In early December 2014, Biogen got some huge news that sent its already pricey stock ($328.52) up nearly $19 — in just one day! The company had achieved positive Phase 1b clinical trial results for its experimental Alzheimer’s drug, BIIB037 (aducanumab). The data looked so good, in fact, that Biogen announced it would be fast-tracking the drug straight to Phase 3 clinical trials.
“We had been preparing in technical development for a few years to be ready for a situation like this,” Cox explains. “Every year we go through the pipeline from a capacity planning perspective to assess what our commercial and late-stage products look like, and then we create models for a variety of scenarios based on that data. We knew there were a couple of products in our pipeline, aducanumab being one, and that if we got positive data we absolutely had to be prepared to move fast. When you work in operations, you’re waiting for moments like these, because this is your chance to come through — in a big way.”
Prepare Years In Advance
This past summer, Biogen announced the centerpiece of its strategy for being operationally ready for biologics coming out of its R&D pipeline — a new biologics manufacturing facility to be built in Solothurn, Switzerland. To make this happen, multiple disciplines such as technical development, quality assurance, formulation experts, project and process engineers, and manufacturing worked collaboratively.
Cox explains that when planning for future capacity his team considers the product, its potential, how many patients have to be served, the dosage required, and throughput capabilities of existing plants. “You have to model all the different capacity scenarios and project what output can be achieved.”
Cell culture titers (i.e., the productivity of the cell lines) are also a big part of that planning process. “You can be working years in advance trying to get the maximum output from your cell lines prior to a commercial manufacturing need,” he explains. “At the same time, you have to consider the engineering requirements needed throughout the process — upstream and downstream — to achieve maximum throughput and minimize bottlenecks.”
From an engineering perspective, he says it’s best to have a layout for what a plant might look like years in advance of critical data readouts. Some of the questions his team faced when considering the new plant included:
Of course, one of the biggest questions they had to answer was “Where will we build it?”
Key Factors Of Biologics Facility Site Selection
Cox explains that the first step toward selecting a site location involved forming a team that consisted of people from engineering, manufacturing, and finance, each of whom is involved in the site selection process.
He adds that it was important to select a place with a very stable business environment that fit with Biogen’s overall business structure. “This is one reason why we have a significant presence and history in Switzerland,” Cox states. “Talent is another extremely important piece that always comes into play; we needed people who were trained in biotech, people who know how to work and run these kinds of plants.” Sustainability and utilities also were important in the site-selection process. “For example, a plant like the one we are planning to build in Switzerland has to have a good water supply,” comments Cox.
When asked about the trend by some companies to locate in close proximity to strategic partners/suppliers, Cox had this to say. “Whether in the U.S. or Europe, at Biogen we feel we are able to find really competent, sophisticated suppliers for our equipment needs, and we can generally handle the logistics to get what we need to the site, no matter where it is located in the world.” As to the role government incentives should play in the site-selection process, he says, “Honestly, government incentives are not a big driving factor. To be competitive, it is more important to build in an area with a stable government, business infrastructure, and tax structure.”
Over the years, Cox has been involved in a number of site selections. As such, he has accumulated some valuable lessons. “This may sound cliché, but don’t underestimate the importance of building a relationship with the local community,” he says. “Where we have had success at different sites around the globe is in communities with local officials who want to work with us as much as we want to work with them.”
He also suggests talking to other companies in the area, particularly if they are in a similar technical field. “This can be very helpful in assessing if the environment is really conducive for hiring and employment,” he states. And finally, he mentions the importance of geographic diversity as it pertains to supply. “Some companies have put everything in one location and gotten themselves into problems as a result,” he explains.
Part Of The Plan: Acquiring An Outsourcing Partner
For Biogen, which ended 2014 with nearly $3 billion in profits, building a billion-dollar facility in Switzerland is a big risk. To help minimize that risk, Cox says the company took a diversified approach. “Using outsourcing can be great,” he states. “But we also want to have some insourcing capability to secure the product launches we think will be critical for us in the future.” This was part of the rationale behind Biogen’s acquisition of Eisai’s Research Triangle Park (RTP), N.C., manufacturing campus. “In the biologics industry there tends to be a tremendous amount of focus on drug substance production because these are big, huge investments,” Cox shares. “Often the challenge is regulatory delays. However, there are also supply challenges in the area of drug product and aseptic fill. Historically, these have been pieces of our business we have outsourced completely.”
While the Eisai acquisition announcement may have come just two weeks after the Switzerland build decision, Cox says there is tremendous benefit to being able to try a manufacturing facility before you buy a manufacturing facility. Toward the end of 2012, Biogen and Eisai announced a strategic, capacity-sharing, manufacturing alliance. “When we started working with Eisai, it was with oral solid dosing manufacturing,” says Cox. “One of our key products, not a biologic, is a small molecule, Tecfidera, for Multiple Sclerosis. Eisai possessed a manufacturing capability that we did not have internally.” But more than Eisai just having the capability to do that type of operation, there is tremendous benefit to being able to have Biogen employees work closely with the people from Eisai. “Though the formal integration only has recently started, because our employees really know their employees, the transition has actually been happening for two or three years,” he explains.
When Biogen entered into the collaborative agreement with Eisai, company executives believed a future acquisition of the drug-product-filling facility was a possibility. “We talked about the various possibilities of working together in the space,” he said.
But if the alliance was working so well, why not just continue to outsource rather than add a large fixed cost to the company’s balance sheet? Cox explains that the demands on capacity and the at-risk capital investments have gone up. “Over the past few years, there has been a biologics capacity shortage that has been building, particularly when it comes to the production of monoclonal antibodies. CMOs are trying to fill that gap with investment and added capacity. Many companies decide to work with CMOs to deal with capacity shortages. But, if the timing and planning are not right, and the CMOs have other clients, the capacity you need may already be consumed,” he states.
The Power Of Preventive Plant Maintenance
Aside from the addition of new facilities, Biogen’s manufacturing/operations team was also applying its ubiquitous proactive nature to another element that would help the company prepare for an influx of biologics — preventive plant maintenance. “You have to continually invest in plants, and you can’t take shortcuts on preventive maintenance or shutdowns,” attests Cox.
As an example, he cites how Biogen made investments in its RTP facility five or six years ago to make it capable of even higher titers. “That was long before we had high-titer processes to put into that facility,” he says. “Today, because we invested heavily in those technologies, that facility is being used for a number of higher-titer processes.”
Biogen’s EVP says it takes discipline and courage to make sure you are investing in your plants. Many companies only look at the short-term savings of delaying maintenance or upgrades; after all, this is a capital-intensive business. But Cox is adamant that focusing on long-term objectives — especially as they pertain to biologics manufacturing — is the only way to be in the optimal position in the event a drug like aducanumab finally gets approved.
Making sure what is engineered in Biogen facilities matches what is coming out of the company’s pipeline two, three, or four years into the future requires complete alignment of the operations team. “We make sure our technical development, process engineering, manufacturing, and quality organizations work as one team,” Cox says. “There are no hand-offs from one group to another; we are completely accountable as a single group.”
It is projected that biologics will account for more than 50 percent of total sales of the top prescription products by 2020. When you consider that biopharmaceuticals make up about only 20 percent of the pharma market today, this 30 percent increase represents what some describe as a biologics R&D tidal wave. With the changes and the planning Cox and his team have made at Biogen, it seems the company is well prepared operationally to surf this pending wave.
Oh, What You Can Learn By Walking The Manufacturing Floor
“From a leadership perspective, I think if you’re going to run operations in this business, you have to love being on the floor,” says John Cox. “In fact, if you’re an operations executive, you have to miss being on the floor.” Biogen’s EVP of pharmaceutical operations and technology believes walking the manufacturing floor is important from a leadership perspective, but to do it well, it has to be natural and done by someone who wants and enjoys doing it. In the manufacturing setting, this means showing up at a shift exchange occasionally. “I like to show up in the evening,” Cox confides. “My favorite place to walk through is a warehouse.” According to Cox, if you want to get a sense for how well an operation is working, the best place to do so is the warehouse. “If it is organized and moving well, you will learn if a plant is working well — and if the culture is right.”
Biogen’s manufacturing executive likes to take the same approach with external plants too. “I can tell in a matter of minutes how a plant is working — not from the management team, but from the people on the floor,” Cox attests. “No matter how automated or shiny it looks, if you don’t get the sense from the people on the floor that they are proud of what they are doing — they want to show it off to you and talk about the facility — you need to find another supplier.” Cox’s advice is to look for people who are really engaged in their work, the process, and the product, and give them the opportunity to share their enthusiasm. Also, be sure to assess the staff’s attention to detail (i.e., cleanliness). “You can pick that up in any corner of the plant,” he says. “If they feel it’s theirs, they will take real pride in it.” Finally, Cox says, when you go to a plant, make sure it isn’t just a conference-room meeting or billed as some big event. “Look, I’ve worked in a plant,” he attests. “So I know there is a lot that can go wrong and happen unexpectedly. But being hoodwinked — that is, being fooled about a plant’s culture — shouldn’t happen, especially if you are practicing manufacturing leadership by walking around.”
What Biogen’s EVP Of Tech Ops Gains From Serving On Repligen’s Board
You might wonder what is to be gained from a biopharma executive serving on the board of another company. Biogen’s John Cox has been a member of the board of directors for bioprocessing company Repligen since November 2013. “In my position as EVP of pharmaceutical operations and technology for Biogen, I tend to deal with big questions related to capital, strategy, and business in general. Being on the board of a company focused on bioprocessing and related technologies helps me better appreciate some of the challenges in my job.” For example, Biogen recently announced the decision to build a new biologics manufacturing facility in Solothurn, Switzerland. One of the biggest challenges of increased cell line output is how to handle the processing and purification. Cox envisions the Switzerland plant being able to produce about 10 metric tons of monoclonal antibodies on an annual basis. However, to be able to process and purify these large quantities will require the introduction of new technologies, including bioprocessing technologies, into the facility. Cox says these new technologies will be crucial to Biogen’s success. Cox’s understanding of the bioprocessing field has been augmented by his service on the board of Repligen, which in turn has been beneficial in his evaluation of the bioprocessing requirements for Biogen’s new manufacturing facility.
The Rationale Behind Biogen’s Modular Facility Design
When planning to invest a billion dollars in building a biologics manufacturing facility, it is important to take a very forward-thinking view. John Cox, EVP of pharmaceutical operations and technology at Biogen, says “Regarding our new Solothurn, Switzerland facility to be built, one of the keys was to minimize any bottlenecks in the upstream and downstream production processes. In addition we wanted to have a site location and design that allowed us to be able to add to the same basic footprint in a logical sequence so as to avoid creating future bottlenecks.”
One of the benefits of using a modular design is being able to set up your infrastructure (e.g., utilities) for rapid future expansion. “Using a modular design puts us in a rather favorable position,” he says. “If we find that more patients need our drug, instead of spending four years trying to get a facility up, running, and validated, we should be able to do that in two. Modular design is all about adding capacity as quickly as possible.”
For those who aren’t biomanufacturing experts (yours truly included), you might assume that quick expansion requires the incorporation of single-use systems. But Cox says this facility will have primarily stainless-steel systems with select disposable single-use technologies employed.