kelsey kehrli small molecules: the big picture · and outsourcing trends that are impacting and...
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Small molecules:the big picture
Thought leading articles from the world’s fastest growing API manufacturer
Winner 2018, 2017, 2016, 2015Winner 2017 & 2016
Clester OxendineSenior Research Associate
Kelsey KehrliData Review Scientist
Marco RivelaProduction Operator
Derek ThomasQuality Assurance Inspector
Hanh NguyenProcess Operator
Discover and enjoy
As we focus solely upon small molecule chemical
development and manufacture, we believe we are uniquely
placed to provide expert insights on manufacturing and
investments, chemistry and technologies and the market
and outsourcing trends that are impacting and changing
our industry.
‘Small molecules: the big picture’ includes a selection of
thought leadership articles our experts have contributed to
which have been featured in global trade publications.
I hope you enjoy reading our expert’s perspectives and
insights and discovering why Cambrex is one of the
biggest names in small molecule APIs.
Steven M. Klosk President and Chief Executive Officer
Cambrex’s expertise in small molecule chemical development and manufacturing makes us unique.
Steven KloskPresident and Chief Executive Officer
| Active ingredients
Dynamic people
Steven M. KloskPresident and Chief Executive Officer
Page 2
As the world’s fastest growing API manufacturer, we are
committed to putting our energy and experience into
being the experts you enjoy working with. Our customers
tell us our people add value towards achieving their goals
of bringing products to market quickly. This dynamic
energy ripples through every part of our business and
has a positive impact on our customers. An approach
that differentiates us from others in the market.
The bigger picture for small molecules
Small molecules continue to dominate in the pharmaceutical
market, with the FDA approving 34 small molecule new
molecular entities in 2017 - the highest number in the
last decade. There now exists the fastest growing small
molecule clinical pipeline reported in the last 20 years, with
more small molecules in phases I, II and III than ever before.
The challenge for Cambrex, and other manufacturers, is
to have the right capacity to meet the demands of the
market. Since 2012 we have invested over $260M in facility
expansions, equipment, technology and EHS upgrades to
ensure that these demands can be met, while also ensuring
that standards in quality, customer service, flexibility and
reliability are not only maintained but enhanced.
1. Manufacturing & Investments
Small Molecules Continue to go from 5-7
Strength to Strength
Cambrex Bucks the Pharmaceutical 8-10
Service Trend
Optimizing the API Life Cycle 11-13
Through Innovation
Highly Potent APIs, Managing the 14-15
Uncertainty in Market Needs
Opportunities in Drug Development 16
and Manufacturing
Inking the Deal 17-20
2. Chemistry & Technology
Making Medicines: Speeding the Path 22-24
from Idea to Patient
The Winning Formula 25-26
Handling Highly Potent Actives and
Controlled Substances Safely and Securely 27-29
Safe and Efficient Synthesis of 3-bromo-
3-butene-2-one from Methyl Vinyl Ketone 30-31
The Ideal Route 32-33
Contents
Page 3
Rebecca Nixt-BrunerAssistant Controller
Lynx GregoireQuality Assurance Auditor
Jesper Kumlin Process Operator
3. Market & Outsourcing Trends
The Next Stop for Pharma Outsourcing 35-37
Staying Focused - How to Turn Challenges 38-39
Caused by Consolidation into New Business
Opportunities
Biologics Staying Home, CMOs 40-41
Destination for Small Molecules
Boom Time for US CDMOs: Part 1 42-43
Boom Time for US CDMOs: Part 2 44-45
A Bright Future for Small Molecules 46-48
The Runaway Outsourcing Train 49-52
Staying Ahead in the Small 53-55
Molecule Space
Pharma Copycats in CMO 56-57
Acquisition Strategy
Cambrex Projects Strong Growth 58-59
for API Manufacturers
Think Small, But Smart 60-61
4. CEO & COO Insights
Steven M. Klosk, CEO 63-64
Shawn P. Cavanagh, COO 65-66
5. Our Webinars
Watch Our Webinars 68
Experts you’ll enjoy working with
Manufacturing & Investments
Amanada FlanaganAssociate Director, QC
Chuck GallagherSystem Administrator
Erena Sawyer-WagnerAnalytical Chemist
Jason MarletteOperator
Michele CioffiRaw Materials & Intermediates Warehouse Operator
Back to Contents
According to global contract manufacturer Cambrex, however, the potential for the small molecule sector is at an all-time high. Dr Matthew Moorcroft, the company’s VP Global Marketing, discusses the research on which this contention is based.
The rise in biological drugs, a greater focus on niche and personalised treatments and the near extinction of the traditional blockbuster model have led some in the industry to suggest that the small molecule drugs sector is in decline. But, research done recently into active pharmaceutical ingredient (API) volume trends by Cambrex, one of the world’s largest contract manufacturing organisations (CMO), shows that rumours of the demise of the small molecule have been greatly exaggerated; on the contrary, the company believes that the potential for the small molecule sector is at an all-time high.
A total of 45 new molecular entities (NMEs) — of which 33 were small molecules and 12 were biologics — were approved in the US during 2015, which is the highest number of approvals during the last 16 years (1999–2015). Furthermore, the current number of chemical molecules in every phase of drug development is greater now than at any time since 1999, says Dr Moorcroft (Figure 1).
He attributes this to the versatility of small molecule drugs, which have been able to transition from global blockbusters to targeted therapies for cancer treatment or orphan indications. “Their surprising longevity comes from their unique and enviable ability to be formulated into pills and tablets,” he states. “A few years ago, you’d have been forgiven for thinking that the rise of biologics and monoclonal antibodies a decade ago in oncology meant that small molecule use in this indication was over. In fact, it is far from that.”
A growing focus on biological drugs and the end of the traditional blockbuster model have led to a predicted decline in small molecule drugs.
Small Molecules Continue to go from Strength to Strength
Manufacturing & Investments
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Figure 1.Number of chemical molecules in development (1995-2015)
Small Molecules Continue to go from Strength to Strength
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Phase 1995 2005 2010 2011 2012 2013 2014 2015
CAGR
(10-15)
Preclinical 1,446 2,054 2,195 2,178 2,461 2,467 2,369 2,834 5.2%
Phase I 231 435 682 643 659 651 677 750 1.9%
Phase II 383 481 749 746 754 735 762 825 2.0%
Phase III 202 163 186 196 201 199 208 227 4.1%
Pre-Reg 78 46 26 34 30 38 41 40 9.0%
Reg 33 10 7 10 8 14 19 15 16.5%
Launched 959 1,249 1,377 1,387 1,423 1,450 1,478 1,523 2.0%
Section title
“The rise of new and pioneering drug classes such as protein kinase inhibitors has completely revitalised the existence of small molecule drugs in modern medicine. When compared with biologics, peptides and oligonucleotide-based medicines, small molecules will continue to be the backbone of the pharmaceutical industry in many therapies, driven by patient preference for oral dosing, lower manufacturing costs and ease of transportation,” he adds.
A closer analysis of the NME approvals in 2015 showed that 21 out of the 45 were approved to treat orphan diseases — rare conditions that affect 200,000 or fewer Americans and for which there are typically few or no drugs available. It was also apparent that expedited review processes are being used more routinely: 27 NMEs were designated in one or more categories of Fast Track, Breakthrough, Priority Review and/or Accelerated Approval. A third conclusion is that most launches take place in the US; 29 out of 45 of the new drugs were approved by the US FDA before receiving approval in any other country.
To get a more accurate picture of the trends in volume demand for APIs, Cambrex looked in detail at the 408 NCEs launched in the US market during the last 15 years. The figures are based on consumption data rather than on the more usual focus on top-line drug sales.
To create a representative sample, the company chose four sample sets split out by a period of 5 years; it then took the data across two consecutive years to smooth out any anomalies. “For example, a particular year might have had an unusually high number of cardiovascular drugs approved, all with high dosages and therefore with huge volumes of API usage associated with them, which might skew the data somewhat,” Moorcroft explains. “When we combined both of these approaches, it gave us a set of 209 small molecules. This was around half the total and, we felt, gave us a healthy number of data points from which to spot any trends that may exist.”
Cambrex also decided to focus the research on NCEs only, without taking into account reformulations, ANDAs or line extensions. Furthermore, because most drugs are launched there first, figures from outside the US were not included. But if the five major European markets and Japan were added in, the resulting demand volumes would be approximately doubled, Moorcroft suggests.
Similarly, the demand from the more populous markets such as India and China was excluded because differences in disease prevalence/epidemiology can result in large uptakes of some products, distorting the results.
The study also took into account the fluctuations in volume demand across the entire lifecycle of the drugs. “Pharmaceuticals, like many other goods, follow the classic lifecycle pattern of introduction, growth, maturity and decline,” Moorcroft explains: “But we wanted to just check whether the data showed us the same curves.”
Potential sources of error were also assessed, such as the effects of mature products and of those launched in 2014–2015 that have yet to reach peak volume. Cambrex zeroed in on 16 particular products that it believed would be the greatest source of error and repeated the analysis several times; however, the differences in the data were not significant and the company therefore felt this approach was robust enough to allow any potential trends to be observed.
Results and analysisThe results of the research indicated a number of clear trends that will shape the future strategy of CMOs in the small molecule sector and are already influencing Cambrex’s investment plans. Although the Cambrex study related only to the US market, the company says that these volumes could easily be doubled when demand in the five major EU markets and Japan are factored in.
Manufacturing & Investments
Figure 2.Peak API Volumes for NCEs Approved in Each of the Four Time Periods (1999-2015)
Page 6 Small Molecules Continue to go from Strength to Strength
1,000,000
100,000
10,000
1,000
100
10
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0.1
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100,000
10,000
1,000
100
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1,000,000
100,000
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1999-2000 2004-2005 2009-2010 2014-2015
Pe
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The first major finding was a clear trend showing that the spread of volumes is narrowing and there is more clustering around the 1–10 metric tonne (mt) range compared with 15 years ago. For the US market, volume data forecasts for 2014–2015 NCEs correspond to a range centred around 10 kg to 10 mt of API; by comparison, the range in 1999–2000 was broader at 1kg to 100mt. The data for 2014/15 showed that 12 out of 27 NCEs are expected to reach a peak volume of 1mt in the US. The number of NCEs with a peak volume of more than 100mt and less than 10kg is declining (Figure 2).
“We believe an effect of this evolution has been a requirement for contract manufacturers to be flexible enough to be able to produce APIs in a range from kilogrammes to hundreds of metric tonnes to satisfy the wide variety of demand,” says Moorcroft. “CMOs need to be monitoring demand and investing in the right capacity to satisfy customer needs as small molecules continue to evolve.”
Growth and investmentCambrex has invested strongly in small molecule capacity and infrastructure during the past 5 years — spending a total of $150 million since 2011. One of the plants to benefit from this investment programme is the facility at Karlskoga in Sweden, which in the past 2 years has seen a 50% increase in custom development capacity and an expansion of the analyticaldevelopment team in its Tallinn, Estonia, subsidiary. It has also added a new 6 m3 of production capacity and further expansion is ongoing to add 12 m3 vessels to this new cGMP multipurpose production line.
The site, which employs 420 people, with a further 30 at its analytical development labs in Tallinn, has extensive capabilities, with a wide range of production scales from kilo lab to large-scale cGMP commercial production. Managing Director Bjarne Sandberg believes it is well set up to handle the current and future crop of small molecules coming down the pipeline.
Since Cambrex purchased its site in Charles City (Iowa, USA) in 1991, it has invested some $125 million. Like Karlskoga, the facility has extensive capabilities, with a range of flexible, multipurpose production units ranging from kilo lab to commercial-scale, amounting to a capacity of some 350,000 L. A further tranche of investment, valued at $45–50 million, is scheduled for 2016/17, which will result in a new Pharma 3 large-scale plant with six reactors. This GMP facility is due to come on stream in 2016.
The company is also planning to add 300 and 500 gallon reactors to its pilot plant in 2017. Meanwhile, at the mid-scale, its Pharma 4 suite is currently empty but has the capability to add 500–2000 gallon reactors without requiring the lengthy lead time to construct a plant from scratch. “The shell is built and would be ready to go with a lead time of about 6 months,” said Joshua Van Kley, Sales Operations Manager. “We believe our investment closely follows the trends seen in the industry, and by establishing the right capacity and capabilities demanded by our customers, we can handle a variety of projects and chemistries while allowing flexibility in the supply chain and volume fluctuations,” Moorcroft added.
Orphan focusThe trend towards a narrower range of peak volumes in small molecule APIs also correlated to the well-observed tendency to focus increasingly on orphan diseases; the consequent reduction in overall patient population sizes was the second
major trend to emerge from the Cambrex research. “Orphan diseases have, by definition, a smaller patient population than traditional drugs,” says Moorcroft. “That said, not all orphan drugs are low volumes; indeed, some are taken in high doses and consumed daily.”
The average patient population targeted in 1999–2000 was 13 million patients, but this had fallen by more than half to 6 million in 2014/15, the data showed. “In the period 1999–2000, a significant proportion of drugs were being used in indications with quite large patient populations, such as obesity, diabetes, conjunctivitis, GORD and hyperlipidaemia,” Moorcroft explains. “Fifteen years later, there is a big change in the average patient population size as the drugs are being used for indications such as multiple myeloma, cystic fibrosis and thyroid cancer.”
Cambrex then went on to examine whether the reduction in patient population size was reflected in the therapeutic dose size; that is, whether the APIs were becoming more clinically potent. However, plotting the single patient consumption for each oral solid dose NCE per year revealed that no significant trend emerged during the data period. The majority of drugs continued to be in the 1–100g per patient per year dosing range, although there was a slight increase in the number of lower dose NCEs below 1g per year. The data also showed little or no change in the size of tablet units. The most frequent size continues to be 10–50mg, although the popularity of the 50–250mg size range is showing a gradual increase.
The research findings considered only final API volumes, Moorcroft stresses, so when other steps in the value chain are taken into account, such as advanced intermediates, the overall volume requirement will be significantly higher, increasing the need for greater and larger-scale assets. “It is important for a world-class CMO to be able to offer a range of manufacturing options to cover the lifecycle of the drug on the market — from introduction to maturity — as well as the option to manufacture key late-stage intermediates and starting materials, should security of supply or regulation be a prerequisite,” he says.
As a result of this, pharmaceutical companies typically aren’t best suited to handle the multiple-scales in manufacturing or dealing with the flexibility and changeover requirements for multiple products, and CMOs will continue to see more outsourcing opportunities as they are better placed to
manufacture the coming pipeline of small molecule APIs.
About the author
Dr Matthew Moorcroft
VP, Global Marketing, Cambrex
First published: Manufacturing Chemist
Title: Small Molecules Continue to go from Strength
to Strength
Date: November 7, 2016
Article link: Click here
Manufacturing & Investments
Page 7 Small Molecules Continue to go from Strength to Strength
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The world of pharmaceutical contract manufacturing has been rocked by a number of jarring deals of late. Thermo Fisher Scientific’s acquisition of Patheon, valued at $7.2 billion, was a shock to many industry watchers earlier this year. Lonza’s $5.5 billion purchase of Capsugel also made a stir, as did the merger of Cambridge Major Laboratories and AAIPharma Services to form Alcami. Even smaller acquisitions, including Catalent’s recent purchase of cell culture specialist Cook Pharmica for $950 million, made waves.
In all cases, the deals brought to light evolving business models in an industry that is consolidating as its players diversify. Firms are adding new service and manufacturing offerings to core businesses by combining final-dosage manufacturing with active pharmaceutical ingredient (API) production, say, or adding biologics to a small-molecule services business.
Cambrex’s acquisition of High Point, N.C.-based PharmaCore last October was worth noting for a different reason. The $25 million deal gave Cambrex manufacturing assets for small-molecule APIs that are in the early phases of human clinical trials. The plan is for the new facility to feed the firm’s larger-scale API plant in Charles City, Iowa.
The news, followed by announcements in the ensuing months regarding expansions at Charles City and elsewhere, signaled that the small-molecule stalwart is sticking to its guns as many of its competitors veer toward diversified services or a one-stop-shop approach combining API and final-dosage
manufacturing. But Cambrex’s latest investments are not a matter of simply doubling down on small molecules.
In addition to adding preclinical and Phase I clinical trial capacity with the North Carolina plant, Cambrex embarked on an expansion in Charles City that includes a scale-up of high-potency API production capacity from 150 L to 4,000 L—a $24 million investment. The combined effect is a stronger pitch to prospective drug industry customers that have molecules in the early stages of development and are concerned about their downstream production options.
According to Chief Executive Officer Steven M. Klosk, Cambrex is stretching out a bit after focusing narrowly on late-stage, small-molecule pharmaceutical chemicals for the past decade. The company had a biologics business but sold it to Lonza in 2007.
And Cambrex, one of the few publicly traded companies in the contract pharmaceutical chemicals field, expects to invest $70 million to $75 million in 2017 and is still on the lookout for acquisitions to increase capacity and perhaps broaden its offerings—even as far as bringing back biologics.
Yet Klosk, who became CEO in 2008 and previously ran the company’s biopharma business, says he’s primarily interested in further expanding Cambrex’s small-molecule production.
“Biopharmaceuticals are growing faster than small molecules—it’s a smaller market, but it’s growing faster,” Klosk acknowledges. Still, he is unmoved by estimates that the share of large-molecule biologic compounds in the current drug
But the small-molecule stalwart may surprise with its next investment
Cambrex Bucks the Pharmaceutical Service Trend
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Manufacturing & Investments
Cambrex Bucks the Pharmaceutical Service Trend
Reproduced with permission
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development pipeline is approaching 50%. “There is still a very large small-molecule market with a whole lot of potential growth,” he says.
Klosk adds that the general shift of contract API production from Asia to Europe and the U.S. also puts Cambrex in a good position. The company, which had sales of $492 million in 2016, has facilities in Karlskoga, Sweden, where it produces intermediates and APIs, and in Paullo, Italy, where it makes intermediates and APIs for brand-name and generic drugs. The firm has research sites in Tallinn, Estonia, and Wiesbaden, Germany.
“The Cambrex brand stands for something in terms of regulatory and quality excellence,” Klosk says. “Managing in some of the areas outside the U.S. and Europe, where we have a lot of experience, comes with risk.”
And there are enough risks operating in the West, he says. Growth in small molecules is such that the firm is having a hard time keeping up with demand, even after investing about $200 million over the past five years.
“You never quite get it right,” Klosk says, noting that it is just as easy to overinvest as it is to underinvest in contract manufacturing capacity. One contract can heavily impact a firm’s availability of manufacturing assets, and the lack of ready capacity could kill a major new contract. “Even with all the investment we’ve been doing, there have been capacity constraints at times,” he acknowledges.
This dilemma is hardly unique to Cambrex, Klosk adds; the industry as a whole is suffering from capacity constraint. “There are cycles, and we have been on a very positive cycle. No doubt there will be a dip.”
While many of the firm’s competitors claim that 2017 is a critical year for making investments, Klosk contends that getting it right is a matter of the kind of steady investmentCambrex has made. Beyond the current project in Charles City, the company recently launched a large-scale API plant in Karlskoga.
The acquisition of PharmaCore and the expansion project under way significantly recalibrate the Charles City site, according to Joe Nettleton, Cambrex’s vice president of U.S. operations, who is based at the plant. “Purchasing PharmaCore allows us to go back to preclinical and increases our analytical bandwidth. There are 30 chemists down there,” he says, referring to the North Carolina plant. “So we have a lot more chemists available to do the analytical andchemical development work.”
The new high-potency technology coming to the Charles City plant will expand Cambrex’s production capabilities to what Nettleton calls the medium range in terms of scale. High-potency capacity is a key to growth in small molecules, he says, given the number of potential customers, including start-ups, with oncology drugs in development. “Folks expect it. It kind of gets you a ticket to the dance,” he says.
James Bruno, president of the consulting firm Chemical & Pharmaceutical Solutions, says Cambrex’s small-molecule focus is a savvy approach to the pharmaceutical services market. It’s a strategy that is paying off, especially given the company’s recent moves, he says.
“The good thing is that they have focused,” says Bruno, who is skeptical of the one-stop-shop approach. “They have not diluted their efforts with things such as working on particle size or engineering of salts. They’re not looking at 50 different things.” While the industry trend has been toward diversifying, Cambrex is locking in on the original pharmaceutical service market and one that is still growing: small-molecule APIs.
“There are a ton of small molecules out there, and Cambrex is starting to capitalize on that, on their ability to do smaller quantities, and on their being a Western manufacturer,” Bruno says. “It points to them being in the right place at the right time.”
He adds that while pipelines are filling with large-molecule drug candidates, oncology drugs are a major drug-industry focus, and many of them are based on high-potency small molecules.
Cambrex has a number of large contracts, Bruno notes, notably with Gilead Sciences, that have allowed it to expand. He speculates that the firm may fall in line with the competition and find an opportunity outside its small-molecule box.
“If they were to buy a stand-alone facility, even in biologics, I wouldn’t be in the least surprised,” he says. Biologics are APIs and would be an extension of Cambrex’s core business of API production. “If they bought a dosage facility,” Bruno adds, “I’d be shocked.” The technology and business of final-dose manufacturing is fundamentally different from producing the drug active, he says.
Klosk avows that Cambrex is open to adding either biologics or dosage services in a near-future acquisition, with a greater likelihood that it would be a dosage facility. Large pharmaceutical companies are investing in their own biologics capacity, he says, adding that Cambrex is no longer involved in manufacturing technologies that are wholly different fromchemical production.
“It would be a very significant investment, and we don’t have the knowledge anymore since we sold the biologics business,” he says.
Still, it is most likely that Cambrex will continue to invest in small-molecule API production, Klosk acknowledges. “I don’t feel an obligation or a need to do an acquisition in what I’m calling tangential services,” he says, “meaning we feel good about the small-molecule API business. We need more capacity, and the market is strong. It makes sense for us to look to grow in small-molecule APIs.”
About the author
Rick Mullin, Senior Correspondent, C&EN
First published in C&EN on October 9, 2017
Manufacturing & Investments
Page 9 Cambrex Bucks the Pharmaceutical Service Trend
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About the contributors
StevenM.Klosk
PresidentandChiefExecutiveOfficer,
Cambrex
JoeNettleton
VP,USOperations,Cambrex
Title:CambrexBucksthePharmaceuticalServiceTrend
Date:October9,2017
Article link: Clickhere
Copyright©2018AmericanChemicalSociety
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Manufacturing & Investments
CambrexBucksthePharmaceuticalServiceTrend
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Reviewing the manufacturing process of an active pharmaceutical ingredient (API) or key intermediate as a project moves towards commercialization can offer significant gains in terms of innovation, process improvement and reduced cost of goods. This article discusses how innovation and the adoption of new technologies by a contract manufacturing organization (CMO) can bring down the costs of an API, and also how collaborative risk and cost sharing approaches between a CMO and customer can benefit both parties.
As an API progresses from early clinical development through clinical trials and on to commercialization, the original synthetic route may not always be the most efficient, sustainable or cost-effective process as the scale of manufacturing increases. Furthermore, complicated or hazardous chemistries, or expensive key intermediates may prevent outsourcing or insourcing of production, or may even make the process too uneconomical to allow the development program to continue.
Process improvement opportunities are often driven by the in-licensing activity of late stage projects from small biotech companies to large and medium sized pharma companies. In-licensing takes place at Phase IIb or even Phase III, but because the small biotech companies have been able to commit only limited resources to this development, and have little experience in commercial manufacture, the processes are frequently not fully developed, very expensive, non-sustainable from an environmental standpoint or very difficult to scale up and make into a commercial process.
By reviewing compounds that are entering Phase III or
above and examining the available data to ascertain the
potential competitiveness of the published synthetic
routes, a CMO can try to identify opportunities to create
significant technical advantage, thereby offering potential
customers the benefits of significant cost reductions,
sustainable robust processes and additional intellectual
property.
There are many opportunities in the marketplace where
a CMO could bring innovation to bear on existing
processes, but while the potential rewards may be great,
these opportunities also entail a high degree of technical
and commercial risk, as well as requiring significant
resources. For this reason, good project selection as to
which to commit potential time and resource is critical.
The three key selection criteria are technical evaluation,
market assessment and customer interaction. The
technical evaluation will involve a full and comprehensive
literature search and a freedom to operate (FTO) study
to ensure that any new process development is non-
infringing. A cost simulation will also need to be carried
out, for both the existing manufacturing process and
the proposed innovative process to assess the level of
possible cost savings.
The potential market is assessed by gathering information
relating to the target product and any potential
Bringing down API costs through new technologies and customer collaboration
Optimizing the API Life Cycle Through Innovation
Manufacturing & Investments
Page 11 Optimizing the API Life Cycle Through Innovation
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Section title
competitive products in the pipeline that may significantly
influence the market dynamics. The risks and rewards for
each product are then evaluated.
For projects where a CMO is manufacturing a product
for a customer, and is in a position to propose alternative
routes, open discussion with the customer is vital.
From the customer perspective, a cheaper route of
manufacture must be weighed up against the cost of
change, and the regulatory consequences that change
brings. In such a situation, customers who are willing to
share clear development targets, long-term costs and
specifications is preferable for a CMO, so that quick,
informed decisions can be made. The different potential
supply strategies and business models will be considered,
such as the supply of the API or key intermediates or
perhaps a licensing model.
Customers will need a good reason to switch from their
current synthesis or supply chain to the one offered
by the CMO, and this is primarily achieved by offering
a significant reduction in the cost of goods (CoG). For
instance, Cambrex, which set up a dedicated Innovative
Product Group in 2012, sets a target in this regard of a
minimum saving of $5m or a 25% CoG reduction. All these
evaluations need to be carried out prior to any laboratory
work being undertaken by the CMO.
Once a project has been identified that is suitable for
developmental work, the next step is undertaking a
proof of concept study. This would typically focus on the
critical step in the proposed new process and could take
several weeks to complete. If this is successful, and the
market and customer information has been reconfirmed,
a proof of scalability study is the next appropriate step,
during which the CMO will work to develop a robust and
commercially appropriate manufacturing process. This
could take several months, depending on the complexity
of the project.
The key elements to consider when developing an
innovative process and/or cost improvement project are:
• An understanding of the CoG for the competitive
processes;
• A knowledge of the patent landscape to ensure
freedom to operate;
• An understanding of the key cost drivers within
the innovative process;
• An understanding of the cost and availability of
raw materials;
• Opportunity to increase the yield;
• Opportunity to improve processing times, to
telescope the process where possible and thus reduce
the number of isolated intermediates;
• Opportunity to develop robust and reproducible
processes, thus ensuring that the specification is
met every time;
• Ensuring a limited and manageable waste stream;
• Recycling solvents, where possible, within a tight
regulatory framework; and
• Using standard equipment where possible to
avoid additional capital investment.
Case Study 1
These considerations are clearly illustrated in a project
to develop an alternative synthesis method for the
manufacture of lacosamide as a generic drug. There were
already a number of synthetic methods existing in the
literature, but all had significant drawbacks, including
the use of an expensive, unnatural amino acid that is not
readily available as a starting material, the need for an
expensive catalytic system, and multiple, linear chemical
steps, as well as health and safety issues.
The main challenge in the project was to introduce
chirality, and initially an enzymatic approach was
used. This resulted in a conversion of up to 90% and
an enantiomeric excess (ee) of 80-85%. Although the
enzyme was expensive, it could be recycled at least 10
times, but the major drawback of the step was a process
time of typically 24 hours, or even longer depending
on the catalyst load. In addition, there was a difficulty
associated with product isolation that was due to
incomplete conversion and moderate enantioselectivity
that resulted in low overall yield.
However, a good racemization system was developed
that converted the remaining amine enantiomer into
racemate, and this system was then successfully used in
the next generation approach, which was resolution by
crystallization.
It was known from the literature that the desired (R)-
enantiomer of the amine precursor could be selectively
crystallized using N-Acetyl-D-leucin, but this resolving
agent is an unnatural amino acid and therefore expensive.
However, during salt screening tests a very similar
resolving agent, N-Formyl-L-leucine, was tested. This
resolving agent is a natural amino acid and is therefore
easily accessible commercially at a much lower price. In
the investigation, N-Formyl-L-leucine exhibited superior
selectivity compared with N-Acetyl-D-leucin: in particular,
the typical purity of crude diastereomeric salt was 90%
compared with 80-85%, and the typical crude yield from
racemate was >45% compared with 30-40%.
After some optimization work, a five-step telescoped
process with only one isolated intermediate was achieved.
The overall yield was 57%, with a purity of greater than
99%, and an ee in excess of 99%. The new route used
easily accessible materials and simple processes in
standard processing equipment. Thanks to the novelty
diastereomeric salt and innovative dynamic resolution
system, the route developed was patentable, and offered
considerable cost savings over published routes.
Manufacturing & Investments
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Case Study 2
Another case study demonstrates how it is possible to
dramatically reduce the cost of goods to a customer by
examining the key variables in an existing process. Using
proprietary technology, Cambrex was the sole supplier
to the innovator of a key intermediate through the entire
clinical development program of a drug. When the Phase
II clinical readout showed that the company needed to
increase the dosage ten-fold, this presented a significant
CoG issue as the intermediate was a major cost driver in
the whole process. The customer therefore wanted to
see whether it was possible to achieve a major reduction
in the price of the intermediate; if not, the entire clinical
program would have to be terminated. The company was
looking to pay a commercial price of between $300 and
$400kg (at a scale of greater than 50 metric tons), which
represented a reduction of up to 87% from the current
price of $2450/kg.
Cambrex’s technical team looked at both the process and
the capacity of facilities, and examined eight key variables
that would enable it to put together a realistic scenario
that would see an achievable price of approximately
$640/kg. Presented with the simulation and supporting
documentation, the customer decided to proceed
with the clinical trial program. Over the course of five
subsequent delivery periods, the price was reduced by
between $150/kg to $500/kg.
By reviewing the plant capacity and throughput,
Cambrex engineers demonstrated that an investment
of $2.3 million would enable the weekly throughput to
be increased from the current 500kg, to 2000kg, which
would give significant cost improvements. This allowed
a long-term projection to be offered to the customer of
$320/kg, based on a commercial supply agreement that
included an investment payback.
Unfortunately, however, this investment was not made
due to the termination of the project by the customer in
the wake of poor Phase III clinical trial data.
In conclusion, there are a number of aspects to managing
the API life cycle to take advantage of the growing
opportunities in the market. However, there are certain
factors that are crucial if the benefits are to outweigh
the risks; the first and foremost of these is initial project
selection. Clear project goals should be established at
the outset and referred to frequently, and existing patent
landscapes should be investigated and understood.
To achieve process improvements, a good understanding
of the process and the facilities is important, as well
as looking to reduce waste costs by good waste
management. Parallel processing and process telescoping
give significant benefits with regard to capacity utilization
and product throughput.
Both process and capacity should also be considered
when looking to improve the cost of goods. The
identification of the key drivers is critical to ensure that
valuable development time is focused on where the most
significant cost savings can be realized.
About the author
Jonathan Knight
VP, New Product Development, Cambrex
First published: Contract Pharma
Title: Optimizing the API Life Cycle Through Innovation
Date: June 6, 2017
Article link: Click here
Manufacturing & Investments
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The industry seems to have reached a consensus that the classification of a highly potent molecule is one with an occupational exposure limit (OEL) at, or below, 10µg/m3 of air as an 8 hour time-weighted average.
Facilities that have been established to handle these “potent” compounds have varying levels of containment, or exposure control bands (ECBs), as the OEL gets smaller and potential hazards increase. The engineering and handling solutions are also fairly standard, although the specific approach adopted by individual companies vary slightly, and higher containment strategies are typically adopted when the OEL falls below
1µg/m3, and then again below 0.1µg/m3.
Although the risk assessment approach is fairly standard, the application of uncertainty factors within the calculation of the OEL, for example on ergonomic or mishap risk, can vary widely, depending on the risk assessor and so the OEL calculated can vary widely leading to different ECB assignments.
OEL assessments amongst experts may also change over time. In the initial phases of product development, the risk factors will typically be higher to take account of the lack of available data associated with a molecule or understanding of the specific exposure control technology required. Hence there is typically a lower OEL and a higher containment technology applied in early development phases. As more data become available for a molecule as it progresses through development, the assessment and categorisation of its “potency” may change, and the associated OEL amended.
What is crucial for a CMO is how effective its engineering controls are in the context of batch operations as defined by the ECB, and how the company’s assets fit against the market’s needs. But what are these needs?
Whatever the descriptor, there is strong evidence of a booming market for highly potent APIs (HPAPIs), which has been largely fuelled by the dramatic rise in New Chemical Entities (NCEs) being approved for oncology indications. Prior to 2010, there were approximately 2 - 4 approvals per year for oncology products, but that increased to 6 - 14 per year in 2011 - 2016. Oncology now accounts for approximately one third of FDA approvals and 30% of the small molecule clinical pipeline. However, it should be noted that potent compounds are not restricted to that therapeutic class, and not all oncology products require high containment.
Cambrex has just announced a $24 million investment in a new facility to manufacture HPAPIs at its 45-acre Charles City, Iowa plant. This will see the installation of over 8,000
litres of reactor capacity, operating to an OEL of 0.1µg/m3, which will enable batches to be manufactured between 50 to 300kg. The new facility at Charles City will integrate into the existing early stage high containment and development capabilities, providing flexibility across a broad range of scale. Construction and installation of all new equipment is expected to be completed by Q1 2019.
Before committing to this multi-million-dollar investment, Cambrex undertook a cross sectional review of the clinical pipeline and the nature of the molecules within it. Based on two independent assessments, there was a marked difference in the OEL calculated for the selected molecules, and hence the containment requirements to handle them. In addition, it was evident that pharmaceutical companies developing new products would be conservative in their assessment.
Highly Potent APIs, Managing the Uncertainty in Market Needs
Manufacturing & Investments
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This evidence led Cambrex to the conclusion that although the independent assessments varied from 68% to only 13% of
molecules having an OEL below 1µg/m3, overall a balanced view is that more than 30% of the small molecule pipeline would be treated as such. Coupled with previous Cambrex research that showed that in general the volume demand for NCEs has reduced from tens of metric tonnes to less than or approximately ten tonnes, these studies shaped the company’s investment strategy.
The new facility allows Cambrex to leverage its HPAPI containment assets across its global manufacturing network to cover the whole continuum of OELs from 10 down to <0.1
µg/m3. This enables early clinical development work through to commercial supply, independent of assessor variation while at the same time allowing for changes during the life-cycle and taking into account the scale required for modern drugs. At the same time it gives Cambrex additional mid-scale facilities, which coupled to the recently expanded ‘pilot’ facility provides launch and commercial capacity – and also for the API intermediates which are usually higher volume, and
for this and products in the 10-1 µg/m3 range Cambrex has
added capacity to meet the growing demand.
About the contributor
Alex Maw
Director, Marketing and Communications,
Cambrex
First published: Specialty Chemicals Magazine
Title: Highly Potent APIs, Managing the Uncertainty in
Market Needs
Date: October 2017
Article link: Click here
Manufacturing & Investments
Page 15 Highly Potent APIs, Managing the Uncertainty in Market Needs
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Growth in the global oncology drug market is an important measure of opportunities in drug development and manufacturing, including for contract manufacturers of active pharmaceutical ingredients (APIs) and finished drug products. On the small-molecule side, whether as an API or finished drug product and depending on the product involved, growth in the oncology market is one indicator of potential opportunities in high-potency manufacturing.
Within the oncology market, a niche segment is antibody drug conjugates (ADCs), which consist of a cytotoxic small molecule linked to a monoclonal antibody (mAb). ADCs, certain oncology drugs, and other high-potency compounds (such as hormones) require high-containment manufacturing, which involve specialized approaches in facility design, equipment selection, and manufacturing processes to achieve the desired levels of containment and minimize operator exposure. Several contract manufacturers have recently invested in high-potency manufacturing. Below is a roundup of activity as announced in 2015 and 2016 to date.
CambrexIn July 2016, Cambrex announced that it had completed and validated a $50-million production and warehousing expansion for API manufacturing at its cGMP site in Charles City, Iowa. This facility sits on a 45-acre site and manufactures a wide range of APIs and pharmaceutical intermediates, including highly potent molecules and controlled substances. The new 7,500 square-foot multi-purpose manufacturing facility will initially add a total of 70 cubic meters of glass-lined
and Hastelloy reactors ranging in size from 7 cubic meters to 16 cubic meters, along with Hastelloy agitated filter dryers for a multi-purpose configuration that will be capable of handling
potent APIs at an occupational exposure limit of down to 1 µg/cubic meter. The facility complements the three existing large-
scale manufacturing facilities at the Charles City site.
About the contributor
Alex Maw
Director, Marketing and Communications,
Cambrex
First published: This article first appeared in the April 20,
2016 edition of DCAT Value Chain Insights, an information
resource from the Drug, Chemical & Associated
Technologies Association (DCAT), and was updated for
publication in CHEManager.
Title: Opportunities in Drug Development and
Manufacturing - High-potency Manufacturing Continues to
Attract Investment of CDMOs and CMOs
Date: September 12, 2016
Article link: Click here
High-potency Manufacturing Continues to Attract Investment of CDMOs and CMOs
Opportunities in Drug Development and Manufacturing
Manufacturing & Investments
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Responsible drug manufacturers and contract organizations share the common goal of producing the best possible product in the most efficient way.
The two have shared mutually beneficial relationships for decades in the pharmaceutical industry and will no doubt continue to do so for years to come. The numbers support that continued success as well: according to an IntelliROI 2016 report, the global contract pharmaceutical manufacturing market is expected to reach $84 billion by 2020, up from $58 billion in 2014.
What follows is an in-depth look at pharma’s outsourcing relationships from the contract manufacturing perspective — what works, what doesn’t, and how to both build and maintain the optimum dynamic for ongoing success.
One size does not fit allWhen trying to qualify the relationships between contract organizations and their customers, generalizations are ill-advised. Asked about the challenges and frustrations of their client relationships, the resounding response from CMOs was — “it depends.”
Drug manufacturers have a broad range of outsourcing experience, and naturally some companies are better-versed in the process than others. Additionally, project complexity, scale, goals and timelines vary. However, in order for the
process to run smoothly, it is pivotal that drug manufacturers do not lose sight of why they are outsourcing. Essentially, is the need functional or strategic or somewhere in between?
“I think it’s important for our potential customers to keep in mind why they went to a CDMO in the first place,” says Mike Valazza, VP global business development, Catalent Pharma Solutions. “Was it speed or technical advancements or a specific delivery platform, for example. If they keep that in the forefront of their minds, they will find a partner that is a good fit.”
Project complexity can change the nature of relationships as well. Drug manufacturers who approach contract organizations with products that are easy to make, with well-characterized processes and well-defined systems naturally create a smoother, simpler relationship. But complex pharmaceutical products are becoming increasingly more common.
“These complex products require a much higher level and frequency of communications as the CMO works through the various challenges that will be confronted. There needs to be mutual trust and responsiveness from both parties to get these challenges resolved quickly and efficiently,” says Lonnie Barish, executive director, business development, Wellspring Pharma Services.
But just because the product is complex, does not mean the outsourcing relationship has to be complex, says Simon
Mastering the art of lasting outsourcing relationships in the pharmaceutical industry.
Inking the Deal
Manufacturing & Investments
Page 17 Inking the Deal
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Section title
Edwards, Vice President of Global Sales and Business Development at Cambrex. “The project may be complex, but relationships only get complicated by people. A good relationship is a bond based on the individuals who are involved. Where it gets complex is when there are people involved behind the scenes who aren’t active in the day-to-day interactions. If all those working directly together respect one another and develop a degree of goodwill, there is a natural tendency to sort out problems,” says Edwards.
Strategic partnership?Much has been written about the role of contract manufacturers evolving from an “extra set of hands” to a more high-level, strategic partnership. But is the term “strategic partnership” truly the best way to describe the contract organization/drug manufacturer relationship? Again, the answer is: it depends.
“I don’t like the term strategic partners. It’s true that if it’s going to work well, the relationship should be strategic in nature. But we are definitely not talking about a formal strategic partnership on paper — it is more strategic behavior as opposed to a strategic partnership. The strategic behavior comes out of the relationship you build, not out of formalizing a strategic partnership agreement,” says Edwards.
Tee Noland, CEO of Pharma Tech Industries, echoes that sentiment and is realistic about the varying nature of the relationship.
“The word ‘partnership’ just gets thrown around a lot,” says Noland. “The reality of some of our relationships can be ‘you’re the vendor and we are the customer,’ which can make solving problems and communication challenging,” acknowledges Noland.
When drug manufacturers are content with working tactically — purchase order after purchase order — and aren’t seeking a strategic relationship, savvy contract organizations adapt to the situation.
“We tune our execution protocol to suit individual client requirements. Some of our longest partnerships have been with clients where we demonstrated flexibility and commitment to fine tune our approach to meet their needs,” says Vivek Sharma, CEO of Piramal Pharma Solutions.
Perhaps it’s a problem of logistics more so than semantics. It isn’t necessarily the case that the entire pharmaceutical industry is opposed to significant, high-level relationships with their outsourcing partners — but getting there can be a struggle.
Supply chain optimization is at the forefront of today’s pharmaceutical industry agenda, playing a key role in addressing current cost, performance and quality challenges. According to an A.T. Kearney Pharma Supply Chain Panel survey of pharmaceutical companies, the single biggest barrier to improving performance is supply chain complexity. And while 92 percent of respondents of that survey saw simplifying their supply chains as a strategic priority, nearly 40 percent of the surveyed firms were not yet doing anything about it.
“Many large pharma companies are in fact saying they want ‘strategic partnerships’ with CMOs. They don’t want to work with 150 CMOs, they just want the 50 best CMOs. But to
get there is not an easy thing to do. There is a tremendous amount of time and complexity involved in shifting products in order to consolidate suppliers,” says Noland.
As drug manufacturers continue to pare down their vendor numbers and establish preferred/strategic partnerships with fewer, integrated suppliers, contract organizations are establishing competitive advantages by understanding the individual needs of each customer and maintaining a flexible approach to the relationship.
Finding “the one”The contract services market has enjoyed healthy growth in recent years, no doubt a reflection of the robustness of pharmaceutical pipelines and the drug industry’s overall greater need for support. In fact, Nice Insight’s 2016 CDMO Outsourcing annual survey revealed that pharma/biopharma execs expect spending on outsourcing to increase for the fourth year in a row.
However, consolidation, increasing offshore outsourcing alternatives and pharma’s tightening purse strings means that competition for outsourcing bids is alive and well — and pricing, like it or not, is a factor in contract services selection. But according to CMOs, it is not the leading factor in the process.
“I don’t think price dominates — it’s not necessarily the number one. Customers talk to at least 3-6 suppliers, and often kick out the highest and the lowest bid. If price was dominating, drug manufacturers would just pick the lowest bid,” points out Edwards.
So what is dominating the selection process? First and foremost, is a contract organization’s quality reputation, followed closely by its ability to execute projects against promised timelines.
“Customers do look at your quality record and do try to get a feel for your technical expertise. I don’t think I’ve ever won any business where our customers haven’t gone to look at our sites first,” says Edwards.
Sharma echoes this sentiment: “The degree of confidence that the CMO can provide to the customer on supplying the product on time, at the right quality, quite often directly correlates to the probability of winning the proposal. Of course, the CMO still needs to be within a certain range of the bids that the customer receives.”
Upon further dissection, the “price” discussion should really be a discussion of value — exactly what are drug manufacturers getting for their dollars spent? “At the end of the day, the least expensive car on the market isn’t going to be a Mercedes, but if you are going to spend the money on a Mercedes, you are expecting that the value is there for what you are spending,” points out Valazza.
Contract organizations caution drug makers against chasing lower numbers. And the precautionary words are not merely self-indulgent: Lower initial prices could ultimately equate to bad service, bad quality and supply disruptions.
“It is up to the pharma companies to decide if they want a reliable supply chain — one where they are not constantly having to put out fires — or do they want to chase a lower cost and, as a result, have to micromanage their supply chain,” says Noland.
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Scope creep — a challenge ubiquitous to all project management — needs to be taken into consideration during the initial price screening. Scope creep occurs when a project is not properly defined, controlled or documented, and deliverables and project boundaries are not properly laid out.
It’s helpful to be aware that different contract organizations take different approaches to handling scope creep. “Some will come in with barebones project scope and then issue change orders as the project moves forward, while other companies will do more of a full-service proposal and lay out what they anticipate to be all the costs, preferring to minimize change orders,” explains Barish.
“It’s not always the case that others are less expensive; sometimes they just scope less work,” agrees Valazza.
“What we do at Catalent is to anticipate the work the client will need based on all our experience and build that into the proposal. We try to be upfront with what we think would be the best way to run the program if we were the decision maker,” Valazza adds.
As drug manufacturers narrow down their choices of outsourcing partners, thorough due-diligence and drilling down to understand how the project is truly going to run ultimately helps inform the decision much more than just figures on a page.
Planning aheadContract organizations cannot stress enough the criticality of advanced planning. There is universal agreement that the clearer the vision for the project upfront, the smoother it will go down the road, and the opposite is equally true: poor planning will cost both sides time, money and frustration.
“One of the leading causes for tension in the CMO/ pharma relationship is lack of clarity and vision upfront,” says Barish.
Planning needs to come from both sides of the relationship.
“Ideally pharma companies lay out exactly what they want, what their regulatory strategy is and how they see the project rolling out. Companies that do not provide the basic info for developing a quotation — safety data on APIs or packaging info for example — create a back and forth as contract organizations struggle to get all of the needed information. And ultimately, pharma companies can regret decisions that were made early on that were not strategically thought out upfront and instead decided on the fly,” says Barish.
When expectations are clearly defined upfront, contract
organizations can then provide the pharma manufacturer with a clearer understanding of full cost and timelines.
“In general, customers are prepared. It is even more helpful if they are clear on the difference between what they want and what they need. Often drug manufacturers are looking to get to the next step, but the bigger question is, what do you NEED to get there?” says Edwards.
A widely used tool for laying out such expectations is the Request for Proposals (RFP). The RFP document should effectively communicate the pharma organization’s key deliverables and timelines in detail and ask questions specific to the proposed project.
“A well-written RFP and an effectively managed RFP process form the foundations for a productive relationship with the chosen CMO — a relationship that may last for the entire lifecycle of your product,” says Ron Herman, senior partner, NexGen Consulting Group.
RFPs mean all potential outsourcing partners see the same package, at the same time. While it standardizes the playing field, there can be downsides to the on-paper process.
“RFPs tend to take the relationships out of a lot of sourcing decisions. I worked with Bob on the last project and it went really well, but Bob is now replaced by a RFP committee. On the one hand, it’s a way of doing things fairly, but it’s also a bit of a loss because it removes the relationship from the initial equation,” says Edwards.
Ideally, drug manufacturers reach back out to CMOs after receiving proposals, seeking further clarification and asking questions about the proposal. The personal relationship element should, at this point, re-enter the picture.
While a carefully written and thought-out RFP can take the human element out of the equation, “on another level it clarifies the direction, and does a better job of setting expectations on both sides,” concludes Barish.
The nature of working with pharmaEach industry comes with its own unique set of challenges. Savvy contract organizations are well-versed in the struggles indicative of pharma and have established methods of working through these challenges.
One such challenge in the pharma industry is culture. As pharma’s business models shift, its cultural models are failing to adjust accordingly. Frequent mergers, acquisitions, and relocations further complicate the matter. PwC went as far as to use the term “cultural sclerosis,” stating that “prevailing management culture, mental models and strategies on which the industry relies are the same ones it’s traditionally relied on, even though they’ve been eclipsed by new ways of doing business.”
Companies struggling to build a strong culture within their own organizations will invariably be challenged when trying to form working partnerships.
“You need to be sure of your own culture before you can find a cultural fit with an outsourcing partner,” says Noland.
But this struggle has helped some contract organizations to reflect inward and work to improve their own cultures. A poor cultural fit can result in awkward CMO-drug manufacturer relationships, which means CMOs also need to have a clear vision of their own capabilities.
Manufacturing & Investments
A new manufacturing plant at Cambrex’s facility in Charles City, Iowa.
Page 19 Inking the Deal
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“Our reputation is paramount to us. If I take on a program that isn’t a good fit culturally and the customer has a bad experience, it can affect our ability to work with that customer on other programs in the future,” says Valazza.
Pharma Tech speaks of the time spent building their own cultural focus. “To get the culture we believe is in the shared interests of our employees and our customers, we’ve had to invest a lot in our cost structure in terms of the right leadership. To grow, we need a certain level of volume and profitability to sustain the culture we want,” says Noland.
Contract organizations can be challenged to take such a position, as the core reason for outsourcing has traditionally been lower costs — meaning CMOs have to exercise some frugality, at least at the start, and need to reach a certain scale before investing heavily in top talent. But the investments seemingly pay off, as contract organizations with strong cultures and values are able to provide structure and consistency to their customer relationships.
Communication, flexibility and planningThere is much variability involved in pharmaceutical outsourcing relationships and tremendous pressure surrounding these relationships.
“In our industry, time is money. Delaying the launch of a product can result in the loss of tens of thousands, sometimes millions of dollars. We, as CMOs, are constantly being reminded of that fact,” says Barish.
Building a good outsourcing relationship is the responsibility of both parties, and the best relationships have these three things in common: communication, flexibility and planning.
“Every project and customer is a learning experience. It’s a complex business to be in. The pace and challenges in the pharma world can be eye-opening,” concludes Noland.
For two sectors that rely on each other for industry success, mastering the art of building and maintaining relationships is proving to be worth it.
About the contributor
Simon Edwards
VP, Global Sales and Business
Development, Cambrex
First published: Pharmaceutical Manufacturing
Title: Inking the Deal
Date: January 31, 2017
Source: Reprinted with permission from the January 2017
issue of Pharmaceutical Manufacturing. Copyright 2017,
Putman Media. All rights reserved. License # 46596
Article link: Click here
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Chuck GallagherSystem Administrator
Erena Sawyer-WagnerAnalytical Chemist
Jason MarletteOperator
Experts you’ll enjoy working with
Amanada FlanaganAssociate Director, QC
Chemistry & Technology
Michele CioffiRaw Materials & Intermediates Warehouse Operator
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The journey from first idea to final product is a long and arduous one. Dan Bowles and Michael Tracey of Cambrex look at how CMOs can assist pharma companies navigating their way through the process for small molecule medicines.
In the past century, small molecules drugs have revolutionized human healthcare. From antibiotics to anticancer drugs, allied to medicines designed to treat chronic conditions as diverse as epilepsy and diabetes, the skills of the organic chemist have had a huge impact on both life expectancy and quality of life. Despite the successes, bringing a new small molecule drug to market is far from a trivial exercise. It typically takes 15 years and costs in excess of a billion dollars, and the attrition rate is high—one estimate is that just one in 5,000 promising chemical entities will actually reach the market (see Figure 1).
But the reward is worth the risk: the size of the global pharmaceutical market topped $1 trillion in 2016 (see Figure 2). In the 40 years from 1977-2016, the U.S. FDA approved around 4,000 small molecule products for commercialization. Annual fluctuations aside, there is a constant supply of new drugs to the market, and with many unmet medical needs remaining, the potential for success is great if these hurdles can be overcome.
Once a new biological target has been identified that might have potential for altering the course of a disease, medicinal chemists can get to work on creating a molecule that might interfere with that target’s activity. Only small amounts of these molecules are required for early biological assays and screens, and through an iterative cycle of design–make–test, an optimized compound is identified for further progression.
At this point, the project has usually been up and running for a number of years, and it is only at this stage that
larger quantities of prospective active pharmaceutical ingredient (API) will be required. The medicinal chemistry route to the molecule is rarely appropriate for large-scale manufacturing—medicinal chemists are more interested in speed than cost, because time is of the essence when determining its potential biological activity. The sooner a molecule gets into clinical trials, the sooner it will reach the market if it proves efficacious and safe.
Medicinal chemists will, therefore, routinely use reagents and reactions that process chemists try to avoid, because they allow a new molecule to be accessed quickly. These might be organolithium bases that must be used at very low temperatures, perhaps, or a reaction that gives a complex mix of products that require separation using solvent-heavy column chromatography.
This is the first point along the development pathway for a small molecule drug that a contract manufacturing organization (CMO) is likely to get involved. Scale up and route optimization is an art in itself, and if in-house expertise is not available, the skills of the CMO can be invaluable. The CMO can be a complement to a Big Pharma company’s own process development team and, in the case of a biotech company with no in-house capabilities, can offer the means to design an appropriate large-scale synthesis.
It is also important to get a good synthetic route early on
in the development cycle. It is rarely altered past phase
IIa, but where the demands for API increase throughout
the clinical stages, and then further into commercial
Chemistry & Technology
Making Medicines: Speeding the Path from Idea to Patient
Page 22 Making Medicines: Speeding the Path from Idea to Patient
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Page 23
Number of molecules
Drug development cost
Target Discovery
Lead Discovery
Preclinical Development
Clinical Phase I
Clinical Phase II
Clinical Phase III
Launch Phase IV Generics
File IND File NDA
Drug Discovery Drug Development Commercialisation
5,000
250
5 1
5 7 14 15 24 Years
>$1bn
manufacturing, the synthetic route is scrutinized, and
process chemists and engineers look to adapt it.
Route evaluation is common for CMOs once the market
has been established for a drug, as late as a number
of years after launch. Although there are regulatory costs
involved in changing the route post launch, there are
occasions when it can be worthwhile. This is particularly
the case if the new route is very much faster or very much
cheaper, and may even help to reduce the impact of
generic competition once patent expiry occurs.
Early stage support The following two case studies illustrate support
provided for API manufacturing demand across the drug
development spectrum.
Case Study No. 1: Early process development and rapid progression to first GMP bulk manufacture. A client had
developed a 13-step route for a new molecule and initially
required sub-kilogram quantities to be manufactured
under non-GMP conditions, followed by a scale up to 5kg
batches that would be manufactured in accordance
with cGMP.
Cambrex was able to design a new route to replace that
original medicinal chemistry route, and at the same time
increase the overall reaction yield significantly from
2% to 18%. In addition, downstream development was
completed in parallel with plant production of the API to
minimize the timeline for the process.
Two steps were shaved off the route, bringing the
total number down to 11. Furthermore, a hazardous
diazotization step was evaluated and risk-mitigated, and
solubility and final form issues were resolved to provide
the desired polymorph.
Case Study No. 2: Process development and process validation studies. In some cases, full time equivalent
(FTE)-based R&D is a more appropriate way to approach
a problem. In this example, Cambrex provided FTE-based
R&D to support a client’s medicinal chemistry/structure-
activity-relationship studies. The result was a second-
generation process that was developed in collaboration
with the client, and sufficient API was delivered to satisfy
an early toxicity study program. This was quickly followed
up by the first kilogram-scale GMP batch of API to meet
the demands of clinical trials.
During the development process, an issue with water
sensitivity was identified. To meet the stringent purity
requirements, refinements to the process were made,
in collaboration with the client, to ensure its robustness
at scale. Further process improvements resulted in an
efficient and streamlined route that also dramatically
reduced the cost of the API. Full analytical and process
validation was successfully completed, enabling the API to
be manufactured at a 40kg batch scale.
Supporting API demand at late clinical phase and commercial launch Late-stage development requires specific skills that a
CMO may be better placed to provide than a company’s
Figure 2. Although the number of new drug approvals per year fluctuates, there is a constant supply of new products to the market.
Figure 1.It costs more than a billion U.S. dollars to bring a drug from the discovery stage to commercialization and only about 1 in 5,000 new drug candidates make it through the whole process to become a marketable product. However, the reward is worth the risk.
Chemistry & Technology
Making Medicines: Speeding the Path from Idea to Patient
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80
60
40
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0
1977
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0
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198
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FDA approvals (1977-2016)
91106
119126
140159 167 182
202 214239
20072006 2008 2009 2010 2011 2012 2013 2014 20162015
0
200
400
600
800
1,000
1,200
WW Pharmaceutical Revenues by Molecule Type / $BN
Small Molecules Biologics
NCEs NDAs
506558 603 622 657
707 692 700 742 743 769
ON
R
O
R R
O
RO
O
N
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in-house team. Biotech companies are unlikely to be
able to do these tasks themselves, and therefore will
look for a CMO with extensive experience in supporting
API manufacturing for late-stage development and
commercial launch.
Case Study No. 3: Internal development and transfer. A customer synthesis project for a generic API project
was originated by Cambrex at the company’s R&D
site in Tallinn, Estonia, and a number of scouting runs
performed to establish the synthetic route and initial
development procedures. The development and technical
transfer teams from the company’s Charles City site
became involved early on in the project to help direct
development, which included design of experiment (DoE)
studies.
The process transfer was undertaken in Estonia, so the
U.S. staff were able to see the process being implemented
and discuss progress with the Estonian development
team. This early involvement resulted in very little process
development being required after the campaign was
transferred back to Cambrex Charles City for full-scale
commercial manufacture.
Case Study No. 4: Process development. A client
approached Cambrex with an 8-step process that
required further development and CMO support for
production and commercial launch of an API. A previous
CMO had made 50kg of the API with an overall yield of
9%. By understanding and optimizing two key reaction
steps, Cambrex was able to develop a process that gave
a substantially improved overall yield of 49%. DoE being
used to determine a proven acceptable range (PAR) for
each critical process parameters (CPP), and fate/purge of
impurities. Analytical method development and validation
included chiral chromatography and UPLC-MS.
Case Study No. 5: Technology transfer. A U.S. client that
had developed a complex 4-step process was looking
for a domestic supplier of the product. Cambrex had
considerable knowledge of the client’s process, having
previously manufactured it at pilot scale, and developed
a suite of analytical methods that enabled the chemical
process to be monitored.
Cambrex committed to building and qualifying a new
large-scale manufacturing facility for the process in
Charles City. This was achieved in less than one year, and
only one laboratory-scale run was required before the
process was transferred to the pilot plant. Furthermore,
just two validation pilot runs were required prior to
the scale up of the process to 15,000-litre equipment.
The application of Six Sigma techniques has allowed
an increase in production year-on-year, and more than
60 tons of this API have now been manufactured by
Cambrex over the past four years.
What makes a good small molecule CMO? For a partnership with a CMO to succeed, there are
multiple factors that will be important. The CMO should
have extensive expertise in process chemistry and
engineering, with a reputation for quality and reliability in
its manufacturing operations. As well as a strong safety
record, it should offer advanced chemical manufacturing
technology, and flexibility that allows it to manufacture
small molecules from milligram through to ton scales,
and be able to adapt as the molecule moves through the
development pipeline.
Perhaps the most critically important factor, however, is
that the CMO should offer dedicated support throughout
the whole route through development, from compound
selection to commercial launch and beyond. Speed is of
the essence, and any delay in the development process
will shave weeks, months or even years off the time a
drug will have on the market before it is subject to generic
competition on patent expiry. A good CMO will play a key
role in getting the drug to the market in a timely fashion,
so it can start to recoup those huge development costs.
About the authors
Dr Dan Bowles
Senior Director, Chemical Development,
Cambrex
Dr Michael Tracey
Principal Scientist, New Product
Development, Cambrex
First published: Contract Pharma
Title: Making Medicines: Speeding the Path from Idea
to Patient
Date: November 10, 2017
Article link: Click here
Chemistry & Technology
Page 24 Making Medicines: Speeding the Path from Idea to Patient
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Experts Statements: Kurt J. Kiewel, CambrexDespite tremendous challenges facing the pharmaceutical industry, it continues with its commitment to innovation and the discovery of novel drugs to address unmet medical needs. Indeed, medicinal chemists face a challenge of their own Trying to survive in a changing environment where pharma is focusing on biologics drug candidates will require chemists to adapt.
CHEManager International asked R&D experts of chemical and pharmaceutical companies to elaborate on their research strategy and share their opinion with our readers. In detail, we interviewed professionals ranging from CEOs to heads of R&D and process development about:
The crucial success factors in chemical and pharmaceutical research.
Kurt J. Kiewel: The important skills for individuals within a successful research program are possession of a broad knowledge of chemistry, creativity in problem solving and a willingness to get peer advice. These factors, along with experience in hands-on research, allow chemists to develop and progress.
Not every problem has a straightforward solution, and not every reaction is described in the literature. Having the confidence to try something reasonable in the lab, even
if it ultimately does not work, may provide clues on how to succeed. Chemists are not always trying to solve new problems, just similar problems in a different context; so being current on the literature and sharing thoughts with colleagues will help to learn about other people’s experiences.
The role of information technology tools in developing reaction routes and processes.
Kurt J. Kiewel: Predictive software can provide a complementary tool to literature review and collaborative brainstorming for identifying possible reaction routes. Selecting a route for manufacturing via software may not analyze a number of key points critical to successful and economical process development:
Firstly, software tends to focus on bond making/breaking, and may not capture the costs or difficulties associated with workup, purification, isolation or waste. Additionally, one has to assess the scalability of software proposed routes in the context of the project, and also the available manufacturing facility in which the chemistry will be undertaken, which is often a significant driver for route selection. It is also important that safety evaluation is undertaken when predicting and developing a route, so the use of any modeling software within a wider cross-functional team, where ideas and literature research can be discussed and brainstormed in an open environment, is ideal to successfully transition and optimize a project from development through to manufacturing.
The Winning Formula
Chemistry & Technology
Page 25 The Winning Formula
Chemists who can collaborate will thrive in pharmaceutical research, experts predict
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Challenges and changes affecting the work of R&D chemists
in the future.
Kurt J. Kiewel: Batch and semi-batch processing is still used in chemical manufacturing, which makes classical process development skills, tools and knowledge as important as ever to master. Emerging technologies are being more widely implemented, but it is important to know when and how these new strategies should be integrated into a manufacturing plan to ensure they are utilized efficiently.
Beyond process development for manufacturing, the requirements of laboratory investigations to support regulatory filings are becoming increasingly rigorous. At the same time, newer quality, impurity, safety and environmental policies result in a more restrictive space in which to operate.
A greater number of cross-discipline science degree programs are available in academia, which may be taking time away from developing broader chemistry fundamentals, and there are limited opportunities for chemical process development training ahead of entering the job market. The number of mergers, acquisitions and the closing of research departments promote a perception of uncertainty in the job market, which may be turning potential scientists toward other career pursuits. In the long term, a negative impact on the available trained workforce for the chemical industry may result.
Experts Statements: Ingrid Hegbom Ekman, CambrexThe crucial success factors in chemical and pharmaceutical research.
Ingrid Hegbom Ekman: It will become increasingly important to better integrate and adopt regulatory and environmental requirements into R&D organizations, and more specifically, get the development chemists to consider these factors at an early stage.
Automation will also become ever more valuable to improve process understanding and “seeing the process window,” as will the adoption of “enhanced development in combination with the traditional way of developing processes,” as outlined in ICH Q11. This also includes the use of risk assessments/quantitative risk assessments from an early development stage.
High-tech analytical instrumentation and integrated, computerized systems to support data evaluations, as well as storage and tracking of data, will be extremely valuable going forward. Internal and external collaboration in specialist areas is also very important, but takes time to establish and a key is open collaboration with external partners, who may have specialist knowledge and expertise beyond that which is available internally.
Challenges and changes affecting the work of R&D chemists in the future.
Ingrid Hegbom Ekman: Chemists need to be more aware of all regulations and requirements for a process to be both efficient and sustainable into the future.
It is important not to view regulations as being painful but as a natural variable that must be taken into consideration, as very often they are nothing more than common sense.
About the authors
Kurt Kiewel
Director R&D, Cambrex
Ingrid Hegbom Ekman
Director R&D, Cambrex
First published: CHEManager
Title: The Winning Formula
Source: CHEManager Pharma Biotech 1/2016, pp 12ff.,
WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim
Date: September 12, 2016
Article links: Article 1,
Chemistry & Technology
Page 26
Article 2
The Winning Formula
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AbstractGrowth in demand for new anti-cancer drugs has seen more and more pharmaceutical companies researching highly potent molecules, but these companies may not have the specialist resources and infrastructure needed to take these developments beyond the R&D scale. Meanwhile, for projects that involve DEA Schedule II-III controlled substances, there is also a need for knowledgeable, experienced, and licensed partners to work with these compounds safely and within legislative constraints. John Michnick, Ph.D., Director, Sales & Business Development at Cambrex, discusses how and why specialist contract manufacturers are in a good position to take on these challenges.
Overcoming the fearHandling a highly potent active pharmaceutical ingredient (HPAPI) can, quite rightly, involve a significant fear factor. Exposure to these molecules can have serious consequences – the effects may be moderate to severe, they may not be reversible and, in some extreme instances, could be life-threatening or even lethal.
It is no surprise, therefore, that many of the innovator companies who start to research these substances do not feel equipped to continue their development beyond the early phases of discovery and look for an outsourcing partner with the expertise and facilities to take the molecule
from preclinical, all the way up to commercialization. This is reflected in the rapid growth of high potency projects within the outsourcing market, particularly in the last 10 years, and the sector is seeing continual, significant investment by existing contract manufacturing organizations (CMOs), as well as by those entering this area for the first time.
The rise in demand for outsourcing of highly potent development and manufacturing is driven largely by the expansion of the oncology sector, which is among the fastest growing in the entire pharmaceutical industry. As well as cytostatic and cytotoxic drugs, there is also an increase in kinase inhibitors as the movement towards specialized medicines advances, and in antibody-drug conjugates, which require highly potent chemical ‘warheads’ to target specific tumor cells. A CMO facility looking to develop or manufacture HPAPIs must have systems in place to offer three-fold protection: it has to protect the product, the environment and the people working with the HPAPI. These requirements can be met only if the company has the appropriate containment capabilities and a thorough understanding of how to use them, an experienced and highly trained workforce, and a system for assessing the risks posed by the substances it is handling and knowing how these risks should be addressed.
The time and cost of putting all these elements in place is something that an innovator company, with perhaps only one highly potent molecule in its portfolio, would see as a less attractive option than outsourcing the project to a specialist
Handling Highly Potent Actives and Controlled Substances Safely and Securely
Chemistry & Technology
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CMO that already has the systems in place. With a partner, the appropriate facilities, expertise and capacity are available, so it would make sense to use them.
To protect the integrity of the drug product, as well as the safety of the environment and workforce, areas handling highly potent projects within facilities are segregated to avoid cross-contamination. And this separation not only applies to the manufacturing side, but also to the development labs, the stability chambers, the analytical labs and the personnel engaged in all these areas.
It goes without saying that containment in the HPAPI facilities should be state-of-the-art, and manufacturers will often work with the isolator manufacturers to ensure that their equipment is best-in-class and suitable for the projects in which they are engaged.
An understanding of the type of personal protection equipment (PPE) required is also crucial. This goes beyond simply making sure that the workforce has the correct garments and breathing apparatus to protect them from the HPAPI – it also means ensuring that the gloves used in the isolators are compatible with the chemicals used in the processes being carried out. For example, if there was not an adequate compatibility check in place, a particular type of glove might be affected by contact with one of the solvents used within the isolator. This then puts not only the operator but potentially also the environment at risk of exposure.
Another important factor in protecting the environment is to be able to prove that the equipment is thoroughly clean between batches. For every high potency molecule it is necessary to have a validated decontamination process that is proven to remove or destroy it.
Proving that something is clean is quite a challenge, especially when the validation figure for some substances can be as low as 25 nanograms per sample. For this reason, CMOs handling high potency small molecules are looking to increase the use of disposable or single use systems. Although single-use plastic elements such as those now widely used in the biologics sector are not suitable, there is a trend to dispose of some of the relatively inexpensive kit, such as piping, rather than undertake the time-consuming and costly process of thorough, validated cleaning routines.
Protecting the environment is only half the story. When it comes to protecting people, containment and the proper PPE are vital, but the most important factor is ensuring that the workforce has the right level of training and skills in place to handle highly potent materials, as well as a proper understanding of the reasons behind the systems and protocols. Inexperienced workers, or those who are not up to date technologically, can engage in risky behaviors and practices that could potentially lead to the risk of exposure.
Everyone who works in pharmaceutical development or manufacturing needs training in the facility’s SOPs, but those going on to work with HPAPIs require additional training so that they can work with optimum efficiency. Essentially, they have to be able to perform routine chemical processes but in a contained environment with all the additional complexities that entails. To put it simply, when handling HPAPIs you have to ‘think before you do’ rather than reacting afterwards.
But to be able to put appropriate containment measures in place and ensure that staff training is up to the levels required,
a CMO must first know what hazards it is dealing with to be able to assess the risks accurately. Each highly potent molecule carries its own set of risks: the effects of exposure may range from moderate to severe or even fatal, and the effects may or may not be reversible. In the case of controlled substances, inhalation, absorption through the skin and/or ingestion are of particular concern.
For existing molecules, an Occupation Exposure Limit (OEL) may already have been established, but products in development will be, literally, an unknown quantity. It is then down to the CMO to assess what it believes will be a safe limit and position the molecule in an appropriate Exposure Control Band (ECB). This assessment can be carried out through in-house systems, or through programs such as those provided by SafeBridge Consultants.
To determine an ECB, the company’s toxicologists will gather together and collate all the information that is known about a given molecule, including any prior experience with similar chemical entities, the mode and mechanism of action, any toxicology data, any existing animal, cell or human data, and whether the substance is carcinogenic, reprotoxic or mutagenic.
They will also research the core chemical structure and search the literature for similar molecules to find out what is known about them. The dosage form will also be taken into account - whether a drug is topical, parenteral or inhaled can affect the mode of action, and how rapidly a biological response would occur – as would the dosage range.
Once all this information has been acquired, an OEL or ECB can be established on the basis of sound scientific reasoning. The ECBs are generally divided into four categories, I – IV, each covering a specific OEL range. For example, products
with an OEL of >1000µg/m3 would generally sit in Category I
and those with an OEL of >10µg/m3 in Category II. Categories III and IV are for substances that would be classified as high potency with OELs of 10-1 and only once a molecule has been given an OEL or ECB is it possible to tailor the measures needed to protect the environment and the workforce These measures will include SOPs, designing the kind of unit within the facility needed to handle this product, what documentation will be required, how the workforce should be trained and the type of personal protection equipment (PPE) that will be needed. Environmental controls and monitoring systems would also need to be set up.
For companies that manufacture controlled substances, there are some similarities between protocols carried out for the handling of HPAPIs, such as additional training, dedicated facilities and rigorous cleaning protocols. However, there is the possibility that controlled substances may also be highly potent and highly toxic molecules, and where there is overlap between both controlled and highly potent molecules, the procedures that need to be established put added responsibilities and accountability on contract manufacturers.
Process research, development, manufacturing, importation and purchase of controlled substances are highly regulated, and in the US cannot be undertaken without a license from the Drug Enforcement Agency (DEA). Handling of controlled substances demands exactly that: control at every stage. Access to the development and production suites is restricted to only those with authority and training to enter, and dedicated equipment and storage, including restricted, name
Chemistry & Technology
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only, access to General Services Administration (GSA) Class V rated vaults is used.
Every aspect of material handling is controlled - inventory management, control and disposal - while specialized handling procedures are put in place to deal with receiving, transferring, packaging and shipping of the substances. Accountability of the material is carried out by a detailed material balance down to grams. In both the manufacturing and storage facilities, security cameras operate to ensure all operations are observed and recorded.
Once projects are completed, final products are either stored or tested in stability chambers, again these must be undertaken in segregated facilities. Documentation must be undertaken and maintained to record the exact location and quantity of all controlled substances at all times. Facilities in the US handling controlled substances are audited by both the DEA and the FDA regularly, every one or two years, with regard to systems, SOPs, training, access and monitoring. Although each company is allowed to determine its own control and monitoring systems, the DEA demands that its controlled substance license holders meet its exacting standards.
Personnel are required to have experience in handling controlled substances and in the cases where they are also highly potent, that experience has to extend to handling hazardous materials, and highly regimented safety protocols and PPE requirements are put in place. In particular, they would be required to undertake specific training in legislative and regulatory requirements, in addition to which, a company will have a substance control officer on site.
Handling hazardous materials such as HPAPIs and controlled substances is obviously a risky business, but by working with an experienced outsourcing partner with the right containment - PPE, barriers and isolators – and most importantly the appropriate education and training of the workforce, they can be handled safely without danger to the product, the environment or people.
About the author
Dr John Michnick
Director of Sales and Business
Development, Cambrex
First published: Pharmaceutical Outsourcing
Title: Handling Highly Potent Actives and Controlled
Substances Safely and Securely
Source: This article was printed in the November/
December 2016 issue of Pharmaceutical Outsourcing,
Volume 17, Issue 6. Copyright rests with the publisher.
Date: November/December 2016
Article link: Click here
Chemistry & Technology
Page 29 Handling Highly Potent Actives and Controlled Substances Safely and Securely
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The α,β-unsaturated carbonyl compound, 3-bromo-3-butene-2-one (Br-MVK) is a versatile synthon for a wide range of synthetic transformations (Figure 1a). Synthesizing Br-MVK is of particular interest to medicinal and drug development chemists, as the heterocycles derived from Br-MVK are known to possess various biological properties. In particular, it is useful for the generation of heterocyclic compounds such as furans, thiophenes, aziridines, benzodiazepines, isoxazoles, imidazoles, spirocycles, and fused heterocycles.
A major drawback of Br-MVK is it is unstable at ambient temperature and is typically prepared in situ from its reasonably stable precursor, 3,4-dibromo-2-butanone (dibromo-MVK). Dibromo-MVK is prepared from brominating commercially available methyl vinyl ketone (MVK, see Figure 1b). Bromination of MVK has been reported in the literature under various reaction conditions, such as using low-boiling solvents (e.g. chloroform, pentane or ether), using a mixture of basic ionic liquids and water, acetic acid, or by reacting MVK with bromine neat (solvent-free) at -20°C. In nearly every case, there is some disadvantage, such as expensive reagents or selectivity, side reactions and polymerization resulting in poor yields.
Although the neat bromination of MVK works rather well, it is highly exothermic and hazardous to run. Based on reaction calorimetry (RC1) data, the adiabatic temperature rise (∆T) is 500 degrees. During the bromination, any loss of cooling, agitation or inadvertent bromine addition can lead to a runaway reaction and possibly a safety incident. Even during a laboratory scale bromination of MVK under these conditions,
a cloud of fumes forms when each drop of bromine comes in contact with the MVK in the reaction flask, and the temperature jumps up. Bromine will also freeze inside the drip tube of the addition funnel during this process (bromine freezing point: -7.2°C). The major issue with this approach is the lack of solvent to absorb the heat of reaction (i.e. 82.8 kJ.mol-1); this should be amenable to attenuation with a solvent. To circumvent the thermal hazard, MVK bromination can be conducted in water.
Bromination of MVK in waterWater was chosen as the solvent as it has a very high heat capacity, MVK is readily soluble in it and it should be unreactive. To test this hypothesis, MVK was dissolved in 10 volumes of water and bromine was added at 0°C. The reaction exotherm was mild and bromine was added within a reasonable timeframe without any safety issue.
As soon as the addition of bromine was complete, two layers were observed; a top light yellow aqueous phase, and a lower red-orange organic layer (3,4-dibromo-2-butanone). After phase separation, the dibromo compound was obtained at 70% yield and in > 95% purity. The calculated adiabatic temperature rise of the MVK bromination reaction in 10 volumes of water was 24.3 degrees.
There are several advantages in conducting the bromination of MVK in water. It eliminates the reaction runaway possibility, and bromine can be added at a much faster rate than under neat bromination conditions. Additionally, there is no freezing
Safe and Efficient Synthesis of 3-bromo-3-butene-2-one from Methyl Vinyl Ketone
Chemistry & Technology
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issue with bromine in the addition funnel drip tube as the reaction was conducted above the freezing point of bromine. Water not only controlled the reaction exotherm, it also removed some of the water-soluble impurities present in the starting MVK. Upon completion of the reaction, the dibromo compound was easily isolated by simple phase separation as it is significantly denser than water.
After the reaction, some residual bromine was detected in the aqueous waste by a qualitative Fuchsin Test. In order to quench the residual bromine prior to disposal, a hypo solution (60:1 mixture of Na2S2O3 and sodium carbonate in water) was added; however this led to elemental sulfur precipitation. To overcome this, the aqueous waste pH was adjusted to about 7 with 50% sodium hydroxide followed by 15% aqueous sodium sulfite.
Dehydrobromination of 3, 4-dibromo-2-butanoneThe dehydrobromination of dibromo-MVK to produce Br-MVK (Figure 2) has been reported in the literature using triethylamine in tetrahydrofuran at -15°C. The reaction is moderately exothermic with an adiabatic temperature rise of 93 degrees. When the reaction was conducted at temperatures lower than -10°C, the RC1 data indicated that the energy equivalent of 35 degrees is generated during triethylamine addition, and energy equivalent to a 58 degrees is released upon ramping the reaction temperature to 0°C. Conducting the reaction under these conditions and ramping to 0° C prior to workup may, therefore, cause a sudden exotherm and a runaway reaction on scale-up. To avoid this possibility, the reaction was successfully conducted close to 0°C without any quality issue. Under inert atmosphere, Br-MVK is reasonably stable at 0°C.
In conclusionBy conducting the bromination of methyl vinyl ketone (MVK) in water, the risk of reaction runaway was avoided. In addition, the safety of the dehydrobromination reaction step was greatly improved by increasing the reaction temperature to
0°C.
About the authors
Sahadeva R. Damireddi
Senior Scientist, Cambrex
J. Robert Durrwachter
Group Leader, Chemical Development, Cambrex
First published: Specialty Chemicals Magazine
Title: Safe and Efficient Synthesis of 3-bromo-3-butene-2-
one from Methyl Vinyl Ketone
Date: October 16, 2017
Article link: Click here
Page 31
Figure 1a. 3-Bromo-3-butene-2-one (Br-MVK) is a versatile synthon for a number of heterocycles.
Figure 1b. Synthesis of Br-MVK starting from MVK.
Figure 2. Dehydrobromination of Dibromo-MVK.
Chemistry & Technology
Safe and Efficient Synthesis of 3-bromo-3-butene-2-one from Methyl Vinyl Ketone
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Dibromo - MVK
O
Br
BrTHF/TEA
-3 to 0 ºC
O
Br
Br - MVK
Dibromo - MVK
O
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Br
O
BrBr - MVK
BaseConditionsO
MVK
Perkin Trans 1, 2001, 22, 2946-2957Heterocycles 1999, 51, 497-500
J.Org.Chem., 2012, 77, 2142
R–NH2
ON S
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NH2
NH
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Tet.Letts, 2007, 48(7), 1295-1298Synlett, 2008, 6, 919
Helv, Chim. Acta., 2001, 84, 2198-2211
OO
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BrBr - MVK
There may not be a perfect process, and practicality may dictate compromises within route development, but it is important to set key project goals, and to consider all aspects of a process to strive to meet them.
Jonathan Knight, VP New Product Development at Cambrex, dissects the route used to manufacture APIs, highlighting those steps that can make a process ideal.
During a drug’s clinical development, the focus is very much on producing API material — with an emphasis on speed — and the route used to manufacture the molecule is rarely altered past Phase IIa. It may be that only as the demands for product increase throughout the clinical stages, and into commercial manufacturing, that the synthetic route is scrutinised, and process chemists and engineers look to adapt it.
Frequently, there are issues with synthetic routes where innovator biotech companies simply have not had the time, or resource, to dedicate to route development. These include the use of expensive key intermediates; poor and expensive registered processes; detrimental environmental footprints; and challenging steps to scale up using commercial scale equipment. Route evaluation is common for contract manufacturing organisations (CMOs) once the market has been established for a drug, several years after launch.
Route evaluationThe economics of the route are driven by the cost of starting materials, the number of synthetic steps, yields, process time and robustness of the process. Manufacturing on a smaller scale, with steps that may involve chromatography, chiral resolutions or multiple functional group protection and de-protection steps may be acceptable, but once the volumes
of batches become higher, in many cases, these must be removed.
When assessing a route, the obvious place to begin is to look at the cost and availability of the key starting materials, as well as the overall cost of goods, to see if these are limiting factors. One must also be aware of any patent restrictions that should be avoided, and the potential to protect the intellectual property of a new route which could give an enormous commercial advantage.
The environmental impact of the route is also a factor to be taken into consideration. The use of chlorinated solvents on a large scale is increasingly restricted, and the cost of energy and waste becomes of greater importance as process volumes and manufacturing scales increase. Using alternative solvents which reduce the impact on the environment and demand less energy are obviously beneficial.
The robustness of the route and the reproducible purity of final products is of paramount importance. Having steps that require multiple work up procedures and purifications not only increases the overall process time spent in the plant, but can also potentially reduce overall yields. With ever tightening rules on elemental impurities in final API material, removing a metal-catalysed step can bring great improvements, particularly if that step is near to the end of the overall synthesis.
As well as purity, the physical characteristics of the end-product may determine a need to change a process. If the end-product is difficult to handle, for example, carrying a high
Chemistry & Technology
The Ideal Route: What Steps Make the Best Manufacturing Process?
Page 32 The Ideal Route: What Steps Make the Best Manufacturing Process?
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electrostatic charge, it may be that the final recrystallisation solvent used needs to be changed.
What is an ideal process?Cheap, readily available starting materials that can be converted in the fewest number of synthetic steps which are atom efficient— by which molecular weight is constantly added to the target molecule rather than being taken away — are fundamentals to efficiency. Additionally, the route should be convergent, rather than linear, as well as robust, reproducible and high yielding.
For ease of manufacture, reducing the number of isolation steps within a process is desirable, so being able to telescope processes throughout the synthesis can reduce the overall process time of each batch, and reduce the quantity of solvents used. Being able to utilise standard plant equipment efficiently throughout a process avoids unnecessary investments to manufacturing facilities, and can reduce bottlenecks and delays where certain steps may be scale-limited by availability of equipment. Additionally, having a manufacturing strategy that limits and manages the waste produced by a particular process is important, and using solvents that can be reused and recycled within a process — albeit according to stringent regulatory parameters — can be greatly beneficial in terms of the economics.
Identification of the key drivers for change from the outset is important, be it any of the factors discussed. There may not be a perfect process, and practicality may dictate compromises within route development, but it is important to set key project goals, and to consider all aspects of a process to strive to meet them.
About the author
Jonathan Knight
VP, New Product Development,
Cambrex
First published: European Pharmaceutical Manufacturer
Title: The Ideal Route: What Steps Make the Best
Manufacturing Process?
Date: June 16, 2017
Article link: Click here
Chemistry & Technology
Page 33 The Ideal Route: What Steps Make the Best Manufacturing Process?
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Chuck GallagherSystem Administrator
Erena Sawyer-WagnerAnalytical Chemist
Jason MarletteOperator
Experts you’ll enjoy working with
Amanada FlanaganAssociate Director, QC
Market & Outsourcing Trends
Michele CioffiRaw Materials & Intermediates Warehouse Operator
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Increasing consumption and steady innovation will be key trends in the small molecule drug market. But what does this mean in terms of contract manufacturing?
In the May issue of The Medicine Maker, I looked at how the field of contract manufacturing has evolved over the past 40 years (1). As a quick recap, my colleagues and I at Cambrex have been studying how contract manufacturing for small molecule drugs has changed since the 1970s (2). Our research showed that there have been four key phases to date: the early years (pre-1975 to 1980), the growth years (1980-1996), the competitive years (1996 to 2010), and the resurgent years (2010 to 2015). Our research was based not only on global API consumption data, the number of new drug approvals and the number of new entrants in the contract manufacturing organization (CMO) space, but also on expert views from leading figures working within the sector.
Reviewing the past is certainly very interesting, but the future is perhaps more important. What can we expect to happen in the lead up to 2020? Extrapolating from the research, I believe three key trends will shape the future of the CMO industry:
• Increasing consumption – it is well accepted in the industry that there is a tendency towards the manufacture of smaller volumes of API, but this will be offset by more people taking more medicines in the future. Growth in generics will also continue to drive consumption higher.
• Steady innovation – despite the benefits of biopharmaceuticals, small molecules will remain the backbone of the pharmaceutical industry. Competing modalities will continue to surface, but approvals for small molecule drugs are expected to remain steady at 25-35 NCEs per year.
• Dynamic CMO space – as pharma companies continue to increase their small molecule outsourcing, the way CMOs do business will continue to evolve. There will be a further shake-out of under-performing CMOs, as well as sustained M&A activity as CMOs try to gain market share, move into early and late-stage development, and gain access to new technologies.
Rickety tracksAll of the above trends appear to point towards a positive future for the CMO sector – and for pharma innovators who will be able to reap the benefits of strong contract manufacturing services. But the experts we spoke to warn that there could be risks for CMOs further along the tracks, as many pharma manufacturers may decide to move their outsourced operations back in house. Here are some intriguing comments from the experts we spoke to:
“The first risk is that whilst western CMOs are enjoying a period of re-shoring and pharmaceutical companies have no obvious plans to explore eastern CMOs just yet, the discussion of building captive capacity, again, could become a real threat. As Cambrex research has shown, the typical volume requirement for a blockbuster product has migrated from the 100 metric ton (mt) range to the 1-10s range. Such a contemporary volume demand makes the prospect of building ‘mid-size’ internal capacity no longer a ridiculous or arcane idea.”
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“Another risk is that the lack of innovation undertaken in CMOs, largely at the request of large pharmaceutical customers who come with a well-developed tech package, has ultimately starved the CMO industry of some core differentiators. If pharmaceutical companies, with their new, ample in-house manufacturing, no longer look to CMOs solely as capacity-for-hire then there needs to be a compelling argument to continue to outsource.”
“We have come full circle back to 1975, where a CMO existed only to offer a specialism based on a type of chemistry that the customer could not/would not want to do. By lacking that unique selling point, in this environment it will make the outsourcing argument in the customer’s decision-making process less and less compelling.”
The CMO space is also changing; cost is no longer the historically critical factor that it once was. Instead, CMOs will need to decide if they are in the capacity game or the technology game – both of which have their merits. Capacity, for example, is often needed by pharma companies, but also has downsides. “If you are in the capacity game, the risk is that big pharma will use you as a ‘cheap date’, where they will use you when they need capacity – but drop you quickly as soon as they don’t,” said one industry expert. “To mitigate this, CMOs have started to ask for commitments up front. This is not seen as such a difficult thing for big pharma to honor, given that the cost of having idle capacity at the CMO (but for which you are paying a fee) is a lot less than the potential costs of not being able to supply the in-market demand.”
Being in the technology game can require significant investment and expertise, but can also help a CMO to differentiate itself, not only from its competitors, but also from big pharma internal manufacturing operations. “A CMO must continually strive to be working on the next technology, even in times when the order book is full and capacity utilization is high,” explained one expert. “The best CMOs are those that have adapted and moved with the industry – whether by adopting a specialty technology or moving into the next level of innovation, such as monoclonal antibodies, gene therapy, oligonucleotides, and so on.”
“Be an expert. There are a few CMOs who do all molecule/technology types, and then those who specialize in a single technology,” added another contact in the industry.
Relationship issues and dataFor CMOs that want to be well prepared for the future market, relationships and data will be key. A CMO’s relationship with its customers has been important since the early days of contract manufacturing – and this will continue to be important in the future, but will become more challenging. A CMO needs to be of sufficient size to be able to offer a wide enough range of services, technologies and manufacturing capacities to satisfy customer demand, but not be so big that bureaucracy, inertia and inflexibility make it difficult to work with. Experts said:
“Offering transparency and an open approach to the partnership builds trust. Also thinking about the whole journey rather than a particular half-year or quarterly period is important. For example, it is easy for a CMO to force a customer to adhere to a particular contract – but this is myopic if the relationship is based on a long-term approach – and an example of such is occurring in the biologics CMO industry. Customers have long memories in this industry.”
“CMOs will have to become more flexible in their approach to making deals with customers. Whilst big pharma is traditionally very conservative and operates in the classical fee-for-service, with some shared accountability, other pharmaceutical companies are less rigid and require different business models from their CMOs. As a general rule, across the industry it is a perception that CMOs need to become more flexible and easier to work with – an example of which might be adopting a greater risk/reward profile.”
“CMOs have to get used to working with both ‘juggernauts’ and ‘gymnasts’. Big Pharma applies this juggernaut approach and expects or demands preferential pricing models. Gymnasts (or specialty pharma) adopt a more partnership mentality, based on mutual sustainability and success.”
As for data, right now there is an “arms race” among CMOs to use market data and analysis – and with good reason, as being able to anticipate market trends is an effective way to react to the rapidly changing market. “The pace of change in today’s business environment – such as new markets and new technologies – is frantic. Things change so much more quickly nowadays than they did back in the 1980s!” said one expert.
Another added, “It is important to invest in market intelligence to ‘take a few bets’ on the next blockbuster products that are still at the early stage. Sitting and waiting for the next large-scale Phase III product is not a viable business model, and making a few early stage bets on pipeline molecules is hugely important – using the appropriate data.”
Further down the tracksFor CMOs looking to grow in the coming years, the most important strategic decision will be developing an approach to secure new markets. One obvious way to do this is to back-integrate further upstream into the production of intermediates, or to forward-integrate into making drug product – or even both.
“As more and more steps in a chemical synthesis come under the scrutiny of the regulatory authorities, there has been a trend to push back the regulated starting material to earlier in the process,” said one expert. “This has led to the need for more GMP manufacturing of intermediates.”
“By back-integrating into the value chain, the CMO will ensure it can not only fill capacity, but the large number of chemical steps performed in the same facility will also allow greater process improvement opportunities,” said another.
Similarly, by moving into the final product, the peaks and troughs of CMO capacity utilization can be smoothed out to some extent through the absorption of excess capacity for own product manufacturing. But tempting as it might be to adopt a one-stop-shop strategy, some experts suggested that this may not be the best solution because by trying to be everything to everybody, you run the risk of failing, which isn’t good for a CMO, its customers, or patients. Experts told us:
“Though there is pressure for CMOs to acquire more competencies and move to formulation activity and vice versa, the preferred approach is to hold your hand up and say ‘we’re not specialists’ in everything, but what we focus on, we are experts in.’”
“The one-stop-shop approach from API to formulation is not essential either. We do not attribute more value in the API and drug product being under the same roof.”
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“If there is someone who can do everything, then great – but no one has managed this yet.”
In summary, to take advantage of the favorable industry scenario of rising consumption, steady innovation and a dynamic outsourcing sector, CMOs will need to offer a technological edge, while at the same time remaining flexible. They must study trends to be in a position to adapt and move with the industry, and be big enough to stand out from the crowd, but not so big that they become difficult to work with. The next five years will present both risks and benefits, but it may well be that fortune really does favor the bold.
References
M Moorcroft, “The Runaway Outsourcing Train,” The Medicine Maker, 30 (2017). Available at: http://bit.ly/2r4XERX.
Cambrex, “A History of the API & Intermediates Contract Manufacturing Industry (1975 – 2015),” (2016). Available at: http://bit.ly/2qjjQe1. Last accessed May 15, 2017.
Experts spoken to as part of this research:
Simon Edwards, VP, Global Sales and Business Development, Cambrex
Ken Kent, Senior Director, Chemical Manufacturing, Gilead
Paolo Russolo, President, Cambrex
Peter Lyford, Commodity Director, GlaxoSmithKline
Carl Johansson, Global Director, Proprietary Products, Cambrex
Dix Weaver, Consultant, Weavchem LLC
Jan Ramakers, Consultant, FCCG
Rob Miotke, Consultant, Advantage Pharma Solutions LLC
Jim Miller, President, PharmSource
Steven Cray, Director, Supplier Relationship Management, Shire
About the author
Dr Matthew Moorcroft
VP, Global Marketing, Cambrex
First published: The Medicine Maker
Title: The Next Stop for Pharma Outsourcing
Date: November 2016
Article link: Click here
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Simon Edwards: It is somewhat obvious that consolidation to fewer customers means fewer suppliers. In addition, when pharma companies merge there is usually at least a temporary slowing down of clinical development and a longer term reduction in the number of products in the pipeline. This can lead to products that the CRO/CMOs were working on being delayed or worse discontinued just based upon new selection criteria of the new company rather than whether they would have got to the market or not.
Drug development/manufacturing projects between pharma companies and CDMOs are based on mutual trust and a focus on success. How big of an issue is a merger or an acquisition for ongoing projects?
Simon Edwards: There are both positive and negative effects of acquisition on pharma/CDMO or pharma/CMO relationships. In terms of negatives, consolidation ultimately means a reduced customer base for CMOs, while existing projects can get delayed, either due to personnel changes, or as project decision-makers become reorganized. Additionally, projects already outsourced prior to any merger can be terminated during strategic reviews, once the portfolio is reassessed in the merged company. Alternatively the outsourcing strategies of the two companies may be different i.e. one outsources routinely and the other does not. It can therefore happen that a product that was outsourced is now brought back in-house to the new combined company. If a merger gives the company access to idle manufacturing capacity there will be less need for outsourced service providers and inevitably, for a period of time, the new
company becomes “less easy to do business with” and discussions for new business / projects will take time as roles are allocated.
Pharma companies tend to have their own preferred supplier lists, and will look to consolidate their use of CMOs. (Is this the same as when the consolidated list of suppliers is drawn up that you might find yourself not on it?).
Simon Edwards: On a positive note, incumbent CMOs can potentially gain access to a new pipeline of products that they previously were not involved with.
This occurs for example when the CMO is working for a customer who might be big or small but after the merger the CDMO is exposed to a new pipeline of opportunities it had not had access to before. So it can sort of go both ways.
Also, if the pharmaceutical company grows in market share as a result of the consolidation, then they might require more volume from their CMO partners.
How can (Pharma and CDMO) outsourcing partners maintain their focus and guarantee confidentiality in their projects during a merger or the following integration phase?
Simon Edwards: Confidentiality is not an issue, as most CMOs will have adequate CDAs and contracts in place with provisions that cover eventualities such as M&A. For a period of time post-merger, which could be weeks or even years, CMOs will need to adopt patience and empathy as the merged company takes time to adjust. During this time the CMO needs to continue to ensure product delivery and, in
Does the consolidation in the pharmaceutical industry affect CROs/CMOs, e.g. does it create a necessity for outsourcing partners to consolidate, too?
Staying Focused - How to Turn Challenges Caused by Consolidation into New Business Opportunities
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some cases, could be left managing the project completely, as personnel adjust on the customer side. This is where the choice of CMO can pay dividends, and if the merged organisation has chosen the right CMO, with the right experts, this can be leveraged during the transition.
About the author
Simon Edwards
VP, Global Sales and Business
Development, Cambrex
First published: CHEManager
Title: Staying Focused - How to Turn Challenges Caused
by Consolidation into New Business Opportunities
Source: CHEManager Pharma Biotech 2017, pp 10+12,
WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim
Date: October 2, 2017
Article link: Click here
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Jim Miller, President, PharmSource Information Services, Inc., sounds as much like a travel agent as a pharma outsourcing prognosticator at his DCAT Week ’17 market overview on pharmaceutical contract development and manufacturing: Pharma’s billions for biologics are staying home; small molecules continue to hit the road.
The road to revenue growthMiller starts with a look at FY 2016 revenue growth for API contract manufacturers versus growth for drug product manufacturers. The first cohort includes public names like Lonza and Cambrex; the second like Patheon and Catalent.
As Miller measures “CMO organic revenue growth” in 2016, the API CMOs are performing nicely, with 6 of the 7 companies listed on a slide he presents us well into double-digit growth. On the other hand, “the dose CMOs” saw limited advancement.
“There’s been a significant difference in performance in the two parts of the manufacturing industry,” comments Miller. “With respect to the contract API side, those are primarily small molecule companies. So it’s not biologics taking off that’s driven tremendous growth in large molecule API manufacturing, although there of course has been large molecule growth.
Miller explains that in terms of “publicly reported performance,” reflecting in the rearview mirror is an image of a drug industry that has “ultimately fully embraced contract manufacturing for small molecule APIs.” He says part of this is simply because of the way small molecule APIs are manufactured. “These are multiple synthesis steps, and pretty much every molecule is touched by a CMO at some point in the synthesis process.” This also reflects the fact that as they
become “a mature technology,” small molecules are an area where global companies are fully comfortable with having CMOs doing the work for them.
Conversely – and plenty more on this in a moment – global bio/pharma companies “have by and large switched their own internal focus to large molecule API manufacture, and that’s where their investment has gone.”
With respect to drug-product services specifically, Miller comments: “It wouldn’t be too much to say it’s challenging. Companies in that industry have generally guided towards moderate, single-digit growth. It’s certainly an area where barriers to entry are lower, and where there’s a lot of fragmentation. Again, Big Pharma - I would say particularly for injectables - has been slower to outsource their requirements than has been the case with small molecule API.”
Summing up: “We’re still looking at an industry that on an annual basis has its drug product companies growing to close to 10 percent annually. But it’s the API guys who have had the most rapid growth in recent years.”
NDA and awayMiller also tracks where the outsourcing industry is going by looking at who receives NDA approvals, and measuring what percentage of those approvals have been outsourced.
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He says the focus on NDAs is “both appropriate and necessary,” because this data is more readily available in terms of manufacturing arrangements than for ANDAs. Most NDAs get approved both in North America and Europe, with about 60% approved first in the U.S. and then ultimately in Europe, and about 40% approved first by EMA and then the FDA. “So it’s representative of the opportunities in the industry,” says Miller.
And what this measurement shows is stark. Again, small molecule API manufacturing has done quite nicely. Historically, it’s tracked in at well over 50% in terms of percent of NDA products that are contract manufactured, and that percentage rose in 2016 to an impressive 64%. What’s most glaring is the trend line reversal for large molecule NME outsourcing. Over the last ten years, it’s steadily declined from around 49% to a low of 25% in 2016.
“Obviously, these divergent trends are not because biologics haven’t been successful,” Miller explains. “Rather, it’s because Big Pharma has invested a tremendous amount of capital in internal biologics manufacturing capacity. While smaller or mid-sized companies continue to depend heavily on CMOs for capacity, large pharma companies have invested heavily in having their own capacity. They’ve realized they had way too little capacity as far as ten years ago, when they first started to roll out their large molecule products. Big Pharma is kind of catching up with literally billions of dollars in internal investments.”
Follow the cashThe above taken together, Miller reminds us that in broad terms of overall penetration, the outsourcing industry is roughly where it was ten years ago, and the segments of the drug industry that continue to depend most on CMOs are small and mid-sized companies.
Not surprisingly, these companies make up 80% of customers for smaller-sized commercial CMOs (defined generally as being under $500 million in revenues). Small and mid-sized drug owners “rely heavily on CMOs for all their manufacturing requirements. That reliance has been consistent, and this group ranges from 50 to 60% for all CMOs.”
The challenge for outsourcing remains with Big Pharma. “Large molecules NMEs are a growing part of global biopharma’s pipeline and portfolio, but as the years have gone by, Big Pharma’s outsourcing of the manufacture of those products – both for the API and for the fill-finish aspect – has declined sharply.”
This is attributed to those capital expenditures Big Pharma has laid out for their own facilities in support of their pipelines. According to Miller, well over $100 billion has been invested by the top 25 companies in new plant equipment in the last ten years.
Miller captured information on about 150 of these projects in recent years. The biggest single category is large molecule API, with 35 major projects, including companies building facilities primarily for mammalian cell culture. Only 10 projects were investments in small molecule API.
“I’d argue this is not a failure on the part of the CMO industry to capture more of the growing large molecule market,” says Miller. “Frankly, the CMO industry would never have the vast resources to put that kind of capital investment into building up the capacity that global biopharma companies needed from when they started rolling out their pipelines of biologics.
“This is just a fact. It’s where the cash is,” concludes Miller. “And if Big Pharma wants to look more to CMOs, they would have to fund that capital investment to get the kind of capacity built up over the lifespan of many years. That’s the reality of the economics of the industry today.”
DCAT Week ‘17 is the annual event of the Drug, Chemical & Associated Technologies Association (DCAT)
First published: Outsourced Pharma
Title: Biologics Staying Home, CMOs Destination
For Small Molecules
Date: 2017
Article link: Click here
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Having commercial-scale manufacturing in North America is driving business for many large CDMOs in the pharmaceutical sector. Manufacturing Chemist recently visited the first CPhI North America show to find out more.
UBM’s decision to move Informex from its traditional February slot in attractive cities such as New Orleans to the more prosaic location of Philadelphia in May and to pair it with a North American version of CPhI appears to have paid off, judging by the response on the show floor at the first event. Much of that will have been down to timing.
Recent years have been broadly positive for suppliers to the US pharmaceutical industry for multiple reasons. There is an improving pipeline at all stages of development, thanks in part to FDA’s increasing use of accelerated approvals and the improved funding available to biotech and small companies. Customers, some chastened by bad experiences and influenced by growing numbers of warning letters to (mainly) Indian companies — or just greater awareness of the true cost of outsourcing to Asia — have returned to Western suppliers.
Whereas suppliers of all kinds of services at all stages of development have enjoyed the benefits, to varying degrees, American-based CDMOs have been among the most fortunate. Their increasing attractiveness to investors was, indeed, demonstrated on the eve of the show when the largest of them all, Patheon, was acquired by Thermo in a financially driven deal.
Senior executives from CDMOs present in Philadelphia agreed that the clearest trend in the market was that business has been strong and will be for the foreseeable future. This applies to both drug substance and drug product, although the two markets differ markedly in other ways. All, likewise, agreed on why, but said that customers’ desire to place manufacturing
in the West in general, and the US in particular, goes deeper than the obvious reasons.
“I also see a deeper analysis of the overall cost of a project — the cost of time, the cost of quality and the cost of logistics — and the challenges that can have on the supply chain,” said Dr Garrett Dilley, Senior Director of Business Development, Sales and Marketing at Johnson Matthey (JM), which has three US east coast sites in its global active pharmaceutical ingredient (API) manufacturing network.
“Companies are finding that working with a quality partner with locations proximal to where they are making their drug product and delivering to the patient is actually providing value — as is a strong regulatory background,” Dilley added. Registered starting materials (RSMs) matter too. FDA is also scrutinising the early stage of supply chains more and this is leading clients to start GMP synthesis earlier in some cases.
“Even if they don’t start earlier, customers are interested in having their RSMs produced to a level of sophistication and to a regulatory specification level higher than they had previously sourced. They need to understand everything about the facility, the traceability of the reagents that went into it, and so on.” This plays to the strength of JM, which can source RSMs from its own facility in China at lower costs … but to Western quality standards.
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Warning lettersThe main effect of all the FDA warning letters, in Dilley’s view, is two-fold. Companies are looking beyond a one-dimensional financial analysis at costs and seeking to stay one step ahead of what FDA wants, “so if they are pushed back on GMPin Phase III, they are working with a company and facility that can handle it without making major changes. That has come up in a lot of conversations and is a benefit we can sell.”
Dr Stephan Haitz, VP of Sales and Business Development at Cambrex, another major Western CDMO on the API side, agreed that there has been a strong trend during the last 5 years for business to come back to the US. “They now lookat the total cost rather than just the price, including travel and response time on problems; there are always problems in pharma, so the issue is how they are dealt with.”
Cambrex is projecting 7–11% growth this year to follow 3 years of previous growth. This has been driven by strong demand in the US pharma market and an increased acceptance of outsourcing. To address these trends, during the past year, the company has invested organically in large-scale capacity at its site at Charles City, Iowa, has also expanded at its Swedish site and acquired Pharmacore in North Carolina.
FDA, Haitz agrees, has clearly made an impact by looking at all suppliers and raising the bar generally, mostly by fines. “Our industry is very risk-averse and if a supplier is hit with a warning letter, you think twice,” he says. “There are not many CMOs in the US and they are all at a very high standard, so when FDA raises the bar, it impacts us less than others.”
Audits and capacity Alcami, which straddles the drug substance–drug product divide, has also benefited from the return of projects to the US, according to Mark Millar, Director of the API and Drug Product business unit. In many cases, this has come from companies coming to Alcami once they get ready to launch after doing early manufacturing offshore, perhaps because they are no longer willing to risk a lowercost provider and want to lock things down.
“There is a lot more scrutiny and companies aren’t willing to send it into a black box and get product out; they want to know that the sites have appropriate environmental and health controls,” Millar said. Customers’ ability to audit companies such as Alcami is another advantage, in his view.
Capacity is a big issue right now, Millar noted. Some CDMOs have none and Alcami itself is feeling the pinch; although, having invested against the curve in US-based commercial manufacturing some years ago, it still has capacity and is scheduling new projects. “A lot of people are coming to us, wanting deliveries at the end of this year; and that’s not a reload, it’s a tech transfer followed by delivery of methods, as well as delivery of GMP material, which is challenging if there are a lot of synthetic steps.”
Quality and capability Catalent, a giant in the drug product field, has spent about $1 billion during the last 5 years on quality, capacity, capability and new offerings, some built in-house and some acquired. Traditionally a leader in softgels and controlled release, the firm has added solid state, micronisation, hot melt, spray drying and formulation expertise to its portfolio, and diversified its existing capabilities.
According to Elliott Berger, VP of Global Marketing and
Strategy, this mirrors the CDMO market as a whole and speaks to several ongoing and mutually reinforcing technology trends. Molecules, especially small molecules, are becoming more complex, just as more and more are being discovered by smaller innovators. As funding is improving, these innovators are taking compounds further into development but they lack many of the necessary technologies. Big Pharma companies too are focusing on discovery and have smaller footprints and less in-house expertise, particularly when it comes to bioavailability.
“All this means they need more partners to help them. That spurred companies to buy each other to offer more capabilities to help them,” Berger said. (And, he noted, many of the key capabilities have not been outsourced because they were never insourced in the first place: very few pharma companies can do hot melt, softgels or spray drying. This isone way in which the drug product and drug substance markets differ.)
Secondly, Berger added, it is no longer enough to get FDA approval and launch a new medicine … because there is so much competition. If there is an issue with a launched drug, particularly one that hampers patient compliance, patients do not benefit and payers stop paying.“Our position is that you have to have a treatment that is good for your molecule and that is also suitable for the patient, with the right level of convenience and gets the right clinical outcome, because without that your expensive medicine willfail, no matter what you do,” he added.
Thirdly, large pharma continues to acquire and medium pharma continues to merge. Companies thus accumulate unmanageable supply chains and start to consolidate their suppliers because they want to have quality-to-quality connections and mutual systems and partnerships. This, said Berger, is a driver of the CDMO trends but has only just begun because this is a slow-moving industry: ultimately, the driver is the molecule and successful treatment.
About the contributor
Dr Stephan Haitz
VP, Sales and Business Development,
Cambrex
First published: Manufacturing Chemist
Title: Boom Time for US CDMOs: Part I
Date: July 3, 2017
Article link: Click here
Page 43
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Having commercial-scale manufacturing in North America is driving business for many large CDMOs in the pharmaceutical sector. Manufacturing Chemist recently visited the first CPhI North America show to find out more.
The key technology trends driving the API market cited by US CDMOs are familiar ones: high potency APIs (HPAIs), including controlled substances, and continuous manufacturing. Alcami’s most recent investment has been in HPAIs and it is just completing a $6 million build-out at its Germantown (Wisconsin, USA) API facility. The firm has dedicated two of the five GMP kilo labs to HPAIs and the target is to get to 30 ng containment, mainly through engineering controls and equipment.
Although the facility still makes tonnes of API, Millar said: “The growth and profitability is being driven by high potency. We are investing in infrastructure and technology and we have our own toxicologist on site, so when we get a process in we do a two-headed evaluation, looking at the final product but also a risk assessment for each step.”
In some cases, an intermediate is highly potent but not the final product, so Alcami will look at all the steps to see which are highest risk and which need containment. The company has also invested in infrastructure for controlled substances at the same site; it recently had its analytical registration approved by the DEA and expects its manufacturing licence to be approved shortly.
“So, yes, we have metric tonne capacity, but what we are really looking at is what our customers are going to keep in the US for manufacturing and that tends to be highly potent, controlled substances and complex chemistry,” Millar said. The first projects are due to start in September, once the ongoing investment is completed.
Millar added that Alcami is also looking at continuous flow chemistry, specifically hydrogenation. “We have capabilities in the field and it tends to be a rate-limiting aspect, so we would be interested in the right technology. We have started thinking about it and putting feelers out to equipment suppliers, customers and other CDMOs,” he said.
Batch versus continuous Haitz said that Cambrex is also seeing a lot of demand for
HPAI capacity, particularly regarding oncology projects.
Ultimately, he added, you need to prove you can control
the chemistry and exposure. This factor is also driving
the growing interest in continuous manufacturing, which
is now going beyond investing in microreactors and
tube reactors to the concept of moving from batch to
continuous, reducing waste and improving speed.
“I don’t see the whole industry switching,” Haitz
added. “There is no blanket approach to continuous
manufacturing, but there are certain elements wherein
it fits well. The future in my mind is batch when batch is
best and continuous when continuous is best, rather than
percentage targets.” Cambrex is also finding more and
more customers asking for solid state capabilities, owing
to the low bioavailability of modern drugs. Although it is
not a drug product company, it can use its skills in API
manufacturing to change to solid state properties at the
crystallisation stage and sees this as a capability it would
like to enhance.
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JM is also not active in drug product but is looking at
it because some customers want it. “We do have some
preformulation capabilities and are developing some
capabilities both internally and externally,” said Dilley.
“Johnson Matthey is strongly committed to pharma; we
see a lot of unmet needs there.”
The cliché trap
The CDMO is on the path to becoming yet another
pharma industry cliché, one that is often confused with
the even hoarier clichés of the one-stop shop or end-to-
end services. Yet, all clichés are based on truth. The drive
for large suppliers to integrate services across a network
or even a single site or network is undoubtedly real — and
there are undoubted benefits in terms of time saving and
risk reduction. The more important question is how far the
trend has to go.
Alcami is one company that bridges the gap between
drug substance and drug product, and currently has about
ten end-to-end projects and expects more. However, Millar
added that this is still a relatively small part of the overall
portfolio and tends to be either/or when it comes to API
and drug product. There is a fine balance between being
excellent at too few things and being good enough at too
many.
“We are trying to focus on small molecules on the API side,
we don’t do fermentation or ADCs,” he said. “On the drug
product side, we do oral solid and sterile injectable doses
but have not gone into topicals or other formulations. We
have wide expertise but it is not too broad-based. When
they are needed, we know third parties we can work with.”
Berger of Catalent said that, despite the company’s
ever-growing array of capabilities, he too is “not a big
fan of the one-stop shop concept.” Cambrex’s Haitz was
more emphatic still, saying that the way forward for the
company is to retain its focus on small molecules while
looking at adding enabling technologies as they emerge —
rather than trying to be everywhere.
“The one-stop model is very popular at the boardroom
level and very unpopular at the working level,” he said.
“Our clients want to choose the best solution, so they may
want to go with us to make a high-energy compound but
to another formulation company for something else.”
The array of technologies is too vast for any company
to come even close to having them all, Haitz added. “No
one has the answer to everything or ever will. Even the
apparent bonus of getting one invoice is illusory — the
work takes years and no supplier will wait 3 years and
send one invoice at the end. The model sounds good but
when you look at it, it doesn’t really work. We want to be
excellent at what we do and that will channel business to
us, whether there is a onestop model or not.”
About the contributor
Dr Stephan Haitz
VP, Sales and Business Development,
Cambrex
Market & Outsourcing Trends
Page 45 Boom Time for US CDMOs: Part 2
First published: Manufacturing Chemist
Title: Boom Time for US CDMOs: Part 2
Date: September 20, 2017
Article link: Click here
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A ‘small molecule’ is generally defined as an organic compound with a low molecular weight (usually less than 500 daltons). This diminutive size enables the molecule to rapidly diffuse across cell membranes, allowing it to reach intracellular sites of action. As a result, the vast majority of pharmaceuticals are small molecules.
However, the end of the traditional blockbuster model in the pharmaceutical industry, together with strong growth in the biologics sector, have made the small molecule market seem distinctly unfashionable in recent years.
In comparison to the 1980s-1990s and the existence of mature 50 to 100 metric tonne (mt) blockbuster products, the last few years has shown an evolution of the industry. While there may be a fall in the volume demand at the top end of the range, small molecule drugs that are in the region of 1 to 10 metric tonne volumes – and in some cases even less – can be ‘blockbusters’ in the sense they can command in excess of US$500 million in sales, Cambrex VP Global Marketing, Matthew Moorcroft contends. “This is especially true for drugs used in oncology indications where the pricing per pill is orders of magnitude higher than drugs used in more chronic indications such as hyperlipidaemia and diabetes,” he says. “Not all orphan drugs are low volumes – indeed some are taken in high doses and consumed daily.”
Of the 45 new molecular entities (NMEs) approved by the US FDA during 2015, 33 were small molecules and 12 were biologics. This was the highest number of approvals in the period from 1999 to 2016, and there are currently more chemical molecules in every phase of drug development than at any time in the last 15 years (Figure 1). Twenty-one of the 45 NMEs were approved to treat orphan diseases and 27 were designated in one or more expedited categories of Fast Track, Breakthrough, Priority Review, and/or Accelerated Approval.
“We believe that small molecules have shown their versatility,” says Moorcroft. “They started life as the classic blockbusters and have moved on to include more targeted therapies or orphan drugs. Their surprising longevity comes from their unique and enviable ability to be formulated into pills and tablets.
“We believe an effect of this evolution has been a requirement for contract manufacturers to be flexible enough to be able to produce APIs in a range from kilograms to hundreds of metric tonnes to satisfy the wide variety of demand. A CMO needs to monitor these trends and invest in capacity to stay ahead and anticipate changing customer needs.”
To this end, Cambrex decided to look at volume trends in the 408 small molecules launched in the US over the past 15 years. An interval period of five years was chosen to give
Small molecule innovation may have been overshadowed by developments in biological drugs, but the versatility and specific properties of these products will ensure that they will continue to be the backbone of the pharma sector for many years to come. Dr Matthew Moorcroft, VP Global Marketing at Cambrex, believes that his company’s research proves small molecules have a bright future.
A Bright Future for Small Molecules
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enough data points for a quantitative study. To avoid any annual anomalies, the data from two consecutive years were combined, giving a final data set of 209 small molecules – around half the total number of approvals – which the company believed would be sufficient to identify any emerging trends.
The study was also limited to the US market, since most drugs are launched first in the US with subsequent launches
in Europe and Japan, followed by the rest of the world. This allowed the exclusion of misleading data arising from differences in disease prevalence/epidemiology in more populous markets such as India and China that can result in large uptake of some products. However, it can be assumed that volumes for the five major European markets and Japan would be similar to those recorded in the US, Cambrex says.
The trend in volume evolution shows a clear decline in the numbers of NCEs with volume ranges above 10 mt and below 10kg, while those reaching their peak volumes in the ranges 10kg to 1mt and 1 to 10mt are stable or increasing. In 2014/2015, 12 out of 27 NCEs were forecast to reach peak volumes of 1mt. It became clear that the spread of volumes is becoming narrower and that there is more clustering around the middle volumes now compared with 15 years ago, says Moorcroft (Figure 2).
Another trend to emerge from the data analysis was the reduction in the size of patient population sizes, in line with the increasing focus of orphan diseases and targeted therapies. The average population targeted has fallen from 13 million in 1999-2000, when a significant proportion on the approvals were for indications such as obesity, diabetes, GERD and hyperlipidaemia, to just 6 million in 2014-15, when the NCEs were targeting conditions such as multiple myeloma, cystic fibrosis and thyroid cancer.
In terms of clinical potency, there has been little change from 1999 to 2015, with the majority of drugs still in the 1 to 100g per patient per year range. However, there was a slight increase in the number of lower dose NCEs below 1g per patient per year, according to the study. “From these data we don’t see any real trend in reduced dosages to patients; if there is a trend to targeted medicines we haven’t seen that show up yet in the doses that patients are actually taking,” says Moorcroft.
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A Bright Future for Small Molecules
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There has also been little change in tablet unit sizes: 10 to 50mg continues to be the most frequent dose size, although the 50 to 250mg size range is gradually increasing in popularity.
The main conclusions of the Cambrex research is that the changing volume requirements and manufacturing conditions require CMOs to ensure they are equipped to deal with the current and future crop of small molecule therapeutics. The trend towards concentration of average volume requirements actually lends itself more to CMOs than to captive manufacturing at big pharma, the company states, given that CMOs are used to handling multiple customer projects, with varying volume requirements and chemistries, and have adapted accordingly.
“We believe this is one reason pharmaceutical companies continue to adopt outsourcing at CMOs over internal production,” says Moorcroft. “It is important for a world-class CMO to be able to offer a range of manufacturing options to cover the life-cycle of the drug on the market – from introduction to maturity, as well as the option to manufacture key late-stage intermediates and starting materials should security of supply or regulation be a pre-requisite.
“CMOs will therefore continue to monitor industry trends at the clinical pipeline level and invest in their facilities appropriately.”
The reformulation of existing drugs is also a key growth area and one that deserves particular attention from CMOs, as supply of API into repurposed or reformulated drugs requires them to act quickly and responsively, for example, to meet the need for rapid supply of small volumes of API for product development and launch purposes or the technical and regulatory expertise to support the customer during registration and commercial supply. Cambrex is unusual among CMOs in that it is able to supply NCE API to innovator customers as well as supplying generic API for reformulated products.
Cambrex has invested strongly in small molecule capacity and infrastructure over the past five years. In total, since 2011 the company has invested US$150 million, and in 2016 announced a further US$50 million expansion of its large-scale API facility in Charles City, Iowa. “We believe our investment closely follows the trends seen in the industry and by establishing the right capacity and capabilities demanded by our customers we can handle a variety of projects and chemistries while allowing flexibility in the supply chain and volume fluctuations,” says Moorcroft.
Specifically, the new investment scheduled for 2016/17 at Charles City has resulted in a new Pharma 3 large-scale plant with six reactors, now on stream. The company is also planning to add 300 gallon and 500 gallon reactors to its pilot plant in 2017. Meanwhile, at the mid-scale, its Pharma 4 suite is now ready for fit out andt has the capability to add 500 to 2,000 gallon reactors and would be ready to go with a lead time of about six months.
This expansion follows a 50% increase in custom development capacity at Karlskoga in Sweden, and an expansion of the analytical development team in its Tallinn subsidiary. It has also added a new 6m3 production capacity and further expansion is ongoing to add 12m3 vessels to this new cGMP multi-purpose production line.
“A few years ago you’d have been forgiven for thinking that the rise of biologics and monoclonal antibodies a decade ago in oncology meant that small molecule use in this indication was over. In fact, far from it,” argues Moorcroft. “When compared with biologics, peptides and oligonucleotide- based medicines, small molecules will continue to be the back-bone of the pharmaceutical industry in many therapies driven by patient preference for oral dosing, lower manufacturing costs and ease of transportation.”
About the author
Dr Matthew Moorcroft
VP, Global Marketing, Cambrex
First published: Speciality Chemicals Magazine
Title: A Bright Future for Small Molecules
Date: November 2016
Article link: Click here
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A Bright Future for Small Molecules
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How many contract manufacturing organizations (CMOs) are operating in the pharma industry today? There are far too many to name – and outsourcing is now such an important part of pharma manufacturing that it’s hard to imagine a time when there were just a few CMOs. Back in the early days of pharma outsourcing, the role of CMOs was to undertake specialized or hazardous chemistries that pharma companies were unable (or unwilling) to carry out themselves. Tracing the development of the outsourcing sector becomes more difficult the further back in time you go because of the lack of reliable data points, but learning about the history of the industry is always a fascinating exercise. Reflecting on the success stories – and mistakes – of the past can be very useful in guiding decisions about the future. To this end, my colleagues and I have been studying the changes in supply and demand in outsourcing of small-molecule drug manufacturing that have occurred since the 1970s.
Unraveling the winding trackAfter World War II, there was a flurry of activity in drug discovery, including antibiotics, antihypertensives and oral contraceptives. As for contract manufacturing, this began to take off in the mid-1970s, with the emergence of blockbuster drugs and big profits. Some of the earliest blockbusters to involve outsourcing were Tagamet (cimetidine) and Zantac (ranidine), which both needed difficult sulfur chemistry. Ranidine was an unexpected success; initial forecasts of 10
metric tons quickly jumped to 900 metric tons. Demand also outstripped supply for a number of antibiotics.
It was a booming time for the industry and demand for extra capacity and services continued to grow until the mid-90s, boosted by the Hatch-Waxman Act and the consequent rise in consumption of generic products as prices eroded. Further expansion in outsourcing followed as the BRIC countries – Brazil, Russia, India and China – emerged as growing consumers for prescription drugs. In the last decade, demand for the manufacture of small-molecule drugs has continued to increase – the result of patent expiries and a surge in new drug launches. Figure 1 shows the rise in demand for small molecule manufacture from less than 25,000,000 kg in 1976 to well over 300,000,000 kg in 2015 – an increase of more than 1100 percent.
The number of approvals of new chemical entities (NCEs) in the US adds to the demand picture. In the 1970s and 1980s, the number of launches ran anywhere from 10 to 30 new drugs per year, speeding up towards the launch of blockbusters in 1990s. There was a peak in 1996/97, which was attributable to administration issues, followed by a notable decline in the early years of the new century, as a result of cost-cutting among big pharma and a switch to more complex modalities, such as recombinant proteins and monoclonal antibodies. Approvals picked up again in the mid-2000s because of greater demand for orphan therapies and the introduction of expedited approval processes in the US.
What can we learn about outsourcing trends from contract manufacturers’ bumpy ride over the last 40 years?
The Runaway Outsourcing Train
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The first crop of truly pioneering CMOs – as opposed to extensions of big pharma manufacturing sites – appeared in the UK, Europe and the US in the 1960s and 70s, and then from the 1980s to 2000, there was an upsurge in CMO entrants in the US and Europe, largely made up of generic API manufacturers and those eager to join in what they perceived as a lucrative market. The upsurge was followed by the entry of large numbers of new CMOs from India and China from 2000 to 2010. Figure 2 shows just how the number of CMO entrants has changed since the 1930s.
Early growth to gold rushAs part of our research, we spoke to a number of industry experts, together representing cumulative experience in the sector of more than 330 years. Essentially, there have been four distinct phases in the CMO industry.
In the early years (pre-1975 to 1980), CMOs were very much technical specialists, often manufacturing intermediates rather than APIs. One of the experts we spoke to explained, “Outsourcing to CMOs was often driven by the need to handle dangerous or difficult chemistries, such as sulfur chemistry, brominations or phosgenations. The early CMOs had often developed these specialties outside of the pharma industry. Large pharmaceutical companies did not want to handle the Safety, Health and Environment (SHE) risk of such chemistry at their large, expensive manufacturing plants, so it led to the use of off-site suppliers. Typically, this would be for a single chemical step, often for an intermediate in the process and often many steps away from the final API.”
From 1980 until 1996, there was then something of a “gold rush” in the market – the growth years – fueled by a shortage
of capacity in the booming pharma industry. Large R&D budgets and expectations of a rapid growth in NCE approvals led to the birth of strategic outsourcing, characterized by bidding wars, and a race to the top for NCE launches. Many CMOs became involved in multiple-step synthesis and some even started producing their own APIs. Meanwhile, quality audits were relatively lax compared to today’s standards, which further boosted entries into the sector. Here are some interesting comments from the experts we spoke to about this era:
“Despite the fact that CMOs were recognized as technology specialists, they previously only focused on a single chemical step before sending the molecule back to the pharmaceutical customer for additional chemistry to the API. This era was the start of multi-step synthesis in CMOs and, before long, a handful of companies were adopting the same business model.”
“The large barriers to entry – such as access to capital, know-how and engineers – meant that in the early days only a handful of CMOs could offer this. However, as the lucrativeness of the approach became obvious to all, the floodgates soon opened.”
“Pharmaceutical CEOs were embroiled in a heated battle and a race to out-bid each other, bidding up the number of NCEs they were forecasting launches per year. This created a feeding frenzy for the industry. Analysts were giving super high valuations for pharmaceutical companies as well as predicting a boom period for CMOs. Some banks and analysts even authored reports claiming that the CMO market could expect 15 to 20 percent growth for the next decade based on the success of R&D in pharmaceutical companies.”
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1996 to 2010 saw a highly competitive period in the industry. Expiration of patents led to price erosion and growth in generics. Consolidation in the industry resulted in rationalization and cost-cutting as a result of loss of exclusivity. And some pharma companies took the calculated gamble of choosing price over quality, with many CMOs in the US and Europe losing business to India and China. There was a shift away from custom synthesis to toll manufacturing, and the ingenuity and expertise of the CMO was taken out of the equation, making price the only point of differentiation. It’s fair to say that many western CMOs were not prepared for the rapid change in business and found it hard to compete. Experts told us:
“The entrance of China and India into the CMO industry was largely facilitated by the need for these companies to supply domestic manufacturing for their own drug industries. The majority of them had drug products launched in their local markets and used their captive manufacturing assets to supply APIs into these generic brands. When they faced excess capacity due to peaks and troughs in drug product demand, they turned their captive manufacturing towards the open market and offered API manufacturing on a CMO basis.”
“The effect of this increase in competition from low-cost countries such as India and China led to differentiation based purely on price. And the Indian companies had the advantage that they were keeping their plants at a base load of capacity with generics when needed. Whether it was this, or the lower expectation on return on capital or lower labor costs, or a combination, it soon became difficult for western suppliers to compete when Big Pharma just went on the hunt for lower prices. As a result, pharmaceutical
companies would often adopt a dual continent sourcing strategy between western and eastern CMOs, whilst being aggressive on low pricing.”
“A handful of big pharma companies led the way during the 2000s in the ‘race to the bottom’ where they were looking to make cost savings from their supply base (to help fund recent M&As). Whilst quality was not considered equal amongst CMOs, they were willing to take a risk on the API quality if it led to a 20 to 30 percent reduction in price. From a political standpoint, it was easier to focus on the short-term corporate cost-saving targets then to worry about the longer-term issues of quality (and the ultimate problems in the supply chain it would and did create).”
“Given that the API makes up a small fraction of the total product cost – did it really make a difference? No, not really! It only affected certain mature products where the API and the tablet costs were a bigger fraction of the price, such as large volume CV products. However, on NCEs and respiratory products, achieving a lower API cost did not make a big difference at all. We knew this and the company knew this, but everyone was geared up to a ‘sheep dip’ approach where everyone had to be seen to be achieving cost savings whether it made a difference or not.”
Today’s outlook Some western CMOs went out of business in this time. Others battened down the hatches or adopted new business strategies. Fortunately, since 2010, things have started to look up for western CMOs, with the sector enjoying what I like to call the “resurgent years”. The increasing availability
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Figure 2. Entrance of API Manufacturers by Region
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and access of medicines to patients, as well as large numbers of patent expirations, have ensured a steady increase in drug consumption, accompanied by rising NCE approvals. At the same time, rising labor costs in China and India have made outsourcing to these countries less attractive, and some sourcing decisions are now being unpicked and work repatriated to the US and Europe. Pharmaceutical companies are now divesting and closing some mature API plants, and with the number of new entrants to the CMO market falling, there is high demand in the US and Europe for outsourcing partners with the right capacity. Because the market is still heavily fragmented, many of the high quality CMOs have filled their capacity and there are substantial lead times for new projects. Experts said:
“Some smart thinking Western-based CMOs have kept pace with changing customer demands and requirements, whether this is based on changing product forecasts or a required flexibility from manufacturing scale and assets. Having a finger on the pulse from a market intelligence – ‘what’s next’ – perspective allows them to be ahead of the curve.”
“Whilst from a technology and capability perspective, there is not much differentiation between Western and Indian/Chinese CMOs – they all have a similar expertize in chemistry, such as high potency, similar plants, similar assets, etc. – there is a big difference in management and leadership style. Western CMOs typically have stronger management teams and people who can adapt to customer requirements and be less rigid to work with.”
“During the previous decade, many procurement teams had made poor sourcing decisions in the use of Indian and Chinese CMOs. They had outsourced the wrong molecules to the wrong CMOs and created problems in the supply chain. Presumably this was during the ‘race to the bottom’ period.”
“A lot more of the US and EU-based CMOs are now full when compared to the period pre-2010. The market is a lot tighter for high-quality CMOs. For these CMOs, there is no capacity available before 6 months. Even after 6 months, only 10 percent have available capacity. That said, despite the resurgence, some have accumulated a high debt-to-EBITDA ratio, which they need to service/pay off. This is a worry to any customer using them given the possibility of cash-flow issues or even insolvency.”
We can learn a lot from history; reflecting on the successes and mistakes of the past can help guide us in the future. So what comes next for the CMO sector? In the June issue of The Medicine Maker, I’ll be looking at how the trends of the past 40 years are influencing current developments in the industry and what trends we can expect in the lead up to 2020. As a preview, here are some of the trends we expect:
Increasing consumption – the trend towards smaller volumes of API manufacture will be offset by the trend for more people to continue to take more medicine.
Steady innovation – chemistry and small molecules will continue to be the backbone of the pharma industry.
Dynamic CMO space – CMOs will continue to evolve. We will also continue to see shake-out of under-performing CMOs, as well as sustained merger and acquisition activity.
Reference
Cambrex, “A History of the API & Intermediates Contract Manufacturing Industry (1975 – 2015),” (2016). Available here. Last accessed May 15, 2017.
About the Study
Research phase
500-600 hours of research to decide which data to discount (e.g., due to poor value)
Mining of data from 20 existing databases (commercial and in-house)
Refine in focus to data that could help explain supply and demand elements of the industry, without excessive ambiguity
Data sources
Cambrex
QuintilesIMS
Peter Pollak
FDA
Jan Ramakers Fine Chemical Consulting Group
Newport (Thomson Reuters)
World Health Organization
Nice Insight
Experts spoken to
Simon Edwards, VP, Global Sales and Business Development, Cambrex
Ken Kent, Senior Director, Chemical Manufacturing, Gilead
Paolo Russolo, President, Cambrex
Peter Lyford, Commodity Director, GlaxoSmithKline
Carl Johansson, Global Director, Proprietary Products, Cambrex
Dix Weaver, Consultant, Weavchem LLC
Jan Ramakers, Consultant, FCCG
Rob Miotke, Consultant, Advantage Pharma Solutions LLC
Jim Miller, President, PharmSource
Steven Cray, Director, Supplier Relationship Management, Shire
Special mention
Dr Peter Pollak
Dr Pollak was recognized as one of the pioneers of the pharmaceutical fine chemistry industry. He was active in the industry from 1968 until 2016.
About the author
Dr Matthew Moorcroft
VP, Global Marketing, Cambrex
First published: The Medicine Maker
Title: The Runaway Outsourcing Train
Date: May 2017
Article link: Click here
Market & Outsourcing Trends
Page 52 The Runaway Outsourcing Train
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For some years now the pharmaceutical manufacturing sectorin general, and small molecule production in particular,has been changing. The growth of biopharmaceuticals, thedemise of the conventional global blockbuster model, and a temporary dip in the number of new drug approvals by the U.S. FDA have even led some to call into question the future of the small molecule drug sector.
But research suggests that the outlook for the small molecule drug industry has never been brighter. FDA approvals for new chemical entities (NCEs) are at their highest level since 1999 and there are more chemical molecules in every phase of drug development than at any time over the last 15 years.
Small molecules have shown their versatility. They may have started life as the classic blockbusters used to treat millions of patients, but they have moved on to more targeted therapies or orphan drugs.
Recent research has aimed to track this change by identifying trends in small molecule API volumes. We believe an effect of this evolution has been a requirement for contract manufacturers to be flexible enough to be able to produce APIs in a range from kilograms to hundreds of metric tons to satisfy the wide variety of demand. Contract manufacturing organizations (CMO) need to monitor these trends and invest in capacity to stay ahead and anticipate changing customer needs as small molecules continue to evolve.
As a starting point for its research, Cambrex looked at the 408 small molecules launched in the U.S. over the past 15
years. To select a data set that gave enough data points for a representative sample, the company chose four sample sets split out by a period of five years; it then took the data across two consecutive years to smooth out any anomalies. Combining both of these approaches resulted in a set of 209 small molecules—around half the total—that gave a healthy number of data points from which to spot any trends that may exist.
An analysis of the evolution of API volumes showed that the spread of volumes is becoming narrower compared with 15 years ago. The peak volume demand in the U.S. seems to range from 1 metric ton to a few tens of metric tons of API. The number of drugs that reach a peak demand above 100 metric tons has dropped while those in the range of 1kg to 10 metric tons have increased and those below 10kg have also dropped (see Figure 1).
The second major trend to emerge from the research was that the average size of the patient population has been drastically reduced, from 13 million patients in 1999/2000 to just 6 million in 2014/15. However, a small patient population does not necessarily mean a small annual volume of the API, and sometimes the opposite is the case.
Cambrex also wanted to see if there was any evidence to suggest that a move towards targeted medicines and highly potent drug manufacturing was having any effect on the total consumed dose of the drug. But a comparison of the total patient dose per year for each drug for 1999-2000 and 2014-15 indicated that there was no significant trend in clinical
To stay ahead of the game in small molecule API production contract manufacturers need to understand what is happening in the market and react accordingly
Staying Ahead in the Small Molecule Space
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potency, with the majority of drugs in the 1-100g per patient per year dosing range.
There was also no sign of a major change in tablet unit sizes. The research showed that 10-50mg continues to be the most frequent dose size, although there has been a gradual increase in the popularity of the 50-250mg size range (see Figure 2).
The changes in volume requirements and manufacturingconditions revealed by the research makes it essential for CMOs to ensure they are equipped to deal with the currentand future crop of small molecules therapeutics if theywant to stay ahead of the game.
This trend actually lends itself to CMOs rather than to captive manufacturing at big pharma, given that CMOs are used to handling multiple customer projects with varying volume requirements and chemistries and have adapted accordingly. This is one reason pharmaceutical companies continue to adopt outsourcing at CMOs over internal production.
Although the Cambrex study related only to the API volume requirements of the U.S. market, these volumes could easily be doubled when the European and Japanese market requirements are factored in. And if the CMO is also manufacturing for the so-called “pharmerging markets,” the volumes could be substantially higher still.
Flexible, mid-scale capacity has been a recent, crucial addition to the CMO industry, but these global scenarios continue to support the need for larger-scale manufacturing. It is important for a world-class CMO to be able to offer a range of manufacturing options to cover the life-cycle of the drug on the market, from introduction to maturity, as well as the option to manufacture key late-stage intermediates and starting materials should security of supply or regulation be a pre-requisite.
Cambrex has invested strongly in small molecule capacity and infrastructure over the past five years. In total since 2011 the company has invested $150 million, and in 2016 we announced a further $50 million expansion of our large-scale API facility in Charles City, IA. The investment closely follows the trend seen in the industry and by establishing the right capacityand capabilities demanded by customers it is possible to can handle a variety of projects and chemistries while allowing flexibility in the supply chain and volume fluctuations.”
One of the plants to benefit from this investment program isthe facility at Karlskoga in Sweden. With a history in chemistry
dating back 120 years, Cambrex Karlskoga produced its first APIs in 1941 and was one of the first CMOs to enter the manufacturing business. Today it has extensive capabilities, with a wide range of production scales from kilolab up to large-scale cGMP commercial production. Managing director Bjarne Sandberg believes the site is well set up to handle current demand as well as the small molecules coming down the pipeline.
The Karlskoga site employs 420 people, with a further 30 at its analytical development labs in Tallinn, Estonia. It has the flexibility and capacity for process piloting and small-scale production, with a cGMP kilo lab capable of handling pressure reactions, a separate drying/milling room, four cGMP pilot plants, 25 reactors—mostly 500-1000 L—and remote control for high energy reactions. For commercial production it has six large-scale production units, 14 production trains, and 70 glass-lined, stainless steel and Hastelloy reactors, mostly in the 4000-6000 L range.
Investment in the past two years has resulted in a 50% increase in custom development capacity and an expansion of the analytical development team in its Tallinn subsidiary. It has also added a new 6m3 production capacity and further expansion is ongoing to add 12m3 vessels to this new cGMP multi-purpose production line. New capabilities include wet milling and a Rosemund filter for safe production of high potency APIs down to 1-10 µg/m3 OEL.
Since Cambrex purchased the site in Charles City in 1991 it has invested some $125 million there. The facility has extensive capabilities, including a high potency development center and controlled substance manufacturing. Like Karlskoga, it has arange of flexible, multi-purpose production units ranging fromkilolab to commercial scale amounting to commercial capacity of some 350,000 L. It currently has 375 employees but this number is expected to rise to 400 following the next tranche of investment that is taking place in 2016/17.
At present it has four full-scale plants, one cGMP pilot plant, three cGMP kilo labs, one of which is capable of handling OELs of <1µg/m3, and facilities for cGMP multi-purpose solids handling, potent compound manufacturing and potent compound drying/packaging.
These will be augmented by the new large-scale plant in Charles City, with six reactors: 2 x 2,000 gallon and 2 x 4,000 gallon glass-lined; and 1 x 2,000 and 1 x 4,000 gallon Hastelloy. In addition, there will be two 6m2 Hastelloy filter dryers and a stainless steel fundabac filter. This GMP facility, which is due to come on stream in mid-2016, will be capable of handling compounds with OELs of 1µg/m3 or higher, enabling the manufacture of some high potency oncology drugs.
At pilot scale Cambrex is planning to add 300 gallon and 500 gallon reactors to the pilot plant in 2017. Meanwhile, a further 7,500 square feet manufacturing shell has been constructed, which will be fitted out to customer specification without requiring the lengthy lead time to build a plant from scratch. This offers the flexibility to meet any uncertain demand or anything that might pop up. The shell is built and would be ready to go with a lead-time of about six months.
The plants are multipurpose plants, which means we have the flexibility to validate processes in multiple work centers to manage the lifecycle of a program as well as offer the flexibility to adjust to the supply and demand needs of customers.
Figure 1. NMEs Approved by the FDA During 1999-2015
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50
45
40
35
30
25
20
15
10
5
0
35
2724
1721
31
5
2
18 18
3
2
16
22
2 6
20
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6
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4
25
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NMES APPROVED BY FDA 1999-2015
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Flexible assets with the ability to manufacture multiple products at multiple scales in the same multipurpose facility is crucial in order to win customer projects from the increasing commercial and clinical pipeline. The trend for pharmaceutical companies to close captive API facilities looks set to continue and CMOs will continue to see more outsourcing opportunities as they are better placed to manufacture the coming pipeline of small molecule APIs.
Small molecule drugs will remain the backbone of the pharmaceutical sector and will continue to be the focus of CMOs for many years to come. The molecules may be small, but the opportunities are huge.
About the author
Dr Matthew Moorcroft
VP, Global Marketing, Cambrex
First published: Contract Pharma
Title: Staying Ahead in the Small Molecule Space
Date: September 8, 2016
Article link: Click here
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Cambrex of PharmaCore; Piramal of Coldstream Labs and Ash Stevens; AMRI of Euticals and others; Capsugel of Xcelience and Powdersize; Catalent of Pharmatek; these are just a few contract development and manufacturing organizations (CMOs) acquiring brethren that we can cite from short-term memory.
Service providers are following Pharma’s playbook – to a degree – for new technology and innovation. We visited this in our first article with Tony Wood, Senior Vice President and Head of Medicinal Sciences, Pfizer. Here we’ll talk to a pair of CMO dealmakers to further analyze the strategy, and parse some differing nuance.
Warm reception for a cold analogy Here’s the premise for our investigation: Big CMOs acquire smaller contract development and manufacturing organizations in the same way as Pharma has historically acquired biotechs and drug developers. This (more than ever) is a strategy to benefit from outside innovation and technologies.
Barry Littlejohns, President, Drug Delivery Solutions, Catalent, agrees with the analogy. Even when I paraphrase this way: Replacing Big Pharma, isn’t a Catalent (or Lonza, et al.) the new “800 pound gorilla” pouncing on more nimble innovators, once they’ve reached a certain level of marketplace success?
“That’s an interesting way to put it,” Littlejohns replies evenly. (So much for attempted provocation.) “I’d say the concept is valid, perhaps more now that we see contract organizations starting up on the fringes of the industry with so many new technologies.”
He continues: “Today, when smaller organizations achieve a certain level, both Pharma and larger CMOs look closely at adding them to the portfolio. But I think there’s been an evolution here. Historically, we saw technologies that weren’t absorbed into a CMO who might have advanced them throughout the industry. They went – at a very early stage – into Big Pharma. The downside was that often the technologies ended up on the shelf, and not taken forward or applied to benefiting other molecules. That’s where we have come in: To ensure good technologies have the capability to be utilized by various customers, and with both small and large molecules.”
From the fringes to the frontLittlejohns borrowed the term “the fringes” from Tim Scott, President of Pharmatek. Some 17 years ago, Scott co-founded a start-up focusing on technologies for early phase development, and it was he who helped secure the negotiation with Catalent to bring the experience of his 200-employee company into that larger organization.
Scott recalls how his start up “became particularly good at handling poorly soluble compounds.” Over the next 15 years, says Scott, “one of the technologies that evolved successfully was this ability to formulate poorly soluble compounds, and then more recently, the ability to create amorphous dispersions, what people in the industry call spray-dried
Pharma Copycats in CMO Acquisition Strategy
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dispersions (SDD). That was the technology we started to work with that was a bit ahead of the rest of the industry. We were willing to commit the resources and time to building an SDD franchise.”
Scott recognizes that Pharmatek’s joining Catalent represents the intensifying trend in M&A among CMOs to further spread technologies and innovation.
“A couple of things are happening here,” says Scott. “One is that outsourcing continues to evolve. We’re still learning how to do it successfully. We’ve seen that with the different models Pharma companies now have with their outsourcing partners. At the same time, you’re seeing technology advance not only on the discovery end of molecules like ADCs, but also in how technology is applied to the development and manufacture of drugs.
“This convergence,” he continues, “doesn’t necessarily create a focus on consolidation. Rather, it’s a view for new shared opportunities so providers and sponsors can bring innovation and technology forward.”
That all sounds good. But we should ask: Is there a point where acquisitions by a subset of “Big CMOs” hinders new company formation in the outsourcing industry? For example, three or five years from now, if the opportunity arose, would Scott be able to again start a new drug-development shop like he did 17 years ago?
“Technology moves forward,” he replies. “There will be interesting opportunities, and new companies willing to take a risk in this space.” He adds: “It’ll be those people on the fringes, doing specialized work like spray drying. Those types of opportunities can become marketable to a broader audience of Pharma, and that’s what inspires a larger CMO to want to incorporate them into their product service line.
“If there are people out there with an idea, and thinking about a start-up, they should do it,” he says, still full of the entrepreneur spirit. “There are innovation and technology holes, and new companies can compete. Pharmatek started with two guys in a garage. That, to me, is one of the fun things about the story. Now that we’re combined with a larger organization, our goal is to be most successful in bringing these technologies to a wider audience and throughout the drug-development phases.”
Partners spread the wealthTowards the end of our discussion, Littlejohns makes a comment echoing a main point that Wood of Pfizer made in our first article, regarding how these technology acquisitions often come about.
“In many cases,” Littlejohns says, “it all comes into focus because you start and then continue to work closely with partners. If you recall the Redwood deal [in which Catalent acquired a biotech for its platform technology in ADCs], we had already been working with them for around two years. Understanding the real potential of their platform, and really understanding their “DNA” as a company, grew through the relationship. You can say the same thing of our relationship with Pharmatek.”
“Perhaps different from Pharma at times,” concludes Littlejohns, “is that when a CMO acquires another development organization, we really do focus on the “DNA” of that company, and on its people. We keep those people with
us. Important is whether there’s a workforce of smart people to progress that technology or service with us. Typically, we don’t move people around; we tend to grow where they are. We don’t want to lose that brain trust.”
Keep the acquired, innovative brain trust intact, but more widely (than Pharma) spread the innovation throughout the industry: It does sound like the CMOs are onto a model for a better circulation of advanced technologies through drug development supply chains.
At the same time, we have to be concerned that “Big CMOs” start to get too big, and begin to emulate another, less positive trait of Pharma we’ve seen at times: rising bureaucracy and a resultant lack of innovation. We’ll be watching where this
carries the outsourcing industry throughout 2017.
First published: Outsourced Pharma
Title: Pharma Copycats in CMO Acquisition Strategy
Date: November 11, 2016
Article link: Click here
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As 2017 fast approaches, Cambrex, an innovative life sciences company with more than 35 years of active pharmaceutical ingredient (API) development and manufacturing expertise, is seeing continued worldwide growth in API volumes and increased outsourcing requirements by large innovator companies.
This, coupled with increasing use of generics and additional opportunities for increased penetration in developing markets, is a sign that the industry will continue to experience strong growth, according to Simon Edwards, Vice President of Global Sales and Business Development at Cambrex.
“This means the situation has arisen where there are periodic shortages of contract manufacturing organization (CMO) capacity, especially in the US and at critical volumes,” Edwards said. Cambrex has invested more than $150 million since 2012 in facility expansions, equipment, technology and environmental, health and safety (EHS) upgrades to ensure that these demands can be met, and standards in quality, customer service, flexibility and reliability are not only maintained but enhanced.
Edwards said that, overall, growth in the contract development and manufacturing industry will see a high demand for suppliers with flexible, large and small-scale good manufacturing practice (cGMP) capacity and world-class quality systems that allow efficient API production.
The industry has seen an increase in drug approvals in recent years and will continue to see the shift in pharmaceutical companies sourcing back to US and European contract manufacturers.
“Many larger pharmaceutical companies continue to divest
their own production facilities, and the rise of ‘virtual’ pharma has increased the demand for contract manufacturing organizations such as Cambrex. The industry has a solid pipeline of late-stage drugs, which, in part, will continue to drive the success of the fine chemicals industry,” he said.
Cambrex believes the greatest challenge for API manufacturing would be a sudden change in any of the macro-factors driving the current positive growth. “If there was a decline in the number of FDA or EMA approvals, a decrease in global medicine consumption, or the sudden shortfall in venture capital funding for early stage research – all at the same time as CMO capacity increasing significantly, the knock on effect could impact any CMO’s business strategies,” Edwards said.
Cambrex remains positive about business growth, especially with the demand for small molecule APIs, in particular, remaining strong. As pharma companies continue their shift towards discovery and marketing, manufacturing of small molecule drugs will increasingly be outsourced to service partners such as Cambrex. Furthermore, a number of companies, including Cambrex, have expanded their US capacity and invested in more challenging areas of the market, such as controlled substances or highly potent API manufacturing, to address the growing demand in this area, Edwards said. “The proactive approach that Cambrex employs
Cambrex Projects Strong Growth for API Manufacturers
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in forecasting future market needs and our investment strategy is something that differentiates Cambrex from others in the industry who may simply build large-scale assets somewhat retrospectively,” Edwards said. “Our investment in technology and appropriate vessel sizes, to ensure the economics of projects match the capabilities we offer, has shown its worth. Clients have bought into this philosophy and understand that as a company we are innovative and forward looking, investing in ‘the right’ capacity.”
Cambrex has traditionally been very strong in the manufacture and handling of controlled substances. “As a company we routinely manufacture and distribute commercial quantities of Schedule II-V controlled substances and hold Drug Master Files for more than 20 controlled substances,” Edwards said. “Our portfolio is built on more than 15 years of experience and expertise in this highly challenging field.”
So what are the growth drivers for the fine chemicals industry?“There is reason for increased optimism due to a rebound in drug product approvals to levels not seen since early 2000,” according to Edwards. “This is due to successful focused R&D programs coming to fruition, as well as increasing numbers of specialty and orphan drugs and fast-tracked review processes.
“In light of these recent drug approvals targeting specialized therapies such as oncology or orphan diseases, the effect has been to a rise in demand for small molecule manufacturing capacity in the 10 metric tonne or lower range compared to the larger volumes seen decades before,” he said. “This will ultimately lead to continued or increased outsourcing by large pharmaceutical companies, many with mature, over-sized captive capacity, to select CMO partners with the ‘right’ capacity for their project.”
Edwards says this will create significant opportunities for CMOs, in areas from raw materials to starting materials, registered starting materials, intermediates and advanced intermediates, as well as APIs.
About the contributor
Simon EdwardsV VP, Global Sales and Business Development, Cambrex
First published: Specialty Chemicals Magazine
Title: Cambrex Projects Strong Growth for API
Manufacturers
Date: November 2016
Article link: Click here
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Ten years ago, the pharma manufacturing industry looked very different; the age of the blockbuster drug had reached its zenith and sites across the US were being shut down, mothballed, or consolidated. Indeed, many believed the industry was heading to low-cost countries in Asia, lost forever from the West.
The times have changed and today’s reality is a stark contrast. There is a critical lack of capacity within small molecule manufacturing in the US and other Western countries. Pharmaceutical companies are repatriating projects from Asia, and at the same time FDA approvals for small-molecule new chemical entities (NCEs) are increasing. Biologics and biosimilar drugs are also seeing high growth, but when it comes to outsourcing, the market is still dominated by small molecule APIs (both originator and generic products). Biopharma products represent only a fraction of the contract manufacturing market.
For contract manufacturing organizations (CMOs), the growing demand for small molecule manufacturing capacity presents new business opportunities, but also challenges. Given that many thought manufacturing would move to Asia, a number of companies have neglected investment in recent years and only taken on projects that fit with legacy capacity, which means they now face problems in terms of responding to newer market demands.
The key, of course, is to have the right capacity, but this is easier said than done. First of all, what exactly is the “right” capacity? Contract manufacturing is notoriously difficult to
predict. Investment in the wrong capacity costs money – and finding projects to fill these assets can be a lengthy exercise. Finding the balance is crucial and to this end it’s important to understand industry trends.
We’ve spent a great deal of time looking into historic market trends and analyzing the current pipeline of drugs to assess what the future market demands could be. One clear trend is a decline in the number of NCEs with a volume range above 10 metric tons (mt) a year. Of the 27 NCEs launched in 2014/2015, 12 are forecast to reach volumes of just 1mt at their peak. To frame this in the context of blockbuster drugs, however, there are small molecule drugs in the region of 1-10mt volumes that can create sales in excess of $500 million, especially in the area of oncology, where drug pricing per pill can be orders of magnitude higher than other drugs.
The number of drugs requiring very low manufacturing volumes – less than 10kg of API per year – has also dropped. With their significance to patient care, orphan drugs are very much promoted by the FDA, but it is wrong to assume that a small patient population means a small annual volume of API. Not all orphan drugs are low volumes – some are taken in high doses and consumed daily.
For any CMO, being able to offer a range of manufacturing services and options to customers – no matter what stage in the lifecycle or the volume of the drug – is a great advantage, as is offering key late-stage intermediates and starting materials for security of supply. But it’s important to not just focus on capacity. The CMO market is highly competitive
Small molecules already represent the bulk of the contract manufacturing market and FDA approvals are on the up. For CMOs, this presents opportunities and challenges.
Think Small, But Smart
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and new technologies can be a key point of differentiation – particularly technologies that meet the specific needs of drugs in the pipeline. At the moment, I see a trend towards contained facilities that can safely handle potent and highly potent molecules. While not all high potent drugs are exclusively oncology products, an increasing percentage of new oncology drugs coming on to market could be nominally classified as highly potent, although experts differ somewhat in their potency assessment. For a manufacturer, being in the position to meet this demand relies on having undertaken the investment and accruing the expertise in handling these projects to attract customers. Building new capacity from scratch can be difficult, which is why the market has seen so much consolidation and M&A activity – some think it’s easier to buy than to build.
These are just a few of the key trends that I’ve noted, but overall the market is bright for CMOs. Far from the predictions that the rise of biologic drugs, as well as competition from low cost providers, would consign Western manufacturing of small molecules to history, the market is flourishing. Of course, nothing is constant and it would be foolish to think that CMOs should rest on their laurels, but through smart investment strategies, companies can aim to be flexible and responsive to the needs of the market.
About the author
Dr Matthew Moorcroft
VP, Global Marketing, Cambrex
First published: The Medicine Maker
Title: Think Small, But Smart
Date: March 2017
Article link: Click here
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Chuck GallagherSystem Administrator
Erena Sawyer-WagnerAnalytical Chemist
Jason MarletteOperator
Experts you’ll enjoy working with
Amanada FlanaganAssociate Director, QC
Cambrex CEO & COO Insights
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Steven KloskPresident and Chief Executive Officer
| Active ingredients
Dynamic people
Steven M. KloskPresident and Chief Executive Officer
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Background
Steven Klosk has been with Cambrex since 1992
(President, CEO and a Director since 2008), giving him a
25-year history with the company. Moreover, with direct
responsibility for all commercial, manufacturing, R&D,
financial, quality and regulatory functions in the company,
Mr Klosk is well positioned to talk about the company, its
strategy and its future.
What are the company’s main strengths
in this competitive market?
Cambrex is almost unique within the leading global
CMOs in that our approach to focus solely upon small
molecule chemical development and manufacture. By
researching the needs of the small molecule market and
making investments in key technologies and the right
assets to match the demands and current shortages, this
strategy has afforded double digit growth year on year,
and this trend is expected to continue in 2017. We are also
unusual among CMOs in that it we are able to supply New
Chemical Entity (NCE) APIs to innovator customers as well
as supplying APIs for generic and reformulated products.
Our strengths lie very much within the wealth of expertise
and the ability of our employees, and their dedication to
the projects and customers who they work with.
Customers can rely on us to do quality work. We have a
team of exceptional scientists and engineers, supported
by excellent management, and backed by a Board
committed to investing in the infrastructure of our facilities
to make them truly world leading. We believe, because
our customers tell us, that we are the experts they enjoy
working with.
Small molecule innovation was overshadowed
by developments in biological drugs for a
while, but they seem to be making a comeback.
Why do you think that is?
I would argue that there is no comeback, the small
molecule market has always been very strong! There are
around 4,000 launched small molecules on the market and
someone has to make the API and GMP intermediates for
these drugs. Demand for small molecules has continued to
grow. The FDA approved the highest number of NCEs in
2015 since 1999, and there now exists the fastest growing
Steven M. Klosk, President and Chief Executive Officer of Cambrex discusses what he considers to be the major opportunities and issues for the pharma industry, the factors underlying Cambrex’s success and his vision for the future.
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small molecule clinical pipeline reported in the last 20
years – with more small molecules in Phases I, II and III than
ever before.
Also, the perception that chemical manufacturing was
going to low cost countries, never to return has proven
to be wrong, and we are witnessing pharmaceutical
companies looking for Western, reliable manufacturing
partners, where the driving factor is not just the cost of
goods.
The challenge for Cambrex – and other manufacturers
looking to capitalise on this opportunity – is having the
capacity to meet the demands of the market. Cambrex has
a very proactive approach to investment and matching it
to forecasted future market needs, and since 2012 we have
invested over $200m in facility expansions, equipment,
technology and EHS upgrades to ensure that these
demands can be met, and standards in quality, customer
service, flexibility and reliability are not only maintained
but enhanced. As CEO, I am very proud of this strategy,
and I believe it sets us apart from others in the industry,
and we have the support of clients who see our philosophy
as innovative and forward looking, so that we are investing
in ‘the right’ capacity.
Cambrex acquired PharmaCore in late 2016, a
North Carolina-based company that specializes
in developing and up-scaling small molecule
APIs for clinical phase projects. What was the
strategy behind that acquisition?
PharmaCore, now Cambrex High Point, was a great fit for
the Cambrex business, as there were similarities between
the companies in core strengths and business practices,
also complementary technologies that expanded our
reach into earlier phases of the development pipeline. Like
Cambrex, PharmaCore focused on small molecules and
had expertise in handling and manufacturing controlled
substances, and had an excellent quality and regulatory
audit track record, as well as a business model that was
committed to investment and its workforce. Where
Cambrex serves customers for late-stage development
and processes requiring scale-up for Phase III and launch
as well as in-market supply, PharmaCore serves customers
through early-stage research including toxicology and IND
submission to Phase I-III clinical trials.
Where do you think the greatest opportunities
lie, both in the US and beyond?
The US market is a major growth area, and it is strange to
think that after years of manufacturing site closures and
consolidations within the industry as a whole, we now
face shortages of US CMO capacity, especially at critical
volumes. For Cambrex, we will continue with the strategy
of investment in capacity where it is relevant for the needs
of the market and also in technologies that differentiate us,
for example, in the manufacture and handling of controlled
substances and highly potent compounds. Controlled
substances is an area Cambrex has been traditionally very
strong in and as a company, we routinely manufacture
and distribute commercial quantities of Schedule II-V
controlled substances and hold Drug Master Files for more
than 20 controlled substances. Our portfolio is one of
the largest globally and is built on more than 15 years of
experience and expertise in this highly challenging field.
As an organization, we have implemented a strategic five-
year plan to become the leading supplier of small molecule
APIs to both the innovator and generic pharmaceutical
markets focusing on quality, customer focus, capacity
generated by both investment and operational excellence
and reliability of supply, while also adding innovative
technologies and capabilities.
Our investment continues in all our global sites to meet
the international and local needs of the industry and
our business model, and as shown by the acquisition of
PharmaCore, where there may be opportunities to expand
our capabilities and increase our reach to customers, we
will react to these. So continue to watch this space!
About the author
Steven M. Klosk
President and Chief Executive Officer, Cambrex
Date: March 2017
Page 64
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What are Cambrex’s major accomplishments
over the past 12 months?
Over the past year we have invested significantly
throughout our global network of development and
manufacturing facilities. We have increased our pilot
scale API capacity in High Point, NC and Charles City, IA,
added large scale commercial capacity and continuous
flow technology at our Karlskoga, Sweden site and begun
building a new, $24 million high potent API manufacturing
plant in Charles City which will be completed in 2019.
The Charles City expansion is in line with Cambrex’s
commitment of ongoing investment in small molecule
manufacturing, as well as responding to the rising number
of APIs that require specialized handling due to potency
and toxicity. Cambrex has built a strong reputation in
the clinical-scale supply of potent, and extremely potent
molecules, and the flexibility that this facility will give
allows us to effectively handle projects throughout their
development and commercial lifecycle.
A further accomplishment in 2017 was winning the API
Development Award at CPhI Worldwide for the second
consecutive year, where we presented a case study which
examined an alternative route developed by Cambrex
towards a drug used for the treatment of dyspareunia
which is now approved and on the market.
Among the challenges the industry faces,
which do you think are most pressing?
Small molecules continue to dominate in the
pharmaceutical market, with the FDA approving 34 small
molecule new molecular entities (NMEs) in 2017, which
is the highest number in the last decade. There now
exists the fastest growing small molecule clinical pipeline
reported in the last 20 years, with more small molecules in
phases I, II and III than ever before.
The challenge for Cambrex, and other manufacturers
looking to capitalize on this opportunity, is having the
capacity to meet the demands of the market. Cambrex
proudly has a proactive approach to investment and
ensures expansions are analysed and fall in line with
future market needs. Since 2012 we have invested over
$260m around the globe in facility expansions, equipment,
technology and EHS upgrades to ensure that these
demands can be met whilst standards in quality, customer
service, flexibility and reliability are not only maintained
but enhanced.
What areas of innovation or technology
development within Cambrex are you most
excited about?
We are seeing significant interest in continuous flow
development and production, predominantly from
Steven KloskPresident and Chief Executive Officer
| Active ingredients
Dynamic people
Shawn P. CavanaghExecutive Vice President and Chief Operating Officer
Page 65
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established pharmaceutical companies looking for process
improvements in phase II, and we recently began the
installation of multiple continuous flow reactor platforms at
our High Point site. This latest facility will focus on the rapid
and successful development of processes to supply clinical
as well as commercial demand for chemical syntheses.
We have designed the new laboratory and GMP pilot plant
with maximum flexibility in mind, allowing us to explore the
possibilities for both new and existing production projects,
either on a FTE or custom contract basis.
The investment at High Point underpins our ongoing
commitment to new technologies and aims to reinforce
our existing experience in continuous flow which includes
a dedicated, commercial-scale continuous flow production
unit at Karlskoga. This was expanded and upgraded in
2017, and now produces multiple metric tons of high purity
intermediates per annum.
How is Cambrex implementing sustainable
business practices or green technologies?
We view sustainable and green technologies as a priority
across all our sites and take these into consideration when
planning any facility investments and expansions. In fact,
last year we announced the construction of a new waste
water treatment plant to support a capacity expansion at
our Karlskoga site. This was designed to improve existing
biological processes, and is being phased over a three-year
period. The 30.5M SEK ($3.5M) investment processes over
4,000mÐ of water each day and handles variations in the
composition of effluent. The majority of the construction
project is now complete and the new facility will reduce
the emission of nitrogen, total organic compounds and
suspended material, improving the site’s environmental
footprint.
What milestones in your life made you choose
industry as your career path?
In a way, the industry chose me very early in my career.
After obtaining my Chemical Engineering degree, I worked
for a couple of years in the miniature battery industry
with Eveready. A fellow engineer that I had worked with
at Eveready, left the company to work with FMC in their
Lithium division. It wasn’t long after that he helped recruit
me to FMC where I began my career in fine chemical and
pharmaceuticals.
About the author
Shawn P. Cavanagh
Executive Vice President and Chief Operating Officer,
Cambrex
Date: March 2018
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Erena Sawyer-WagnerAnalytical Chemist
Jason MarletteOperator
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Highly Potent APIs – Markets, Myths and Manufacturing
November 29, 2017
How does a CMO handle complexity? Learn about the
challenges presented by the rising popularity of potent
small molecule drug therapies.
Development of Small Molecule Drugs – From the Clinic to the Market
April 21, 2017
A thought-provoking analysis of the development and
lifecycle of a small molecule drug – and the associated API
manufacturing requirements for CMOs.
A History of the API & Intermediates Contract Manufacturing Industry (1975-2015)
November 15, 2016
An expert review of the last 40 years of the CMO industry
for small molecules with a series of primary research
interviews with industry experts.
Small Molecule API Volumes – Trends From the Last 15 Years of NCEs
May 17, 2016
A condensed review of the last 15 years of small molecule
launches and why CMOs need to invest in manufacturing
assets to meet demand.
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