BioPharm International, March 2012

Biological applications within the pharmaceutical industry have proven to be one of the primary technological development areas of the 21st century. Productivity in biological R&D has surpassed returns from conventional small-molecule pharmaceuticals, and the number of biologic license applications (BLAs) has been rising.

Increased capital and labor resource allocation towards biologically-derived pharmaceuticals and biocatalysts has buoyed the biopharmaceutical research market as the new frontier in innovative drugs.

More specifically, the industry's trajectory towards pharmacogenetics has the potential to provide access to more powerful personalized medicines. Not only will pharmocogenetics remove guesswork from the drug selection process, it will also speed recovery time and increase safety by significantly reducing the likelihood of adverse reactions. Moreover, advance knowledge of susceptibility to particular diseases will allow for careful monitoring so that treatments can be introduced at the most appropriate stage to maximize their effect.

Some well-known large capitalization pharmaceutical companies have recently made significant investments in biotechnology through acquisitions, in-licensing, or partnership deals with emerging biotech firms. With conventional R&D yielding below-par returns and the industry's vulnerability to generic competition, the development of large-molecule biologics is an attractive option for many pharmaceutical companies. Sanofi-Aventis' $20-billion acquisition of Genzyme, completed in April 2011, was a clear play for positioning within the biotherapeutics market. Also noteworthy are Roche's $47-billion acquisition of the remaining stock in US biotech Genentech that it did not already own, and Pfizer's $68-billion merger with Wyeth Pharmaceuticals, which had one of the strongest biotechnology pipelines among large pharmaceutical players.

Trends in biomanufacturing are encouraging, as companies with superior process-design capabilities will be able to extract more profit from their operations and thus become more successful.

According to S&P industry data, biotechnology products are expected to account for 48% of the top 100 drugs of 2016. Of the 25 drugs approved by FDA through August 2011, 21 were new molecular entities (NMEs). According to the Pharmaceutical Research and Manufacturers of America (PhRMA), biopharmaceutical companies are currently working on 887 cancer medicines, all of which are either in clinical trials or under review by FDA. The total includes 98 being developed for lung cancer, 91 for breast cancer, 80 for prostrate cancer, and 55 for colorectal cancer. Biologic-based products accounted for 12 of the 27 new pharmaceuticals and biologics approved by FDA in 2010. A move away from vaccines in favor of products such as monoclonal antibodies (mAbs) was the norm until 2007. However, since then, vaccine development has seen a reinvigoration. For example, in 2008, the number of candidate vaccines in development rose to 223 from just 62 in 2006. MAbs, which had been by far the biggest pipeline category, were overtaken, despite the rise of investigational drugs from 160 to 192 over the same period.

Key Challenges

Much of the motivation for biomanufacturing research has been based on the belief that it is significantly different from traditional manufacturing and therefore requires different resources and approaches for both engineers and management. In many cases, the underlying technology required to support production at scale did not even exist five years ago. In fact, the manufacturing infrastructure needed to support this market is enormous. While the foundation of the needed capacity is in place for some segments, the capital expenses and development necessary to support a $600 billion per year market requires much planning and a comprehensive technology map for execution. The key differences between conventional small-molecule manufacturing and biomanufacturing include:

Transfer of Technology
The transfer of products from the prototype stage to production is a significant task in the developmentof biotechnology and biomedical products because of the complexity of the products and the regulations established by government agencies such as FDA. Scalability comprises a large part of the difficulty as well. A test tube of organisms will often react differently than a vat of organisms.

Process Dynamics
Biotechnology products comprise complex technology that may not yet exist at the time of product conception and design. Managing the creation of the technology for concurrent design and manufacturing as required for product advancement, and applying it to products are extremely difficult, but is usually required in biomanufacturing. This provides significant challenges to companies because they are often required to invent or acquire untested, leading-edge technology as they develop new products. Development risk of products in biotechnology is generally high because of the leading-edge nature of the products and their cost of introduction.

Origination of Drug Candidates
Historically, traditional pharmaceutical companies have developed new chemical entities within their own drug discovery groups. In the case of biopharmaceuticals, much of the innovation that occurs is not related to the licensing of new drugs from biotechnology. To date, the traditional pharmaceutical companies have accounted for the introduction of 70% of the approved biopharmaceuticals; of which over 50% are originated externally.

Implications for CMOs
Trying to predict capacity requirements for opportunities presented by biomanufacturing is not simple. While the contract-manufacturing sector has strongly promoted the need for additional capacity, with many organizations investing in microbial and mammalian cell-culture capabilities, big pharmaceutical and biotechnology companies are also increasing capacity based on their product portfolios. These can be split in two main groups—those that focus on early-phase clinical supply and those that deal with large-scale capacity. A development group with access to a small-scale multiproduct production facility is required to support this type of function. For companies with limited product portfolios or those wholly focused on clinical supply, this function is often contracted out. There is a shortage of companies worldwide that can provide the necessary level of support.

Future Outsourcing Needs
The goal of process optimization is to integrate process development with product development so that there are no surprises when the products are transferred to production. Within pharmaceutical R&D there is a strong correlation between highly effective process development capabilities and the profitability of the associated product and company. Companies with superior process development capabilities have strategic leverage in time-to-market and associated productivity.

Because of the extensive regulatory requirements of drug introduction, it is desirable to delay process development as long as possible and then quickly develop it once approval looks likely. Some companies are much better at this task than others. The design of development processes for scale-up works reasonably well with chemical-process-based drugs. This is not always the case with biologics. The novel nature of each process requires significant learning and flexibility during implementation. Also the transfer of expertise acquired during development for application in new processes varies greatly from company to company. Some companies appear to have more structured knowledge that stems from their particular competencies. Understandably, different segments of the pharmaceutical market have differing approaches to biomanufacturing, although some similarities do exist when it comes to the desire to harmonize or standardize manufacturing across different therapeutic diseases and in the categories of biotherapeutics (i.e., hormones, mAbs, enzymes, or proteins).

Based on data from its Q4 Pharmaceutical and Biotechnology Outsourcing survey, which included 2619 individuals in outsourcing-facing roles, Nice Insight found distinct differences across customer groups with respect to biologic-based therapies. Seventy-six percent of respondents from both biotech companies and Big Pharma companies, each with an annual outsourcing spend in excess of $50 million, indicated their business is actively engaged in the development of biotherapeutics (see Table I). These customer segments were second only to emerging biotech companies, in which 82% engage in the development of biologic-based therapies. Just over half of the respondents from specialty pharma companies stated their business develops biotherapeutics and only one-third of emerging pharma companies are developing biologic based therapeutics.

Big Pharma, biotech, and emerging pharma segments are in accordance, with monoclonal antibodies taking top priority, whereas the specialty pharma and emerging biotech segments indicated protein-based therapeutics as their top priority. Enzyme, hormone, and peptide-based therapeutics followed in sequence with respect to relevance across the segments. As mentioned above, standardization is an industry-wide goal when it comes to the development of biologic-based therapies. This was supported by Nice Insight's research, in which 82% of specialty pharma companies engaged in biotherapeutic development stated their organization was trying to standardize the process and 92% of Big Pharma companies stated the same.

On average, the biotech and emerging biotech segments indicated that a slightly larger portion of their outsourcing budget was allocated to large molecule projects, spending 60% and 56% on biologic outsourcing, respectively. Big Pharma followed closely behind, allocating 53% of their budgets to biomanufacturing. Specialty pharma and emerging pharma were the only segments that had a slightly larger percentage of their budgets allocated to traditional, small-molecule projects, with 49% and 47% allocated to biologics.

Trends in biomanufacturing are encouraging, as companies with superior process-design capabilities will be able to extract more profit from their operations and thus become more successful. Accordingly, these companies are likely to produce better products that are more aligned with customer needs.