Contract Manufacturing in Biotechnology
Positioning your company for success by selecting the
right partner and by knowing and preparing for the
‘previously’ unexpected!
Contract Manufacturing and Technology Transfer Dinner Meeting
ISPE San Francisco / Bay Area Chapter
Vacaville, CA
September 10, 2009
Disclaimer
The views expressed in these slides
and accompanying discussion are my
own and do not necessarily reflect the
views of Genentech.
What ‘Contract Manufacturing’ are we
discussing?
Internal
External
Transfers
API / Bulk
Fill & Finish
Devices
Services
Clinical
Commercial
Products
CMO
Pharma
Businesses
Today’s Focus
Contract Manufacturing – a Very Viable Option
•
Why companies consider utilizing a CMO?
•  Provides flexibility in your supply chain
•  Provides surge capacity
•  Act as supplement to existing internal capacity
•  It’s ready now – (18 months vs 4-5 years)
•  Minimizes need for capital investment
•  Allow company for focus on other capabilities
•  Provide assistance in development, scale-up, and regulatory areas
•
Why companies consider providing CMO services?
•  It’s the business model for the true CMO
•  Need to fill excess capacity
•  Opportunity to learn while utilizing new capacity
•  Train staff
•  Start-up new facility
•  Gain valuable experience
Successful Contract Manufacturing begins during Selection
Contract Manufacturing Process
1. Define
2. Identify
Outsourcing
Requirements
Identified
•
•
•
•
3. Evaluate
RFP
Issued
4. Negotiate
Term Sheet
Issued
5. Transfer
Agreements
Signed
Identifies gaps and risks to address
•  In the contract
•  During tech transfer
Set expectations and flush out assumptions
•  CMO
•  Your own company
Calibrates overall project schedule
•  Identify early watch outs
Establishes working relationships and trust
6. Manage
FDA
Approval
Kind of like a marriage!
Selecting the Right Partner…
There are differences between ‘dedicated’ CMOs and
‘gap filling’ Pharma companies
On the positive side, sure you get this:
•
Dedicated CMO
•  Lower cost
•  Speed
•  Reliability (failure puts them out of business!)
•  Experience in wide variety Manufacturing situations
•
Gap filling Pharma / Biotech company
•  Experience in Manufacturing
•  Strong Development and Scale-up expertise
•  Strong Quality Systems
•  Strong Regulatory history and expertise
Selecting the Right Partner…
Understanding more than just the ‘upside’
But you also get this!!!!
•
Dedicated CMO
•  Thinly staffed to handle ‘upsets’
•  Penny pinching – it’s all about the money
•  Negative Regulatory perception of some CMOs
•  Scheduling challenges – Multiple companies at the table
•  Increased support needed to fill expertise gaps
•
Gap filling Pharma / Biotech company
•  Manufacturing experience in one ‘platform’ process
•  Systems not built to ‘act as a CMO’
•  Battle for ‘the best’ resources vs internal projects
•  Difficulty doing things ‘your way’
Do your homework during Selection
Don’t judge a book by it’s cover…
•
Don’t …
•  Shortcut this stage
•  Assume CMO knows best (but don’t
discount their experience)
•  Underestimate cultural fit
•
Do …
•  Develop a structured selection process
•  Cross-functional governance
•  Stage-gates
•  Standard evaluation criteria,
deliverables
•  Conduct thorough due diligence of the
CMO w/ cross-functional team
•  Publicly available information
•  Site visits
•  Facilitated technical discussions
•  Friends in the industry
•  Tease out and consider ways to align
incentives
Key Evaluation Criteria
•
•
•
•
•
•
•
•
Technical and technology transfer
maturity
Manufacturing capabilities and
infrastructure (Make)
Operational capabilities and
infrastructure (Plan, Source, Deliver)
Regulatory compliance
Quality Systems
Economic attractiveness
Business profile
•  Management Expertise
•  Business Stability
•  Cultural Fit
•  Risks
Strategic fit
Made your selection?
What you need to know, expect, and prepare for no matter who you choose!
•
Tight timelines from day 1
•  The project end points, ie. when the product needs to be released, will
drive the schedule
•  Back-scheduling will occur from there and all required activities must fit
in that time period
•
Quick engineering decisions for long lead items
•  Long lead items are critical path from the day the contract is signed.
•  More engineering will be needed than anticipated.
•
Dedicated staff
•  This is not a hobby or side job!
•  Full time dedicated staff are required in all key functional areas
•  Dedicated senior project lead with decision making authority a must
•
Quality organization (RQC) alignment
•  No two Quality organizations are exactly alike!!
•  Time must be spent up front to document and align expectations and
philosophies
Did you really think it would be easy?
There’s more you need to expect and prepare for…
•
Relationship building
•  Booze cruises and wine tasting are seriously important (seriously!)
•  Time and effort must be put towards building relationship –
including nights and weekends
•  Need to build strong relationships while times are good to
effectively work together when times are bad
•  Face to face time is critical – phone calls and video cons alone will not suffice
•
Early and often QC Activity
•  Method Transfers must start early with face to face interactions
•  Raw material release will be on the critical path
•  QC needs to be ready for quick turnarounds for process testing
•
Procurement and Raw Material challenges
•  Challenges will be abundant when acquiring others raw materials
•  Pricing, availability, and delivery concerns
•  Vendor approvals and audits required
•  Start early and plan for additional resources
•
Shipping and logistics - Don’t overlook these area’s
•  Critical to bring in the raw materials, cell banks,
and for shipping samples and final bulk.
•  Requires management well beyond transfer!
Maybe you shouldn’t have outsourced after all!
You’re stuck now, but you still need to expect and prepare for…
•
Meetings, Meetings, Meetings
•  Strong project governance / management is essential
•  Documented transfer agreements
•  Quality Agreement
•  Joint Service Agreement
•  Time spent in meetings is part of the game
•
High senior management engagement
•  Expect more senior management engagement than with internal
products
•  Prepare staff to manage effectively in a high visibility project
•
Surge in activity to impact all your systems
•  Change control, documentation management, etc. will see big upswing
really quickly
•  Increased complexity when third party approvals are required
•
Data availability
•  More process data will be viewed by more people than ever before
•  Data will be expected real time – without review at times
•
Validation disagreements
•  Validation policies, procedures, practices, experiences, and
expectations vary
•  Expect and work early to identify gaps
And yes, there is even more....
You need to understand, expect, and prepare for…
•
Travel Budgets
•  Estimate your travel requirements than multiply by 3x
•  Expect staff to be away from the shop more than expected
•
Changes in manufacturing kg requirements
•  Estimating clinical and commercial product demand is far from an
exact science
•  Build flexibility into your manufacturing schedule to prepare for
changes
•
Meets specifications?
•  Be aware and prepare for the fact that ‘meeting specifications’ is
not enough - scope creep
•  This needs to be controlled early
•
Maintain schedule at what cost
•  Must be diligent to maintain RQC levels while confronting business
drivers
•  ‘Business’ is now part of daily life
•
Approximately 40% of all marriages end in divorce
•  Constant work will be needed throughout the length of the contract
and beyond to ensure your contact manufacturing experience does
not end in an nasty divorce!! (don’t forget the ‘kids’!)
How to Prepare for Success…
•  Success begins with selection – get the right people involved early
•  While the type of CMO you choose does not necessarily matter, it is
critical to understand the weaknesses of all options up front
•  Expect and plan for the ‘previously’ expected
•  Successful Contract Manufacturing is a lot like a successful marriage.
By selecting well and by understanding and accepting your partners
weaknesses up front, you will be better prepared for success ahead.
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Some Quotes to consider
“Marriage is that relation between man and woman in which the independence is equal,
the dependence mutual, and the obligation reciprocal.” Louis K Anspacher
“Many marriages would be much better if the husband and wife clearly understood
that they are on the same side.” Zig Zagler
Thank You!
Dan Moskey
Associate Director,
Vacaville Technology
Genentech, Inc.
dmoskey@gene.com
Appendix
•  Governance Structure
•  Low Overhead Project Management
Establish an Effective Governance Structure
•
•
Governance = People + Process
•  Project and management
teams
•  Stage review process
•  Decision-making process
Benefits
•  Minimizes time wasted
negotiating through certain
conflicts
•  Ensures best possible minds
are contributing to the solution
•  Minimizes fire drills
•  No surprises for
management
•  No “plausible deniability”
•  Leverages resources
Executive Steering Committee
Management
Committee
Decisions
Leaders
Project
Team
Recommendations
Team
Leaders
Core Team
Extended Team
(ad hoc)
Sub-Teams
Leaders
Leaders
Leaders
Leaders
Leaders
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

Quality
Technical
Engineering
Validation
Supply Chain
QC
Establish a “low-overhead” project
management approach early
•
•
•
Communications
•  Meeting standards (attendance, frequency, format)
•  Meeting minutes template
•  Meeting schedule
•  ADI log (Actions, Decisions, Issues)
•  Metrics / dashboards
•  Team roster and roles/responsibilities
•  Software standards
Document management
•  Document management systems/tools
•  Project scheduling responsibilities, processes, and systems/
tools
Risk assessment and management
•  Methodology
•  Risk assessment tool and processes