Biomanufacturing Report - Market Research

Biomanufacturing Report
June 2003
Gil Y. Roth
Contract Pharma
Will one more year do it? For the past several years, both sponsors and providers have been investing in biomanufacturing facilities, both for APIs and finishing operations. The belief was that a wave of blockbuster biologicals was soon to be approved by the FDA, and that manufacturing capacity would be scarce.
Biologic drug and vaccine approvals have been on an upward curve for years now, accelerating from seven in 1994 to 16 in 1995, reaching 35 in 2002. This year?s been relatively sparse (only five approvals in the first four months of 2003), but the FDA may have taken a significant step in jump-starting that wave of approvals. In September 2002, the agency announced that it would consolidate the responsibility for reviewing new drug products into the Center for Drug Evaluation and Research (CDER). Previously, the Center for Biologics Evaluation and Research (CBER) handled all Biologics License Applications (BLA), the bio-version of the New Drug Application (NDA).
At the time of the announcement, FDA?s deputy commissioner, Dr. Lester M. Crawford, commented, ?FDA?s drug and biological product reviews have long been the gold standard in the world. By carefully combining part of our present biologics review operation with our drug review operation, FDA will be optimally positioned to uphold that gold standard by continuing to review novel pharma products promptly and rigorously in an accountable and consistent manner.?
He also remarked, ?In addition, this consolidation will allow CBER to concentrate its scientific expertise and effort in the crucial areas of vaccines and blood safety. These are top priority items critical to our national defense and public health. Moreover, CBER will be able to concentrate its expertise on such cutting-edge biologic areas as gene therapy and tissue transplantation.?
Dr. Yemi Onakunle, manager, strategic planning for Lonza Biologics, agreed with the agency?s rationale. ?It is anticipated that folding CBER?s drug evaluation functions into CDER would result in a more streamlined and consistent regulatory review program for traditional human drugs and biologics. This is likely to result in reduced turnaround times for processing new licensing applications,? Dr. Onakunle said.
Some contract manufacturers are taking a wait-and-see approach with regard to the CBER-CDER consolidation. Said one industry figure, ?We?re hopeful that there will be no drastic changes to the process, and we believe it will have a positive impact by bringing consistency to the evaluation process. The key issue will be how they do this without increasing timelines.?
Others are pessimistic about the consolidation, particularly its early phases. ?One major impact was the loss of key CBER personnel, especially those who had been leading the center and had a wealth of knowledge regarding complex biopharmaceutical products, which are significantly different than small molecules,? said one source, who added, ?Still, we hope that this will be an opportunity for CBER and CDER to learn from each other and adopt best practices from both centers.?
Parity or Parody?
Large and small molecule drugs are converging in other ways, too. As medicinal chemist Derek Lowe points out in this month?s Lowe Down column (see pp. 24-26), R&D for biologics may have reached an ignominious point of parity with that of small molecule drugs. Currently, they face the same sort of failure rates, and the same set of pressures from shareholders, the sales department, etc.
That said, successes in bio-trials still seem to have greater cachet. Just look at the recent Phase III success for Genentech?s Avastin monoclonal antibody. The company?s stock rocketed up 50% in one day (by almost $17 per share) when Genentech released findings that the drug may extend survival in colorectal cancer patients. The next day, articles appeared predicting a new wave of biopharmaceutical investment by venture capitalists. A few months earlier, however, investors were down on Avastin after it failed Phase III trials to treat breast cancer. It?s an industry that a lot of investors want to believe in, but that just makes the downswings much more drastic than they are for other sectors.
Investors overall have grown much more cautious since the bear market began in 2000, and biotech is no exception. With the lion?s share of venture capital pulling away from smaller startups and over to companies that either have a product on the market, or have a fairly solid pipeline, how have contract biomanufacturers been affected?
Terry Novak, senior vice president, marketing, sales & business development, for DSM Pharmaceuticals, remarked, ?In the short term, the lack of VC money can obviously impinge our ability to gain new business, as many smaller biotech companies do not have the funds to proceed with all of their projects. However, in the long term I don?t see a real impact. There will always be money available for companies with a solid technology and/or product platforms, which will mean greater success in advancing the products through clinical trials and, ultimately, FDA approval. Therefore, the success rate and revenue impact for the contract biomanufacturers improves as the stronger companies survive.?
This sounds a bit Darwinian, but other biomanufacturers echo Mr. Novak?s sentiments. It may lots of fun during a bull market, when every boutique bio-company could snap its fingers and get tens of millions tossed its way, but the true health of a business is demonstrated by how it deals with tough times. Said one industry figure, ?From a bulk manufacturing, purification or fill/finish standpoint, the movement of VC has eliminated some smaller, underfunded companies, which is not a bad thing. Those who have survived the last few years are more focused, with better plans. They should be the more successful ones, and that means less risk for their contract service providers.?
Rick LaPointe, Hollister-Stier?s vice president, operations, described a lack of perspective on the part of some small biopharmas. ?There is a trend concerning clientele in the dosage delivery business, especially those having a very complex manufacturing process,? he said. ?Start-up companies do not have the capital necessary to modify a contract manufacturer?s facility to incorporate their unique processes. These companies do not understand that the contract manufacturer is not willing to add facilities for a drug product that has a low percent chance of FDA approval three to five years from initial discussions with the company. The idea that a start-up company can use a contract manufacturer to avoid all capital expenditures is not reality.?
Large Molecule = Big Money
And the capital expenditure can be a doozy. A large capacity bulk bio-manufacturing facility can run $400-500 million and take years to get validated.
The most common systems for producing biopharmaceuticals are mammalian cell culture and microbial fermentation. The former system is used to produce the more complex proteins (Mabs and growth factors), while microbes can generate less involved ones.
However, transgenics may become a dark horse in the production race. This mode of production, in which animals or plants are engineered to produce the desired protein (after purification), is seen by some as an economically advantageous method of production. Dow Plant-Based Biopharmaceuticals, a subsidiary of The Dow Chemical Co., has been developing strains of corn that can produce therapeutic proteins. The company has been able to leverage the work of Dow Agrosciences, which developed a working genome for some plants, to engineer protein expression.
Several bio-manufacturers we spoke to have also been investigating the prospects of transgenics for production of bio-drugs. Peter van Hoorn, president of the Biopharmaceutical Business Unit at Cambrex Corp., commented, ?Cambrex is involved in the downstream purification of a transgenically derived protein. Earlier this year we successfully completed a Phase III clinical supply production campaign. Though the overall market has eased somewhat, transgenics remains
of interest to Cambrex; we believe there is a future for the technology.?
Sigma-Aldrich has also worked on deriving proteins from transgenic sources.
The company has purified proteins from transgenic milk and is in the early stages of working on transgenic eggs. It?s also added capacity for purifying proteins from transgenic plants. Tom Gelineau, director, new business development, Sigma-Aldrich Fine Chemicals Division, commented, ?I see significant opportunity for isolating and purifying transgenic proteins.? He added that the ?tried and true? methods (mammalian cell culture and bacterial fermentation) will likely grow at
the 15% levels that some analysts have projected.
If transgenically derived proteins pass muster with the FDA, they?ll definitely offer an advantage over the existing modes of production, which are capital intensive, with high operating costs. ?The use of transgenic systems may offer significant benefits for very large volume protein production in the future, and it?s an area that my company will keep monitoring,? said one biomanufacturing executive. ?Still, the regulatory road map to commercialization is unclear, and this is reflected in the lack of any transgenically derived drugs on the market.?
Good businessmen hedge their bets, and the transgenics proponents are no exception. Dow, for example, also owns Dowpharma, a provider of development and manufacturing services for pharma and biopharma firms. Dowpharma resulted from the consolidation of several Dow assets and acquisitions, including Dow Contract Manufacturing Services, Dow Biopharmaceutical CMS, Chirotech Technology, Mitchell Cotts Chemicals, and Hampshire Chemical. On the biomanufacturing side, the company can produce biologics at a pair of cGMP API plants in Stony