Almac Group is a global contract development and manufacturing organization (CDMO) that provides a range of services to the pharma and biotech industries including drug discovery, development, and commercialization, as well as clinical trial supply services and active pharmaceutical ingredient (API) development and manufacturing.

On March 6, 2024, Almac announced the expansion of commercial manufacturing and packaging operations, as well as peptide production capacity, at its headquarters campus in Craigavon, Northern Ireland.

On the heels of the news, Contract Pharma talked with John McQuaid, president and managing director of Almac Pharma Services, about the most recent investment in expansion, as well as broader trends impacting the CDMO industry, including Novo Holding’s recent acquisition of Catalent.

Contract Pharma: What can you tell me about Almac’s recent investments and plans for future growth?

John McQuaid: We’ve just completed two facilities at our Craigavon campus. The first of these two major projects is a 32,000 square foot custom-built high-volume facility that significantly increases commercial manufacturing and packaging of sachet drug product presentations.

The second project is a 28,000 square foot GMP facility that more than doubles peptide API manufacturing capacity. It will enhance synthesis, purification and isolation capabilities and meet anticipated demand for clinical development and commercial products.

These two new facilities are just the latest part of a $500 million investment program covering many areas of our business from drug substance peptides through to drug product to clinical packaging, labeling, distribution, and diagnostics as well.

For example, we previously announced another significant investment at the Craigavon campus in a multi-product, drug product facility. That one is due to come online later this year. A diagnostics facility is nearing completion as well and we have increased our API manufacturing capacity at the site in Craigavon too. In the U.S., we’re investing in a significant expansion of our clinical packaging, labeling, and distribution site while also investing in cryogenic capabilities.

Almac is always growing and thinking about the future. As we complete these facilities, we’re already thinking about what comes next. The ambition is to continue to grow the organization to meet Pharma’s needs.

CP: What must CDMOs be doing going forward to remain reliable?

McQuaid: Reliability, customer service, and delivery performance are all part of Almac’s DNA. I think I’d probably turn that question around slightly and ask, “What do the Pharma companies need to do to ensure they’re getting and maintaining reliable service out of their CDMOs?”

For me, that comes back to really assessing each company’s ownership structure and the stability of the organizations that they’re working with while also looking at whether their business strategy, goals and cultures are aligned. So, I definitely think moving forward there’s going to be much more scrutiny on the stability and long-term strategy of CDMOs to make sure they are reliable partners long into the future.

It’s also important that Pharma companies understand not all CDMOs are built the same. I think that is an important message to convey. Almac is a bit different from other CDMOs in the industry in that we are privately owned by a charitable foundation with 100% profits reinvested back into our business. As a result of this unique ownership structure, Almac cannot be bought or sold. This means that we have a long-term focus and strategy in play and can provide stability and confidence that our partnerships will endure well into the future. While this is something that we receive positive feedback on all the time from Almac’s longer term strategic clients, it’s perhaps something that we have not vocalized enough to the wider industry.

CP: What was your initial reaction to Novo Holding’s acquisition of Catalent?

McQuaid: I was surprised, but not shocked. There were rumors in the not too distant past that Catalent was maybe in play as an acquisition target after some financial struggles. At one point it was reported by several news outlets that Danaher Corporation was looking at them.

CP: What does this deal say about the future of the CDMO model?

McQuaid: The Pharma industry never stands still. Mergers and acquisitions are quite common on both the Pharma company side and within the CDMO sector. In fact, we see smaller CDMOs getting bought all the time. While the Catalent acquisition is a big deal, I don’t think there’ll be a huge trend towards Pharma companies acquiring other big CDMOs. I also don’t see a reversal of the trend of Pharma outsourcing to CDMOs.

Big Pharma have always maintained a mixture of internal capabilities as well as strategically using outsourcing for their needs and this will continue. Outsourcing will stay. I don’t see a major drive backwards as that has massive capital implications.

There are many different types of companies that will have to continue to outsource. For example, there a lot of smaller companies these days taking products further through development and even to commercialization. Investing in capital assets for them at their scale probably isn’t an option most of the time. So, I think these smaller pharma companies and biotechs will continue to drive demand for outsourcing services.

In our experience, having taken multiple products through development to commercialization, it is not unusual for there to be a lot of change on the client side whether that be in terms of the personnel we interact with, or on occasions the molecule itself changing hands. Ironically, in these scenarios, we find ourselves as the CDMO being the constant through the lifecycle of the drug.

In terms of Big Pharma, over the course of the last couple of decades we’ve seen their perception of CDMOs change, realizing the advantages partnering offers in terms of greater flexibility. Outsourcing frees up resources, capital, and expertise within large Pharma companies, allowing them to focus on exploring new research frontiers. 

In fact, as the demand for outsourcing services continues to grow, I’m seeing more rigor and assessment of outsourcing partners, particularly among large Pharma partners for strategically important products. The alignment between the Pharma company’s business goals and strategy and their outsourcing partners strategy is going to become increasingly important.