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Volume 24, Issue 6
Knowing where key biomanufacturing facilities are located around the world is essential for decision-making.
We use "Top 10" lists to help put order to our environment, but until recently, little effort was given to defining who is manufacturing biologics, and where. This, in our opinion, is more important to us individually than lists of companies based on revenue. While revenue analysis can define a company's distribution, marketing, and business development prowess, it does not necessarily define its core operations and manufacturing competence. Revenue reported from "headquarters" can be moved around, but manufacturing is a fixed, long-term commitment to a community, an employment base, and a strategy.
In today's global biomanufacturing environment, buyouts, layoffs, and divestitures can take place rapidly. But establishing a manufacturing base requires long-term commitment to communities, to internal strategy, and to individual employees.
The success of a biomanufacturing enterprise depends as much on its human capital as its fixed capital, and a critical mass of appropriately educated and skilled people is often needed to establish a viable biotech cluster. Funding alone isn't enough to build a cluster. Neither is raw access to life-scientist communities (for example, the 9000+ scientists around the National Institutes of Health and FDA hasn't produced a Top Biotech Manufacturing Cluster for the Maryland or Washington DC area). A successful cluster requires the right mix of people and funding in addition to other factors, as our research at BioPlan Associates indicates.
The global biomanufacturing industry is growing, and the need to benchmark the relative strength of existing and emerging manufacturing clusters is becoming imperative. So as part of our 20+ years of evaluating and benchmarking the biopharmaceutical manufacturing industry (1), BioPlan Associates is sponsoring the Top 1000 Global Biopharmaceutical Manufacturing Facilities Index. We will be presenting this as an industry-driven website at the BIO International Convention in Washington DC in June (updates will also be available at BioPharmInternational.com).
Table 1: Top 1000 biopharmaceutical facility counts by region as of May 2011.
Some in the industry find it hard to imagine that there are 1000 biomanufacturers worldwide. But our research, reports, and studies have shown that in China and India alone the number of qualified facilities has grown more than 20% in the past three years to their current number of 91 and 99, respectively (see Table I). To create the BioPlan BioFacility Index and rank biomanufacturers, we analyzed overall fixed capacity, manufacturing-related employment, and number of commercial and clinical products. The result is an indexed ranking based on these factors. Shortcomings in this methodology include: difficulty in establishing equivalence between capacity for, say, a monoclonal versus microbial, versus vaccine production; questions regarding which functions are "manufacturing related"; weight to be applied to each factor; and the need to monitor each factor regularly to ensure up-to-date ranking. Prior efforts to benchmark manufacturing have generally failed because managing thousands of data points, year after year, becomes virtually impossible. For this effort, we are making use of the industry's own knowledge. Our analysis uses publicly available information that we have amassed over decades. In addition, we have recruited hundreds of participants to maintain the listing. But most uniquely, to keep the data accurate, we have implemented a "Wiki" approach whereby industry is able to contribute public knowledge.
In addition, BioPlan will pass proposed changes to the database through our review panel to ensure accuracy and consistency of any updates.
Biopharmaceuticals represent a $135-billion industry worldwide and are growing at 20% annually, much higher than most other industries. This dynamic segment provides well over 400 drug products to the major US and European markets, and hundreds of others marketed internationally. The biopharmaceutical industry is one of the most important engines for technology growth worldwide. In fact, mainstream pharmaceutical companies have been moving into biopharmaceuticals in search of future products and profits. Currently, about 15% of worldwide pharmaceutical revenue comes from biopharmaceuticals (2), but this will grow to about 40%, with an estimated 40% of pharmaceuticals currently in development being biopharmaceuticals. The biopharmaceutical industry is maturing, and many products are coming off patent, with biosimilar versions on track to enter US, European, and lesser-regulated international markets. Thus, the number of biopharmaceutical manufacturers and facilities are expected to multiply rapidly in coming years.
In BioPlan's Top 1000 Biopharmaceutical Facilities Index, we will provide not only counts, but also indexed rankings of each company, as well as the regional ranking based on the sum of each individual facility BioIndex. This index will provide a quantitative analysis of the strength not only of the biomanufacturers, but of the regions and clusters, as well.
Biopharmaceutical manufacturing facilities are strategic assets, both for the companies involved and for the cities, states, and countries where they are located. This status is unlike the financial and other industries where products and profits are often more virtual. Biopharmaceuticals involve real products, with their manufacture requiring the highest technology, trained professionals, and expensive infrastructure. Research and development (R&D), on the other hand, is increasingly diffuse, and often involves multiple facilities, outsourcing, licensing in, and collaborations. In contrast, biopharmaceutical manufacturing provides sources for revenue and profits and is physically concentrated, generally performed in a single major or, at most, several redundant facilities. Each facility typically costs more than $100 million, employs hundreds of manufacturing professionals, and provides for its community related tax and other local benefits. While biopharmaceutical R&D facilities may come and go, for example, through corporate changes, acquisitions, and bankruptcy, manufacturing facilities are physical assets that tend to continue to manufacture products despite corporate changes.
However, technological advances are reducing bioprocessing costs and complexity, therefore lowering the bar for entry, including in lesser-developed countries. Improved expression systems and genetic engineering continue to increase productivity. Single-use bioprocessing systems are reducing the need to support infrastructure, reducing up-front investments, and are making manufacturing simpler, more affordable, and flexible.
BioPlan is tracking more than 1000 facilities worldwide with at least some involvement in biopharmaceutical manufacture. Included are hundreds of product manufacturing facilities and many more operating at smaller scale to support R&D and clinical testing. These facilities account for approximately $10 billion in equipment and consumable sales annually. Despite its strategic importance, this information resource to track biopharmaceutical manufacturing facilities and benchmark their economic contributions is the first to provide comprehensive indexing and ranking.
Knowing where the key people and facilities are is critical for decision-making. Besides comparisons between facilities and companies, the Top 1000 enables geographic, indexed comparisons on a local, state, or country basis. The clustering of related facilities and professionals in the same locale is important for high-tech industry growth. Companies, investors, human resources departments, analysts, regional business development authorities, and governments can use this resource to address a variety of strategic issues. For example:
For this effort, BioPlan Associates is leveraging its annual survey of biopharmaceutical manufacturers (1), to establish the BioPlan Top 1000 Biopharmaceutical Manufacturing Facilities Index as an ongoing resource to rank and index facilities and biomanufacturing regions. The information will be provided on BioPlan's website, www.bioplanassociates.com/top1000, and detailed data will be made available to those who contribute to the effort to keep the information updated. This enables benchmarking, comparisons, and quantifying of geographic trends within the biopharmaceutical manufacturing sector.
1. BioPlan Associates, 8th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, April 2011, www.bioplanassociates.com/top1000.
2. BioPlan Associates, Biopharmaceutical Products in US and European Markets, 2011, www.bioplanassociates.com/biopharma