Pfizer Sets Example For CMOs In M&A Strategy

By Louis Garguilo, Chief Editor, Outsourced Pharma

Certainly this isn’t the first (or fifty-first) offering of this analogy, but stay with me; the consonance continues to grow.

“Big CMOs” acquire smaller contract development and manufacturing organizations in the same way as Big Pharma has historically acquired biotechs and smaller drug developers.

Two recent cases are Catalent’s gobbling up Pharmatek, and Piramal lassoing Ash Stevens and Coldstream Laboratories before that. These are prime examples for at least this reason: The acquiring is aimed at new technologies more than capacity. Like Pharma’s own acquisitions today, bringing new technology platforms and innovation into the fold is a fundamental business strategy of supply chain partners.

All this allegory resurfaced with Pfizer’s recent asset acquisition of Bind Therapeutics. What better modern-day model for CMOs to emulate? Admittedly, I’m influenced in part by a penchant for the promise of nanotechnology, about which I’ve written in Life Science Leader magazine.

But again, stay with me here. When we further parse the Pfizer-Bind deal on the Pharma side, and for example the above mentioned Catalent-Pharmatek combo on the CMO side, we get more than allegory. These activities are instructive and part-and-parcel to vital trends in drug development and outsourcing.

A Nanoscale Example

Fortuitously, we’ve previously met members of both sides of the Catalent-Pharmatek combination. OursourcedPharma.com readers may recall the modestly titled article Unifying Theory of Everything with Tim Scott, President and founder of Pharmatek Laboratories. When last we visited with Barry Littlejohns, President, Advanced Delivery Technologies at Catalent Pharma Solutions, we were discussing another Catalent purchase aimed at new technology (antibody-drug conjugates). We’ll get their takes on this most recent combination – and the state of the provider world – a bit later.

But let’s first turn to that Pfizer acquisition, and talk with Tony Wood, Senior Vice President and Head of Medicinal Sciences. He starts us off with the salient reminder of the fundamental importance of forming relationships throughout the industry. He recalls that in 2015 Pfizer exercised its option to obtain an exclusive license to develop and commercialize an Accurin (nanotechnology) drug-candidate for the treatment of solid tumors, under a collaboration agreement that BIND and Pfizer entered in April 2013. “We’d already been collaborating with BIND and seeing the benefit of their expertise.”

Wood explains that key members of BIND are now working on Pfizer’s ACCURINS nanotechnology, which could “optimize the therapeutic potential of assets in our pipeline.” He adds: “This has particular applicability to our oncology programs because of its potential to advance tumor-selective drug delivery. Given our relationship with BIND, we were already evaluating the platform, and so welcomed the opportunity to combine capabilities, and ensure the technology was given a chance to prove itself.”

So we see promising technology brought to a greater potential by M&A that starts with building relationships for co-development and co-innovation. Certainly this is also an operable model for CMOs to drive their own innovation. We’re not suggesting CMOs become their own drug developers (although there are examples of this, too), but that they get better at enhancing and bringing forth advancing technologies, ultimately on behalf of their Pharma customers, and their patients.

Says Wood: “We believe this field of research offers promise, and continue to evaluate other tissue-targeting technologies to explore nanoparticles. But we don’t have a one-size-fits-all approach to partnering. Our strategy is decided on a case-by-case basis.” Again, considerations ripe for harvesting by the service provider side of the business. And it appears, quite well on the way to being adhered to.

Pharma Wants The Innovative Partners

I further bring the Big Pharma and Big CMO equation together by asking Wood about the importance to Pfizer today (perhaps opposed to in the past) that its partners are “innovative," and help with new solutions for complicated products and new therapeutic areas.

“Pfizer’s R&D programs strive to be at the forefront of science,” says Wood. “To do that, both we and our partners must innovative. While we encourage innovation and thoughtful risk-taking inside Pfizer, we also look for partners who have unique technologies and assets that – even in the earliest stages – have the potential to be transformative on their own, or in conjunction with our existing capabilities and programs.”

With BIND, Pfizer saw an approach to nanotechnology that could be applied to an oncology portfolio. This combining of innovations – and its application to the CMO world – can be straight-up additive, or combine internally and externally arrived at innovations to further advance a particular asset or technology. Increasingly, companies throughout the drug development industry believe they can achieve more together than alone ... and that combining through M&A and other strategic partnerships is desirable. This may not sound revolutionary; however, in our hyper-competitive and IP-driven domain, it suggests an important tipping point.

The challenges Pfizer faces in an ever increasingly competitive – and technology-driven – environment are in fact the same faced by Big CMOs. “A key challenge is we have to not only identify the ‘true gems,’ but also demonstrate that Pfizer is the best place for them to succeed,” advises Wood. “It’s not just about what’s best for you – it’s about the partner as well. By fostering the optimal environment for a given asset or technology, we provide the best path forward for patients.”

Wood continues: “Historically, it was typical for large pharma companies to simply acquire a partner, or license a particular asset or technology, and bring it in house. But that’s changed in recent years. We have an ever-increasing toolbox of investment and partnering vehicles, so we can be as flexible as possible to address the objectives of the collaboration.”

Which brings us back to those development and supply chain partners. As promised, we’ll hear more from them in our next article.