Capacity Utilization Trends In Bioprocessing

By Eric Langer, president and managing partner, BioPlan Associates, Inc.

The biopharmaceutical industry continues to have underutilized capacity for all expression systems, according to results from our Ninth Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, where we asked 302 biotherapeutic developers and CMOs to estimate their average production as a percentage of their operating capacity. Capacity utilization information is important for planners as they determine whether capacity will be available for the production of pipeline drugs that may be reaching approval. For biomanufacturing capacity utilization from 2006 to the present, the industry rate has remained relatively stable at 61.7%.

Biopharmaceutical manufacturers have become increasingly adept at anticipating high production demands and avoiding capacity crunches. A certain amount of excess, “flex,” or buffer capacity is important in biomanufacturing because the opportunity costs associated with not getting a company’s drug product to market can be devastating. On the other hand, the cost of an idle biomanufacturing facility and costly excess capacity is also actively avoided.

Compared to last year, capacity utilization appears to be steadier for some systems than others. Mammalian cell culture — this year at 61.7% — is virtually unmoved from last year’s 61%. Similarly, capacity utilization for plant cells — at 52.7% — has not changed appreciably from last year’s 51.3%. Rates for other systems have seen more movement: microbial fermentation, down from 53.6% in 2011 to 49.5% this year; yeast, down from 46.8% to 35.7%; and insect cells, down from 59.3% to 53.9%. Looking back as far as 2004, there has been significantly more volatility, with capacity utilization generally trending downward during that time period.

Significant capacity utilization drops for mammalian, microbial, and yeast culture after 2003 are partly due to new large scale facilities going operational and following that, higher titers in upstream production. We note that the same equipment can be used for both microbial and yeast systems (yeast is a eukaryotic microbial system). So the differences between microbial and yeast capacities are likely due to respondents’ accounting for actual processes being run at their facilities (rather than processes capable on the same equipment).

Is the industry planning better?
The current economic situation also has had a dramatic impact on global capacity utilization for all industrial segments, so it is likely to have some impact on biopharmaceutical products. However, despite utilization percentages having decreased in recent years, it is worth noting that a lot of new capacity and higher yields have been established during this period, so overall biomanufacturing levels (output) are up considerably.

Of course, a certain amount of excess, flex, or buffer capacity is important in biomanufacturing because the opportunity costs associated with not getting a company’s drug product to market can be devastating. At the same time, the cost of an idle biomanufacturing facility and costly excess capacity is also actively avoided. So predicting one’s own needs and overall industry capacity becomes a high-stakes game. Today, smoothed-out biopharmaceutical industry utilization rates are due primarily to improved planning by manufacturers and the lack of major new blockbuster products that might absorb substantial industry capacity. The leveling-off in biomanufacturing capacity suggests that companies are using their existing capacity more efficiently and are planning more effectively for shifts in demand for additional capacity.

CMOs See Higher Capacity Utilization for Nontraditional Systems
Our study also compares drug developers to CMOs, finding that reported capacity utilization for mammalian cell systems in 2012 was higher for biotherapeutic developers than for CMOs, at 64.2% compared to 51.1%, respectively (vs. 61.3% and 52.5%, respectively, last year). Conversely, for microbial capacity utilization, the opposite occurs, with biotherapeutic developers at 48.2% capacity utilization, compared to CMOs at 55.9%. Biotherapeutic developers report slightly higher utilization than CMOs for yeast systems (36.1% vs. 34.6%), while CMOs are slightly higher for plant cells (55.5% vs. 50.8%).

The Outlook for Capacity Utilization
The study’s data agrees with most industry analysts who feel there is likely to be sufficient capacity worldwide to meet production requirements for biopharmaceuticals during at least the next five years. However, budgets for new capacity have or are being increased in 2012, and companies continue to consider CMO capabilities at the scale-up stage and beyond. With the continued increase in biopharm approvals, some industry capacity may be absorbed. Further, because blockbuster products, particularly monoclonal antibodies, can consume substantial installed capacity, the success or failure of one or two potentially high volume products in development can change the capacity utilization picture. However, this only affects those few companies with the largest capacity, and we are seeing fewer blockbuster-like products in the pipeline.

Survey Methodology: The 2012 Ninth Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production in the series of annual evaluations by BioPlan Associates, Inc. yields a composite view and trend analysis from 302 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 29 countries. The methodology also included 185 direct suppliers of materials, services, and equipment to this industry. This year’s survey covers such issues as: new product needs, facility budget changes, current capacity, future capacity constraints, expansions, use of disposables, trends and budgets in disposables, trends in downstream purification, quality management and control, hiring issues, and employment. The quantitative trend analysis provides details and comparisons of production by biotherapeutic developers and CMOs. It also evaluates trends over time and assesses differences in the world’s major markets in the U.S. and Europe.

If you want to learn more about the report, please go to bioplanassociates.com.