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Published by: Business Insights
Published: May. 1, 2008 - 165 Pages
Table of Contents
- Contract Manufacturing Strategies
- Executive Summary
- The contract manufacturing market
- CMO industry analysis
- Manufacturing strategies in the biopharmaceutical industry
- Managing contract manufacturing
- India and China - emerging outsourcing markets
- Chapter 1 The contract manufacturing market
- Summary
- Introduction
- Overview of the global contract manufacturing market
- Current market drivers
- The expansion of the biopharmaceutical contract manufacturing market
- The reorganization of pharmaceutical production
- Case Study - Pharma manufacturing site close-down
- Growth in Offshoring - Asian CMOs becoming a global force
- Current market restraints
- Fewer new drug approvals
- The threat of overcapacity
- Increased competiton - low barriers to entry
- Conclusions
- Chapter 2 CMO industry analysis
- Summary
- Introduction to biopharmaceutical manufacturing
- The stages of pharmaceutical development
- Primary manufacturing
- Secondary manufacturing
- Structure of the CMO industry
- Size of contract manufacturing organizations
- Does size really matter?
- CMO business models - evolving over time
- The advent of biopharmaceutical contract manufacturing
- CMOs focusing on early drug development stages
- The emerging full-service CMO business model
- Examples of CMO service offerings
- Lonza Group Ltd.
- Patheon Inc.
- Siegfried Group
- CMO Industry Outlook
- Chapter 3 Manufacturing strategies in the biopharmaceutical industry
- Summary
- Introduction
- Strategic options for manufacturing
- Vertical integration - The business model of the past
- Drivers of vertical integration
- Benefits of vertical integration
- The deconstruction into a fragmented industry structure
- The shift towards outsourcing
- The make vs. buy decision
- Factors influencing the make vs. buy decision
- Mixed sourcing models
- The sale and leaseback model
- Examples of recent sale and leaseback deals
- The potential downsides of outsourcing
- Transaction costs of outsourcing
- Drivers of hidden costs in outsourcing
- Efficiency, effectiveness and flexibility, all in one outsourcing project?
- Outsourcing manufacturing is like buying commodities
- The need for a comprehensive contract
- Contracts do not matter
- CMOs are insurance companies
- The project is not the client’s problem anymore
- The first failure should be the last attempt
- Conclusions
- Chapter 4 Managing contract manufacturing
- Summary
- Introduction
- Key factors in selecting and managing a CMO
- Sourcing CMO partners
- Defining the goals of outsourcing
- Writing a Request for Proposal
- The site visit - a critical step
- The Selection
- Managing the CMO relationship
- Technology transfer and scale-up
- The Design of Experiments (DOE) used for the scale-up process
- Challenges of the technology transfer process
- The importance of engineering runs
- Ensuring regulatory compliance
- The definition of responsibilities
- The importance of change control in contract manufacturing
- The Annual Product Review and other ways to ensure compliance
- Due Diligence - common pitfalls and how to mitigate the risks
- Avoiding faulty contracts and contractors
- Case Study - Pharmaceutical companies caught out by Inyx collapse
- Due diligence from a CMO perspective
- Risk management in the outsourced relationship
- The business risk
- The technical risk
- The CMO Relationship - A lifecycle model
- Stage 1 - Aligning relationship strategy with long-term business needs
- Stage 2 - Employing a structured evaluation and selection process
- Stage 3 - Building working relationships
- Stage 4 - Technology transfer and scale-up
- Stage 5 - Ongoing operations
- Stage 6 - Changes over time
- Awarding preferred provider status
- Chapter 5 India and China - Emerging outsourcing markets
- Summary
- Introduction
- Contract Manufacturing in India
- Size of the Indian CMO market
- Patent situation and implications for foreign direct investment
- Challenges in current patent law
- India as a preferred offshoring destination
- The new, integrated business model of Indian CMOs
- Challenges facing the CRAMS business model
- Expansion strategies of India’s major contract manufacturing organizations
- Conclusions
- Contract manufacturing in China
- Drivers of the Chinese contract manufacturing market
- Challenges of the Chinese contract manufacturing market
- China’s regulatory framework
- Intellectual property protection
- Counterfeit drugs
- Case Study - China’s Heparin producers
- China’s major contract manufacturing organizations
- CMOs offering finished drugs services
- Biopharmaceutical contract manufacturing in China
- Conclusions
- Chapter 6 Appendix
- Bibliography
- Index
- List of Figures
- Figure 1.1: Size of the global contract manufacturing market, 2002-2011e
- Figure 1.2: Structure of the pharmaceutical API market, 2007
- Figure 1.3: Structure of the pharmaceutical API market, 2006
- Figure 1.4: Size of the contract biomanufacturing market, 2000-2008e
- Figure 1.5: Contract manufacturing providers across the service chain, India
- Figure 1.6: FDA approvals for NDAs and NBEs, 2000-2007
- Figure 1.7: Captial expenditures of top 15 pharma companies, 2004-2007
- Figure 2.8: Drug development and relevant milestones during the pharmaceutical manufacturing process
- Figure 2.9: Lonza’s life science platform
- Figure 2.10: Siegfried’s pipeline in 2006
- Figure 3.11: Change in pharmaceutical industry structure over time
- Figure 3.12: Categorization of varying degrees of integration
- Figure 3.13: Percentage of manufacturing output produced through CMOs, 2007 and 2010e
- Figure 3.14: Business objectives for moving to contract manufacturing
- Figure 3.15: Considerations influencing the make vs. buy decision
- Figure 4.16: Critical success factors for the manufacture of an early phase product
- Figure 4.17: Stages 1 - 6 of the CMO lifecycle
- Figure 4.18: Percentage of outsourcing dollars spent on preferred providers*(2007)
- Figure 4.19: How many preferred providers do you utilize?*(2007)
- Figure 5.20: Assessment of API manufacturing costs by region, 2005
- Figure 5.21: Size of India’s contract manufacturing market 2005-2010e
- Figure 5.22: Global outsourcing expenditure and segmentation of contracted services, 2005 and 2010e
- Figure 5.23: Size of China’s API Industry, 2005 and 2010e
- List of Tables
- Table 1.1: Big pharma ongoing or recently completed manufacturing projects
- Table 1.2: New entrants in the pharmaceutical CMO market
- Table 2.3: Key characteristics of biotechnological and chemical API manufacturing (figures indicative only)
- Table 2.4: Summary of services offered by contract manufacturing organizations
- Table 2.5: Structure of the CMO industry
- Table 2.6: Mammalian cell culture capacity in the biopharmaceutical industry
- Table 2.7: Comparison of in-house production vs. outsourcing
- Table 2.8: Pros and cons of the ‘one-stop shop’ concept
- Table 3.9: Challenges for the pharmaceutical industry
- Table 3.10: The benefits of outsourcing
- Table 3.11: Examples of transaction costs
- Table 3.12: Drivers of hidden costs in outsourcing
- Table 4.13: Typical steps of an outsourced project
- Table 4.14: Definition of responsibilities for main quality areas
- Table 4.15: Risk-mitigation tactics for pharmaceutical companies
- Table 5.16: Selected contract manufacturing/ research deals in India as of July 2007
- Table 5.17: Strategic options for Indian pharmaceutical companies
AbstractContract Manufacturing Strategies
Drug manufacturing now typically accounts for 25% of company costs and achieving agility in the production process has become essential for pharma companies hoping to align their supply chains with constant shifts in global product demand. In addition to offering efficiencies in cost, capacity and time-to-market, contract manufacturing organizations (CMOs) can provide innovative, state-of-the-art process and production technologies to support the rapid technical transfer of products from R&D to commercial manufacturing. However, the effective management of the CMO/sponsor relationship is critical not only in satisfying regulatory requirements amid growing concerns over quality control, but also in meeting the overall commercial aim of the project.
‘Contract Manufacturing Strategies: Market developments, technology transfer and key success factors’ is a new report published by Business Insights that explores the future of the contract manufacturing market with a detailed analysis of emerging drivers and restraints, business models and production strategies. The potential benefits and risks of contract manufacturing are assessed and the key strategies for effective CMO selection and successful relationship management are identified. This report also reviews the latest FDA contract legislation to determine the most effective measures in ensuring regulatory compliance and assesses the rapidly expanding markets of India and China to discover their growth potential and regulatory outlook.
Understand how the CMO market will develop over 2008-2013, identify emerging manufacturing strategies/regulatory issues and assess the outsourcing growth potential of India and China with this report...
Some key findings from this report...
- The global CMO market will be worth $20.5bn by the end of 2008, having expanded from $12.8bn in 2002. Steady growth in this sector is set to continue, with a projected CAGR of 10%.
- Contract Research and Manufacturing Organization (CRAMs) have emerged as key future business models, engaging in both contract research and manufacturing. These hybrids can offer molecule synthesis from the milligram to the multi-hundred-tonne scale.
- 29% of all manufacturing output is expected to be produced via third parties by 2010, as large companies continue to scale back on production and focus on core competencies. Major players including AstraZeneca, Roche, Pfizer and Schering are currently undertaking manufacturing strategy reviews to enhance profitability.
- Asia-based CMOs increased their contract service revenues by 44% over the 2006-2007 period. Low-cost competition from Asia will be a key influence on the CMO industry over the next 5-10 years.
- Biologicals manufacturing has become a focus area for CMOs. The number of new biotechnology-based drugs progressing through development far exceeds the number of conventional drugs
Top five reasons to order your copy today
- Assess future outsourcing trends and manufacturing strategies with this report’s analysis of the changing CMO industry structure, emerging business model capabilities and five year market growth forecasts.
- Discover the outsourcing potential of India and China and measure the impact of low cost manufacturing by using this report’s assessment of future growth potential, regulatory frameworks, recent patent and safety issues and a case study of Heparin producers in China.
- Identify the latest FDA contract manufacturing legislation and understand the how to ensure regulatory compliance by examining current regulatory requirements for both sponsors and contract manufacturers.
- Understand the key success factors for establishing successful CMO partnerships with this report’s detailed analysis of the multi-step sourcing process for CMOs and determine the essential criteria for CMO selection and effective relationship management.
- Evaluate the major risks and challenges of contract manufacturing projects by gaining insights into potential downsides and costs.
Key issues examined in this report...
- Importance of tech-transfer/scale-up. Effective technology transfer is a key component in the success of a contract-manufacturing project, but it is engulfed in uncertainty. Timelines and costs both vary dramatically, and together with scale-up capabilities, this constitutes a deciding factor in determining the fit between a client and a CMO.
- Ensuring regulatory compliance. The client company is deemed to be responsible for the manufacturing process, whether it be external or internal. All facilities involved in the manufacturing/testing of a drug product must adhere to the cGMPs that apply to their operations.
- Effective risk management. Although the risk of drug failure is assumed by the client company, the CMO business model is not designed to absorb high levels of risk. It is therefore critical for the client company to implement a wide array of risk-mitigation tactics.
- Offshoring to India/China. Asia continues to expand it’s outsourcing capabilities to offer high cost-savings and revenue-growth opportunities, however many CMOs in the region are still failing to demonstrate the levels of regulatory compliance expected by clients.
Your questions answered...
- How will the CMO market develop over the period 2008-11?
- What are the key factors influencing ‘buy vs. make’ decisions in biomanufacturing?
- Which are the current market drivers and constraints of the contract biomanufacturing market?
- What is the forecast global manufacturing capacity and growth rates for microbial fermentation and mammalian cell culture expression
systems over 2006-2011?
- What kind of risks and challenges are inherent in an outsourced manufacturing project?
- What are the key selection criteria and success factors for contract manufacturing organizations?
- What are the critical issues affecting technology transfer & scale-up?
- How will India and China influence the global CMO market?
- What is the long-term future of in-house manufacturing?
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