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Biopharma Manufacturing: Budgets Continue to Expand 

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By Eric S. Langer

The biopharmaceutical manufacturing industry rebounded from the recession in recent years with renewed budgets, even as the industry sought to become leaner and less dependent on legacy systems.

Each year, BioPlan Associates Inc. conducts its Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, in which the firm gathers hundreds of industry participants to report on a variety of areas, from budgets to innovation, hiring, offshoring, and manufacturing capacity constraints.Preliminary results from the 2014 survey — the 11th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production1suggests that budgets continue to expand again this year — but that, nonetheless, the industry is looking to focus its efforts on cost reductions.

The following are key trends.

Trend No. 1: Budget Growth Continues

This year, the preliminary results of the industry’s plans for budget changes across 12 specific areas indicate that budgets for innovation, capital equipment, and staffing could see significant rises this year. Specifically:

*Some 64 percent of respondents expect to budget more in the next year for new technologies that improve efficiencies and costs for upstream operations (compared with 61 percent in 2013);

*Some 62 percent expect to budget more for new technologies that improve efficiencies and costs for downstream operations (similar to last year);

-          About six in 10 will increase their funding for new capital equipment;

-          Close to six in 10 will expand their budgets for hiring new operations staff; and

-          Slightly more than one in two will spend more to hire new scientific staff.

Fig 1: Percent Expecting Budgets will Increase at Least Somewhat in 2013

Source:  10th Annual Report and Survey of Biopharmaceutical Manufacturing, April 2013 BioPlan Associates Inc.

By contrast, this year, the area seeing the least enthusiasm for budget expansion is new facility construction.  In 2013, the lowest budget increase was for Outsourced Biomanufacturing (29 percent of respondents)

Taken together, these results imply that efficiency (including cost efficiency) continues to be paramount for biopharmaceutical biomanufacturers. Moreover, with the recent increase in single-use applications and modular facilities, companies are hesitant to pour more money into facilities that require large upfront costs. Instead, they are focusing on innovations that allow them to produce more at a lower cost and with a smaller footprint.

Not surprisingly, when it comes to those innovations, the conversation still centers on disposable products, much as it has for the past few years. When respondents were asked to identify the top areas they want their suppliers to focus their development efforts on, disposable products occupied the top three spots among the 21 areas identified in the survey. Some four in 10 global participants are looking for innovation in the most basic single use devices, including disposable bags and connectors.  In addition, a large percentage is seeking better disposable probes and sensors, and bioreactors. This has generally been the case for several years now; if current trends hold, interest in single-use bioreactor innovation will be at its highest point since the study began to measure this area.

And suppliers are taking note of this trend. When industry suppliers are asked separately about the top new technologies or new product development areas their company is working on in the biopharmaceutical manufacturing industry, some of the top responses were for single-use applications, such as bioreactor bags/consumables, bags and films and filtration.  

End-users should be prepared to pay a bit more, though. Some three in 10 suppliers say they expect their pricing for disposable, single-use devices to rise over the next year, though most of those say the price increase would be less than 10 percent.

Trend No. 2: Manufacturing Costs Become Top of Mind

While single-use devices are the hot topic in terms of innovation, interestingly, this year, respondents do not see them as the most important trend on which the industry should focus its efforts.

This year, the study asks participants to identify the single most important trend or operational area that the industry must pay attention to this year. Topping the list was “manufacturing cost reductions” — cited as the single most important area by 18 percent of respondents-to-date. A related response, “manufacturing productivity/efficiency,” was indicated by 11 percent of respondents, about the same amount as cited “continuous processing” and “single-use system integration.”

The focus on manufacturing cost reductions is part of a broader trend toward increased attention to efficiency. Indeed, references to costs pop up throughout our study. For example:

-          Facilities believe that single-use products need to be more cost-effective in order to avoid future capacity constraints;

-          Respondents believe that the ability for single-use devices to remove costs associated with system redesign and modifications is a critical factor;

-          By the same token, the perceived high cost of disposables is a commonly indicated factors hindering further adoption of disposables; and

-          When selecting single-use device vendors, respondents find cost to be among the areas they are least satisfied with their vendor (this is a significant change from previous years, and may relate more to the larger-scale implementation of these devices).

Given the emphasis on costs and efficiency, the obvious question is: What are facilities doing to address these concerns?

Preliminary results from this year’s survey indicate that, as with last year’s survey2, the most significant action taken in the prior 12 months was the “Implementation of programs to reduce operating costs,” currently at almost three in four survey respondents. That result was consistent with years past. What has changed is the shift from external focus (on pushing vendors to reduce prices — fewer companies are negotiating harder with vendors), to an internal focus of reducing costs, as more are targeting process development times and costs.

Other Notable Trends

Although results are still preliminary, they are consistent enough with prior years and with trends from elsewhere in our report and research. Below are three key areas that a significant portion of the industry has singled out as top trends to look for this year.

1.      Biosimilars/Biogenerics

Currently, the market for approved biosimilars is fairly small, less than a billion dollars in Europe, where biosimilars still have a relatively small market share today. But unlike in Europe, where market penetration of biosimilars proceeds slowly, adoption of biosimilars in the United States could be more rapid — pending approvals, of course.

There are likely close to 1,000 follow-on products in the development pipeline for more than 100 biopharmaceuticals currently in the market (many of these are very early stage). Given the recent health care changes enacted within the United States, private sector insurers will gravitate toward biosimilars and biobetters, requiring their use where possible. It’s reasonable to forecast a worldwide market in the several billions of dollars in the next few years.

That, obviously, hinges on FDA approval. The main goal that biosimilars must attain is lack of significant differences compared to a currently-approved reference product. That differs from generic products, where sponsors need to prove equivalence, or being essentially the same product. That makes the development of biosimilars more difficult as the products need to closely match many aspects of another company’s data and clinical and safety profiles.

However, many biosimilars and biobetters will be manufactured using newer production systems, which may result in them actually being better than their reference products in some respects, such as by having higher purity. That may negate the biosimilar (requiring full) approval.

2.      Continuous Processing

“Newer” production systems that may be used to manufacture biosimilars and biobetters are being developed. Continuous bioprocessing is one exciting new route being taken by the industry and pushed by the FDA. The traditional approach to bioprocessing, both upstream and downstream, is still batch processing. This assembly line approach has its benefits, but may ultimately prove the lesser option when compared to continuous bioprocessing whose benefits include:

·        Lower costs: Given the survey results, this is obviously a big factor. Continuous bioprocessing doesn’t require such large-scale equipment; given that operations are continuous, smaller bioreactors and other such equipment can still generate the same output as larger equipment that use traditional batch-fed operations. Smaller-scale equipment generally costs less (a big plus when facilities aren’t looking to expand their upfront investments) — and in tandem with the use of single-use equipment — allows for a reduced footprint.

·        More productivity and flexibility: Because continuous bioprocessing is not a start/stop affair, operations tend to move more seamlessly. What’s more, staff requirements are limited. And due to its smaller footprint and more efficient facility utilization, continuous bioprocessing is a more portable solution. This is particularly the case when combined with single-use equipment; such facilities are much more flexible in design than large ones housing fixed stainless steel equipment. These benefits also dovetail with the trend toward increased use of modular bioprocessing systems.

·        Better quality: Aside from cost and productivity factors, there is reason to believe that products manufactured using continuous bioprocessing can have higher cell densities and product concentration. That’s because the continuous nature of the operations eases stress and is more easily controlled; the process is altogether more steady and stout.

3.      Manufacturing Efficiencies

Clearly, continuous bioprocessing is one avenue to more productive and efficient operations. But this type of production remains a relatively small niche for the time being. So manufacturers are continuing to seek ways to improve their biomanufacturing performance.

Early results from the study suggest that companies are attributing significant improvements in performance to better processing. So far, more than two in three respondents indicate that an overall “better control of process” at their facility has led to “significant” or “some” improvements at their facility over the past 12 months. This is the top area contributing to improved performance. Additionally, close to six in 10 say better process development has had a beneficial effect on their performance.

Other areas that many respondents indicated have improved performance at their facilities include: Use of single-use devices; optimized cell culture processes; and improved upstream and downstream operations.

To sum up, it seems like another year of growth and maturation for the biopharmaceutical manufacturing industry. But facilities are operating at somewhat of a paradox — embracing new technologies and innovation; but at the same time proceeding cautiously with an eye on costs. As always, in this highly regulated environment, the industry continues to strive for more productivity and efficiency without adversely affecting product quality or safety. The solutions that can best demonstrate their safety, effectiveness, and efficiency from the outset, and as early in the pipeline as possible, will be the ones to see the most rapid adoption into clinical manufacturing.

Eric S. Langer is the president and managing partner at BioPlan Associates Inc. (www.bioplanassociates.com), a biotech and life sciences marketing research and publishing firm, based in Rockville, Md. He is the editor of several industry reports. He can be reached by calling 301-921-5979 or emailing elanger@bioplanassociates.com. 

End Notes

1.        11th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production:  A Survey of Biotherapeutic Developers and Contract Manufacturing Organizations, BioPlan Associates, April 2014.

2. 10th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production:  A Survey of Biotherapeutic Developers and Contract Manufacturing Organizations, BioPlan Associates, April 2013.

Survey Methodology
The 11th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production yields a composite view and trend analysis from more than 200 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 30 countries. The methodology also included more than150 direct suppliers of materials, services and equipment to this industry. This study 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 United States and Europe.

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