GEN: What is the most widely held misconception regarding working with a CMO, and how do you address this issue?
Dr. Lambalot: Perhaps the greatest misconception is that contract manufacturing simply provides access to the physical assets and resources required for the conversion of raw materials to finished product. In reality, successful partnering with a competent and experienced CMO is more about building a mutually beneficial and trusting relationship.
It should be one that provides the client with access to a wealth of process development, technology transfer, manufacturing and regulatory experience that can ensure creation of a successful regulatory filing dossier and the ability to sustain long-term compliant commercial manufacturing. We address this misconception early on in the vetting process by working to convince prospective clients that our experienced staff provides a level of process judgement and regulatory acumen that while not factored into the cost of access can very well be a determining factor in the overall success of their CMO strategy.
Mr. Downey: In my experience there continues to be a misconception that outsourcing is more expensive and it is always cheaper to do things in-house. Clients continue to find it challenging to determine their internal costs whether it be the perception of incurred overheads (labor and facilities) or complex product assembly. Often there is an assumption that client overhead rate is the same for all products irrespective of such complexities. This makes it difficult to perform true side-by-side cost comparisons. The flip side to this is when cost becomes the key driver and quality, flexibility, and CMO management are forgotten about (e.g., off-shoring to an Indian or Chinese CMO). To address this Almac builds “value” into its service offering by integrating development, clinical, and commercial requirements to save time and cost and to mitigate risk.
Dr. Ruchatz We think that the degree and magnitude of benefits a world class CMO can offer is often underestimated. We see this as a misconception because our experts help reduce costs with our services for a client company, both in up-front capital cost and also net expenses. Customers only pay for the services related to their products and not the entire cost of operating a development and manufacturing infrastructure. The high utilization in our multiproduct facilities results in cost-efficient services for our customers.
In a “total cost-to-market” view, we offer highly competitive services along the entire life cycle of a product, which basically allows our customers to avoid significant capital expenses and low running cost for their products.
Furthermore, we as a CMO help to shorten process development time lines. With our broad experience in different molecule types and our platform technologies we increase speed and flexibility to our customers as we help them select the right technology and high-expression system for their project early on. The increased speed to reach first clinical results is crucial for the overall development cost of a project.
Mr. Head: The main misperception is that the CMO can address or “fix” any technical challenges encountered without an interruption in cGMP manufacturing schedule. The CMO needs to work with its clients to educate them in misconceptions such as manufacturing costs, realistic timelines, documentation, and the time involved for process development work so that a CMO is not pushed into GMP manufacture, which results in performing process development work at scale. This will end up hurting the production runs because problems have not been solved.
Mr. Weiler: The greatest misconceptions we see are:
- Fear of IP infringement.
- Being tied to a CMO/getting taken advantage of.
- CMO pricing should be cheaper than keeping the process in-house.
In the past, there were CMOs that negotiated lower prices in exchange for partial ownership of the IP, but that model is going away. Today, CMOs sign full nondisclosure agreements. The customer almost always wants to own the process.
Regarding costs, CMOs are constantly fielding a large amount of hidden costs in technical capital and reinvestment. Even if a customer can do the work for considerably less money, it would be hard for them to compete with the time lines and expertise that a CMO can offer.
SAFC has been building on its CMO approach for over 15 years, and we ensure that our customers own the process. From having a dedicated project manager to support their projects, to having the ability to get weekly reports, there is never a moment where the customer does not have full access to what is happening.
Mr. Podesta: We believe there are two widely held misconceptions. The first is that a company may feel a sense of loss of control. With so much at stake for each program, finding the right partner is difficult. It comes down to trust in the CMO’s capabilities. It is an uncomfortable position to place trust in a second or third party with one’s creation. Thus, the misconception is that the lack of trust in the contract manufacturer will result in a negative impact to the program.
Another misconception is that CMOs defer to the biotech or pharmaceutical company for direction and support regarding specifications and validation. This can be the case when the customer has a defined approach, depth of talent, and historical reference. They may prefer to dictate the approach and method of validation.
However, we have the capability and bandwidth to develop those processes and protocols in tandem with the customer. This assumes that we fully understand the defined test and functional requirements. This can be sorted out with early and clear communication. It is a function of the partnership, the building of trust, so that we can work through these issues effectively.