP

Lot release tests and specifications if known• All methods and specifications should be listed• Provide product-specific or unusual methods to help CMO

provide accurate timeline and pricing Status of method development

• Will assays be transferred in only or is developmentneeded at the vendor?

• Assays should be qualified or validated? Analytical methods for MCB testing

• Must meet regulatory guidelines• Additional testing desired• Known issues with chosen host cell (if unusual)


The Vendor Selection Process

Consider at least 5 – 6 vendors

Obtain a minimum of 3 competitive bids

Request contract terms as part of bid response

Talk to references

Capture data for future reference


Sponsor Top Issues and Concerns

Ref: “Moving the Bioindustry into the Manufacturing Phase”, Coopers & Lybrand Survey, 1996


Additional Sponsor Expectations

Rapid turn around time

On-time manufacturing

Cost-efficient processes

Up-to-date regulatory compliance

Customized manufacturing processes

Scale-up engineering


Sponsor Expectations: Need for Process Development

Ref: “Moving the Bioindustry into the Manufacturing Phase”, Coopers & Lybrand Survey, 1996

0

20

40

60

None

Required

Some

Required

CM

O to develop entire process

Sponsor Expectation BPTC Experience


Selecting a CMO – One Example


$100 - $1,000/g$450/g

$200,000 - $3,000,000/batch$1,650,000/batch4 - 84 months18 monthsCommercial

$200 - $5,000/g$1,600/g

$200,000 - $4,000,000/batch$160,000/batch6 - 66 months18 monthsPhase III

$500 - $15,000/g$6,000/g

$200,000 - $1,500,000/batch$772,000/batch3 - 30 months13 monthsPhase I/II

$750 - $12,000/g$6,000/g

$50,000 - $2,700,000/batch$600,000/batch3 - 30 months9 monthsPreclinical

Pricing (Range)Pricing (Avg.)Timeline (Range)Timeline (Avg.)

Ref: HighTech Business Decisions, Moraga, California

Typical CMO Timeline and Pricing


Examples of CMO Manufacturing Costs

Costs listed are for process development and manufacture of earlystage clinical trial material (Phase I/II) for mammalian cell culture


Essential Elements to Successful Outsourcing

Business Terms• Tie pay to performance• Pay attention to signals and be proactive• Establish the core team early• Keep the group small• Divide the key responsibilities• Have clear expectations about deliverables and timelines• Each relationship is unique


The Sponsor/CMO Relationship

Finding the right match is key for success No ideal contractor for any one sponsor No ideal sponsor for any one contractor Not a traditional customer - supplier relationship Relationship is similar to a partnership “Customer is always right” adage does not apply exclusively to

Sponsor Typically not a “one-shot” deal Each relationship is unique Must understand each other’s culture


Effect of Negotiations on the Relationship

ImplementationNegotiationSelection


Why the Problems During Negotiation?

Realization that this is not a partnership• Fee for service relationship• CMO puts up no money, assumes no risk• CMO gets paid whether or not product is successful

Switch from process to deliverables• Focus on specific tasks to be performed, cost, and what

Sponsor will receive• Buying service not product• “Oh, you want us to do that too?”• “You want it when?”


Why the Problems During Negotiation?

Risk avoidance becomes key objective• Contracts deal with worst cases• What-ifs breed distrust• Excessive coverage/risk transfer demanded

Sources of Risk• Business loss

− No efficacy, safety, cash, sales• Property loss

− Fire, loss/damage in transit, data destruction• Contractor performance

− Batch failure, non-compliance• Product liability

− Subject/patient adverse event


Major Contracting Issues

Respective Obligations• Detail mutual responsibilities−Who, what, when, how−Standards for performance−Task and payment schedule

• Procedures for changes and deviations• Resource allocation• Procedures to remedy faulty performance−Discussion, arbitration, litigation−Refund vs. Rework−Limitation of liability



Intellectual Property• Who is actually contributing knowledge and value vs. who

happens to be around when it is created• Ownership, right to license, right to negotiate, option• Joint inventorship – not as easy as it sounds!• Patents vs. Trade Secrets

− Patent: utility, novelty, non-obviousness, fulldislosure

− Trade Secret: kept secret, not generally known,commercial advantage



Regulatory Compliance• Performance guarantee and certification• Contractor’s QC and QA responsibilities• Validation documentation and rigor• Control of applications• Reference rights• Disclosure of FDA inquires and inspections• Non-FDA obligations: EPA, OSHA, State, Federal, Foreign• Post-contractual needs and obligations



Warranties, Indemnifications, and Remedies• Warranty – promise on current or future status• Indemnification – coverage against third party action• Remedies – rights in event of breach

Dispute Resolution and Enforcement


Development and Supply Agreements

Purchase Order• Cost per gram vs. cost per batch

Development Agreement• Cost• Milestones• Access to process and ownership of technology

Supply Agreement• Duration• Market share and pricing• Cancellation notice, “take or pay,” etc.


Goal: Successful Fee-for-Service Relationship

Sponsor gets• Fair price• Deliverables that meet

specifications andtimelines

• Competence andquality

• Excellent service

Vendor gets• Reasonable margin• No FDA problems or

hazard losses• Repeat business• Good reference


Dos and Don’ts of Successful OutsourcingRelationships

Don’t say it’s urgent unless it really isShare your objectivesTake advantage of the Contractor’s experience and expertiseStick to your deadlinesDon’t assume things will happen just because you want them toDon’t blame the Contractor for things it can’t controlDon’t assume you are the Contractor’s only clientDon’t be a “serial shopper”Don’t be overly concerned about priceInvestigate significant differences before making decisionsDon’t change the project after it startsDon’t destroy your relationship over an occasional error

Remember the Golden Rule of Outsourcing: Treat your contractor theway you would like them to treat you


Conclusions

Effective RFPs for any outsourced activity should generateproposals that can be compared

Detailed description of desired service essential Use Scope of Work format in RFP and request line by line

responses in proposal from CMO• CMO not always cooperative in providing breakdown

pricing Request quality/compliance history

• Formal pre-selection audit should be performed afterreceipt of proposals and before final choice

All manufacturing activities can be outsourced• Client has final responsibility for product quality, timeline,

and budget


One final view of outsourcing…


Thank you!

BioProcess Technology Consultants, Inc.289 Great Road, Suite 303

Acton, MA 01720

[email protected] (o)617-417-9240 (m)

www.bioprocessconsultants.com


Appendix


Success Rate and Turnover Data

Turnover statistics (2003/2004) No BLA products remained in the same stage

• All either approved or rejected 60 – 65% of Phase III products remained in Phase III

• ≤40% moved forward or failed 61 – 67% of Phase II products remained in Phase II


Biopharmaceutical Production Objectives

Quality

Timeliness

Quantity

Cost

Safe for humans Meets standards (GMP) Reproducible

First to market launch Rapid material supply

Adequate productivity to meet clinicalsupply & market supply

Meet cost target Depends on dose and price Economics acceptable and

predictable


Sample Final Product Specifications

Purity >98 %Purity typically determined by two or more assaysPotency As defined by assayProduct-related Impurities Identified for >1%

No single impurity >2%Host Cell Protein <100 ppmDNA <100 pg/doseEndotoxin <y eu/mgBased on dose & a limit of <50 eu/Kg body weight


Biopharmaceutical CMO Market Growth

Biopharma$29 B

Biopharma CMO$1 B

Total pharma market$390 B

Biopharma CMO$3 B

Biopharma$70 B

Total pharma market$690 B

2001 2007

Sources for BPTC Estimate: IMS Health, Arthur D. Little, and Woods-Mackenzie

Outsourcing of commercial manufacturing accounts forapproximately 3.5% of biopharmaceutical product revenues

CMO percentage of market to remain relatively flat through 2007


Biogen Idec NICO Facility – Available Q4 2005

Designed as a licensable, multi-product,clinical & launch facility

Approx 70,000 sf located in Oceanside, CA 2 x 2,750L bioreactor capacity

• Supporting seed, purification andformulation train

Approx 18,000 sf of clean-room space− Manufacturing− QC lab− Warehouse− Facilities support− Engineering, MTS, Validation, QA

Full plant wide data acquisition andautomation: Emerson Delta V and SiemensAutomation systems - linked


Success Rate and Turnover Data

Turnover statistics (2003/2004) No BLA products remained in the same stage

• All either approved or rejected 60 – 65% of Phase III products remained in Phase III

• ≤40% moved forward or failed 61 – 67% of Phase II products remained in Phase II


Manufacturing: Outsource or Perform In-House?

In-house

Capital for design, land, structure,equip

Utilize existing equipment & facilities Staffing & operating costs fixed

regardless of utilization Validation cGMP infrastructure & regulatory

compliance Impact on existing operations

Outsourcing

Finding, qualifying & negotiatingw/vendor

Monitoring, project management,inspection

Technology transfer Economies of scale Access to proprietary technology Actual work/delivered materials Loss of control Improve time to market

successfully managing biopharmaceutical manufacturing ... · successfully managing...

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