Paradigm Change in Bio-Manufacturing
Technology is transforming manufacturing options
By Donald F. Gerson
Biopharmaceutical manufacturing is undergoing a major paradigm change from unique, highly specialized processing of individual products to uniform systematic processing that applies to a multitude of products. This transformational technology increases the number of new biopharmaceutical entities that can be produced in a single facility, increases the efficiency of capital and fixed asset utilization, and increases the utility of multi-product, multi-user manufacturing facilities. In this environment, contract manufacturing of biopharmaceuticals promises to open the pipeline for new biopharmaceuticals, reduce the cost of manufacturing to the innovator and increase the availability of new and more varied products to health care providers and patients.
Traditional biologicals include vaccines and blood-derived protein products such as albumin, Factor VIII and VIX, and immunoglobulins. These products were hard to purify and characterize by techniques available when they were developed, susceptible to unknown contaminations from source materials, and had relatively unusual and specific processing technologies with uncertain effects on product quality. Regulatory agencies relied on the documentation of processing controls in addition to QC test outcomes for assurance of the consistency of product quality, and operated on the basis that the process defined the product. In this paradigm, the manufacture of a given product was precisely facility and process dependent. The concept that "the product is the process," while unproven, was heavily relied upon and virtually precluded changing processing technologies or facilities, or using contract manufacturing in multi-use facilities.
Biologicals produced by biotechnology include recombinant proteins and monoclonal antibodies that are understood at a high level of molecular detail. Current bioprocessing techniques include well-understood and highly specific purification steps. Analytical techniques now give a full molecular characterization of the product and show details of batch-to-batch variations allowing root-cause assignments to manufacturing variations. With tested and released cell lines grown on highly characterized animal-byproduct-free growth media, manufacturing lots of well characterized biologics are now highly reproducible. Methods are available that demonstrate the bioequivalence of biopharmaceuticals before and after process improvements or site-to-site transfers. Analytical characterization, combined with bioequivalency studies, have proven repeatedly that bioprocessing has reached a stage of maturity dominated by scientific approaches to product consistency that prove the equivalency of product made in different locations by slightly different processes, leading to regulatory acceptance of the use of CMOs for biopharmaceutical manufacturing (Faden, 2005).
There are more than 125 biopharmaceuticals currently licensed, and in 2006 there were more than 400 in development (PhRMA, 2006). While estimates vary, growth in new biopharmaceutical entities (NBEs) will be approximately 20% annually during the next decade, with an estimated market value of $18 billion by 2010. With this explosive growth comes the need for significantly increased manufacturing capacity. The number of products is large and the total amount of protein API required is large, but the amount required for each product is neither large nor easily predicted. There is uncertainty of outcome for each product until completion of clinical trials:
- clinical success or failure is uncertain until completion of trials,
- dose levels and target patient populations are uncertain until proof of efficacy, and
- quantities required for market satisfaction cannot be estimated until the last stages of product development.
It is therefore difficult for a company to accurately evaluate and decide on capital investments for manufacturing a new unproven product in time to be ready for the projected launch date. This uncertainty opens opportunities for contract manufacturing of biopharmaceuticals to reduce risk and increase supply flexibility for the product originator.
Worldwide capacity for the production of protein biopharmaceutical APIs from mammalian cell culture was estimated to be about 2 million liters in 2006, with approximately another 1 million liters in construction planning and start-up phases (Seymour, et al., 2006). The split between product originators and CMOs is about 85% to 15%, but there are indications that the proportion of CMO-based manufacturing is increasing (Miller, 2008). The physical requirement for biopharmaceutical therapeutics is expected to more than double over the next decade, requiring a doubling of production capacity for the industry as a whole, and raising ‘make-vs-buy' decisions for all product originators. Most of these originators are either involved in or are considering outsourcing of new biopharmaceutical products to enhance profitability and to focus on core competencies (Contract Pharma, 2007).
Two seemingly opposing trends are driving the shift to CMO-based biopharmaceutical manufacturing: One is the convergence of production technologies and the other is market fragmentation. The first therapeutic monoclonal product to be produced was OKT3™, an anti-transplant-rejection mouse antibody produced as ascites, which was licensed in 1986. Today more than 20 monoclonal-based biopharmaceuticals (MAbs) have been licensed, the number is growing rapidly, and they are almost exclusively humanized antibodies that are manufactured by mammalian cell cultivation in large-scale bioreactors (Jones, et al., 2007).
Fully humanized antibodies are now mass-produced in large cell-culture bioreactors in quantities of 5-10 kilograms per 10 - 20,000 liter batch, and some protein biopharmaceutical products are manufactured in quantities in the range of 100 – 1000 kg/year. Since monoclonal technology was developed, there have been major advances in cell line development, bioreactor construction and operation, purification strategies and analytics. Manufacturing monoclonals now follows a regular sequence of unit operations, largely independent of the epitope specificity of the monoclonal. Today, the technological convergence to a ‘one-plant-fits-all' approach to biopharmaceutical manufacturing is a practical realization.
Manufacturing with recombinant CHO and other cells as a common platform for monoclonal antibody (mAb) production has converged cell-culture processes and allowed cultivation at levels of approximately 10 million cells/ml in total volumes as large as 20,000 liters, levels that few imagined would be possible 20 years ago. The use of standardized purification schemes with Protein A capture, ion-exchange, hydrophobic interaction and cross-flow concentration and diafiltration has made it possible to use one set of hardware, with adjustable parameters and exchangeable resins or filters, for most monoclonal and related products. There have been detailed analyses of this convergence of processing technology that indicate further convergence, uniformity and cost reduction is possible (Sommerfeld, et al., 2005), especially if manufacturability in a uniform system is an objective of process development (Gerson, et al., 2005).
Market fragmentation is driven by both the existence of large sales-volume products for many major indications, and the identification of niche indications by increasingly sophisticated genetic and analytical techniques. Of 16 therapeutic categories, cancer represents 45% of the new products, infectious diseases represent about 15%, and the remaining 14 categories each represent less than 10% of the potential products, as seen in Figure 1 (PhRMA, 2006). A few target indications with large numbers of patients -- rheumatoid arthritis for example -- have already been dealt with by a number of biopharmaceuticals, and there is significant competition for market share. To further expand product lines, companies are focusing on smaller markets and more specific indications, with the clear implication that large manufacturing capacities for a single product will not be required and that contract multi-product facilities will be increasingly used for biopharmaceutical API production, in much the same way as contract sterile filling and packaging facilities are frequently used today.
|Figure 1: Monoclonal Products in Development 2006
To meet reasonable expectations of financial return, the cost of developing, licensing, manufacturing and launching new biopharmaceutical entities, NBEs, must be trimmed to balance against the lower expected financial returns and higher uncertainties of lower volume niche products. DiMasi et al., (2003) have analyzed the economics of new drug development and concluded that in 2003 the capitalized cost of an NCE was about $800 million, and that this cost was growing at a rate of >7% above inflation, or will be an estimated $1.1 billion for each new drug by 2008. Little of the capitalized cost is significantly related to potential market size or therapeutic potential; it costs the same to license and launch a biopharmaceutical with low or high market potential.
A comparison of the hypothetical pre-launch build-vs-buy costs to the product originator is given in Table 1, exploring whether the originator builds, starts-up and validates a new biopharmaceutical facility or goes with an existing CMO for the same product. Costs for a new facility include new staff, training, qualification, validation, and related costs to the time of beneficial occupation. Case-by-case differences in the actual numbers will depend on the location and complexity of the facility, however, the major effect is determined by the cost difference between building a single-user facility for the product originator compared to the fee-for-service use of a multi-user facility. Offshore CMOs offer additional benefits related to reduced personnel costs, contributing to the need for manufacturing cost and cost-to-consumer reduction (Finnegan, et al., 2006).
Significant reductions in the overall capitalized cost can come from the use of a CMO for manufacturing both clinical and licensed commercial materials; the use of an existing and fully operational CMO facility reduces both direct capital expenditures and the time from project inception to launch. Reduced capitalization and shorter times to market improve the rates of return on investments and, most importantly, improve the flow of new biopharmaceutical products to the patients who need them. Once the capital cost is paid down, however, the originator must also be able to realize benefits and cost reductions in the form of reduced operational costs and complexities. The CMO must therefore provide more cost-effective operations than the originator could reasonably provide at their own facilities, and must also provide a level of service that significantly reduces operational complexity for the originator. For example, the CMO must provide high operational effectiveness, a full spectrum of laboratory testing capabilities, and a very high level of regulatory compliance in order to relieve the originator of all concerns related to product supply. The concentration of manufacturing expertise in the CMO should allow this level of service, allowing the originator to focus on product development and marketing.
Investing in new drug development is highly risky as a result of uncertainties in drug target determination and side-effect prediction, both biological factors that are very difficult to overcome. In addition to the uncertainties of biology, the development process contributes additional risk by the uncertainties of scale-up, facility design and construction, quality system implementation and the regulatory evaluation and inspection process.
Table 1. Hypothetical Pre-Launch Costs if the Product Originator builds, starts-up and validates a new biopharmaceutical facility compared to the use of an existing CMO for the same product. Costs for a new facility include new staff, training, qualification, validation, and related costs to the time of beneficial occupation. Case-by-case differences in the actual numbers will exist depending on the location and complexity of the facility, however, the major effect is determined by the cost difference between building a single-user facility vs. using a multi-user facility on a fee-for-service basis.
In the traditional scenario, a company is involved in taking the NBE though Phase II and III clinical trials while it is also designing, building, validating and starting-up a new facility, and preparing for and going through a pre-approval inspection. Taken together, these activities can stress organizations to their financial and personnel limits, often with negative outcomes in one area or another. By utilizing a CMO for the production of both clinical materials and final marketed product, the originator of a NBE can greatly reduce its risk level, capital expenditure and organizational stress.
The most direct risk reduction is capital savings of nominally $400 million that is not spent on facilities, plus the operational savings that would have been spent on either engineering and construction support or personnel costs for facility validation and start-up. By using a facility already owned and operated by a CMO, only those costs directly associated with product manufacturing are borne by the originator. Secondary risk reductions involve simply reducing the number of things that can go wrong: start-up failures resulting from new and relatively inexperienced staff, technology transfer failures due to scale-up or equipment or facility-related difficulties, assay validation or implementation failures, and pre-approval inspection issues causing delays in licensure, all combining to exacerbate uncertainty. At an experienced CMO and a facility already licensed for manufacturing other biological products, the staff have performed many tech transfers into the same facility and know what works and what does not. Equipment and facilities tend to have been tuned to perfection, and quality and regulatory teams are experienced in showing their facility to regulators, all combining to make a picture of success.
Additional benefits and opportunities arise from the capital-sparing effects of CMO-based manufacturing. The usual approach of product originators is to license a product in one's home country first, and with often a delay of several years, license it in similar markets -- the EU or the U.S. as the case may be -- then obtain licenses some years later in other countries further from the corporate base. Generic companies, on the other hand, usually attempt to obtain as many licenses in as many countries as possible, as quickly as possible, in an attempt to cover the global market and obtain effective market dominance by rapid global market penetration. The current pharmaceutical market is characterized by short product lifetimes due to the combined effects of long product development periods and rapid technological advancement (Pisano, 1997 and Grabowski, et al., 2002). It is therefore very important to generate as much profit as possible in the early years of the product's lifecycle, because later profits may not be realized either as a result of competitive product introductions or unforeseen product side-effects that may reduce indications or marketability. Investment of a portion of the funds that were not used for the construction of a manufacturing facility into product development activities such as expanded clinical studies or other support for additional indications or international filings would provide greater benefit to the originator than would a product-specific manufacturing facility.
From the perspective of long-term planning, there are multiple opportunities for directed investment into aspects of product and process development that would optimize the gains over the shortened product lifecycles prevalent in today's pharmaceutical market. Long-term arrangements between originators and CMOs allow targeting process development for a particular facility, reducing uncertainties and increasing the speed of the development process. Early-stage planning for increased indications or multiple registrations utilizes some of the funds spared by CMO-based manufacturing, but increases revenues early in the product lifecycle. Use of experienced manufacturing teams with long-term experience in biopharmaceutical production, and in locations with lower labor costs, can significantly reduce the cost of goods from the beginning, increasing initial revenues and prolonging profitability as price pressures mount late in the product lifecycle. Integrated over the entire product lifetime, these effects can result in extra profits of a magnitude that could support the development of another new product.
Biopharmaceuticals are contributing increasingly to the pharmaceutical industry, and can contribute substantially to the improvement of human health worldwide, but at present they are very costly. The maturation and relative saturation of the pharmaceutical market, the need for price competitiveness, and more rapid new product introductions, has led to need for speed in product development and efficient manufacturing. The paradigm change in the manufacturing of biologicals and biopharmaceuticals, from unique to generally applicable processes, and from ill-defined to highly characterized products, has in turn allowed regulatory agencies to accept the use of multi-product, CMO-based manufacturers.
The combined effect of this paradigm change is to present the industry with an opportunity to increase product revenues and the speed of new product introductions while decreasing healthcare costs. The new paradigm benefits the originator, the producer, the regulator, the health care system, and
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