Dispatches from BIO 2014

Biotech IPO boom generating more work earlier for CMOs

By Zachary Brennan

- Last updated on GMT

Biotech IPO boom generating more work earlier for CMOs

Related tags Good manufacturing practice

The biotech boom of over 165 IPOs in 2013 has resulted in earlier and more lucrative work for CMOs (contract manufacturing organizations), experts say.

In a session at BIO 2014 called Outsourcing Innovations in the CMO industry, David Enloe, president and CEO of Ajinomoto Althea, told attendees, “The client base – particularly on the small client side is really changing. The IPO window is still open​” and that’s driving change for CMOs.

He added that as IPOs have grown from $20m to $200m, investors are now saying, “Show me your complete filing submission strategy with respect to manufacturing​…and that’s a completely different way for small companies to look at the world​.”

There’s a new expectation from financial backers that manufacturing risk is minimized, and investor groups, which now have CMC (chemistry, manufacturing and controls) and GMP (good manufacturing practice) expertise, are even beginning to tout GMP milestones publically.

“It’s odd to me to hear a company celebrate the beginning of a process validation batch” as they would celebrate early clinical results, Enloe said. “For a CMO, that means people are paying us to do work earlier, and the challenge of that is that expectations have shifted​.”

What that also means is that the shift of risk is often being pushed towards the CMO, so the expectation is that the CMO is going to be able to magically be able to do all of these things for the first time is something we have to work through with a client​,” Enloe said, noting the importance of early communication with senior management.

Troy Carpenter, president of CMO Vetter, noted that his company’s sales have tripled over the past 12 years as the use of CMOs has increased while small and medium-sized biotech companies have flourished.

And we’re seeing a higher degree of oversight than we’ve ever seen, especially from our largest customers, which consider us an extension of their manufacturing network​,” Carpenter said.

He noted that formulations and delivery systems are shifting and an increasing complexity of parenteral molecules.

But areas where sponsors and CMOs still need to discuss include siliconization techniques, closure systems, devices and proprietary manufacturing processes.

The overall riding point is that the CMO must take it personal – you really have to own your processes, though CMOs and sponsors should work together to help shape the regulatory environment​,” Carpenter said.

Michael Reinhard, head of sales at Lonza, added that CMOs need to focus on areas where there might be regulatory risk and that communication is key to any supplier-sponsor relationship. 

Related news

Related products

show more

State-of-the-Art Virtual Pharma Factory Tour

State-of-the-Art Virtual Pharma Factory Tour

Content provided by METTLER TOLEDO | 09-Jun-2023 | Event Programme

Join METTLER TOLEDO’s weighing experts on a virtual tour of a state-of-the-art manufacturing facility. On the call, you'll be digitally transported...

The Right CDMO Can Unlock Faster Drug Development

The Right CDMO Can Unlock Faster Drug Development

Content provided by Lonza Small Molecules | 15-May-2023 | Interview

Drug development presents biotech companies with ever-changing challenges. Enabling a faster end-to-end process requires seamless flexibility and extensive...

Related suppliers

Follow us


View more