By Kate Hammeke, Contributing Editor
Nice Insight has learned from its strategic partnering surveys that the long-term strategies of many businesses in the pharmaceutical industry for maintaining a strong drug development pipeline include integration of biopharmaceuticals.
This integration can take several different forms, from partnerships with large biopharmas (56 percent), purchase of a small biopharma company (51 percent), partnering with a small biopharma (37 percent), or simply purchasing a biopharma’s compounds (22 percent). These activities are motivated by the demonstrated profitability of biopharmaceuticals. The practice of partnering with or acquiring biopharmaceutical companies is mirrored in the results of Nice Insight’s annual survey, where the percentage of respondents whose businesses are engaged in the development of biologic-based therapeutics continues to increase — up two percentage points from 71 percent in 2012 to 73 percent in 2014.
Spend on biologics development now consumes a slightly larger portion of these businesses’ annual expenditure as well: 57 percent in 2014 as compared to 54 percent in 2012. Such expenditure continues to show promise for contract service providers both in winning outsourced biomanufacturing projects and in manufacturing biosimilars/bioequivalents for the biologics that come off patent in the coming decade. Now is a good time to start considering CMOs for these projects.
OVERALL EXCELLENCE IN CUSTOMER PERCEPTION PLAYS A STRONG ROLE IN CMO SELECTION
Interest in identifying quality suppliers for biomanufacturing services prompted the expansion of Nice Insight‘s research to include specific questions about buyers’ habits when outsourcing mammalian and microbial manufacturing, as well as their supplier preferences. According to the 2014 study, 53 percent of respondents who will outsource biomanufacturing would engage a CMO for mammalian cell culture. In reviewing the companies that were most likely to be considered for this type of project, it was clear that overall excellence in customer perception played a strong role. In fact, these companies averaged excellent ratings (between 80 and 100 percent) from respondents who outsource mammalian cell culture in four out of five categories. Quality was the single category where scores fell slightly below the excellent range (by 2 percentage points). The top companies considered for mammalian cell culture projects were GSK Contract Manufacturing, Boehringer Ingelheim, CMC Biologics, Lonza, and KBI Biopharma.
Microbial manufacturing was reported to be outsourced with greater frequency than mammalian cell culture, with nearly two-thirds of respondents who will outsource biomanufacturing reporting they would outsource microbial manufacturing (65 percent). Three of the companies that were most likely to be considered for mammalian cell culture also made the top five for microbial manufacturing: GSK Contract Manufacturing, Boehringer Ingelheim, and Lonza. Pfizer CentreSource and Althea rounded out the top five companies most likely to be considered for a microbial manufacturing project. While the highest scores among the top five companies were in reliability and regulatory, these companies averaged excellent scores in all five categories. Nice Insight also reviewed the scores
from a broader group of CMOs for both mammalian cell culture and microbial manufacturing to see where these companies received their highest scores.
The data showed that among microbial manufacturing CMOs, the companies received their best scores in Reliability and Regulatory. For mammalian cell culture CMOs, the best scores across the group were in Reliability and Innovation. It will be interesting to see from future research if CMOs increase the chances of being considered for a project if they improve on these outsourcing measures. The percentage of new drugs to market that are biologic based continues to rise — from 26 percent of new approvals in 2011 to 29 percent in 2013 — which means it’s
a good time to identify prospective outsourcing partners and begin to develop relationships. Consideration of the companies mentioned above is a good start, but doing so may end up costing more than joining forces with a smaller, lesser-known CMO. In which case, outsourcers of microbial manufacturing can start by looking for contract manufacturers with strong Reliability and Regulatory scores. Those looking to engage a CMO for mammalian cell culture should look for companies with strong Reliability and Innovation scores, or select one of the most frequently considered companies that showed excellence across four categories.
Survey Methodology: The Nice Insight Pharmaceutical and Biotechnology Survey is deployed to outsourcing-facing pharmaceutical and biotechnology executives on an annual basis. The 2013-2014 report includes responses from 2,337 participants. The survey is comprised of 240+ questions and randomly presents ~35 questions to each respondent in order to collect baseline information with respect to customer awareness and customer perceptions of the top 100+ CMOs and top 50+ CROs servicing the drug development cycle. Five levels of awareness from “I’ve never heard of them” to “I’ve worked with them” factor into the overall customer awareness score. The customer perception score is based on six drivers in outsourcing: Quality, Innovation, Regulatory, Affordability, Productivity and Reliability. In addition to measuring customer awareness and perception information on specifi c companies, the survey collects data on general outsourcing practices and preferences as well as barriers to strategic partnerships among buyers of outsourced services.