Biopharmaceutical products continue to expand globally, spurring growth in related bioprocessing supplies and services, which are tracking along with this worldwide growth. Over the past 20 years, the broader pharmaceutical industry has integrated biopharmaceuticals into its portfolio of therapeutics. In fact, many leading pharma companies are now dependent on these products for their pipeline and revenue. An estimated 40% of all pharmaceutical R&D expenditures and products in the pipeline, likely up to 5,000, are biopharmaceuticals. A significant portion of this development pipeline, ≥1,500 products, is follow-on biopharmaceuticals, mostly biosimilars but many biogenerics and biobetters.² Follow-on product development mostly involves adopting current vs. legacy bioprocessing technologies, with cost-effective manufacturing needed for these products to be competitive.³

A large portion of the biopharmaceuticals coming to market involve therapeutics for smaller markets, or currently untreatable indications, making them particularly needed. With their cost of manufacture generally much higher, biopharmaceuticals (vs. drugs) tend to be developed for indications generally lacking current good options for treatment, assuring them of markets upon launch along with willingness to pay higher prices. In recent years, this has included a growing number of products for orphan indications.

Biopharmaceuticals Market Growth
Biopharmaceuticals (vs. drugs) have now for decades proven themselves to be profitable, e.g., with higher profits per sale and likelihood of attaining success, including products making it through the development pipeline, gaining approvals, and capturing market share. Total product revenue (sales) for biopharmaceuticals has been growing steadily at ≥12% annually since the initial market launches of recombinant proteins three decades ago; and many biopharmaceutical manufacturing-related benchmarks have much the same growth rates. Current (mid-2018), worldwide biopharmaceutical revenue is at a rate of ~$275 billion/year. The world market for recombinant protein therapeutics is now ~$150 billion; and the world market for all pharmaceuticals in now ~$1.1 trillion. 

Consistent growth in biopharmaceutical revenue and manufacturing is primarily due to new products entering world markets; and secondarily, expansion of markets for existing products, particularly for new indications. Approvals in 2017 included a record number and the highest proportion of products being recombinant vs. non-recombinant. Note, despite the ups-and-downs with approvals, the related increases in terms of annual biopharmaceutical revenue have generally remained much the same from year-to-year, ≥12%.

New Product Classes Bringing Growth
New classes of products are expanding world markets as recombinant and monoclonal antibodies are increasingly becoming ‘legacy products’ that are being targeted for biosimilars and biogenerics development. First-in-their-class approvals of cellular and gene therapy products were granted by FDA in 2017, including two autologous (patient’s own cells cultured) CAR-T cell products incorporating gene therapy modifications and a viral vector gene therapy product. This is just the start of an expected rapid growth in cellular and gene therapies. Product development is intense such that there is currently an estimated 400%-500% shortfall or ‘capacity crunch’ in terms of available manufacturing capacity, particularly among CMOs.⁶ That is, five times the current cell therapy manufacturing capacity would be used if it were available. And although at present the total capacity required is rather small, there is a projected very large cell/gene therapy capacity shortfall likely to occur within the next five years. As an indication, anecdotal insights from current CMOs indicate an average backlog to start a cellular/gene therapy project at a competent cell therapy CMO is now 18 months. The few leading CMOs in these sectors are building capacity to handle their backlogs of R&D and clinical supplies projects, with none yet building what will be needed to support commercial manufacturing of these products. 

As a cautionary tale, in the early 1990s, many now Big (Bio)Pharma companies built huge and terribly inefficient manufacturing facilities, e.g., ≥100,000 L monoclonal antibody manufacturing facilities operating at ≤3% of current productivity (titers) using less-than-optimized methods. We similarly expect established companies to focus on the cellular and gene therapies sectors, including supporting expansions of manufacturing worldwide. The cellular/gene therapy sectors, like the early mAb manufacturers, will find it necessary to spend whatever is needed to commercialize and market their products. As a result, suppliers to cellular/gene therapy facilities will see significantly increased sales of bioprocessing supplies relative to conventional bioprocessing, because cellular therapies bioprocessing at present tends to consume more materials. For example, large amounts of single-use equipment are used for manufacture of each single autologous patient’s product or allogeneic (multi-patient) batch/lot, e.g., often up to 200 fluid transfers (connectors, containers, etc.), multiple cycles of cell culturing-washing-separation, etc. 

Biosimilars and other follow-on biological products are another rapid growth area, with patents expiring on many established biopharmaceuticals. Follow-ons include biosimilars and biobetters in developed countries and biogenerics in developing countries. The Biosimilars/Biobetters Pipeline Directory currently tracks >960 biosimilars/biogenerics in development or marketed.² Follow-ons are bringing in many new biopharmaceutical players, with many constructing their own facilities, often single-use-based. This includes generic pharmaceutical companies and new entrants based in China, India and other developing countries increasingly entering the biopharmaceutical industry through follow-on products.
Other factors leading to increases in the number of biopharmaceutical facilities and manufacturing worldwide include:

• Backup/second-source facilities: Manufacturers of most every commercially successful biopharmaceutical sooner or later, need to have a second manufacturing source for each product, whether a CMO or another company-owned facility. The risks to products and company survival from not being able to meet market demand are too high for any manufacturer to ignore;
• Developing countries are increasingly demanding foreign biopharmaceutical companies manufacture products domestically or partner with local companies to address domestic markets. Various counties’ governments, e.g., Brazil, are slowly developing their own captive biopharmaceuticals manufacturing facilities and markets. China, in particular is rapidly growing their bioprocessing segment (see below); and
• A slow-down in large company acquisitions of other large companies is having a positive effect, with companies investing more in developing manufacturing infrastructure vs. in mergers and acquisitions (M&A) to distract investors.

Productivity Continues to Increase
A factor contributing to lower costs for bioprocessing, allowing this to be done at smaller scales, while the numbers of products, facilities and process lines increase, resulting in overall market growth, is the slow but steady increase in bioprocessing productivity, particularly upstream bioreactor titers.⁷ Average titers, e.g., for mAbs manufacturing, have increased from about 0.1 g/L three decades ago to now about 3.8 g/L, with growth in productivity paralleling growth of biopharmaceutical product markets with similar ≥12% average annual increases. Downstream/purification yields have not increased much in recent decades, but purification now includes more options, including membranes replacing chromatography columns and continuous chromatography starting to enter the market.

The largest growth in biopharmaceutical manufacturing in the past decade has been in single-use systems, disposable bioprocessing supplies. These now totally dominate pre-commercial—R&D and clinical scale—biopharmaceutical manufacturing, accounting for ~85% of this segment of bioprocessing; and developing manufacturing capacity measured as total bioreactor volume is quicker and more adaptable to needs. However, larger-scale commercial manufacturing continues to be dominated by fixed stainless steel-based manufacturing, with this still more cost-effective at large(st) scales. Although there are fewer stainless steel facilities being constructed, with single-use systems starting to be adopted for commercial manufacturing, there continues to be dramatic expansion of stainless steel commercial manufacturing capacity, exemplified by the new super-sized facilities of Samsung and Celltrion in S. Korea, with these facilities having >500 million L total capacity.

Numerically most new facilities and process lines will increasingly be single-use based. Recurring costs for equipment are much higher with single-use vs. fixed stainless steel, with totally new equipment swapped-in with each new run/batch/lot. So the single-use facilities-related bioprocessing supplies market has expanded more rapidly than that for stainless steel systems. There will be increased single-use facilities at the expense of stainless steel ones in the future as more orphan, biosimilar and other products with smaller markets, less product needed to be manufactured, continue to receive approvals, and as scaling-out with single-use bioreactors is adopted for commercial manufacturing.

Market Expansion in Asia and Globally
Biopharmaceutical manufacture outside of the developed major market countries is increasing rapidly. BioPlan’s Top 1000 Global Biopharmaceutical Facilities Index ranks the top 1,000+ facilities worldwide in terms of known or estimated bioprocessing capacity (cumulative onsite bioreactor volume), number of biological products manufactured, and bioprocessing-related employment.8 Over the past eight years, we have identified and tracked global facilities, including recombinant products, vaccines, biosimilars, and veterinary biologics. The database excludes blood and plasma-derived therapeutics, synthetic peptides and diagnostics.

The database now tracks over ~16.5 million L of active production capacity at over 1,500 facilities worldwide, including 6 million L (37%) in the U.S./Canada, 5.5 million L in Western Europe (33%) and 4.7 million L (25%) in Asia Pacific, including 870 thousand L in China and 941 thousand L in India. These capacity figures are significantly higher than other available capacity data resources, partly because we include active capacity from all global sources, including biogeneric production, veterinary vaccines, and non-GMP capacity that may be used for therapeutics in lesser regulated markets. While such facilities may not currently be selling biologics in regulated western markets, they should be counted as part of global capacity. Further, their needs for bioproduction tools, technologies and services may be as important to their domestic markets as they are in developed markets.  In addition, given the global nature of biopharmaceuticals, many of these facilities may eventually, in the not-too-distant future, be producing API, biosimilars, or finished innovative biologics for global markets.

Much new manufacturing capacity is being added internationally, with biopharmaceutical markets in many developing countries growing and more domestic companies increasingly serving these markets, generally with biogeneric copies of innovator products. Advances in bringing biopharmaceutical manufacturing capacity online have been particularly notable in China and India.^9,10 Major growth in biopharmaceutical CMO capacity is expected in China, with regulations changing to allow third parties (CMOs) to be hired to manufacture clinical and commercial biopharmaceutical products. Otherwise, China is building capacity and adopting newer technology faster than India, and will be pulling ahead of India in terms of demand for biopharmaceutical manufacturing and related services. Much of India’s well established biologics manufacturing expertise and capacity centers on vaccines production, while China’s is seeking to expand in a broad range of platform areas.

These and other foreign countries bioprocessing capacities are growing at a much more rapid rate than major Western markets, but since most have recently started from near-zero baselines, this growth rate will likely taper off. However, developing countries for the foreseeable future do not pose a threat to U.S. and European dominance of the biopharmaceutical industry, particularly highly profitable innovative product development and manufacturing. Regardless, the demand in developing regions for bioprocessing tools and services will continue to grow.

Many large companies in China, India and other developing countries are bringing commercial-scale biopharmaceutical manufacturing and CMO facilities online to serve domestic and regional needs, including many targeting eventual full cGMP manufacture to supply Western markets. Markets for bioprocessing supplies and services are increasing in developing countries. Various major bioprocessing suppliers have been reporting double-digit sales growth in Asian markets. There are currently just small but growing amounts of bioprocessing supplies being manufactured in developing countries, notably China, with these currently targeting domestic non-GMP research and biogenerics manufacturing markets. But the companies in China, India, Brazil and elsewhere that are targeting eventual sales in highly-regulated countries are mostly investing in U.S.- and European-sourced GMP-ready bioprocessing supplies.

Market (Facilities) Distribution
Biopharmaceutical manufacturing (bioprocessing) facilities compose the great majority of the manufacturing-related supplies and services, with R&D facilities just a small portion. BioPlan estimates from our Top 1000 Bio database and other data resources total worldwide bioprocessing capacity is now ~16.5 million L. Table 1 presents some top-level capacity and facilities data. 

The online Top 1000 Global Biopharmaceutical Facilities Index contains records for over 1,050 facilities, those facilities with ≥500 L capacity, accounting for 99.5% of the total capacity worldwide.⁸ Facilities with ≥1,000 L capacity are generally involved in commercial products manufacturing, with these facilities having 98.7% of worldwide capacity. An estimated 68% of the ≥15 million L culture/fermentation-based capacity (capacity for blood/plasma products excluded), ~10.2 million L, is mammalian, the great majority for manufacture of monoclonal antibodies, nearly all using CHO host cells. Essentially all the rest, ~5 million L, is microbial, most all of which is using E. coli host cells.

Regional Concentration of Bioprocessing
Because capacity is only one measure of a region’s bioprocessing presence, we assess regional capability based on four factors: Capacity, bioprocessing employment, number of commercial biologics at a facility, and number of clinical-scale biologics being produced. We use these data to create a ranking scale for each facility. This “Facility Index” can then be used to define a region’s overall concentration, and these total numbers can be used to more accurately compare and predict where robust capacity and employment is occurring. Regional distribution of facilities and capacity is shown in Table 2.

The U.S. and Western Europe continue to be the leaders in biopharmaceutical R&D, number of companies, and biopharmaceutical revenue. This is reflected in facilities and capacity data, with Average Capacity/Facility being an indicator of average size of facilities.  North America is the leading region in terms of total manufacturing capacity, very closely followed by Europe and then Asia. Besides having the most capacity, the U.S. has the largest number of development facilities, which reduces its Average Capacity/Facility.

Supplies and Services Markets
Based on our analyses over the past 28 years, the market for bioprocessing tools, materials and services continues to grow at between 12 and 14% annually.¹¹ The current worldwide market for biopharmaceutical manufacturing-related goods and services, the direct costs of products manufacturing, is currently ≥ $22.0 billion or ~8.0% of current biopharmaceuticals revenue. This includes bioprocessing supplies and CMO, CRO and other services. This does not include in-house staff or indirect costs, including costs of financing/debt servicing, utilities, real estate, internal storage, managerial overhead, and other infrastructure-type costs.

Bioprocessing supplies is a healthy, consistently-growing market, with growth generally tracking that of related products’ revenue. Those facilities performing late-stage and, particularly, commercial manufacturing account for about 90% bioprocessing supplies consumption and revenue, e.g., just the Protein A resins used for initial monoclonal antibody purification for a large-scale bioreactor run can cost $millions. This includes the 600+ facilities worldwide each with ≥1,000 L capacity known to be commercially manufacturing products. 

BioPlan’s annual survey data are showing that biopharmaceutical industry outsourcing is becoming more strategic and long-term.¹¹ Companies, including Big Pharma that formerly eliminated in-house capabilities to cut staffing and outsource feasible operations are now taking a more sophisticated approach. Companies carefully evaluate and weigh their manufacturing options, including assessing options from longer-term perspectives. 

Conclusions
Growth in the biopharmaceutical manufacturing-related supplies and services markets continues steadily, closely paralleling growth of biopharmaceutical products revenue, generally in the 12%-15%/year range. These markets are growing about twice the rate of those for non-biopharmaceutical products (primarily small molecule drugs). There is every reason to assume that future growth in biopharmaceutical sales and related manufacturing markets will continue, nearly doubling about every 5-6 years. 

References
1. Rader, R.A. “(Re)Defining Biopharmaceutical,” Nature Biotechnology, vol. 26, 743–751, 2008.
2. Rader, R.A., Biosimilars/Biobetters Pipeline Directory, online database at www.biosimilarspipeline.com).
3. Rader, R.A., Biosimilars Paving the Way for Cost-Effective Bioprocessing,” Biosimilars Development, https://www.biosimilardevelopment.com/doc/biosimilars-paving-the-way-for-cost-effective-bioprocessing-0001, Aug. 23, 2017.
4. Rader, R.A., BIOPHARMA:  Biopharmaceutical Products in the U.S. and European Markets:  U.S. Approvals, 2002-present,” list online at http://www.biopharma.com/approvals.html.
5. Rader, R.A.,  BIOPHARMA:  Biopharmaceutical Products in the U.S. and European Markets, online database at www.biopharma.com.
6. Rader, R.A., "Cell and Gene Therapies: Industry Faces Potential Capacity Shortages," Genetic Engineering & Biotechnology News (GEN), 37(20), Nov. 15, 2017.
7. Rader, R.A., Langer, E.S., “Thirty Years of Upstream Bioprocessing Improvements,” BioProcess International, 14(2), Feb. 2015, p. 10-14.
8. Langer, E.S., Rader, R.A., “Top 1000 Global Biopharmaceutical Facilities Index,” online database at http://top1000bio.com.
9. Xia, V., Yang, L.C., Langer, E.S., Directory of Top 60 Biopharmaceutical Manufacturers in China, 357 pages, Feb. 2017.
10. Xia, V., Yang, L.C., Langer, E.S., “Chinese & Indian GMP Biologics Exports - Surveying The Current Landscape,” Bioprocess Online, https://www.bioprocessonline.com/doc/chinese-indian-gmp-biologics-exports-surveying-the-current-landscape-0001, June 2, 2017.
11. Langer, E.S., et al., Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, 14th edition, BioPlan Associates, April 2017.

---

Ronald A. Rader is senior director, technical research at BioPlan Associates. He has more than 25 years of experience as a biotechnology, pharmaceutical and chemical information specialist and publisher.

Eric S. Langer is president and managing partner at BioPlan Associates, Inc., a biotechnology and life sciences marketing research and publishing firm. 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