Inside the Outsourcing Relationship

Real Life Lessons from Contract Manufacturing Services Partners
Jul 01, 2003

Serendipity has little to do with a successful manufacturing outsourcing relationship, but strategic planning does. So does picking the right partner, a key factor in any serious alliance. An understanding of the client's clearly defined needs, objectives, and product vision is vital, as is both partners' ability to grasp the other's expectations. A realistic attitude, flexibility, and trust are equally important attributes on both sides of the table. And the real glue that holds the partnership - and project- together, even more so than a formal contract or quality agreement, is the ability to communicate regularly and honestly with each other. As impossible as all that may seem, partnerships like these do exist in the biopharmaceutical industry. Here are lessons learned from the partners of two successful matches.

Whether you contract for activities outside your core competencies or for shared or extended competencies, there are considerable benefits to be had if the outsourcing relationship is executed properly. In the case of contract manufacturing services, client companies consistently name the same three major benefits: speed to market, risk and debt reduction, and access to expertise, equipment, and experience.

Mark O'Mahony, head of process development, quality control, and manufacturing for the biopharmaceutical company TolerRx, Inc. (Cambridge, MA), says, "Outsourcing compresses our development timeline, primarily through access to the facility, equipment, personnel, and expertise that we may not have in-house. We avoid capital risk and debt and gain flexibility. In early stage development, you want to mitigate your risk as much as possible. Working with a contractor allows you to do that, and it also allows you to change direction fast."

TolerRx, whose development pipeline contains four monoclonal antibody products to induce, maintain, or remove immunological tolerance, outsources purification and aseptic filling functions to Laureate Pharma LP, a privately held contract manufacturing services firm headquartered in Princeton, NJ. Laureate's Michiel Ultee, senior director of biopharmaceutical development and operations, confirmed that the capital outlay for a clinical-phase production center falls anywhere between $50 million and $300 million. "To invest that kind of money in something with uncertain returns is risk-laden," he says.

Time is also invested constructing a facility, from site placement, beginning with local zoning concerns, to actual construction and validation of all the processing equipment, including bioreactors and chromatography stations. Validation of a large piece of equipment can take three to five months, according to Ultee, so it could be up to a year to fully validate all the equipment. "It's a totally different timeline than, say, constructing a bank," he adds.

TolerRx continually assesses its make–buy decisions, and a balance of both has been the best way forward to expedite the way to the clinic, shares O'Mahony. The company seeks current good manufacturing practices (CGMP) and current good laboratory practices (CGLP) outsourcing support for its preclinical and clinical trials with several manufacturing and testing facilities at any one time, depending on the available capacity, scale, and technical capabilities. TolerRx's core competency in biologics manufacturing, as well as cumulative successful experiences working with different antibodies in an outsourcing capacity, give it the confidence to consider outsourcing as a viable alternative.

Key Selection Criteria If using contract manufacturing services is a strategy you're considering for the future, or if you've experienced unfortunate circumstances in a prior outsourcing relationship, first identify your process requirements and establish your project timeline before starting your candidate search. Alexion Pharmaceuticals, Inc. (Cheshire, CT), which develops novel antibody therapeutics for human diseases where treatments are either inadequate or nonexistent, has used various manufacturing outsourcers since 1996. Eric Frieden, its director of fermentation and cell culture development, believes these two elements are key criteria and will help considerably to narrow the candidate pool. Analyzing your needs ahead of time helps you recognize more of the synergies with respect to scale, expertise, techniques, capacity, and availability.

"Analyzing the outsourcers' capabilities, as well as evaluating the cost factors, are other key criteria," explains Frieden. "Determining their long-term interest is also an important consideration. Once you start working with someone, there's a huge cost - in both dollars and time - in changing partners."

Not only is expertise a consideration, but particular experience in the functionality you seek and the outsourcer's regulatory experience should factor into the equation, too. One of Alexion's manufacturing and development outsourcing partners, Lonza Biologics (Portsmouth, NH), is a case in point. Glyn Forster, its head of product management, explains that the company has over 20 years of experience in successful interfacing with numerous regulatory agencies. For example, it has had nine successful inspections in the past two years - six in the United States and three in the United Kingdom. Alexion outsources various functionalities to Lonza, including development and manufacturing of its drug Eculizumab.

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