Contract Pharma: What is the importance of the location of the new Global Logistics Center?
Jerry Shelton: Cryoport’s new Global Logistics Center located in Livingston, New Jersey is a part of the development of our Global Logistics Network which will continue to evolve as the life sciences temperature-controlled logistics market continues to grow, producing lifesaving therapies. Livingston is located in the heart of much of this biopharma activity with companies such as Novartis, Celgene, Bristol-Myers Squib, GenScript, Janssen, Zoetis, Cancer Genetics, Celularity and many others. These companies are all participating in the emergence of regenerative medicine and we want to be positioned to serve these clients, many of whom have therapies in phase III trials. As we have seen with Novartis’ Kymriah™, as therapies advance through clinical trial phases and reach commercialization, the demand for temperature-controlled logistics grows dramatically.
In fact, we think the industry will soon reach a “tipping point,” when our Logistics Network will be needed to enable these biomaterials to be shipped efficiently and effectively on a global basis. Compounding the demand for technologically advanced temperature-controlled logistics are the regulatory environments surrounding shipments of immunotherapies, regenerative medicine and other biomaterials.
To give your readers a taste of our exciting markets, as of the last quarter end, there were 866 Global Regenerative Medicine Companies (up from 672 in 2016) with 466 in North America, 235 in Europe and Israel, 127 in Asia, and 16 in the remainder of the world. In May 2018, Gilead announced its new Yescarta™ manufacturing facility to be built in Amsterdam, Netherlands. And in July 2018, Novartis announced Kymriah™ manufacturing centers in Paris, France and Leipzig, Germany. Our new Cryoport Global Logistics Centers in Livingston, New Jersey and Amsterdam, Netherlands line up with the new Gilead and Novartis facility locations. Cryoport is the sole provider of temperature-controlled logistics for Novartis’ Kymriah™ and Gilead’s Yescarta™, which are the first of many new therapies to be introduced that will be driving volume to Cryoport’s Logistics Network and hence, ramping revenue.
This investment in our new Livingston facility is the first of the work we are undertaking to build out our Logistics Network designed to support the expected needs of our clients as their therapies are approved in Europe, the United States and, soon, Asia.
CP: How will opening this center meet the needs of the rapidly developing regenerative therapy market?
JS: Our new Livingston Global Logistics Center is one of many we are undertaking to build out to support the expected demand from our clients as they develop immunotherapies for approval in Europe, the United States and Asia.
The number of companies requiring sophisticated temperature-controlled logistics has grown significantly. The clustering of these companies in the Northeastern United States has made it necessary for us to be here. Furthermore, there are regions we can determine where regenerative medicine will grow as supported by our data mapping showing growing densities of demand. Our Livingston Global Logistics Center will allow us to more effectively and efficiently manage our fleet of Cryoport Express™ Shippers and provide excellent service our customers. We are working diligently to ensure our network is composed of well-positioned facilities to accommodate the anticipated ramp of our client’s regenerative therapies.
The regenerative therapy target market is composed of 977 clinical trials underway with 324 in Phase I, 560 in Phase II and 93 in Phase III. We think we have reached an industry inflection point – “commercialization has begun”. Novartis’ CAR-T drug, Kymriah™ was approved in August 2017 and Gilead/Kite therapy, Yescarta™, was approved in October 2017. Kymriah™ second indication was approved in May 2018. At least 4 additional BLA/EMAs for regenerative therapies are expected to be filed by the end of 2018. 532 of all current clinical trials are focused on oncology and a total of 20 Regenerative Medicine Advanced Therapy (RMAT) designations have been granted. Our Livingston Global Logistics Center is an important part of the supporting network that enables clinical trials and commercialization of products.
CP: What are some of the most notable features of the new facility?
JS: Cryoport’s new fully equipped, state of the art Global Logistics Center is in close proximity to Novartis’ manufacturing operation, which is one of our main customers and our location allows us to quickly service many of the other biotech companies in the eastern United States.
Currently, Novartis, Celgene, and Bluebird Bio utilize this facility along with other customers, who are among the who’s who of the life sciences industry, including Gilead/Kite Pharma, Celularity, Bellicum, Juno, and Bristol-Myers Squibb. This facility allows us to provide faster services and, in some cases, same day delivery to customer facilities vs. next day. This facility is designed for scalability and has significant latent capacity that we will employ as new regenerative therapy programs ramp up in their respective regions.
CP: What trends in the logistics market are behind the need for the launch of a center like this?
JS: In short, it is the emergence of regenerative therapies and, more broadly the rapid pace of development in commercial biology-based products. Cryoport is a technologically advanced, specialty logistics provider serving the temperature-controlled logistics requirements of Biopharma, Animal Health and Reproductive Medicine. As such, we track trends in a very different way from undifferentiated logistics companies. We are looking primarily at the growth in biologics as related to our markets.
For Cryoport, the new developments in biopharma are a major driver as we think biopharma has a very big future. With the new regenerative therapies being developed, we think it is important to have logistics support within a reasonable proximity to manufacturing; hence, our Global Logistics Network development, which will be second to none. The Livingston Global Logistics Center has been commissioned at the very beginning of this initiative. At Cryoport, we are about delivering effectiveness and efficiency. We think of ourselves as practicing the science behind temperature-controlled logistics for the life sciences; we are the leader serving the life sciences and we pride ourselves on providing our clients with the certainty that we provide them with the most advanced logistics solutions available anywhere in the world for Biopharma, Animal Health and Reproductive Medicine.
Cryoport CEO Jerry Shelton has more than 30 years of executive and corporate governance experience across several industries including information services, telecommunications, manufacturing and distribution. Previously, he was a visiting executive at IBM Research, where his team created and developed WebFountain, a project contributing significantly to IBM’s software strategy. He was also president and CEO of NDC Holdings, Continental Graphics Holdings, Thomson Business Information Group and Advantage Companies. Under his leadership, each of those companies achieved rapid revenue growth, improved profitability and increased shareholder value. Shelton holds a B.S.B.A. degree from the University of Tennessee and an MBA from Harvard Business School.