According to a recent analysis by BioProcess Technology Consultants (Acton, MA), the industry will require nearly 3.3 million liters of cell culture capacity by 2010, thanks to the growth of currently marketed MAb and recombinant protein products, as well as expected approvals over the next three years. However, only 3.0 million liters of capacity (captive and contract) is forecast to be available by 2010; that's a 10% capacity shortfall. The capacity deficit is likely to be exacerbated because that capacity is not where it is needed, i.e., there may be not only a more extreme shortage of contract capacity but also unused captive capacity at the major biopharma companies.
The capacity shortage puts the commercial-scale contract manufacturing organizations (CMOs) who are still in the game— notably Lonza, Boehringer Ingelheim, and Celltrion—in the driver's seat. Having survived an industry turndown in which key competitors, including DSM, Dow Chemical, and Cardinal Health, closed down facilities or scaled back investment plans, survivors are now seeking to secure their market shares and raise the barriers to entry for potential new entrants.A central strategy for the market leaders is simply to have more capacity available than potential new entrants. Large capacity means economies of scale, accumulated experience, and availability that new entrants cannot match. The three largest players have accumulated, or are in the process of accumulating, nearly a million liters of capacity between them, and have scared off most potential competitors.
The moves by Lonza have had the highest profile. In February, Lonza completed its acquisition of Cambrex's biomanufacturing business and late last year it announced a major deal to acquire Genentech's facility in Porriño, Spain, while building a new large-scale facility for Genentech in Singapore. Those transactions combined with expansions at facilities it already owns in Portsmouth, NH; Visp, Switzerland; and Slough, UK, give Lonza 350,000 L of biomanufacturing capacity, the most any CMO has.
Celltrion broke ground last year on a massive 180,000-L expansion expected to cost over $400 million, which will make Celltrion the second largest biomanufacturing player based on capacity. The company completed the construction of its initial four 12,500 L cell culture bioreactor trains in 2005. The expansion was undertaken after Celltrion signed a second supply agreement with Bristol-Myers Squibb (BMS), which will lock up 60,000 L of capacity. In 2005, BMS and Celltrion signed an agreement for 50,000 L of capacity to produce Orencia, BMS' rheumatoid arthritis drug approved in late 2005.
Another key strategy for the market leaders has been to offer early development services in order to build potential commercial relationships at an early stage. Their combined clinical and commercial solution is something that smaller competitors cannot offer.
To that end, Boehringer-Ingelheim Biopharmaceuticals (Biberach, Germany), with over 180,000 L of cell culture capacity and 12,000 L of fermentation capacity, recently formed a development collaboration with Laureate Pharma (Princeton, NJ). Under the agreement, Laureate will offer its clients access to BI's HEX expression system and large-scale manufacturing capabilities at BI's Biberach facility. Lonza has development capabilities in the UK and the Cambrex acquisition added a North American presence. Celltrion currently lacks development capabilities outside of Korea.
CROWDED CLINICAL SEGMENT
While the few commercial biomanufacturers are consolidating their positions, clinical-scale biomanufacturers are battling it out in a crowded arena. The PharmSource Advantage database lists over 70 contract biomanufacturers worldwide with GMP capacity of at least 100 L. The supplier base includes 39 companies in North America, 28 in Europe, and a small but growing number of players in the Asia-Pacific region.