Building a business case for a fully continuous biomanufacturing platform

Integrated Continuous BiomanufacturingJason Walther 23 October 2013

www.genzyme.com

Sol Pompe disease Argentina

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• Genzyme developing a continuous integrated platform− Technical results are promising

− But can we justify the platform from a business perspective?

− And can we use economic modeling to guide development?

Fully continuous biomanufacturing platform

2

High-productivity Smaller facilities Media requirements

Steady state Consistent operation Steady quality

More automation Increased complexity Less labor

Single-use tech Faster build times Reduced turnaround Closed process

Volume reduction Smaller facilities No scale-up

Step reduction Smaller facilities Simpler process

Economic drivers for the continuous platform

3

CAPEX OPEX Risk

• Can we quantify these advantages and disadvantages?

Universal platform Omni-product facilities Common work force Flexible infrastructure

Financial valuation methodology

Outputs

Cash Flow Projections

Financial Indicators

CVI, NPV, IRR, etc.Discount future costs

Facility Estimates

CAPEX/OPEX savings using the new platform

Assessment

Inputs

Develop-ment Costs

Launch Scenarios

• Estimate CAPEX/OPEX using BioSolve software• Estimate platform dev costs and lay out a future product timeline• Predict discounted cash flows for legacy & continuous platforms• Calculate financial indicators (e.g., NPV) and make assessment

• Use BioSolve software package− Define process (unit ops, scaling rules, assumptions)

− Calibrate cost data (equipment, materials, labor, etc.)

− Benchmark against previous internal and external projects

− Biosolve capital estimates are acceptably accurate

Facility estimates: CAPEX and OPEX

5

Facility Scale(Reactor # and Size)

Facility CAPEX (Actual:Estimated)

Facility A 4X20,000L 104%Facility B 12X12,000L 101%Facility C 6X15,000L 101%Facility D 3X10,000L 102%Facility E 3X4,000L 120%

Fed-batch1X10,000L SS

Batch12 days

3000 Mcell·h/mL3.5 g/L

US

DSTimeIVCDTiter

US

DSTimeVCDTiter

Suspension perfusion2X500L SUContinuous

60 days100 Mcell/mL

1.4 g/L

US

DSTimeVCDTiter

Suspension perfusion1X500L SUContinuous

60 days100 Mcell/mL

0.5 g/L

Facility estimates: Platform assumptions

6

mAb500 kg/y

Enzyme20 kg/y

Legacy Platform Continuous Platform

US

DSTimeVCDTiter

Microcarrier perfusion2X2,000L SS

Batch60 days

5 Mcell/mL0.05 g/L

Facility estimates: Platform assumptions

7

mAb500 kg/y

Enzyme20 kg/y

CAPEX ($M) OPEX ($/g)

3X

1X

50X

8X

1.2X

1X

2X

1X

Legacy

Continuous

mAb CAPEX

Cost impacts of the fully continuous platform

8

mAb OPEX

Overall: –54% Overall: –20%

% o

vera

ll co

st

• Financial estimates can guide process development− (For example, CSPR and VCD targets)

CAPEX/OPEX sensitivity analyses

9

Viable cell density

Cel

l-Spe

cific

Per

fusi

on R

ate

CAPEX Savings(Fed-Batch mAb – Continuous mAb)

OPEX Savings(Fed-Batch mAb – Continuous mAb)

Red = More Savings

Push tohigh VCD,low CSPR

break-even

break-even

• Financial estimates can guide process development− (For example, CSPR and VCD targets)

CAPEX/OPEX sensitivity analyses

10

Viable cell density

Cel

l-Spe

cific

Per

fusi

on R

ate

ΔNPV for a single facility(Fed-Batch mAb – Continuous mAb)

Red = More Savings

Push tohigh VCD,low CSPR

break-even

Financial valuation methodology

Outputs

Cash Flow Projections

Financial Indicators

CVI, NPV, IRR, etc.Discount future costs

Facility Estimates

CAPEX/OPEX savings using the new platform

Assessment

Inputs

Develop-ment Costs

Launch Scenarios

• Create a hypothetical product timeline with various mAb and enzyme product launches

• Calculate NPV for two scenarios− Legacy platforms (fed-batch and microcarrier perfusion)

− Universal continuous platform

• Compare NPVs to estimate value of new platform

Product launch scenario

12

20322031203020292028202720262025

Advanced Modeling – An Integrated Approach

13

SalesProfiles

Development Profiles

StockingStrategy Portfolio NPV

Dashboard

ManufacturingNetwork

Product Definition

Product NPV

In partnership with Biopharm Services Ltd.

Relative cash flow projections

14

• Clear benefits to new platform (given the assumptions)

• Hundreds of millions of dollars in potential savings

mAb OPEXEnzyme OPEXmAB CAPEXEnzyme CAPEXDevelopment Cost

discount rate = 7%

ΔNPV for product portfolio

Relative cash flow projections

15

• Different product launch scenarios can be investigated

• Continuous platform competes in a variety of scenarios

Low demand

Medium demand

High demand

ΔNPV for product portfolio

• Infrastructure in place for economic modeling of future platforms

• Preliminary analysis shows strong, quantifiable business drivers for continuous platform− We will continue to revisit and improve assumptions

− Additional sensitivity analyses

− Expand comparisons to other platforms (e.g., disposable FB)

• Process development guidance− Cell density and CSPR are influential upstream parameters

− Similar parameters will be found for downstream process

Conclusions

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• Genzyme Late Stage Process Development

• Genzyme Capital Finance

• Genzyme Industrial Affairs

• Sanofi Biologics Research & Development

• Biopharm Services

Acknowledgments

17