• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Manufacturing
    • Packaging
    • Development
    • Compliance
    • Top 25
    • Directory
    • Microsites
    • Events
    • More
  • Magazine
  • News
  • Manufacturing
  • Packaging
  • Development
  • Compliance
  • Top 25
  • Directory
  • Microsites
  • Events
  • Current / Back Issue
    Features
    Editorial
    Columns
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    Top Features
    DCAT Week ’19

    Temperature-Controlled Logistics

    Reducing Pill Burden

    Nasal Drug Delivery

    AI in Pharma: Transforming Data into Drugs
    Breaking News
    Online Exclusives
    Industry News
    Collaborations & Alliances
    Promotions & Moves
    Trials & Filings
    Financial Reports
    Bio News & Views
    Custom Sourcing News
    Packaging & Tracking
    CRO News
    Live From Shows
    Top News
    Nestlé Health Licenses Codexis’ CDX-6114

    SK, Arvelle Sign $530M Deal for Antiepileptic Drug

    GS1 Delivers Lightweight Messaging Standard For Verification of Product Identifiers

    Progenics Launches Mfg. Ops in NJ

    Charles River to Pay $510M for Citoxlab
    APIs
    Aseptic Processing
    Cleaning Validation
    Clinical Trial Materials
    Cytotoxics and High Potency Manufacturing
    Equipment
    Excipients
    Extractables and Leachables
    Facilities
    Fill/Finish
    Lyophilization
    Parenterals
    Process Development
    Process Validation
    Risk Management
    Scale-up/ Technology Transfer
    Solid Dosage/ Creams/ Ointments

    Progenics Launches Mfg. Ops in NJ

    Pelican BioThermal Opens New Network Location

    Reed-Lane Facility Tour

    Haselmeier Acquires Drug Manufacturing License

    Emerald Health, Lonza Enter Large-Scale Mfg. Pact
    Capsules
    Cold Chain Management
    Injectables
    Logistics
    Serialization
    Solid Dosage / Semi-solids
    Supply Chain
    Vials

    GS1 Delivers Lightweight Messaging Standard For Verification of Product Identifiers

    Pelican BioThermal Opens New Network Location

    Reed-Lane Facility Tour

    Recipharm Facilities Ready for EU Serialization

    Andrew Alliance, Sartorius Launch Research Solution
    Analytical Services
    Bioanalytical Services
    Bioassay Developement
    Biologics, Proteins, Vaccines
    Biosimilars
    Chemistry
    Clinical Trials
    Drug Delivery
    Drug Development
    Drug Discovery
    Formulation Development
    Information Technology
    Laboratory Testing
    Methods Development
    Microbiology
    Preclinical Outsourcing
    R&D
    Toxicology

    Nestlé Health Licenses Codexis’ CDX-6114

    Personalized Medicine: Getting More Out of Clinical Trials

    SK, Arvelle Sign $530M Deal for Antiepileptic Drug

    Charles River to Pay $510M for Citoxlab

    West, Swissfillon Enter Drug Delivery Partnership
    Filtration & Purification
    GMPs/GCPs
    Inspections
    QA/QC
    Regulatory Affairs
    Validation

    Former FDA Senior Executives Join PAREXEL

    Top Global Pharma Company to Implement ValGenesis' VLMS

    WCG, Prudentia Enter Pharmacovigilance Alliance

    ValGenesis VLMS Chosen to Digitize Validation Process

    Serialization Compliance: Understanding the Challenges
    Companies
    Categories
    Corporate Capabilities
    Add New Company
    Contract Service Directory Companies
    Baxter BioPharma Solutions

    Federal Equipment Company

    Emergent BioSolutions, Inc.

    Jubilant HollisterStier Contract Manufacturing & Services

    Reed-Lane, Inc.
    Companies
    News Releases
    Posters
    Brochures
    Services
    Videos
    Case Study
    White Papers
    Jobs
    Contract Service Directory Companies
    Ajinomoto Bio-Pharma Services

    Aphena Pharma Solutions, Inc.

    Emergent BioSolutions, Inc.

    Alcami

    Vetter Pharma International GmbH
    Webinars
    Live From Shows
    • Magazine
      • Current / Back Issue
      • Features
      • Editorial
      • Columns
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
      • Enewsletter Archive
      • Digital Edition
    • Directory
      • Companies
      • Categories
      • Corporate Capabilities
      • Add Your Company
    • Manufacturing
      • APIs
      • Aseptic Processing
      • Cleaning Validation
      • Clinical Trial Materials
      • Cytotoxics and High Potency Manufacturing
      • Equipment
      • Excipients
      • Extractables and Leachables
      • Facilities
      • Fill/Finish
      • Lyophilization
      • Parenterals
      • Process Development
      • Process Validation
      • Risk Management
      • Scale-up/ Technology Transfer
      • Solid Dosage/ Creams/ Ointments
      • cGMP Manufacture
    • Packaging
      • Capsules
      • Cold Chain Management
      • Injectables
      • Logistics
      • Serialization
      • Solid Dosage / Semi-solids
      • Supply Chain
      • Vials
    • Development
      • Analytical Services
      • Bioanalytical Services
      • Bioassay Developement
      • Biologics, Proteins, Vaccines
      • Biosimilars
      • Chemistry
      • Clinical Trials
      • Drug Delivery
      • Drug Development
      • Drug Discovery
      • Formulation Development
      • Information Technology
      • Laboratory Testing
      • Methods Development
      • Microbiology
      • Preclinical Outsourcing
      • R&D
      • Toxicology
    • Compliance
      • Filtration & Purification
      • GMPs/GCPs
      • Inspections
      • QA/QC
      • Regulatory Affairs
      • Validation
    • Top 25 Pharma & BioPharma
      • Top 20 Pharma & BioPharma
      • Top 10 BioPharma Companies
    • Contract Pharma Direct
    • Breaking News
    • Online Exclusives
    • Slideshows
    • Experts Opinions
    • Surveys
      • Outsourcing Survey
      • Salary Survey
    • Glossary
    • Videos
    • White Papers
    • Infographics
    • Contract Pharma Conference
      • Contract Pharma Conference
      • Speakers
      • Exhibitors
      • Agenda
      • Conference Sessions
    • Supplier Microsite
      • Companies
      • News Releases
      • Posters
      • Brochures
      • Services
      • Videos
      • Case Study
      • White Papers
    • eBook
    • Webinars
    • Events
      • Industry Events
      • Live from Show Events
      • Webinars
    • Classifieds / Job Bank
      • Classifieds
      • Job Bank
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Columns

    Trends in New Technologies & Budgets

    Budget increases in biopharmaceutical industry indicate future growth

    Related CONTENT
    • Contract Manufacturing in the Supplement Industry
    • CMOs Hiring Constraints: Cell Therapy Manufacturing Expecting Future Challenges
    • Elemental Impurities: A Virtual Company Perspective
    • CMOs & Biosimilars Mfg. in the U.S.
    • Current Trends in Analytical Testing
    Eric S. Langer, BioPlan Associates06.06.17
    The future health and stability of any industry can be difficult to assess. As markets fluctuate, getting a read on where an industry may be headed can be a challenge. Although many metrics are available to evaluate industries, budget analyses can offer a clear assessment of a segment’s strategic direction. When we aggregate individual companies’ strategic funding decisions, we get an overall trend analysis that shows the economically critical business direction that segment is taking. 

    Budgets and funding can be the canary in the coalmine when it comes to projecting future trends in the biopharmaceutical industry. Examining whether biomanufacturers and contract manufacturing organizations (CMOs) are planning to increase or decrease spending in critical areas gives a good indication of the current health of the industry and the projected growth, or contraction, expected in the future. In BioPlan Associate’s “14th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production,” we surveyed 227 biomanufacturers and CMOs about their budget and planned expenditures. We looked at not only general increases or decreases, but also, over the past eight years, the specific areas those in the industry are planning budget shifts.

    Big picture budget issues
    Budgets are typically based on pressing strategic needs, and in bioprocessing, when asked what the single most important biomanufacturing trend or operational area on which the industry should focus its efforts, “Manufacturing productivity/efficiency” was the top answer for the fourth year in a row. Biomanufacturers are indicating they want to produce more and do it more efficiently. This clearly factors into budgetary concerns.

    We began measuring budget shifts amidst the drastic economic slowdown beginning in 2008. And current and projected budgets for the biopharmaceutical industry are at some of the highest levels we’ve observed since then. We have asked manufacturers and CMOs their budget trends in 12 key areas since 2009. Over that time, we’ve seen budget swings. But in BioPlan’s 14th Annual Report, we see increases for budgets this year in every area. Not only that, the percent increase reported is the largest ever since 2009 for every category except one (see Figure 1 for selected budget areas).

    Increased budgets for new capital equipment
    The trend toward the highest increase in budgets in nearly a decade is a clear indication of growth in the industry. The overall picture is important, but examining which areas are seeing the biggest growth is even more informative. From Fig 1, the biggest change was reported in “New capital equipment,” where biopharmaceutical manufacturers and CMOs are reporting an increase of 10.6% for 2017. Budgets for new equipment have been steadily increasing since 2014, indicating the industry’s ability to continue to grow and reinvest in current and future equipment expansions. This is in sharp contrast to the decrease in the budget for new equipment reported in 2009.

    Another area related to new capital equipment, signaling long-term growth, is “New facility construction.” Biomanufacturers and CMOs are planning a 6.5% increase in budgets for new facilities. While this is an increase over the last couple of years, this is another area that has seen growth in expenditure the last few years, and has recovered dramatically from a decreased budget in 2009-2010.

    The concerns that the industry may have built too much capacity for the pipeline, which surfaced in 2007-2008, resulted in a slowing of new capacity investment while demand and existing supply evened out. The industry is now pivoting towards increasing facility capacity since the fears excess capacity have abated. The increased budgets for new facility construction and new capital equipment are solid indications that the industry is anticipating future growth.

    Growth in new technologies for downstream and upstream processing
    Another area of anticipated growth, based on projected budgets for this year, is in new technologies. Perhaps this is not much of a surprise as companies are constantly investing in new technologies to grow and change, adapting to innovations like single-use systems and continuous bioprocessing. In this case, biopharmaceutical manufacturers and CMOs reported an 8.8% and 7.7% anticipated increase in 2017 budgets for “New technologies to improve efficiencies/costs for downstream production” and “Upstream production,” respectively. Both of these areas have seen fairly steady budgetary growth in the last 3-4 years. These two categories being the second and third highest expected budgetary growth is not surprising when manufacturing productivity and efficiency is rated the most important trend for the industry.

    Downstream processing is often the limiting factor in facility capacity. Chromatography, purification capacity, and filtration tend to be significant budgetary concerns. Large increases in protein expression levels over the past few years have increased pressure on downstream operations and created bottlenecks. Many of the challenges in this arena involve cost. Cost of chromatography materials, cost of membranes, and costs of cleaning and validation are all factors contributing to downstream processing bottlenecks and limiting facility capacity. However, the industry is clearly aware of these budgetary issues, as they have indicated an increase in budget for new technologies for downstream production for the last 4 years, with 2017 being the largest increase ever reported.

    Staff hiring and training budgets at all-time high
    The budgets for staffing are also all being reported at historically high increases. In our survey, we have staffing broken down into 3 different categories. “Training for operations staff” was reported as having the highest increase ever seen at 7.3% for 2017. The hiring budgets for new operations staff and new scientific staff are also expected to have increased budgets this year by 6.9% and 5.7%, respectively.  Training is a critical function in bioprocessing, and often correlates to difficulties in hiring operational staff. Productivity increases are typically accompanied by staffing and training budget demands. And future hiring and training can be a bellwether of projections for even further expansions.

    Outsourcing budgets
    Interestingly, outsourced biopharmaceutical manufacturing is expected to have a relatively small increase in budget this year, only 2.8%. Taken together, this may indicate a flattening or general slow-down of outsourcing, also indicating that biopharmaceutical manufacturers may seek to do their production in-house, rather than increase their overall outsourcing. Even with this relatively low average increase, over 42% of biomanufacturers will be increasing their outsourcing budgets at least somewhat in 2017, up from 36% in 2016. 

    These trends are further confirmed elsewhere in our survey where we asked specifically about outsourcing. We measured the percentage of facilities expecting to outsource substantial production within the next five years (by 2022). We queried regarding mammalian, microbial, yeast, plant and insect systems. In Figure 2, we note that the only type of production expected to generally maintain its outsourcing projections over the next 5 years is mammalian cell culture. In all other areas, manufacturers expect a decrease in outsourcing, including microbial fermentation. It will be interesting to see if the projected outsourcing is an accurate indicator of actual outsourcing over the next 5 years. Historically, mammalian cell culture has been by far the largest segment, and has been increasingly outsourced, but all other areas have been difficult to predict and sometimes shown drastic shifts in expected percentages of outsourcing from year to year.

    Budget trends of biopharma suppliers
    Biopharmaceutical manufacturers and CMOs are of course the key industry players. However, the opinions of vendors and suppliers for the industry are equally critical in mapping future trends. In BioPlan’s 14th Annual Report, we also asked 131 respondents employed by suppliers about their budgets.

    Perhaps unsurprisingly, the budget trends seen for vendors somewhat mirror those seen for manufacturers and CMOs. As seen in Figure 3, vendors are also projecting increased demand, so budgets for “New capital equipment” (6.2%) and “New facility construction” (6.3%) were both reported at historically high levels of anticipated increases over the next year. However, unlike manufacturers and CMOs, those were the only two categories that were reported at such high levels for this year. Most other areas saw either modest growth or a slight decrease in the expected budget for 2017.

    Hiring new scientific staff and new commercial staff both saw an increase in budgets for this year over last year, but both of those categories were somewhat lower than the high reported in 2013-2014. And hiring new operations staff actually saw a small decrease in budget for this year compared with 2016.

    Based on our analysis, while vendors have clearly recovered from the economic downturn in 2008-2009, they may be operating currently at sufficient capacity to meet the robust growth needs of their biomanufacturing and CMO customers. Separately, we asked vendors to indicate their general sense of optimism about the market. Data indicate a dramatic increase in the percentage of vendors expecting continued ‘above-average’ expectations for financial performance in 2017. With 41% more vendors indicating that they expect to do ‘much better’ this year, compared to last.

    While the anticipated budgets are mixed, with 5 of 11 categories reported as an increase for 2017, there are no sharp decreases, and all areas are greatly improved over 2009 budgets.

    Will budgets continue to increase?
    Biomanufacturers, CMOs, and suppliers, may all have more budget available and are continuing to recover at a healthy pace from the economic downturn. Manufacturers continue to work leaner and harder, trying to do more with less, and we are seeing that the budgetary restrictions are loosening in all areas, particularly those that show far reaching and long-term confidence in the industry, such as new equipment and facility construction.

    The focus remains on productivity, which includes cost-cutting measures. Although, it seems that in 2017, companies are looking at efficiency rather than straight cost-cutting since the budgets are expected to increase across the board. As the industry continues to grow and adapt, as it deals with broad factors such as new technologies, companies are continuing to increase budgets by historically high levels in nearly every category. This is an industry whose products are simply needed, and biopharmaceutical products have shown themselves to be largely immune to the worldwide economic problems and recessions.

    There is a concern that mergers among large vendors may result in reduced competition, and increased prices. But at present, the new products, innovation, and profitability appear to be relatively in balance, and our study shows, in separate questions, that pricing increases are not ramped up significantly over the past eight years.

    The large increases in budgets across the board for manufacturers and CMOs indicate that the biopharmaceutical industry may be headed in a positive direction. Budget increases in long-term investments such as new facilities, equipment, and technologies paint an optimistic picture for the future of the industry. 

    References
    1. 14th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, April 2017, BioPlan Associates, Inc.  www.bioplanassociates.com


    Eric S. Langer
    BioPlan Associates

    Eric S. Langer is president and managing partner at BioPlan Associates, Inc., a biotechnology and life sciences 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.  elanger@bioplanassociates.com  301-921-5979.  www.bioplanassociates.com
    Related Searches
    • it
    • filtration
    • production
    • single-use systems
    Suggested For You
    Heading to BIO 2017! Heading to BIO 2017!
    Evotec Opens U.S. HQ in NJ Evotec Opens U.S. HQ in NJ
    Current Trends in Analytical Testing Current Trends in Analytical Testing
    CMOs & Biosimilars Mfg. in the U.S. CMOs & Biosimilars Mfg. in the U.S.
    Elemental Impurities: A Virtual Company Perspective Elemental Impurities: A Virtual Company Perspective
    CMOs Hiring Constraints:  Cell Therapy Manufacturing Expecting Future Challenges CMOs Hiring Constraints: Cell Therapy Manufacturing Expecting Future Challenges
    Contract Manufacturing in the Supplement Industry Contract Manufacturing in the Supplement Industry

    Related Columns

    • Biologics, Proteins, Vaccines
      Innovate UK Grant Supports Viral Vector Manufacturing

      Innovate UK Grant Supports Viral Vector Manufacturing

      Cobra Biologics talks about its recently awarded $3.4 million capital infrastructure investment
      Betsy Louda, Associate Editor 04.10.18

    • Biologics, Proteins, Vaccines | Injectables
      A World of Innovation

      A World of Innovation

      The importance of innovation in the injectable business and the hurdles a CDMO faces
      Claudia Roth, Vetter Pharma-Fertigung GmbH & Co. KG 11.07.17

    • Biologics, Proteins, Vaccines
      India is an Emerging Hub  For Low-cost Vaccines

      India is an Emerging Hub For Low-cost Vaccines

      Improvising basic vaccines to enhance stability, efficacy and compliance
      S. Harachand, Contributing Editor 11.07.17


    • Biologics, Proteins, Vaccines
      Flu Season is Upon Us

      Flu Season is Upon Us

      My chance and capricious Monday afternoon run-in with antiscience nonsense
      Ben Locwin, Contributing Editor 11.07.17

    • Biologics, Proteins, Vaccines

      Biomanufacturing Trends and Outlook 2017: Where Is It All Going?

      A look at the technological advances permeating (bio)pharma manufacturing
      Ben Locwin, Contributing Editor 04.20.17

    • Biologics, Proteins, Vaccines
      CMOs Hiring Constraints:  Cell Therapy Manufacturing Expecting Future Challenges

      CMOs Hiring Constraints: Cell Therapy Manufacturing Expecting Future Challenges

      Technically trained staff needed to run complex manufacturing platforms, automation
      Eric S. Langer, BioPlan Associates 03.07.17


    • Biologics, Proteins, Vaccines

      Year-End Trends in Biopharma Contract Manufacturing

      Budgets are flattening, but some CMOs are well positioned for growth
      Eric S. Langer, BioPlan Associates 11.09.16

    • Biologics, Proteins, Vaccines

      Economics of In-House Buffer Preparation

      Evaluating the cost effectiveness of keeping basic ops in-house
      Eric S. Langer, BioPlan Associates 09.08.16

    • Biologics, Proteins, Vaccines | cGMP Manufacture | GMPs/GCPs | Preclinical Outsourcing | Process Development | Risk Management

      Getting to Yes

      The critical attributes CMOs need to demonstrate to win business
      Eric S. Langer, BioPlan Associates 07.14.15


    • Biologics, Proteins, Vaccines | Biosimilars | Capsules | Extractables and Leachables | Facilities | Fill/Finish | GMPs/GCPs | Inspections | Logistics | Lyophilization | Methods Development | Process Development | QA/QC | Serialization | Supply Chain | Validation

      CMOs Facing Significant Capacity Constraints

      Downstream purification creating chronic problems
      Eric S. Langer, BioPlan Associates 06.02.15

    • Biologics, Proteins, Vaccines | Biosimilars | Capsules | Extractables and Leachables | Facilities | Fill/Finish | GMPs/GCPs | Lyophilization | Process Development

      7 Top Trends in Biomanufacturing Outsourcing

      Keep your eye on these trends in 2015.
      Eric S. Langer and Jean-Claude Lupis, BioPlan Associates 01.29.15

    Breaking News
    • Nestlé Health Licenses Codexis’ CDX-6114
    • SK, Arvelle Sign $530M Deal for Antiepileptic Drug
    • GS1 Delivers Lightweight Messaging Standard For Verification of Product Identifiers
    • Progenics Launches Mfg. Ops in NJ
    • Charles River to Pay $510M for Citoxlab
    View Breaking News >
    CURRENT ISSUE

    January/February 2019

    • DCAT Week ’19
    • Temperature-Controlled Logistics
    • Reducing Pill Burden
    • Nasal Drug Delivery
    • AI in Pharma: Transforming Data into Drugs
    • Digitization: Pharma 4.0
    • Serialization Compliance: Understanding the Challenges
    • FDA & Data Integrity
    • Rising Demand for Lyophilized Products
    • Future Trends in the CDMO Space
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • privacy policy
    • term and condition
    • about us
    • contact us

    follow us

    Subscribe

    magazines

    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image

    Copyright © 2019 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login