Building Toolboxes through Cross-Functional Partnerships - Pharmaceutical Technology

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Building Toolboxes through Cross-Functional Partnerships
In the arena of pharmaceutical outsourcing, when speaking of partnerships, the discussion typically focuses on the relationship between a pharmaceutical/biopharmaceutical company as the sponsor company and a contract-service provider.


Pharmaceutical Technology


Sidebar 3: An emerging model: manufacturing-capacity sharing arrangements


Achieving a good return on assets through manufacturing-capacity utilization is an ongoing challenge for biopharmaceutical/pharmaceutical companies. Pharmaceutical companies need manufacturing capacity on hand to produce commercial products and also to launch new products as they come through their drug-development pipelines. The inherent uncertainty of drug development, however, makes it difficult to balance the need for timely access to manufacturing capacity with the interest of avoiding underutilizing capacity and a resulting reduction on a return on assets. One strategy taken by some companies has been to enter manufacturing capacity-sharing agreements, which allows one partner to monetize underutilized capacity and another partner to secure access to manufacturing capacity.

In December 2012, Biogen Idec and Eisai formed such a strategic alliance to strengthen the manufacturing capabilities of both companies' facilities in Research Triangle Park (RTP), North Carolina. Under the terms of the agreement, Biogen Idec will lease a portion of the Eisai facility to manufacture oral solid dose products for both companies. Eisai will provide Biogen Idec with vial-filling services for biologic therapies and packaging services for oral solid-dose products. The 10-year lease agreement gives Biogen Idec the option to purchase the Eisai oral solid-dose facility.

Approximately 50 Eisai personnel are expected to become Biogen Idec employees in early 2013, building on the company's RTP workforce, which exceeded 1000 in 2012. Eisai currently employs approximately 225 full-time employees at its RTP site. Biogen Idec and Eisai have both operated manufacturing facilities in RTP since the mid-1990s.

Merck & Co. and MedImmune, the biologics arm of AstraZeneca, also have a capacity-sharing arrangement in biologics, an arrangement the companies formed in September 2011. The relationship emerged to address underutilized capacity on behalf of MedImmune and a need for Merck to secure biologics capacity for its biologics program.

In 2007, AstraZeneca completed the acquisition of MedImmune, which became the biologics arm of AstraZeneca, incorporating the MedImmune assets, legacy AstraZeneca biologics assets, and Cambridge Antibody Technology, which AstraZeneca had acquired in 2006. A key manufacturing asset for MedImmune, which is headquartered in Gaithersburg, Maryland, is the company's large-scale monoclonal antibody (mAb) manufacturing facility in Frederick, Maryland. Prior to its acquisition by AstraZeneca in 2005, MedImmune committed to support 500 kg of production per year through the addition of two 15,000-L bioreactors, which would replace an original 2 x 2500 L plant. The additional capacity was intended to meet the mid-range product demand of MedImmune through 2013.

In acquiring MedImmune in 2007, AstraZeneca further authorized an additional 500 kg of capacity to include a total of four 15,000-L bioreactor trains at the new Frederick facility. When the MedImmune product for which the initial capacity was intended did not proceed through clinical development, MedImmune realized that existing products would not fill the site. The combination of a pipeline-delivery gap and the subsequent improvement in titers or grams-per-liter yields required an alternative solution to fill capacity (1). The companies formed a 15-year manufacturing capacity-sharing agreement in September 2011 with Merck utilizing MedImmune's Frederick, Maryland facility for Merck bulk-product manufacturing. The companies also are exploring the suitability of Merck's facilities in the production of microbial-based compounds in MedImmune's pipeline and other potential manufacturing opportunities where business strategies intersect.

Reference

1. P. Van Arnum, "Outsourcing Resources supplement to Pharm. Technol. 36 (8), s28–s32 (2012).


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