What can the pharma industry do about the critical shortage of contract manufacturing organization (CMO) and contract development and manufacturing company (CDMO) facilities?
For a growing number of young entrepreneurial drug companies, the answer is a middle ground between building their own facilities and outsourcing to the saturated CMO/CDMO market. This middle ground lies in hybrid flexible cleanroom facilities with wraparound support services, which are gaining greater acceptance in the pharma industry. This model allows companies to leverage their manufacturing expertise while still maintaining control of their intellectual property. This approach is particularly valuable as new therapeutic technologies emerge, which require a different competency than many of the existing CMO/CDMO facilities can handle. Hybrid flexible cleanroom facilities are likely to emerge as a new paradigm, changing the face of the drug development industry.
The scope of the problem
How serious is the CMO/CDMO capacity shortage? A recent report from Bourne Partners showed demand for pharma CDMOs outpacing supply by 16 to 24 months. The demand has become so great that customers are paying to wait in production lines “years in advance.” What’s more, even though the CDMO industry is rapidly adding new facilities to address this shortage, Bourne suggests that the capacity offered by new facilities will only address the existing backlog of work. A gap remains for future capacity, and the pipeline of therapies being developed continues to grow dramatically.
What about going it alone and building a facility?
That comes with its own unique challenges. CMO/CDMO contracting became a real force in the late 1990s, addressing the time and expense required for pharmaceutical companies to build new facilities or refit existing ones. These challenges are why CMOs/CDMOs exist in the first place, and now they are currently not able to adequately scale to fill the industry’s manufacturing needs.
A “build-new” timeline can be daunting. Under the best of circumstances, facility procurement, construction and qualification can take at least two years or more. In reality, that number can easily double. The Pharmaceutical Research and Manufacturers of America has placed that number at five years or more. Many companies, particularly smaller start-ups cannot afford to take that time to advance their therapeutic candidate. Without the capital reserves of larger pharma companies, many companies find themselves caught between a rock and a hard place, leaving smaller biotechs without access to the same resources as their established counterparts.
What is the solution to this problem?
As mentioned at the outset, using flexible hybrid cleanrooms with a wide range of wraparound services is one strategy that can be deployed to put dynamic companies back on track to get from discovery to delivery.
The advantages of the middle ground
This hybrid cleanroom option has fundamental advantages that might not be readily apparent.
First among those advantages is the capability to “fail fast.” No one wants or anticipates failure, but it is a part of the developmental process. Speed to market is essential in the success of any drug, and pharmaceutical manufacturing is costly and labor-intensive. It’s best if a company knows early if a given molecule is likely to fail so that it can move on quickly to other pipeline candidates. Waiting a year or more for a CMO/CDMO to produce a product only to have it fail is a cost most small companies cannot afford. In the same timeframe in a hybrid facility, a company can make multiple batches of product and adjust or pivot processes as needed based on clinical results of their molecule. It speeds up the fail-forward decision.
A second advantage of the hybrid model is the control of intellectual property (IP). It is important to remember that most CMOs/CDMOs need access to a company’s intellectual property to manufacture a product for them. That is a daunting prospect for many companies, especially for early-stage companies, whose principal asset is typically their IP. The hybrid flexible cleanroom strategy doesn’t require that transfer of knowledge. Clients enter the cleanrooms and conduct their business without the lessor of the cleanroom needing to know the specifics of their intellectual property. A simple process fit exercise is all that is required.
Another underestimated advantage in this strategy is the GMP and related expertise such facilities provide beyond the manufacturing process. Entrepreneurial young companies are typically research-driven and may not have a core competency in supply chain/materials management, facility/asset management and phase-appropriate GMP requirements.
With deep expertise in GMP practices and quality management systems, hybrid flexible cleanroom facilities offer support that would otherwise add time and cost to the development and manufacturing process. That’s particularly true for novel therapeutics such as cell and gene therapies, personalized vaccines and microbiome processes.
Scaling out versus scaling up: How companies grow
Of course, as companies grow and mature, they are likely to move beyond flexible hybrid cleanroom facilities, particularly as they approach commercialization. The growth of these entrepreneurial companies from start-up to success eventually leads them to graduate to later-phase CMO/CDMO organizations or develop their facilities. Until then, these ambitious young companies have to continue to deal with the business challenges of scaling up versus scaling out. Fortunately, their options are no longer limited to building versus outsourcing because the former (building) is costly and time-consuming, and the latter (outsourcing) has seen demand outstrip available capacity.
The answer to the critical shortage of CMO/CDMO facilities in the pharmaceutical industry now lies in the option of hybrid flexible cleanrooms. From retaining their IP and failing fast to developing their expertise in GMP practices, hybrid flexible cleanrooms are a winning strategy for dynamic and entrepreneurial drug development companies. Not only will this new approach allow such companies to progress more quickly, but it could also become the new paradigm for how the industry will operate for the foreseeable future — or until the CMO industry waiting list grows much, much shorter.
Daniel Dernbach is vice president of operations at Azzur Cleanrooms on Demand.