FlexFactory™

The Economic and Strategic

Value of Flexible Manufacturing

Capacity

Geoffrey Hodge, Xcellerex

ISPE Strasbourg Conference Sept 28-29, 2009

…speeding medicines to people…

Factors Influencing

Strategic Manufacturing

Decisions

A Brief History of Biomanufacturing

• 40-60s: Penicillin, SCP, structure of DNA discovered

• 70s: Recombinant DNA, beginnings of biotech

• 80s: Industry growth, abundant funding, potent

molecules

• 90s: Advent of antibodies, capacity crunch

• 21st century: Health care costs, tough investment

environment, M&A, resurgent vaccine market,

pandemic threats, globalization, follow-on / biosimilars

Manufacturing is increasingly important as a strategic asset

Biotherapeutic Development

Timeline

Phase I~1 year

Phase II~2 years

Phase III~2 years

NDA Review~1.5 years

Product Approval & Launch

Design~1 year

Validation

~1 year

Construction~2 years

Decision~1 year

80% Success

45% Success

75% Success

90% Success

“Buy vs. Make”CMO vs. Build

10% Risk

33% Risk

60% Risk

76% Risk

Manufacturing capacity decisions must be made while risks are high

Delay or Accelerate Construction?

DELAY

Decrease risk of drug failure

Improved market forecast

Consider PD improvement

ACCELERATE

Decrease risk facility delay

Mfg phase III product in facility

What About Contract Manufacturing?

• Builds capability

• Strategic asset

• Control of projects

• Flexibility

• Capital expense

• Long lead time

• Risk

• Maintenance cost when idle

• Loss of control

• Does not build

internal capability

• No capital expense

• Fast access to capacity

• No cost between projects

Buy (CMO) vs. Make (Build)

Con

Pro

Flexible Manufacturing

Solutions

Advantages of Single Use Systems

Reductions in:

• Cleaning

• Sterilization

• Engineering cost

• Equipment lead time

• Utility requirements

• Validation

• Quality / Regulatory burden

• Space

• Labor

• Waste generation

Improvements in:

• Manufacturing quality

• Capital investment

• Facility buildout time

• Cycle time

• Flexibility

• Environmental impact

• COGS

Lead to

1,000L Bioreactor 19941,000L Bioreactor 1982

Escaping the Legacy of Stainless Steel

1,000L Bioreactor 19941,000L Bioreactor 1982

1,000L Bioreactor 1982 1,000L Bioreactor 1994

Escaping the Legacy of Stainless Steel

The Fully Disposable Process

Seed reactor(Wave System20 shown)

N-1 reactor(XcellerexXDR-200 shown)

Production reactor(XcellerexXDR-2000 shown)

Perfusion centrifuge(Centritech Cell I shown)

Depth filtration(Millipore POD shown)

Chromatography(BioFlash 8cm shown)

0.2u Filtration(Sartorius Sartopore shown)

Virus Filtration(Pall DV20 shown)

Buffer/Media Prep(Xcellerex XDM-500 shown)

Buffer/Process Storage(Hyclone Labtainer shown)

What is FlexFactory™?Combination of 3 technologies:

• Disposables

• Used wherever feasible (everywhere but bind & elute chromatography)

• Eliminates need for hard piping, CIP, SIP, most utilities

• Controlled Environment Modules

• “Shrinking the clean room down around the unit op”

• Decreases gowning, increases operator mobility

• Protects product from greatest source of environmental contamination

(the operator)

• Process Automation & Electronic Batch Records

• Reduces operator hands-on operations

• Reduces chances for human error

• Provides mechanism for automated QA, data mining

Traditional Biomanufacturing FacilityA

ir L

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s &

Hal

lway

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Cell Culture Purification Form / Fill

Air

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PW

WFI CIP

Clean

Steam

HVAC

Buffer Storage

Buffer / Media

Prep

Cleaning

Records

Validation &

Maintenance

Records

Batch

Records

Specifications

Sterilization

Records

Production

SOPs

Deviations,

CAPAs

Manufacturing

Reports

Replacing Stainless w/ Disposables…A

ir L

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lway

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Cell Culture Purification Form / Fill

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PW

WFI CIP

Clean

Steam

HVAC

Buffer Storage

Buffer / Media

Prep

Cleaning

Records

Validation &

Maintenance

Records

Batch

Records

Specifications

Sterilization

Records

Production

SOPs

Deviations,

CAPAs

Manufacturing

Reports

…Eliminates UtilitiesA

ir L

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lway

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Cell Culture Purification Form / Fill

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HVAC

Cleaning

Records

Validation &

Maintenance

Records

Batch

Records

Specifications

Sterilization

Records

Production

SOPs

Deviations,

CAPAs

Manufacturing

Reports

Adding Microenvironments…A

ir L

ock

s &

Hal

lway

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Cell Culture Purification Form / Fill

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Air

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Air

Lo

cks

& H

allw

ays

HVAC

Cleaning

Records

Validation &

Maintenance

Records

Batch

Records

Specifications

Sterilization

Records

Production

SOPs

Deviations,

CAPAs

Manufacturing

Reports

…Eliminates Clean Rooms & Complex HVAC

Cleaning

Records

Validation &

Maintenance

Records

Batch

Records

Specifications

Sterilization

Records

Production

SOPs

Deviations,

CAPAs

Manufacturing

Reports

Air

Lo

cks

& H

allw

ays

Cell Culture Purification Form / Fill

Adding E-Batch Records & Automation…

Cleaning

Records

Validation &

Maintenance

Records

Batch

Records

Specifications

Sterilization

Records

Production

SOPs

Deviations,

CAPAs

Manufacturing

Reports

eFactory™

Air

Lo

cks

& H

allw

ays

Cell Culture Purification Form / Fill

…Eliminates Paper, Provides Electronic Data &

Web Access Through Secure Portal

eFactory™

Operators work in “gray space” and can move easily from one unit op

to another between upstream and downstream or between products

FlexFactory™ Plant

Air

Lo

cks

& H

allw

ays

Cell Culture Purification Form / Fill

FlexFactory™ Plant – Rapid Deployment

GMP FlexFactory™

(newly fabricated downstream modules & GMP manufacturing facility

Economic Value of

Flexibility

Choose

process

type

Select scale,

titer, use of

disposables

Define

unit

operations

Define

equip,

matls, etc.

Run

scenarios

Economic Analysis

Economics evaluated with “BioSolve” model

from Biopharm Services• Cost of goods model (based on Excel)

• Calculates costs & plant data based on database of industry averages

• Researched/validated default values can be edited by user

• Customized for FlexFactory (preliminary results reported in this case study)

Assumptions

Process Definition Traditional Xcellerex

Product Titre 2.00 g/L 2.00 g/L

Capacity Utilisation 90% 90%

Production Bioreactor Volume 2000 L 2000 L

Total Number of Production Bioreactors 4 4

Number of Bioreactors / Batch 1 1

Bought-In Solutions

All Media Solutions No No

All Buffer Solutions No No

All WFI No No

FlexFactory™ Modules & Single-Use Options

All Upstream Processing No Yes

All Downstream Processing No Yes

eFactory™ Knowledge Management No No

Single-Use Bioreactors (up to 2000L) - XDR™ No Yes

Single-Use Media Preparation (up to 2000L) - XDM™ No Yes

Single-Use Buffer Preparation (up to 2000L) - XDM™ No Yes

Single-Use Media and Buffer Hold (up to 3000L) No Yes

Single-Use Intermediate Product Hold (up to 2000L) No Yes

Use Stainless Steel above Threshold No No

Threshold Volume 3000 L 3000 L

Membrane Adsorber for Flowthrough Yes Yes

MAb TypicalScenario assumption:

• Typical mAb process

• 2 g/L, 2000L scale

• 4 prodn bioreactors

• 2 DSP lines

• Fully traditional vs.

• Fully disposable

BioSolve Dashboard – entry fields:

Results — Plant Footprint

Floor Area - Traditional (ft2)

A B C D U TOTAL

- 369 1,906 8,390 16,627 27,291

Floor Area - Xcellerex (ft2)

A B C D U TOTAL

- - 861 4,549 9,734 15,144

• 45% reduction in total space required

• Shift toward lower air classification

Results — Water Usage & Waste

• ~85% reduction in water usage & waste

• 3x increase in plastic usage & waste

Water Usage - Traditional (L per batch)

WFI PW Process Cleaning TOTAL

36,201 41,358 11,174 66,384 77,559

Water Usage - Xcellerex (L per batch)

WFI PW Process Cleaning TOTAL

9,957 - 9,957 - 9,957

Waste - Traditional

Aqueous Plastic

79,155 67

Waste - Xcellerex

Aqueous Plastic

11,554 189

Results — Capital

67% reduction in capital cost

Stainless Steel FlexFactoryTotal Installed Capital Estimate

Equipment ListGeneral

Equipment

Process

Equipment

Total cost 3,557,615 8,212,454

Multiple Bioreactor Factor

Scale factor 1.62 1.62

Adjusted total 5,779,362 13,341,172

Cost of Works

Installation 2,167,261 5,002,939

Minor items - -

Pipework 3,178,649 7,337,644

Control 4,206,091 9,709,408

Building 10,908,190 7,938,151

Fit out 830,783 1,917,793

Other Capital

Validation 2,424,322 5,596,344

Fee 3,232,429 7,461,791

Total 32,727,088 58,305,243

Cost of capital 12% 12%

Future value 10% 10%

Duration (years) 8 8

Annual Charge 6,854,136 12,211,049

Total Capital (US$) 91,032,332

Annual Charge 19,065,186

Total Installed Capital Estimate

Equipment ListGeneral

Equipment

Process

Equipment

FlexFactory

Equipment

Total cost 1,178,040 1,735,102 6,954,047

Multiple Bioreactor Factor

Scale factor 1.00 1.00

Adjusted total 1,178,040 1,735,102

Cost of Works

Installation 441,765 650,663 12,864,986

Minor items - -

Pipework 58,902 86,755

Control 209,429 308,463

Building 6,254,898 1,512,206 2,103,552

Fit out 169,343 249,421

Other Capital

Validation 308,622 454,561

Fee 411,496 606,081

Total 9,032,497 5,603,251 14,968,538

Cost of capital 12% 12% 12%

Future value 10% 10% 15%

Duration (years) 8 8 8

Annual Charge 1,891,704 1,173,506 3,195,757

Total Capital (US$) 29,604,286

Annual Charge 6,260,967

Results — Cost of Goods Sold

32% reduction in COGS

CoGs (US$) Gram Batch Campaign Year %

Capital 68.7 166,295 5,487,721 19,065,186 44%

Materials 12.8 30,926 1,020,547 3,545,535 8%

Consumables 20.2 48,860 1,612,392 5,601,696 13%

Labour 35.4 85,656 2,826,646 9,820,202 23%

Other 18.3 44,370 1,464,223 5,086,935 12%

TOTAL 155.4 376,107 12,411,529 43,119,554 100%

CoGs (US$) Gram Batch Campaign Year %

Capital 19.4 46,913 1,735,788 6,260,967 18%

Materials 11.1 26,923 996,143 3,593,078 11%

Consumables 50.7 122,800 4,543,589 16,388,671 48%

Labour 18.6 44,995 1,664,821 6,004,990 18%

Other 5.0 11,997 443,883 1,601,081 5%

TOTAL 104.8 253,628 9,384,224 33,848,786 100%

Stainless Steel

FlexFactory

FlexFactory™ Layout

Space Requirements(Cross-checking against previous studies)

Conventional (4 x 2000L lines)• Downstream Processing 4,500

• Upstream Processing 4,500 sf

• Air Locks 1,700

• CIP/SIP 900

• Wash Suite 1,400

• Equipment Prep 1,400

• Clean Utilities 2,000

• Media Prep 2,200

• Plant Utilities 2,000

• Buffer Prep 2,200

• Office 2,000

• Labs 2,000

• Corridors 7,300

• Lockers/Gowning 2,000

• Warehouse 3,900

TOTAL 40,000

FlexFactory (4 x 2000L lines)• Processing Suite 9,000 sf

(Upstream & Downstream)

• Air Locks 200

• CIP/SIP 0

• Wash Suite 0

• Equipment Prep 1,400

• Plant Utilities 1,800

• Clean Utilities 0

• Media Prep 0

• Buffer Prep 0

• Office 2,000

• Labs 2,000

• Corridors 2,200

• Lockers/Gowning 1,200

• Warehouse 3,900

TOTAL 24,700

Courtesy of Lockewood Greene

38% reduction of space

Courtesy of Lockewood Greene

for 4 x 2000L lines, cell vial to purified API bulk

Traditional vs. FlexFactory™ Layout

Financial Modeling of Facility

Scenarios• Built a 2000L FlexFactory (Xcellerex data) &

Standard Facility (BPS data) *• 2 lines, 4 products

• 1 g/L, 50% DSP recovery

• Run COGs on both models*• Projected Case = Capital @ 2X, Operating @ 1X

• Best Case = Capital @ 2X, Operating @ 2X

• Worst Case = Capital @ 2X, Operating NA (drug fails)

• Delay Case = Capital @ 1X, Operating @ 1X – PC Delay

• Use output of COGs model to run sensitivities in financial model*

Assumptions for Financial Model

• Assumptions for both FlexFactory and Standard Facility

• Depreciation straight line 15 yr facility, 8 yr equipment

• 35% tax on profits, 3% inflation, cost of capital 25%15%

• 30% facility resale value

• Advantages of FlexFactory assumed in model• 25% QA/QC savings

• 10% less downtime

• 10% lower batch failure

• 50% reduction in campaign change-over time

• 75% equipment resale value after 5 years (vs. 50%)

• 65% equipment resale value after 15 years (vs. 20%)

Baseline Results—Difference in Net

Present Value

Std FF ∆

PC 35.4 18.7 16.7

WC 12.1 5.1 7.0

BC 45.0 26.9 18.1

DB 32.4 18.0 14.4

NPV Cost / Savings ($MM)

FlexFactory™ “TransPlant” Service

Customer Facility

design, build validate

Customer FlexFactory™

Re-qualify / cal, start GMP mfg.

CMO

FlexFactory™ modules

design, build, validate

CMO

Customer contract

mfg., training

Portable turnkey manufacturing modules enable a new

solution to the buy vs. make dilemma

The Ultimate

Tech Transfer

Other Strategic Considerations

9 to 18 months to complete/validate facilityDelay decision to build until absolutely necessary

Wait for later stage clinical success

Design facility based on better process & market data

Rapidly expand capacity if / when needed

Transport to new locationsNo longer tied to traditional fixed facilities and sites

Simpler facilities - flexibility to cost-effectively relocate

Leasing and facility sale become practical

Respond to labor demographics, tax-advantaged locations

Simultaneous multiple products operation

(in same space)

Conclusions

• Disposables enable novel FlexFactory

bio-manufacturing platform

• Significant savings in capital, plant footprint, water

use, waste generation & reduction in operating

costs, COGS

• Portable mfg. capacity enables quick start-up

• Low investment cost, quick build-out /validation time

and portability create new strategic possibilities for

addressing manufacturing capacity needs

Thank You

Transforming biomanufacturing

170 Locke Drive, Marlborough MA, USA

508-480-9235 ● www.xcellerex.com