Industry Expert Q&A with Franco Negron

Q&A with Franco Negron, president, Drug Product Services at Patheon

PharmTech: What are some of the new areas of drug development being outsourced to the contract development and manufacturing organization (CDMO) industry? How are CDMOs adapting to these changes?

Negron: There has been growing demand for supply chain services, involving either a combination of drug substance and drug product or API sourcing and drug product. From our mid-size, specialty and smaller pharma company customers, we’re receiving requests for regulatory and supply chain support. We are also seeing similar demands from some large pharma companies, although some tend to view supply chain activities in drug product and drug substance as separate items.

Currently, the CDMO industry is being separated in several classes including niche players that manage one specific technology (e.g., sterile filling or HAPI manufacturing), technology players (e.g., chemical or mammalian API production), and integrated players, which offer the whole value chain. Patheon is driven to meet the needs of our clients. We created Patheon OneSource to meet the growing demands for supply chain services. We have also created an API Sourcing program to help clients simplify this portion of their supply chains including quality personnel in China to ensure that the Patheon quality standards are extended to the entire supply chain of our clients.

PharmTech: What are some of the latest trends in small-molecule API formulation?

Negron: The majority of the pipeline is considered to be complex, with drug products requiring additional formulation work for efficacious clinical results and commercialization potential. We are seeing an increase in the number of low-soluble molecules, those that require high-potent handling and combination products. The added complexity of these formulation programs is paired with increasing pressure to shorten development timelines. In addition, we see strong demand for development and manufacturing services based on single-use technology, while at the same time there is a demand for large-scale production.

PharmTech: Patheon is already involved in multiple international markets. Is the company looking to enter any new markets in 2016?

Negron: While we currently have an on-the-ground presence in more than 20 countries and our products reach 70 countries, we do stay on the lookout for both organic and inorganic growth opportunities. We’re focused on Europe and the United States, which together offer enough growth potential.

We also anticipate continued growth in Asia, especially from a supply perspective. Our short-term focus is on collaborations with raw material, intermediates, and API suppliers with a stellar reputation and track record. In fact, we have our own quality personnel in China since quality at source is a top priority for us. We also continue to evaluate the option for manufacturing and development centers in emerging markets.

PharmTech: The CDMO industry has seen increased consolidation in the past few years. How do you think this will impact the industry in the future?

Negron: The CDMO industry has certainly experienced significant consolidation in recent years.  We believe this will have a positive impact on the future of the industry, as there are several benefits for pharmaceutical companies that stem from outsourcing partners who have achieved strategic consolidations. The increased bandwidth, capacity and capabilities, together with an expanded regional and/or global presence are a benefit to these companies, as well as improved economies of scale and a simplified supply chain. The CDMO industry currently has more than 600 players, but the wide-ranging demands from customers–including simplification of supply chains due to regulatory pressures, and quick, cost-effective and reliable manufacturing of products–will lead to fewer, but larger players being awarded a majority of the outsourcing contracts.