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Consistent growth in outsourced biomanufacturing points to an evolving industry increasingly reliant on external capacity and expertise.
Outsourcing has been an established feature in biomanufacturing for the past two decades. But the increase in the percentage of outsourced biologics points to the fact that contract manufacturing of biologics today is a strategic, integral part of the industry. Since BioPlan Associates began evaluating outsourced production in 2010, there has been a steady increase. On average, in 2023, more than 25% of biologics APIs manufactured for companies is outsourced today, according to a BioPlan survey (1). In 2010, only 7.9% on average was outsourced. This represents a growth rate of 10.5% annually (see Figure 1).
In comparison, fill/finish operations have generally moved in-house, as a percentage of overall biologics fill/finish performed. Declining slightly from 33.5% on average in 2010, to 26.3% in 2023. This suggests that, on a per-facility basis, fill/finish is increasingly being considered an internal operation.
Although during the COVID-19 pandemic there was much discussion regarding reducing offshoring and bringing production of both raw materials and finished biologics back to companies’ domestic locations, this trend has largely not proven itself over time. While, in 2022, there was a notable dip in the percentage of bioprocess
respondents indicating they would consider international outsourcing over the ‘next 5 years’, in 2023, the percentages have pretty much returned to pre-COVID trend levels.
In terms of specific locations, when respondents were asked where they would consider outsourcing their internal operations, the United States remained the primary likely international destination (for production outside respondents’ country). Nearly 50% would be considering this at least as a ‘likelihood’. Germany followed as the number two location, with 27.9% of global respondents (see Figure 2).
Outsourcing was also assessed based on the platform respondents were using. Mammalian and microbial platforms are the most common. Significant differences were found between platforms:
Mammalian cell culture: For mammalian cell culture, there was a continuing shift. In 2023, only 29.7% of companies reported completely in-house cell culture production, down from 34.9% in 2022. This decline is just a continuation of the trend seen for nearly 20 years. In 2006, 57.6% of the industry produced all their biologics in-house.This percentage has declined steadily since.
Microbial fermentation: Similarly, microbial fermentation mirrors trends observed in mammalian cell culture, and noticeably moving away from complete in-house production. In 2023, only 34.3% of companies handle all their microbial fermentation in-house, a decrease from 40.0% in the previous year. This dropped from 58.1% in 2006.
Cell or gene therapies: The cell or gene therapies sector is witnessing a reduction in companies opting for full in-house production, down from 29.7% in 2022 to 24.3% in 2023. This is down from 34.1% in 2018. Most of the innovators for these advanced therapies have little capabilities for production in-house. So, it is likely that even greater pushes toward outsourcing as these therapies reach commercial scale.
Other cell systems: In other cell systems like yeast, plant cells, and
insect cells, the rates of full in-house production have shown remarkable stability. This consistency suggests that companies dealing with these particular cell types continue to find value in maintaining internal control over the entire production process, perhaps due to specialized requirements or the perceived lack of advantages in outsourcing.
The decline in in-house production for mammalian cell cultures and microbial fermentation systems is driven by the technological complexity of bioprocessing, which makes it increasingly challenging for companies to maintain the required specialized skills and equipment. Second, outsourcing has become an attractive option for its cost-effectiveness, allowing companies to mitigate risks and operational expenses. Lastly, there is a strategic move toward focusing on core activities such as R&D, with companies offloading the manufacturing aspect to specialized contract organizations.
These trends likely reflect several factors: technological advancements in specialized facilities, the drive for cost efficiencies, and the complexities of regulatory compliance. As more companies experiment with partial outsourcing, the industry may be entering a transitional phase, marked by re-evaluations of in-house capabilities and a cautious exploration of the benefits offered by external vendors. This suggests a future where a hybrid model of in-house and outsourced cell culture becomes more prevalent.
The biopharmaceutical industry is seeing an ongoing transformation regarding its production strategies. BioPlan’s Annual Report data underscores the evolving landscape and complexities of biopharmaceutical manufacturing. While some cell systems like yeast, plant cells, and insect cells continue to rely heavily on in-house production, the overwhelming trend suggests an industry increasingly open to external partnerships. Contract manufacturing organizations that can offer specialized expertise and services stand to benefit greatly in this environment. As companies continue to test the waters of outsourced production, one thing is clear: adaptability and strategic partnerships will likely define the success stories in the biopharmaceutical landscape for years to come.
Doug Nissinoff is director, Research Projects at BioPlan Associates.
Vol. 47, No. 10
When referring to this article, please cite it as Nissinoff, D. Growing Opportunities in Outsourced Biopharma APIs. Pharmaceutical Technology 2023 47 (10).