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May 15, 2011 (Vol. 31, No. 10)

CMOs Dominate Fill-and-Finish Operations

Biotech Companies Outsource 81% of Their Requirements to Contract Manufacturers

  • The development of genetically engineered drugs is a relatively new endeavor. Insulin, as Humulin® from Eli Lilly & Co. and approved in 1982, was the first genetically engineered biopharmaceutical. Although biopharmaceutical discovery and development are relatively new, these drugs comprise 10% of all pharmaceuticals today and represent the fastest growing sector of pharmaceutical production.

    Biopharmaceuticals are manufactured both by companies with internal capacity and by contract manufacturers that provide manufacturing expertise and capacity. HighTech Business Decisions’ recent report, Biopharmaceutical Fill-and-Finish: Best Practices Study, reviews the operational and business activities related to contract manufacturing of finished biopharmaceuticals.

    The summary information presented in this article is based on extensive interviews with 29 directors of biomanufacturing at pharmaceutical companies and executives from 12 fill-and-finish contract manufacturing organizations (CMOs). This article highlights the current state of the outsource market for fill-and-finish services, contractor fill-and-finish capacity and capabilities, and future trends for the CMO industry.

  • Outsourcing

    Generally, companies outsource their biopharmaceutical fill-and-finish needs to take advantage of the CMO’s expertise and specialized manufacturing capabilities. On average, biotech companies outsource 81% of their fill-and-finish requirements. While this is an average, the industry’s fill-and-finish outsourcing requirements vary considerably among biotechnology companies. Biotechnology and pharmaceutical companies with in-house fill-and-finish capabilities outsource 40% of their requirements. On the other hand, many smaller biotechnology companies with no in-house biologic fill-and-finish capabilities outsource 100% of their requirements.

    The biotech companies that outsource 100% of their biologic fill-and-finish needs tend to be smaller companies with biologics in early-phase clinical trials. A majority (63%) of these companies have no plans to change the way they outsource their fill-and-finish requirements. According to one director when asked about his plans to continue to outsource his fill-and-finish requirements, “From what I’ve seen, unless you have many products, fill-and-finish is an underutilized function at biotechnology companies.”

    Conversely, 37% of the companies that outsource all their fill-and-finish needs plan to either switch CMOs or build in-house capabilities. The major reasons for switching CMOs are the company’s need for improved capacity or capability.

    The other segment of this market is biotechnology and pharmaceutical companies with in-house biopharmaceutical fill-and-finish capacity that also use CMOs for some of their fill-and-finish needs. These companies outsource to CMOs primarily to gain access to capacity or to gain access to specialized technology. Examples of the types of capacity that these biotechnology companies need include: a) temporary capacity during start up of in-house capacity, b) balancing production volumes to line capacities, or c) manufacturing that is validated for commercial products.

    As mentioned previously, companies with in-house fill-and-finish capacity will use a CMO to gain access to specialized technology. Some examples of specialized technology required by biotechnology companies include the need for barrier isolation for handling cytotoxic material or lyophilizers for freeze-drying and stabilizing their drug product. As noted by one of the manufacturing directors, “Anytime we need to add production and reduce capital spending we consider outsourcing. Fill-and-finish production is not our core competency. When we need special services like handling cytotoxics or blow fill seals, we look to contractors.”

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