Universal learnings & Key strategies

Universal learnings & key strategies

So far, we have assessed several competing outsourcing philosophies and taken a sweeping look at the small molecule CDMO sector. In this section of the report, our experts will take you from theory to practice. Here they outline the pros and cons of different outsourcing strategies and tell us which they believe to be the most effective.

As we explored in a previous section, the sector has been shifting away from phase-appropriate development in favour of a more forward-looking model. It should therefore come as no surprise that our experts advise starting the search for an outsourcing partner early.

According to Hajir Mokhtari, Senior Manager, Programme Management at Thermo Fisher Scientific: ‘Once you've decided that you need a CDMO partner, the sooner you engage them the better.’ Mokhtari, who works on the company’s Quick to Care™ programme, notes that early engagement can be particularly beneficial for smaller companies who stand to benefit from the outsource partner’s experience.

‘We've seen it done in both ways. We have clients who look for partners from the molecule inception and the idea inception, which is the best prepared approach. As soon as you have a potential molecule, you can engage the experts on your partner’s side to help put a project plan in place to get you to the end goal,’ he says.

‘And we have also had other clients, mostly Big Pharma, that might have some early development studies and might have preclinical data and now they're looking for tech transfer to their CDMO. Regardless of what your needs are, if the decision is made that you need to outsource to a CDMO, the earlier you engage them the better. You’re then better positioned to have those discussions and ultimately get the most help that you can from your partners.’

Our experts advise starting this search with a general roadmap in your pocket, as this should narrow the options. Bikash Chatterjee, CEO of Pharmatech Associates, says it is important to have a ‘clear idea what the end game is for your business plan’.

He says: ‘It’s important for drug sponsors to go into an engagement understanding that CDMOs often have both current development and commercial customers they are managing simultaneously. On average a CDMO allocates a total of 7-10 hours per week for managing your projects—which isn’t very much. So, going into the engagement, drug sponsors must have a really clear roadmap on what you want a CDMO partner to do, how you want them to do it, and how you want to work together.’

It is important to have a clear idea what the end game is for your business plan. It’s important for drug sponsors to go into an engagement understanding that CDMOs often have both current development and commercial customers they are managing simultaneously.’

Bikash Chatterjee, CEO of Pharmatech Associates

Multi-vendor vs integrated services

When considering potential CDMO partners, drug sponsors also need to decide whether to take a multi-vendor approach, where they work with more than one partner, opt for an integrated services solution that handles the process from start to finish, or just engage an outsource partner for a very limited part of the process. The suitability of each option will likely depend on a few factors, such as the size of the sponsor company, the type of expertise required, and the desired time to market.

Valdas Jurkauskas, Senior Vice President at Pardes Biosciences, gives the example of a small, up-and-coming biotech moving towards IND. He says: ‘For a fast-moving first in human study, when that development candidate needs to go to IND, time is very, very short. Biotechs may benefit from a CDMO that provides integrated, end-to-end services. That could be advantageous from a timeline perspective, especially when it’s compressed. For example, end-to-end services may be advantageous when there are only a few short months between nomination of development candidate and corporate objective to file the very first investigational new drug application and initiation of the first in human studies. In such an instance, it may be easier to establish an integrated development and manufacturing plan leading to drug substance and product GMP batches.’

Jurkauskas notes that while an integrated solution may work well at certain points in the process, sponsors should not assume that it will be the right fit for all. ‘Whatever is the best for first in-human enabling studies may not be the best for registration and validation. So, the point is that it’s important to assess what technology and capacity is required for this drug,’ he says.

Chatterjee echoes this opinion, noting that CDMOs offering integrated services have strengths and weaknesses. He says: ‘While an integrated CDMO potentially gives you more visibility on what the roadmap may be, as the drug sponsor moves to submission it is hard to for a CDMO to be good at everything. Smaller CDMOs will likely have areas they specialise in—such as analytical method development or process characterisation—while larger CDMOs can muster greater resources to support or lead key development activities. In the end the data must meet the expectations of the intended regulatory authority, and understanding a CDMO’s true capabilities will greatly reduce a drugs sponsor’s programme risk and help realise timeline acceleration.’

However, Chatterjee says expectations around quality and expertise must be balanced with logistical and regulatory considerations. ‘Ideally you don't change CDMOs,’ he says.

‘Going from first-in-human to commercial with one CDMO partner provides a drug sponsor and CDMO with the ability to build a cadence and understanding of how best to work together. There is complexity associated with changing. Even if you ignore the logistics around having to qualify, tech transfer, integrate, get to know, and work with a new CDMO. In a multi-vendor model, there is the CMC argument and the clinical argument that you must consider to make a comparability argument as you move through the clinical programme. You want to do that thoughtfully, so that you're not putting yourself in a situation where you've got fundamentally disparate processes in the eyes of a regulatory authority.’

For drug sponsors who lack experience managing CDMO relationships, selecting one vendor who can provide expertise across a range of services can simplify the process. In this case, sponsors are able to map out the entire product journey and if there is a delay in one phase, timelines can be easily adjusted. This is more complicated with a multi-vendor approach, as the sponsor retains complete responsibility for keeping the project on track. In the case of a delay or unexpected change, the sponsor must communicate with multiple vendors, sometimes working in parallel, and adjust timelines across multiple projects.

According to Elena Gontarz, Senior Manager, Scientific and Technical Affairs at Thermo Fisher, the ability of a sponsor to communicate through one central channel is a significant benefit of the integrated services model.

Speaking about Thermo Fisher’s Quick to Clinic™ programme, she says: ‘We provide clients with a complete package, where they don’t have to think about the moving pieces all the time. They can just contact one person, ask how the project is going and pretty much just be involved in the technical part. They don’t have to think about something not working in the timeline, something needing to be moved around, or there being a delay.’

Acknowledging Chatterjee’s point that integrated offerings may not be able to provide the same level of expertise across all stages of development, Gontarz says sponsors should consider whether capabilities or speed are more important to their individual project. She notes that while outsource partners like CROs can provide valuable, niche expertise, sector-wide capacity issues make attaining these services a challenge.

‘These CROs maybe deliver a product that is 10% better, but then you have to look at the delays that they provide because everybody wants to work with them. It's like you're trading off 10% of improvement for 20% of your overall timeline. So, is it worth it? That’s for the sponsor to decide.’

Additionally, several of our experts stated that outsource partners engaged as part of a multi-vendor project tend to demonstrate less buy-in than vendors who work on the project from start to finish.

‘Thinking about the multi-vendor approach, let's say you decide to do your preclinical, early development studies with one CDMO and then go to another vendor for your clinical trials and another vendor for your validation and commercial. That creates a web of multiple vendors and multiple stakeholders that the clients are left managing on their own,’ says Hajir Mokhtari.

‘So, the responsibility ends with that one vendor. They don't have that shared commitment throughout the process. They just think about their portion of the work, get it done, and hand it over to the client.’

This poses the question – when does it make more sense for a sponsor to take the multi-vendor route, rather than selecting an integrated, ‘all under one roof’ solution?

According to Brian Scanlan, Operating Partner – Life Sciences at Edgewater Capital, mid-sized outsource partners may be a better fit for highly nimble biotechs who accept the added complexity of working with multiple vendors as a trade-off for quality and cultural alignment.

The challenge here is that a wave of acquisitions in the last few years means that the market is increasingly spilt into large and small contract providers. Moving forwards, the question is will we see many of the smaller firms, who often offer excellent chemistry services, grow to fill this gap? That might be a great solution in a growing outsourcing space.

Scanlan says: ‘We are left with a giant divide between the really small players and the really big ones. There's not a lot to bridge that gap, and this is causing a discontinuity in the market because the smaller players don't necessarily have integrated solutions and cannot provide a fully strategic outsourcing solution to their biotech and big pharma customers. However, culturally, they match up extremely well, particularly with the small, medium and virtual pharma companies. These smaller players tend to be entrepreneurial, fast paced, lack bureaucracy, and have a very strong depth of expertise, albeit in a very narrowly focused window. So, it can be a very valuable proposition.”

In fact, Scanlan anticipates these smaller CDMOs growing extremely quickly as sponsors become more comfortable managing complexity as a tradeoff for access to high quality teams and chemistry.

Ultimately, it is for the drug sponsor to consider the level of expertise required for their individual project, as well as their own capacity to potentially manage multiple concurrent outsource relationships. It is clear that both models (multi-vendor and integrated services) pose their own unique challenges and benefits, and sponsors should remember that the suitability of either one will be highly dependent on project-specific factors.

Perhaps the most significant takeaway for sponsors is that they must look at early development with new eyes and have a development strategy and pathway mapped out much earlier than before – irrespective of the number of CDMOs or complexities involved. In fact, the work undertaken in early or in preclinical, mapping out a route to commercial, is perhaps the most important component of successfully turning ideas into therapies.

We are left with a giant divide between the really small players and the really big ones. There's not a lot to bridge that gap, and this is causing a discontinuity in the market because the smaller players don't necessarily have integrated solutions and cannot provide a fully strategic outsourcing solution to their biotech and big pharma customers.’

Brian Scanlan, Operating Partner – Life Sciences at Edgewater Capital