Outsourcing: What is the Path Forward? - External consultants and contract service organizations will play a central role in biopharmaceutical expansion and commercialization during the next ten

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Outsourcing: What is the Path Forward?
External consultants and contract service organizations will play a central role in biopharmaceutical expansion and commercialization during the next ten years.


BioPharm International


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. 1 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. 2 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 development.

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.


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