Biologics Manufacturing: The CMO Advantage

Biologics Manufacturing: The CMO Advantage


Since the late 1990s, the use of CMOs has steadily increased. The research survey indicates that complications remain, however, as companies with relatively sophisticated manufacturing capabilities still encounter issues in replicating a facility. Consequently, biologics manufacturing companies should carefully weigh the risks associated with contract manufacturing. The research also indicated, however, that an increased level of knowledge, experience, and skills among contract manufacturers and their deeper understanding of biologics manufacturing are helping to reduce these risks. Just go through the article for better understanding about the topic..



DEMAND FOR BIOTECH PRODUCTS ON THE RISE



Since recombinant insulin was first developed and commercialized in the early 1980s, biotechnology-derived therapeutic products have grown in both number and revenues generated. The growth has accelerated in recent years and is expected to continue in the near future. The worldwide market for biotech drugs in 2010 is estimated to be nearly $70 billion, with an estimated compound annual growth rate of around 10% from 2005 to 2010.

The number of biotech drugs is expected to grow from 100 in 2005 to about 150 in 2010. A closer look at the current research and development (R&D) pipeline shows more than 500 protein and 150 peptide drugs in various stages of development, suggesting that this growth will continue. This increasing demand for biotech products will likely require greater manufacturing capacity.


Spare capacity based on planned capacity projections is decreasing from around 57% to 25% for monoclonal antibodies. While it may appear that no additional capacity is required, we believe this is not the case, for two reasons.

First, all capacity is not the same. While certain types of manufacturing capacity, such as those used for fill-and-finish operations, are abundant, industry professionals have indicated that other types of capacity for upstream processes like fermentation and purification are scarce.

Second, both supply and demand in biotech operations can be highly uncertain. Even though biologics manufacturing is more advanced now than before, it is still relatively immature and may lead to significant supply uncertainties. On the demand side, drug development and commercialization risks can lead to large de-mand variations. These uncertainties require a substantial buffer in manufacturing capacity.

We believe these reasons, combined with the significant reduction in spare capacity we expect to see in the near future, indicate that the need to develop more manufacturing capacity is high. However, additional capacity is needed more in some areas than others, as we will discuss below.



MAMMALIAN CELL CULTURE SHOWS HIGH POTENTIAL

There are significant differences in the outsourcing market for the two main types of biotech drug manufacturing, microbial manufacturing and mammalian cell manufacturing.


As a first-generation technology, microbial manufacturing is typically less complex than mammalian cell culture, but has limitations. As a result of less frequent use in new products and the commoditization of technologies, the majority of microbial manufacturing capacity already resides in CMOs. Thus, the growth potential for microbial manufacturing appears to be limited. These observations suggest that microbial manufacturing is maturing and there may not be a substantial need for additional capacity in the future.

On the other hand, mammalian cell culture technologies are still less developed, and most technologies and processes involved are proprietary. A large portion of manufacturing is still controlled by the product companies. At the same time, significant expected growth suggests that opportunities for process improvements are abundant and additional capacity may be needed. This additional capacity could be built internally or outsourced to a CMO.



CMOS ARE CRITICAL TO THE BIOTECH ECOSYSTEM


Since the 90s, the overall CMO market has grown significantly, to around $2 billion. CMOs now represent 66% of total microbial manufacturing capacity and 25% of overall mammalian cell culture capacity. CMOs play a dominant role in microbial manufacturing, with the three largest CMOs—Sandoz, Akzo, and Avecia—representing 40% of the market. On the other hand, mammalian cell culture manufacturing is still largely dominated by in-house capabilities.

As the biologics manufacturing market matures, the CMOs will continue to grow and provide compelling value propositions to biotech companies, both small and large.