The two companies were familiar with each other's capabilities and culture well before their discussions began. For one, their
two facilities are located in close proximity to each other in RTP. In addition, both have been involved in a manufacturing
group within The North Carolina Biosciences Organization and have benchmarked each other's best practices as part of that
Both Sanders and Arp say that their partnership is truly strategic and different from a traditional CMO deal. They describe
it as a "reciprocal and co-dependent relationship," in which issues that arise will have to be handled consistently for both
parties. So, for instance, the way in which Biogen Idec resolves a problem in the manufacture of an oral solid-dose product
for Eisai will be reflected in (or reflective of) how Eisai handles a similar problem in the manufacture of injectable products
for Biogen Idec. The sometimes adversarial relationship that can arise in a traditional CMO-client relationship can't be tolerated
in their partnership, they contend.
As one might expect, governance will be a key to success in the partnership. The two companies have established a joint steering
committee consisting of three representatives and director-level leadership from each. Manufacturing, engineering, and quality
professionals are included on the committee.
Both Sanders and Arp maintain that the compatibility of their corporate cultures will be the central factor for the partnership's
success. "Finding the right partner with the right values" was crucial in establishing the relationship, and the fact that
they are both mid-size companies able to be flexible and nimble is also important.
MIXED SOURCING STRATEGY
For both Biogen Idec and Eisai, the new manufacturing partnership is part of a sourcing strategy in which both internal capacity
and CMO relationships are key components. Biogen Idec has traditionally outsourced its fill-and-finish requirements while
maintaining its own large molecule API manufacturing facilities. While it will manufacture its own products at the leased
Eisai facility, it has also outsourced the manufacture of a new solid-dose product in its pipeline.
Eisai plans to continue to invest in its injectables capabilities to support its own pipeline, and sees the additional volume
from Biogen Idec as helping to justify the additional investment. However, Eisai will use CMOs where appropriate: it recently
announced a three-year master supply agreement with DSM Pharmaceutical Products for manufacture of eribulin mesylate (Halaven)
at DSM's Greenville, NC, injectables manufacturing facility.
Whether the partnership between Biogen Idec and Eisai is just a one-off event or becomes a model for the industry remains
to be seen. It may be that unique factors like geographic proximity, interpersonal dynamics, and complementary needs facilitated
an innovative approach that may be hard to duplicate. Or it may be that having seen this example of a new partnership approach,
other bio/pharmaceutical companies start looking for innovative alternatives to addressing their manufacturing requirements.
Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report, tel. 703.383.4903,