EUROPEAN OUTSOURCING OUTLOOK 2015

SUPPLEMENT TO THE MARCH 2015 ISSUE OF MARCH 2015

EUROPEAN

OUTSOURCING

OUTLOOK

2015

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outsourcing market

s4 Trouble on the Horizon for the Expanding Contract Manufacturing Market?

Faiz Kermani

capacity expansions

s10 CMOs Plan for Capacity Expansions

Eric Langer

outsourcing trends

s12 Moving with the Changing Tides of Outsourcing

An Industry Roundtable Moderated by Adeline Siew, PhD

technology transfer

s18 Technology Transfer: A Practical Science

A.G. Damodhar

sterile solutions

s22 Sterile Solutions: How to Choose the Right CDMO?

Marga Viñes

s24 Guide to Conventional and

Biotech Pharmaceutical Outsourcing Services

s26 Ad Index

European Outsourcing Outlook 2015

Issue Editor: Adeline Siew, PhD

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Pharmaceutical companies use outsourcing as a strategic option for

manufacturing (1, 2), and this trend has been growing for a number

of years, driven mainly by the potential opportunity for companies

to reduce costs. Globalization of the pharmaceutical industry has

resulted in outsourcing options becoming more international in

nature. Today, contract manufacturing organizations (CMO) exist in a

number of different countries and work on behalf of clients in other

parts of the world.

Perspectives on the sector outlookWith the economy faltering and companies struggling financially, cost

minimization is often the main influencer in outsourcing decisions.

However, concerns about quality standards and adherence to regulations

have led many stakeholders to worry that other important aspects

relating to outsourcing are being overlooked. All organizations involved

in the manufacture of pharmaceuticals should comply with good

manufacturing practice (GMP) standards, which were originally developed

to ensure that medicinal products are consistently produced and

controlled to the quality standards appropriate to their intended use and

as required by the marketing authorization or product specification (3).

Incidences of GMP violations, however, have been identified during

routine inspections by regulatory agencies, demonstrating that not all

manufacturing sites operate with the same standards. EudraGMDP,

the EU database that contains GMP certificates (4, 5), lists details of

such violations identified by European regulators. Consequently, both

regulators and industry associations have been working to determine

the optimal way to ensure sufficient monitoring of the global contract

manufacturing system and supply network.

According to an annual pharmaceutical sector survey by Nice

Insights, the total CMO market was valued at US$33.7 billion in

Faiz Kermani

The market for outsourcing is set for growth, but the pharmaceutical

industry has concerns over product quality and continuity of supply,

especially with CMOs in emerging markets.

Trouble on the Horizon for the

Expanding Contract Manufacturing Market?

2014 (6). Overall, most industry

observers predict that the market

for outsourced pharmaceutical

manufacturing is set for continued

growth in the future (7). This is a

logical projection given that the global

market for pharmaceutical products

is growing, hence driving the need

for organizations with specialized

capabilities to manufacture these

products. Furthermore, it is unlikely

that companies that have already

outsourced their manufacturing

activities would have financial

resources to bring back those

functions in-house (which in any case,

would be a hugely time-consuming

exercise).

Nevertheless, it appears that the

CMO industry has suffered in the

current difficult financial climate,

with a number of players exiting

the sector. Difficulties in complying

with increasing regulations

and manufacturing capacity

constraints have also played a part

(8). Consequently, this situation

has caused some difficulties for

companies in seeking alternative

manufacturers with the capabilities

to continue production of their

drugs (8). Due to these factors, it is

recommended that companies pay

closer attention to the agreements

they set up with CMOs and employ

risk management elements to

proactively address any possibility

that their CMOs may exit the sector.

Based on answers from more

than 2300 respondents, the Nice

Insights annual survey (6) provides

considerable insight into the

industry’s current attitudes to

outsourcing of pharmaceutical

manufacturing activities. While the

survey findings indicate a positive

future for CMOs, they also highlight

areas of vulnerability that could

unsettle the sector’s rate of growth.

Of those questioned, more than

half intended to outsource solid-

dosage manufacturing, 50% of

respondents would outsource for

injectables, 44% for semi-solids,

and 42% for speciality dosage

forms. In terms of CMOs of choice,

most companies were interested in

seeking service providers in emerging

markets; however, it appears that

providers in the established markets

are still set to receive considerable

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Outsourcing Market

opportunities. For the outsourcing

of solid dosage manufacturing, 23%

of respondents were considering

options in the United States and

Canada and 15% were looking to

European organizations (6).

What is intriguing about the sector

survey is that although emerging

market providers were top of the

list as outsourcing prospects,

pharmaceutical companies admitted

to having certain reservations about

their quality levels, adherence to

appropriate regulatory standards, and

protection of intellectual property

rights (6). Concerns over these

quality and compliance aspects have

tainted the CMO sector in emerging

markets in recent years, and given

that manufacturing is closely linked to

the pharmaceutical supply network

in major markets, any disruption at

the manufacturing end can have

a significant impact downstream

in the supply chain. Despite this

unease, respondents in the survey

acknowledged that outsourcing

to emerging markets has reduced

their costs; as a result, they are still

prepared to pursue this strategy.

Violations of manufacturing standardsRecently, Ranbaxy’s manufacturing

sites in India have been the subject

of negative media coverage (9–11).

Following an unannounced United

States FDA inspection to Ranbaxy’s

Toansa site in January 2014, the

agency reported severe failures

in complying with pharmaceutical

current GMP and prohibited the

site from producing and distributing

drugs for the US market (9, 10). The

GMP violations reported by FDA

included Toansa staff retesting raw

materials, intermediate drug products,

and finished API after those items

had failed analytical testing and

specifications, in order to generate

acceptable findings, and subsequently

not reporting or investigating these

failures (9). The agency required

Ranbaxy to hire a third-party expert

to thoroughly inspect its facility and

certify to FDA that the site and its

methods and controls were adequate

to ensure continuous compliance with

current GMP (10).

Unusually, European regulators

took a different approach to the

Ranbaxy situation. After the FDA

inspection, European regulators sent

a team of inspectors from Germany,

Ireland, and the United Kingdom,

who were also joined by inspectors

from Switzerland and Australia (10).

Following this separate assessment

of the site, EMA reported that “there

was no evidence that any medicines

on the EU market that have an API

manufactured in Toansa were of

unacceptable quality or presented a

risk to the health of patients taking

them.” EMA also stated that the

Ranbaxy site would be kept under

close supervision in collaboration

with Indian and other international

regulatory authorities (10).

The different approaches taken

by the US and European regulators

have been criticized in the media.

FDA has stated that similar quality

standards and underlying principles

of current GMPs were used by both

sets of regulators, but that differing

regulatory and legal standards

were used to address the violations

identified (10). While EU authorities

have reinstated Ranbaxy’s GMP

certificate (4), FDA declined to

overturn its ban until Ranbaxy met its

requirements (10).

At the end of 2014, European

authorities were forced to take action

against Ranbaxy over its antibiotic

product, cephalosporin, after German

regulators found that its plant in

central India was not complying with

standard manufacturing practices

(11). Specifically, the inspectors found

deficiencies concerning operation

of drug manufacturing rooms and

procedures related to sterilization of

equipment. As a result, the product

was banned from being imported into

the EU (11).

The Ranbaxy incidents are not

the only bad publicity for the Indian

pharmaceutical manufacturing sector

that are grabbing headlines (12, 13).

In 2014, a paper was published by

researchers who claimed that a

number of Indian drug manufacturers

were making substandard drugs for

global markets where there was weak

or non-existent regulatory monitoring

(14). The researchers analyzed the

quality of 1470 drug samples from

Indian manufacturers that were sold

in Africa, India, and five mid-income

non-African countries (14). Of these,

nearly 11% failed a basic assessment

of APIs, and most of the failures were

due to substandard products (7%)

that contained some correct APIs but

with the amount of the API under-

dosed (14).

In the light of these manufacturing

issues, the US appears to be taking

a stronger stand compared to the

EU authorities. Given that Indian

pharmaceutical manufacturers

supply 40% of over-the-counter and

generic prescription drugs on the US

market, FDA has been under public

pressure to take action against any

lapses in quality and safety (13). In

2014, FDA inspected 160 Indian drug

plants, which was three times as

many as in 2009 (13). Furthermore,

safety standards for Indian-

manufactured products were among

the topics discussed between FDA

Commissioner Margaret Hamburg and

Indian trade minister Anand Sharma

when they met in February 2014 (12).

Besides India, China is another

country that is often cited for

violations in pharmaceutical

manufacturing (13, 15–17). EMA

data from the EudraGMDP database

revealed that in 2013, 10 Chinese

manufacturing plants and 14

Indian plants failed to comply with

required standards (15). In October

2014, EU GMP inspectors from the

competent authority in Romania

found 26 deficiencies at the Chinese

API manufacturer, Hebei Dongfeng

Pharmaceuticals (16). The customers

of the Chinese company included

firms in Spain, Italy, the Czech

Republic, and Cyprus amongst other

countries (16). European companies

were subsequently prohibited from

using the APIs concerned (16). In

November 2014, German inspectors

identified one critical, non-major and

several minor deficiencies to EU GMP

at the Chinese API manufacturer,

Zhejiang Apeloa Kangyu Bio-

Pharmaceutical Co. Ltd (5, 17).

While much of the media focus

concerning GMP violations centres

on manufacturing sites in emerging

markets, the EudraGMDP contains

records of incidents in Europe as

well (5). In November 2014, Spanish

inspectors issued a GMP non-

compliance report for local company

Manuel Riesgo and identified 32

failings (5, 17). The company, which



Outsourcing Market

repacks APIs, was found to lack

laboratory facilities and, therefore,

could not ensure that APIs complied

with the established standards of

quality and purity (5, 17). In fact,

the inspectors found that no tests

to verify batches of the material

were ever conducted and that the

original manufacturers were never

evaluated nor approved (17). Around

the same time, Austrian authorities

reported 11 GMP violations, including

eight major ones, at the domestic

company Agepha (5). Among its

failings, the company was unable

to prove that all relevant analytical

methods had been validated by its

quality-control department and

inappropriate reference materials

had been used (5).

Improving inspectionsThe pharmaceutical industry relies

heavily on CMOs to manufacture its

products and has been alarmed at

the failings identified by regulators. It

has noted that the increasingly global

nature of manufacturing comes with

new risks. Representatives of the

industry are eager to improve the

current situation, particularly since any

manufacturing violations, even minor,

can disrupt the supply of medicines.

EFPIA, which represents

the European pharmaceutical

industry, has produced a set of

recommendations for enhanced

GMP and good distribution practices

(GDP) inspection efficiency (18). While

wholeheartedly backing regulatory

inspections to ensure patient safety,

it has expressed concerns at the

way in which the current inspection

system is set up. In particular, EFPIA

believes that international regulatory

cooperation is suboptimal and there

is frequent duplication of inspection

oversight at manufacturing sites. This

problem leads to a misallocation of

resources and often means that high-

risk areas of the supply chain may

escape detection.

EFPIA has noted that a number

of regulatory agencies have

started to conduct international

inspections of manufacturing sites,

but these inspections provide

limited additional value to those

already conducted by domestic

bodies. Furthermore, on occasions,

there have been inconsistent

or diverging interpretations of

regulations by different inspectors.

Occasionally, inspectors have asked

companies for requirements beyond

the formal written standards.

EFPIA believes that resource

management for inspections should

be optimized through avoiding

consecutive inspections at the same

manufacturing site and by using risk

principles for scheduling inspections

in areas where they may be

particularly important. Another issue

identified by EFPIA was the demand

by many regulatory agencies for

documentation to be supplied before

the inspection. The administrative

burden of this requirement has been

increasing and yet companies are not

convinced that it has added any value

to identification of problems.

At present, drug development

is moving towards more complex

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Pharmaceutical Technology Europe EuropEan outsourcing outlook 2015 s7


Outsourcing Market

biological products. The commercial

cost of manufacturing monoclonal

antibodies can amount to

approximately US$1000 per gram (19).

Pharmaceutical companies involved

in this field will, therefore, have to

carefully choose their manufacturers

because of the considerable

investment and effort made in

equipment, systems, and staff by

both parties (i.e., the CMO and its

client) to ensure high product quality

and consistency of biologics.

Given the heavy investment in

newer therapies, companies are

likely to be wary that inspections

could potentially interfere with the

manufacture of such high-value

products. Any disruption in the

manufacturing activities of these

products would not only be financially

damaging to the companies involved

but also detrimental to the patients.

While there are no GMP violations

reported in the EudraGMDP for

biologic manufacturing, a US incident

serves as an example of what can

happen. In April 2014, FDA issued

a warning letter to the Mexican

company Instituto Bioclon regarding

significant violations of GMP for the

manufacture of the biologic drug

product, Anascorp, which is the first

specific treatment for scorpion stings

(20, 21). The violations included a lack

of appropriate written procedures

designed to prevent microbiological

contamination of drug products (20,

21). Anascorp is licensed to Rare

Disease Therapeutics Inc. in the US,

but manufactured by Instituto Bioclon.

The drug’s high price of approximately

US$50,000 generated considerable

media publicity (22). The impact

of ongoing FDA action will be felt

financially by the companies involved.

In addition, patients who require the

treatment will be unhappy at the lack

of availability.

SummaryThe global CMO market is set to

grow, but the increasing reliance

on outsourcing for manufacturing

capabilities by pharmaceutical

companies has led to concerted

international regulatory efforts to

ensure manufacturer compliance

with standards. A number of these

inspections have led to necessary

action against substandard

manufacturing practices that

endanger patient safety. Although

the pharmaceutical industry

supports regulatory standards of

manufacturing, it would like to see

improvements made to the inspection

system. If inspections are carried

out in an uncoordinated manner by

different parties and according to

heterogeneous requirements, this

will undermine the effectiveness of

the system and may damage the trust

between regulators, industry, and

other stakeholders.

References1. A. Nagurney et al., “Pharmaceutical

Supply Chain Networks with

Outsourcing Under Price and Quality

Competition,” presentation at POMS

Annual Meeting (Denver, CO, May

2013).

2. A. Lowe et al., Contract Manufacturing

in Life Sciences: The Need for an

Integrated Approach, www.lode-

stonemc.com/files/pdf/WP_Contract_

Manufacturing_in_Life_Sciences.pdf,

accessed 27 Jan. 2015.

3. MHRA, good Manufacturing practice:

guidance and legislation, www.

mhra.gov.uk/Howweregulate/

Medicines/Inspectionandstandards/

GoodManufacturingPractice/

Guidanceandlegislation/index.htm,


4. EMA, “Ranbaxy, Toansa assessment

concluded: no risk to public health,”

Press Release, 5 June 2014.

5. EudraGMDP, http://eudragmdp.ema.

europa.eu/inspections/displayHome.

do, accessed 27 Jan. 2015.

6. K. Hammeke, “Trends in outsourcing

solid dose manufacturing in 2014,”

http://lifescienceleadermag.epubxp.

com/i/267232/17, accessed 27 Jan. 2015.

7. PR Newswire, “Life Sciences BPO

Market is Expected to Reach USD 596.0

Billion Globally in 2019: Transparency

Market Research,” Press Release, 3

Feb. 2014.

8. J. Miller, “CMO Exits Reduce Pharma

Manufacturing Capacity,” www.pharm-

source.com/thinking/outsourcing-

outlook/, accessed 27 Jan. 2015.

9. FDA, “FDA prohibits Ranbaxy’s Toansa,

India facility from producing and dis-

tributing drugs for the U.S. market,”

Press Release, 23 Jan. 2014.

10. Reuters, “Europeans, US differ over

safety of Ranbaxy facility,” Press

Release, 5 June 2014.

11. Reuters, “Germany bars antibiotic drug

from Ranbaxy’s central India plant,”

Press Release, 3 Dec. 2014.

12. WsJ, “US, India Clash Over Generic

Drugs,” www.wsj.com/articles/SB1000

14240527023038745045793748419140

31168, accessed 27 Jan. 2015.

13. new York times, “Medicines Made in

India Set Off Safety Worries,” Press

Release, 14 Feb. 2014.

14. R. Bate et al., “Poor Quality Drugs

and Global Trade: A Pilot Study,”

NBER Working Paper No. 20469, Sept.

2014, www.nber.org/papers/w20469,


15. Biospectrum, “India, China top 2013’s

GMP failures,” www.biospectrumasia.

com/biospectrum/news/206001/

india-china-2013-s-gmp-failures-ema,


16. GMP News, “EU GMP Inspectors

find 26 GMP Deficiencies at

Chinese API Manufacturer Hebei

Dongfeng Pharmaceuticals,”

www.gmp-compliance.org/

enews_04530_EU-GMP-Inspectors-

find-26-GMP-Deficiencies-at-Chinese-

API-Manufacturer-Hebei-Dongfeng-

Pharmaceuticals.html, accessed 27

Jan. 2015.

17. GMP News, “EMA publishes several

GMP Non Compliance Report,” www.

gmp-compliance.org/enews_04638_

EMA-publishes-several-GMP-Non-

Compliance-Reports.html, accessed 27

Jan. 2015.

18. EFPIA, Enhanced good Manufacturing

and good Distribution practices

(gMp/gDp) inspection Efficiency,

www.efpia.eu/uploads/documents/

EFPIA_Enhanced%20Inspection%20

Practice%20-%20Final_v8a_19May2014.

pdf, accessed 27 Jan. 2015.

19. H. Levine, “Challenges in the cGMP

Manufacturing of hESCs: Lessons

Learned from Monoclonal Antibodies,”

presentation at ISCT 2011 Annual

Meeting (Rotterdam, The Netherlands,

May 2011).

20. FDA, “FDA Warning Letter: Instituto

Bioclon, S.A. FDA,” Press Release, 16

Apr. 2014.

21. FDA, “FDA approves the first specific

treatment for scorpion stings,” Press

Release 3 Aug. 2011.

22. Kaiser Health News, “Treating A

Scorpion Sting: $100 in Mexico or

$12,000 in US,” http://kaiserhealth-

news.org/news/treating-a-scorpion-

sting-100-in-mexico-or-12000-in-u-s/,

accessed 27 Jan. 2015. PTE



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BioPlan Associates’ annual studies have shown that

biopharmaceutical outsourcing has been growing

steadily at 12–18%, along with the overall biopharma

industry over the past five years. But recently, their

clients are allocating a greater percentage of their

budgets for contracting out activities previously

considered core business. It’s not surprising then to see

that capacity expansions are being planned by various

contract manufacturing organizations (CMOs). Smaller

CMOs, such as Cytovance Biologics (1) and Rentschler

(2), for example, in 2014, announced investments in

capacity expansions. CMC Biologics (Copenhagen and

Bothell, WA) purchased substantial facility capacity in

Berkeley, CA to prepare for accelerating growth, while

Lonza is sharpening its focus on biotechnology (3) given

the upswing in the outsourcing market.

These trends are reflected in the data from

BioPlan’s 11th Annual Report and Survey of

Biopharmaceutical Manufacturing Capacity and

Production (4). Based on BioPlan’s estimates, CMOs’

mammalian cell culture capacity—measured by

installed bioreactor volume—grew from 474,000 L

in 2008 to 790,000 L in 2013. Estimated microbial

fermentation capacity (in terms of installed bioreactor

volume) grew more slowly during that period, but

nevertheless, increased from 354,000 L to 400,000 L.

These capacity expansions are in response to

a general trend toward greater outsourcing by

biopharmaceutical manufacturers. In the 2014 study,

50% of companies were outsourcing at least some

mammalian cell culture production, up from 43% in

2006, with 58% outsourcing at least some microbial

fermentation production, up from 42% in 2006.

Furthermore, just 3 in 10 respondents expected to keep

all of their mammalian cell culture (30%) and microbial

fermentation (31%) production in-house by 2019.

In keeping with future increases in outsourcing,

CMOs also reported planned capacity expansions.

Respondents estimated that their facilities would

increase total mammalian cell-culture production

capacity by 39% during the 2014–2019 period, with

overall microbial fermentation capacity also set for an

increase, though a more muted one (19%).

Interestingly, those projections were down from a

year earlier, when CMOs expected significantly larger

capacity expansions for mammalian cell culture and

microbial fermentation. One reason may be that

CMOs reported more idle capacity in 2014’s survey:

on average, they estimated operating at 58% of their

mammalian cell-culture production capacity and 54%

of microbial fermentation capacity.

Hiring talent is going to be a problemDespite operating at lower levels of total capacity in

2014 (of course, 100% capacity usage is neither ideal

nor likely attainable), CMOs continued to forecast

capacity expansions. Concerns about a future glut

of outsourcing capacity may not be warranted. And

even though some biomanufacturers themselves

are seeking to offer some of their excess in-house

capacity as contract manufacturers, this increased

supply does not seem to be affecting CMOs’

intentions to expand their own capacity. Rather, the

big emerging struggle among CMOs appears to be the

need to contend with staffing bottlenecks.

Capacity expansions will, of course, require staff

expansions, too—and skilled, experienced staff, at all

levels, are simply becoming increasingly hard to find.

That’s particularly the case for process development

staff, who are likely to be among the most in-demand

in years to come.

BioPlan’s 2014 study asked industry respondents

(both biotherapeutic developers and CMOs) in what

areas they will be hiring new biopharmaceutical

production during the next five years. While process

development and R&D emerged as big areas of growth

(21% share of new hires), the top segment was in

production operations, where 31% of the industry’s

new staff in biomanufacturing will be hired. This

demand for process development staff is going to

create challenges. Indeed, more than 4 in 10 (42.3%) of

respondents cited current difficulties hiring upstream

process development staff at their facilities, with

this topping the list of ‘most difficult’ positions to fill.

Downstream process development staff followed,

cited by 35.2% of respondents, with process engineers

(26.8%) also a challenging hire (see Figure 1).

Indeed, process development jobs (both upstream

and downstream) have been consistently cited

in the past five years as difficult positions to fill.

This generalized bottleneck in hiring may also

reflect the continuing adoption of new initiatives,

new technologies, and facility expansions that

require specialized staff, such as process analytical

technology (PAT) and quality by design (QbD).

Hiring bottlenecks creating industry capacity problemsThe inability to hire qualified staff is having a

significant impact on capacity usage (see Figure 2). In

fact, the industry considers it one of the factors most

likely to create capacity constraints in the future.

Some of the top factors cited by survey respondents

CMOs Plan for Capacity ExpansionsIs there enough talent to go around?

Eric Langer is president

of BioPlan Associates,

tel. +1.301.921.5979, elanger

@bioplanassociates.com.

s10 Pharmaceutical Technology Europe EuRoPEAn outSouRCing outlook 2015 PharmTech.com


Capacity ExpansionsA

ll fi

gu

res

are

co

urt

esy

of

the

au

tho

r.

as likely to create a capacity crunch

by 2019 included:

• Facility constraints (52%)

• Analytical testing and drug product

release (41%)

• Inability to hire new, experienced

technical and production staff

(33%)

• Inability to hire new, experienced

scientific staff (29%)

• Physical capacity of downstream

purification equipment (28%).

Essentially, hiring difficulties figure

to be as prominent a challenge (if not

greater) as the physical capacity of

downstream purification equipment,

which is often seen as a major culprit

when it comes to existing constraints.

Hiring is one of the few factors

measured that has steadily grown as

a concern over the past few years.

For example, the 33% of respondents

indicating potential future capacity

constraints owing to the inability to

hire technical and production staff

represents a large increase from

fewer than one-quarter (24%) feeling

that way in 2010. Additionally, the 29%

sharing that concern with regards to

scientific staff is almost double the

proportion of respondents (16%) who

felt that way in BioPlan’s 2008 study.

Clearly, this is a growing problem.

CMOs worried about hiringCMOs appear to be even more

concerned than biotherapeutic

developers about this trend in

hiring. When the respondents were

segmented into those two groups,

the inability to hire new, experienced

technical and production staff was the

second-most cited factor likely causing

future constraints for CMOs, by

43.8%. (The comparable figure among

biotherapeutic developers was 31.8%).

CMOs were also more likely to see

future capacity constraints arising from

the inability to hire new, experienced

scientific staff (37.5% vs. 27.3%), the

inability to retain experienced technical

and production staff (37.5% vs. 20%),

and the inability to retain experienced

scientific staff (25% vs. 20%).

ConclusionThe future looks bright for contract

manufacturing. Biopharmaceutical

manufacturers are outsourcing more

activities and expect to be doing so to

a greater degree in the medium-term.

Along with that, outsourcing budgets

have been on the rise in recent years,

rebounding from a recession-induced

contraction. Contract manufacturers

are working to meet that demand,

with industry players of different sizes

and in different geographies securing

investments and breaking ground

on new facility expansions. Still, it’s

important to note that there are

challenges ahead for CMOs besides

increased competition from market

entrants. Facility expansions will require

new specialized staff, and finding,

developing, and retaining the right

talent is a consistent pain point. It takes

time and significant company resources

to build up the required expertise, and

much of the hiring that currently takes

place (at least anecdotally) is the result

of poaching talent. For second-tier

CMOs looking to attract more business

and strategically partner with clients,

being able to boast top technical

expertise is a significant (and arguably

requisite) factor.

The importance of attracting that

talent is not going away—and should

only grow as CMOs raise their levels

of sophistication and lead the charge

in new technology adoption. It will be

interesting to see how they go about

attracting and retaining the necessary

talent to do so.

References

1. Cytovance Biologics, “Cytovance

Biologics Breaks Ground on GMP

Warehouse and Manufacturing

Operations Facility,” Press Release

(Oklahoma City, OK, 28 Jan. 2014).

2. Rentschler, “Rentschler Expands

Single-Use Manufacturing Capacities,”

Press Release (Laupheim, Germany, 6

June 2014).

3. C. Copley, “Lonza to focus on pharma

as benefits from outsourcing,” Reuters

(23 Jan. 2014).

4. BioPlan Associates, 11th Annual Report

and Survey of Biopharmaceutical

Manufacturing Capacity and Production

(Rockville, MD, April 2014). PTE

Process development staff, upstream

Process development staff, downstream

Process engineers

Downstream operations staff

Cell culture techniques

Technology transfer

Source: 11th Annual Report and Survey of Biopharmaceutical Manufacturing, April 2014,www.bioplanassociates.com/11th

42.3%

35.2%

26.8%

19.7%

19.7%

19.7%

Figure 1: Areas where hiring difficulties exist in biopharmaceutical operations.

Source: 11th Annual Report and Survey of Biopharmaceutical Manufacturing, April 2014,www.bioplanassociates.com/11th

Facility constraints

Inability to hire new, experiencedtechnical and production staff

Inability to hire new, experiencedscientifc staff

Physical capacity of downstreampurifcation equipment

Inability to retain experiencedscientifc staff

51.8%56.3%

31.8%43.8%

27.3%37.5%

27.3%

20.0%25.0%

Biomanufacturers

37.5%

CMOs

Figure 2: Selected factors creating future capacity constraints, biotherapeutic

developers vs. CMOs.

Pharmaceutical Technology Europe EuRoPEAn outSouRCing outlook 2015 s11


Sh

an

no

n S

ten

t/E

+/G

ett

y Im

ag

es

Outsourcing continues to be part of pharma’s business strategy.

To gain insights on current trends in outsourcing and the

implications for CMOs and CDMOs, pharmaceutical technology Europe

conducted a roundtable discussion with industry experts. Participants

included Elliott Berger, vice-president, Global Marketing and

Strategy, Catalent; Antonio Magnelli, senior vice-president, European

Commercial Operations, Patheon; Cynthia Wooge, Global Strategic

Marketing, SAFC; Frédéric Gaussens, vice-president, Global Strategy

and Business Development, SGS; and Peter Soelkner, managing

director of Vetter.

PTE: As we see more consolidation in the pharmaceutical

industry, what is the impact on contract manufacturing

and outsourcing trends? Are there any particular activities

that tend to be outsourced more than others?

Magnelli (Patheon): Every market always

moves naturally toward optimization, with the

aim of increasing competitiveness between

the main players. Every merger, consequently,

leads to natural consolidation of the business,

driven by supply-chain optimization. The CMO

market is following the same trend, moving more

toward consolidation, with the best performers

becoming full-service partners to the pharma industry, not serving

as only occasional suppliers. These partnerships not only focus on

the general capabilities of a CMO, but also on the possibility to offer

extended services to support clients from early stage to market.

Gaussens (SGS): The impact of consolidation in the pharma

industry can go both ways. For instance, on the one hand, you

could have a scenario where a larger pharmaceutical company

acquires another, and the result can be that work that was

previously outsourced is immediately internalized on the directive

of the acquiring company. Typically, this action can be justified by

the acquiring company initially needing to evaluate any particular

Moderated by

Adeline Siew, PhD,

editor of

pharmaceutical

technology Europe.

Moving with the Changing Tides of Outsourcing

capacities it may have as a result of

the consolidation. This being said,

we can point to examples where

a consolidation represented an

opportunity. In the second type of

scenario, there are instances where

SGS has been able to leverage

its existing relationship with the

acquiring company to gain immediate

credibility with the acquired company.

Over the past decade, there has

been an evolution in the kinds of

activities that are outsourced. In the

past, contract analytical outsourcing

typically consisted of more routine or

‘commodity’ kinds of services. Large

pharmaceutical companies were

reluctant to outsource high-value

services and projects that required

more method development. However,

what you find now is that more

companies are open to contracting

out high-value activities such as

cell-based assays, formulation, and

biologics characterization.

Soelkner

(Vetter):

As we have

seen with the

consolidation

in the

pharmaceutical

and biotech

industry, there has also been similar

activity in the service partner network

that supports this industry. Typically,

large pharmaceutical and biotech

companies prefer to have a small

number of carefully chosen long-term

strategic partners rather than a large

number of single contractors. This

approach helps reduce administrative

oversight, including handling and

managing efforts, while also helping

to negotiate price.

Outsourcing is often done when

either the drug or its corresponding

manufacturing process is highly

complex, or when in-house

production is not able to be

performed economically due to

the volume or special nature of the

drug. A further reason to outsource

manufacturing is the flexibility it

affords in being able to react quickly;

for example, having a partner to help

with fill and finish operations at times

of peak demand. Thus, the partners

are considered an extension of their

fill and finish network.

Industry experts share their perspectives on the evolving

outsourcing landscape and how current trends are shaping the

increasingly competitive contract manufacturing sector.



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Outsourcing Trends

Berger (Catalent): There has been

a shift that has seen the pharma

majors increasingly outsource to

a smaller number of suppliers that

possess a wide range of services,

technologies, and expertise.

These partnerships are starting

earlier in the drug development

process, sometimes in the late

discovery phase, because with more

challenging molecules, there is

increased need to help optimize the

API and formulations of new drugs,

encompass deeper engagement

including analytical and clinical

support, and last longer, through

late-stage clinical manufacturing,

scale up, and global commercial

manufacturing. Consolidation has also

resulted in increased interest from

Big Pharma in partnering on more

complex and specialized capabilities,

including drug development, instead

of just outsourcing space capacity.

Wooge (SAFC): A sizable increase

in outsourcing has been seen in

recent years, even among Big

Pharma. This trend is especially true

for APIs using specialized services

or technologies. An example in this

class are antibody drug conjugates

(ADCs), which require specialized

handling for highly active containment

and biologics processing, as well as

sophisticated analytical methodology

for their development and

manufacturing.

PTE: Outsourcing was

primarily driven by cost

reduction in the past, but

a lot has changed over the

years. What are the key drivers for

outsourcing today compared to the

past decade?

Wooge (SAFC):

The primary

drivers today

are quality and

speed to clinic for

new therapeutic

molecules. When

an innovator

company can partner with a CMO that

is highly experienced in the target

technology, efficiency in product

delivery can be gained along with

lower capital and resource usage

internally. In the case of ADC and

highly active compounds, specialized

handling and containment is required,

so these types of products are

outsourced to minimize capital outlay.

Berger (Catalent): Sponsors are

more focused on seeing solution

providers as long-term collaborators,

with whom they can have the

confidence and assurance of long-

term supplies where appropriate.

The complexity of products and

development projects is rapidly

increasing, and the industry is looking

for specialized expertise to help bring

these products to market rather than

cost-based outsourcing of routine

activities.

Large pharmaceutical companies

continue to focus on its core

capabilities in developing new

drugs and taking them to market,

and outsourcing enables them to

conserve capital and energy in this

space as opposed to driving lower

costs. In the current market, the

need to outsource to gain specialized

expertise and technology, supplied

reliably and at high quality, far

outweighs the cost factor.

Soelkner (Vetter): Today,

large pharmaceutical and biotech

companies tend to focus their efforts

on the late-stage development and

marketing activities for drugs in

special indications, such as cancer or

haemophilia drugs. They are primarily

concerned with their business

activities and will often cooperate

or merge with other companies

operating in the same area to bring

about synergies in these activities.

Because they focus on those

elements of the business, they often

outsource their fill and finish work to

specialty firms as much as possible.

In our discussions with larger

companies, it has been our

experience that price is not

necessarily the decisive factor in

choosing an outsource partner.

Rather, they are looking for a partner

that can support drug development

and manufacturing effectively and

efficiently.

Gaussens (SGS): In the past,

the relationship between the

pharmaceutical company and

the contract analytical service

provider was more transactional

and largely driven by cost. Today,

however, price alone is no longer

the main consideration. Drivers

now include strong project

management and more open, pro-

active communication. Additionally,

companies expect service providers

to have transparency with regards

to project issues that may arise, and

they expect to have a dialogue with

the service provider on resolution.

Successful service providers can then

set proper expectations with regards

to on-time delivery.

Magnelli (Patheon): Clients are

looking for a lean supply chain,

favouring service relationships

and partnerships over purely price

negotiations. The focus is now on

integrated support and partnerships

with shared mutual goals. Clients

share future pipeline opportunities,

allowing their CMO partner to grow

with them in a common direction.

Key drivers for success as a CMO

include the ability to foresee and

anticipate client needs as well as the

flexibility to adapt to expectations.

Every CMO has to evolve and create

an organization that is capable of

contributing to the client’s strategy,

not only guaranteeing them ‘units,’

but providing solutions that are

integrated and seamless.

PTE: As the outsourcing

landscape evolves,

how have clients’ priorities

and expectations changed?

Soelkner (Vetter): As outsourcing

projects to qualified specialists

continue to increase, so too does the

expectation for high-quality results.

Customers today expect state-of-

the-art equipment, laboratories,

and filling lines at their partners’

sites to enhance the quality of their

manufactured drug. They also expect

the highest possible flexibility in

equipment and processes. To meet

the specific needs of a product, the

service provider must be able to offer

both small- and large-scale filling

lines as well as stainless steel and

disposable equipment. The service

provider must also have the capability

to process various systems such as

bulk and presterilized glass, as well as

polymer drug-delivery systems.

Gaussens (SGS): Today, especially

with more biologics in development,

companies are looking for providers



Outsourcing Trends

that can serve as medium- to long-

term partners. The level of technical

competence is now more important,

as the types of services being

outsourced has changed. This being

said, companies typically engage the

service provider with an initial project

to demonstrate their capabilities.

Here is where project management

and an open dialogue are key in

dealing with issues and setting

client expectations. Because failures

at this stage can impact product

development, companies are more

demanding with their expectations.

Consequently, they are more apt to

abandon a service provider lacking

in competence, whether it be project

management or technology-related.

With stakes so high, companies are

not inclined to babysit a service

provide nor a project.

Magnelli (Patheon): In addition

to a lean supply chain and strategic

partnership, clients expect robust

quality and continuity. It is important

to meet increased customer demand

for integrated global solutions and

improved quality and regulatory

experiences, through building a

culture committed to reliability

and scientific excellence. On-time

delivery, simplicity, speed and quality,

are essential in demonstrating

commitment and success to a client.

Our clients seek CMOs with clear

investment strategies for future

growth that will deliver on the

promise of speed to market as well as

simplified and reliable supply chains.

Wooge (SAFC): Expectations

for outsourcing have changed from

CMOs being a low-cost provider of

large-volume APIs to that of a partner

providing a high-value, collaborative

service to expedite delivery of highly

complex new products into the clinic

and through commercialization.

There is an emphasis on technical

excellence and regulatory compliance

and knowledge, in which the CMO

can reliably provide both the product

and the necessary support for

regulatory filings.

Berger

(Catalent):

Long-term

relationships

with a smaller

number of

suppliers

require a

joint governance structure that

fosters deeper, multi-site global

relationship building. Better

communication is at the heart of a

successful long-term relationship,

and tools such as gate-review

techniques and transparent

balanced scorecards help toward

continuous improvement in

cooperation. These partnerships

also need quality agreements

that unite the two parties in a

single supply and quality chain.

Big Pharma increasingly expects

a high level of expertise, quality.

and innovation from the CDMOs

that they partner with, as their own

R&D and operational budgets are

focused on fewer priorities.

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Outsourcing Trends

PTE: How can CMOs and

CDMOs remain

competitive? And what are

the attributes of a

strategic partnership that benefits

both parties?

Berger (Catalent): CMOs and

CDMOs will need to continue to invest

in new, differentiating technologies

that Big Pharma does not possess

in-house. By collaborating early and

enabling pharmaceutical companies

to bring truly differentiated products

to market, both the payers and the

patients will ultimately benefit.

Additionally, suppliers will need

to provide customized solutions

to smaller innovators who are

increasingly pursuing more

molecules further into development

independently.

Maintaining investment in both

quality and reliability is paramount

to maintain exemplary regulatory

compliance. A key policy at Catalent,

for example, is to harmonize

and strengthen its global quality

management system and to go above

and beyond what is necessary by one

single regulatory body.

Wooge (SAFC): CMOs and

CDMOs will need to stay abreast

of the rapidly changing technical

landscape to ensure they can meet

the demands of novel products being

developed. In many cases, these

new therapeutics are complex and

require multiple components. Having

a strong supply-chain network or

strategic partnerships that enable

the end-to-end seamless delivery

of APIs and drug product will offer

a competitive advantage to allow

innovators to focus on product

development instead of logistics.

These strategic partnerships are

most valuable when the independent

companies work together as a single

entity with the client and share

similar cultures and harmonized

operational practices.

Magnelli (Patheon): CMO

and CDMOs must be efficient to

compete, but the best way to

remain competitive is to focus

on being a highly reliable partner

that provides excellent quality

and on-time delivery. Becoming

a preferred partner will, in any

case, be dependent on the ability

to create relationships aimed at

sharing company strategies. Client

pipelines are one of the main drivers

for a CMO/CDMO strategy because

they offer the possibility to preview

and foresee market needs. CMOs

must develop solutions that lead

to robust product formulations,

simplified supply chains, and take

customer needs from start to finish,

from API all the way to commercial

supply. Through these partnerships,

customers find cost-effective support

for the launch of new products,

reducing the cost and time needed to

get to market, which is a ‘win-win’ for

clients seeking fair pricing and CMOs

seeking profitability.

Soelkner (Vetter): A key success

factor for a CDMO to remain

competitive today is to focus on key

competencies. That means ‘more is

not always better.’ Rather, a contract

services company must decide which

attributes it wants to excel at and

how it wants to be perceived in the

market. For example, a CDMO might

offer a wide service portfolio, or offer

highly competitive prices. Or, it may

be perceived as one that focuses

on high quality, offering a great deal

of experience in handling complex

compounds and manufacturing

processes.

‘Win-win’ partnerships are born

when a solid working relationship

between both parties is established.

Of critical importance in the

creation of this partnership is the

understanding between both parties

of the strategy and the business

roadmap. To achieve this, good

communication among team

members and peers is necessary,

though not always easy to achieve.

Differences in corporate cultures

and business models as well as

varying levels of knowledge and

experience at all levels are just a

few of the issues that can make

communication among parties more

difficult.

Nonetheless, once a good level of

communication is reached, the basis

for both parties to benefit is created.

The sponsor company gets valuable

time and resources to concentrate

on its core competencies, and the

strategic partner is well aware of the

sponsor’s expectations.

PTE: Has the increasing

globalization of the

pharmaceutical industry

added new challenges to

outsourcing? How can these

challenges be addressed?

Gaussens (SGS):

There are plenty

of challenges in

outsourcing in

an increasingly

global pharma

industry. For

instance, the

trend over the past decades was

establishing operations in Asia. For

pharmaceutical companies, the

move made sense given the fast

growth in China and India, with the

promise of lower costs. The reality,

however, is that issues such as

regulation on the local level as well

as the expectation of equivalent

quality of service have proven to be

initial hurdles. Over the past decade,

there has been more focus on these

quality and regulatory issues given

the scrutiny of the US FDA. These

issues do not need to be dealt with

in more mature markets such as

North America or Europe.

Soelkner (Vetter): A major

factor affecting the outsourcing

business is indeed globalization.

Drugs continue to be sold on a

global scale, and therefore, any

company doing business globally

must provide solutions that

meet the different market needs

efficiently and reliably. Consider,

for example, the Asia Pacific

(APAC) region; approximately 10

years ago, the medicines produced

within this region were primarily

intended to be used only there.

Today, there is a growing increase

in activities that are designed to

enlarge the customer base for drugs

manufactured within APAC to be

distributed to countries outside of

APAC. We expect this activity to

increase in the future.

With this change in distribution

comes increased challenge for

pharmaceutical companies and their

contract manufacturers who now

face competition from outside the

region. Manufacturing companies

must adapt to differing criteria of

the recipient countries if they are



Outsourcing Trends

going to be successful. For example,

they have to make certain that

distinct quality requirements are

met for countries located inside, as

well as outside, the APAC region.

As they enter this market, contract

service providers will be faced with

these challenges and must react

accordingly.

Wooge (SAFC): Globalization

in the pharmaceutical industry

is a reality—and certainly offers

challenges, such as operating

in multiple time zones, different

cultures and languages, as well as

dealing with import/export issues

and transport. These challenges can

be overcome with strong project

management and standardized

processes to ensure all aspects

flow together. However, to be

efficient, clear and transparent

communication is a must to

understand and mitigate the risks at

each step, and proactively provide

solutions as a team.

Magnelli (Patheon): The CDMO

market is becoming increasingly

global and companies must be able

to operate in international markets.

Pharmaceutical companies are

looking for the ability to work with

more than one manufacturing site

in a CDMO’s network, maintaining

regulatory compliance and

capabilities for clients. Offering

strategic services on a global scale

not only allows CMOs to serve

local geographic markets, but also

serves clients seeking long-lasting

relationships into the future.

Berger (Catalent): We believe

that local market access as well as

access to local talent are key. Service

providers constantly have to adapt

to frequent regulatory changes

and be on top of proposed shifts in

legislations to be able to advise their

clients through the process.

PTE: In your opinion, what

is the future outlook of

outsourcing?

Gaussens (SGS): The

future of outsourcing looks quite

good. Specifically, the addressable

market (i.e., the portion of the R&D

market that can be outsourced

because there are certain activities

that can never be contracted out)

will be broader than previously.

According to a recent Frost and

Sullivan report, the penetration rate

of outsourced services is presently

between 25–30% of the addressable

market (1). Within the next decade, it

is conceivable that this number can

reach 40–50%.

Berger (Catalent): The rate of

outsourcing will only increase.

Customers’ demands are becoming

more diverse and specialized, and the

need for partnering and collaborative

innovation with experts in such

fields can only be matched through

outsourcing.

Partnering enables pharma

to focus on capabilities and

minimize investment in specialized

technologies and capacity while

getting better products to patients

faster. For smaller companies,

time is the pressure to allow for

a return on investment to be

made as soon as possible, and

they recognize they are unable to

be experts in every stage of the

development or even to manage

multiple suppliers well. Allied to

this, they need integrated expertise

in development, formulation,

technology, manufacturing, clinical,

and regulatory expertise for any

given dose form (e.g., extractables

and leachables testing in inhalation

products or intravenous bags) and

in given geographies (e.g., how

ANVISA audits compare to FDA

audits).

Magnelli (Patheon): The

near future will bring further

consolidation, and success will

depend on building a strong

global presence with end-to-end,

integrated offerings. Outsourcing,

specifically by small and mid-size

pharmaceutical companies, will

continue to increase. The decision

to outsource will be different

for big, medium, and small-sized

companies, depending on their core

strategies. Outsourcing isn’t done

just for financial reasons anymore.

Outsourcing allows customers to

find smart business solutions for

simplified and reliable supply chains.

This approach allows customers to

focus on market growth and new

product launches with strategic

partners.

Soelkner (Vetter): In the injectable

area where our company is operating,

we see that further growth is

forecast, with biologics being the

major reason behind it. This growth

represents significant opportunities

for companies operating in the

contract services sector that

support pharmaceutical and biotech

companies.

Also, the continuing erosion of

the blockbuster model combined

with the fact that many promising

new drugs come from small

biotech companies, means further

opportunity for CDMOs to help

guide these small companies and

provide support early in the drug-

development process. CDMOs

subsequently can also continue

their partnerships with large

pharmaceutical companies after an

out-licensing process is realized.

There are, however, challenges to

recognize, and a good deal of hard

work is required to overcome these

challenges. For example, there is an

ever-increasing regulatory oversight

of the contract services industry

that is necessary to enable the safe

manufacturing of drugs. This is a

factor that every company operating

in this sector must pay special

attention to if they want to succeed.

They must work hard in ensuring their

quality systems stay ahead of the

market.

Wooge (SAFC): The market for

outsourcing continues to look strong,

especially for complex technologies.

With the recent rise in quality

citations in API manufacturing sites,

especially in Asia, there will be an

even stronger emphasis on quality

and transparency in outsourced

programs. Organizations that have

earned excellent reputations as CMOs

will continue to be sought after as

valued partners.

Reference1. Frost & Sullivan, “Global

CRO Market Transformation,

Developments, Opportunities and

Future of CRO Market,” www.

reportlinker.com/p02672043/

Global-CRO-Market-Transformation-

Developments-Opportunities-and-

Future-of-CRO-Market.html, accessed

13 Feb. 2015. PTE



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Successful technology transfers require well-

established scientific strategies combined with

human acumen. Applying scientific knowledge to

practical problems is at the core of technology

transfers.

There are many reasons why a pharmaceutical

company would require a technology transfer. Some

of the main reasons include the lack of capacity and

resources, the lack of regulatory approvals at current

site, the need to secure the supply-chain network and

register an alternate/back up site, and to reduce cost

of goods sold (COGS) due to pricing pressures.

There are many complexities involved in a

technology transfer. To facilitate a successful and

seamless technology transfer, one must evaluate

the risks associated with the transfer and create a

risk-mitigation plan before the technology-transfer

process commences. Planning should take into

account any gap analysis of the equipment (not

only in the manufacturing plant, but also in quality

control); any challenges with the API or other raw

materials in terms of storage, process, and physical

characteristics; and current manufacturing practice

at the donor site compared to the receiving site, to

name a few. Table I shows the types of technology

transfers and the activities involved.

The process. Ideally, the donor and receiving site

will have their own guidelines to define the steps

of the technology transfer process. Figure 1 shows

the typical steps of a technology transfer process at

Kemwell.

The team. Apart from having well-defined

procedures and well-documented processes in

place, it is important that the right team manages

the process because the most important aspect

of a technology transfer is the knowledge that is

being transmitted back and forth between the

donor and receiving sites. An efficient technology

transfer department bridges the gap between the

two sites and helps solve any challenges that may

arise. The team streamlines the processes and

relieves much of the transfer pressure by acting as

a common medium and integrating the information

across both sites. Kemwell’s technology transfer

team, for example, includes project managers,

technical team members who have a broad range

of technical expertise, as well as subject matter

experts (SME) as and when the need arises. SMEs

could be from production, quality assurance, quality

control, R&D, procurement, or business development

departments. During the project kick-off, it is

important for this team to draw up project timelines

and set internal targets and deadlines to expedite

the execution of activities.

A crucial success factor in transferring technology

is project management. The project manager for each

product transfer should ensure that there is never a

period where there is no communication between the

sites. If hitches in the system are identified, escalated,

and resolved at the correct time, the receiving site

will secure a more robust process. Figure 2 shows

a synergistic approach for a successful technology

A.G. Damodhar is

senior manager of technical

services at Kemwell,

34th KM, Tumkur Road,

Teppada Begur,

Bangalore, 562 123, India;

Tel: +91 80 3928 5450;

Email: damodhar.ag@

kemwellpharma.com.

Technology Transfer:A Practical Science

The author discusses the complexities of a technology

transfer and presents a risk-mitigation plan that

may be implemented to facilitate the process.



It takes a unique blend of expertise

to deliver the right results

From clinical development to commercial production

At Vetter, we look at your product from every angle. And help you

find answers that make a difference in efficiency, productivity, safety,

quality, and growth. From initial process design through high-speed

fill and finish, learn how a partnership with Vetter will keep your

product moving smoothly towards success.

■ More than 35 years of experience in aseptic filling

■ Expertise with many compound classes, including biologics

■ Highly trained experts in key technical areas

■ Integrated life cycle management

■ Innovative drug delivery options

■ State-of-the-art cGMP manufacturing

■ Excellent global regulatory support

Vetter

Development Service

Vetter

Commercial Manufacturing

Vetter

Packaging Solutions

For US inquiries, please contact [email protected] ■ For Asia Pacific inquiries, please contact infoAsiaPacific@ vetter-pharma.com ■

For EU and other international inquiries, please contact [email protected]

Answers that work

www.vetter-pharma.com

To learn more visit our website and subscribe to our quarterly newsletter.


All

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uth

or.

Technology Transfer

transfer and the four factors

involved—manpower, machine,

material, and method.

Possible challenges in technology

transfer across both sites include:

• Obtaining a manufacturing facility

that meets regulatory requirements

• Identifying a pure-play CMO (no

products of its own) to ensure IP

protection of dossier documents

• Change of raw material source

• Evaluating the staff and their

knowledge at the receiving site

• Transfer of old established

products, where limited dossier

information is available

• Change in overall processing

timelines if there is a change in

equipment

• Inadequate documents from donor

site

• Maintaining equivalent

environmental conditions at

both sites (e.g., environmental

conditions in Europe are extremely

different compared to India)

• Equipment challenges due to of

different operating principles (e.g.,

process change from tray dryer to

fluid bed processor)

• Technical competency to tweak

the process from robust validation

without altering the original dossier

• Communication gap due to

language barriers (e.g., if the

dossier compiled is in a foreign

language).

Case studies The following are some examples

of the challenges that Kemwell has

resolved when receiving a transfer

from various global sites.

Table I: Types of technology transfers.

Type of tech transfer Activities Goal

Tech transfer from R&D to

production pilot areas

Execution of submission batches.

Execution of pre-clinical or clinical

batches.

To produce successful clinical

batches and to replicate R&D

process at a commercial scale.

Tech transfer from pilot areas to

commercial area

Execution of engineering batches,

validation batches with intended or

commercial batch size.

Optimization and validation of

intended production-scale batch

size, followed by launch of the

product.

Tech transfer of commercialized

products from existing site to new

site

Execution of engineering batches,

validation batches with intended or

commercial sellable batch size.

To identify and add new alternate

manufacturing site for an approved

commercial product.

Intra-site tech transfer Execution of engineering batches

and validation batches with intended

commercial sellable batch size.

Addition of alternate area,

equipment, materials etc. in the

existing site.

Figure 1: Steps in a technology transfer process.



Technology Transfer

Implementing new processes.

The challenge was to change the

equipment operating principle for a

drying process (i.e., changing from

direct heating static solids bed to

fluid bed dryer because the former

process had long cycle times).

The first step was to establish the

drying process parameters such as

the inlet and outlet temperatures,

critical process parameters (CPP),

fluidization, and whether generation

of fine particles due to fluidization

would lead to compression issues.

This was followed by evaluating

the drug product feasibility for

the change through detailed risk-

assessment. Scale-up batches were

executed using quality-by-design

concepts to generate limits for

the identified CPPs, followed by

generation of stability data before the

execution of the validation batches.

The impact of change on product

critical quality attributes (CQA)

was also studied. The product was

successfully transferred to Kemwell’s

Bangalore site and approved by the

concerned regulatory authorities. The

change significantly improved the

overall efficiency and robustness of

the product.

Increased impurities during

transfer. An existing commercialized

product had increased impurities

in the commercial batches. Upon

in-depth investigation, it was found

that the root cause of the issue

was the preparation of the drug

solution. Kemwell developed an

in-house equipment to overcome the

issue. SMEs from all departments

contributed to resolve this issue,

demonstrating the crucial role played

by SMEs in a technology transfer

team. The new process was made

more robust without altering the

original dossier.

Change in API. A client used a

specific pulverized grade of an API

that was not available at Kemwell’s

manufacturing site in India. A

scale-up of the batch was proposed

to understand the impact of API

micronization on the dissolution

parameters of the drug product

based on the solubility of the API.

An un-micronized API was used for

the trial batch and all critical test

parameters (including dissolution) were

studied and found to have no impact

on the final product. The outcome

resulted in markedly increased cost

savings for the customer.

Product-related quality issue.

The commercial manufacturing of a

certain product had to be stopped

due to some quality-related issues,

in this case, because the product

did not display uniform drug

content. Because the product was

a lifesaving drug, the problem had

to be resolved on an urgent basis

to avoid stock-outs in the market

for the customer. Kemwell and its

customer identified a joint taskforce

team and created a timeline to solve

the issue. The process was closely

monitored by both organizations.

Effective and quick communication

formed the core of this operation.

The lifesaving product reached the

patients well before any chance of a

stock-out. This example shows that

timely communication and decision

making is important for uninterrupted

product supply to market.

Change in coating process. A

tablet that formerly used a sugar

coating (which is an old manual

process) needed an enteric coating.

Kemwell used an automated coating

machine for this product. A few trial

batches were produced to finalize

the coating process parameters.

The spraying system was reworked

without impacting the equipment

qualification status. Optimization

batches were followed by validation

batches, all of which were successful.

The product was successfully

commercialized and 50 commercial

batches have been produced for

distribution.

ConclusionContract manufacturing of

pharmaceutical products is

significantly increasing for companies

as they focus more of their efforts

on the discovery and marketing of

newer products. Pharmaceutical

companies are constantly looking for

the right strategic partner for product

commercialization. Understanding

the science behind a successful

technology transfer will help

differentiate a CMO. Manufacturing

contracts last for decades and

hence, human attributes such as

trust, compatibility, and common

shared goals between CMOs and

pharmaceutical companies form

the core of a successful working

relationship. PTE

Figure 2: A synergetic approach to the following 4M factors will help facilitate a successful technology transfer.



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The correct choice of a contract development manufacturing

organization (CDMO) involves detailed analysis of the options

available. This type of analysis requires financial resources and time.

The first aspect to consider is the project you are going to outsource,

which determines the type of CDMO and whether to choose a

transactional, tactical, or strategic CDMO. So what´s the difference

between one and the other?

A transactional partner is an indirect partner. This type of

transaction-based relationship provides little loyalty between both

parties. As soon as the transaction is no longer attractive, the

contracting organization moves on to another supplier or vendor.

A tactical partner is one that has some common business interest,

but different expectations. This kind of relationship can evolve to a

more strategic alliance when mutual success and trust come into play.

A strategic partner is a long-term business relationship where

both parties expect to grow together with similar expectations

about products and markets. Both parties are involved in the global

management of the product lifecycle. Risks and milestones are shared

and business objectives must be aligned. A global, full-service CDMO

can identify potential opportunities lying in the sponsor products and

suggest some innovative solutions. A limited number of sponsor–

CDMO relationships, however, are able to progress to strong strategic

alliances.

What to look for in a strategic partner?There are some key points to consider in guaranteeing a successful

strategic partnership:

• In a strategic alliance, both partners should obtain greater benefits

than they would from working alone, because the objectives of both

parties are aligned. Sharing certain resources can result in saving

time and investments, especially for smaller companies that do

not have the capital to build new equipment or new manufacturing

lines.

• There is a balanced expectation from both sides; this case is

especially relevant when the sponsor and CDMO have different

sizes. A relationship between a small CDMO and a large

pharmaceutical company can be extremely successful if based on

mutual trust and common objectives.

Marga Viñes is

senior product manager,

Contract Manufacturing,

Grifols International S.A.,

Avinguda de la Generalitat,

152–158, Parque de

negocios Can Sant Joan,

08174 Sant Cugat del Vallès,

Barcelona, Spain,

tel: (34) 935710500,

[email protected].

• The amount of time invested

in finding the right partner can

be rather long and it comes

with experience. The process

involves an accurate evaluation,

understanding of the objectives,

aligning different cultures,

and performing audits, which

all involve time and consume

resources. For this reason, it is

crucial to define exactly the type

of relationship you are expecting

from your CDMO to minimize risks

and obtain maximum efficiency.

The best recommendation would

be to start with companies

you already know. While this

approach could save time, it is

also important to ensure that

the current partner can offer the

services you need for the new

project. For those without any

prior experience with a CDMO,

a short visit to the contract

manufacturer is mandatory.

Looking at the facilities and

equipment, as well as talking

to the people at the potential

CDMO, will give you an idea of

the CDMO’s capabilities. These

first impressions provide more

information than you can imagine.

Less tangible factors to consider in CDMO selectionDon’t think of your product as merely

an item; behind each product, there

is a patient, and it is important not to

forget this aspect.

Both the manufacturer and sponsor

are responsible for product quality,

from the early stages to the final step

of the process. The manufacturing

company, however, holds the ultimate

responsibility. A valuable attribute for

any CDMO is, therefore, its integrity.

Product quality is considered

the most crucial success factor

for pharmaceutical contract

manufacturing in injectable products,

and quality remains the greatest

challenge when the sponsor works

with a CDMO.

Alignment of top management

between sponsor and CDMO

is another factor to take into

consideration. Creating synergies

between both parties requires more

than an objective and a strategy.

It involves optimal coordination

Sterile Solutions: How to Choose the Right CDMO?How do you know if you have chosen the right CDMO?

Do you just wait to have the answer when your product is out on the market?



Sterile Solutions

between teams and a global

framework to provide the best

solution for needs and process

requirements.

The responsiveness of the CDMO

should also be taken into account.

Throughout the project, the sponsor

and the CDMO will deal with

unexpected events that can disrupt

the schedule of the project. During

the development phase and earliest

stages particularly, the chance of

problems arising is greater. Therefore,

a fast and effective decision-making

process is an important asset to keep

the project moving. As a sponsor,

you are contracting a service but

you should let your CDMO suggest

improvements related with the

process, methods, and product.

Another factor to consider is the

CDMO´s attitude when faced with a

risk. Does the CDMO adopt a positive

attitude? Or does the CDMO refuse

to assume any risks due to a lack

of knowledge? Take time to answer

these questions in depth because

it will help to determine if this

company is the right CDMO for your

project.

Many reports show communication

as the top challenge of the sponsor-

contract service, especially if both

partners have different cultures.

Communication must be team-based

with individuals that are capable of

building winning relationships based

on honesty. Good communication

can help a project to move along

quickly, but poor communication can

lead to delaying the launch and even

affect the availability of the product

on the market. Both parties must

share all the information because

a lack of transparency will hinder

the progress of the project. Sharing,

even if it means sharing mistakes,

can streamline the next steps. For a

CDMO, It is acceptable if a project is

not awarded to your facility due to

technical reasons; however, don’t let

poor communication be the reason

for losing a project.

Four attributes to consider when choosing a CDMO—tenacity, credibility, flexibility, and simplicityTenacity. Be open to new challenges

even if it means making some

mistakes; this attitude will convert

the CDMO company into a more

competitive organization.

Credibility. While it is often easy to

talk about how well a CDMO works,

it is much better to show the results.

The best promotional campaign for

a CDMO is not an advertisement; the

best campaign is what customers tell

you.

Flexibility. The CDMO should be

flexible enough to adapt to sponsor

requirements but maintain its own

identity without losing the values of

the company.

Simplicity. A project can have

different approaches and points of

view but the main goal is always the

same (i.e., to try and make the job

as simple as possible and to be fully

committed).

Complexity of sterile manufacturing and outsourcing trendsInjectable dose formulations have

experienced strong growth despite

the dominance of solid-dose

formulations. The current trend is

to work with CDMOs that offer full

service capabilities from formulation

to commercial production. This trend

is expected to continue in the next

few years, driven by the following key

factors and requirements:

• Highly sterile and aseptic

manufacturing conditions. Access

to technology and equipment

requires high levels of investment.

• Parenteral manufacturing requires

a high level of automation to

minimize human interaction

with the product and avoid

contamination risks, as well as to

detect the presence of particles

using automatic controlling

processes.

• Skilled and experienced personnel

• Pharma and biotech companies

are switching to prefilled syringes

for existing and new products,

and also to ready-to-use (RTU)

containers to minimize potential

risks of contamination, which

is a result of less manipulation.

The RTU formulas are a top

market trend in the lifecycle

management to add value to a

product that has been on the

market for a long time.

The emerging markets are more

favourable to outsourcing solid

dosage forms than injectable

products that involve a more

challenging formulation, a complex

manufacturing process, and high

quality assurance requirements.

Lifecycle management for injectable productsA viable product lifecycle

management strategy is a key

tool that can help injectable drug

companies stay competitive in the

marketplace. One of the current

trends in the injectable field is to

move from a vial (concentrated) to

a pre-mixed solution (ready-to-use

formula). The advantages of a pre-

mixed solution compared to a vial

include:

• Less manipulation of the

container, which consequently

minimizes contamination and

medical errors

• Increased patient safety as a result

of minimizing the risk of receiving

an incorrect dose

• More safety for physicians because

the use of needles for preparation

is avoided and there is less contact

with cytotoxic drugs.

Reformulations are also used to

improve efficacy or for reducing the

frequency of injection. The CDMO’s

experience and knowledge are key

factors to take into consideration

when selecting the manufacturer for

such a project.

The approach is to select a

CDMO that can offer development

and manufacturing from vial

containers to premixed solution.

This approach allows the sponsor to

establish a long-term relationship

with the CDMO and work together

as strategic partners, taking into

consideration the requirements for

manufacturing capacity, regulatory

issues, potential investments, and

launch schedules. Working with

the same CDMO means saving

time and money and being able to

rely on someone you trust. Given

that the pharmaceutical contract

manufacturing market is expected to

grow, choosing the right CDMO can

determine the future success of your

company. PTE


ES582643_PTESUPP0315_023.pgs 03.11.2015 01:40 ADV blackyellowmagenta

Guide to Conventional and Biotech Pharmaceutical Outsourcing Services

AbbVie1401 Sheridan Rd

North Chicago, IL 60064 USA

Tel: 847-938-8524

Email: [email protected]

Website: www.abbviecontractmfg.com

Business Unit Head: Keith Kentala, VP Ops Comms

Sales Contact: Michelle Calhoun

Year Founded: 2013

Number of Employees: 501+See our ad on page 5

CONTRACT SUITE OFFERINGS

Analytical services: Chemistry & stability.

API and intermediates (cGMP, small molecule)

manufacturing capabilities: High-potency or

high-containment manufacturing.

Biomanufacturing: Cell culture; Prokaryotic

fermentation; Vaccines.

Commercial manufacturing: Active

Pharmaceutical Ingredients (API) and advanced

intermediates manufacturing (cGMP, small

molecule); Active Pharmaceutical Ingredients

(API) manufacturing - (cGMP, large molecules/

biologics); Ingredient processing (milling, coating,

etc.); Injectables manufacturing; Semi-solids &

liquids manufacturing; Solid dose manufacturing;

Specialty dosage forms.

Consulting services: Project & sourcing

management services.

Development & Phase I/II Clinical Trial

Materials (CTM): Active Pharmaceutical

Ingredients (API) - large molecule/biologics; Active

Pharmaceutical Ingredients (API) - small molecule;

Injectable products development; Solid dose,

semi-solids & liquids development.

Packaging & logistics: Clinical labels; Clinical

packaging & distribution; Commercial packaging.

Aenova GroupBerger Strasse 8-10

Starnberg, 82319 Germany

Tel: +49-8151-9987-0


Website: www.aenova-group.com

Sales Contact: [email protected]

Year Founded: 2008

Number of Employees: 501+

Annual Revenues: €500 million+



Commercial manufacturing: Injectables

manufacturing; Semi-solids & liquids manufacturing;

Solid dose manufacturing; Specialty dosage forms.

Consulting services: Regulatory, validation, IT,

and QA/QC services.


Materials (CTM): Injectable products development;

Solid dose, semi-solids & liquids development.

Packaging & logistics: Clinical packaging &

distribution; Commercial packaging.

Almac Group LtdAlmac House, 20 Seagoe Industrial Estate

Craigavon, Armagh BT63 5QD United Kingdom

Tel: +44-2838-332200

Fax: +44-2838-332299


Website: www.almacgroup.com

Business Unit Heads:

Professor Paul Harkin, MD Almac Diagnostics

Dr. Stephen Barr, MD Almac Sciences

Dr. Robert Dunlop, MD Almac Clinical Services

Jim Murphy, MD Almac Clinical Technologies

Graeme McBurney, MD Almac Pharma Services

Sales Contact: [email protected]

Year Founded: 1968




Analytical services: Bioanalytical testing;

Chemistry & stability; Particle characterization;

Product characterization.


manufacturing capabilities: Amino acids and

analogs; Asymmetric synthesis or chiral chemistry;

Biocatalytsis; Chemocatalysis; High-potency or

high-containment manufacturing.

Commercial manufacturing: Active Pharmaceutical

Ingredients (API) and advanced intermediates

manufacturing (cGMP, small molecule); Active

Pharmaceutical Ingredients (API) manufacturing -

(cGMP, large molecules/biologics); Ingredient processing

(milling, coating, etc.); Solid dose manufacturing.



Ingredients (API) - small molecule; Solid dose,

semi-solids & liquids development.



Baxter BioPharma SolutionsOne Baxter Pkwy

Deerfeld, IL 60015 USA


Website: www.baxterbiopharmasolutions.com

Business Unit Head: Nelson Patterson,

VP Sls Mktg

Year Founded: 1931





Chemistry & stability; Microbiology; Particle

characterization; Product characterization.


manufacturing capabilities: Amino acids

and analogs; High-potency or high-containment

manufacturing.

Biomanufacturing: Vaccines.

Commercial manufacturing: Active Pharmaceutical

Ingredients (API) and advanced intermediates

manufacturing (cGMP, small molecule); Active

Pharmaceutical Ingredients (API) manufacturing

- (cGMP, large molecules/biologics); Injectables

manufacturing; Semi-solids & liquids manufacturing.

s24 Pharmaceutical Technology Europe EUROPEAN OUTSOURCING OUTLOOK 2015 PharmTech.com

ES582858_PTESupp0315_024_CL.pgs 03.11.2015 19:11 ADV blackyellowmagentacyan


management services; Regulatory, validation, IT,

and QA/QC services.


Materials (CTM): Injectable products

development; Semi-solids & liquids development.

Butterworth

Laboratories Ltd54-56 Waldegrave Rd

Teddington, Middlesex, TW11 8NY United Kingdom

Tel: +44 (0)20 8977-0750

Fax: +44 (0)20 8943-2624


Website: www.butterworth-labs.co.uk

Business Unit Head: Doris Butterworth, Mng Dir

Sales Contact: Daniel Morland, Mktg and

Bus Dev Mgr

Year Founded: 1974

Number of Employees: 51-100

Annual Revenues: €0-10 millionSee our ad on page 7



Catalent Pharma Solutions14 Schoolhouse Rd

Somerset, NJ 08873 USA

Tel: 732-537-6200

Fax: 732-537-6480


Website: www.catalent.com

Business Unit Head: John Chiminski

Sales Contact: Will Downie

Year Founded: 1997


Annual Revenues: €500 million+See our ad on page 28





Biomanufacturing: Cell culture.

Commercial manufacturing: Ingredient

processing (milling, coating, etc.); Injectables

manufacturing; Semi-solids & liquids

manufacturing; Solid dose manufacturing;

Specialty dosage forms.


and QA/QC services.



development; Other delivery forms (transdermal,

inhalable...); Solid dose, semi-solids & liquids

development.



Corden PharmaOtto-Hahn-Strasse

Plankstadt, 68723 Germany

Tel: +49-62-02-99-2299/800-868-8208

Fax: +49-62-02-99-2000


Website: www.cordenpharma.com

Year Founded: 2006

Annual Revenues: $251 million+See our ad on page 27




manufacturing capabilities: Acetylenic

chemistry; Acylation; Asymmetric synthesis or chiral

chemistry; Carbohydrate chemistry; High-potency

or high-containment manufacturing.

Commercial manufacturing: Active

Pharmaceutical Ingredients (API) and advanced

intermediates manufacturing (cGMP, small

molecule); Ingredient processing (milling, coating,

etc.); Injectables manufacturing; Semi-solids &

liquids manufacturing; Solid dose manufacturing.



Ingredients (API) - small molecule; Injectable

products development; Solid dose, semi-solids &

liquids development.

Eurofns Lancaster

Laboratories2425 New Holland Pike

Lancaster, PA 17601 USA

Tel: 717-656-2300

Fax: 717-656-3772


Website: www.eurofnslancasterlabs.com

Business Unit Head: Timothy Oostdyk

Sales Contact: Michael McDowell

Year Founded: 1961


Annual Revenues: $101-250 millionSee our ad on page 13





Grifols Intl, S.A.Parc Empresarial Can Sant Joan

Avinguda de la Generalitat, 152-158

Sant Cugat del Vallès, Barcelona 08174 Spain

Tel: +34-93-571-21-99

Fax: +34-93-571-0722


Website: www.partnership.grifols.com

Business Unit Head: Marga Viñes, Sr. Product Mgr

Sales Contact: Marga Viñes

Year Founded: 1940

Number of Employees: 501+See our ad on page 2



manufacturing.



development.

Pharmaceutical Technology Europe EUROPEAN OUTSOURCING OUTLOOK 2015 s25


Guide to Conventional and Biotech Pharmaceutical Outsourcing Services

Hapa AGChriesbaumstrasse 4

Volketswil, 8604 Switzerland

Tel: +41-43-399-32-00

Fax: +41-43-399-32-01


Website: www.hapa.ch

Business Unit Head: Beat Rupp, CEO

Sales Contact: Stephan Wengi

Year Founded: 1933


Annual Revenues: €50 -100 million


Packaging and Logistics: In-process printing

solutions for the packaging industry.

LucideonQueens Rd, Penkhull

Stoke-on-Trent, Stafordshire, ST4 7LQ United Kingdom

Tel: +44 (0)1782-764428

Fax: +44(0)1782-412331


Website: www.lucideon.com

Business Unit Head: Parmjit Bilan,

Pharmaceutical Bus Dev Mgr

Sales Contact: Melissa O’Brien

Year Founded: 1952





Chemistry & stability; Microbiology.


management services; Regulatory, validation, IT,

and QA/QC services.

SGS Life Science Services1 Place des Alpes

Geneva, CH 1211 Switzerland

Tel: +41-22-739-95-48

Fax: +41-22-739-98-33


Website: www.sgs.com/lifescience

Business Unit Head: Frederic Gaussens,

VP Bus Dev & Strategy

Sales Contact: Frederic Gaussens

Year Founded: 1971








and QA/QC services.

Vetter Pharma Intl GmbHEywiesenstrasse 5

Ravensburg, 88212 Germany

Tel: +49-751-3700-0

Fax: +49-751-3700-4000


Website: www.vetter-pharma.com

Business Unit Head: Oskar Gold, VP Key Acct

Mgmt & Corp Mktg

Sales Contact: Oskar Gold

Year Founded: 1950


Annual Revenues: €400 millionSee our ad on page 19






manufacturing.



development.

Packaging & logistics: Commercial packaging.

Wickham Laboratories LtdHoeford Point, Barwell Lane

Gosport, Hampshire PO13 0AU United Kingdom

Tel: +44-0-132-922-5500

Fax: +44-0-132-922-6688


Website: www.wickhamlabs.co.uk

Business Unit Head: Chris Bishop, Tech Dir

Sales Contact: Lynne Murdoch, Ops Mgr

Year Founded: 1962



Analytical services: Microbiology.


and QA/QC services.

AD INDEX

COMPANY PAGE

ABBVIE 5

BUTTERWORTH LABORATORIES 7

CATALENT PHARMA SOLUTIONS 28

CORDEN PHARMA INTL GMBH 27

EUROFINS LANCASTER LABORATORIES 13

GRIFOLS INTERNATIONAL SA 2

LUCIDEON LTD 15

SGS LIFE SCIENCE SERVICES 9

VETTER PHARMA-FERTIGUNG GMBH 19

s26 Pharmaceutical Technology Europe EUROPEAN OUTSOURCING OUTLOOK 2015 PharmTech.com


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EUROPEAN OUTSOURCING OUTLOOK 2015

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