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The authors share their approach and experience working in complex, multicompany environments for in-licensed products to develop successful chemistry, manufacturing, and controls packages for managing outsourcing partnerships.
An increasing percentage of pharmaceutical industry revenue is derived from collaborations, copromotions, acquisitions, and licensing arrangements. For example, one major pharmaceutical company recently reported that more than 64% of its 2010 revenue was attributable to alliance products. Partnerships and alliance management are now considered essential to growth strategy. Although the scope of this article is limited to in-licensed products, and focuses on development of chemistry, manufacturing, and controls (CMC) and technology transfer, the principles described can be applied to any partnership and technology-transfer activity between two or more companies. This article is written from the point of view of a US-centric company and development of CMC for FDA submission, and assumes that the due diligence performed using multifunctional teams was comprehensive and that gaps relating to CMC were identified properly. It does not delve into details of CMC requirements that can be found elsewhere, such as FDA and International Conference on Harmonization (ICH) websites, but provides a high level view of partnership management leading to successful technology transfer and CMC package development.
The technology transfer and CMC development of an in-licensed product can take several shapes with varing levels of complexity. Some of these arrangements can be broken down as follows: codevelopment of CMC and manufacturing at licensor's facility; codevelopment of CMC and manufacturing at licensee's facility; technology transfer of a developed product from licensor to licensee with product being manufactured at licensee's facilities; and technology transfer of a developed product from licensor to licensee with product being manufactured at a third party contract manufacturing organization (CMO). Although different, these arrangements can be brought to successful fruition using similar management techniques. This article addresses the important aspects of successful process management, common pitfalls, and recommended best practices in this regard.
For the purposes of this article, let's consider an aseptically filled liquid product. A typical CMC package includes critical and noncritical components. Critical components are defined as those documents that require tangible laboratory data. Non-critical components are defined as documents that are purely administrative in nature and do not require data generation in the laboratory. Some components of a typical CMC package are below.
One of the most important and often ignored aspects for successful CMC package development is a well written and comprehensive development agreement. The agreement defines the scope of a partnership, the legal framework, expectations and deliverables of each party, and any monies involved. The agreement between parties is the most important document that defines the path of the relationship. It should be well thought out with clearly defined objectives, deliverables, timelines, and responsibilities. If possible, regulatory and manufacturing departments should be involved in the development of deliverables as they relate to CMC, basing them on regulatory requirements. In addition to legal and financial information, a good agreement should contain the following CMC development and management points:
Successful partnerships avoid the common pitfalls that can undermine the agreement or, worse, lead to acrimony between companies involved. Although there are many challenges that occur, some of the common pitfalls include lack of communication, misalignment of goals, unresolved conflicts, different regulatory experiences, and cultural differences.
Lack of communication. Communication, or lack thereof, is probably the number one cause of unnecessary delays or even failure of a partnership or agreement. High levels of communication ensure that expectations are aligned and conflicts are resolved as they arise. Frequently, the agreement itself can cause problems when unclear or ambiguous language is used. Each party may choose to interpret it in ways which are favorable to its position, so clearly defined terms are essential. Further challenges arise when a lack of written communication exists throughout the project; written correspondence is essential for keeping the project on track. This is especially important when working with companies outside the US due to inherent differences in interpretation.
Misalignment. When the goals, expectations, and assumptions of the different parties are not in alignment it can lead to different levels of commitment. Often subjective, these can be difficult to detect but should be an important part of due diligence. These issues are especially important when the size and/or company cultures of the partners are different. For example, if two companies agree on project goals it is equally important to know what prerequisites are necessary to achieve them.
Unresolved conflicts. Conflicts should normally be resolved at the core level in a timely manner. Resolution requires a level of trust between the parties. If a conflict is left unresolved, it will erode the relationship. And certainly, any activities on the critical path of a project should be elevated sooner rather than later. Though this may not always be well received, experience has shown it necessary to keep timelines and deliverables on track. Elevating conflicts in the correct manner cannot be understated; elevating a quality issue to the quality representative may not always be the correct path. Frequently, functional issues are really business decisions that involve tradeoffs between risk and reward. Normally, a functional manager will act in ways that benefit his or her function, but not necessarily the larger project. Once the contact at the partner organization is selected, it is then key to frame the issue in a fair and balanced manner.
Different regulatory experience. If one company has more experience working with FDA, theoretically, it can guide the other through the process. In some cases, hiring an external consultant can be useful to iron out any differences. Conversely, for two companies with similar FDA experience, the unfortunate truth is that interpretations of guidance documents may become overly conservative in order to mitigate any incorrect regulatory decision liability to the detriment of the project. The interpretation may or may not be in alignment with the actual acceptable practice, but rather on what a company or individual believes the FDA likes or doesn't like. It can be subject to personal opinion and by extrapolating issues from experiences that are not always directly related. One solution during stalemate is to seek external advice from a mutually respected authority.
Language and cultural differences. Risk profiles, accountability, and the partners' decision-making processes are all potential areas for contention. It is important to understand risk tolerance from a societal standpoint (e.g., Japan, US, India, China) and a company scale (e.g., small, medium, large). These differences are not easily managed or changed and should be well understood before engaging in a licensing deal. Perhaps the most appropriate solution is to build expectations into the deal structure at the start. Having mutual respect for each other's cultural and societal norms is key as attempts to modify or retrain the partnering company will typically not be met with success and so avoided when possible.
Organizational commitment. Partners should be committed, have aligned goals, and communicate with the functions involved. It is imperative to have key stakeholders' support and organizational resources. The negative consequences of a lack of organizational commitment to success are obvious, but they are more pronounced if issues arise in the project that require quick decision making and additional resources. For example, if a licensed product is being transferred from the licensor to a CMO and during the process, the CMO receives observations from the FDA that will not be resolved quickly, it may become necessary to engage a different CMO. To do so requires not only additional resources, but possible time delays depending on the stage of the process.
Communication. High-level communication between dedicated alliance managers on each side is critical. The alliance manager liases with the different parts of the organization, whether it be development, manufacturing, commercial or legal, to ensure the partnership runs as smoothly as possible. The importance of constant communication and dedicated project management cannot be overstated as they help to manage deliverables and expectations of all parties involved. Furthermore, unexpected obstacles are more easily overcome. For example, if during the crucial stage of exhibit batch manufacturing, issues arise that require mutually agreeable decisions, they can be made rapidly if excellent communication exists between parties.
Project management. Dedicated project management (which can be performed by alliance managers) is a key strategy in helping alliances stay on track and meet timelines. This approach is especially critical in the age of virtual teams with multiple partners handling complex projects such as CMC development with numerous moving parts, where functional involvement of all is required for successful completion
Strategic partnership. Companies with successful past collaborations should consider extending mutually beneficial relationships to expand opportunities for reaching shared goals. Companies that excel in alliance management will position themselves to attain partner-of-choice status and win new deals.
Alliance management will continue to become an important component of not only in-licensing partnerships leading to successful CMC package development but also to other partnerships within the pharmaceutical industry. It is important to manage these alliances as effectively as an in-house research team to reap the full reward. Working with partner companies can be difficult and, at times, frustrating, but with adequate planning, forward-looking agreements, pitfall avoidance, and insistance on adoption of best practices, the benefits of successful partnerships can be tremendous.
Sumeet Dagar* is manager, alliance management and new business development, and Sean Brynjelsen is vice-president, new business development, both at Akorn Inc., email@example.com, tel: 847.353.4902.
*To whom all correspondence should be addressed.