Pharmaceutical Outsourcing, January 2016
Predictions for healthy growth in demand for biologic drugs are driving many manufacturers, including branded and biosimilar drug producers and contract manufacturers, to invest in new production facilities. These state-of-the-art manufacturing sites often look quite different from traditional plants, however. Rather than massive, three story tall permanent stainless steel reactors, biopharmaceutical companies are opting for much smaller (typically 2000 gallon max) disposable bioreactors.
Many factors are influencing this move to single-use technologies, not least are the benefits they provide, such as reduced capital expenditures, reduced risk for cross-contamination, and greater flexibility to meet changing market needs.
Notable Biologics Growth
The global biopharmaceuticals market was valued at $162 billion in 2014 and is estimated to grow at a compound annual growth rate (CAGR) of 9.4% from 2014 to 2020 to $278 billion by 2020, according to Persistence Market Research1. The global biosimilars market, meanwhile, is expected to grow at a CAGR of 22.1% from $2.29 billion in 2015 to $6.22 billion by 2020, according to Markets and Markets2.
Many More Players
Given this healthy growth, it is not surprising that many conventional pharmaceutical companies have joined their counterparts that specialize in biologic drugs and initiated R&D efforts focused on the development of biopharmaceuticals. According to the results of the 2015 Nice Insight Pharmaceutical and Biotechnology Outsourcing survey of over 500 outsourcing-facing pharmaceutical and biotechnology executives, the percentage of respondents whose companies are engaged in the development of biologics has increased from 65% in 2013 to 82% in 20153.
As of 2016, the new Nice Insight CDMO Outsourcing Survey with over 500 respondents shows that 66% of respondents are engaged in the development of New Biological Entities (NBE's) with 50% of respondents engaged in the development of biosimilars. Furthermore, large and emerging biotech companies are now outsourcing nearly as frequently as big pharma and generally more often than emerging pharma at the discovery, preclinical, and Phase 1 stages of drug development, based on responses of survey participants3.
Strong Demand for Contract Services Too
Given these results, it is not surprising that Roots Analysis estimates that the global biopharmaceutical contract manufacturing market is growing at an overall, healthy, annualized rate of 8.3%4. In June 2015, HighTech Business Decisions was predicting that the market forbiopharmaceutical contract manufacturing services would reach $3 billion in 20155. The market research firm points to expanding drug pipelines, greater drug approval rates, increased investment in biologic drug companies and a wider range of CMO/CDMO capabilities. It also expects the biopharmaceutical contract manufacturing sector to increase its capacity for mammalian cell culture production by 14% and for microbial fermentation production by 16% by the end of 20165.
Serious Investment Activity
Indeed, to meet the growing demand for specific products or to position themselves for the longer term, many pharmaceutical companies are investing in new biologics production facilities, ranging from API manufacturing to fill-finish and packaging operations. Contract manufacturers are also expanding their capabilities to meet the growing demand for their services by branded and biosimilar manufacturers that prefer to outsource rather than invest in in-house capabilities.
A few recent examples of big pharma investments include:
- Regeneron: recently announced that, in addition to its initial $300 million investment to create a pharmaceutical plant at a former Dell computer manufacturing site in Ireland, it will be investing an additional $350 million.
- Roche: announced in 2013 that it is investing $880 million in biologics manufacturing capabilities, including an ADC manufacturing plant in Switzerland and expansion/upgrades of sites in California and Germany. Its Japan-based subsidiary Chugai Pharma is also investing $310 million in antibody production capacity at a plant in Tokyo.
- Boehringer Ingelheim announced in December 2015 plans to invest approximately $550 billion to expand its biopharmaceutical production capabilities in Vienna with the construction of largescale manufacturing facility for biologic APIs manufactured using cell cultures.
- Amgen: opened in August 2015 a $300 million facility including a syringe filling facility and a cold chain warehouse.
- Eli Lilly: completing a $450 million biologics facility in Ireland. In 2013, the company also announced nearly $1 billion in planned plant expansions for the production of its insulin products, including API and cartridge manufacturing capabilities.
- Alexion Pharmaceuticals: announced in May 2015 plans to construct the company’s first biologics manufacturing facility outside of the United States. The nearly $500 million investment in Ireland will take four years to complete.
- Bristol-Myers Squibb: planning to build a new state-of-the-art, largescale biologics manufacturing facility in Dublin that will produce multiple therapies. The company is also expanding its recentlyopened $500 million biologics production site in Devens, MA.
- Pfizer: spending $100 million to upgrade its biologics plant in Ireland.
- Novartis: broken ground on a new $500 biologics plant in Singapore. Its generic pharmaceuticals business Sandoz recently inaugurated its new, nearly $165 million, state-of-the-art BioInject biopharmaceutical manufacturing facility in Austria.
- Genzyme: investing $80 million at its recently approved facility in Framingham, MA, adding more downstream processing capabilities for Fabrazyme, its treatment for Fabry disease.
Biopharmaceutical contract manufacturers have not been idle, either. A few examples of recent activity in the CMO/CDMO space include:
- Catalent Pharma Solutions: officially opened its new, state-of-the–art Catalent Pharma Solutions: officially opened its new, state-of-the–art biomanufacturing Center of Excellence in Madison, WI in April 2013.
- AbbVie also announced in February 2014 that it will invest $320 million to build a facility in Singapore for the production of both small-molecule and biologic APIs. The company will also spend $30 million to expand its Barceloneta, Puerto Rico site.
- Patheon Biologics: adding capacity at sites in the US and the Netherlands.
- KBI Biopharma: expanding its mammalian and microbial API production capacity.
- Fujifilm Diosynth Biotechnologies: acquired Kalon Biotherapeutics in 2014 for its viral vaccines capability. Additional investments will also be coming online in 2016, including additional bioreactor capacity and expanded process and analytical development capabilities.
Changing Industry Dynamics
Given the advances in production technologies, it should be no surprise that the new facilities being constructed today are quite different from those built during the early days of the biopharmaceutical industry. In fact, advances in manufacturing technologies have led to a 10-fold increase in productivity, mainly with respect to higher titers. It is therefore now possible to produce in a 2000-L reactor which previously required a 20,000-L vessel, allowing for significant reduction in the necessary scale for biopharmaceutical manufacturing facilities and associated capital expenditures.
In addition, because a significant portion of the growth in demand for biologics is coming from emerging markets and many governments in these regions require local production, biopharmaceutical companies are looking to establish local production capabilities. Demand for each individual biotherapeutic remains limited within a country, however, and therefore smaller production volumes are required.
The growth of the biosimilar market is also creating opportunities for many biopharmaceutical companies. The competition will be extremely fierce, and highly efficient and cost-effective processes and facilities will have a huge impact on both market access and ultimate profitability.
The intense competition also means that volumes will once again generally be limited for each company offering biosimilars for the same branded product.
Some of the newer facilities will also incorporate continuous processing capabilities for both upstream and downstream operations. Continuous processes can help reduce overall process footprints, reduce production times, provide more consistent product quality and even result in lower overall costs.
Contract manufacturers with multi-product biologic API manufacturing and/or fill-finish capabilities must also be prepared to safely handle many different products with different physical, chemical and therapeutic properties without risk of cross contamination between batches. Capabilities for the production of highly potent biologics are becoming a necessity as well.
Innovation Important for Outsourcing
Implementation of innovative process technologies is clearly a necessity for biopharmaceutical contract manufacturers. This conclusion is supported by the results of the Nice Insight’s 2015 Pharmaceutical and Biotechnology Outsourcing survey. Respondents indicated that technological innovation has significant potential to benefit many key operations within the biopharmaceutical sector, with quality control most likely to be improved, followed by research and development, manufacturing, distribution and labeling and packaging. Nearly all survey participants (96%) also had at least some interest in forming outsourcing partnerships with service providers that adopt stateof-the-art technologies to increase efficiency, safety, quality and traceability. When choosing outsourcing partners, survey respondents also indicated that they consider the level of technological innovation used by potential candidates to improve safety, efficiency, security, and regulatory compliance, among others.
Single-Use Technologies Top of the List
Single-use technologies have received increasing acceptance for biopharmaceutical manufacturing as companies have begun to realize their numerous benefits and equipment manufacturers have addressed key concerns, such as the potential for extractables and leachables from plastic components and interconnectivity of equipment from different suppliers.
Implementation of single-use technologies for biopharmaceutical drug production helps to reduce the risk of contamination, reduces scheduling times, increases operational efficiencies, and reduces capital expenditures, including both fixed and consumables costs. Single-use systems come pre-sterilized, thus eliminating the need for cleaning and sterilization and significantly reducing setup and switch-over times. As a result, they also provide flexibility and enable manufacturers to quickly change their portfolios in response to market needs.
In particular, disposable technologies are ideal for scaling down biologic manufacturing processes, which as noted above, is a key trend in the biopharmaceutical industry. Single-use technologies are also well-suited for use in modular facilities, which are designed to enable high-quality production of biologic APIs and formulated products around the world, including in places where traditional facilities cannot be constructed.
As a result of these benefits, single-use bioreactors are widely used in upstream biopharmaceutical manufacturing processes. Disposable technologies for downstream operations are more limited, but suppliers of single-use technology systems are making rapid advances in developing effective solutions. For example, various tangential flow filtration (TFF) devices are now commercially avialable that can be effectively combined with other downstream unit operations for continuous manufacturing. Disposable, pre-packed chromatography columns have also been introduced to the market, as have advanced filtration devices, pumps and heat exchangers. Single-use continuous chromatography systems are also under development. The emphasis on single-use technologies for continuous manufacturing is driven by the need to increase downstream throughput to where it can keep up with the higher titers achieved upstream.
Of the announced plans for new and expanded biologics facilities listed above, the vast majority include the incorporation of some level of single-use technologies for one or more phases of production, from fedbatch and perfusion bioreactors for upstream API production to various filtration devices for downstream processing to disposable fill-finish systems. It is quite clear that disposable production technologies are now commonplace for many biopharmaceutical operations, and their use can only be expected to expand further as additional innovative solutions are introduced by single-use equipment suppliers.
- Persistence Market Research, “Global Biopharmaceuticals Market Will Reach US$ 278 Bn by 2020”, Press Release, July 27, 2015
- Markets and Markets, “Biosimilars Market by Product (Recombinant Non-Glycosylated Proteins (Insulin, Filgrastim, Interferons, rHGH), Glycosylated (Monoclonal Antibodies, EPO), Peptides (Glucagon, Calcitonin)) & Application (Oncology, Blood Disorders) - Global Forecast to 2020”, Press Release, July 2015
- Nice Insight, 2015 Pharmaceutical and Biotechnology Outsourcing Survey, Nice Insight, January 2015, 2016.
- Roots Analysis, “Biopharmaceutical Contract Manufacturing Market, 2015 - 2025”, Press Release, May 5, 2015
- W. Downey, “Biopharmaceutical Contract Manufacturing Capacity Expansions”, Contract Pharma, June 2, 2015.