Cell and gene therapy boom creates CDMO capacity bottleneck

As of the third quarter of 2019, developers of advanced therapy medicinal products (ATMPs), such as cell and gene therapies, were running 1,052 clinical trials, according to the Alliance for Regenerative Medicine​. This represents a 67% increase in activity in four years.

Having gathered information on the impact of that increase at the CPhI Worldwide conference in Frankfurt, Germany, William Blair analyst John Kreger identified capacity constraints created by the pipeline expansion.

Kreger wrote, “There is surging clinical activity for cell and gene therapies, and production yields thus far have been poor. As a result, the viral vector producers such as Lonza, Thermo​ Fisher and Catalent have elongating waiting lists for new space, and sterile fill/finish capacity is also in short supply​.”

That conclusion is reinforced by the actions of organisations involved in developing ATMPs. In the US, ElevateBio created a production facility​ to help its portfolio companies take cell and gene therapies out of academic laboratories and toward commercialization.

The surge in demand for cell and gene therapy capacity is contributing to a broader trend that spans traditional biologic, small molecule active pharmaceutical ingredients (APIs) and finished dosage forms. 

Kreger wrote, “Nearly every company we spoke with at CPhI described demand as being excellent. We heard reports of extending wait lists for new projects, greater prevalence of pre-contracting for space under construction, and opinions that the only slack capacity​, at present​, resides within underutilized pharma plants​.”

The demand stems from both the expansion of drug development pipelines and the trend for small startups to discover a growing portion of new candidates and take them deep into human testing.

Many of these startups lack internal production capacity and therefore rely more heavily on contract development and manufacturing organizations (CDMO) than the large pharma companies that used to dominate the drug development pipeline.

Kreger thinks the proportion of new drug candidates coming from smaller companies means “the risk of longer-term oversupply is fairly low​.”

A significant minority of the current capacity is owned by a few CDMOs but the industry remains far more fragmented than the contract research sector. Kreger expects that to change gradually in the coming years as large players, notably Catalent, Thermo and Lonza, consolidate the fragmented market.