Analytical methods and bioassays require a well-thought-out manner of evaluating method validity (truthfulness) and systems suitability (a known positive control) to ensure the method is correct, reliable, and can be used to determine the value of the unknown test article. This paper recommends and explains methods for evaluating system suitability as well as validity criteria. Further, the paper discusses practical and phase-appropriate methods for setting limits for systems suitability and validity criteria.

In alignment with guidances such as International Council of Harmonisation (ICH) Q2 (1), 

) <1033>, <1032>, <1225>, and ICH Q6B (2), method development, validation and method understanding is a critical element of product measurement and control. Systems suitability should be understood to be separate from validity criteria. Systems suitability is defined as a known positive control that can be demonstrated to be within a defined set of limits. Validity criteria typically includes signal control for bioassay criteria for parallelism and linearity, and criteria for repeatability.It may further include a fixed number of outliers for data management.

There are two methods for systems suitability. The first method involves adding a positive control to the assay run. The positive control is a known standard at a fixed concentration.By adding the known standard to the plate and checking if it is within a defined limit, one can trust that the method is running correctly, and the test article may be reliably determined.The second method requires use of a standard curve. A standard curve or calibrator has a known value and is placed on the plate at three or more concentrations; a curve is then fit to the data.By measuring the concentration at a fixed position on the standard curve, one can use that data for systems suitability. The standard curve approach has a distinct advantage in reducing the analytical error of the quantitation of the positive control. It is not recommended to use a calibrator and then add the positive control to a plate, however, as this doubles the analytical error. 

 shows the systems suitability back-calculated from a fixed position on the reference standard.

Before relative potency of a test article to a reference standard can be calculated, it is crucial to verify that there is a clear signal from the dose response for the reference standard. There are two methods for verifying a reliable signal; the dose response test and curve depth.

Based upon health authority input, the dose response test is a standard approach to show signal-to-noise control. The dose test measures the effect of analyte concentration, which is used to generate a statistically significant signal (alpha = 0.05, two-sided). A regression model may be linear, square root, log, three parameter exponential model, or four parameter logistic regression (4PL), depending on the method.

The curve depth of the reference standard is another method to demonstrate a clear signal. Curve depth is the mean signal for the highest concentration subtracted from the mean signal from the lowest concentration. For assays using 4PL fit, curve depth is calculated by subtracting the lower asymptote of the standard from the upper asymptote of the standard (

). Normally the limit is set at 50% of the curve depth from qualification or validation assay runs.

 of a fitted curve is not recommended for a validity criterion, but should be for report-only. Confidence intervals (CIs) of the reportable value are a more reliable indication of the errors in quantitation due to curve fitting.

Validity criteria for bioassy parallelism

 <1032> defines parallelism as the following:

“A quality in which the concentration–response curves of the Test sample and the Reference Standard are identical in shape and differ only by a horizontal difference that is a constant function of relative potency” (3).

Parallelism must be evaluated as a validity criterion because parallelism between the test article and reference standard demonstrates that the two are similar, and, therefore, relative potency may be determined. F-tests for parallelism are not recommended because they are too sensitive and may cause a high degree of invalid results.

Demonstrating parallelism in a bioassay is done for a sigmoidal curve and may be evaluated using the upper asymptote ratio (UAR). The UAR is compared to a two-sided limit. If the ratio of the upper asymptote for the reference standard and the UAR for the test article is within defined limits, then the curves can be constrained, and relative potency can be calculated. UAR only checks parallelism at one point on the sigmoidal curve. Slope ratios may be used for a parallel line analysis of the reference and test article. A highly recommended method for determining parallelism is the absolute difference between the relative potency of the unconstrained model and the constrained model. This measures how the forcing function of constraining the curves changes the reported relative potency.

An equivalence test may be used in evaluating the UAR. If the slope ratio is outside of the equivalence bounds, the assay run fails parallelism and is invalid. 

 is a parallelism test example with a resulting slope ratio of 0.993.

Linearity ratio calculation for bioassays

A bioassay also has a requirement to be linear in the dose response.The Linearity Ratio method of analysis uses a measure of curvature relative to the linear line rather than a measure of probability by comparing the effect size attributed to the quadratic term (curve) to the effect size attributed to the linear term in the full model.In practical terms, the question of linearity is, what percentage of the linear line is curvature?

A scaled estimate for the linear term is half the change in the signal over the range (distance from center). To determine the full change over the range linear effect of concentration, it must be multiplied by two. The quadratic term is curving andthe range is the full curvature, which is then divided by full change in the linear signal.

Validity criteria: assay repeatability/analytical error

In order for an analytical method to be validated, it must be shown to be repeatable at the moment of measurement (4). Before evaluating repeatability, outliers should be removed from the assay run or run of the analytical method. Jackknife z is the preferred method of outlier identification within each dose. Jackknife z is calculated independently for each concentration in the dose response for both reference and sample type. Jackknife z evaluates the influence each point is having on the curve fit where each point is removed from the model; the model is regenerated and evaluated, iteratively, for each data point. Jackknife z = (measurement - dose mean (measurement removed)) - Standard deviation (measurement removed).

CIs should be included when reporting the results for any and all test articles. CIs control for sample size, variation in the method, and risk (95%). CI range is calculated by taking the difference of the upper confidence limit of the constrained relative potency and the lower confidence limit. A narrower CI range indicates that the assay is less variable and, therefore, more repeatable. Excessive CI range may not make the assay run invalid; it demonstrates that additional assay runs are required to tighten the error.Normally, the CI range is reported as a percent of tolerance (

where USL is upper specification limit and LSL is lower specification limit. The coefficient of variance (CV) is often used to evaluate repeatability of the dose response. CV is not recommended for use because it incorrectly scales the analytical error by concentration; high concentrations appear to have low error and low concentrations seem to have high error.

Setting systems suitability and validity criteria limits

When setting specification limits based on the representative sample, risk must be considered. The wider the interval, the greater the amount of allowable transmitted variation on the Y response. K sigma is used when the sample size is 30 or more, and tolerance intervals are used when the sample size is less than 30. Before setting limits, a representative data set must be available. Systems suitability and validity criteria limits are normally set post-qualification and review and finalized post-validation of the method (5).

Tolerance intervals were developed to provide a correction for limited sample sizes and scales. The interval of risk is based on three considerations: sample size, confidence interval, and proportion of the population to be described.

Tolerance intervals should be used under the following conditions:

No transfer function is available and/or possible

No adverse nor unacceptable results are associated with the parameter or response

When n => 30, use K sigma in setting limits

Sample data are stable (use a control chart or regression analysis to evaluate stability)

Distribution is either normal or nonnormal.

The procedure for setting limits are as follows:

Make sure there is a representative sample of the assay validity or systems suitability measurement.

Check data for outliers. Jackknife z and three sigma cut point is typical.

Determine the distribution that best fits the data, normal or nonnormal distribution, use a goodness of fit or second-order Akaike’s information criterion (AICc) functions to determine the best fit.

Avoid using Johnson or Sinh-Arcsinh (SHASH) distributions when fitting nonnormal tolerance intervals as they set limits excessively wide. Normal, Gamma, Weibull, Lognormal, Normal Mixture are preferred and should all work well to set limits.

 to determine the risk and associated tolerance interval and margin. 

Use a K Factor calculator (6) to determine K for the interval (sample size, confidence level andpopulation) for any tolerance interval.

Set Spec using K sigma to define the limits.

Examine results and document limits, update any standard operating procedures or calculators with the defined limits.

Using the correct methods for evaluating systems suitability and acceptance criteria is critical to ensuring that the analytical methods is fit for use. Setting specification limits as described is statistically rigorous, scientifically sound, and defendable upon regulatory review. 

 is a summary table of all criteria and recommended limits. 

Validation of Analytical Procedures: Text and Methodology

, Step 4 version (November 2005).
2. ICH, Q6B 

Specifications: Test Procedures and Acceptance Criteria for Biotechnological/Biological Products

 <1032>, “Design and Development of Biological Assays,” (Rockville, Md., 2015)
4. USP, 

 <1225>, “Validation of Compendial Procedures,” (Rockville, Md., 2015).
5. USP, 

 <1033>, “Validation of Biological Assays,” (Rockville, Md., 2010).
6. NIST, “Tolerance Intervals for a Normal Distribution,” in 

NIST/SEMATECH e-Handbook of Statistical Methods

Thomas A. Little*, PhD, drlittle@thomasalittleconsulting.com, is president and principle consultant of Bioassay Sciences, and Daniel S. Harding is a principle consultant of Bioassay Sciences.

*To whom all correspondence should be addressed.

Supplement: Bio/Pharma Outsourcing Innovation 2022
February 2022
Pages: s6–s11

When referring to this article, please cite it as T.A. Little and D.S. Harding, “Establishing Systems Suitability and Validity Criteria for Analytical Methods and Bioassays,” 

Articles

Analytics

Ensuring reliable analytical methods and bioassays requires a well-thought-out strategy for evaluating method validity and systems suitability.

Establishing Systems Suitability and Validity Criteria for Analytical Methods and Bioassays

According to market research, the size of the outsourcing sector serving the pharmaceutical and biotechnology industries is expected to expand, reaching $99.4 billion by 2028 (1). Demand for outsourced services is being driven by several factors, such as high demand for biologics and small molecules, a lack of in-house expertise, and rising costs associated with in-house development capabilities.

To find out more about how demands have changed for outsourcing partners providing method development services and the trends affecting this sector, 

 spoke with Jerry “Jr.” Mizell, senior director, Analytical Services, Metrics Contract Services.

 Could you provide a brief overview of how the demands have changed over the years for outsourcing partners in terms of method development services?

 Nowadays, there is an increased demand for sound methods to be developed early in the product life cycle. More customers want rugged and robust methods in place as early in the development process as possible, and they want methods that require minimal changes as their programs advance to commercial phases.

Based on the experience of Metrics Contract Services, customers also want to develop quality control (QC)-friendly methods that help maximize laboratory efficiency in the commercial phase. Across various methods developed in recent years, dissolution, in particular, has been in the spotlight. A comprehensive approach to dissolution should produce a discriminating method that can demonstrate that an adequate drug product has been manufactured. Current customer expectations also demand a detailed dissolution method development report describing how the dissolution procedure was derived. This is especially important for new drug applications (NDAs).

 How has demand of outsourced services for method development been impacted by the COVID‑19 pandemic?

 While we haven’t experienced a direct uptick in development services requested because of the COVID-19 pandemic, we have experienced supply chain challenges as a result of it. The delays and disruptions to key supplies have made it imperative to execute method development in the most effective means possible to align with clinical timelines.

Choosing a method development partner with vast experience and a proven track record becomes invaluable to customers who need to deliver treatments to patients at speed, while also ensuring that key project deliverables are met.

Have there been changes in expectations as to what an outsourcing partner should be able to provide or accomplish with method development services?

 The outsourcing partner, or contract development and manufacturing organization (CDMO), should have a vast array of development experience in solid oral dosage formulations. This experience will allow for expedited development services, especially when challenging formulations are being developed. These challenging formulations may include API loaded on resin or beads and molecules that do not contain chromophores, requiring alternative modes of detections.

CDMOs with experience in charged aerosol detection, evaporative light scattering detection, and refractive index detection for challenging molecules can be the deciding factor in awarding a project. Outsourcing partners with mass spectrometry (MS) capabilities are also at an advantage when impurity issues arise and identification is needed. Cost can be a primary focus for some programs; however, quality assurance and the ability to meet deliverable timelines are also very important qualities, which can often outweigh price differences.

 What other trends have impacted outsourced method development in recent years?

 Over the past few years, there has been an increase in the development of poorly soluble small-molecule drug products, which can be extremely challenging when developing a dissolution method. This type of program is challenging because introducing two APIs into the same formulation and combining products, with significantly differing physical and chemical characteristics, means that method development can take on a new level of difficulty.

From a safety perspective, highly potent APIs (HPAPIs) introduce additional challenges, as developers want user-friendly methodologies in place without jeopardizing laboratory staff safety.

 In your expert opinion, what trends might we expect to see in the future and why? Also, how might outsourcing partners be best prepared for future demands/industry trends?

 There should be more and more Biopharmaceutical Classification System Class II and IV molecules being discovered for evaluation.

Customers should seek outsourcing partners with extensive experience in dissolution development and alternative mode of detection in the event that a molecule does not contain a chromophore. Instrumentation must remain compliant with current industry standards to ensure method expectations are met.

There is also an expectation that future demands will call for methodology development for nitrosamine assessments, and the ability to meet FDA (and other regulatory bodies’) requirements for NDA filings and current commercial products on the market. This methodology requires MS, which if not currently available at a CDMO, may become a worthwhile investment to offer to customers. As with elemental impurities, this requirement will not go away and will only face increased scrutiny as time passes.

Biotechnology and Pharmaceutical Services Outsourcing Market Size, Share, and Trends Analysis Report by Service, by End Use, and Segment Forecasts, 2021–2028

Felicity Thomas is the European editor for Pharmaceutical Technology Group.


Supplement: Biopharma Outsourcing Innovation 2022
February 2022
Pages: s12–s13

When referring to this article, please cite it as F. Thomas, “Method Development in Demand,” Biopharma Outsourcing Innovation 2022 (February 2022).

Development

Experience is an invaluable asset for outsourcing partners, particularly as more challenging method development services are in demand.

Method Development in Demand

In pharmaceutical science several divergent paths typically exhibit clear validity. Decisions often boil down to embracing instead of eschewing risk, to accelerate as the only priority, or to trust a partner rather than emphasize self-reliance. Each molecule, each company or research group possessing that molecule, has an assortment of strengths and weakness to guard against or to leverage. Multiple factors weigh in the balance when deciding how best to move forward, and increasingly the route chosen is to outsource research, development, and manufacturing.

The global contract development and manufacturing organization (CDMO) industry, averaging across several market research firm estimates, is currently valued around $100 billion (1). In part, this growth is shaped through direct regulatory influences suggesting, if not demanding, that a drug have multiple sites of manufacture to spread the risk for supply chain planning. Above regulations, companies also seek to reduce the complexity of their operations internally, and to reallocate internal resources most effectively.

According to Hanns-Christian Mahler, CEO and board member of ten23 health—a new CDMO that offers development, manufacturing, and testing services for injectables—there are a variety of reasons as to why demand for outsourced services of technical R&D activities is increasing. “[Reasons] include a potential lack of internal asset(s) for a given technology and/or specific requirement,” he says. “For example, the building and operating costs of a sterile fill/finish facility are significant. If a pharma company would not have sufficient molecules in a portfolio that would benefit from being manufactured in that facility, the costs could be quite prohibitive, and outsourcing is surely much more cost efficient.”

There could also be instances where a pharma or biotech company has an asset but does not necessarily have the required technology or features, Mahler continues. For smaller companies, in particular, he adds, there may not be internal knowledge or industry and scientific expertise available. “Hence, specialized providers, such as ten23 health, may provide significant advantages for [such companies], contributing to faster development timelines whilst minimizing and derisking any R&D obstacles that can be anticipated by the Experts,” Mahler states. “Finally, even in existence of internal assets and internal experts, there may be insufficient capacity in house.”

Focusing somewhat on internal capacities and the fact that the outside economic environment is encouraging. Ramesh Subramanian, chief commercial officer, Aragen, believes it is a buoyant time for R&D outsourcing at the moment. He specifies that this buoyancy can be attributed primarily to three reasons, “increased fund flowing into [the R&D outsourcing] space, a high number of targets in the pipeline, and renewed interest in pharma R&D due to the COVID-19 pandemic.”

“In fact, as a direct consequence of this better funding environment, we are seeing increasing number of biotechs pursuing their research programs with renewed vigour,” Subramanian adds. “In the past, those companies that were quite conservative in advancing their discovery programs are now focusing on advancing their assets quickly through the development continuum to reach the proof-of-concept milestone. With this shift, we see more biotechs approaching us for more end-to-end integrated solution offerings, from discovery through to Phase IIb—where their assets get them better valuations. Venture capitalists are also open to a longer-term view on development and willing to take risks for such potential upsides from valuation of successful programs. For Big Pharma, outsourcing of all but core activity is the de rigour approach to achieve fastest development timelines.”

Sy Pretorius, MD, president, Clinical Development, and chief medical officer at Parexel, points to the need to focus on and build a lasting relationship when partnering. “To meet complex industry challenges, successful outsourcing partnerships are essential,” he asserts. “This is necessitated by increasing pressures to reduce the cost of drug development and to bring therapies to market sooner. Rather than purely transactional in nature, these partnerships should be truly collaborative. Strong relationships can foster innovation beyond contractual obligations and typically leads to higher levels of staff engagement and better quality. The reason for continued demand for outsourced services can be attributed to a variety of factors including a burgeoning drug pipeline, record levels of funding, lack of in-house resources or expertise, and increased operational complexities.”

“Outsourcing happens in many different shades,” notes Mahler. “Outsourcing can include full technical programs including drug substance and drug product, it can include only specific studies. It could be only for early-stages of a program or the opposite, just for the commercialization stage. In the end, the outsourcing model needs to fit to the needs of the pharma and biotech company, their own expertise and knowledge base and their preference on either working with the most qualified outsourcing partners for specific studies, versus the preference on working with just one partner.”

Subramanian reflects that the focus of Big Pharma has now shifted to ensure they can retain their core activities in-house. “[Big Pharma’s] definition of core has become a lot smaller as they look to CDMOs to be their R&D engines. We are seeing these emerging trends in R&D outsourcing,” he says. “Pharma/biotechs are looking for more integrated discovery service offerings to leverage on the efficiencies and synergies of chemistry and biology offerings from one service provider/co-location of these capabilities. In the outsourcing of development services, pharma/biotech companies still prefer to have the final drug substance being manufactured closer to their locations in the United States/European Union. Given the greater demand for access to capacities, a large number of these biotechs leverage the capacities/expertise available in Asia to execute the initial steps and the final steps in US/EU.”

The range of relationships is large, encompassing full-service outsourcing (FSO) to functional provider (FSP) type arrangements, Pretorius states. “Likewise, these [relationships] range from tactical/per study outsourcing to more strategic programmatic outsourcing,” he notes. “Landing on the right outsourcing model requires an assessment of each individual organization’s needs. Functional service provision continues to be a core outsourcing model allowing the vendor to provide embedded teams that support sponsors for specific services and work directly with their client’s systems and infrastructure. In other instances, a hybrid, more limited scope might work best”.

Pretorius observes that the pandemic forced industry to reexamine how research studies are designed and conducted, while also demanding record-breaking speed of innovation. “As a result, digital medicine was embraced in ways never seen previously. Decentralized clinical trials (DCTs) became embedded in the overall clinical development ecosystem and part of the new norm in how we operate,” he emphasizes. “At Parexel, DCTs are now being woven into 80% of Phase II/III trials and 100% of real-world evidence new trial proposals include DCT elements.”

However, Pretorius cautions this movement is not without obstacle. “A challenge is the lack of industry-wide data standards and how best to manage more and more data from disparate and diverse sources across multiple platforms while ensuring quality,” he says.

Mahler adds that downstream manufacturing and the supply chain were affected by the pandemic. “The significant demand in vaccine manufacture also led to significant demand in primary packaging and disposables,” he stresses. “This has an impact on the globally available outsourcing capacity for any kind of (sterile) product development and manufacturing, which certainly has become smaller given the capacity need for vaccine manufacturing, and the shortage in supplies of raw materials poses some specific challenges and risks for supply chain planning and inventory.”

When contemplating the pandemic, Subramanian specifies that, on a global scale there has been an obvious impact on resources, with CDMOs required to prioritize COVID-19 targets and vaccines—an aspect that will continue onto the future as new variants of the virus continue to develop. “Geo-diversity has also been on the rise, and if innovators are too reliant on China, Europe, or India, they will look to rebalancing their spread. However, the net result is that India has been the biggest beneficiary—as there was more reliance on China previously,” he says.

“The other interesting impact of COVID-19 has been the development further down the chain from the messenger RNA (mRNA) vaccines,” Subramanian continues. “So, there is much greater interest now in areas like oligonucleotide discovery and development, and even peptides—areas that Aragen is investing in due to increasing demand. In terms of mRNA vaccines, we are also seeing innovators look for smaller aspects of its production from lipids to linkers—basically they look for anything that can increase speed and deliver customer value.”

Looking beyond the pandemic, Subramanian expects that industry will see a continuation in oncology as a leading therapeutic area of interest, although he adds that there has also been a rapid uptick in demand for central nervous system (CNS) targets. “Almost all Big Pharma is involved in oncology, so on the development side, we see a similar make up in CDMOs and of course in technologies like HP,” he says. “CNS is interesting, as there have been several high-profile failures. So, innovators are looking for partners to advance several candidates simultaneously to increase their chances of success.”

For Mahler, other potential trends that will likely impact outsourcing of R&D services are the diverse therapeutic modalities and APIs being investigated. “For example, in the category of therapeutic proteins, we see increasingly complex formats,” he says. “We also see a huge variety of indications and administration routes, including the challenging intravitreal and subcutaneously administered products.”

Additionally, the trend for self-administration is broadening out to areas such as oncology, where devices are typically required (i.e., an increasing trend towards drug/device combination products), Mahler notes. “Of course, these [trends] bring specific challenges related to the product design, manufacture, and testing,” he adds.

Pretorius returns focus to DCTs. “Given the rapid speed of adoption and the evolving vendor and regulatory landscape, [contract research organizations] CROs are particularly well-placed to deploy DCT strategies because of the breadth of experience obtained across multiple sponsors,” he empathizes. “Some CROs have been active in the space for more than a decade enabling them to leverage significant learnings and expertise.”

Looking toward another burgeoning area, cell and gene therapy, Pretorius lauds the availability of new technologies, which are allowing industry to see the potential of such innovative therapies. “For patients, [cell and gene therapy] provides promising options with potentially less toxicity,” he says. “We are seeing significant interest and investment in this area beyond treatment for oncology.”

As parting thoughts, Mahler expresses his belief that “outsourcing and the development and commercialization of medicines in general should be more a ‘system thinking’ approach. Companies or outsourcing services may be getting so specific about one given part of the product, that the interconnectivity and dependency of all the components of a drug product are being forgotten: a sterile product can only be reliably and reproducibly manufactured if the formulation, primary packaging, and processing parameters are wisely chosen in its entity.”

Furthermore, Mahler stresses the importance of focusing on ‘people’—patients and employees—as well as the planet. “We, at ten23 health, hence embed considerations of fairness and sustainability in all we do. There is only one Planet,” he adds.

Pretorius also points to the larger operating system, observing that outsourcing can also prove beneficial in the area of regulatory operations through aiding with submissions, product registration, tracking agency interactions, and so on. “This [service] requires working in tandem with partner internal regulatory teams and carefully defining roles and responsibilities to assure alignment,” he says. “At Parexel, our regulatory outsourcing teams consist of former regulators from FDA, European Medicines Agency, National Medical Products Administration, among others with specialized knowledge and first-hand experiences of regulatory expectations.”

While there is much to weigh and evaluate, the uptick in outsourcing appears well founded on benefits and advantages. This has led to what might be termed a ‘run’ on available scheduled slots within CMOs and CDMOs. Currently, not only must one place a large cash down payment but also the requesting company must now face wait times of around 12 months to get their place in the que. However, in this case good things take time, and time taken pays dividends at the (pun intended) finish line.

Current Trends and Strategic Options in the Pharma CDMO Market


Supplement: Bio/Pharma Outsourcing Innovation 2022
February 2022
Pages: s30–s34

When referring to this article, please cite it as C. Spivey, “Balancing Internal Focus Against External Capabilities,” 

Demand for outsourced services of technical R&D activities is increasing.

Balancing Internal Focus Against External Capabilities

The actions taken by contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs), large or small, provide insight into the greater state of the biopharmaceutical industry. Recent news surrounding CDMOs prioritizing mRNA services, fullservice integration, and global expansion, may provide context to the state of outsourcing.

Piramal Pharma Limited (PPL) increased its stake in Yapan Bio, an India-based biologics manufacturer, with an investment of approximately $13.7 million, which was announceed in December of 2021. Yapan Bio works with various complex biologics, including current good manufacturing practice (CGMP)-compliant manufacturing of vaccines and biotherapeutics. This includes high-containment classes up to biosafety level-2, recombinant vaccines, both RNA and DNA vaccines, gene therapies, monoclonal antibodies, and therapeutic proteins.

According to a company press release, PPL made this move in an effort to augment their antibody-drug conjugation capabilities. Peter DeYoung, CEO of Pharma Solutions at PPL, noted in the press release that biologics (and their accompanying development services) are the fastest growing segments of the CDMO business. Integrating biologics into their offerings allows CDMOs to provide a full suite of services, including development, manufacturing, conjugation, and fill/finish (1).

This news touches on a key trend among CDMOs: the desire to provide an all-encompassing service. For instance, in June of 2021, three companies—Protagen Protein Services, BioAnalytix, and GeneWerk—agreed to a merger. In January of 2022, the newly formed company, ProtoGene, announced that they would supply “advanced, integrated, and complete protein and gene analytic services for biological therapeutics and cell and gene therapy platforms” (2).

Other CDMOS, such as the recently formed ten23 health, have also allocated resources toward providing an integrated offering (3). Still other CDMOs that have existing end-to-end service capabilities, such as Curia (4) and WuXi Biologics (5), are making it a point to highlight the end-to-end service aspect of their business structure. Industry demands are putting pressure on CDMOs for more comprehensive services.

The increase in demand can be attributed to various factors, such as the COVID-19 pandemic, which caused severe supply chain disruptions. These disruptions highlighted the idea that working with a full-service company for pharmaceutical needs may be more prudent. But independent of “why”, the “what” of this trend may be showing how successful CDMOs will need to operate in the future.

Merck KGaA announced in January that they would spend $780 million to acquire Exelead, an Indianapolis-based CDMO specializing in complex injectable formulations. These include both lipid nanoparticle (LNP)-based drug delivery technology, as well as fill/finish capabilities.

According to Belén Garijo, CEO of Merck KGaA, Exelead was purchased because of the company’s complementary abilities as it concerns messenger RNA (mRNA) delivery services. mRNA therapies have received a well-documented boom in interest following the release of mRNA-based vaccines for the SARS-CoV-2 virus. In a press release detailing the acquisition, Garijo stated that Merck felt that the acquisition would allow the company to pounce on this fast-growing market for mRNA therapies (6).

Merck’s $780 million move may foreshadow an increased prominence on mRNA in the industry. In addition to Merck’s acquisition, industry powerhouses such as Lonza (7) and Samsung Biologics (8) have both ramped up their presence in mRNA over the course of the past year, suggesting a strong trend toward mRNA. CDMOs are being rewarded for putting significant sums of money into mRNA, an indication that mRNA delivery mechanisms will likely continue to grow in prominence in the biopharmaceutical space.

In August of 2021, BioAgilytix, a US-based CRO, announced that it would be acquiring 360biolabs, a CRO-based in Australia. While this added immunology and virology services to an organization known for specializing in large molecules, Jim Datin, president and CEO of BioAgilytix, stated in a company press release that this move was made as part of the company’s global growth strategy to reach more markets (9). 

The acquisition of 360biolabs allowed BioAgilytix to expand its human testing services into Australia. Similarly, ten23 health’s acquisition of SwissFillion not only gave it that company’s capabilities in fill/finish services, but regulatory approval to do so for both the US and European markets (3). 

The supply-chain disruptions brought on by COVID-19 may have made it difficult for customers to source multiple companies for different parts of the pharmaceutical process. However, these limitations also held true for CDMOs: if a company does not have a global presence while the global economy is strained by a pandemic, it will have some difficulty accessing certain markets. By acquiring a company that can directly interface with that region of the world, a company can organically grow their overall presence.

1. PPL, “Piramal Pharma Ltd. To Invest Minority Stake in Yapan Bio, India-Based CDMO Providing Expertise in Biologics and Vaccines,” Press Release, Dec. 21, 2021.

2. BioPharm International, “Protagen Protein Services, BioAnalytix, and GeneWerk Combine to Form New CRO, ProtaGene,” 

3. ten23 Health, “Swissfillon, a Leader in Sterile Filling of Complex Pharmaceuticals, Joins ten23 health and Enhances the Combined Company’s Integrated Offering to Its Customers,” Press Release, Oct. 25, 2021.

4. Curia “About Us,” www.curiaglobal.com/about-us/, accessed Jan. 27, 2022.

6. Merck KGaA, “Definitive Agreement to Acquire Exelead will Strengthen the CDMO Offering for mRNA of the Life Science Business of Merck KGaA, Darmstadt, Germany,” Press Release, Jan. 6, 2022.

7. Lonza, “Lonza and Moderna Enter New Agreement to Double Drug Substance Production for COVID-19 Vaccine in Visp,” Press Release, Apr. 29, 2021.

8. Samsung Biologics, “Samsung Biologics Shares Strategic Roadmap for Sustainable Growth at the 40th Annual JP Morgan Healthcare Conference,” Press Release, Jan. 13, 2022.

9. PR NewsWire, “BioAgilytix Closes Acquisition of Australia-based 360biolabs,” Press Release, 14 Oct. 2021.

Supplement: Bio/Pharma Outsourcing Innovation 2022 

When referring to this article, please cite it as G. Playter, “Contract, Development, Action! Analyzing Recent Events in Outsourcing” 

Recent news surrounding CDMOs provides insight into ongoing trends in the sector.

Contract, Development, Action! Analyzing Recent Events in Outsourcing

By the year 2026, the global outsourcing market for formulation development is expected to reach a value worth $12.65 billion, growing at a 7.2% compound annual rate (1). Factors driving this market growth include the rising demand for innovation of novel drugs due to the increasing number of patent expirations for major drugs and the fact that many pharmaceutical and biotechnological companies are trending toward outsourced services for formulation development (1).

To learn more about outsourced formulation development services, including various industry trends impacting the sector, challenges for outsourcing partners, and key benefits for outsourcing formulation development, 

 spoke with Lynn Allen, vice-president of Business Development at MedPharm.

 Could you provide insights into industry trends that have affected the formulation development outsourcing market?

 The pharmaceutical industry continues to adapt to new business conditions. Life cycle management continues to drive the need for outsourced formulations, often in developing products for alternate routes of delivery.

Companies that are looking to improve patient compliance or reduce systemic side effects can look at new formulations for local delivery through topical dosing. Based on MedPharm’s experiences, there have been increases in the demand for formulation services of ophthalmic preparations and respiratory delivery, primarily intranasally. An increase in the number of biologics with targeted topical delivery routes has also been a trend. As a contract development and manufacturing organization (CDMO) that specializes in dermatological, nail, eye, airway, mucosal membrane, and otic product development, MedPharm continues to support topical formulation development services for local delivery market needs.

Additionally, proprietary nonclinical models that test formulations for effectiveness at early stages continue to be an asset to the company’s client base. For example, MedPharm’s reconstructed human nasal epithelia model is a living representation of the nasal membrane, and allows formulations that are targeted for the different regions of the nose (local, systemic, or brain) be tested to evaluate formulation parameters such as delivery, irritancy, mucoadhesion, and effectiveness.

 What type of formulation work is more commonly outsourced currently?

 There is continued growth in product development by specialty and virtual pharmaceutical companies. As large pharma looks for investments in late-stage assets, start-up companies that effectively deliver well-developed products with effective clinical data are highly sought out for licensing and acquisition deals.

Consequently, start-up companies require formulation expertise at the earliest stages of development and often do not have extensive research labs to perform critical assessments such as screening multiple APIs. Outsourcing of these early research activities continues to grow, and MedPharm continues to invest in these services to support both early start-up and specialty pharma companies.

 What are the biggest challenges for outsourcing partners when working on a formulation project?

 In the fast-paced environment of drug development, it can be challenging to ensure that all stakeholder needs are being articulated at the start of formulation activities and continue through the development process. When sponsors have not conveyed all needs or if they are not prepared to make decisions on formulation priorities when challenges arise during development, it can often mean repeating activities or delaying timelines.

 How do outsourcing partners overcome these challenges?

 One key aspect that must be stressed at the start of any program is the necessity of a well-defined target product profile. The key attributes of what the formulation should achieve and, particularly in the topical space, how it should feel when applied or how it should be packaged and used by the patient are critical considerations of development. Internal expertise is also critical which includes program management, development, or regulatory resources.

 What are the key benefits of outsourcing formulation development?

 When formulation development is not an internal strength or if the delivery route is outside of in-house formulation expertise, the broad experience of a service provider dedicated to these services can save time, money, and avoid the pitfalls of an ineffective, poorly developed formulation. CROs [contract research organizations] and contract development and manufacturing organizations, particularly those focused on niche markets like MedPharm, have broad experience and can pull from decades of experience and current real-time learnings to guide development activities in the constantly changing regulatory environment. Service providers can also offer more dedicated resources when companies need to prioritize critical programs.

Formulation Development Outsourcing Market—Growth, Trends, COVID-19 Impact, and Forecasts (2021–2026)


Supplement: Biopharma Outsourcing Innovation 2022
February 2022
Pages: s14–s15

When referring to this article, please cite it as F. Thomas, “Gaining Formulation Expertise through Partnerships,” Biopharma Outsourcing Innovation 2022 (February 2022).

A key benefit for companies when outsourcing formulation development is the broad experience they can gain from a dedicated service provider, particularly for niche markets.

Gaining Formulation Expertise through Partnerships

In the modern bio/pharmaceutical industry, countless services are outsourced, including manufacturing, process development, scale-up, regulatory compliance assistance, analytical services, software and cloud services, and much more. But what should companies looking to outsource know prior to selecting vendors and partners? In addition, what should the companies that are outsourcing services be aware of?

interviewed David Heiger, associate VP, Agilent CrossLab Group; Nandu Deorkar, vice president of R&D production, Avantor; Sébastien Ribault, vice president and head of end-to-end solutions, Life Science business of Merck KGaA, Darmstadt, Germany; Angelo Filosa, PhD, portfolio director, professional and technology services OneSource, PerkinElmer; and Christoph Zehe, research fellow, advanced cell biology, Sartorius Corporate Research, on what outsourcing partners wish you knew.

What companies offering outsourcing services should know

: What are your top recommendations for companies offering outsourcing services?

Clearly define what you want to outsource and why

. Classify activities as core to your work and non-core and then identify partners that have expertise in the non-core activities that are a strategic aspect to how you run your business so your internal team can focus on the science you are advancing.

. Once you have identified the non-core activities, then you need to decide whether they are outsourced or insourced and what needs to be supported on-site or can be done remotely. Certain activities are non-core but still must be done onsite for various reasons. This process is part of defining your outsourcing strategy and identifying the correct partners.

. Make sure to properly evaluate vendors and understand their expertise and how they can grow with you as you evolve your outsourcing strategy. You might look at one service today, but [you will] likely expand the scope in the future; so, it’s important that the provider can grow with you.

Ribault (Life Science business of Merck KGaA, Darmstadt, Germany)

Determine the end goal and assess the team

. It is important for companies looking to outsource to define their end goal and determine their key experts and resources to reach that goal.

. By defining a step-by-step strategy early in the development process in alignment with quality and regulatory requirements, companies looking to outsource can foresee potential risks and challenges before they arise and help determine the best course of action to help mitigate these risks.

If what you require is absolutely core to your business, be cautious about outsourcing. But don’t build what you can buy. It’s important to distinguish between the ‘core’ and the ‘context’ from the outset. If something is core to your business, then it might be more cost-effective, efficient, and reliable to think about sourcing this yourself. Part of deciding whether to outsource will be influenced by your timeframe—are you looking for a short-, medium-, or long-term solution? This way you can determine whether it’s worth making a large investment up front to handle the operation in-house. If it’s something that is readily available and other suppliers have years of skill in that area, then outsourcing is the right option.

Think through your business objectives to ensure you are selecting an appropriate partner or vendor for the long term

. Take the time to remind yourself of what you are trying to achieve in the first place and how these relate to your core business objectives. Having transparent conversations to ensure your vendor understands your objectives can give you a good head start. The last thing you want is to be tied into a contract if it’s wrong for your core business objectives. These objectives can be aligned with a broader vision for your business and brand. For example, you may want to partner with a vendor with similar commitments to sustainability to make your business greener. If you are committed to offering your customers highly innovative solutions, you’ll need to ensure your vendor is continuing to invest in the latest technologies the market has to offer.

Companies need to look beyond just unit cost

. To provide total value, a service provider’s capabilities should be understood. Like choosing a contractor, companies shouldn’t make a decision based on the cost alone. They need to make sure that the service provider can meet their needs to complete the project.

Expectations should be clearly communicated to the service providers as early as possible

. The project requirements change over the progression of the project. Open dialogue with your service provider on any changes sooner than later would help to overcome potential delays.

Choose a provider with proven performance and expertise 

… The capabilities and experience should be proven by a track record, which gives insight into the number of successful projects, experiences with different product types (antibodies, complex molecules, etc.), and regulatory acceptance (projects that have reached clinical phases, market approval, etc.).

Choose a provider offering a comprehensive service and product portfolio

. It is important to keep the whole drug development process in view. A good partner should not only offer individual isolated services but provide more holistic support … Such complete solutions ensure higher success rates, shorter timelines, and simplified project management and communication.

: What are your top recommendations for companies seeking outsourcing partners?

. Stay close to your core competencies and ensure a best-in-case experience for your clients.

Consider reviewing where your team is spread too thin and not able to support what is key to your business

. Look at outsourcing as a way of taking care of operations. This is important because business can be a stressful, high-paced environment, and handing over operations to a service provider can really help to focus the team.

. The customer’s molecule is often ‘the life of their company’; so, they place a significant amount of trust when handing it off to a contract development and manufacturing organization (CDMO). They want more transparency in their molecule’s complex development and manufacturing process. A key element in creating transparency is communication, and excellent partners should also be excellent communicators. This includes access to its experts when urgent matters come up, as they will.

. A key element in the outsourcing relationship is relying on your partner to possess distinct scientific insight and expertise for your molecule’s unique journey.

. A good partner should be flexible to help meet their customer’s needs so that they are successful in achieving their milestones. Having the right capabilities, capacity, and scale to meet the client wherever they are in their molecule’s journey, when and where it is needed, is critical. It sounds pretty straightforward, but many CDMOs today don’t have enough capacity or capabilities to meet their customers’ timelines.

. Outsourcing companies need to spend more time listening to their customers rather than trying to make sales pitches. It’s critical to understand customers’ process/product requirements and application needs to deliver the service that would exceed customers’ expectations.

Capabilities and limitations should be laid out early in the project discussion

. This would help avoid any promises that cannot be delivered.

. Companies should work with customers on a project timeline that can be delivered upon. Since outsourcing buffer management is a part of complex biopharma processes, it is essential that all outsourced services meet the customers’ critical timeline. If the project timeline cannot be met, always communicate early to find alternative solutions or paths.

. In addition to good technologies, service providers also require a high level of flexibility and customer focus to overcome the manifold challenges related to biologics development. This includes tailor-made development approaches, short lead and response times, the possibility to stop or change work packages (also on short notice), clear and efficient communication (ideally single point of contact), and flexible business models.

Establish and apply platform technologies

. Well-developed and efficient technologies are the basis to provide cost-effective services and fulfill the steadily increasing demands with respect to timelines, yields, scalability, and product quality. Furthermore, good platforms ensure regulatory compliance and a high project success rate.

. Single-vendor/one-stop-shop approaches comprising the full spectrum of cell-line development, cell-culture media, cell banking, analytical, and biosafety testing services provide big advantages, such as higher success rates, shorter timelines, and simplified project management and communication.

. Understand exactly what your client’s needs are so that you can meet them in the smartest ways.

Find solutions for multiple critical needs

. Once needs are identified, create a solution that solves multiple critical needs (vs. only one or stove-piped issues). Creating an improved overall workflow will benefit both sides of the collaboration.

. Good outsourcing is about creating optimal solutions and long-term, trusted relationships. Part of this can mean saying no sometimes and being flexible in creating new directions together. This really looks out for a client’s best interests. The partnership becomes stronger when you create opportunities for acceleration and improvement of the workflow.

Industry experts share their top outsourcing tips from both the perspective of companies offering outsourcing services as well as for companies looking to outsource.

Pharmaceutical Technology, BioPharma Outsourcing Innovation, February 2022

Establishing Systems Suitability and Validity Criteria for Analytical Methods and Bioassays

Method Development in Demand

Balancing Internal Focus Against External Capabilities

Contract, Development, Action! Analyzing Recent Events in Outsourcing

Gaining Formulation Expertise through Partnerships

What Outsourcing Partners Wish You Knew

Evolving Demands of Process Development Services

Preparing for the Future: Expanding Capacity and Facilitating Multi-modalities

Spray Drying Finds Growing Use for ASDs

Fostering Orphan Drugs