Plant Construction & Process Technology

Outsourcing Biopharmaceutical Manufacturing

CMOs, CROs Must Take on Risks

12.11.2013 -

Development On Trial - The number of biopharmaceutical projects in clinical trials and products is increasing, playing an important role in new treatments.

Many of these projects start in small and startup biopharmaceutical companies. They depend on contract manufacturing organizations (CMOs) and contract research organizations (CROs) to develop potential pharmaceutical products. These biopharmaceutical companies are crucial to Big Pharma because they supply new projects, often after phase II or proof of concept (POC). Society needs new drugs that solve medical problems and reduce costs. Patients need drugs that cure their illnesses and maintain their quality of life.

The Development Chain

The small and young biopharmaceutical companies are an important starting point for development of new drugs. They play a crucial role in the development chain of new biopharmaceuticals. These projects are important for Big Pharma companies: After POC in humans, the projects are candidates for insourcing, thereby supporting their project portfolio.

Big Pharma has the resources and capability required for the costly phase III and commercialization. Therefore it is important that biopharmaceutical companies have an environment that fulfills their requirements.

Know-how and financial levels vary among these companies. Small ones do not have their own good manufacturing practice (GMP) facilities or development organization, and some companies are virtual. They require strong support from the CMO. However, it can be difficult for the CMO to get a good profit margin, and in some cases it's a financial risk.

Virtual Company

Ideas for new biopharmaceuticals generated outside Big Pharma must be developed by virtual companies. The investments required to set up a complete biopharmaceutical company are high - too high to be an acceptable risk.

The success rate for development is too low to sustain investment in that range. It's a gigantic step from a virtual company to a company with its own facilities and organization for research and GMP, marketing and sales. Most of these virtual companies will continue with that business model; they are strong in the early discovery phases.

Requirements For Success

A big requirement for success is financial support, but this article doesn't cover that. The companies have limited experience in the development of biopharmaceuticals. Physicians or scientists often start these companies without experience in development, process development, manufacturing, or regulatory and authority requirements. They do not have and will not have their own GMP facilities. They depend on service providers, CMOs and CROs. Since they do not have the know-how to define what they need to purchase, they depend on the service providers' support.

They need the active pharmaceutical ingredients (API), drug product (DP) for the next clinical trial, an application for the clinical trial and design of the clinical. They do not need to understand the manufacturing or the process chemistry. But it is a requirement from authorities, so the service providers must supply this know-how concerning the process chemistry.

Process Development, Manufacturing

The project has to fulfill requirements regarding the manufacturing of API and DP. For commercial manufacturing, the process must be industrial and robust, fulfilling requirements for regulatory registration as a commercial product. During clinical trials, the costs of goods sold (COGs) are not important; however, for a product on the market they are crucial. The process used to produce the drug for clinical phases I and II must have been designed in such a way that after modification it has a COGs level within market requirements. That requires planning from the project's start.

So the virtual company has to develop a manufacturing process fulfilling these requirements, and that is done by the CMO.

General Problem

Small companies face two significant problems: low bargaining power and insufficient know-how. They lack expertise in several areas:

  • Defining what to purchase
  • Designing the agreement
  • Industrial process know-how
  • Analytical and characterization skill
  • GMP
  • Setting specifications
  • Regulatory knowledge
  • Quality assurance/quality control (QA/QC)

The traditional way to handle process development for a drug project is to use the process that has been developed for creating substance for POC in animals. It starts with a general method that might give the answers you think you need for the moment. But the only thing that is true is that both the specification and several analytical methods will need to be modified.

The methods used during early development are not suited for market, so there are always huge demands for modifications. The process development is often driven by the accelerated quality demands, and the development is done stepwise without a proper plan and with no control of either the cost or the goals. It is an expensive way of doing process development, and it is reacting, not acting.

It will not give an optimal process and will not take into account:

  • COGs
  • Quality
  • Reproducibility
  • Comparability
  • Authorities' requirements

The same tradition is also true for analytical methods development. After POC in humans (phase II), the focus is on fine-tuning and validation of the process. If the analytical method development is done with the Quality by Design (QbD) concept, the knowledge of both accuracy and precision are much more secure than if an older method is used. Focusing on both methods and specifications early in development makes the knowledge about both methods and substance much more reliable than when trying to solve the problems as they come up.

More reliable knowledge about both substance and impurities is an essential tool for process development. The process development could never be better than the analytical knowledge.

Knowing the substance early on reduces the chance of nasty surprises. Focusing on a well-designed process as early as possible during project development naturally produces a risk of losing time and money invested in a project that could fail in a later stage. But the benefits outweigh the risk. Be careful and critical in your choice of projects to develop further. After deciding to develop a project, plan for success. 

Characterize MCB/WCB[MK1] , API and DP from each clinical phase to secure that comparability is maintained during the clinical phases and different manufacturing sites. If the manufacturing has to be moved after POC, the characterizing data are required. The characterization shall include potency measurements; preferably buy a bioassay/cell line. Development, manufacturing and characterization have to be well-documented.

QbD: Quality by Design

Quality by Design (QbD) is often seen as an expensive way to develop an early project.

However, in the long run, it is the other way around. The smart design of the process for API and DP will secure the quality of the product. Analyzing the final product, for sterility for example, does not create quality. Quality shall be planned - designed - that's QbD.

Start to think QbD as soon as you decide to get involved in a project. You should have a structured way of doing development. That makes it possible to avoid expensive and time-consuming surprises. The possibilities for success are improved. Invest in a stable and reliable production process from the beginning.

Create a strategy for:

  • Specifications
  • Regulatory requirements
  • Clinical trials
  • Stability and shelf life
  • Process development
  • Manufacturing

It will secure delivery of API and DP, fulfilling specifications for the clinical trials and fulfilling your timelines.


You have to understand the chemistry in your process. Describe the chemistry in regulatory documentations, and explain your process design and regulatory requirements. Quality cannot be analyzed - the quality in the process has to be based on process design, that is, QbD. The regulatory knowledge required for a project has to be part of the company or performed by the CMO or consultant. Regulatory shall be part of the project from the start. The regulatory person or department shall have the knowledge to take an active part in the development, including knowledge of the chemistry in the process. If the knowledge is not part of the company, get external help.

The CMO or a consultant can create the regulatory documentation regarding the process:

  • Chemistry
  • Rationale for the process design
  • Rationale for the specifications

But the project owner is responsible for the documentation.

Specifications, in-process, API and DP must reflect the use of the drug, dose, one-time use, lifelong use and so on. The specifications per clinical phase should be decided at the project's start; it is an important goal for the process development.

Read and understand the International Conference on Harmonization guidelines as a start.

Collaboration: Win-Win

For the customer:

  • API and DP for the next clinical trials or market
  • At a reasonable cost

For the CMO:

  • Successfully perform the project and build know-how
  • At a reasonable profit

For a successful collaboration, the involved companies have to understand each other and what is important to each company. The CMO has to understand what the customer really needs; the customer must understand what it needs and what it will get. If this isn't happening, get help from external consultants. Both parties have to receive what they need from the assignment: delivery of the drug, specifications fulfilled, timeline and cost.

If the expectations from the CMO and the customer are not the same, one or both parties will regard the assignment as a failure, even if it has been performed according to the plan.


CMOs and CROs have to take on the risk by delivering a defined process, manufacturing of API and DP, not activities. At a fixed amount, price and timeline. It is important for the companies using their service. There are CMOs offering manufacturing of an antibody, from gen to a fixed amount of API for phase I/II. At a fixed price and timeline. They do an evaluation of the project before accepting the assignment. The biopharmaceutical industry needs more of this kind of offer. It is also important for the investors: They will know what they get for their investment, and funding a project will be easier. It will generate development of more projects, which Big Pharma can commercialize for the benefit of patients and society.



Bio Evaluation

Axel Johanssonsgata 4 -6
75471 Uppsala