Contract manufacturing and contract development and manufacturing organizations (CMOs and CDMOs) are an entrenched and critical component of the bio/pharmaceutical industry, but they have proven to be more important to some segments of the industry than others. A bio/pharma company’s relationship with its CMOs depends a lot on its size and product portfolio.	 	Not surprisingly, CMOs have been most successful meeting the needs of small- and mid-size bio/pharma companies. Nearly 80% of the products approved by FDA on behalf of small bio/pharma companies (companies with just one or few products) are contract manufactured, while 50% of the products sponsored by mid-size companies ($500 million to $5 billion in revenues) use a CMO. Small- and mid-size companies typically lack the cash needed to build a modern bio/pharmaceutical manufacturing facility and cannot bear the financial risks in the event their products don’t succeed commercially. CMOs are crucial to the existence of small and mid-size bio/pharma companies, and the converse is almost equally true.	 	The CMO industry, however, has been challenged in overcoming the insistence of global bio/pharma companies that manufacturing of their newest, highest-value products be kept in-house. Analysis by PharmSource has shown the outsourcing of drug-product manufacture for new molecular entities (NMEs) by global bio/pharma companies has dropped sharply during the past 10 years, from 60% of new NME approvals in 2006 to 20% in 2015 (	

	 	It would appear that the manufacturing networks of the global bio/pharma companies have finally caught up with their pipelines. When the wave of new biologics approvals hit, global bio/pharma companies were not prepared, and they depended more heavily on major CMOs to launch their products. In the past 10 years, however, they have invested heavily in manufacturing facilities to accommodate this transition from an organic chemistry-focused platform to a multi-technology platform incorporating cell biology and even more novel technologies. Global bio/pharma companies have spent nearly $100 billion in just the past five years to build up their biopharmaceutical manufacturing base, including very large-scale facilities to house mammalian cell culture, microbial fermentation, and filling of vials and prefilled syringes.

	These developments point to two realities that face the CMO industry: global bio/pharma companies prefer to keep manufacturing in-house, and only they have the resources to bring about a large-scale transformation of the industry’s manufacturing base in a relatively short amount of time. The reasons are easy to understand.	 	Bio/pharmaceuticals are a product business. While the industry press often focuses on intellectual property creation, and licensing fees are important to emerging bio/pharma companies, the bulk of industry revenues are generated from sales of the actual products themselves.  So, far from being a “non-core competency” as some contract manufacturing proponents tell themselves, manufacturing is crucial to the existence of the bio/pharmaceutical industry. It should come as no surprise that companies would want to maintain control of their main revenue generators by manufacturing them in-house. 	 	Further, capital investments of the magnitude needed to manufacture the rapidly-expanding portfolio of biologics can only be supported by the kind of profit margins and cash flows that biopharmaceutical product companies can generate. The bio/pharmaceutical industry has gone through a technology revolution as biologics capture a growing share of revenues and product pipelines, and a whole new manufacturing infrastructure has been required to make those new products. To create that infrastructure, capital spending by the 25 largest bio/pharmaceutical companies in each of the past three years has exceeded the revenues of the entire drug-product manufacturing sector. So while CMOs have been critical for helping global bio/pharma companies make the transition to biologics, they don’t have the resources to provide all of the manufacturing capacity the industry needs.	 

	CMOs can’t compete with captive capacity on scale. If they are going to capture a meaningful share of global bio/pharma manufacturing expenditures, they need to do two things effectively: position their offerings toward those activities for which they can compete effectively, and innovate their business models to address the broad range of objectives that global bio/pharma companies seek to achieve in their manufacturing arrangements.	 	Global bio/pharma companies have shown a clear propensity to outsource certain categories of activities (

). Activities that involve seldom-used technologies and capabilities, are highly novel, or are high risk, are likely to be conducted at a CMO. For instance, global bio/pharma companies frequently turn to contract manufacturers of highly potent APIs (HPAPI) and dosage forms incorporating HPAPI, because they require very specialized capabilities that CMOs can amortize across multiple clients. CMOs have manufactured the first antibody-drug conjugates (ADCs), which similarly require very specialized facilities and which are still unproven commercially. CMOs have also been leaders in investing emerging technologies such as cell and gene therapy, being among the first companies to establish facilities and improve the technology. Other specialized requirements that are often outsourced include drug delivery and clinical packaging.	 	

	 	Global bio/pharma companies are also more likely to outsource requirements that involve mature technologies or that involve highly routine activities. Global bio/pharma companies are increasingly using CMOs to manufacture their small-molecule APIs, even for new molecular entities; the double-digit growth rates in recent years of CMOs manufacturing small-molecule APIs bear testament to the increased willingness to outsource those requirements. Routine analytical testing, including testing products using validated methods and raw materials testing, has long been outsourced.	 	By contrast, global bio/pharma companies continue to invest heavily in technologies and capabilities that are fundamental to their long-term strategies, notably biologics manufacturing and manufacturing of key dosage forms including injectables and inhalation. They also tend to hold on to activities that generate knowledge about their molecules and which supports their strategies as it accumulates, such as knowledge gained in characterizing molecules and developing analytical methods and formulations.	 	Where CMOs have been successful in winning manufacturing business from global bio/pharma companies, it is often because they have addressed the broader considerations involved in making manufacturing decisions. Traditionally, CMOs have focused on addressing the basic supply concerns of security of supply and unit cost, which mostly come down to matters of price and capacity. But, as illustrated in 

, global bio/pharma companies have a much broader array of objectives and options to consider when determining how to design their supply chains and whether to manufacture in-house or outsource, as follows:	

		Financial considerations can often skew the decision. Generous tax incentives and subsidies and lower tax rates may drive companies to construct a facility in a country, while balancing exchange rate exposures may also drive decisions on where costs are incurred.

		Regulatory factors will play heavily into sourcing decisions. Regulatory regimes in many countries favor local manufacture over imports, as do reimbursement policies. Local labor laws may make it difficult or expensive to close a manufacturing facility even if outsourcing the products made in it would be more cost effective.

	 	With the increased use of in-licensing and acquisitions to build product pipelines, manufacturing plans must be able to accommodate products that are not currently in their pipelines and have not yet been identified. That may mean maintaining unutilized capacity to handle unexpected demands.	 	To address these broader considerations, leading CMOs are reconsidering their value propositions to develop innovative service offerings. In particular, they are realizing that they can disaggregate the range of activities they perform in order to manufacture a product, and repackage them into offerings that create more flexible solutions for their global bio/pharma clients. 	 	The primary example of that new thinking to date is the growing number of deals in which CMOs are hosting and operating dedicated manufacturing operations for clients. Typically, these arrangements involve the client funding, and some cases operating, dedicated equipment in a leased suite at a CMO facility. The client enjoys the flexibility and security of having its own dedicated manufacturing operation but at much lower cost, because it can share fixed and operating facility costs like warehousing, air and water systems, and site security.	 

	The history of the contract manufacturing business has generally been one of CMOs acquiring outmoded legacy facilities from pharmaceutical companies to manufacture late lifecycle and generic products. Few CMOs have participated in the innovator drug portion of the industry: from 2006-2015, more than 150 CMOs got at least one new drug application (NDA) approval but just 10 account for more than 50% of those approvals, and most only got one NDA approval in 10 years. 	 	In the next five years, most CMOs will remain mired in the commodity capacity CMO model, stymied by a lack of strategic vision or limited capital. However, based on recent industry developments, a handful of CMOs will offer a more innovative CMO model that will be truly service-oriented and innovative, and will be more appealing to global bio/pharma companies. Those are the companies that will dominate the industry and inspire customers and investors. 	 

	Supplement	Vol. 40, No. 8	Pages: 6–10	 

	When referring to this article, please cite as J. Miller, "What’s Next for 	the CMO Industry?," Outsourcing Resources Supplement to Pharmaceutical Technology 40 (8) 2016.

Articles

Features

CMOs that offer an innovative service-oriented model will dominate the industry.

What’s Next for  the CMO Industry?

Stability testing of bio/pharmaceutical products evaluates how environmental factors affect an API or finished drug product and are essential to established drug handling and storage conditions, as well as shelf life.

	Experts at contract analytical laboratories shared insight on testing of drug-product attributes with 

, including testing at different stages of development, special considerations for different dosage forms, special considerations for transport tests and temperature excursions, the benefits of risk-based approaches, and new instruments and test methods.

	Discussion participants are Brad Rowe, director of analytical’ and Justine Kiehl, group leader in analytical services-stability, both at Charles River Contract Manufacturing; Loretta Sukhu, staff scientist and team leader, and Rowel Tobias, principal scientist and team leader, EAG Laboratories; Amy Gladson, group leader, analytical services, Metrics Contract Services; Steven Pilewski, executive director, PPD Laboratories, GMP Lab; and Hildegard Brümmer, PhD, operational laboratory manager-SGS Life Sciences Berlin.

: What product attributes should be assessed in stability testing? Does the testing differ based on the stage of product development?

: Stability testing provides evidence of the safety, efficacy, and quality of a pharmaceutical drug product over time. In addition to its active ingredient, several important components contribute to the overall stability of a drug product including excipients, formulation, and packaging. Assessing the right product attribute is essential and must include tests that evaluate quality, strength, potency, identity, purity/impurity, and safety.

: Appearance testing is the first line of defense in determining degradation. Additionally, moisture, assay, degradation/profile testing, and dissolution properties are typically assessed. Other physical properties that have been shown to change over time--and are considered key attributes of the compound--include hardness, viscosity, and pH. As the product moves through the various stages of development, more rigorous testing may be required to characterize the product (e.g., morphological changes) as well to emphasize key quality attributes, such as dissolution testing. At a minimum, a stability study will include the major testing attributes of dissolution and degradation.

: Typically, you test for anything that could potentially change with age, such as the appearance, potency, related substances (impurities or degradants), dissolution, water content, and depending upon the patient population or phase of clinical stage, microbial limits. For some liquid oral products, you might also want to do additional tests, such as looking at the preservative content.

	[Testing does not really differ based on the stage of development], but the level of validation and scrutiny of methods do change. The biggest changes in the product development cycle are the specification limits themselves--evolving from an open-ended ‘report result’ to specific limits that tighten as more data are available--and the level of validation of the method, starting with specificity, accuracy, and precision at early phases and adding full robustness and intermediate precision at later phases.

: During drug-product development, the primary attributes assessed during stability studies focus on the physical and chemical limits. The testing is similar while advancing through the stages of drug development; however, the amount of stability information will differ by phase. During Phase I, stability for the drug substance and product is needed to support the shelf life of drug substance used for toxicological studies and drug product that is dosed to humans. This could be three to 12 months of stability data. During Phase II, multiple investigational formulations and product strengths may be evaluated based on the information gained during previous Phase I and Phase II studies. This could be 12-24+ months of stability data. As you advance through Phase II into Phase III, you are using the information collected during each phase to further refine and select the best formulation and packaging components to achieve your final product configuration that drives your Phase III stability protocols for commercial registration.

: In order to undertake an efficient and meaningful study, parameters should be selected that are indicative of the product’s stability, which in most cases are unique to the molecule/product and will be different for large and small molecules. In the majority of cases, physical parameters such as viscosity, or chemical parameters such as pH, water content, product appearance, assay and degradation products, dissolution, and microbial parameters can typically change. Depending on the nature of the product or drug substance, these parameters should be fixed individually--and specifically for the formulation where appropriate--and defined in a protocol within the product’s shelf-life specifications.

	During product development, it is important to know whether a new formulation is stable or not, but only limited testing is possible. It is only possible to get a first impression as to whether a formulation is stable, or whether it needs to be changed. For late-phase studies, stability has to be ascertained so that products meet shelf-life specifications and that no risks exist concerning the effectiveness of material over a period of time.

: What instruments and expertise are required to assess each product attribute?

: There are too many required instruments to list everything that applies to the variety of different product types. Two standards for all dosage forms are high-performance liquid chromatography (HPLC)/ultra-high pressure liquid chromatography (UHPLC) with either ultraviolet (UV), fluorescent (FL), refractive index (RI), mass spectrometry (MS), charged aerosol detector (CAD), or diode array detectors (DAD), along with ICH-configured stability chambers. Other common instrumentation requirements for the various dosage forms are: dissolution apparatus, cascade impactors, microscopes, laser particle size equipment, moisture determination equipment, pH, osmolality, viscosity, X-Ray powder diffraction (XRPD), and gas chromatography

: Most drug substance and drug product forms require an assay, which is usually analyzed via HPLC. Knowledge of current industry standards and good manufacturing practices (GMPs)--as well as basic understanding of HPLC instrumentation and theory--is critical. Similar knowledge of the various dissolution apparatuses (typically United States Pharmacopeia [USP] Apparatus I and II) and Karl Fischer titration instrumentation used to support standard drug product forms is a must. Additionally, it’s best to know the compound’s degradation path in order to identify potential stability limiting factors.

: Most analyses, namely those that assess how potent and uniform the product is, or how well it dissolves, can be tested on HPLC. For water content, you would use a Karl Fischer titrator, which is an automated electro-chemical titration device that can precisely detect water levels even at very low amounts. Dissolution tests also rely on a separate apparatus that mimics the in-vivo performance of how the product dissolves when ingested. Potency, uniformity, and water content tests are product attribute-based, while the dissolution test is a measure of product performance and one of the key tests scrutinized by the regulatory agencies.

: There is no fixed list of equipment or prescribed lists of test that fit all products because of the number of variable attributes with individual products. However, for most products, chromatographic systems (e.g., HPLC, gas chromatography [GC]) will be used for testing the assay, with purity, dissolution, and water content usually tested by a Karl-Fischer titration system. Solutions will be analyzed, for example, by a laser diffraction technique for particle size distribution or aggregation in the case of large molecules.

	A variety of different instruments need to be in place for these analyses, and also large molecules will require specific equipment depending on the attributes being assessed. These include molecular characterization, molecular size, charge, and hydrophobicity using techniques such as, gel electrophoresis, isoelectric focusing, and HPLC-MS. However, it is crucial in all cases when assessing the drug products that any instrument being used has to be qualified and meet GMP requirements.

: Laboratories must be equipped with state-of-the-art instrumentation that can support a wide array of tests required for biopharmaceutical analysis. Instruments must be properly qualified for use and include pH meters, osmometer and particle counter (testing for appearance and color, visual particles, sub-visible particles, osmolality and other compendial methods); spectrophotometer (protein concentration); HPLC, electrophoresis, imaging capillary isoelectric focusing and capillary electrophoresis to confirm product identity and purity; and cell-culture capabilities with instruments to assess absorbance, fluorescence, luminescence, and electro-chemiluminescence endpoints to measure product potency. Scientific expertise is needed for the proper design, execution, and interpretation of results from the myriad tests. Analytical scientists must have solid backgrounds in protein chemistry/biochemistry, immunology/cell biology, pharmacology, and the regulatory process.

: What are special considerations for different dosage forms?

: The most important things to consider are the delivery mechanisms and targets for the product. For instance, a sustained release product--such as acetaminophen extended-release tablets--needs a test that can monitor dispersal of the material over a long and defined period of time to ensure it meets the exposure needs of whatever disease the product is being prescribed for. Other products labeled as delayed release may target a different absorption area such as the lower intestinal track for better performance or efficacy. Likewise, these products need to be monitored such that the release of drug is withheld for a period of time after consumption, again simulated through in-vitro experiments. For low-dose products, uniformity of potency values between individual units is typically a critical attribute to target in product development and production.

: The stability of a drug product in its finished form requires a number of tests to verify its safety and efficacy. There are a number of dosage forms that require additional tests to address its specific configuration. For example, capsules require tests for dissolution rates and inspection for leaks and brittleness. A drug product in suspension form may require testing for viscosity, resuspendability, and effects of freezing.

: Drug-product samples in both tablet and capsule form may require special handling or may react differently based on coating and/or capsule formulation. With capsule formulations, a scientist must consider potential cross-linking of gelatin in the capsule shell, which is not typically an issue with tablet formulations. Additional considerations with respect to the storage container system and storage conditions should be made for drug-substance material and, in some cases, drug-product forms as well. Unique testing is required for liquid, gel, or foam dosage forms for attributes such as volume, pH, clarity of solution, and solution viscosity.

: Some examples where specific tests may be necessary for certain dosage forms include, but are not limited to:

. Particle size distribution by a laser diffraction technique to detect changes in particle size, which can have an effect on the quality of a product

. Specific particle counting techniques such as Andersen impactor or next-generation impactor to ensure particles are not too large to be efficacious

. The zeta potential of a product can determine the stability of an emulsion throughout its shelf life

. X-ray powder diffraction (X-RPD) can show any changes or modifications that may affect the efficacy of a product

. Specific detection systems such as an electrochemical detector can be used for assaying antibiotics to determine impurities.

: In general, assay, degradation products, and appearance will be evaluated for all types of dosage forms. Critical quality attributes and methodologies for controlling these need to be identified for each product. For example, with solid oral drugs you will need to evaluate moisture, dissolution properties, color, friability, and odor. Special consideration should be given to products that utilize devices to deliver the medicine. With inhaled products: [pressurized metered-dose inhaler] (pMDI), dry-powder inhaler (DPI), nasal, and nebulizers could include testing for co-solvents, moisture, leak rate, aerodynamic particle size distribution, shot weight, microbial limits, and delivered dose, to name a few.

	An additional consideration is the impact of intermediate and final packaging materials. There are increasing requirements for developing methods to understand possible extractables from primary packaging materials and the impact of these materials on leachables during drug product storage and stability. Another attribute to consider is the ability to detect and measure the amount of foreign particulate matter to assure patient safety.

: When should stability tests be conducted to assess distribution and transport conditions?

: It’s important to have a good understanding of risks associated with transport and to determine possible areas of degradation to ensure the integrity of the product. Accelerated stability storage conditions--as well as temperature, humidity, light, and forced degradation studies--provide good information in building this preliminary data set. Simulated stability studies may be performed in which material is shipped or stored at extreme conditions. The product also may be agitated to ensure the drug product remains unaffected despite adverse shipping conditions. Chemical tests such as assay and degradation products--as well as physical tests such as appearance and tablet friability--are critical when assessing transport conditions.

: Stability tests can be conducted as soon as a biopharmaceutical drug substance is available to assess sensitivity to temperature, light, pH, humidity, and oxidation during early-phase drug development. The findings of these studies are useful both when transporting the drug substance and in determining suitable tests to control transport conditions for the drug product. Stability studies are also conducted when the drug substance is formulated into a drug product with excipients and container parts to acquire adequate data to support the distribution and transport conditions during drug development.

: The same parameters should be used as for long-term stability, because these are fixed in the product’s specification, for example, appearance, assay, purity (the most important), and more general tests such as pH, water content, and other stability indicating parameters.

: Typically, these tests are conducted during Phase III trials, or during registration planning and process validation preparations, when clients are confident they have a marketable drug. If you are manufacturing for early-stage clinical trials--not mass distributing across different regions for efficacy trials or anticipation of mass-marketing--individual shipments are easier to manage, even if cold-chain shipment in insulated containers is required if there are concerns about temperature sensitivity. For commercial distribution, these transport studies are critical to understand allowable excursions and mitigate recall actions.

: Formal transportation and distribution studies should be conducted once the final primary and secondary packaging configurations are finalized. These will drive understanding of how your product may change under the influence of time, temperature, and vibrations once it’s left your control. Generally, these are conducted during Phase III while working toward marketing authorization and commercialization.

: What tests should be conducted to assess the impact of temperature excursions?

: On the whole, the same parameters as for transportation conditions, but it is also important to determine any visual examinations that may be appropriate, such as changes in color or clarity.

: [Tests include] anything that could potentially change upon distribution, usually tests for potency and dissolution. If humidity excursions are also a threat, testing for water content and possibly microbial limits is considered.

: This would be product specific and require an understanding of critical quality attributes impacted by the length and extent of the temperature excursion. All product types will require evaluation of assay, degradation products, and physical appearance. Solution and suspension products will need further evaluation to particle growth, mean particle size change, redispersibility, or changes to rheological properties. Inhaled-drug products will be further evaluated for leak rates, aerodynamic particle size properties, delivered dose changes, and co-solvent changes.

: Accelerated degradation, storage, and stress studies should be conducted to assess the impact of temperature excursions during the transport of pharmaceutical products. In these studies, temperature ranges outside of the product-specified ranges, including freeze/thaw, must be tested by stability-indicating methods to ensure that product safety and quality are maintained during these stress conditions. At a minimum, these tests should include potency, safety, and quality attributes of the drug.

: As the product moves into the later phases of drug development, more thorough studies should be conducted to simulate aberrant storage situations and temperature excursions. Short-term freeze/thaw, heat/cool, and wet/dry studies usually fulfill this requirement. As with distribution and transport conditions, accelerated condition stability and forced degradation studies also can be used to set allowable temperature excursions. Similar to a standard stability study, assay, degradation, and dissolution (for drug product) should be assessed. Additionally, testing such as appearance, hardness, moisture, and viscosity may be critical at extreme storage conditions.

	New technologies advance stability studies

: What new technologies or methods have advanced drug stability studies?

: Several advances in technology have had a significant impact on drug stability studies by improving the turnaround time and the quality of the data generated. UHPLC, charged aerosol detector (CAD), improvements in LC-MS and gas chromatography (GC)-MS capabilities and improvements in dissolution sampling all have helped to streamline the stability testing process, deliver results more quickly, and provide accurate testing of compounds that previously were considered a challenge. Additionally, improvements in data collection software and laboratory information management systems (LIMS) have created the ability for increasing stability storage and organization gains to understand, track, trend, and predict data generated.

: [Technologies include] MS (i.e., multiple-reaction monitored [MRM]-MS assay), electrochemiluminescence-based immunoassays, and technologies to improve sensitivity in current methods.

: The introduction of UHPLC technology has advanced stability studies by helping improve chromatography sensitivity, speed, and resolution. The higher separation efficiencies achieved by UHPLC have allowed chromatographers to greatly reduce runtimes for complex related substance assays from 90 min to 15 min in some cases. The growing interest with combination products containing two or more active ingredients has, and will continue to benefit, from UHPLC technology.

: UHPLC is a next-generation version of HPLC. It’s a similar base technology; however, superior equipment design allows for higher pressure load on the system, which in turn allows for selection of finer particle size in separation columns and superior resolution. This offers greater specificity of active ingredients and related compounds detection in your products. Water activity monitoring is another emerging tool that is being used specifically to assess whether the environment in the product is able to support microbial growth. If proven that the water level is insufficient for microbial growth, such as bacteria or fungi, this eliminates the need for microbial limits testing. This method is much faster than microbial limits testing, which requires defined incubation times up to or exceeding one week. Microbial limits testing also requires working with live organisms as standard controls, which sometimes don’t always grow properly. You would still be expected to prove the equivalency of water activity as a supplement to microbial limits testing before defending the data to regulatory authorities.

: These changes mainly affect large molecules, and biophysical analysis has become increasingly important for monitoring biopharmaceutical drug stability. Changes in the higher-order structure of the protein can have a critical impact on potency and activity and, together with degradation and aggregation, should be assessed. Multiple orthogonal analytical techniques are now being used more routinely. Methods include circular dichroism (CD) spectroscopy and Fourier transform infrared spectroscopy (FTIR), thermodynamic-differential scanning calorimetry (DSC), and a variety of approaches to assess aggregation such as size-exclusion chromatography with multi-angle light scattering (SEC-MALS), dynamic light scattering (DLS), field flow fractionation, and sedimentation velocity analytical ultracentrifugation (SV-AUC). More recently, techniques have been emerging from research environments such as hydrogen-deuterium exchange-mass spectrometry (HDX-MS) and 2D protein nuclear magnetic resonance (NMR).

	Adopting a risk-based approach to stability testing

: What are the benefits of a risk-based approach to stability testing?

: This approach saves money and time by reducing the number of batches and tests, as well as reducing the number of test intervals.

: Using a risk-based approach allows prioritization and focus of the aspects of the stability program that are likely to have the largest impact. For example, performing risk assessment on analytical methods helps to identify risk (e.g., robustness affecting precision) that can be further studied in a systematic fashion.

: A risk-based approach to stability testing can save both money and time, if staged correctly. A robust understanding of the interactive and degradation properties of the compound’s active pharmaceutical ingredient can reveal the stability properties. This would allow for a reduction in the number of time points needed or the use of matrix designs, because the point of critical degradation already would be known. Also, the storage conditions can be optimized to focus on expected conditions for which the product would be distributed and consumed, such as climatic zones. Overall, the process would be more streamlined and the data generated would be fine-tuned to give a good overall picture of the drug profile.

: Stability is a central issue in the pharmaceutical industry that can have a significant impact on the safety and efficacy of drug products. Stability includes characteristics of the manufacturing process, drug substance and excipient, type of formulation, and container closure system. Appropriate testing must be conducted to ensure the pharmaceutical products’ stability. A risk-based approach offers the capability to conduct effective and efficient testing without compromising the drug products’ safety and quality. A knowledge base, previous work, and familiarity of methodologies allows the manufacturer to conduct a rational approach to testing that can save time and be cost effective without forfeiting the drug products’ safety and quality.

Pharmaceutical Technology Outsourcing Resources 

:
	When referring to this article, please cite it as “Testing Programs Ensure Drug Product Stability and Shelf Life," 

Pharmaceutical Technology Outsourcing Resources Supplement 

Stability testing programs should provide drug owners the information needed to establish the proper handling, shipping, and shelf-life recommendations for drug products.

Testing Programs Ensure Drug Product Stability and Shelf Life

Technology transfer occurs when a pharmaceutical company moves its product from an existing manufacturing site to a new manufacturing site. This transfer can happen from one process train to another process train within the same building, from one facility to another facility, from one building to another on the same campus, or to a contract manufacturing organization (CMO).

	At every stage, a detailed operational plan and cooperation among all parties involved are required to avoid cost overruns and delays and ensure regulatory approval of the manufacturing process. From the perspective of the drug license holder, a successful technology transfer begins with due diligence.

	The goal of due diligence is to be fully aware of all issues that may impact the manufacturing of a pharmaceutical product. CMOs receiving a client’s new drug product for manufacturing must have a thorough understanding of the processes, quality control, quality assurance, regulatory affairs, and logistics related to the manufacture of a drug product.

	During this process, all aspects of the project-for example, ensuring that analytical methods are current with today’s pharmacopeia standards and are based on the product’s formulation-are double-checked. The due diligence process should include the following steps:

		Ensure that the supply of the API and key excipients are of identical grade and function

		Identify materials that may be hazardous to employees or the environment

		Include a review of all development reports

		Analyze the development of process parameters

		Identify any FDA 483 observations issued for manufacturing or testing

		Explain any documented commitments made to regulatory agencies that need to be completed.

	Assessing manufacturing feasibility and changes

	Chemical processes involved in manufacturing pharmaceuticals are often exacting; small changes in humidity, climate, water source, or equipment can have a noticeable impact, as can changes in the process (e.g., changing from scooping to gravity feed), suppliers of raw materials, or even personnel training.

	Ideally, a technology transfer begins by assessing the original manufacturer’s information, from raw materials through critical process parameters, followed by equipment evaluations according to scale-up and post-approval change (SUPAC) guidelines. The FDA’s SUPAC guidelines identify the types and specifications of equipment available for different pharmaceutical manufacturing functions [SUPAC: Manufacturing Equipment Addendum] (1). For example, blending equipment can be organized into several different classes, from V-blenders to ribbon blenders to bin blenders; SUPAC charts allow efficient comparison between the various classes.

	Transfer protocols should challenge critical steps and machine differences. It may, for example, be necessary to develop new operating ranges for the product, in which case one or more batches may be required. The more rigorously a process is challenged in the feasibility stage, the more robust that process will be moving forward. A strong process means reproducible quality, which in turn means fewer rejections later.

	In January 2011, FDA issued a process validation (PV) guidance (2) defining three major stages that must be satisfied to consider a manufacturing process validated. Under FDA’s previous 1987 guidance, PV was established through sampling and testing. Under the new guidance, the validation process is an exercise in design and control with three distinct stages:

. The commercial manufacturing process is based on knowledge gained through development and scale-up activities.

. The process design is evaluated to determine if the process is capable of reproducible commercial manufacturing.

. Ongoing assurance is gained during routine production that the process remains in a state of control.

	Because the PV guidance pertains to equipment, three commonly used terms are installation qualification (IQ), operational qualification (OQ), and performance qualification (PQ). Each piece of equipment requires design specifications that comprehensively define it, from the type of power required to the exact materials used in its construction. The drug owner and the CMO should work together to agree on a PV plan. With approved design specifications in hand, the installation qualification and operational qualification can be developed.

	Installation qualification compares the equipment to the design specification and should be conducted by any CMO assuming a drug production process. For example, if 316-stainless steel is specified, tests should be conducted to verify that the equipment is 316-stainless steel. If passivation has been performed on the stainless steel, tests should be conducted for any residue remaining from the process. Confirm that the power requirements and power output are consistent with specifications and that the room the equipment is installed in can accommodate that power requirement.

	The next phase of validation is operational qualification. If equipment has been specified to run in a range of 50-150 rpm and draw a specific amount of power, verify the equipment is achieving those parameters.

	In the final phase, performance qualification, equipment must be challenged under load. While equipment may run at 50-150 rpm when empty, PQ ensures it achieves appropriate speed ranges when processing a production load of material.

	Process validation verifies and documents that the manufacturing process will consistently yield a product of predetermined quality.

	Smoothing the technology transfer process

	Technology transfers may occur within a company, may involve two or more corporate entities, or may involve successive lifecycle stages, such as development and scale-up. External technology transfers prompt the most discussion and cooperation is key as the CMO comes to understand, from the sponsor, the product’s critical quality attributes and known process control parameters within the scope of the customer’s business objectives.

	From a project management standpoint, the two main items manufacturers require from the client from the beginning are a clearly defined project scope and a complete technology transfer documentation package. Having a defined scope in place prior to the technology transfer kickoff meeting helps eliminate guesswork and creates a foundation of common understanding between the teams provided by the sponsor and the CMO. One way to achieve a defined project scope is with a comprehensive request for quotation (RFQ) from the drug license holder; another is an interview designed to obtain the same information about product manufacturing requirements. Unexpected changes in scope or missing information could delay the technology transfer. By identifying this information in advance, inaccuracies are minimized and the job of preparing master documents is greatly simplified.

	The best way to begin a technology transfer is with a tightly structured and documented kickoff meeting that includes all stakeholders and is overseen by an experienced project manager. The goal of the meeting is to create a detailed technology transfer list that includes everything required to initiate and understand the anticipated chemical and engineering issues. Cross-functional teams, working together to generate a project structure and timeline with agreed-upon milestones, help secure buy-in from all concerned and ultimately provide the project blueprint. As the project is executed, regular project team meetings and open communication will be essential for a smooth transfer.

	In contract pharmaceutical manufacturing, technology transfer is the process of the CMO gathering the information needed to successfully and sustainably manufacture the end product. The client who owns the intellectual property conveys project expectations and the data, while the project manager and team bear the responsibility of executing those expectations. When the sponsor and CMO work together in a strong and supportive partnership to create a protocol, timeline, and milestones, a technology transfer can be effectively and smoothly executed.

SUPAC: Manufacturing Equipment Addendum, Guidance for Industry

Guidance for Industry, Process Validation: General Principles and Practices

:
	When referring to this article, please cite it as N. Fong, “Effective Technology Transfer and Validation Strategies with CMOs," 

The success of a pharmaceutical manufacturing transfer from one facility to another requires detailed operational plans, attention to detail, and coordination between all parties.
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Effective Technology Transfer and Validation Strategies with CMOs

The old adage “is the glass half empty or half full?” could be used to describe the diversity of opinion as to the health of the Chinese economy in 2016; the only caveat being, it would be more appropriate to reference a five-liter stein instead of a petite glass. Once a seemingly unstoppable freight train, China’s economic growing pains have created global conversation that swings from fear to optimism. Two events in January 2016 provide good examples of the West’s contrasting views of China’s future roles in the global economy.

	Prior to the World Economic Forum (WEF) in Davos, Switzerland, in January 2016, Goldman Sachs issued a white paper concluding that China could not smoothly transition from a low-cost, export-driven economy to a more domestic, consumer-driven economic model. The investment firm cautioned that a “hard landing” could be expected (1).

	The majority of the WEF’s 2600 attendees shared the view that China serves as the sine qua non of the world’s economic pulse, and that the current slowdown would have negative repercussions across emerging markets and eventually in developed market economies. While there was no formal consensus on China’s future, many attendees reported a foreboding sense of uncertainty (2).

	Just prior to WEF, the global biopharmaceutical industry gathered in San Francisco for the annual JP Morgan Healthcare Conference. In addition to the usual Wall Street and pharmaceutical executives previewing the year’s anticipated performance, there was a noticeable onslaught of interest in Chinese investment with a marked focus on healthcare and China’s up-and-coming biopharmaceutical sector (3, 4).

	What explains this schizophrenic view of China as an economy about to take a nosedive, while the healthcare and biopharmaceutical sectors portend significant growth?

	First, the macroeconomics of China has to be objectively viewed outside the prism of Wall Street. Yes, economic growth has declined in China from pre-recession double digits. From 2011-2015, however, China’s gross domestic product (GDP) was just under 8% versus approximately 2% for the United States and less than 1% for the European Union. The real debate about China is not whether there will be continued growth, rather it is uncertainty on how the government will structurally reform its state-owned enterprise sector, service national debt, and maintain social cohesion, all while the economy continues in a smooth transition (i.e., achieves a “soft-landing”) (5).

	The future of pharmaceuticals in China looks exceptionally bright because pharma represents a lower hanging fruit on the healthcare tree that can easily be addressed via government policy. Thus far in 2016, China is fearlessly advancing on reforming this critical and lucrative industry.

	China’s healthcare reform targets pharmaceuticals

	As incomes rise, expenditures on healthcare increases. In a country with one-fifth of the world’s population, this is a daunting societal expectation. While China spends 5.6% of their GDP on healthcare, per person expenditure is low and is now being vigorously addressed by government policy. In 2011, China spent $357 billion on healthcare, and McKinsey conservatively projects continued three-fold growth to $1 trillion by 2020, with other projections of $1.3 trillion (6).

	Among the most recalcitrant problems facing China’s healthcare sector is facilities use and allocation of finances and resources. Despite having 10,000 community health centers and 6000 county- and district-level hospitals, citizens prefer to use the 1450 tertiary-level facilities in urban communities. This serious resource imbalance is due to a perception that these advanced hospitals offer access to the best physicians and most current medical technologies and drugs.

	Hospital fees are low so there is no financial incentive not to go to these “super” hospitals. With limited private insurance and direct government subsidy covering only a small percentage of operating income, these tertiary hospitals derive the majority of operating revenue from pharmaceutical sales-most of them expensive, off-patent branded foreign drugs-and providing services beyond what is covered by basic medical insurance. This system incentivizes overtreatment and treatment with the most expensive products and thus is at the core of the Chinese government’s efforts to reform the hospital sector. However, hospital reforms are not easily achieved.

	Unlike the hospital industry, China’s pharmaceutical industry is small, disproportionally lucrative, and represents a much easier target for reform. Specifically, the government wants to get hospitals to stop selling drugs, lower the overall costs by switching to domestically produced multi-sourced generics, and control sales and distribution of only truly innovative foreign drugs to minimize over prescribing and better facilitate subsidy or third-party financing of these expensive products.

	Domestic pharmaceutical industry is key reform

	China’s efforts to train and resource China Food and Drug Administration (CFDA) staff to the level required to meet industry oversight obligations have been hindered, causing a number of consequences. The China pharmaceutical industry is highly fragmented and lightly regulated, and consists of more than 5000 manufacturers, 12,000 distributors, and a multi-year backlog of mostly domestic, un-prioritized, pooled applications of drugs for review and approval. The backlog serves as a disincentive to foreign research-based pharmaceutical multinationals from initiating the regulatory drug approval process for newer drugs.

	To circumvent the logjam, foreign drug companies have disproportionately relied on selling older, branded products at higher prices via China’s tertiary hospital network because of the revenue and patients’ preferences for western brands (

	The cumulative effect of these inefficiencies have led to higher-priced older drugs and a corresponding rejection of domestically produced products. While China has become the second largest global drug market, the Chinese have experienced what one industry expert called “a lost generation of new products” (7).

	China has a large unmet medical need involving multiple disease areas, but few of the newer drugs currently sold in the global markets are available in China. Only one-fifth of drugs launched in major global markets between 2008-2012 were available in China as of 2013 compared to 68% in the US (8). Underscoring the innovation lag time, of the 241 drugs approved by CFDA in 2015, 25 were from research-based foreign multinational corporations (MNCs). Of these, only 10 were new drugs and vaccines. By comparison, US FDA approved 45 novel drugs that same year (9-10).

	Recognizing the CFDA’s instrumental role in fostering domestic drug innovation as well as optimizing the contribution made by foreign MNCs via expedited review of innovative drugs, in February 2015 a senior leader of China’s State Council was appointed as the new CFDA director. In addition to assuring that appropriate resources would be devoted to expanding staff, training, and international interaction with major/regional national regulatory bodies, he reinvigorated ongoing phased reforms and was publically critical of the lack of data integrity in regulatory filings and clinical trials performed in China. This led to the development of a series of reforms that, when fully implemented, will result in a wholesale change of China’s drug review and approval process.

	Quality and priority are the CFDA guiding mandates

	The Chinese government recognizes the delinquencies in its pharmaceutical sector, but because of the size, scope, and autonomy of its country, it has chosen to phase changes in over time and establish pilot programs to test and implement corrective actions. China’s pharmaceutical industry has been selected as a key area for industrial development with emphasis on meeting global manufacturing quality standards and establishing necessary prerequisites for China to become Asia’s regional center for clinical drug development.

 illustrates regulatory reforms undertaken by CFDA over the past year to meet international quality standards.

					China FDA (CFDA) - 2015 Drive Toward Quality

	
	Current good manufacturing practice (cGMP) mandates were first initiated in 2010 with a compliance deadline of 2015. Despite vigorous actions by Chinese authorities to ensure cGMP compliance, these goals have not been fully achieved. A significant reduction in the total number of domestic pharmaceutical manufacturers unable to comply is anticipated over the coming months (11).

	In late 2015, as a harbinger of the anticipated consolidation, CFDA requested applicants to self-examine whether their applications met the required good practices (e.g., good manufacturing practices, good clinical practices, good laboratory practices). Between completed reviews and voluntary withdrawals, the multi-year backlog of applications was immediately cut nearly in half. Some 80% of marketing authorization applications were voluntarily withdrawn (9).

	Also in late 2015, CFDA implemented fundamental changes in the way new drugs are reviewed and approved. The strategic intent was to foster local innovation and ensure that truly innovative drugs receive the required level of CFDA resources for expedited review. 

chronicles the changes that CFDA has made in the Fast Track approval pathway and identifies disease areas of high medical need.

					CHINESE FDA (CFDA)-
					Changes to Fast Track Drug Approval Pathway

					CFDA-Opinions for Prioritized Review and Approval to Resolve Drug Registration Backlog

Registration applications for drugs with clear clinical value can meet one of the following circumstances:

					1.  Novel new drugs which have not been launched in or outside China.

					2.  Novel new drugs which will transfer production to China

					3.  Drugs adopting advanced formulation technologies and innovative therapeutic approaches as well as with clear therapeutic benefits

					4.  Clinical trial applications (CTA) for drugs with patents expiring in three years and production applications for drugs with patents expiring in one year.

					5.  Synchronized clinical trial applications in the US and EU

					6.  Registration applications for drug products manufactured in China on the same production line which are applying for synchronized marketing approvals in the US and EU with completed onsite inspections

					7.  Traditional Chinese medicines (including minority medicines) targeting major disease prevention and treatment with clear clinical positioning

					8.  New drugs listed in the state sciences and technology major programs or national R&D programs

Registration applications for drugs with clear clinical advantages for the prevention and treatment of the following diseases

	Upon close examination of the new regulatory changes, one can interpret acknowledgment of China’s national strategic priority of fostering an innovative and domestic pharmaceutical sector, specifically:

		Categories 1 and 5 require simultaneous global clinical development via multi-regional clinical trials (MRCT).

		Category 2 production/manufacture of the new drug in China is the only objective pathway. For injectable products, at minimum, this would require API/ABI (active biological ingredient) shipment to China with aseptic fill/finish into final product presentation (e.g., vials, pre-filled syringes, cartridges, pens, etc.)

		Category 3 is completely subjective and would most likely only be combined with one of the specified diseases.

		Category 4 appears to encourage Western MNCs to apply for Fast Track approval with products that are about to expire. Considering the limited availability of current Western products this “last bite of the apple” is ideal for first generation biologics not yet registered in China.

		Category 6 is like 1 and 5, but also mandates global production sourcing from China. At a minimum, the Chinese site would require US/EU drug master file (DMF) and onsite inspection (option as backup facility).

		Categories 7 and 8 are specific to China.

	Biological “revolution” and dominance of injectable formulation

	Of the top 10 selling drugs worldwide in 2004, only one was an injectable formulation. A decade later, seven were injectable. The significant shift reflects a realignment of product portfolios from small molecule to macromolecules and biologics, targeted to treat specialty patient populations. These new drugs are not metabolically conducive to oral or pulmonary delivery (12). Of the seven top-selling drugs in 2014, all are biological/large molecule and none will have their principal US patent in force beyond 2018 (13).

	In March 2015, the US FDA approved its first biosimilar, and China’s CFDA issued their Technical Guidelines for Development and Evaluation of Biosimilars. Currently, US FDA is advising on 58 biosimilars involving 18 different innovator drugs. While China has few biologicals registered, the Greater Shanghai region has up to 800 companies involved in biopharmaceuticals. Eyes are definitely on the future.

, of late-stage drug development portfolios, 50% of new product introductions will be injectable presentations and 47% will be biological/macromolecule. New formulations, lower volume requirements, and better pharmacokinetics will facilitate less frequent, subcutaneous administration and patient-convenient delivery devices. Pre-filled syringes and pens should help establish injectable delivery on par with oral dosage in overall acceptability and compliance. Complex upstream bioprocessing combined with ample patent coverage (12 years United States), will help protect intellectual property.

	Between the current generation of products, late-stage portfolio projects, and burgeoning biosimilar entrants, the global pharmaceutical industry is in a biological revolution, virtually all of which are injectable. In contrast, in China, with the exception of the diabetes space dominated by foreign companies, no commercial-level injectable western products are manufactured; all are imported, a non-expedited regulatory approval pathway.

	This is significant because on Dec. 1, 2015, CFDA announced a Pilot Marketing Authorization program allowing Chinese contract manufacturing organizations (CMOs) the opportunity to serve as the principal manufacturer of a pharmaceutical company’s products.

	The death of small molecules has been greatly exaggerated

	New emerging science in the 1970s helped foster the first generation of recombinant biological therapeutics. This rich vein of research was expanded with monoclonal antibodies and encompassed many products whose mechanism of action proved clinically efficacious to treat multiple disease categories. Complicated and expensive manufacturing, combined with relatively rare treatment disease targets, resulted in high costs of therapy, thus propelling the brand sales to the top of the industry league tables. Coupled with limited or no regulatory pathway for approval of generic copies to challenge proprietary brand dominance once the patents expired, the rapid ascendancy of biological/macromolecules to virtual equal status to traditional small-molecule pharmaceuticals in R&D portfolios was assured; they became the darlings of the industry.

	However, 90% of therapeutics used by clinicians today remain small molecule, including generic drugs. The reason for their ubiquitous and perpetual longevity in drug development is predicated on the simple fact that small molecules are derived via chemical synthesis, which is not restrictive like the biological pathways required in the production of large molecules. Two other characteristics that are always welcome include their high bioavailability via oral administration-approximately 80% (

	Combine these unique characteristics with advances in molecular understanding of disease progression and the personalized, often genomic-based capability of identification of optimal drug responders, a resurgence in small-molecule therapeutics is virtually assured. As evidenced by the fact that 52% of late-stage drugs in development are small molecules, small molecules are here to stay.

	Greenlighting of contract manufacturing in China

	Effective per the May 26, 2016, Chinese State Council Meeting, CFDA changes now allow foreign pharmaceutical MNCs to contract manufacture injectable innovative products in China, and qualify for the new Fast Track drug approval pathway. Considering the proprietary nature of new small molecules as well as the complex biologicals upstream manufacture of large molecules, MNC global development teams should begin planning for final stage aseptic fill/finish contract manufacturing to be conducted in China no later than Phase III. At a minimum, this will require identifying Western cGMP-level capable CMOs in China to begin at time of US new drug application/EU marketing authorization qualification with tech transfer commencing no later than at time of US FDA/European Medicines Agency regulatory filing(s).

	This “reformation” of China’s drug regulatory laws and the specific mandates of the new Fast Track pathway means the CFDA is no longer intent on companies delaying or postponing the introduction of clinically innovative products for the Chinese people.

	With 1.4 billion healthcare consumers, China is larger than North America, South America, and the European Union combined. With annual pharmaceutical sales growth rate of more than 21% for 2007-2012, China is the world’s second largest market, behind the US. Even with China’s economic slowdown in 2015, the annual growth rate is a healthy 6.6%, vs. a global average rate of 1%, and is projected to grow at up to 9% through 2020 (15).

	With the future of pharmaceuticals having transitioned toward injectable biologicals and China offering the most promising opportunity for market growth of any geographic region, injectable manufacturing of global products in China to source the Chinese market is assured. To compete in this resource-intensive manufacturing process requiring large volume capacity and a technically trained labor force, pharmaceutical companies will logically turn to contract manufacturing in China to meet strategic sourcing requirements.

, Goldman Sachs Report (January 2016).
	2. K. Schwab, “The Fourth Industrial Revolution, What It Means, How to Respond,” World Economic Forum (Jan. 14, 2016).
	3. WuXi Global Forum: A Celebration of Partnerships: Session III China the New Horizon Panel Discussion moderated by Greg Scott, ChinaBio, JP Morgan Healthcare Conference (San Francisco, Jan. 12, 2016).
	4. M. Tirrell, “

JP Morgan’s Big Health-care Confab: What to Expect

,” Jan. 8,2016,  accessed June 13, 2016.
	5. The World Bank, 

Healthcare in China: Entering ‘Uncharted Waters

,’ McKinsey & Company (November 2012).
	7. B. Shobert, Lost Generation of New Products, WICON, Pharma China (Feb. 2, 2016).
	8. IMS Healthcare (research data).
	9. 

Press Conference with Chinese FDA (CFDA) Director Bi Jingquan,

, accessed June 13, 2016.
	11. N. Gray, “China’s next big move to bolster domestic drug industry: Market Consolidation,” 

 (Feb. 16, 2016), accessed June 5, 2016.
	12. A. Philippidis, “The Top-25 Best-Selling Drugs of 2014,” Genetic Engineering & Biotechnology News (Feb. 23, 2015).
	13. United States Patent and Trademarks Office (USPTO).
	14. Y. Cohen, “Small Molecules The Silent Majority of Pharmaceutical Pipelines,” 

, Nov. 23,2015,  
	15. J. Shen, “Confronting Healthcare Challenges in China,” Pharma China Annual Forum, Shanghai, China (March 18, 2016).

:
	When referring to this article, please cite it as D. Deere “Regulatory Reform in China Creates Opportunities," 

Quality, innovation, and new approval pathways open drug development options for the Chinese market, including injectable contract manufacturing.

Regulatory Reform in China Creates Opportunities

Bio/pharmaceutical contract development and manufacturing organizations continued investments in technology and facility upgrades in 2016. The following are some of the latest developments.

	Cambrex announced on July 12, 2016 the completion and validation of a $50-million production and warehousing expansion at its cGMP Charles City, Iowa site. The new 7500-sq.-ft. multi-purpose manufacturing facility will initially add a total of 70 cubic meters of glass-lined and Hastelloy reactors along with Hastelloy agitated filter dryers, and will be capable of handling potent APIs at an occupational exposure limit (OEL) of down to 1μg/m3. The 36,000-sq-ft cGMP warehouse provides general cGMP storage, and segregated 2-8 °C refrigerated storage with distributed control system monitoring and control for temperature and humidity (1).

	Hovione has started expansion of its East Windsor, New Jersey facility, which will add 30,600 sq. ft. to the existing 24,000-sq.-ft. facility to handle potent drug substances. The expansion will include a new commercial spray dryer unit to complement the existing pilot unit. In addition, the facility will more than double its capacity to manufacture drug substance. The expansion is expected to add approximately 60 new jobs to the current workforce over the next three years. The start-up of the operation is expected to take place in April 2017 for the drug substance and spray drying services, and the continuous drug product manufacturing is expected to start up at the end of 2017 (2).

	CordenPharma announced on July 2, 2016 that expansion of its Boulder, Colorado facility for the manufacture and development of oligonucleotide APIs will be completed by the end of 2016. The addition of oligonucleotide APIs will broaden the company’s service offerings, which currently include peptides, lipids, and carbohydrates for APIs and drug products (3). In late June, the Italian Medicines Agency approved Corden’s sterile injectable facility in Caponago, Italy. The recently completed manufacturing facility will support customer development and commercial programs by providing service in aseptic filling of liquid and lyophilized vials, and pre-filled syringes (4).

	On July 5, 2016, Recipharm announced that the company will invest $19.7 million to expand blow-fill-seal (BFS) capacity at its site in Kaysersberg, France including the introduction of a BFS high-speed filling and packaging line. The company reports that it plans to add three additional filling lines to the facility in upcoming years, increasing the company’s BFS capacity by 50% (5).

	On July 19, 2016, Quay Pharma announced that its laboratories and manufacturing facilities have completed FDA pre-qualification inspection that confirmed the company’s systems are GMP compliant, with no deficiencies identified. The company recently invested more than $3 million in GMP manufacturing suites to make larger batches of product for Phase 3 clinical trials and small-scale commercial manufacture for non-sterile products (6).

	Biopharma technology and facility upgrades

	In early June 2016, FUJIFILM Diosynth Biotechnologies announced a planned collaboration with MSD, known as Merck in the United States and Canada, to invest in and operate a large-scale microbial-biologics facility for supply of API to its customers (7). The collaboration involves a $60-million investment by MSD at its Brinny manufacturing plant in Innishannon, County Cork, Ireland. Fujifilm Diosynth will lead customer interactions, program management, and process and analytical development. The MSD facility will operate as cGMP manufacturing support for FUJIFILM Diosynth’s contract development and manufacturing business. The 20,000-L facility will be operational in early 2018 for biotech and pharma customers of FUJIFILM Diosynth to address Phase III and commercialization needs.

	In May 2016, FUJIFILM Diosynth Biotechnologies completed construction on a new three-story, 62,000-square-foot facility in Research Triangle Park, NC (8). The new building houses the company’s process and analytical research and development, process sciences, and stability groups. CMC Biologics announced in early June the completion of the first stage of the expansion of its manufacturing facility in Copenhagen, Denmark with the addition of a single-use Bioreactor 3PACK facility (9). The Bioreactor 3PACK configuration consists of three 2000-L single-use production bioreactors and associated seed train for scale up, which allows for production scales from 2000-L to 6000-L in a single production suite. The bioreactors can be run singly, simultaneously, sequentially, or in staggered fashion to achieve desired production needs, the company reports.

	Contract service acquisitions, IPO, and rebranding

	Evonik announced the acquisition of Canada-based Transferra Nanosciences on June 28, 2016. The acquisition will allow Evonik to expand its Business Line Heath Care for parenteral drug delivery technologies and services. Transferra services include prototype identification, scale-up and process development, analytical support and qualification of methods, production of test articles for toxicology studies, and cGMP manufacturing of clinical trial materials (10).

	Charles River Laboratories announced on June 27, 2016 that it has acquired Woburn, MA-based Blue Stream Laboratories, an analytical contract research organization supporting the development of complex biologics and biosimilars. This acquisition will combine Blue Stream and Charles River’s existing discovery, safety assessment, and biologics capabilities (11).

	Patheon closed an initial public offering of 34 million ordinary shares of its public stock for $21.00 per share on July 26, 2016. According to a statement, the company intends to use the proceeds of the sale and cash on hand to repay its outstanding $550 million of Senior PIK Toggle Notes, and pay related fees, expenses, and accrued interest (12).

	EAG, Inc. announced on July 12, 2016, that it has combined its 11 brands under EAG Laboratories to bring together capabilities in the materials, engineering, and life-sciences sectors. The company has 20 locations in the United States, Europe, and Asia-Pacific (13).

	In July 2015, the company acquired Analytical Bio-Chemistry Laboratories (ABC Laboratories), and in 2011, acquired Chemir Analytical Services, adding analytical services such as stability programs, extractables and leachables testing, bioanalysis, and custom synthesis.

	1. Cambrex, “Cambrex Completes $50 Million Investment in Large Scale API Manufacturing and Storage at Its Charles City, Iowa Site,” Press Release, July 12, 2016.
	2. Hovione, “Hovione announces the ground breaking expansion plans of its New Jersey Facility,” Press Release, June 15, 2016.
	3. CordenPharma, “CordenPharma Enters Oligonucleotide API Manufacturing Market to Further Strengthen its CDMO Offering,” Press Release, July 1, 2016.
	4. CordenPharma, “CordenPharma Caponago Announces Successful Approval of New Sterile Injectable Facility,” Press Release, June 28, 2016.
	5. Recipharm, “Recipharm increases blow fill seal capacity in Kaysersberg, France,” Press Release, July 5, 2016.
	6. Quay Pharma, “Quay Achieves Successful FDA Inspection,” Press Release, July 19, 2016.
	7. Fujifilm, “FUJIFILM Diosynth Announces Collaboration on a New 20,000-Liter Microbial Biologics Facility for Use by Its Contract Development and Manufacturing Customers,” Press Release, June 6, 2016.
	8. Fujifilm, “FUJIFILM Diosynth Biotechnologies Opens New Laboratory Facility in Research Triangle Park, NC,” Press Release, May 9, 2016.
	9. CMC Biologics, “CMC Biologics Expands GMP Manufacturing Capacity in Europe,” Press Release, June 2, 2016.
	10. Evonik, “Evonik acquires Transferra Nanosciences Inc.,” Press Release, June 28, 2016.
	11. Charles River, “Charles River Laboratories Acquires Blue Stream Laboratories,” Press Release, June 27, 2016.
	12. Patheon, “Patheon N.V. Announces Closing of Initial Public Offering and Full Exercise of Underwriters’ Option to Purchase Additional Shares,” Press Release, July 26, 2016.
	13. EAG, “Introducing EAG Laboratories,” Press Release, July 12, 2016.

:
	When referring to this article, please cite it as “CMOs Invest in Large- and Small-Molecule Manufacturing," 

Bio/pharmaceutical contract service provides continue to invest in development, facility upgrades, technological advancement, and mergers and acquisitions.

Pharmaceutical Technology-08-01-2016

What’s Next for the CMO Industry?

Testing Programs Ensure Drug Product Stability and Shelf Life

Effective Technology Transfer and Validation Strategies with CMOs

Regulatory Reform in China Creates Opportunities

CMOs Invest in Large- and Small-Molecule Manufacturing

New Business Models Attract Virtual Pharma

Debating the Role of RABS and Isolators in Aseptic Manufacturing

Dealing with Pharmaceutical Supply-Chain Complexities

Real-World Serialization

Planning for Successful Technology Transfer

Offshore Supplier Quality: Trust, But Verify