19th Annual
J.P Morgan H&Q Healthcare Conference

On the road for Info.Resource, publisher of Oregon-Bioscience.com

Manufacturing Biologics: production capacity as investment criteria

By Lorraine Ruff and David Gabrilska, Partners
Milestones, the critical thinking company
Seattle, WA

There’s a serious shortage of bioprocess capacity in the United States and abroad that’s affecting large and small companies alike. The issue is exacerbated by stepped up activity in drug submissions and approvals and the reluctance of management to invest too soon in the high cost of building plants: an average of $200 million and up to five years to design, build, validate and qualify a typical plant consisting of six 5,000-liter custom engineered reactors that yield hundreds of kilograms on a batch or continuous process before they know for sure a drug will pass rigorous regulatory hurdles.

Bioprocess plants, whether microbial or mammalian take on average three-to-five years and $200 million to build six 5000-liter bioprocess vessels that yield 100s of kilograms of recombinant protein.
Construction phase (design, site selection and permits, stick or skid design)	2 years
Start-up phase	1 year
Validate facilities and processes that will evolve	1 year
Operations qualification Make material process batch to demonstrate reproducibility and write filings for regulatory review and approval Regulatory review and approval	1 year

It’s a game of chicken that is not necessarily alleviated by small companies making manufacturing deals with larger companies. Some larger companies sell excess capacity, but there’s just not that much of it. The largest bioprocess capacity in the world is the Boehringer Ingelheim 100,000-liter facility in Europe. Genentech has similar capacity in its US operations, but after that it falls off precipitously.

Contract manufacturing organizations (CMO) market their capacities to the smaller companies working on their initial drugs with 100- to 1000-liter needs, but they aren’t much help to more developed companies with multiple products or drug candidates requiring larger commercial quantities of material.

"Years ago when CMOs could have addressed what was to become burgeoning need, they didn’t have the vision or the needed capital to build large scale reactors," said Morris Rosenberg, Eli Lilly. There are also the issues of highly specialized needs and the propriety nature of bioprocess yields. "If a company hasn’t contracted for its needs during 2001 and 2002, it’s out of luck," Rosenberg said.

Some companies have begun to evaluate alternative bioprocess systems: E. coli, mammalian cell culture, monoclonal antibodies, immunofusion, CHO, transgenic strategies utilizing milk and egg, and plants as production vessels. Drug from plant production is on the distant horizon and commercial grade transgenic bioprocess systems won’t deliver commercial levels of drug until 2003, according to Sandra Lehrman, MD, chief executive officer of Genzyme Transgenics. While the panelists predict more design and construction of multiple product facilities to spread risk across several products, this strategy adds burdensome time, complexity issues and stringent cleaning requirements of multi-process validation.

From dosing trials requiring pilot plant production to commercial production, companies are often off several fold in their typically low estimations of how much drug will really be needed for a commercial formulation, explained Lehrman. During time, operators are learning processes as well as attempting to adjust and optimize the process. The task is daunting.

For each company and product there will be a manufacturing strategy that is defined by the end volume needed and a calculation of needed resources. The strategy needs to anticipate the fluidity of the process and build in a framework for change, including new methods development and bridging strategies.

While easing somewhat from a 1980s regulatory prospective when companies had to invest in and qualify bioprocess plants beginning in Phase III, companies are reluctant to "bet the store" on drug candidates that could (and have) failed during late-stage clinical trials that left companies and investors with costly white elephants. Instead they are hedging their bets, holding off on large capital expenditures for manufacturing facilities until they are assured they have demonstrable commercial product.

"What we’re seeing now is a pendulum that has swung back too far," said Lehrman. "We needed and received more flexibility in the regulatory process and relief from early investments in manufacturing plants that resulted in white elephants."

The real issue is whether biopharmaceutical companies will have the time they need to plan and build bioprocess facilities. It’s an opportunity waiting for a massive infusion of capital that will require patience on the part of investors: not a good combination. Investors will be wise to add "production capacity" to their selection criteria checklists when making investment picks.

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