Growth in Biologics Market Inspires Outsourcing

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Biologics, including cell and gene therapies, have continued their upward trend in the pharmaceutical industry in the past few years. Pharma companies are investing in these therapies, and FDA has been encouraging the development of generic versions of already established biologics (1). Biologics, however, are costly to develop and manufacture, causing a variety of pharmaceutical companies to turn to contract development and manufacturing organizations (CDMOs). In response to this demand, CDMOs are continuing to invest in biopharmaceutical services and manufacturing facilities.

“The industry is investing in an increasing number of API biologics (cell, gene, vaccine, and virus therapies), although this still accounts for a low proportion of CapEx [capital expenditure] projects in the period 2019–2025 (7%). The use of cell and gene therapies in the market is not well established, and the required manufacturing costs and level of expertise are high. CapEx projects involving API chemical or commercial solid-dose manufacturing as a percentage of total CapEx has decreased between the period 2016–2018 and 2019–2025,” says GlobalData Analyst Adam Bradbury.

Shiva Khalafpour, vice-president, head of Commercial Mammalian and Microbial Development and Manufacturing at Lonza, agrees. “The biotechnology sector is projected to grow faster than the conventional pharma sector (9% vs. 6% CAGR [compound annual growth rate] 2019–2024). The strong venture capital funding for biotech companies will continue to support a healthy growth that positively impacts the outsourcing sector.”

GlobalData’s report, Gene Therapy Market Opportunity for CMOs–2019 Edition, shows an investment by CDMOs in greater capacity for anticipated gene therapy pipeline products, either through acquisitions or building facilities (2). “Some pharma companies including Pfizer and bluebird bio are also investing in gene therapy manufacturing facilities for excess capacity contracts or for in-house manufacturing of proprietary therapies. Cobra Biologics Ltd, Symbiosis Pharmaceutical Services Ltd, Novasep, LakePharma, Oxford BioMedica Plc, and Sanofi have also made recent major investments in gene therapy manufacturing, especially in viral vector manufacturing for gene transfection,” says Fiona Barry, editor, PharmSource, a GlobalData product.

According to Eric Langer, president of BioPlan Associates, CDMOs offer expertise, cell and gene therapy processes, personnel, and capacity that pharmaceutical companies may not have. “In our research on the make-vs-buy decision process, we have found that many companies decide early in their development that they intend to become a fully integrated bio/pharma company, including seeing manufacturing as a core competency.  Others see manufacturing as potentially outsource-able and not part of their core competency. Still others need the flexibility to decide their manufacturing strategy as their pipeline develops and as their investment situation unfolds.  Nearly a third of biologics are produced using CMOs [contract manufacturing organizations] and CDMOs, and these organizations are now an integral and indispensable part of the industry,” says Langer.

A look at the CDMO market in 2020

How has the push toward biologics changed or added to the processes pharmaceutical companies are outsourcing and CDMOs and CMOs are offering? According to Bernie Clark, vice-president, Marketing and Strategy, at Catalent Biologics, the contract industry will continue to evolve to meet the needs of the developing biologics market and to support the trend of personalized medicine.

“Next-generation biologics, such as ADCs [antibody-drug conjugates], bi-/multi-specifics, gene therapy, and cell therapy, are growing sectors of the biologics industry, and providers are adding capabilities to support the unique needs of these novel modalities. For example, new analytical techniques are being developed to support these new therapies, and providers are evaluating whether it makes sense to adopt them as part of their offerings. Other capabilities being evaluated include potential process improvements, such as continuous manufacturing and automation, and providers are conducting cost-benefit analyses for adopting these technologies into their platforms. One driver to adopt continuous manufacturing, but also a more general industry trend, is the shift toward biologics that treat smaller patient populations, such as therapies that address orphan indications. This shift has resulted in a movement towards manufacturing smaller batch sizes, which has led to more investment in smaller bioreactors, with a heavy emphasis on single-use technology,” says Clark.

Catalent has been evaluating possible new capabilities, says Clark, and acquired Paragon Bioservices as part of their expansion into the gene therapy market. “On the technology front, we adopted the Beacon system from Berkeley Lights to expedite clonal selection and improve titers for monoclonal antibodies and Fc fusion proteins. However, it is not enough to just acquire the right equipment or technology; contract organizations also need experts who are knowledgeable and experienced in the challenges that need to be addressed. We are focused not only on adopting new technologies for our customers but also on hiring or building the right expertise to support them across our global network,” says Clark.

“Cell and gene therapy manufacturing is, of course, relatively new to the biopharma industry, and these will be seeing significant increases, especially as the cell and gene therapy innovators move their pipeline toward commercialization. As demand for clinical capacity increases, there will be a potential capacity crunch for CDMOs capable of meeting these needs.  But doing so will require having the skilled staff capable of work in this segment. And hiring of these experts is becoming increasingly challenging,” says Langer.

According to Langer, the next two years will see more analytical testing being outsourced. “From our annual report (3), we find that analytical testing, including bioassays, leads the list with 32.8% indicating they will be doing more.  Following is cell line development (24.1%) and cell and gene therapy production (23.4%). Fill/finish operations appear to be contracting slightly over the past five years, from a high of 27.8%, indicating an decrease in outsourcing, to 19.7% this year who plan more fill/finish outsourcing over the next two years. Downstream process development is on the rise in terms of outsourcing trends. Validation services, on the other hand, have declined somewhat over the past nine years.”

Khalafpour sees strong growth in mammalian-derived molecules, which may require the services CDMOs can provide. “Based on market assessment, mammalian appears to remain the preferred production technology with the highest growth potential due to pipeline increase and improvements in manufacturing technology,” says Khalafpour. Small and virtual biotech companies are expected to own these molecules, according to Khalafpour, and these companies may not have the expertise or services needed to produce these products. “In addition, the development and manufacturing of biopharmaceuticals is getting more complex in terms of production processes and regulatory environment while forecasting remains uncertain,” says Khalafpour.

Lonza has announced the acquisition of a sterile manufacturing facility in Stein, Switzerland for clinical production and commercial launch of parenteral drugs, according to Khalafpour. The company is also building a development and manufacturing facility in Gaungzhou, China.

On the horizon

Development of new and more complex molecules are in store for the industry, according to Khalafpour. Clark sees biosimilars as the next trend in outsourcing because of the amount of innovator products coming off patent and the unique needs associated with analytical testing. The promise of next-generation biologics is also becoming evident, according to Clark. “Mid/large pharma companies are taking notice and acquiring companies and molecules to expand their pipelines. The shift in focus to these new therapeutic classes may impact the types of programs that a sponsor company outsources. For example, they may choose to outsource the manufacturing of monoclonal antibodies or recombinant proteins that they had previously manufactured in-house to free up internal resources to focus on their next-generation therapies,” says Clark.

Khalafpour agrees. “As far as drug manufacturing is concerned, we see smaller production volumes driven by personalized medicines, highly active compounds, [and] higher titers as well as continuous manufacturing and process intensification.”

References

1. Brett P. Giroir, “Statement on Efforts to Help Make Development of Biosimilar and Interchangeable Insulin Products More Efficient,” FDA.gov, Nov. 25, 2019.
2. GlobalData, PharmSource–Gene Therapy Market Opportunity for CMOs–2019 Edition, December 2019.
3. BioPlan Associates, 16th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production (BioPlan Associates, Inc., April 2019).

Article Details

Pharmaceutical Technology
Supplement: Partnering for Bio/Pharma Success
February 2020
Pages: s4–s8

Citation

When referring to this article, please cite it as S. Haigney, “Growth in Biologics Market Inspires Outsourcing," Pharmaceutical Technology Partnering for Bio/Pharma Success Supplement (February 2020).