Contracting & Outsourcing Session Highlights and Key Takeaways

The following offers brief summaries of a few of the presentations from the 2017 Contracting & Outsourcing Conference.
 
Contract Manufacturing Market Trends Update  

Jim Miller of Pharmsource highlighted recent and robust performance from CDMOs. For the first half of 2017, revenue growth rates for drug development services for companies such as Patheon, Catalent, and AMRI, were between 10-20%. API revenue growth from providers including Patheon, Lonza, and AMRI were between 15% and 25%. Revenues related to dose for companies including Patheon, AMRI, Catalent and Baxter, were between 2% and 10%.
 
While outsourced FDA approvals are up, and emerging biopharma funding is driving development, Mr. Miller also pointed out potential challenges facing the CDMO industry.
For example, emerging biopharma spending can slow with shifts in financial markets, or failure of a major therapeutic class, and unfavorable pricing decisions.
                                                                  
He also noted that resources needed for growth may be hard to access. CMOs would not benefit if small and mid-size biopharma approvals decline. Also, fewer CMOs are benefitting from high-value drug approvals. Additional factors to consider are: pricing pressures could hurt development, and a mismatch between product pipeline and CMO capabilities.
 
Mr. Miller went on to say, the near-term outlook is robust. Also, market entry, scale, new capabilities and finance are driving M&A as evidenced by several recent deals. For example, strategic-based deals such as ThermoFisher/Patheon, and Lonza/Capsugel; add-on service acquisitions such as Catalent/Accucaps and Lonza/Pharmacell, and financial investments such as Carlyle Group/AMRI, and Permira/LSNE.
 
Biotrends Report: Top 5 Global Trends Affecting Biopharma Outsourcing  
Eric Langer of BioPlan Associates discussed the top biotrends based on a recent report: Industry Growth; Demand for Efficiency; International Biomanufacturing Centers; Biosimilars; Cell Therapies; and Hiring and Training Staff.
 
Based on the report, of the biomanufacturing services that are increasingly outsourced, analyticial testing ranks the highest at 90%, followed by toxicity testing at 81%, and fill/finish at 73%, with validation services, product characterization, and contract research at or near 70%. These levels are project to rise with the greatest increases in the next 24 months.
 
Geographically, outsourcing destinations over the next five years are projected as follows: the U.S. ranked the highest at 31%, followed by Ireland and India, both 18%. China stands at 16%, and Germany at 13%.
 
The top global trend this past year, according to the report, is manufacturing efficiency and productivity. CMOs offering speed and efficiency are in demand. Also, emerging markets of China and India have fewer legacy facilities and are going state-of-the art. Additionally, more biosimilar development has led to more facilities and more competition. Of the 700-plus biosimilars in development, the majority are from virtual companies with no manufacturing capability. We should expect many new facilities that utilize SUS (single-use systems). Finally, the #5 trend is a healthy 14%~ biopharma industry segment growth. The past 14 years have shown consistent growth between 12-15%.  
 
CMO Oversight: What is the Client’s Role?
When it comes to Biomanufacturing Readiness Jason Condon of Vaccinex emphasized the active review of all processes and procedures of a manufacturing campaign at a CMO so as to ensure successful manufacture of the product on time and within budget.  He said to focus on what is important for bio/pharma manufacturing: Documentation; Raw Materials & Consumables; Equipment; Manufacturing Operations; Facility; Personnel; Quality Control; and Packaging & Labeling.
 
This readiness process should include a checklist with questions regarding equipment and the facility, for example. There should be a readiness agenda and a visit. He notes that you must go on site as part of the readiness process as this provides access to documents and records your CMO wouldn’t otherwise be able to share, and helps build a relationship. 
 
Progress & Challenges in Pharmaceutical Manufacturing Compliance
Paula Katz of the FDA emphasized that even in a complex market, everyone is responsible for quality. She noted that CMOs and their customers should work together proactively to characterize and control risks to product quality and patient safety and to address any quality issues.
 
Take the following considerations and perspectives into account: When it comes to the relationship, was the selection process for the contract manufacturing relationship appropriate and robust? Are the roles/responsibilities appropriate in all instances?
 
With deviations and investigations, what should each organization have done as part of the investigation and what is each organization’s role now? What additional controls, if any, are needed for continued manufacture and use of product?
           
Regarding an inspection, what should be the approach for responding to the 483 observations?
Who should be involved in preparing the responses?
 
Ms. Katz said to focus on product quality, as a comprehensive evaluation and risk assessment feeds into quality-focused corrective actions. 
 
FDA Quality Agreements Guidance
Paul Mason of Lachman Consultant Services noted that when it comes to responsibilities, each party engaged in the manufacture of a drug is responsible for ensuring compliance with CGMP for the manufacturing activities it performs. He added, the owner takes responsibility of ensuring that any contracted activity was compliant with the cGMP requirements and meets the specific requirements of the final API/Product. Also, the requirements of Quality Agreements should be integral to the owner’s Pharmaceutical Quality System along with the process by which a contract facility is qualified and continually monitored. He noted, the owners Pharmaceutical Quality System should ensure control over outsourced activities including purchased materials.