Eric S. Langer, BioPlan Associates, Inc.09.06.12
Capacity constraints in biomanufacturing, although far less impactful than what was occurring 10 years ago, continue to affect the industry in different ways. Today, at least two-thirds of biomanufacturers are facing at least minor constraints at clinical and commercial stages of manufacturing. This is according to data released in our 9th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production. Further, the 302 biotherapeutic developers and contract manufacturing organizations (CMOs) we surveyed this year don’t appear to see any end in sight: in fact, more expect capacity constraints in the next five years than are experiencing them today.
To better understand what will be leading to these future constraints, we asked respondents to identify the major factors likely to constrain their organization’s production capacity during the next five years. Clear winners are showing up.
The most frequently indicated factor, by a large margin, was facility constraints, with 52.9% of our respondents citing this as a cause of future capacity problems. This factor is likely emerging as existing facilities age or become obsolete. Single-use and new flexible facility options are creating a set of expectations that mean older facilities are unlikely to survive in their current configurations. Beyond facility constraints, the second tier factors included: capacity of downstream purification equipment (35.5% of respondents), costs associated with downstream purification (32.3%), analytical testing and drug product release (29.7%), and the inability to hire new, experienced technical and production staff (22.6%).
Rounding out the top 10 factors creating future capacity constraints were:
These factors suggest that the industry expects a very broad range of issues to emerge in the future. Few common groups of factors appear, indicating that solutions will also need to be broad ranging.
Shifts Over Time
Study data for this year show significant differences from previous years. The top factor, ‘facility constraints,’ maintained its dubious distinction from the previous two years, increasing from 48.6% of respondents last year, but down from a peak of 55.4% in 2010. Beyond this consistent top factor, though, perceptions have tended to differ over time.
The #2 factor, this year, ‘physical capacity of downstream purification equipment,’ increased 7.4% points from last year, when it stood in the third position, but below 2010’s high of 41.7% (and the #2 spot). By now, the lack of capacity in the downstream purification area is a well-known capacity constraint; it is affected by increasing titers and improvements in upstream production. This is clearly identified in the data — the 35.5% indicating this to be a ‘future factor’ this year, although lower than the peak concerns last year, continues to be an ongoing worry.
The lack of technological evolution in purification, filtration and chromatography means that biomanufacturing facilities continue to struggle with downstream processing bottlenecks. These constraints are difficult to correct, requiring alternatives to current chromatography steps, more efficient columns and buffer prep and hold space that is capital intensive.
This year’s #3 factor, ‘costs associated with downstream purification,’ took a big jump from last year’s 23.3% to this year’s 32.3%, and is at a five-year peak. Back in 2006-07, ‘inability to hire new, experienced technical and production staff’ topped the list of future constraint factors with more than 30.0% of respondents citing this. In 2008, hiring concerns declined in importance to the second constraint slot, with 27.9% of respondents. Worries about technical and production staff hiring largely settled in recent years, and have not reached the level seen in 2004, when this factor was the #1 concern, at 52%.
Meanwhile, the ‘inability for any new cutting edge technology to achieve claimed performance’ rose markedly this year to 21.3% of respondents indicating it as a future concern, after holding steady around 12.5% between 2008 and 2012. This ties back to the issue of downstream purification, as there appear to be no significant advances in technology in this area that would allow the alleviation of this capacity constraint.
Also growing this year was the ‘inability to obtain raw materials required for production,’ which has been on a steady increase, increasing from 5.2% of respondents in 2008 to 10.0% last year, before jumping to 18.7% this year and breaking into the top 10. Just five years ago, this was one of the least-cited concerns. This may be the result of significantly increased focus on secure sourcing, and the traceability of materials.
People-Based Problems
The industry this year appears to be less concerned with a number of “people-based” factors that affect capacity. As noted above, ‘inability to hire new, experienced technical and production staff’ dropped three spots on our list this year as a future capacity factor; other people-factors also decreased. For example, ‘inability to hire new, experienced scientific staff’ (20.0% this year vs. 27.6% last year) and ‘inability to retain experienced scientific staff’ (16.8% this year vs. 21.4% last) both saw fairly significant drops, while the ‘inability to retain experienced technical and production staff’ saw only a marginal increase, from 21.4% last year to 22.6% this year.
While the data suggests that people-based constraints (both in terms of hiring and retaining talent) have become less of an issue in 2012, they still feature among the top concerns held by biomanufacturers. One of the primary reasons is that much of the knowledge in the biotech community is institutional in nature, and largely based in the U.S. and Europe. Experienced operators mitigate contamination risks and provide a depth of production experience that can be used to reduce costs and cycle times.
People Problems at CMOs
For CMOs (particularly those in Asia) looking to move into the biomanufacturing space, the people-based constraints may be a significant challenge. In fact, when we separate responses into two groups — biotherapeutic developers only and CMOs only — we find that, while CMOs expressed much higher levels of concern for most factors, in general CMOs were more concerned over hiring issues than biotherapeutic developers were. For example, CMOs were far more likely than biodevelopers to believe that the ‘inability to hire new, experienced technical and production staff’ would create future capacity constraints (40.0% vs. 25.9%). They were similarly more apt to demonstrate concern with the ‘inability to hire new, experienced scientific staff’ (30.0% vs. 18.5%) and the inability to retain this staff (25.0% vs. 15.6%).
That is not to say that biodevelopers do not have staffing concerns, too: they still occupy three of their top 10 factors. Yet CMOs are an important leading indicator for concerns because they retain a tight focus on operations, and are critically focused around managing cost and efficiency for the products they are producing, whereas biodevelopers are more likely to take a longer view of the process. In the next three to four years, then, we might expect to see experienced people — particularly in the operations and late-stage process development community — become increasingly valuable, particularly as the industry pivots towards lower-cost manufacturing of biogenerics, where cycle times and avoiding contamination events are critically important. Indeed, while biomanufacturers traditionally have had a relatively open culture towards sharing best practices and techniques in the industry, the competition brought about by biogenerics could erode some of this camaraderie. With this type of evolution ahead, experienced operations and technical staff become increasingly important to retain – if for no other reason than to prevent the loss of that knowledge to a competitor.
Regional Differences: U.S. vs Western Europe
Expectations regarding future capacity-constraint factors showed some significant differences between U.S. and western European respondents (biodevelopers and CMOs combined). In particular, this year, U.S. respondents displayed a higher degree of concern about capacity than their European counterparts. This ties back to separate results from our study, in which 54.5% of U.S. respondents said they expected at least moderate capacity constraints by 2017, compared to just 31.0% of Western European respondents who felt that way.
One issue for which both groups find a problem is ‘facility constraints,’ which topped the list of factors creating future constraints for both U.S. (54.9%) and western European (54.1%) respondents. Beyond this commonly-held belief, though, opinions begin to differ, notably for the following factors:
The Road Ahead
Our study indicates that the biopharmaceutical industry doesn’t see the problem of capacity constraints going away in the next five years. However, the breadth of problem areas suggests there are no clear, singular solutions. Even so, there is a silver lining: when we examine the data on a multi-year basis, it appears that more facilities are projecting only “minor” or “moderate” constraints going forward, as the decline in facilities expecting “significant” or “severe” constraints continues.
The industry is indicating that for capacity problems to abate, downstream purification must be a top priority. The relatively tight labor market — particularly for experienced bioprocessing specialists — will also need to be navigated. As the industry addresses downstream purification and human capital issues the capacity problems of the future will continue to abate.
Reference:
Eric S. Langer is president and managing partner at BioPlan Associates, Inc., a biotechnology and life sciences custom marketing research and publishing firm established in Rockville, MD in 1989. He is editor of numerous studies, including “Biopharmaceutical Technology in China,” “Advances in Large-scale Biopharmaceutical Manufacturing”, and many other industry reports. He can be reached at elanger@bioplanassociates.com, 301-921-5979 and www.bioplanassociates.com.
Survey Methodology: The 2012 Ninth Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production in the series of annual evaluations by BioPlan Associates, Inc. yields a composite view and trend analysis from 302 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 29 countries. The methodology also included 185 direct suppliers of materials, services and equipment to this industry. This year's survey covers such issues as: new product needs, facility budget changes, current capacity, future capacity constraints, expansions, use of disposables, trends and budgets in disposables, trends in downstream purification, quality management and control, hiring issues, and employment. The quantitative trend analysis provides details and comparisons of production by biotherapeutic developers and CMOs. It also evaluates trends over time, and assesses differences in the world's major markets in the U.S. and Europe.
To better understand what will be leading to these future constraints, we asked respondents to identify the major factors likely to constrain their organization’s production capacity during the next five years. Clear winners are showing up.
The most frequently indicated factor, by a large margin, was facility constraints, with 52.9% of our respondents citing this as a cause of future capacity problems. This factor is likely emerging as existing facilities age or become obsolete. Single-use and new flexible facility options are creating a set of expectations that mean older facilities are unlikely to survive in their current configurations. Beyond facility constraints, the second tier factors included: capacity of downstream purification equipment (35.5% of respondents), costs associated with downstream purification (32.3%), analytical testing and drug product release (29.7%), and the inability to hire new, experienced technical and production staff (22.6%).
Rounding out the top 10 factors creating future capacity constraints were:
- ‘Inability to retain experienced technical and production staff’ (22.6%),
- ‘Lack of financing for production expansion’ (21.3%),
- ‘Inability for any new, cutting edge technology to achieve claimed performance’ (21.3%),
- ‘Inability to hire new, experienced scientific staff’ (20%), and
- ‘Inability to obtain raw material required for production’ (18.7%).
These factors suggest that the industry expects a very broad range of issues to emerge in the future. Few common groups of factors appear, indicating that solutions will also need to be broad ranging.
Shifts Over Time
Study data for this year show significant differences from previous years. The top factor, ‘facility constraints,’ maintained its dubious distinction from the previous two years, increasing from 48.6% of respondents last year, but down from a peak of 55.4% in 2010. Beyond this consistent top factor, though, perceptions have tended to differ over time.
The #2 factor, this year, ‘physical capacity of downstream purification equipment,’ increased 7.4% points from last year, when it stood in the third position, but below 2010’s high of 41.7% (and the #2 spot). By now, the lack of capacity in the downstream purification area is a well-known capacity constraint; it is affected by increasing titers and improvements in upstream production. This is clearly identified in the data — the 35.5% indicating this to be a ‘future factor’ this year, although lower than the peak concerns last year, continues to be an ongoing worry.
The lack of technological evolution in purification, filtration and chromatography means that biomanufacturing facilities continue to struggle with downstream processing bottlenecks. These constraints are difficult to correct, requiring alternatives to current chromatography steps, more efficient columns and buffer prep and hold space that is capital intensive.
This year’s #3 factor, ‘costs associated with downstream purification,’ took a big jump from last year’s 23.3% to this year’s 32.3%, and is at a five-year peak. Back in 2006-07, ‘inability to hire new, experienced technical and production staff’ topped the list of future constraint factors with more than 30.0% of respondents citing this. In 2008, hiring concerns declined in importance to the second constraint slot, with 27.9% of respondents. Worries about technical and production staff hiring largely settled in recent years, and have not reached the level seen in 2004, when this factor was the #1 concern, at 52%.
Meanwhile, the ‘inability for any new cutting edge technology to achieve claimed performance’ rose markedly this year to 21.3% of respondents indicating it as a future concern, after holding steady around 12.5% between 2008 and 2012. This ties back to the issue of downstream purification, as there appear to be no significant advances in technology in this area that would allow the alleviation of this capacity constraint.
Also growing this year was the ‘inability to obtain raw materials required for production,’ which has been on a steady increase, increasing from 5.2% of respondents in 2008 to 10.0% last year, before jumping to 18.7% this year and breaking into the top 10. Just five years ago, this was one of the least-cited concerns. This may be the result of significantly increased focus on secure sourcing, and the traceability of materials.
People-Based Problems
The industry this year appears to be less concerned with a number of “people-based” factors that affect capacity. As noted above, ‘inability to hire new, experienced technical and production staff’ dropped three spots on our list this year as a future capacity factor; other people-factors also decreased. For example, ‘inability to hire new, experienced scientific staff’ (20.0% this year vs. 27.6% last year) and ‘inability to retain experienced scientific staff’ (16.8% this year vs. 21.4% last) both saw fairly significant drops, while the ‘inability to retain experienced technical and production staff’ saw only a marginal increase, from 21.4% last year to 22.6% this year.
While the data suggests that people-based constraints (both in terms of hiring and retaining talent) have become less of an issue in 2012, they still feature among the top concerns held by biomanufacturers. One of the primary reasons is that much of the knowledge in the biotech community is institutional in nature, and largely based in the U.S. and Europe. Experienced operators mitigate contamination risks and provide a depth of production experience that can be used to reduce costs and cycle times.
People Problems at CMOs
For CMOs (particularly those in Asia) looking to move into the biomanufacturing space, the people-based constraints may be a significant challenge. In fact, when we separate responses into two groups — biotherapeutic developers only and CMOs only — we find that, while CMOs expressed much higher levels of concern for most factors, in general CMOs were more concerned over hiring issues than biotherapeutic developers were. For example, CMOs were far more likely than biodevelopers to believe that the ‘inability to hire new, experienced technical and production staff’ would create future capacity constraints (40.0% vs. 25.9%). They were similarly more apt to demonstrate concern with the ‘inability to hire new, experienced scientific staff’ (30.0% vs. 18.5%) and the inability to retain this staff (25.0% vs. 15.6%).
That is not to say that biodevelopers do not have staffing concerns, too: they still occupy three of their top 10 factors. Yet CMOs are an important leading indicator for concerns because they retain a tight focus on operations, and are critically focused around managing cost and efficiency for the products they are producing, whereas biodevelopers are more likely to take a longer view of the process. In the next three to four years, then, we might expect to see experienced people — particularly in the operations and late-stage process development community — become increasingly valuable, particularly as the industry pivots towards lower-cost manufacturing of biogenerics, where cycle times and avoiding contamination events are critically important. Indeed, while biomanufacturers traditionally have had a relatively open culture towards sharing best practices and techniques in the industry, the competition brought about by biogenerics could erode some of this camaraderie. With this type of evolution ahead, experienced operations and technical staff become increasingly important to retain – if for no other reason than to prevent the loss of that knowledge to a competitor.
Regional Differences: U.S. vs Western Europe
Expectations regarding future capacity-constraint factors showed some significant differences between U.S. and western European respondents (biodevelopers and CMOs combined). In particular, this year, U.S. respondents displayed a higher degree of concern about capacity than their European counterparts. This ties back to separate results from our study, in which 54.5% of U.S. respondents said they expected at least moderate capacity constraints by 2017, compared to just 31.0% of Western European respondents who felt that way.
One issue for which both groups find a problem is ‘facility constraints,’ which topped the list of factors creating future constraints for both U.S. (54.9%) and western European (54.1%) respondents. Beyond this commonly-held belief, though, opinions begin to differ, notably for the following factors:
- ‘Physical capacity of downstream purification equipment,’ 30.8% of U.S. vs. 40.5% of European respondents (compared to 33.1% and 22.8% last year, respectively),
- ‘Inability to retain experienced technical and production staff,’ 26.4% of U.S. vs. only 8.1% of European respondents,
- ‘Inability to hire experienced technical and production staff,’ indicated by 29.7% of U.S. respondents vs. 18.6% of European respondents, and
- ‘Inability to optimize my overall system, given my current technology and resources’ 22.0% of U.S. respondents vs 13.5% of European respondents.
The Road Ahead
Our study indicates that the biopharmaceutical industry doesn’t see the problem of capacity constraints going away in the next five years. However, the breadth of problem areas suggests there are no clear, singular solutions. Even so, there is a silver lining: when we examine the data on a multi-year basis, it appears that more facilities are projecting only “minor” or “moderate” constraints going forward, as the decline in facilities expecting “significant” or “severe” constraints continues.
The industry is indicating that for capacity problems to abate, downstream purification must be a top priority. The relatively tight labor market — particularly for experienced bioprocessing specialists — will also need to be navigated. As the industry addresses downstream purification and human capital issues the capacity problems of the future will continue to abate.
Reference:
- 9th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production: A Survey of Biotherapeutic Developers and Contract Manufacturing Organizations, BioPlan Associates, April 2012.
Eric S. Langer is president and managing partner at BioPlan Associates, Inc., a biotechnology and life sciences custom marketing research and publishing firm established in Rockville, MD in 1989. He is editor of numerous studies, including “Biopharmaceutical Technology in China,” “Advances in Large-scale Biopharmaceutical Manufacturing”, and many other industry reports. He can be reached at elanger@bioplanassociates.com, 301-921-5979 and www.bioplanassociates.com.
Survey Methodology: The 2012 Ninth Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production in the series of annual evaluations by BioPlan Associates, Inc. yields a composite view and trend analysis from 302 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 29 countries. The methodology also included 185 direct suppliers of materials, services and equipment to this industry. This year's survey covers such issues as: new product needs, facility budget changes, current capacity, future capacity constraints, expansions, use of disposables, trends and budgets in disposables, trends in downstream purification, quality management and control, hiring issues, and employment. The quantitative trend analysis provides details and comparisons of production by biotherapeutic developers and CMOs. It also evaluates trends over time, and assesses differences in the world's major markets in the U.S. and Europe.
