By Joerg Ahlgrimm, CEO, Center for Breakthrough Medicines
Following an exuberant investment period during the past several pandemic years, strong headwinds are now challenging the biotech industry. Supply chain snags, a scarcity of skilled talent for technical roles, and a skittish investor climate are severely impacting corporate valuations and are causing some retrenchment in early-stage biotechnology companies.
The promise of and demand for cell and gene therapies (CGT) has never been greater given remarkable advancements including a ten-year follow-up of one of the first patients treated with CAR-T cell therapy for chronic lymphocytic leukemia showing he remains cancer-free and the word “cure” being used to describe the treatment’s success, as well the recent approval in Europe of PTC Therapeutics’ gene therapy, Upstaza, to treat AADC deficiency. However, the complexities and financial pressures of developing and manufacturing future life-saving treatments is threatening innovation.
To counter these prevailing winds, biotech companies are increasingly forming strategic partnerships with contract development and manufacturing organizations (CDMO) to help them navigate the myriad of challenges impacting their assets:
1. Manufacturing Bottlenecks
While the highly bespoke engineering of CGTs is what makes these therapies so precise for treating genetic and rare diseases, it’s also what places tremendous demands on the manufacturing of these products. The exponential growth of CGT research, clinical trials, and commercial approvals has put increasing strains on manufacturing capacity and supplies, causing delays in production for many biotech firms and preventing new therapies from reaching patients in need. Shortages in viral vectors, a critical component used in the delivery of CGT therapies, is presenting serious obstacles to producing these treatments.
The pandemic has exacerbated the problem, causing considerable supply chain disruptions and reducing the availability of active pharmaceutical ingredients (e.g., media, reagents, vials, etc.) and other necessary raw materials. Additionally, the production of Covid-19 vaccines has been the obvious priority, further limiting manufacturing capacity for other advanced therapies.
2. Building and Staffing Challenges
Despite these production issues, the CGT industry has been expanding at a rapid pace. According to the Alliance for Regenerative Medicine (ARM), 1,320 industry-sponsored regenerative medicine and advanced therapy trials were in progress worldwide as of 2021, with an additional 1,328 trials sponsored by non-industry groups, leading to a dramatically increased demand for facilities and labor.
CGT companies that have decided to develop and manufacture products in-house are plowing millions of investment dollars into building and staffing infrastructure, exemplified by Vertex Pharmaceuticals’
planned $400 million facility expansion in the Boston Seaport. But that path is difficult and has gotten even harder over the past year. Facility requirements include the need to provide CGT innovators rapid access to GMP spaces specially designed to provide process development, plasmid and viral vector production, analytical testing and cell banking, as well as the ability to expand those operations under the same roof when scaling up is needed.
Biotech companies are also struggling to hire qualified talent for the level of specialization needed in the development and manufacturing of CGTs. Even once staff is hired, employees often require months of training with continuous follow-on course work to keep up with latest scientific advancements. These investments in staff and facilities, while several years ago may have seemed pragmatic, are currently tying up capital that could otherwise be used toward R&D assets.
3. Investment Downturn
The investment boom that pumped huge amounts of capital into the CGT industry has taken a downward turn, with the XBI (the biotech index) falling over 50% from its high in February 2021. Feeling the effects of the current stock market declines and global economic volatility, investors are pulling back from riskier and longer timeline investments which is putting particular pressure on small and medium sized biotech companies with products in early-stage development.
This contraction is causing innovator companies to readjust their strategies in order to conserve cash. Some companies like Atara Biotherapeutics have sold off their manufacturing facilities, while numerous others tracked by Fierce Biotech are cutting staff, narrowing their R&D focus and pursuing merger and acquisition opportunities.
New Manufacturing Models
To battle the aforementioned headwinds, speed to patient and cost containment are the tailwinds needed to survive this evolving and high stakes market.
While easier said than done, a recent industry surveys shows more than two thirds (62%) of survey respondents will be outsourcing viral vector manufacturing, with Plasmid DNA as the next highest outsourcing capability need at 46%. Although only one-third (38%) of respondents reported outsourcing Allogeneic Cell Therapy manufacturing, within the next five years it is expected to have the highest outsourcing increase, jumping to 47%. Clearly the outsourcing of these cell and gene manufacturing capabilities are driven by the need to lower costs and accelerate timeline success metrics, while delivering on FDA quality and safety requirements. This is a trend that is destined to continue due to what is a very complex process.
It is for this reason that any biotech company embarking on a new drug development and manufacturing journey focus on the market launch of the product from the very beginning of the project. But, as we know, there is no one size fits all, with minute differences in offerings that are specific to every different type of therapy. So, while technical expertise, quality controls and scalability are vital to the success of a project, flexibility and patient-centricity are key. That is why flexible CDMO relationships will offer clients the ability to select just process and analytical development arrangements when cash is tight, and the ability to use a module platform toolbox that can integrate some or all of the clients’ established process to save time and money. This allows innovator companies to get the data and outcomes they need for first-in-human trials before locking in manufacturing clauses.
While biotech companies frequently use numerous partnerships to pull through their development pipeline, this can add administrative burden, create knowledge gaps, and require more time and costs, as well as introduce risks. CDMOs offering true end-to-end solutions (process development, analytical development, manufacturing of plasmids, vectors and cell therapies, and testing) can provide answers to these challenges. But with anything complex in nature, the devil is in the details. The CDMO partner you select, especially within the cell and gene therapy space, must have the expertise to meet your particular objectives and provide a full suite of solutions.
As it relates to cost reductions, a CDMO partner with specialized capabilities can optimize everything from supply chain and raw materials sourcing to automating upstream and downstream processes to reduce labor overhead and material. Regulatory support and services, as well as ongoing collaboration with FDA committees and platform data submissions can further accelerate the approval process and speed to market.
Working side-by-side with biotech and life science R&D teams, the CDMO industry is poised to provide manufacturing solutions that can reduce the time, complexity, and cost to commercialize lifesaving and life-changing therapies.