By Louis Garguilo, Chief Editor, Outsourced Pharma
I’m amazed that today’s biotechs and drug developers are still questioning whether they should search globally for a CMO. But, since this is a difficult business decision for many companies, I decided to compile the following (edited) excerpts from a panel discussion at last year’s Outsourced Pharma West conference in San Diego, which I believe could help.
The panel was moderated by Jeff Barker, principal consultant and sr. advisor, Rondaxe. The panelists were David Enloe, president/CEO, Althea; John Gregg, president/CEO, BalinBac Therapeutics; Brian Mendelsohn, leader of ADC Chemistry Group, Agensys; Nils Olsson, VP chemistry, manufacturing and controls, Retrophin; and Nicholas Virca, president/CEO, HedgePath Pharmaceuticals, Inc.
COMMENT 1: Looking Globally For CMO Support Is Inevitable
First, approach outsourcing from the realization you cannot know everything. But what you can do is find some experts in the areas most vital to your project or business model. That was especially important when I joined my company because we are not married to any specific technology or disease but more driven by business development opportunities in general.
It was clear to me from the beginning that I couldn’t handle our CMO search or management of outsourcing alone. Therefore, my initial objective — over the first year or so — was to bring in a small group of experts that I could fully rely on and that did not require any hand-holding. I was fortunate to be able to bring good people on board. Experts like this are out there for you, too.
And it’s no coincidence that the individuals I selected for our internal group came from the four corners of the world. They knew all the key service providers in their fields. So we felt no limitations about where to go in our search for CMOs. We now work with CMOs here in the U.S., in Europe, and Asia. In my opinion, looking globally for the best fit seems inevitable nowadays, and there are strategies to do so.
COMMENT 2: Balance Your Risk/Reward
I think the answer to every question regarding global outsourcing is, “It depends.” There’s so much risk that a company takes on with the “four-corners-of- the-world” approach, particularly depending on what your specific product is and what it requires.
For example, with a biologic where the process might not be fully tried and true, yet there’s a lot of expertise and knowledge that resides with the sponsor. It will require a ton of interaction and knowledge transfer to a CMO, and you’ll be trying to have that across multiple time differences — and perhaps at times some language differences — if your provider is in a far off location. Small inaccuracies — a subtle miss — can lead to a failed batch in an early-stage process. It can bring a project to its knees.
I think sponsors need to be balanced regarding risk/reward when considering local vs. global outsourcing. Frankly, I’m always astonished at how many people say how far and wide they looked, and then how glad they are not to have gone so far and wide.
COMMENT 3: Always Be Looking For Partners
Maybe our company takes a slightly different view of this. We don’t really ever start looking for CRO or CMO partners for different projects; we’re basically always searching globally. Perhaps that’s a luxury we have because of a constant need to find partners and because we have the headcount to do this kind of networking. But we’re always talking to people, we’re always looking, and we do it in Asia, North America, and Europe.
We find that the global search really increases our ability to find the best and most appropriate partners for the kind of work we need done. We look at every aspect of the CRO and CMO we think is important to accomplish our due diligence. For example, our quality team attends technical audits with us to review quality systems. All of this has become just the normal way we go about outsourcing … and doing business.
COMMENT 4: It’s A Big Adventure With Potentially Big Cost Savings
You’ll learn that in this industry there’s not one partner who can magically do everything you need. You’ll most likely have to mix and match, and you’ll have to learn to balance time to manage these CRO and CMO relationships. In the beginning, this really was a struggle for me.
However, I’m convinced the extra upfront work to find the right partner and do that extra management has paid off. We feel we got the CRO that could do our formulation best and the CMO that could manufacture most reliably for us.
To be clear, though, even going to India or China for starting materials can be a big adventure. But it’s a big adventure for potentially big cost savings. You simply have to do your due diligence. At times we hire reputable brokers for some locations.
That’s one way to get started and bring international service providers on board. Brokers or agents, though, can’t replace your own due diligence. You have to visit the CMOs and kick the tires, particularly in China and India.
So it is a healthy exercise first to think through whether you even want to pursue global opportunities. In the end, I agree a lot depends on your development plan for your product and overall goals for your company.
COMMENT 5: It Takes Effort To Stay Connected — But It Can Work
We try to be as interactive as humanly possible from the investigative stage through any relationship we establish with CMOs. So, generally speaking, you can say it is a benefit to have a CMO close to your geographic location. You can easily meet people face-to-face and go out and look at samples and processes when you like.
Nonetheless, in these times of various global and instant modes of communication, you can also interact quite easily with people anywhere in the world. If you take advantage of this and make the extra efforts to stay connected, you can make it work.
Particularly, if you are going to search globally, the key is to establish more than communication, but a good working relationship with CMOs from the initial selection process. A fundamental question — no matter where in the world they are located — is do they have a group of individuals at the service provider that your internal resources can easily communicate and get along with? Frankly, you should consider whether they are fun to work with. If it is going to be a struggle, why bother?