Current biotech manufacturing plants are capital intensive, with yearly depreciation costs sometimes as high as raw materials costs. In such an environment where indirect costs dominate direct charges, a single metric becomes important: throughput of sale-able product. In this article, we examine a return-on-investment case study for processing a high titer product in a large-scale biopharmaceutical plant. In this case, modeling the altered unit operation in the context of the existing unit operations was essential to establish accurate throughput metrics and overall valuation. We argue that such process-focused economics models are essential in the biopharmaceutical industry.
Second, greenfield facilities are inherently right-sized, whereas retrofitted facilities are not. Retrofitting requires the comparison of legacy equipment in the plant, such as, steam and clean in place (SIP/CIP) skids and existing media, and buffer preparation tanks, with new technology. Such decisions inevitably involve design compromises, and these can have unintended effects on throughput and equipment utilization.
Finally, cost-saving retrofits are not typically justified solely on direct cost reductions, but on metrics like flexibility or capacity increase. As an example, the adoption of disposables in many existing plants is either based around process standardization, decreased contamination risk, or increased flexibility (either in changeover or in utilities). Given existing tanks and CIP or SIP handlers, there is little or no motivation in direct cost-savings to move to new technologies, and thus retrofits typically use one or more indirect cost savings metrics in their justification. Such metrics also may be more qualitative than quantitative, such as the flexibility of a plant to produce multiple products in the future.
Such a fixed-cost infrastructure is uncommon in most other manufacturing sectors, where raw materials costs and direct-support costs far outweigh indirect cost considerations. One of the few exceptions to this is in semiconductor manufacturing, where significant infrastructure costs and the requirement for a controlled environment create higher indirect costs on a scale similar to biopharmaceuticals.
In such an environment where indirect costs dominate the direct cost of manufacturing, only relatively small improvements in performance can be achieved through direct cost reduction. For example, a 15% reduction in raw materials cost—roughly equivalent to completely removing the most expensive recovery step in most biopharmaceutical process operations, Protein A—reduces overall operating expenses by less than 2%. Such direct cost reductions are typically outweighed by the need to shut down the plant to perform installation and testing of retrofit options: an expensive proposition because most costs are not run-rate dependent. Far more important in most economic studies is the ability for biopharmaceutical manufacturers to maximize the number of kilograms of material they can manufacture (and subsequently sell) in a year.