Contract Pharma spoke with Bernardo Estupiñán Gaisbauer, Managing Partner at CDMO Advisor, ahead of his session on “Navigating Outsourcing Partnerships for Start-Ups”.
 
Please click here for a full break down on the topics at CPHI Milan
 
Contract Pharma: What would be the first bit of advice you would offer to a start-up seeking to partner with a CDMO?
 
Bernardo Estupiñán Gaisbauer: That’s very simple – partner with a service provider or CDMO that can perform the type of work that the company needs in order to get to the clinic within their desired timeline and budget. The harder part is finding them. But fortunately, there are logical ways to go about this.
 
Contract Pharma: OK, so how would a West Coast America Biotech start this process?
 
BE: Even before they start looking for a partner, they need to figure out how they will fund the project and start talking not only to angel investors, but also to potential equity investors to generate the capital they need.
 
Part of this may be identifying the type of conferences they need to attend to pitch the science behind their asset in such a way that investors are going to look at it and give it some funding.”
 
Contract Pharma: If they secure the funding they need, what should they do next, and how do biotech source potential partners?
 
BE: The services offered by CDMOs have expanded over the years, so it is important to define the resources that are needed. Some providers now offer everything from early development, manufacturability assessment, clinical manufacturing all the way through to commercial manufacturing.
 
A good start is to go to conferences, like CPHI Milan, where they can meet a wide range of potential partners, ascertain exactly what services they offer and then match these to their own project.
 
It can be a long and tedious process because there are a lot of service providers out there, and they are located around the globe. So, our start-up should consider appointing a CMC advisor to help them identify and qualify the various CDMOs out there that could potentially help them. And begin the process of identifying a target list.
 
Contract Pharma: With so many potential partners, is ranking their offerings a good idea?
 
BE: Most definitely. Recently, we gathered eight different proposals and did a thorough evaluation of what each one provided against what was needed for biotech. We then ranked them and started to speak with potential partners to better understand what they were proposing and to make sure they understood what we needed.
 
The best advice I can give is to get as many proposals as possible, and make sure you talk to as many service providers as possible, as this will also educate you about what kind of capabilities are out there.
 
Contract Pharma: Where does pricing come in?
 
BE: Understanding the phasing of payments and total cost is obviously essential and this will depend on the scope of work that’s being provided and where the work is being done. 
 
For example, does the provider require a large payment upfront? Or, because you’re a small biotech and you’re trying to make that money go as far as possible, are they willing to work with you in providing a staggered payment plan that allows you to advance the project within your timeline without having to give up a lot of your working capital. It’s certainly worth asking.
 
Contract Pharma: What about language and ‘chemistry’ – are they important?
 
BE: Language, yes, because you will need to ensure that nothing gets lost in translation and decide how you will deal with day-to-day communication.
 
Of equal importance is ‘chemistry’. If it turns out that you don’t really understand the person, or you perhaps don’t get along, that’s not a good omen. As the relationship between the biotech and the service provider will be a long one, establishing the right chemistry from the start is essential. If it is not there, then it is likely to be a relationship you would be best not to enter. If your relationship is not on a good footing to start, how will it survive the strains of developing drugs together – because the reality is there are always problems, and you need great communication to address and overcome these problems expeditiously.
 
Contract Pharma: When would you envisage site visits?
 
BE: When you have completed the ranking, you should plan to visit your top three. Then you can start discussing the technical details of the project.
 
At this stage, you can also start fine-tuning the activities and create ‘what-if?’ scenarios, exploring how each service provider would react to changes in project, timelines or modifications to the scope of work that must be done. It is also key to meet and talk to the staff who will undertake the work for you and be your points of contact.
 
Since changes and challenges are inevitable, during a site visit it is important to explore and agree how these will be dealt with and how any tensions can be diffused if things start to get a little bit beyond just a disagreement on some of the activities.
 
Contract Pharma: Is the next stage, contract negotiations?
 
BE: Yes. After your site visits, and a potential re-look at the rankings, the next stage will be 
contract negotiations.
 
Now is also the time to draw up the Master Quality Agreement because it defines the roles and responsibilities of each party with respect to the quality of the product, what gets delivered, what gets provided by the service provider in terms of the review and certificate of analysis, etc. When you do non-GMP work, or when you do development work, you don’t really need to have the quality agreement in place.  You should, however, have your quality agreement signed before you start GMP work.
 
Contract Pharma: And how crucial is the Master Service Agreement?

BE: It’s the final piece of the puzzle – the most important piece as well, Master Service Agreements often tend to be time-consuming and confrontational, so you need to allow ample time for this process. It is the contract that you sign with your service provider, so you need to know exactly what your commitments are in terms of your financial obligations.

It’s essential, for instance, to define the consequences when there’s some type of breach. You need to know what your liabilities versus the service providers liabilities are. You need to know the type of coverage that is being provided for making this product. The Master Service Agreement defines who owns the product during the process. It states who is responsible for making sure that this particular product is being delivered as required through the proposal. It must spell out what happens, when scenarios change.

This means it is extremely, extremely important to make sure that that Master Service Agreement captures everything that you understand is required for your project and covers you in case of an error, in case of a missed a deliverable or if there is negligence.

This is why the negotiations and discussions around the master service agreement tend to sometimes be longer than the discussions around the technical scope of work that must be done. It needs to be right – for the sake of both parties and the ultimate success of the partnership.