Pilot Plant Partnerships

No longer just a safety valve, pilot-scale outsourcing has become a strategic tool for pharmaceutical manufacturing. Outsourcing sponsors, who typically look for help during early clinical phases, tend to be lean, small-to-mid-sized firms that want more than just a clean place to park their first blockbuster for a few years. They often expect contract manufacturing organizations (CMOs) to provide chemistry, separations and packaging expertise. Full-scale CMOs follow FDA-sanctioned recipes to the letter and ask few questions.

At one time, large drug makers took on contract work, but as the industry's fortunes have improved, many mega-pharmas have rededicated manufacturing capacity to their own products. They're also less likely to outsource. Today, many large pharmaceutical firms avoid CMOs except for intermediates and products at the end of their life cycle. They may make exceptions for a 33-step synthesis that includes several esoteric reagents or proprietary catalysts. "Even then," comments Vijay Samant, CEO of San Diego-based Vical, Inc., "when they outsource it's usually to make room for pipeline products."

Outsourcing needs change during any product development cycle. Early in drug development, small-to-midsized sponsors seek out flexible manufacturing partners who can adapt to changes in schedule, batch size and product requirements. Flexibility becomes less desirable as development proceeds and supply chains become more predictable. "At later stages," says Samant, "capacity, cost, and the ability to help commercialize the product become much more important."

When selecting a pilot-scale CMO, due diligence is critical. Research everything and anything related to your potential manufacturing partner. Get references, visit their site and ask for documents related to FDA inspections. "Get to know people who work there "your success depends on those relationships and building trust," says Roy Musil, director of quality at Althea Technologies, San Diego.

Because manufacturing relationships are complex and involve many different services, you may be looking for a one-stop shop that can manufacture and fill the product, plus provide technical expertise. Unless they're looking for a very specific skill set, most sponsors don't relish the idea of schlepping their products from one contractor to another. "What you want is a smooth flow all the way through to your clinical-trial materials," adds Michiel Ultee, Ph.D., senior biopharmaceutical director of Princeton, N.J.-based Laureate Pharma.

Contractors should be honest, and state immediately if a project strains their technical, scientific, or engineering capabilities. Don't be afraid to put wavering negotiators to the test. Ask how they would handle a difficult reaction, scale up a particular step, or negotiate an unexpected problem "and to be as specific as possible. "An honest contractor will turn down projects outside their comfort zone," says Kevin Lesnewski, marketing manager for DSM (Greenville, N.C.).

The price of manufacturing services is just one component of outsourcing economics. Everyone knows that a drug in Phase I is worth a thousand leads, and the value of time in an industry where lost opportunity is measured in millions of dollars per day.

Needless to say, experience is critical. At the very least you don't want them learning on your time when they're supposed to be making Phase III-worthy material. "No big pharmaceutical company will hire a CMO inexperienced with the scale, the molecule, or the process you offer them," says Samant of Vical, "which is why it's so tough to break into contract manufacturing."

Excluding lower priced CMOs in Europe or Asia would clearly be a mistake. However, a convenient location can be an advantage, particularly when workers from the contracting company need to visit the manufacturing facility regularly, or camp out there for weeks at a time. "Travel and living away from home burns out people quickly and can stretch a small sponsor's ability to carry out day-to-day operations," Samant explains.

If you choose a company outside the U.S., native language may not be a top priority, but you must be sure of the organization's fluency in English. That includes the subtle, complex English used for business and technical communications as well as the colloquial language required, for example, in the Chemistry, Manufacturing, and Controls (CMC) section of a FDA Investigational New Drug (IND) document. "You don't want your batch records coming back in German," muses Roy Musil of Althea.

Metaphorically, you also want to "speak the same language" as your contractor, share similar business philosophies, and feel reasonably assured that your ongoing communications will be smooth, cordial, and on your terms. You're not marrying your contract manufacturer; you're "only" doing business with them. However, corporate culture clashes can be uncomfortable. After considering all other hard selection factors, choose a partner based on rapport and how well interacting teams get along.

Expectations should be congruent. Both partners need to be able to see their business benefits and to have reasonably similar expectations of what the partnership will mean in terms of deliverables, product quantity and purity, delivery dates and money. In many cases, the contract manufacturer also may need to be able to work with the type-A personalities who sometimes tend to aggregate at small, undercapitalized pharmaceutical firms.