January was another very bleak month financially, but luckily it ended on a bit of a political high. On 20 January, Barak Obama's Inauguration ceremony was followed with anticipation by millions of people worldwide.

Researchers in the US have been looking forward to his arrival for a long time. Obama has indicated that he wants to make his mark in two specific areas — climate change and stem cells research — that the Bush administration had neglected or ignored for a number of years. Indeed, compared with his predecessor's anti-intellectual stance when faced with sciencerelated issues, Barak Obama is a breath of fresh air and has been hailed as being "good for science" by academics and scientists from both the US and Europe. George W. Bush, in his two mandates, didn't do much to earn their respect. First, he waited more than 1 year to appoint a scientific advisor while at the same time continuing to make decisions about climate change and other significant scientific issues. Secondly, he has left a poor legacy of alleged weakening of environmental regulations, defending corporate and political interests and influencing decision-making processes at agencies such as EPA. It is thus that academics and scientists expect Obama to initiate a good 'working relationship' by first restoring their budgets or increasing funding and then recovering some of the integrity of the government's judgment in scientific issues.

On the other side of the coin — the coin being the pharmaceutical and chemical industries — manufacturers are concerned about the potential tax rises and increased regulatory burden that, they warn, may render the industry non-competitive in the international market. With experts describing the mood in government as anti-business, manufacturers want to ensure that the President considers the industry and their need for large amounts of natural gas and petroleum.

A lot, therefore, now rests on Obama's shoulders. Reconciliating the wants and needs of academia and industry is no easy task, but he has made a great start by successfully surrounding himself with experts from a variety of disciplines (marine biology, physics, engineering, etc.) to create a team that includes two Nobel prize winners and many well-known scientists. Will this become the "science dream team"?

Articles

January was another very bleak month financially, but luckily it ended on a bit of a political high...

The dream team

Pfizer is no normal company. As recently as 2007 it was still the industry's largest player with $47.5 billion (€36.8 billion) coming in from pharma sales alone. Its rise to the top had been nothing short of spectacular; betting so confidently on Lipitor when it bought the drug's marketing partner Warner-Lambert in 2000 for a price most people at the time thought was way over the odds.

That confidence, which enabled Pfizer to trump all rival bids for Warner-Lambert by $20 billion (€15.5 billion), seems now to have evaporated as it undergoes an equally spectacular and well-documented decline. Despite spending around $7 billion (€5.4 billion) a year on R&D for years, the highest in the industry, the last major product to have emanated from its own research effort was Viagra in 1999.

Shares, which were trading at approximately $26 (€20) when CEO Jeff Kindler took over from Hank McKinnell in 2006, were worth $17.45 in January 2009 — and that's after the company had spent billions buying back stock (at prices far higher than $17.45 (€13.51) to stem the fall. Meanwhile, employee numbers, which stood at 122000 in 2003, have steadily fallen to approximately 86000 today, and the cull continues beyond the sales reps to managers and scientists.

In one sense, Pfizer's rise and fall simply exemplifies the weakness of Big Pharma's traditional business model based on big drugs, big sales forces and big profits. However, because its experience has been more extreme than its rivals, it attracts more attention. Indeed, the mere mention in a recent interview with the Financial Times that it wasn't ruling out the possibility of a major deal was enough to put the rumour mill into overdrive. Goldman Sachs even upgraded the stock from 'sell' to 'hold' regardless of what it might acquire.

A major deal is certainly possible. An analysis by EvaluatePharma back in August 2008, when Pfizer was still resisting the idea of a mega-merger, showed the company to be the only one of the global majors to have a decent cash position and no serious financing commitments.

Analysts, realizing this possibility, have responded to the prospect of a mega-merger with all the enthusiasm of gossip columnists speculating over the marriage prospects of A-list celebrities. They forget that all the evidence suggests mega-mergers tend to erode rather than create value. They forget that all the industry dynamics suggest downsizing is the order of the day. Instead they round up the companies that are possible targets and endlessly speculate about what a Pfizer–Amgen, a Pfizer–Gilead Sciences, a Pfizer–Bristol-Myers Squibb, or Pfizer–Wyeth might look like and how it might perform.

Arguably, the more interesting comments about what Pfizer should do come from the blogs, where you find vast numbers of former employees with time on their hands, insider knowledge about the company and nothing to lose by speaking their minds. Since the January announcements that Pfizer would cut up to 800 research jobs by the end of the year and that another 2400 sales reps and managers are threatened with redundancy, comments from these often disgruntled folk have also been in overdrive.

Unsurprisingly, and at the risk of oversimplifying the situation, they blame top management for decisions that have come too late (not buying Amgen when it was trading at around $40 (€31) in March 2008 rather than now when the price has soared to approximately $55 (€43), for example), for getting rid of older people with all the experience and who do all the work, for not doing nearly enough to dismantle the bureaucracy and for not recognizing the company is still too big and would be better off breaking itself down rather than bloating itself further with a large merger.

Who knows what Pfizer will do? It looks increasingly likely that it will buy itself out of trouble, if only because it can. It that sense, it is eminently normal. Who in their right minds likes to admit failure and start dismantling what once worked so very well?

Viewpoint

Pfizer is no normal company. As recently as 2007 it was still the industry's largest player with $47.5 billion (36.8 billion euro) coming in from pharma sales alone.

How will Pfizer fight failure?

There is a constant focus on stock levels and production capacity optimization. We have to plan in a dynamic environment with variable market demands. Internally, however, it takes a considerable amount of time for changes that impact on production to be implemented because of regulatory requirements and difficulties in matching regulatory data with the logistic data. How can we analyse production planning data with regulatory data efficiently and improve controllability?

A lot of communication, manual searching and analyses of the data stored in regulatory and logistics (Enterprise Resource Planning (ERP)) systems is needed before an answer can be formulated. Most companies have this problem because their IT systems are designed for a specific, single purpose and are not developed to handle the multiple aspects of the pharmaceutical business spectrum, as is the case, for example, within logistics and regulatory affairs (RA). The regulatory domain deals with documents and regulatory compliance where as logistics involves working with, for example, data tables, production planning and product ID with a focus on production efficiency domain. There is a considerable gap between logistics and regulatory data exchange and the problem is deeply rooted.

Depending on the type of change, the impact on market authorizations (MAs) can be limited to one or a few dossiers. An example of a change with such limited impact could be a packaging change, but many changes often occur on the lower hierarchical level of the product structure (i.e., on API intermediary technology level) and can potentially impact the submissions of hundreds of MAs. The scheduling of the variation submission because of the proposed change often makes the implementation procedure painfully long.

The solution is to develop an integration tool capable of analysing regulatory requirements and logistics fact data within a company. As regulatory systems are based on submission modules, chapters and documents, and the logistics system is based on material ID, it is important to create a common language or, using IT terminology, a number of common identifiers. We must then assess the differences in identifiers and determine up to what level of detail they play a role. For this, we need to answerthe following questions:					

Is the material ID integrated into an R&D process?

Can the material ID be changed independently from MA variations?

Do you use any higher level component ID that can identify the API or product component data as the MA submission identifies them? 

Is there a code in the technology documentation that is also written on batch record?

Is there a logic in the technology documentation that enables you to compare the different component stages in a long production chain independent of the chemical batches with the content of the drug master file? 

Do you directly use the quality or technology specification document identifiers during quality release? If not, what is then the logic in coding when you release a batch?

What is the process of specification transfer from RA to the system where you release the batches?

The answers to these questions should provide the information required to build a custom-specific analysing tool based on the common identifiers between RA and the logistics system.

The last step is to determine how these common identifiers can be best maintained to ensure the analysing tool remains consistent and reliable (maintenance is to be read as "correct and timely capturing all (planned) changes to the identifiers") and to mould the identifier maintenance into a set of business rules to guarantee that modifications are performed in a controlled way.

The system should now be ready to be put to work.

 is Consultant and Managing Director at Iperion BV (The Netherlands).

Ask the Expert

Ask the Expert looks at logistic problems.

Efficient logistic operations

During the past years, there has been increasing demand for fast dissolving disintegrating tablets (FDDTs), such as orally disintegrating tablets (ODTs) and sublinguals. An ODT is a solid dosage form containing medicinal substances that disintegrates rapidly in the oral cavity and disperses in the saliva without the need of water.

  Besides convenience of intake, the advantage of this dosage form is fast bioavailability of the active ingredient.

Today, several technologies are widely used for the manufacture of FDDTs. The most common ones are lyophilization, molding and direct compression. However, the number of filler/binders that can be used for FDDT formulations is limited because these bulk excipients have to fulfil special requirements, such as being soluble in water, having a pleasant (sweet) taste and mouth feel, as well as being rapidly dispersible.

A direct-compression FDDT formulation usually contains — apart from the API — a diluent, disintegrant, lubricant, flavouring, sweetener and, sometimes, colourant. The most commonly used bulk excipients for the development of this kind of formulations are sucrose, mannitol and spray-dried lactose, which have been used for years in chewable tablets because of their favourable characteristics. A popular way to enhance disintegration properties is the addition of super-disintegrants, such as croscarmellose sodium, sodium starch glycolate and crospovidone.

A new approach in this field has been made with isomalt, known as galenIQ from BENEO-Palatinit (Germany), which is used as diluent and filler/binder for direct compression. Isomalt is a polyol that has been widely used for more than 20 years as a bulk sweetener in sugar-free confectionery and nutraceutical products. A new range of pharmaceutical-grade isomalt suitable for any type of oral solid dosage form has been developed and introduced to the market.

The isomalt excipients are of nonanimal origin. They are derived from sucrose through its enzymatic transglucosilation into the disaccharide 6-O-α-D-glucopyranosyl fructose, a reducing compound, which is then hydrogenated resulting in the stereoisomer disaccharide alcohol 1-O-α-D-glucopyranosyl-D-mannitol dihydrate (1,1-GPM dihydrate) and 6-O-α-D-glucopyranosyl-D-sorbitol (1,6-GPS) in an approximate equimolecular mixture.

 Through additional processing, the ratio between the two molecular components can be varied, resulting in grades with different solubility that can be used in a number of applications from slow release to very fast disintegrating formulations. In its final state, isomalt is a white, odourless, water-soluble, crystalline powder that complies with the isomalt European Pharmacopoeia (Ph. Eur.), British Pharmacopoeia and US Pharmacopoeia National Formulary monographs.

Particularly in tableting, the direct compressible isomalt grades 720 and 721 gained a lot of interest as an alternative to traditionally used bulk excipients because of their multifunctionality as a filler and a binder. Their high-dilution potential, as well as their unique morphology, ease the development of both high and low dosage formulations. High-agglomerate stability and superior flow properties facilitate isomalt handling in the tableting process. These two grades differ in solubility producing tablet formulations with different disintegration times.

This article describes the use of pharmaceutical isomalt excipients for direct compression in the formulation of fast disintegrating tablets.

Isomalt galenIQ-720 and 721 from BENEO-Palatinit GmbH (Germany) was used as filler/binder up to 99.5% (used besides lubricant and superdisintegrant to fill to 100%); Crospovidone NF Polyplasdone XL and XL-10 from ISP Corp. (Wayne, NJ, USA) and Kollidon CL, Kollidon CL-SF and Kollidon CL-M from BASF (Germany), sodium starch glycolate ExploTab from JRS Rettenmeier (Germany) and croscarmellose sodium Nymcel ZSX-W from Noviant (The Netherlands) were used as superdisintegrants to the percentage indicated in Figure 1 and 2, as well as in Table 1. Magnesium stearate from Merck KG (Germany) was used as a lubricant at 0.5 % w/w in all formulations.

Tablets were produced on 24 stations equipped with 12 punches fully instrumented tableting press (P1200iG; FETTE, Germany) using a 12 mm concave tooling at 50 rpm and 3–11 kN compression force (Table 1). The target tablet weight was 600 mg. Tablet crushing strength was measured on a tablet hardness tester (TBH 300; ERWEKA, Germany). Tablet friability was measured on a friability tester (ERWEKA) following Ph.Eur. methodology. Tablet disintegration time was tested using a tablet disintegration tester (ERWEKA ZT 300).

Even without superdisintegrants, tablets containing both isomalt grades disintegrated quickly, within 200–500 s (Figure 1). However, as a very fast disintegration is required, the grade 721 with higher solubility produced very good disintegration results. Therefore, it was decided to use this in all subsequent tests and in the formulation of FDDTs. 

Superdisintegrants, such as croscarmellose sodium and sodium starch glycolate, which are commonly used at approximately 2–20% w/w in FDDT formulations, have been investigated in isomalt-based tablets. Preliminary tests had shown that best results were obtained when adding 2–3% w/w of a superdisintegrant to the tablet formulation.

The addition of sodium starch glycolate did not lead to shorter disintegration times. However, 2% w/w croscarmellose sodium was sufficient to decrease disintegration time of tablets with 60 N mechanical strength (Figure 2) to 30–40 s.

In a next step, different grades and concentrations of crospovidone as superdisintegrant were tested.

Best results were obtained using 3% w/w of the coarse crospovidone grade (Figure 3). Very short disintegration times of less than 20 s that were independent of tablet mechanical strength were obtained. Additions of 5% w/w crospovidone did not lead to faster disintegration.

The addition of crospovidone also had a positive effect on tablet weight variation compared to a placebo formulation. Nevertheless, total weight variation was very much within the Pharmacopeial requirements in all the produced tablets (Table 1). 

Table 1: Summary of applied compression force and tablet properties.			

The coarser grades of crospovidone led to a slight reduction in tablet mechanical strength, but still very low compression forces were required. Conversely, a positive effect of crospovidone on tablet friability was observed.

Isomalt pharmaceutical excipients possess outstanding tableting properties. Grades with different solubilities are available for producing tablets with different disintegration times. In this study, isomalt grade galenIQ 721 was found to have the best performance when combined with superdisintegrants. In placebo formulations, crospovidone produced the shortest disintegration time of <20 s, which was independent of tablet mechanical strength.

In addition to the unique combination of physico-chemical, physiological and technological properties, the pleasant taste of galenIQ makes it an ideal excipient for the formulation of mechanically strong, stable and fast disintegrating tablets.

is Area Manager Sales and Technical Services PHARMA at BENEO-Palatinit GmbH (Germany).

is Head of Sales & Technical Servic PHARMA at BENEO-Palatinit GmbH (Germany).

1. FDA Guidance for Industry — Orally Disintegrating Tablets, December 2008. 

3. S.C. Ziesenitz, "Basic structure and metabolism of isomalt" in T.H. Grenby, Ed, 

 (Blackie A&P London, UK, 1996) pp 109–133.

Ingredients

During the past years, there has been increasing demand for fast dissolving disintegrating tablets (FDDTs), such as orally disintegrating tablets (ODTs) and sublinguals.

Fast dissolving disintegrating tablets with isomalt

Immunogenicity can either be wanted or unwanted. Since the first biopharmaceuticals were placed on the market more than 20 years ago, unwanted immunological reactions have been observed in man and, thus, postmarket surveillance contributed to coining this expression. In this context, immunogenicity is the 'unwanted' immune response (IR) that can lead to clinically adverse consequences.

  It can analytically be shown by the detection of neutralizing antibodies (NAbs) and non-neutralizing antibodies (NNAbs) to therapeutic proteins. On the other hand, immunogenicity is also the 'wanted' IR directed against proteins intended for the induction of a protective immunity, such as vaccines.

There are multiple causes for unwanted immunogenicity including: 					

a patient's characteristics and/or genetic background.

The 'wanted' immunogenicity requires computational analysis of protein sequences giving rise to potential B-cell and T-cell epitopes, which are the prerequisites for the induction of long-lasting protective immunity, the major goal of designing vaccines.

This article briefly describes the basic principles of immunity and the nature of antibodies, the different concepts of biopharmaceuticals, regulatory considerations on immunogenicity issues, the impact of the different

 diagnostic methods used for detection of NAbs and NNAbs, and the information obtained through postmarketing surveillance.

Immunogenicity assessment of biopharmaceuticals is a master of disciplines because it requires knowledge of protein/antibody structures and developmental design, as well as knowledge of the immune system paired with understanding of technological and analytical procedures, methods and techniques and their implementation in monitoring clinical and preclinical studies.

Testing for immunogenicity requires the analysis of NAbs and NNAbs to therapeutic proteins and potential cross-reactivity to endogenous protein (when applicable). Major factors causing immunogenicity are: treatment with proteins of nonhuman origin, the presence of impurities, the formation of aggregates, the immune status of the individual patients in addition to protein/antibody formats, post-translational modifications, degradation of products, storage conditions and dose, route, frequency, and duration of therapeutic protein administration.

The immune system can be divided into the innate and adaptive IR. The innate IR is the 

 IR and consists of nonspecific defence mechanisms (e.g., inflammatory response). The induction of toll-like-receptor-mediated signalling, and production of reactive oxygen intermediates through stimulation of macrophages and monocytes in combination with the production of antiviral polypeptides, such as interferons, provide protection within minutes to hours after invasion of pathogens. The adaptive IR takes days to build up pathogen-specific immunocompetent B-and T-cells. B-cells are the major constituents of the humoral response and T-cells are the major components of the cellular immune response. B-and T-cells cooperate through lymphokines, cytokines and through direct interaction, and guide the IR either towards B-cell response (humoral IR) or towards T-cell response (cellular IR), which is dependent on the nature of the antigen, its presentation on antigen-presenting cells and the relative amount of 'polarizing' cytokines.

 The initial ability of an antigen to bind to a complementary receptor on a naive B-cell or to be recognized by a specific T-cell as a peptide presented in the context of a major histocompatibility complex molecule by an antigen-presenting cell (i.e., dendritic cells, macrophage or B-cell) is dependent on the individual's B- or T-cell repertoire, respectively.

  After activation of adaptive immunity, which includes clonal expansion and maturation of antigen-specific effector B-and T-cells, the binding strength will enhance with time because of somatic hypermutations in the encoded variable region genes, resulting in antibodies or T-cell receptors with increased affinity. The IR itself is controlled by mechanisms such as production of anti-idiotype antibodies, regulatory T-cell function, clonal selection processes, and tolerogenic and anergic T-cells, resulting in unresponsiveness, but also in targeted and nontargeted apoptosis.

Biopharmaceuticals comprise therapeutic proteins, antibodies, vaccines, cells and tissues intended for curative and preventive therapeutic use. The development and market of recombinant biopharmaceuticals, such as recombinant therapeutic proteins (e.g., interferon (IFN)-a 2a) or recombinant humanized antibodies (e.g., Humira, anti-TNF-a) has expanded during the past 20 years.

  Recombinant biopharmaceuticals can be produced by recombinant DNA technology through fermentation processes in either yeast, 

 (either by 'phage display' or transformation methods), baculovirus cells (insect cells, e.g., SF9) or eukaryotic cells. The new generations of therapeutic vaccines are primarily produced in eukaryotic cell lines, such as Vero cells (African Green Monkey Kidney cells), Madin Darby Canine Kidney cells or Chinese Hamster Ovary cells. Recombinant therapeutic proteins may be used to directly treat infectious disease (e.g., IFN-a 2b in the treatment of chronic hepatitis C infection) or as replacement proteins (e.g., for in-born protein deficiencies). Recombinant therapeutic antibodies are being developed to treat a wide range of diseases and may act through a variety of pharmacologic mechanisms. One mechanism of therapeutic antibodies targeting tumour cells is the cross-linking of specific proteins (which could be ligands or receptors) that subsequently result in induced cell signalling.

  Direct anti-tumour specific antibody application for solid tumours may only be successful if tumours provide tumour-specific transplantation antigens.

  The pharmacologic action of Rituximab, anti-CD20 monoclonal antibody, in the treatment of Epstein-Barr Virus-associated Post Transplantation Lymphoproliferative Disease

  or non-Hodgkin's Lymphoma has been determined.

  The Fab domain of Rituximab binds to the CD20 antigen on B-lymphocytes and the Fc domain recruits immune effector functions to mediate B-cell lysis 

. Evaluation of safety, efficacy and pharmacokinetics during premarket development of recombinant biopharmaceuticals must include an assessment of immunogenicity.

Most recombinant therapeutic proteins, including antibodies, are homologous of human proteins. European regulatory requirements for chemistry, manufacturing and controls are set forth in the European Pharmacopoeia on the fermentation process,

  and the new European Pharmacopoeia guideline on control of recombinant protein expression,

  as published in July 2007. Additional basic aspects of the pharmaceutical quality system are given in the new ICH Q10 guideline,

  and nonclinical regulatory guidance is given in Snodin and Ryle.

EMEA recently published an updated guideline, 

Immunogenicity assessment of biotechnology-derived therapeutic proteins

  which is much more thorough and complex than the formerly published, but now obsolete, concept paper dated 22 February 2006.

  The new and updated guideline considers not only B-cell immunity assessing methods and analyses, but also T-cell relevant methods, such as the enzyme-linked immunosorbent spot (ELISPOT) assay and the tetramer technology. While ELISPOT is a versatile tool to specifically and sensitively analyse T-cell-function/interaction, T-cell frequencies and T-cell-derived cytokines, tetramer technology provides a tool for the analysis of T-cell receptor specificity, which may also be used to assess T-cell receptor affinities, as well as frequencies.

NAbs or NNabs to therapeutic proteins may be detected in plasma or serum from previously treated individuals by ELISA methodologies, western blot or immunoprecipitation. Biological assays or 'bioassays' provide evidence for detection of NAbs. Determining NAbs to therapeutic antibodies takes the analysis of anti-idiotype, and also anti-allotype antibodies, by competitive ELISA methods with subsequent characterization in neutralizing assays or bioassays.

Bioassays may be divided into two categories:					

the indirect cell-based assay to measure biologic functions.

The direct bioassay can be used to assess proliferative/inhibitory responses on cell lines to biologics by measuring either DNA replication through incorporation of labelled nucleotides (e.g., 3H-Thymidine or Bromodesoxyuridine) or by staining the cells with dyes indicative for vital and metabolic active cells. Neutralizing activity can be shown by the parallel addition of plasma/sera/antibodies of the questioned function, resulting in inhibition of proliferative effects. Indirect biologic function assays may use reverse transcriptase-polymerase chain reaction (RT-PCR) methodology to measure signalling effects through crosslinking of proteins/antibodies to cell membrane molecules. For example, RT-PCR may be used to measure induced mRNA molecules known to be specific to a stimulatory effect on cells, such as increased 2'-5'-oligoadenylatesynthase m-RNA, after virus infection of cells.

Detection of NNAbs can be conducted with classical ELISA technology. Analysis of antibody affinity or avidity can be performed by ELISA technology, immunofluorescence assay or western blot analysis. Surface plasmon resonance may easily allow discrimination between 'early' (lower affinity) 

 'late' (higher affinity) antibodies. Impurities and protein degradation, which may potentially elicit an immune response, may be detected using HPLC methods, polyacrlymide electrophoresis with or without subsequent western blot analysis, or other more sensitive electrophoretic methods.

Twenty years experience from postmarketing surveillance and vigilance of individuals previously treated with recombinant biopharmaceuticals have provided considerable information pertaining to clinically adverse consequences of and potential mechanisms for immunogenicity. The application of the first therapeutic antibodies of murine origin in man in the early to mid 1980s and the administration of xenogeneic therapeutic proteins, such as porcine or bovine insulin in the treatment of diabetes, paired with still ongoing postmarketing surveillance, provide evidence for immunogenicity. These biopharmaceuticals were for curative/supportive use. Recombinant Hirudin (Refludan), an anticoagulant of nonhuman origin (from the medicinal leech), induced antibodies of the NAb-type in some patients, although no clinical phase study (I–III) provided evidence for this complication. Even using 100% homologous human proteins, immunogenicity-related issues (although minimized) may occur with unpredictable consequences. As an example, the application of 100% human erythropoietin led to the dramatic clinical adverse consequence of pure red cell aplasia in patients with chronic kidney failure because of the adjuvant effect of leachables from the container closure that led to development of antibodies that cross-reacted with endogenous erythropoietin. For immunosuppressed patients or patients suffering from chronic diseases, predicting an individual's immune response is not possible because of the complex presentation of the individual's disease state.

  In addition to this, even among healthy individuals there are differences concerning the individual B-and T-cell repertoires that give rise to the vast heterogeneity of immune response outcomes.

  Therefore, clinical assessment of immunogenicity for each new recombinant biopharmaceutical will continue to be required as part of premarket demonstration of safety and efficacy. 

The authors gratefully acknowledge the contributions by Nancy Kirschbaum, Melanie Kaltenbach, Hannah Jahn and Irmgard Scherer of PAREXEL Consulting in support of this article.

is a Principal Consultant at PAREXEL Consulting (Germany).

is Vice President of PAREXEL Consulting (Germany).

Biopharmaceuticals

A discussion of the basic principles of immunity and the nature of antibodies.

Understanding immunogenicity responses

The global economic crisis has not spared the pharmaceutical industry and, by extension, the pharmaceutical contract services industry. The financial prospects for 2009 of CROs and CMOs have dimmed significantly in recent months.  

There are two principal culprits for this downturn. The first is the efforts of major pharmaceutical companies to reduce their costs even as they outsource more. Big Pharma is even exiting entire therapeutic areas and halting early stage projects in those areas. For continuing programmes, they are aggressively looking for ways to cut development expenditures prior to demonstrating proof of concept. 

Further, most major pharmaceutical companies have established global sourcing units that are pursuing strategies to reduce outsourcing costs by standardizing processes and reducing the number of vendors that must be qualified, audited and managed. These programmes started 5 years ago in the clinical CRO realm and resulted in companies reducing the number of CROs they work with by as much as 80%. These practices have spread to the preclinical area, and we expect to see a similar pattern for outsourced formulation and manufacturing services. 

The second factor undermining CRO and CMO industries is the uncertainty of funding for early stage companies. Traditional funding sources, such as initial public offerings, follow-on stock offerings and debt, have all but dried up. Venture capital flows have held steady, but investors are funnelling their money to companies in which they already have investments rather than spreading it around. This is because they want to ensure that the most promising candidates in their portfolio companies continue to progress, and because new investors would insist on terms that would greatly dilute the equity positions of the early investors. The problem is particularly acute in Europe where venture capital support for early stage bio/pharma companies has always been weaker than in the US. 

To conserve funds, early stage companies with multiple candidates are being forced to shelve less developed candidates to concentrate on those with the nearest and best prospects for commercial approval or out-licensing — while start-ups are having a difficult time getting funding at all. 

Service providers that offer early R&D services are being especially hurt by the downturn because there are fewer candidates and less money to spend on them. These include CROs offering discovery, preclinical toxicology, process development and Phase I clinical supplies manufacture. These companies are reporting steep downturns in business activity, and a sharp increase in project cancellations and delays. 

Late stage development has not been affected too much yet as candidates closest to commercial approval are being advanced. Contract backlogs at clinical CROs continue to rise despite the general downturn although the timing of projects may suffer. 

How long will this difficult environment last? It's hard to say because no one really knows how the financial and economic crisis will evolve and when the funding situation for early pharma will improve. Executives at Covance (NJ, USA), a market leader in the preclinical and Phase I services areas, said in December that they expect market trends to turn positive in mid-year. Many companies were blind-sided by the downturn and don't know what to expect. 

The impact on the product pipeline is likely to be long term, however. When the financial markets were flush with cash, many companies and projects received funding they wouldn't have if proper due diligence had been conducted; they got the green light because venture capital investors had to put their large pools of money to work. Now, products and companies with marginal chances of success (and many that may be promising, as well) are not getting funded, meaning the decline in early stage compounds could be sustained for several years. 

With less money, fewer compounds and continuing efforts at major pharmaceutical companies to consolidate the vendor base, the number of CROs and CMOs is expected to shrink considerably. Companies that have depended largely on the venture capital-backed companies will have a particularly hard time as their customers seldom have more than one or two candidates in need of services at any one time so they must continually replace their customers with new ones. However, those candidates won't be there. 

The survivors will have a strong track record of servicing companies with multiproduct pipelines that can offer repeat business. They will have profitable operations, strong financial positions (little or no debt and positive cash flow) and savvy business development skills. Increasingly, those that serve the largest bio/pharmaceutical companies will have a global network of operations that can support their clients' global ambitions. 

Companies looking for vendors are advised to do careful due diligence on those they seek to do business with. Financial condition, including profitability, cash position and debt service requirements, should be a paramount consideration; clients should insist on full financial disclosure, even from privately held companies (of course, contractors should demand the same of their venture-backed clients). Further, some strategic due diligence will be important to make sure the parent company or investor group is committed to the business. 

One part of the industry that is already showing significant signs of consolidation is the European dose manufacturing segment. PharmSource estimates the size of the market at $5.75 billion (€4.29 billion), representing approximately 55% of the global contract dose manufacturing market. Our contractor database counts more than 160 dose manufacturers in Europe. Most impressively, 10 of the largest dose CMOs operate almost entirely from an European network of facilities.

One of the distinguishing characteristics of the European CMO industry of late has been the level of merger and acquisition activity. Major players have been adding facilities or combining operations at a rapid pace, propelled by private sources of financing (either private equity funds or private family ownership) with a long-term commitment to the CMO business. Major developments in the past year include:  

Fareva (France) recently acquired the Farmaclair semisolid and liquid manufacturing facility in Herouville (France) from GSK and the Feucht (Germany) operations of Pfizer. Fareva has shot from almost no pharmaceutical manufacturing revenues 3 years ago to approximately $300 million (€224 million) today thanks to the acquisition of redundant facilities, mostly from Pfizer.

AENOVA (Germany) was created through the merger of SwissCaps (Switzerland), a softgel manufacturer, and Dragenopharm (Germany), which produces solid dose forms. The merger was driven by Bridgepoint, the private equity firm that owns both companies.

Haupt Pharma (Germany) recently became a $250 million (€187 million) company after two other German CMOs, Amareg and Wulfing, were merged into it by their common private equity investor.

Recipharm (Sweden) acquired injectables facilities in France, the UK and Switzerland to complement its solid dose operations in Sweden. In 2007, the company sold off its proprietary product line to focus on contract manufacturing.

As these companies grow, they are looking to become more global. Notably, several that lacked FDA compliance standing have gained or are anticipating their first FDA approvals. Vetter and Haupt have established a sales presence in the US. Nextpharma (UK) made its first US acquisition in 2007 (Bioserv in San Diego), and European CMOs are expected to be among the bidders for the parental facility in North Carolina (USA) that Catalent has announced it may sell. Japan is another target; Haupt has acquired a parenteral facility, Catalent has operated a softgel facility for some time and others, including Vetter and Patheon, have a sales presence in the country. 

The major European CMOs have succeeded for a variety of reasons. The major success factors include:  

Long-term relationships with global pharmaceutical companies, often as a result of acquiring a redundant facility from a major company, and getting a multi-year contract to manufacture the legacy products.

Specialty capabilities, including the ability to handle compounds that require segregation, such as cytotoxics, hormones and cephalosporins.

Efficiency; that is, the ability to achieve greater output from a given level of investment and staffing than competing operations elsewhere. 

The European dose CMO sector appears to be very vibrant, probably more so than the market in the US. The big question for European CMOs is whether they can stay on this role. Companies such as Fareva and Recipharm must replace the legacy business they gained when they acquired their facilities; challenges from Eastern Europe and Asia are growing; and the competition from companies selling excess capacity isn't abating. The difficult global financial environment will only increase the challenges for these market leaders.

Outsourcing review

The European dose CMO sector appears to be very vibrant, probably more so than the market in the US.

Consolidation play

During the last 20 years, pharmaceutical R&D spending has increased 15-fold while new product approvals have increased only 0.70-fold. The number of new chemical entities making it to market remains low, with only 17 new approvals by FDA in 2007. While there are more opportunities to discover potentially drugable compounds, only approximately 20% of drugs that enter Phase I make it to market. The prospect of a continued rise in R&D expenditure suggests that new approaches are needed to reduce the current attrition rate.

Obtaining data about a drug candidate before it enters Phase I can reduce the risk of failure by filtering out unsuitable candidates early on. Of particular importance are data on the pharmacokinetics of a drug because pharmacokinetics can often be related to pharmacodynamics. Although there have been some reports that drug failure caused by pharmacokinetics has been virtually eliminated, this seems prematurely optimistic in a number of respects. Drugs rarely fail for one reason and classifying the cause of attrition against a single component can be misleading. Knowledge of a drug's pharmacokinetics sits at the heart of effective selection: too little drug at the target will lead to lack of efficacy, while too much is likely to lead to toxicity.

  For these reasons, efforts are made to predict a drug's pharmacokinetic profile prior to Phase I clinical trials.

 modelling and allometric scaling tools are used to predict what the pharmacokinetic profile might look like in humans. Unfortunately, preclinical data obtained by allometric scaling from animals or 

 modelling studies do not always reliably predict what will happen in humans.

Where preclinical studies may be unreliable, a Phase 0 trial in humans using a 'microdose' can be a solution. A microdose study uses a dose approximately 1/100th of that required to produce a pharmacological effect. Such microdose trials can inform decisions about drug candidates in humans before they enter a Phase I study. In particular, a drug candidate can be rejected if its Phase 0 pharmacokinetic profile is unfavourable. As these studies use very small doses, they are considered inherently safer than studies using the therapeutic dose. They are, therefore, less heavily regulated, quicker and cheaper to run than a Phase I study.

Microdosing studies are increasing in popularity as the evidence that results obtained at low drug doses predict those at the therapeutic dose has grown during the past 5 years. A recent review of related peer-reviewed literature shows that, of 18 drugs reported, 15 demonstrated pharmacokinetic parameters at a microdose within a factor of 2 compared with those observed at therapeutic doses.

  This difference in magnitude between a preliminary and therapeutic study is acceptable for allometric scaling studies and, therefore, the limited data currently published supports the use of microdosing studies.

The 18 drugs in this review had wide ranging pharmacokinetic and physiochemical properties with half-lives ranging 1–>40 h, bioavailability between 0 and 100%, and solubility from virtually insoluble to 170 g/L.

  Because low doses of drug are administered to human volunteers in microdose studies, the resulting plasma drug concentrations are also low, and very sensitive analytical techniques are required to reliably measure the presence of a drug and calculate its pharmacokinetic parameters. The most sensitive analytical technology is accelerator mass spectrometry (AMS), which can measure zeptomolar (10

Microdose studies are moving from hypothesis to acceptance, but how can we be more confident of results produced by this technique? The answer: we need more data and, unfortunately, much of it is unpublished because of commercial sensitivities. However, more results are on the way, including those from the seven-drug European Microdosing AMS Partnership Programme (EUMAPP) completed in 2008 and published data expected later this year.

  Part of the EUMAPP programme was to incorporate human microdose data into physiologically-based pharmacokinetic models. Microdosing is moving onto the next level, with data being interpreted and modelled more intelligently, thereby helping drug discovery scientists.

3. M. Salehpour, G. Possnert and H. Bryhni, 

4. European Microdosing AMS Partnership Programme. 

Talking Point

During the last 20 years, pharmaceutical R&D spending has increased 15-fold while new product approvals have increased only 0.70-fold.