Sales of biopharmaceuticals are projected to grow at a rapid pace over the next few years. Biological products are expected
to account for 60% of revenue growth for large pharmaceutical companies by 2010, with annual sales increasing by $26 billion,
compared to a $13 billion increase for small molecules.
Meeting the production capacity for this remarkable expansion, however, will have many companies, large and small, competing
for solutions. Although several large drug companies have built up manufacturing capacity in anticipation of future growth,
small- to mid-size biotechnology companies may be left exposed to fluctuations in demand, a shortfall of skilled labor, or
a lack of flexibility in adapting to new technologies and regulatory demands. Smaller companies may simply remain behind the
curve of anticipated demand. One solution lies in using outsourced expertise to rapidly adjust to changes in production requirements,
to improve efficiencies, and ultimately to transfer this expertise in-house. In fact, a survey conducted in 2004 showed that
35% of companies with biologics outsourced at least some of their production, and the survey predicted that this number will
increase to 47% by 2008.
This article examines some of the emerging trends and strategies for meeting anticipated growth through outsourcing, particularly
among smaller companies that focus their core competencies on discovery, and that lack their own infrastructure for product
manufacturing and development.
Outsourcing Development: Where to Start
The areas of greatest need for outsourcing in the biopharmaceutical sector include drug substance and drug product manufacturing,
preclinical biology, regulatory oversight, and first-in-human studies. The foremost challenge for emerging companies is drug
substance and drug product manufacturing, followed by the rest of the critical path activities that lead to Phase 1 clinical
Discovery-based organizations' core expertise is the ability to decipher biological pathways, to identify disease targets,
and to develop novel drug candidates. These companies are able to make small quantities of their lead compounds; to take a
drug into Phase 1 and Phase 2 clinical development, however, they must dramatically increase the scale of production under
good manufacturing practice conditions. This step is extremely resource-intensive, and it is a step that most small companies
cannot manage independently because it is a distraction from their core competencies.
Emerging and mid-size companies have a number of choices when considering how to ramp up production of a drug candidate. Outsourcing
to multiple vendors does not, by itself, protect these companies from wasteful and costly inefficiencies in development and
manufacturing if the project is not managed properly by the skilled staff. To help smaller companies navigate these complexities,
experienced consultants have taken an increasingly prominent role in shepherding biopharmaceutical or pharmaceutical products
through the manufacturing and development processes, as well as in coordinating relationships among companies and their vendors.
Consultants can help emerging companies realize greater efficiencies, speed development, and generate the quality of material
needed for reliable preclinical and clinical safety and efficacy studies. Getting it right the first time adds long-term value
to a project.
Consultants can help biopharmaceutical companies and their boards understand the complexities of manufacturing systems, thereby
minimizing mistakes that a company might make if it tries to do it alone. Biological manufacturing is an area where depth
and breadth of expertise is commonly scarce at small companies. A company that deals directly with multiple vendors, without
the benefit of a knowledgeable and experienced consultant, risks the expensive prospect of having to repeat its efforts as
it endeavors to generate well-characterized biologics and meet regulatory requirements. Investing early and gaining access
to consultants with hands-on drug development expertise is vital to achieving best practices on the first attempt.