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Recent news surrounding CDMOs provides insight into ongoing trends in the sector.
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,” Biopharminternational.com, Jan. 18, 2021.
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.
5. WuXi Biologics, “Company,” www.wuxibiologics.com/company, 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” Bio/Pharma Outsourcing Innovation 2022, Supplement to Pharmaceutical Technology (February 2022).