Assessing Market Opportunities in Contract Biologics Manufacturing - Pharmaceutical Technology

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Assessing Market Opportunities in Contract Biologics Manufacturing
Strong growth in biopharmaceuticals bodes well for contract manufacturing, but the perils and the promises of pipelines remain.

Pharmaceutical Technology
Volume 33, Issue 5, pp. 56-60

Factors influencing outsourcing

In making the decision to outsource biologics manufacturing, the relationship between the CMO and drug developer is crucial. Approximately 93% of respondents in the BioPlan survey said that establishing a good working relationship is either "very important" or "important" when outsourcing biopharmaceutical manufacturing. Nearly 63% said it is "very important," and nearly 31% said it is "important" (3).

"This factor has been a major concern during the last six years, and the current high number suggests that the industry has work to do in developing effective client–vendor working relationships," says Langer. "Such soft managerial attributes are difficult to quantify, and sometimes harder to establish as business objectives. However, such long-lasting less-than-positive working climates are not conducive for anyone in the industry."

Other top considerations when outsourcing biopharmaceutical production include the following:
  • Compliance with quality standards (58.7% of survey respondents ranked this factor as "very important")
  • Protection of intellectual property (55.8% characterized this issue as "very important")
  • Sufficient capacity to meet a sponsor company's demand (52.9% said it was "very important")
  • Adherence to a schedule (52.9% classified this factor as "very important") (3).

China and India

Big Pharma strengthens its pipeline and manufacturing in biologics
Unlike the market for contract small-molecule manufacturing, the market for contract biologics manufacturing in China and India is still in its infancy. Western CMOs engaged in pharmaceutical chemical development, particularly early-stage intermediates and generic active pharmaceutical ingredients (APIs), face strong competition from suppliers in China and India and increased competition, particularly from Indian suppliers, in advanced intermediates and custom APIs (4). Findings from a recent member survey of the Society of Chemical Manufacturers and Affiliates (formerly the Synthetic Organic Chemical Manufacturers Association), the US-based trade association representing chemical custom and batch manufacturers, showed that competition from suppliers in emerging markets (i.e., India, China, Eastern Europe, and Latin America) is expected to rise. For 2009, the mean market share of suppliers from emerging markets is expected to be 30.8%, which is up from the 26.5% reported in 2008, 26.3% in 2007, and 22.2% in 2006 (5).

A different situation exists in China and India. "The market for contract biologics in both countries is growing, but the domestic regulatory, quality, and operations capabilities required for international approvals and distribution are still in relatively nascent stages," says Langer. "As such, large-scale contract manufacturing for biologics, as compared with domestic manufacturing for products such as enzymes, vaccines, and other domestically sold biosimilar products, may still be a few years off," he says.

There are more than 60 major biopharmaceutical manufacturers in China, but very few contract biologics manufacturers, according to a recent BioPlan analysis (6). One reason for this situation has been the Chinese government's reluctance to allow pharmaceutical outsourcing. China's pharmaceutical contract manufacturing industry began in 1992 after China's State Food and Drug Administration gradually lifted bans on contract manufacturing (6). "After 10-plus years of development, Chinese CMOs are now capable of providing a wide range of contract manufacturing services such as API synthesis, peptide synthesis, and recombinant production," says Langer.

However, it was only in 2006, that CMOs were provided an opportunity to work with non-domestic sponsor companies. Beginning Jan. 1, 2006, all GMP-certified (good manufacturing practices) Chinese manufacturers are legally permitted to conduct contract manufacturing for foreign companies provided the products will not be sold in China. Vaccines, blood products, and Chinese herbal products continue to be excluded from the list of drug products acceptable for contract manufacturing (6). One example of a CMO involved in contract biologics manufacturing is Autek Bio (Santa Clara, CA), which has operations in the US and China.

Unlike China, India has a more developed biologics manufacturing history (7). "There are a number of companies providing support services in India, but pure CMO services are still largely directed at support of the domestic market," says Langer.

As an example of India's progression in biopharmaceutical manufacturing, Langer points out that the country has moved from complete dependence on foreign multinationals to becoming a major supplier of vaccines, which is a important segment of India's biopharmaceutical market (8). The domestic vaccine market in India is estimated at $100 million and is growing at a rate of 10% per year (8). Langer, however, specifies that most of the major Indian companies involved in biopharmaceutical manufacturing are largely confined to traditional biotechnology areas such as vaccines and fermentation.

Patricia Van Arnum is a senior editor at Pharmaceutical Technology, 485 Route One South, Bldg F, First Floor, Iselin, NJ 08830, tel. 732.346.3072,


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