Will Delivery Technologies Deliver Profits to CMOs? - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Will Delivery Technologies Deliver Profits to CMOs?


PTSM: Pharmaceutical Technology Sourcing and Management


Contract manufacturing organizations (CMOs) are always looking for a competitive edge—something that can distinguish them from rivals and add incremental margin to their bottom lines. One of the tactics that CMOs are trying is to offer proprietary drug delivery technologies.

Drug delivery technologies are viewed by CMOs as offering several potential business advantages:

  • They constitute unique value-adding solutions for clients that competitors cannot easily imitate.
  • They generate royalty revenues over and above the usual fees for manufacturing the product.
  • They yield better manufacturingmargins by locking the client into using the CMO that controls the technology.


Jim Miller
Examples of CMOs offering proprietary delivery technologies include Cardinal Health (Somerset, NJ, http://www.cardinal.com/), which has its "Zydis" fast-dissolve, solid-dose technology and "DelPouch" and "Microsponge" topical delivery systems; Baxter Biopharma Solutions (Round Lake, IL, http://www.baxterbiopharmasolutions.com/), whose portfolio includes the "Nanoedge" technology for drug solubilization and "Promaxx" microsphere technology; and Vetter (Ravensburg, Germany, http://www.vetterpharma.com/), which has a proprietary dual-chamber prefilled syringe for lyophilized injectable drugs.

Patheon and Depomed align

The latest CMO to add the drug delivery technology arrow to its quiver is Patheon, Inc. (Mississauga, ON, Canada, http://www.patheon.com/). Patheon recently announced an alliance with Depomed, Inc. (Menlo Park, CA, http://www.depomedinc.com/) to promote Depomed's "AcuForm" technology to its clients. AcuForm is a controlled-release tablet technology that delivers drugs to the stomach and upper segments of the small intestine. It incorporates proprietary excipients and formulation approaches, but can be manufactured on conventional tableting equipment.

Depomed has two commercially approved products incorporating AcuForm: "ProQuin XR" tablets for the treatment of uncomplicated urinary tract infections and "Glumetza" for type 2 diabetes. A third product, "Gabapentin GR," is in Phase III clinical trials for the treatment of postherpetic neuralgia. Patheon is the current contract manufacturer for both approved products.

Under their agreement, Patheon will provide development and scale-up services for products incorporating the technology. Both companies will jointly review compounds before initiating work to avoid conflicts with Depomed's internal pipeline and to set development terms and license arrangements with third-party clients. Depomed and Patheon will share license fees, milestone payments, and royalties generated in deals involving the Depomed technology. The agreement further stipulates that any formulated products developed will be manufactured at a Patheon site.

The fact that Acuform is used in several marketed products removes a risk factor that Patheon has had experience with in the past. Some years back, Patheon announced an alliance with a UK company, Weston Medical Group, for a needle-free injection device for which Patheon was to provide the manufacturing services. Patheon went so far as to build the filling line at its Swindon, UK facility. That technology has gone nowhere because Weston ran into financial problems and the successor owner, Aradigm, made only limited progress with it. Aradigm recently sold the technology to a start-up company.

Delivery technology limitations. One of the drawbacks of the delivery technology strategy is that the limited applicability of any single technology restricts its potential to enhance a CMO's bottom line. The successful application of a drug delivery technology requires the confluence of multiple factors, including market factors such as competing therapies and reimbursement potential and technical factors such as compatibility of the API with the technology and pharmacokinetics of the drug when formulated. Very few candidates clear all the hurdles, so the CMO gets very few opportunities to cash in on its intellectual property.


ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
FDASIA was signed into law two years ago. Where has the most progress been made in implementation?
Reducing drug shortages
Breakthrough designations
Protecting the supply chain
Expedited reviews of drug submissions
More stakeholder involvement
Reducing drug shortages
70%
Breakthrough designations
4%
Protecting the supply chain
17%
Expedited reviews of drug submissions
2%
More stakeholder involvement
7%
View Results
Eric Langerr Outsourcing Outlook Eric LangerTargeting Different Off-Shore Destinations
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerAsymmetric Synthesis Continues to Advance
Jill Wechsler Regulatory Watch Jill Wechsler Data Integrity Key to GMP Compliance
Sean Milmo European Regulatory WatchSean MilmoExtending the Scope of Pharmacovigilance Comes at a Price
New FDA Team to Spur Modern Drug Manufacturing
From Generics to Supergenerics
CMOs and the Track-and-Trace Race: Are You Engaged Yet?
Ebola Outbreak Raises Ethical Issues
Better Comms Means a Fitter Future for Pharma, Part 2: Realizing the Benefits of Unified Communications
Source: PTSM: Pharmaceutical Technology Sourcing and Management,
Click here