What Capacity Crunch?

Is a cell culture capacity shortage likely? Biomanufacturers are still scratching their heads.

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By Angelo De Palma, Ph.D., Contributing Editor

Biotechnology companies sink or swim based on cell culture manufacturing capacity: too little means product delays, too much and accountants pull out their hair over “excess capacity” and “underperforming assets.” With cell culture the manufacturing method of choice for biotech’s fastest-growing product segment—monoclonal antibodies (MAbs)—one could say that as cell culture goes, so goes the industry.

Warnings of imminent, severe cell culture capacity shortages picked up steam after Immunex’s troubles, in the late 1990s, with its Enbrel (etanercept) MAb rheumatoid arthritis drug.

Enbrel was so well-received following its 1998 approval that Immunex could not meet demand. The company announced plans to build a dedicated manufacturing facility in Rhode Island and, later, to contract out a chunk of Enbrel production to Amgen (Thousand Oaks, Calif.). Three years later partner became parent, as Amgen acquired Immunex for $16 billion.

Enbrel was one of biotech’s great success stories, not the unmitigated disaster portrayed by commentators and editors. “Immunex predicted that Enbrel would be merely a successful drug, not a fantastically successful drug,” observes Nick Shackley, vice president of business development at Cambrex Corp. (East Rutherford, N.J.), a biotech contract manufacturing organization (CMO). Nevertheless, the stampede of ominous capacity predictions was on and continues to this day.

Predictions of shortages were not only dire, but claimed four-significant-figure certitude. An investment banker quoted in a January 2002 Chemical and Engineering News article foretold of a “best case” scenario (depending on one’s point of view, since it required several pipeline products to fail) that would result in the liberation of just 12,150 liters of capacity worldwide.

Those awaiting another “Enbrel” were disappointed. What’s puzzling is that five years later the consensus on biotech capacity is that there is no consensus on whether the “crunch” occurred at all, came and went, was postponed, or was simply a figment of someone’s imagination.

Some experts believe that manufacturing capacity was never in danger of running out and will not run out any time soon. Others feel capacity shortages have merely been deferred to a later time, when new product approvals and more exuberant equities markets will conspire to rekindle capacity concerns.

The optimists

“Whether the capacity crunch exists or not depends on which company you talk to and when you talk to them,” admits Ken Tindall, Ph.D., senior vice president for science and business development at the North Carolina Biotechnology Center (Research Triangle Park, N.C.).

Data from Bioplan Associates (Rockville, Md.) suggest a huge perceptual gap among bioprocess experts regarding future capacity shortages (see chart). Forty-four percent of survey respondents believed they would experience capacity shortages by 2008; 28% disagreed and 28% were “neutral” or had no opinion.

Earlier concerns over capacity shortages relied on overly-optimistic estimates of demand and approval rates, says Janice Reichert, Ph.D., senior fellow at The Tufts Center for the Study of Drug Development (Boston, Mass.). Could current capacity worries be based on the same misconceptions?

“I’ve heard ridiculous claims for the number of MAbs that would be approved in the next five years, something like 100,” notes Dr. Reichert. “These estimates are ridiculous given the number of pipeline products and historic success rates. You can’t expect better than about a 25% approval success rate, which means that no more than two or three MAb products are likely to be approved in any given year for the foreseeable future.” Just one MAb, Biogen Idec’s (Cambridge, Mass.) Antegren, is currently under regulatory review.

Roger Lias, Ph.D., vice president of business development at KBI BioPharma (Durham, N.C.), believes that product-approval optimists and volumetric-capacity pessimists feed off each other. “The analyst and banking communities did us a huge disservice with their doom and gloom scenarios,” he notes. “Most took an overly simplistic view of biotech’s capacity needs based on the successes of a few monoclonal antibodies, approval rates, and what were up to then normal process yields. They matched capacity they were aware of with products they knew about. They relied too heavily on biotech’s marketing and launch date projections. It was a very naïve math game.” Doom-and-gloomers also ignored big biotech’s underutilized capacity and willingness to share it, not to mention improvements in process yield and efficiency that allow processors to get more protein from smaller volumes.

That’s not to say that no biotech sponsor will ever experience difficulty finding bioreactor space. Lack of planning, unexpected demand, multiple products competing for facilities, and mishaps could all contribute to shortages, but optimistic observers don’t see these factors affecting the industry globally.

“Predicting capacity needs is immensely complex and it’s still difficult for individual companies to predict what they will need in five or ten years,” Dr. Lias admits. “We’ll probably see periods of relative abundance and shortage—a seesaw effect. One successful high-dose product can tip the scales towards shortage, but as long as there is reasonable balance everything will be OK.”

Nick Shackley of Cambrex believes capacity issues are something of an embarrassment for many manufacturers, especially those that responded to shortfall predictions but later put off expansion plans. “The crunch that never happened left a lot of people with egg on their faces.”

The pessimists

Although severe cell culture shortages never materialized, many capacity-crunch Jeremiahs are sticking to their positions, namely that capacity fundamentals have not changed.

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