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Feature Articles : Mar 1, 2009 (Vol. 29, No. 5)

CMOs Hold Their Ground in Troubled Times

Long Lead Times for Projects Have Protected Contractors from Slowdown So Far
  • Angelo DePalma, Ph.D.

Despite the economic downturn, contract biomanufacturing remains strong and vibrant. Contract manufacturing organizations (CMOs) continue to provide specialized research, development, and manufacturing services for large, small, and virtual biotechnology companies alike.

One of the oldest bio-CMOs, Goodwin Biotechnology was acquired in 2004 by India-based Wallace Pharmaceuticals. Wallace provided growth capital, which Goodwin put to good use. The company enjoyed record business in 2005 and 2006, and shut down in 2007 and part of 2008 to undergo an expansion.

Once it was up and running again, Goodwin had added to its floor space by 50%, more than doubled its capacity through the addition of 200 L and 500 L bioreactors, and tripled its process-development capabilities. As of mid-2008 the company was experiencing record revenues, and 2009 is expected to bring even greater success.

Goodwin is considering the acquisition of a 2,000 L bioreactor, which will enable full-scale production of a fair number of late-stage products, particularly niche and orphan biopharmaceuticals. Its decision will be based on anticipated utilization.

“If we were a product company, the decision would be simpler, since we could more easily forecast capacity requirements,” notes CEO Stephanie Finnegan. “But when you’re a contractor, you need to find clients that will keep your bioreactors running, which is the key to success. The last thing we need is to install a behemoth tank train that’s utilized only ten percent of the year. We cannot be profitable with that kind of utilization, yet we’re fairly certain we can keep a 2,000 L reactor busy.”

Economic Uncertainty

Since lead times for pharmaceutical manufacturing projects tend to be long, it is too early to tell how the global financial crunch will affect CMOs. The impact may depend on the severity of the economic downturn. A recession that falls short of the most dire predictions might turn out well for contractors. Cash-poor biotechs might delay or cancel projects, but established companies may lean on CMOs more to avoid production-related capital investments.

Finnegan has observed that some smaller clients are doing quite well, perhaps due to the flight of capital from equities and bonds into private ventures. A more severe recession or depression, however, would likely cause all companies to scale back, thus hurting contractors. “There’s a lot of uncertainty at this point,” she notes. “Often, management determines that the safest course of action is to pull back some of its programs.”

Avid Bioservices also experienced a year of record business, and expects 2009 to be “just as good if not better,” according to Rich Richieri, svp, manufacturing. “We have not seen any cancellations due to the downturn.”

Single-use equipment provides CMOs with the flexibility to respond rapidly to customer needs, Richieri says. Avid uses bioreactor bags from Thermo Scientific Hyclone—100 L sizes for development, and 1,000 L for manufacturing. “Disposables allow us to provide ten to twenty grams of material quickly, even from nonoptimized clones, so customers can begin animal studies.”

Avid is a pure-play contract manufacturer, but its parent company, Peregrine Pharmaceuticals, has two antibody drugs of its own in clinical development for cancer and antiviral indications. Last year, Peregrine received a five-year, $44.4 million contract from the Department of Defense to test its bavituximab monoclonal antibody against hemorrhagic fever.

Improvements in volumetric productivity favorably positions CMOs, even smaller ones, for capturing longer manufacturing campaigns. Improvements have come through process improvements, feed/media strategies, and cell-line engineering.

Avid, for example, uses the ClonePix clone-selection device from Genetix to replace manual cloning and achieve high productivity from the earliest stage of a manufacturing project. Avid acquired the ClonePix in August 2008, and so far the instrument’s performance has fully met expectations. “More and more contract manufacturers will concentrate on clone screening to achieve high-producing cell lines right away,” says Richieri.

Mammalian Cells: Still the Workhorses

Mammalian cell culture remains the workhorse expression platform at CMOs, in large part due to the popularity of monoclonal antibody treatments. Like many contractors, Laureate Pharma works exclusively with mammalian cells, generally for the manufacture of clinical trial materials. Laureate’s product mix includes 75% monoclonal antibodies, 15% fusion proteins (usually containing antibody fragments), and 10% other therapeutic proteins.

The company’s largest bioreactor is 2,500 L, with a 2,000 L working volume, but Laureate is considering adding 5,000 L tanks to accommodate commercial-scale manufacturing. That decision will ultimately depend on economic conditions and anticipated demand for that level of capacity. “Many of our clients, which are small biotechs, are having trouble raising money and are cutting back on the number of batches,” explains Michiel Ultee, Ph.D., vp, process sciences. 

Nevertheless, Dr. Ultee recognizes that gains in cell-line productivity and trends toward lower dosing and more potent biopharmaceuticals may solve the capacity problem for Laureate “without us having to go to larger bioreactors.” Laureate is, in fact, speaking with one customer with a Phase III molecule about producing commercial-scale batches.

But mammalian cells are by no means the alpha and omega of biomanufacturing.  “There’s still plenty of work to do in microbial systems, particularly for smaller protein drugs,” notes Harold Ross, vp, process development for KBI Biopharma. One of the more versatile CMOs in terms of expression platforms, KBI specializes in process development and manufacturing through Phase II in bacterial, yeast, mammalian, and insect cells.

Ross believes that volumetric productivity numbers from mammalian cell lines can be misleading, since cells are engineered in every conceivable manner for specific products (mostly monoclonals), only to be assessed honestly in terms of specific proteins and expression systems. “That’s what people are generally referring to when they mention yields of 15 or 30 grams per liter. These cells have been selected and engineered specifically to withstand high antibody concentrations.” Expression of non-mAb proteins can, and often are, much lower.

Biotech's Sweet Spot

Still, there is something to be said for hitting biotech’s sweet spot. Spun off from the University of Wisconsin, Catalent Pharma Solutions’ services are based on the company’s GPEx® gene-insertion technology.

Catalent has engineered approximately 200 cell lines for manufacturing monoclonal antibodies, which comprise approximately 80% of the company’s projects. It also has the capacity for GMP manufacture of preclinical batches, as well as material to support Phase I/II. It also conducts process development, develops master cell banks, and conducts scale-up.

Catalent has announced its intention to install a 1,000 liter bioreactor later this year, which will support commercial-scale manufacturing at the Middleton, Wisconsin site.

Thanks to upstream productivity, many smaller contract manufacturers are closing in on commercial manufacturing scales. What is holding many back, says Catalent’s GM, Michael Jenkins, Ph.D., is the ability to achieve the level of cGMP compliance required for commercial production. “It’s still a major barrier for most CMOs. And let’s not forget that we still need to purify those proteins. Downstream operations have a good deal of catching up to do.”

Bioinvent, which specializes in product development and contract manufacturing of antibody drugs, has three monoclonal antibodies of its own in clinical trials. The company also created a novel library (n-CoDeR™) of fully human antibodies for use by its own scientists and outside organizations.

Dan Andersson, senior business development director, sees important synergies  between Bioinvent’s in-house drug development efforts and projects it conducts on behalf of clients. “We use the same technology platform and facilities, and the two aspects of our business go hand-in-hand. We are able to share what we learn from in-house drug development with our clients, which we believe gives us something of an edge. In that respect, we are different from pure-play CMOs.”

From his perspective, Andersson sees disposables as a major trend that improves the capabilities of contract manufacturers. He notes that single-use equipment, which is firmly entrenched upstream, is making inroads into downstream processing, as well.

Years ago, CMOs and contract research organizations spoke freely of partnering  with big pharma and biotech, a fact that irritated some large innovator companies. Today, companies seek long-term relationships with contractors to assure the availability of production capacity and capabilities.

“The approach has definitely matured from the client side,” Andersson notes. “Ten years ago they were looking to the next batch, or perhaps two to three years ahead. Now they’re seeking CMOs that can handle their entire clinical program, and prepare the molecule for the commercial stage.”

Andersson is not alone in observing that cell-culture capacity woes, predicted by nearly every observer of the biotech industry, never came to pass. And before long, he says, 20,000 liter bioreactors might become dinosaurs as productivity improves to 10, 20, and 30 g/L, and more processes become amenable to disposable equipment.

Contract Manufacturing Organizations