The CDMO Evolution

According to market research, over the next five years the pharma contract development and manufacturing organization (CDMO) market is expected to grow at a compound annual rate of 8% (1). A key driver of this growth is highlighted as the increasing need for advanced processes and production technologies that are capable of meeting regulatory requirements.

Diving deeper into the evolution of the CDMO market in pharma during the past 30 years, Pharmaceutical Technology Europe interviewed Matthew Moorcroft, vice-president of Global Marketing at Cambrex.

A changing landscape

PTE: Could you run through some of the key factors that have driven the most significant change in the CDMO model over the past 30 years? 

Moorcroft (Cambrex): From a small-molecule API and fine chemical manufacturer perspective, the past 30 years have seen numerous changes in terms of the variety of services offered, the types of chemistries and the volumes of material manufactured, the dynamic nature of the competitive landscape, and the breadth of customers we work with.

The concept of outsourcing in API manufacturing was coined at the beginning of the early blockbuster era of pharmaceuticals, at a time when volume demands outstripped pharmaceutical companies’ internal resource and capacity. Drug manufacturers turned to one or two pioneering contract manufacturing organizations (CMOs) to take on very specific manufacturing steps-either early in the synthetic process, or ones that involved challenging or hazardous chemistry and needed specialist capabilities. Fast forward a few decades to the present day, where an entire CDMO industry has been created to support the plethora of new projects as the trend towards outsourcing has continued. CDMOs’ capabilities have also evolved to be able to manufacture entire campaigns in large, multipurpose facilities.

After the end of the first wave of blockbusters, Big Pharma companies came under increasing pressure to reduce their costs, which ultimately filtered down to risking API product quality for a lower price from suppliers. This led to an inevitable migration to lower-cost CMOs such as those based in India and China. At the same time, the industry shifted from custom synthesis to toll manufacturing, and using a CMO for its skill or know-how in a specialist technology or developing a process was no longer required. CMOs were soon beginning to be seen as undifferentiated, and increasingly, the lowest-bidding supplier was awarded the business.

Again, fast forwarding to the present day, the now-evolved CDMO market has strengthened again for Western-based suppliers, which has coincided with a decrease in the amount of captive manufacturing in Big Pharma and the increase in the number of FDA [US Food and Drug Administration] and EMA [European Medicines Agency] approvals for small-molecule new chemical entities (NCEs). Customers are also focused on high-quality API product rather than low costs.

The nature of the customer base for CDMOs has also seen an interesting shift, away from the traditional Big Pharma companies, to where the majority of new drugs in development are being developed by smaller and virtual companies. These smaller companies typically lack the manufacturing assets required to produce the quantities required for clinical or commercial supply, further tilting the balance to outsourcing.

Finally, the nature of the APIs and intermediates involved in the new wave of drugs in the pipeline has also seen dramatic changes: the increased number of synthetic steps; the availability of key raw materials; the toxicities of the species produced; as well as the typical volume requirements of small-molecule drugs have led to CDMOs needing to evolve and keep in step with these trends.  

Come a long way

PTE: How have CDMOs evolved to be able to deal with the various industry changes?

Moorcroft (Cambrex): The most successful CDMOs have had to invest in new technologies, facilities, containment capabilities, and staff expertise. CDMOs have moved a long way from the toll manufacturers of the late 1990s, and are once again considered experts rather than “capacity for hire.” 

CDMOs have had to be increasingly attentive to their customers’ requirements, investing accordingly in appropriate capabilities, technologies, and capacity. Establishing in-house market intelligence groups has also proved important to monitor and measure industry trends and adapt to fulfil the markets’ needs. 

Flexibility is key

PTE: In the future, what might significantly impact CDMOs?

Moorcroft (Cambrex): The shift in the customer base and reacting to customers with new and different needs is key. Typically, these companies have little or no captive manufacturing, are less resourced in managing single or multiple outsourced suppliers, and are likely to have less experience in bringing a drug to market than Big Pharma. This means that those CDMOs in a position to offer integrated solutions over the lifecycle of a drug can benefit from strong, strategic partnerships with the growing number of smaller companies who are taking their products through the clinical pipeline and on to the market.

At the same time, it is imperative that CDMOs can offer a broad range of manufacturing chemistries and technologies, and have the ability and flexibility to manufacture clinical and commercial volumes. Historically, this meant volumes of 100s of metric tonnes; but today, CDMOs also need to be able to cater for the growing number of niche volume APIs and drug products, requiring significantly lower volumes-even in the 100s of kilograms. Flexibility is crucial for CDMOs to be able to respond to sudden changes in volumes that the customer has perhaps not forecast, either due to the need for additional clinical trials or sudden changes in the launch quantities or commercial supply.

Reference

1. Mordor Intelligence, “Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market-Growth, Trends, and Forecast (2019–2023),” Market Report, June 2019. 

Article Details

Pharmaceutical Technology Europe
Vol. 31, No. 8
July 2019
Page: 16

Citation 

When referring to this article, please cite it as F. Thomas, “The CDMO Evolution,” Pharmaceutical Technology Europe 31 (8) 2019.