Over the past decade, planned average annual capacity growth in the biopharmaceutical contract manufacturing industry has slowed. This situation reflects both recent market conditions and a shift in investment priorities by biopharmaceutical contract manufacturing organizations.
CMOs have realigned their investment plans to focus on productivity improvements, lower costs, and better asset utilization.
This change in investment policy is documented in HighTech Business Decisions recent report, “Biopharmaceutical Contract Manufacturing: New Participants, Expanded Services and Emerging Markets.” Planned capacity increases, measured by bioreactor volume in liters, for both microbial fermentation and mammalian cell culture have slowed over the last seven years.
In 2005, CMOs expected to add capacity at a rate of 13% per year. Over the subsequent years, expected annual capacity increases have steadily declined. In 2011, CMOs planned to add capacity at a rate of 3% per year.
The CMOs interviewed for this article gave examples of the investments they are making to meet the current and future industry needs.
While new planned expansions have slowed, the CMO industry continues to take advantage of current biotech industry conditions. On July 31, CMC Biologics acquired Xoma’s large-scale manufacturing operations and affiliated assets in Berkeley, CA.
CMC Biologics has taken over the lease of buildings and three 2,750 L stainless steel bioreactors and two purification suites. CMC Biologics has already put a management team in place, and it expects the new facility to be fully operational by the end of this year.
Following the sale of its production facility, Xoma announced that it had entered into an agreement with Boehringer Ingelheim to manufacture gevokizumab, Xoma’s interleukin 1-beta allosteric modulating antibody. Boehringer Ingelheim will manufacture this product for both Xoma and its partner Les Laboratories Servier.
CMC Biologics’ acquisition deal with Xoma is the most recent involving biomanufacturing capacity made by a CMO in the past year and a half. Last year, Boehringer Ingelheim, and Fujifilm, and Gallus BioPharmaceuticals each made major biopharmaceutical manufacturing acquisitions from drug innovator companies.
Boehringer Ingelheim purchased Amgen’s Fremont, CA, biomanufacturing facility. Fujifilm bought Merck & Co.’s contract manufacturing business, and re-named it Fujifilm Diosynth Biotechnologies. Closely following these two acquisitions, Gallus BioPharmaceuticals purchased Centocor’s St. Louis, MO, manufacturing facility in May 2011.