The Integral Role of CDMOs for the Future of the U.S. Biopharma Industry
Last Monday, President Biden unveiled a $2B spending plan towards the growth of the U.S. biotechnology and biomanufacturing sectors to accelerate onshore biotech innovation, manufacturing, R&D, and sustainability, and to support the rocky biotech market. One of the key goals of the National Biotechnology and Biomanufacturing Initiative is to drastically cut the rate of cancerous deaths in the nation by 2025.
The announcement came as a hopeful sign that the government is prioritizing the biotech industry’s success in economic instability. Disruptive biotech companies developing cell and gene therapies (CGT) and other precision medicines remain imperative for industry evolution, and specifically, Contract Development Manufacturing Organizations (CDMOs) and Contract Research Organizations (CROs) will play a critical role in the coming years.
A Brief Introduction to CDMOs and CROs
A CDMO is a viable alternative to in-house development and manufacturing of pharmaceutical products. Outsourcing manufacturing has become integral to the biopharma business model, proving increasingly successful and necessary to meet demand for therapies. Initially used by large pharma, the CDMO is now widely used among smaller biopharma companies and offers services at all stages from drug discovery to commercialization (PWC, 2019).
CROs support pharmaceutical companies in their drug discovery and clinical research efforts by providing services such as patient and site recruitment, clinical monitoring, analytics, biostatistics, medical writing, and regulatory affairs consulting (PWC, 2019).
As CDMO/CRO models have evolved, there are often overlapping functions between them. Many CROs are now integrating drug product development into their services as well as focusing heavily on the preclinical R&D phases.
Drivers Behind CDMO Growth
When the COVID-19 pandemic hit, it became glaringly obvious that pharmaceutical manufacturing capacity in the U.S. is severely inadequate for product demand, and the government launch of the National Biotechnology and Biomanufacturing Initiative aims to address “the complexities and financial pressures of developing and manufacturing future life-saving treatments that threaten innovation” (Ahlgrimm, 2022).
According to a report released by Technavio earlier this year, 40% of the world’s CDMOs are based in Asia (namely China and India), with North America having 24%, and the Middle East and Europe having 9% and 7%, respectively (Sullivan, 2022). Considering current manufacturing trends, the report predicts that market growth could be as much as $8.65B by the year 2026, with North America projecting the highest growth at an estimated 41% increase in CDMOs.
Presumably another motivator for Biden’s incentive is due to the increasingly competitive relationship with Asia when it comes to biotech innovation. While many Asia-based CDMOs such as WuXi Biologics (China) and Samsung Biologics (Korea) have expanded their facilities to U.S. sites and are looking to build collaborative relationships with U.S. drugmakers, the initiative aims to “build, revitalize, and secure national infrastructure for biomanufacturing across America” (The White House, 2022) to strengthen the U.S. supply chain and decrease reliance on these manufacturers.
How CDMOs Are Critical for the Future of the Biopharma Industry
Ultimately, CDMOs and CROs are essential for the future of biopharma manufacturing in the U.S. because they are poised to provide the very things the initiative prioritizes – sustainability, driving forward R&D, providing quality data, streamlining regulatory compliance, and building global partnerships.
· Sustainability. The biopharma industry leaves a big carbon footprint, and a huge portion of this comes from manufacturing. Biotech companies are starting to prioritize ways to minimize environmental impact, while seeking partnerships that allow for achievement of business goals and consider sustainability efforts. CDMOs understand the responsibility they carry in sustainable manufacturing practices, and are increasingly seeking to become more eco-conscious, both making them competitive and essential to the future of biopharma innovation (Wright, 2022).
· Driving Forward R&D. Ways to accelerate R&D, such as the use of artificial intelligence (AI), machine learning (ML), and digitization of processes is not restricted to innovative biotech companies. CDMOs are also including these technologies, especially using automation and robotics to increase supply chain productivity and enhance the quality of drug substances (Wright, 2022).
· Providing Quality Data. The capability most sought-after by pharma companies is now data-driven manufacturing through collection and processing of real-time data using sensor technologies, advanced analytics, robotics, and other “smart” systems (MacDonald, 2021). The Pharma & Biopharma Outsourcing Association (PBOA) even helps guide the FDA in drafting guidelines for good data keeping and quality management for pharmaceutical manufacturing (Roth, 2016).
· Streamlining Regulatory compliance. When biopharma companies decide to develop and manufacture products in-house, compliance to U.S. and global regulatory standards take significant resources and time, from hiring regulatory experts to ensuring facilities adhere to regulatory expectations. Strategic partnerships with CDMOs allow biopharma companies to bypass the stalling, inconvenience and cost of equipment maintenance required for in-house drug development. CDMOs are increasingly specialized to support complex regulatory adherence to new modalities such as CGT, antibody-drug conjugates (ADCs) and mRNA-based therapies.
· Building Global Partnerships. It is well known that the U.S. remains the largest and most lucrative pharmaceutical market in the world (Wright, 2022), with the FDA being one of the most rigorous and stringent regulatory bodies. Because of this, global biotech and pharma companies want to partner with U.S. drug manufacturers, potentially securing FDA approval. CDMOs facilitate these quality partnerships and accelerate the process of moving novel therapeutics forward according to FDA regulations.
Conclusion
CDMOs/CROs are integral to driving forward the success of the biopharma industry, especially with the announcement of the National Biotechnology and Biomanufacturing Initiative announced this week.
From a Talent Management perspective, the severe talent shortage is prolonging the time it takes new therapies to reach patients. CDMOs ease talent shortages through the contribution of specialists working in R&D, quality assurance, and drug discovery.
BayBridge is proud to support CROs working to accelerate biopharma innovation and is particularly optimistic about what lies ahead for the biopharma industry with the launch of the National Biotechnology and Biomanufacturing Initiative.
Sources
Ahlgrimm, J. (6 June 2022). Weathering the biotech storm: Accelerating manufacturing, controlling cost, and managing risk with a strategic CDMO relationship. Cell & Gene. https://www.cellandgene.com/doc/weathering-the-biotech-storm-accelerating-manufacturing-controlling-cost-and-managing-risk-with-a-strategic-cdmo-relationship-0001
MacDonald, G.J. (2 April 2021). CDMOs embrace industry 4.0 to satisfy customer demand. Genetic Engineering & Biotechnology News. https://www.genengnews.com/insights/cdmos-embrace-industry-4-0-to-satisfy-customer-demand/
Beutin, N., & Schmidt, H. (November 2019). Current trends and strategic options in the pharma CDMO market. PWC. https://www.pwc.de/de/gesundheitswesen-und-pharma/studie-pharma-cdmo-market.pdf
Roth, G. (3 October 2016). Quality metrics and CDMOs. Contract Pharma. https://www.contractpharma.com/issues/2016-03-01/view_columns/quality-metrics-cdmos/
Sullivan, J. (18 February 2022). North American CDMO market poised for a boom to $8.65B by 2026 – report. Endpoints News. https://endpts.com/north-american-cdmo-market-poised-to-grow-41-by-2026-report/
The White House. (12 September 2022). Fact Sheet: President Biden to launch a national biotechnology and biomanufacturing initiative. https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/12/fact-sheet-president-biden-to-launch-a-national-biotechnology-and-biomanufacturing-initiative/
Wright, T. (4 April 2022). Pharma & Biopharma trends CDMOs face in 2022 and beyond. Contract Pharma. https://www.contractpharma.com/issues/2022-04-01/view_features/pharma-biopharma-trends-cdmos-face-in-2022-and-beyond/