Outsourcing drug development is a growing trend in the pharmaceutical and biotechnology industries. With growing pressure to take potential drugs candidates from discovery to human clinical trials as quickly as possible, most pharmaceutical and biotech companies are outsourcing at least a portion of the development of their potential new drugs. Outsourcing compresses the timeline of product development and provides a cost-effective alternative to adding specialized resources. Changing needs in the current accelerated development environment dictate that resources must be adapted quickly to meet demands. Therefore, outsourcing allows a variable cost structure, increasing resources and spending when necessary and decreasing when demand subsides.
Formulation development is a key area of product development that can determine patentability, lifecycle and, ultimately, the success of a pharmaceutical product. Companies integrate formulation development functions and personnel into their product development cycle in many different ways. In fully integrated large pharmaceutical companies, specific departments may exist to deal with such areas as the physical characterization of drug substances and formulation issues. In many cases, other departments, often in other buildings or locations, may handle preclinical functions, such as animal testing. These departments must work closely to gain a complete understanding of their unique drug substance.
For smaller, emerging companies, as well as many biotechnology companies, the function of formulation development often falls in one of several departments. Sometimes it exists within project group responsible for the overall development plan of a particular drug candidate. These groups are led by project managers who interface with both internal and external resources. The analytical chemistry or the analytical development lab often executes the majority of the formulation tasks, as they are already the ‘experts’ in the analytical assays, most often high performance liquid chromatography (HPLC) assays, which are an integral part of product development.
Types of Projects
Formulation development encompasses a very wide range of activities. Traditionally, formulation covers such functions as pre-formulation, including analytical assay de-velopment and characterization, excipient screening to stabilize or enhance the solubility of the product and dosage form development, whether it involves a solid, topical, aerosol, liquid or lyophilized dosage form. Formulation development may also include assessing delivery options and delivery device compatibility.
What types of formulation development projects are best suited to outsourcing? Projects generally fall into two broad categories: those requiring outsourcing services to solve an existing product development problem and those that have been planned entirely as outsourced activities from the start. The project may be very comprehensive with long-term goals, such as delivery of a lyophilized dosage form of a biotherapeutic at 50 mg/ml concentration, or oriented toward very short-term goals, such as figuring out why a molecule is aggregating.
Some problems that occur during product development include: low or no drug solubility in aqueous environment, low bioavailability in animal studies and incompatibility with the desired delivery system, as well as a host of stability issues. For many of these challenges, companies may look for outside help. Sometimes the problem is solved easily, requiring only a fresh set of eyes to look at a long-standing problem. Other obstacles require a great deal more work, perhaps even thinking outside the traditional formulation box. For example, sometimes we must address a small molecule stability issue by adopting a biomolecule mentality.
In some cases, when a NCE (new chemical entity) or new drug substance shows activity, the project is assigned to an outsourcing provider immediately. This often happens when there are several drug candidates for similar indications or when the company’s internal resources are focused on other key projects within the company. Often, a large company may have 10 projects running, of which three are projected to be the top tier, while the others are considered to be worth pursuing, but are thought to have a lower probability of success. These other projects may be contracted to an outsource provider to insure that they are not put on the back burner indefinitely.
Why Outsource Formulation Development?
Contract formulation development is the only way the industry can keep pace with the growing number of potential drug candidates. Time pressure and lack of internal resources are just part of the underlying reasons for outsourcing formulation development. There are essentially three reasons for companies of all sizes choose to outsource their formulation development functions:
• to compress timelines,
• to access a particular expertise and
• to provide extra insurance against product failure.
Time pressure has been overemphasized as the number one reason for outsourcing in all areas. In fact, when potential clients claim that shrinking the timeline is the motivating factor in choosing to outsource, it usually signifies that at least one of several situations is occurring at the company.
For example, the staff working on top priority company projects may simply be overloaded. As the industry struggles to stuff more drug candidates into the pre-clinical pipeline, formulation and analytical groups often become overtaxed. As few as five years ago, this pressure to get more candidates into animals did not exist to the extent it does today. However, many formulation development departments in large companies have not added significant staff. Thus, the number of projects has increased out of proportion with staffing levels.
Formulation development projects are, by their very nature, more difficult to predict than manufacturing functions. Timeline prediction in development projects requires skill in assessing laboratory procedures that may be unpredictable. An example of this is transferring and qualifying an analytical HPLC assay. Although this seems straightforward, an assay used to assess drug substances early in development may not be useful in making discriminating decisions that are needed in excipient screening. How does the sponsor decide which excipients are providing better results based on accelerated stress experiments if the analytical assay has a high coefficient of variation?
Timelines may get extended if these issues are not discussed early on in the proposal process. The provider may feel it is appropriate to develop alternate stability indicating assays, a key measurement parameter in formulation development. This takes time; the contact lab must therefore ask for assay information up front to provide a realistic and accurate timeline.
Sponsors face these same issues internally. Thus, outsourcing these functions and demanding a contract provider stick to the development timeline is sometimes preferred. The provider typically has the flexibility to assign staff quickly to a project with a slipping timeline, a luxury that a company may not have.
Another common reason to outsource formulation development is to access a particular area of expertise. If a sponsor does not have the internal expertise to deal with its first biotechnology-derived product (a therapeutic recombinant protein, for example), outsourcing may be wise. Think of outsourcing as accessing a trained development team that can act as an extension of your own laboratory. These teams are specialized and ready to go.
Some outsource providers may have extensive experience in evaluating the solubility and stability issues of a particular molecule type, such as proteins. The provider’s staff may have worked on as many as a half a dozen projects in the last year with similar, although not identical, issues.
Excipient screening has long been a trial and error process; with contract labs handling more and more of these kinds of projects, the experience base for certain molecule types may be extensive. For example, it has long been assumed that antibodies are, for the most part, stable molecules. Even if this is the case, however, the instabilites of the molecule must be examined to pick the best excipients. Experience thus plays a role. The right provider will know how to examine the instabilities and pick the excipients that will most likely stabilize the molecule.
If a sponsor has always worked in oral delivery and is now branching out to inhalation or topicals, the company may require unusual assay development, different instrumentation and different skill sets to complete these projects. Outsourcing may be more efficient in terms of time and money.
Specialized expertise may also include novel delivery systems. There are a growing number of drug delivery companies (DDC) actively searching for appropriate drug candidates for their unique delivery systems. These deals tend to be royalty-based as opposed to fee for service. This may, in some cases, be preferred to defray development costs and to guarantee a unique, patentable product. Sometimes the DDCs will also serve as the contract manufacturer.
Another trend is to develop novel delivery systems for existing therapeutics that will offer added benefits, such as im-proving patient compliance. An example of this is a sustained release formulation of recombinant Human Growth Hormone, the first depot formulation of a therapeutic protein (from Genentech) This is an example of a new formulation giving new life to one the first biotechnology products. This strategic use of novel formulations or delivery systems with existing generics or new products serves to provide a competitive advantage.
Insure Against Failure
Many companies outsource formulation projects in parallel with internal development efforts. For example, a NCE may have very poor solubility. Internally, the project is assigned to a team working to increase solubility, but this team is also working closely with the discovery research group to try to modify the NCE and increase its solubility. Such an interaction is more difficult to outsource. At the same time, the existing molecule, which exhibits great efficacy but low absorption and solubility characteristics, is outsourced to a contract lab with the assignment to increase solubility and bioavailability for toxicology testing. Thus, two threads of the same project continue in parallel. Ultimately, if the contractor succeeds, the project is on track. If it is determined that the goal in unattainable, the company is still actively pursing alternate NCEs.
Another example is a new drug substance undergoing parenteral development. The sponsor may be several months into a project before discovering that the drug substance is showing poor stability characteristics. It is decided, for reasons of being first to market, that a lyophilized dosage form should be pursued. The sponsor has limited experience in this area, but would like to try to develop this expertise, since more lyophilized products are likely to come through the pipeline.
This may be another time to consider parallel development efforts. The provider may continue to work on the liquid formulation matrix to stabilize the molecule and provide a matrix suitable for freeze-drying. It may also begin the process of adding bulking agents and stabilizers as part of lyophilization cycle development. Internally, the development team can continue its work on the project. In this case, the sharing of observations, data and results between groups can be very useful.
Parallel development efforts are not always stress-free for either party. Often, in the discussion phase of selecting an outsource provider, an in-house formulation group may be resistant to sharing data or will protest more subtly, by holding back their internal anecdotal experiences. An overall negative tone may develop along the lines of, “If we couldn’t solve the problem, what can this external team do differently?”
These problems, although unavoidable in some situations, may be minimized by the actions of a project or senior manager on the sponsors’ team. As trivial as it sounds, if a group leader sets a tone of cooperation early on, everyone benefits. The provider can also help by being humble and sympathetic to the sponsors’ situation and by offering a clearly stated plan of action for the project. Providers are understandably reluctant to divulge their plan of action sometimes before a formal commitment is made to work together. Also, sponsors must remember that it is difficult for providers to plan a detailed experiment list without ever having worked with this particular novel drug candidate. How can 20 pages of data given to construct a proposal replace two years of hands-on experience? It can’t. Therefore, a team effort and mutual respect and trust are the keys. This is best done through repeated interaction and frequent communication, from the proposal process to the project initiation meeting and continuing throughout the project.
The advantage of outsourcing is that it provides variable costs, as opposed to fixed costs, for particular functions with fluctuating demands. This makes economic sense. For years, there has been a reluctance to outsource any function that was considered to be an integral part of product development, such as assay development, pre-formulation studies and formulation development. Many people mistakenly believe that companies with internal formulation resources seldom outsource this portion of their product development. The reasons mentioned above, combined with the growing acceptance of outsourcing in general, indicate that this is clearly not the case.
In the $4 billion market of outsourced development, there are several types of companies that may be able to satisfy sponsors’ needs for formulation and dosage form development services. Beside the obvious requirements, such as company viability, reputation and accessibility, how does a sponsor choose? Here are some of the considerations in choosing a contract formulator.
Like it or not, it is very difficult for companies to do everything well. In all industries, companies focus on their most successful niches. In the pharmaceutical industry, we see some large pharmaceutical companies beginning to focus on their core competencies; discovery and marketing. If big pharma companies are focusing on their strengths, can we possibly expect contract service organizations to do everything well? There are many kinds of outsource providers, focusing on clinical re-search, contract research, bulk drug substance manufacturing, final product manufacturing and niche services.
In evaluating a contract provider for a formulation project, the sponsor must find out if formulation is a core service. Many providers will claim to perform “formulation,” but they may be referring to formulating the bulk drug substance into drug product prior to clinical supply manufacturing, as opposed to formulation development. For those that do offer formulation development, sponsors must find out what kind of drug substance they work with most: small molecule synthetically-derived entities, antibodies or synthetic peptides.
The sponsor also must not overlook the importance of its particular project to the outsource provider. For example, some companies focus on large-scale commercial manufacturing opportunities. Although they may have the technical expertise to accomplish a sponsor’s formulation development project, a biotech product with a commercial lot size of only 20,000 vials per batch will not and should not be as important a project to this sort of company.
Drug Substance Type
As mentioned above, contract providers have strengths in different areas. Many larger, traditional CROs are focused on small molecule NCEs and generics. Many contract providers are working to build specialty groups to deal with the increasingly diverse and specialized needs such as cytotoxic drugs, gene therapy and biotechnology products.
For a fairly straightforward NCE without solubility or stability issues, an outsource provider focused on traditional solubility profile determination and formulation matrices may be the best choice. There is little need for creative thinking and a great need to have established procedures.
For niche formulation service providers, whether a group within a large contract provider or a small specialty company, good logical science can persevere and many different drug substances can be addressed. These groups pride themselves on tackling the tougher formulation issues that require creative thinking. Examples of this are everywhere; NCEs with solubility issues, biotech products with stability issues, complexes, conjugates and modified peptides. Specialized niche providers will be well versed in the uniqueness of a sponsor’s drug substance.
Should sponsors choose outsource providers solely based on their experience with a particular kind of drug? Not always, but experience generally leads to shorter timelines and better guesses; formulation is still, at times, still three parts science and one part art.
An integral part of formulation development is defining the ultimate clinical dosage form. While this may seem obvious, many times, especially in early development, the dosage form is undefined. We frequently hear such statements as, “We would like it to be a liquid, if we have the stability,” “We would like to have an aerosol, if the protein will survive the process,” and, “We would like a new delivery technology for an existing compound.”
Delivery options for all drugs are changing quickly. From patches to aerosolizing, there are more choices than ever. This decision often comes down to what is feasible for a particular drug, what is marketable and what is cost effective. It may sound like a great idea to have a pre-filled syringe, but the cost may be prohibitive for certain indications. This decision is a combination of science and business. The most successful companies think through these delivery decisions well.
Once the delivery decision is made, it is important to ask potential outsource providers if they have experience with assay development and evaluation of the delivery vehicle. For example, if a compound is to be delivered through a nebulizer, does the lab have the ability to measure particle size? If the sponsor is pursuing a lyophilized dosage form, can the lab measure moisture content of the lyophilized powder? Other delivery modes have special requirements. Having a firm idea of the ultimate delivery vehicle will help to narrow the contract provider field.
Understanding the real goal of the project will refine the selection criteria. The goal of pharmaceutical development is to produce a safe, effective, stable, efficacious and, hopefully, best-selling new drug. However, there is usually an unstated, underlying goal to the company, to the stockholders and to the specific project.
For instance, the project goal may be to come up with a new formulation for an existing product, which is due to come off patent in one year. The goal may be to arrive at unique formulation of an existing biotherapeutic or it may be to beat a competitor with a better tasting oral liquid. These are unique goals and there are outsource providers that can address all of them.
The difficult part is finding the best fit; this can only be done by asking the right questions during the negotiations. Has the provider worked with other generics? Has it come up with formulations that are unique and patented? Has it worked with this particular dosage form? All of these questions will help to define the project focus and will lead both the outsource provider and the sponsor to a better understanding of the project.
Formulation projects to be outsourced span a wide range of needs. An outsourced project may be an entire development project from pre-formulation studies to clinical supply manufacturing, or it may comprise a very limited sub-set of the total development project.
Why outsource a small portion of a formulation development project? Suppose Company A is in-licensing an existing drug substance for Company B. There is often data on the drug substance that has been unconfirmed by Company A. One limited outsourced activity may be to re-test the solubility characteristics of the drug to see if the data can be reproduced.
Some other examples of limited formulation goals are increasing bioavailability by a certain percentage, providing additional microemulsions to be tested in animals and developing assays to correlate potency to an analytical assay. Be aware that some outsource providers shy away from projects that are not entire development projects. Therefore, choosing a provider that is willing to tackle a project of limited scope may be important. This varies tremendously from provider to provider. Some find it difficult to deal with many small projects that do not have a consistent revenue stream. The provider will still be expected to offer the same services in terms of communication, reporting, etc. on a smaller project and ultimately end up dealing with more people for the same dollar volume of work. This leads many providers to prefer larger projects.
For sponsors, selecting individual providers to perform specific functions may or may not be preferable. They must consider the time involved to manage many individual projects and visit several sites. The upside, however, is large, since finding the best service for an individual problem or project can outweigh the increased logistical concerns.
This is intentionally the last selection criterion mentioned. When it comes down to making an outsourcing decision for formulation development, the right fit, based on the considerations above, will lead to the provider. Cost is obviously a factor, but choosing the most appropriate re-source will be far less aggravating and re-quire less hand-holding.
A Biologics Example
In the biologics area, some of the key formulation issues are the development of stability indicating assays, solubility issues, product stability issues and drug administration characteristics.
The first step in formulating a biologic is to determine the inherent instabilities of the molecule and work to minimize them. A program of data-driven, biophysical experiments designed to serve as a basis of formulation development was used to accomplish this. Proteins are subjected to acute stresses such as pH, temperature and shear stress. The protein, in this case an antibody, was monitored by its ability to absorb, emit and/or scatter light, which rendered valuable insight into possible protein conformational changes. This data served to explain the nature of the molecule and to help the lab select excipients to stabilize the antibody. During the approval process, it was necessary to justify the choice of excipients added to the bulk product and this data supported the formulation.
Formulation development projects range from the routine to the complex. The process of identifying the right contract service pro-vider for a project may be streamlined by asking a series of questions internally before seeking an outsourcing company. A definitive project plan in terms of scope, timelines and goals will help the contract service provider offer realistic cost estimates and detailed proposals. The greater the up-front communication, the better the project will progress. This will help the outsource provider stick to the three “D”s of project commitment: deliverables, deadlines and dollars.
Formulation will continue to be a key area of drug development. As the outsourcing industry continues to grow, there will be an increase in the emergence of companies to address the niche product development needs of both biotech and pharmaceutical companies.