The biomanufacturing industry has issues. From key drivers and hurdles, to the spectre of leachables legislation and the need for greater harmonization between suppliers, the biotech sector is experiencing a period of growing competition and increasing pressure. But, it is also a market with a future; the commercial success of more than 350 approved biologics has prompted the biotechnology industry to accelerate discoveries in further protein-based therapeutics, placing greater emphasis upon the importance of biomanufacturing. In addition, it is predicted that pharmaceutical biomanufacturing could account for more than 20% of the global contract manufacturing market in 2012. New disposable technologies, build-versus-buy decisions and opportunities to collaborate and co-operate were high on the agenda when Sartorius Stedim Biotech invited some of the industry’s elite to attend a roundtable discussion and debate the pros and cons of single-use technologies to produce cost-effective biomanufacturing services with quick turnarounds and other key drivers in the sector

Q: Which parameters and key drivers do you consider to be most important for the future success of the biopharmaceutical industry?

Dr Peter Moesta: I personally believe the most important driver of future success of the biopharmaceutical industry will be its ability to innovate. The industry’s success will be determined by our ability to discover new medicines that treat unmet medical needs or that significantly improve upon existing treatments.

Dr Daniel Stark: We need to develop further biomarkers to achieve the goal of personalized medicines. Even now, successful products do not work for every patient … and it’s crucial to identify how these drugs work in high-efficacy patients. Our colleagues in clinical development roles will play a very important part in this.

Prof. Florian Wurm: We are on the brink of a paradigm shift in large-scale drug manufacturing and selling. Currently, there are 10–15 blockbuster drugs on the market, but sales for these will decline in the face of ‘me too’ competition. The industry has to accept that there will be a large number of products addressing the same indication, which puts a heavy burden on manufacturing, and which will be one of the major cost drivers in getting new drugs to market.

Eliane Agorrody: The key driver for success is innovation. We have to improve our existing products and efficiency to reduce costs; we are in a very competitive business and the situation is becoming evermore competitive. We also have to develop new products, such as vaccines and, in addition, consider sustainability.

Dr Hermann Allgaier: The most important issues are innovation, cost of goods and affordable medicines, and we need to look at changing manufacturing strategies.

Patrick Evrard: I would like to add that the manufacture of goods needs to be efficient while on the R&D side the aim is to develop more high value products.

Q: How does the panel view the development of biosimilars? Are the current developments an opportunity or a threat, and what do you consider to be the biggest threat to your organization?

Dr Hermann Allgaier: We develop and manufacture biosimilars and biopharmaceuticals, and biosimilars are definitely an opportunity. But the entrance hurdle is high and more than 50% of the companies starting to develop biosimilars for regulated markets have already ceased their activities. Why? Because they underestimated the investment, know-how and technology that is necessary to bring these products to market. Similarly, only a few companies will overcome the problems associated with the next wave of biosimilars, the monoclonal antibodies, which will come in between 2014 and 2020.

Dr Oscar-Werner Reif: Do the Asian companies producing biosimilar drugs, especially with their recent investments, pose a threat to the biosimilar industry in Europe?

Dr Hermann Allgaier: Yes, those that do succeed in getting biosimilar products to regulated market could be a threat, and they certainly represent additional competition in the European and US markets.

Dr Guido Dietrich: In the vaccine industry, there are five major players, and although there is competition between us, we basically know what each other is doing. So, perhaps, in terms of competition, it’s not such a bad thing if new players do show up; for instance there are a couple in Korea and India that have vaccines licensed by the World Health Organization. I think that this is good for competition and, as our colleague from Sanofi mentioned, innovation will be one of our key drivers. If there is competition, there will also be innovation.

Dr Daniel Stark: The situation parallels the anti-infective market 20 years ago. Back then, we saw manufacturing capacity moving to India or China, but some players stayed in Europe and remained competitive. I strongly believe that if you focus on operational excellence and can drive costs down, then you can survive in Europe. Novartis has shown, with our Sandoz subsidiary, that this is possible in the anti-infectives market. It will be the same for biosimilars — but innovation is key.

Eliane Agorrody: One concern with the expansion of biosimilars is counterfeiting; it is a real threat.

Dr Oscar-Werner Reif: I think that trend will grow even stronger. There are examples where biosimilars have been passed by the authorities for financial reasons, and this will lead to an imbalance between the US and European standards and Asian standards, purely because it’s more cost driven.

Q: Cost of Goods (CoGs) for biopharmaceuticals has not been a prime industry focus for many years. Now, it is being increasingly addressed, but what does the market need to do to stay competitive?

Dr Hermann Allgaier: High dose and volume products such as monoclonal antibodies have ever been under cost pressure and small dose and volume products are becoming more cost sensitive through biosimilar developments. If the actual COGs level is set at 100%, we must lower CoGs into the 50–25% range during the next 5 years. The cost of goods for biopharmaceuticals must, and could, come down.

Prof. Florian Wurm: I agree to an extent. It does depend on the process being used; perfusion cultures are expensive, yet batch or extended batch processes in suspension cultures are at a sensible price level now. But will it reduce the cost of goods? I think the pricing bottlenecks are the downstream processing costs.

Dr Uwe Gottschalk: We have to look at where these costs are coming from. If we accept a price of $100–200 per gram of antibodies, then most of those costs are fixed and not variable. This is simply derived from the fact that marketing projections are never precise enough to avoid idle costs from the expensive biomanufacturing infrastructure. In other words, even if we were able to cut manufacturing costs in half, it would not solve the issue. I’m not defending the high costs in this area, they do have to come down, but even if this were feasible, the major issue is still the upfront investment. A possible way out of that problem is to shift costs from the fixed to the variable area by changing part of the infrastructure from a reusable to a disposables set up. These costs would then only occur if the plant is in operation.

Dr Daniel Stark: I fully support Dr Gottschalk. During the next few years, we have to utilize our capacity in a much more efficient way, by increasing throughput and by using disposable technologies.

Reinhard Vogt: I think that’s key and, also regarding a much better ROCE ratio, particularly during the current financial crisis, disposable technology can help.

Patrick Evrard: I generally agree with what is being said; but, whatever the fixed costs are, the variable costs are influenced by many things … for which there is no single or simple solution.

Q: What role and contribution do you expect in this respect from your main suppliers?

Dr Daniel Stark: From our perspective, the difficulty is that there are only one or two players that can supply us with, for instance, Protein A or viral filtration membranes. To change this, we have to overcome regulatory hurdles, so we have to live with it. With so few players in the market, it makes the products expensive — it’s our main issue.

Dr Peter Moesta: We have a strong focus on inventory management and expect our suppliers to deliver items on time.

Prof. Florian Wurm: There is a huge bottleneck in cell culture production for the smaller players that rely on four or five media producers to provide them with good media. This is fine for a few months, but I’ve observed this industry for many years and there is a lack of consistency. The upshot of this is that, one day, you’re standing in front of your reactor and you don’t have a product. There are a lot of smaller companies that would like to do something on a 10, 20 or 100 litre scale and they don’t have the assurance of a consistent supply with high quality media for cell culture.

Q: In the current economic climate, are your organizations still planning investments and, if so, in what regions or areas?

Eliane Agorrody: At Sanofi, we are creating a new campus; at present, our facility is too big and overcrowded to be managed efficiently so we are creating a new vaccine campus.

Prof. Florian Wurm: We are planning a new facility — up to the 1000 litre scale — exclusively based on disposable technology.

Dr Peter Moesta: Abbott is doing more to improve its cost structure and, where needed, gradually increasing capacity.

Dr Kevin Robinson: Is there a significant role for CMOs and CROs in that development? We’ve seen the traditional manufacturing industry go almost completely over to an outsourcing model.

Dr Daniel Stark: We’re trying to use our available capacity more efficiently. We have no current investments planned for manufacturing. It is important for us, however, to use the synergy of CMOs, or to mitigate any risk of capacity shortage by working with a CMO.

Dr Kevin Robinson: So, it’s the use of CMO/CROs as a risk management tool?

Dr Daniel Stark: Indeed, to avoid capacity shortages — either in development or in clinical and/or commercial manufacturing, or to reduce any investment-related risks.

Q: What other concept technologies are there to help reduce this risk and investment situation?

Dr Uwe Gottschalk: In an ideal world, with 100% capacity utilization producing antibodies on a very large scale for the foreseeable future, then of course a concrete, stainless steel building is the answer. In all other cases, disposables can be an alternative, but not — I should add — at any cost. A number of parameters such as the product requirements, the scale and the user’s business model have to be assessed to identify the best solution for any given unit operation.

Prof. Florian Wurm: I would add one more parameter — the lifespan of the drug. If this is limited, which with the prevalence of ‘me too’ alternatives, it could be, then the upfront investment in stainless steel, even at 100% for 3 or 4 years, is not ideal. I see far more opportunities for disposable technology.

Patrick Evrard: The key issue is how to dramatically reduce the level of complexity of both the building and associated operations. Where you previously needed a number of appliances, you can now use ‘plug-in-place’ disposables. As such, the operation becomes much more of an exercise in design philosophy.

Dr Peter Moesta: The issue of facilities sitting idle cannot be addressed just by switching to disposables. Whether you have an expensive stainless steel facility or an open cleanroom environment, it will still be sitting idle. To drive down costs, you have to develop a portfolio approach and go into partnership with other companies. In our Worcester (MA, USA) facility, we have a number of alliances and approximately 8–12 projects pass through the facility every year, and it does not sit idle!

Reinhard Vogt: That is a valuable point: lack of plant utilization is not simply resolved by the use of disposable technologies, but it is significantly reduced.