BioPharm: What specific adaptations have you made to implement QbD?
Hancock: We've built up our process development group and integrated it as completely as possible with our analytical development
group. One of the first things we do before we start process development is to make sure we have assays in place that are
reliable and rugged enough to detect the purified product and impurities along the way. We'll do an initial qualification
of those assays so that when we start process development and we begin generating a lot of samples we know that we have a
reliable, quantitative assay for testing them., As we're going through the process development and comparing different process
steps we have procedures in place that allow us to do a rigorous mass balance and a thorough evaluation. This way, when we
come to a decision point in the process, we have very reliable data we can share with our client which allow us to make a
well-informed decision together on how to proceed.
BioPharm: As you know, drug shortages are on the rise, especially for many crucial drugs, such as those targeted to treat cancer. Reports
blame uncertain supply chains and inadequate capacity. Would you agree with this assessment?
Hancock: To me, the biggest issue is that a number of these products are older products, and some are very low margin. I think
that a number of companies in these challenging economic times are focusing on the highest return products when they look
at their portfolio. For products that are extremely low margin and very competitive, companies may be forced to drop product
lines and focus more on higher margin products. A whole lot of people dropping these product lines at once have created shortages,
so the prices will likely increase. The markets are very fluid and I think they'll adapt, but it will be some period of time
before it happens.
Another factor to consider is that there are inherent manufacturing and supply chain challenges associated with some of these
products, such as with high potency products. Historically, a company may have been able to [manufacture these products] fairly
easily, but as occupational safety and containment regulations have become more stringent, some companies have realized that
they need to make a large investment to comply with the newer standards or they may have decided that that's not a direction
they want to go, or they don't have access to capital.
BioPharm: Is it a fair characterization to say that there is overcapacity in biologics outsourcing? How do you see this issue playing
out in the next few years?
Hancock: [In microbial manufacturing] in the US, we have not observed an excess of capacity. There may be at the small scale. When
we did a survey a while ago, we found that if you wanted to do microbial fermentation at 100-L scale, there were about 30
companies you could go to. When you get to the 1000-L scale, that number goes down by a factor of 10. At the small scale,
there is plenty of capacity, perhaps over capacity. At the larger scale, based on what we're seeing, there is a lack of capacity.
Our estimates are that for all biotech products, 35–40 percent are produced in microbial systems (E. coli, yeast, any other microbe) and the rest are produced in mammalian systems. As Althea has expanded, we have considered adding
mammalian production several times. However, in watching all the new plants coming on line, I always thought there would be
a bit of a glut. For mammalian production, a new facility can be accomplished with very little capital by using a WAVE or
other disposable system, which really lowers the barriers to entry. For microbial production, stainless steel tanks are required
and represent a much higher capital investment. When I talked with larger and more established friendly competitors in that
area [mammalian-cell manufacturing], it seems like many of them are really busy. A lot of their facilities are booked for
the next year to 18 months. Again, I believe there to be plenty of capacity for early stage or small-scale projects. However,
at large scale or for commercial projects, there is a limited pool of companies that can really do it well, have approval
produce commercial products, and that have robust quality and regulatory systems required to support these programs. As with
most things, the companies that execute well are very busy, so it seems like there really isn't an excess of capacity at that
scale and level of performance.
I can look out as far as 18 months or so. Similar to how companies are now accustomed to producing many of their small molecule
APIs in China or India, I think many companies will become more comfortable producing their large molecules in those countries
as well. Many of the concerns are IP related and recently the governments have taken steps to address these concerns. Also,
they haven't made a lot of these types of products so their quality systems are not as robust as many clients will require
and there are not as many FDA-inspected facilities from which to choose. They're building a lot of very large facilities so
if you combine that with a very well-trained and relatively inexpensive workforce, Asia could become an attractive option
for biologics manufacturing very quickly. The flip side is that there are a lot of biotech drugs in the pipeline, and with
biogenerics, instead of one facility producing the world's supply of a product there will be 2–8 major players who will each
have their own facility. I don't see shortages in capacity because of all the new facilities coming on line in the US and
Europe, but [I don't see overcapacity because] there are enough products to support that capacity.