The demand for outsourcing services is dependent upon the outsourcing strategies of the pharmaceutical and biotechnology companies.
The biomanufacturing directors participating in the study were asked to describe their overall biomanufacturing strategy from
clinical to commercial production by asking them what they outsource and what are the drivers behind their strategic decisions.
For the most part, biomanufacturing strategies are driven by the overall business strategy of the biotechnology companies.
For companies that primarily outsource their bioproduction, the strategies followed are either to outsource all production
or outsource production when good manufacturing practices (GMPs) are required. Biotechnology companies with GMP capacity in-house
stated that they outsource on a case-by-case basis. Those respondents that do not outsource stated that their products were
of a specialty or complexity that required technologies not easily transferred to an outside contractor.
Each company's outsourcing strategy and plan of execution is unique, so the outsourcing strategies shown in Figure 2 should
be considered as a general overview. Details of the differences in strategies may be found in select comments from the biomanufacturing
directors further described in this article.
Figure 2. (HIGHTECH BUSINESS DECISIONS)
Almost all biomanufacturing outsourced.
The following are comments from pharmaceutical or biotechnology companies that outsourced almost all of their biomanufacturing:
- "Our business model and strategy is to outsource 100% of the manufacturing."
- "We always outsource. If we had a partnership (either in-licensing or out licensing), we would use the capacity of our partner
instead of paying for outsourcing. One of the driving factors behind our decision to limit our internal manufacturing capacity
is that our capital-equipment needs are very diverse. We make everything from small molecules to large biomolecules and use
mammalian and microbial technologies. So, in order for us to manufacture in-house, we would need a very large variety of equipment."
- "We outsource 100%. It is cheaper and more efficient. Rent the facility; rent the expertise. Our business model doesn't support
bricks and mortar; we won't be building a biomanufacturing facility."
- "It is a technology-risk issue. We will always look to outsource. There are not enough biological products in our pipeline
to do production in-house."
Almost all biomanufacturing in-house
. The following are comments from pharmaceutical or biotechnology companies that keep almost all of their biomanufacturing
- "We truly are beginning to weigh all options. Should we expand microbial or go to a biopharmaceutical contract manufacturer?
Literally, just this week, we started to weigh the pluses and minuses. It is starting to gel. Within the next year, we will
make the call on what we are going to do. On the mammalian side, we have a good-sized clinical-trials production capacity.
We are bringing it up to speed in our first GMP suite ... In 2005, we were manufacturing Phase III at a CMO [contract manufacturing
- "Our outsourcing decisions are based on cost and the difficulty of making the product. Our company is focused on immunotherapy
in which we manufacture a recombinant protein."
Early clinical biomanufacturing done in-house and commercial outsourced.
The other scenario for outsourcing involved keeping early-stage or clinical biomanufacturing in-house and outsourcing commercial
production. Select comments from biomanufacturing directors using this strategy follow:
- "We manufacture [in-house] for Phase I and II; we will go elsewhere for finishing the material needed for clinical work. We
would not do our own manufacturing for commercial product. For late-stage or larger Phase II trials and Phase III, we will
go to a CMO."
- "We do all preclinical and Phase I–II production in-house. We will continue to do that until it impacts our ability to take
on new projects. We outsource Phase III and commercial production, and this will not change for the next five years."
- "Anything that requires GMP manufacturing, we outsource. We do all non-GMP production ourselves. Venture capitalists don't
want to pay fixed capital costs for manufacturing facilities. For Phase III and commercial production, we are looking for
a strategic alliance with a pharmaceutical company or CMO. We are also looking at regions outside of the United States for
more cost-effective manufacturing."
- "Our goal is to keep the machines running 24/7. If we lacked capacity, we would go outside, and we won't go beyond Phase II
internally, so we'll outsource after that. We want to keep our in-house manufacturing focused on the development phase."