Long lead times: Demand currently outstrips supply for contract manufacturing

By Jane Byrne contact

- Last updated on GMT

© GettyImages/Reptile8488
© GettyImages/Reptile8488

Related tags: CDMO, Rna, pandemic

As capital project delivery ramps back up to pre-pandemic levels over the coming months and years, the smaller biopharma players are looking outside their own resources for strategic manufacturing and research support, confirms a new market outlook from CRB.

That publication, which we dipped into​ yesterday, is informed by survey insights from more than 500 pharma representatives on key issues facing their organizations.

We wanted to dig deeper on the contract manufacturing trends noted in the report, CRB Horizons: Life Sciences,​ with the authors noting the “heroic role”​ that CDMOs played during the push for a COVID-19 vaccine.

A role that “buffed their reputation to a shine”​ and demonstrated that unprecedented speed and scalability are possible through strategic partnerships, said the CRB team.

But companies whose scale-up strategy leans entirely on CMOs or CDMOs face a significant challenge: demand currently outstrips supply, and many contract manufacturers have prohibitively long lead times, they stressed.

IP protection

Large pharma companies seem to have planned for this in their manufacturing strategy. Most have a hybrid in-house/CDMO strategy or work exclusively in-house. Only 18% rely on CDMOs exclusively, according to the data collated in the CRB report.

“We believe that protecting intellectual property (IP) may also play a role because larger companies have a lot to lose if their IP gets out—and more resources to protect that IP by keeping it in-house. For start-up companies, there is nearly an equal split for in-house versus CDMO manufacturing—with capital cost being the strongest driver.”

Of course, large companies are better positioned than start-ups to limit their reliance on outsourced manufacturing, noted the life science industry specialists.

“For one thing, they are more likely to have the capacity and the capital to vertically integrate certain operations, like the critical fill-finish step.

“Start-ups generally don’t have this option as they scale toward commercialization.

“They’re operating with less capital, less infrastructure, and a great deal of pressure from investors to get their product to market as fast as possible. That’s likely why 73% of survey respondents from this group plan to rely on CMOs and CDMOs exclusively when it comes to production.”

Designing future flexibility

Even with more CMOs and CDMOs coming into the market every day, CRB wonders how so many start-ups will compete for so few outsourced manufacturing slots.

One way is to work with a consulting partner who can help them accelerate the process of finding, prequalifying, and negotiating with appropriate and available contract manufacturers, according to the publication.

“A good partner will go even further, though, helping start-ups review their business case with alternative options in mind. If a drug developer faces a five-year wait for capacity with their CMO of choice, for example, but they could build a small-scale manufacturing operation in just two years, they may come out ahead; the value of getting their product to market three years sooner could more than offset the cost of constructing and operating their own commercial facility.

“And if they design future flexibility into that facility—by integrating multimodal equipment platforms, for example—then they could be at an even greater advantage, particularly as they grow and diversify their product portfolio over time.”

Outsourcing RNA production

More than one-quarter of respondents to CRB's poll said they are pursuing or plan to pursue RNA therapies across a wide array of indications, from autoimmune diseases to oncology. 

Given that, for now, the quantities needed of most RNA products are small, there is a logical preference to outsource production. This is reflected in the fact that 60% of respondents said they intend to enlist a CMO/CDMO to produce their RNA products.

crb horizons life sciences
© CRB Horizons Life Sciences 2021

“However, the rising popularity of RNA-based therapeutics, combined with the limited capacity of CMO production space, especially for RNA-based technology, means a company might have to wait up to two years before delivery of its first batch. This is a trend that has driven up prices.

“This move is mirrored in the oligo sector, where 45% plan to pursue in-house manufacturing. Among those considering in-house production, the average timeline for capital investment is three years.”

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