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Biopharmaceutical outsourcing has increased markedly in recent years with a greater volume of work previously kept in-house being handed over to third party contractors.
The trend is evident in the balance sheets of the larger CDMOs, which suggest biopharma outsourcing may even be outpacing gains made in the small molecule contracting sector.
Fiona Barry, editor at PharmSource – a GlobalData product told us, “If you look at the FY 2017 results from public CMOs, there were strong signs of growth in the biologics sector -- Samsung and WuXi had aggregate revenues over $600M, mostly stemming from US customers.
“In contrast,” she continued, “small molecule APIs had a less exciting year but the results were still solid -- all the major participants grew, and the smaller players PCAS and Bachem showed double-digit growth. The finished dose sector saw mostly low growth.”
The biopharmaceutical industry was slower to embrace outsourcing than the small molecule drug sector. Partly, this was because production of biologics is more technically challenging than drugs made using chemical synthesis.
Another factor was the lack of specialist bioprocessing capacity in the contracting sector. As a result, most developers chose to manufacture their own products in house with only tasks for which there was existing capacity in the CDMO sector, like fill-finish, being handed over to contractors.
The dynamic has now changed. More developers are outsourcing manufacture of their products with some like France’s Sanofi forging partnerships in which the contractor takes on most of the production work .
And going forward certain types of biologics contracting are likely to be more in demand than others according to Barry, who predicts that demand for cell therapy manufacturing and related services will grow.
She told us, “We expect to see a shift towards outsourcing more cell therapy manufacturing in the near future with the coming wave of cell therapy approvals.
“Although there are fewer CMOs in the cell therapy space at the moment than in small molecule pharma or the biologics space, it’s clear that cell therapy manufacturing volumes will rise in the next five years as these products move from the clinic.”
This demand is likely to benefit contractors that can invest in the production technologies needed to undertake cell therapy Barry said, explaining that currently much of this type of work is carried out using ad-hoc systems.
“At present, most cell therapy production is conducted in the lab by PhDs often using repurposed blood banking equipment, to the commercial stage. The industry is going to need to overhaul manufacturing methods and automate to keep up.”
Barry added that, “This could be an opportunity for CMOs to invest in technology and capacity to help protect cell therapy companies from inefficiency and mistiming capacity building, avoiding the problems Dendreon ran into with Provenge.”
For the uninitiated, Provenge was a treatment for benign prostatic hyperplasia that was developed by Dendreon. Production of the cell therapy proved to be highly complex, a logistical challenge and, ultimately, a major financial hurdle .
Prefilled syringes and facilities
Biophamaceutical delivery devices are another are of opportunity for CDMOs according to Joern Leewe, a partner at EY-Parthenon, who told us, “Prefilled syringes is an area with increasing interest.”
Partly this is because drug companies are keen to make their products easier to use for physicians and patients.
However, growing biopharmaceutical industry interest in prefilled syringes also reflects a desire to differentiate products from follow-on biologics and biosimilar competitors .
CDMOs may also have the opportunity to gain additional manufacturing capacity according to Leewe, who told us he, “expects approximately 200 site divestments from pharma companies during 2018.”