The early February announcement of the planned acquisition of Catalent by Novo Holdings rocked the pharmaceutical world. The $16.5 billion deal, described as “undoubtedly ‘unique’ in the CDMO world,” launched calls for scrutiny by antitrust regulators and highlighted the need for supply chain control. It also ignited debate about the future of outsourcing in the increasingly competitive biotech industry.
Contract development and manufacturing organizations (CDMOs) have become an integral part of the pharmaceutical industry. Companies appreciate the many benefits of outsourcing, including greater flexibility, increased resources and capital for strategic initiatives, and access to specialist expertise and experience. However, amid intense competition and movement by some companies to consolidate operations, pharma leaders are re-examining the role of CDMOs.
It’s smart to stop and question the status quo. It’s also best to respond proactively, not reactively, to shifts in the business world. Now more than ever, sponsors are set on choosing a dependable outsourcing partner with these four qualities:
Stability
Pharmaceutical companies with high demand products dominating the market will always seek to safeguard their supply chains. This is no more evident than with today’s “blockbuster” drugs, GLP-1 inhibitors, which have had a striking moment in the sun since their Food & Drug Administration approval for the treatment of obesity. As we know today, such demand for GLP-1 inhibitor Wegovy led to drugmaker NovoNordisk’s unprecedented acquisition of CDMO resources to ensure “resilience against potential supply chain disruptions,” as described in an article by CPhI Online. what level of uncertainty does a deal of this nature create for other drugmakers that entrust CDMOs with their products?
Accordingly, it’s impossible to overstate the importance of stability in choosing an outsourcing partner. Sponsors want and need to work with a dependable partner.
Sponsors will look for a CDMO partner with a proven record of stability and reliability, considering potential partners’ business structures and practices in tandem. Assessing the ownership structure of CDMOs, for instance, can provide insights into their long-term stability. Privately owned companies or those with a long-term focus may be more stable than those owned by private equity or venture capital firms. Direct investment in new capacity, capabilities and technologies from the CDMO itself is another revealing sign that your outsourcing partner is in it for the long haul—as this is a tangible indicator that the CDMO is invested in their partners’ success.
“Going forward, it’s inevitable there will be more scrutiny on the stability and long-term strategy of CDMOs to make sure they are reliable partners long into the future. With that in mind, it’s important that Pharma companies understand not all CDMOs are built the same,” said Graeme McBurney, Chief Operating Officer, Almac Group.
Quality
One thing is clear from sponsors – they will not compromise on quality. Sponsors will require partners that adhere to regulations and will actively avoid those with a checkered history. Since quality is so important in the pharmaceutical industry, companies that experience quality lapses may experience problems on a number of levels – quality of the drug product is of paramount importance, and that in itself can lead to changes in leadership and management. These leadership changes may be positive, but in some cases can create a continuity problem, causing a flux that disrupts supply chains and ultimately a company’s ability to meet partners’ expectations. Persistent quality issues may even result in the acquisition or dissolution of a company, which will dramatically impact on their ability to deliver.
“At Almac, quality, customer service and delivery performance are all part of our DNA. We are a privately owned company with an ownership structure that allows us to guarantee long term stability to our clients,” Graeme McBurney continued. “It also allows us to meet the commitment that we will re-invest 100% of our profits back into the business. These values and our demonstrated investment in quality and our clients’ futures is how we have built a strong, global reputation over the last 55 years as a trusted and stable CDMO partner. It’s also how we are instilling confidence that our partnerships will endure well into the future.”
Forward thinking
CDMOs that don’t anticipate and prepare for the future will not be able to consistently meet their partners’ needs.
In the last number of years, more and more activity in the biologics space, from vaccines to monoclonal antibodies and cell and gene therapies, have resulted in more products that require a different approach to manufacturing, storage and processing. This is especially true in the case of personalized medicine, a market that is growing rapidly. According to Grand View Research, the global personalized medicine market was valued at USD 538.93 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 7.20% from 2023 to 2030.
A CDMO that can meet sponsor needs today may not be prepared to meet their demands of tomorrow. So, when considering possible partners, sponsors must examine which vendors are preparing for the future.
Graeme McBurney furthered, “At Almac, we believe it is vital to keep growing our capacity and our range of service offerings to meet the growing needs of all our clients now and into the future. As evidenced by the over $500 million in investments we have announced over the past two years, covering many areas of our business from drug substance peptides through to drug product to clinical packaging, as well as diagnostics, Almac is preparing for the future.”
Strategic alignment
Shared values and objectives are important. Ideally, sponsors want to select a partner that is aligned with their business strategy and goals.
Careful examination of CDMOs’ past work can reveal a lot about their business goals and strategy. Sponsors may also wish to consider company culture. Comparable values, work culture and business strategy predict a higher likelihood of a stable, successful partnership.
Graeme McBurney closed: “Alignment with sponsor culture and strategic goals has been essential for our long-term working partnerships. As uncertainty continues, increased rigor and assessment of outsourcing partners is inevitable. At Almac, the needs of our clients are paramount, and we believe that our experience and track record speak for themselves”.
In the ever-evolving landscape of the pharmaceutical industry, outsourcing remains a smart, strategic choice. Companies that partner with CDMOs gain access to specialized expertise, advanced technologies and available flexible capacity, while freeing up capital for further investment. The importance of selecting reliable outsourcing partners cannot be overstated. Choose stable, forward-thinking partners that are strategically aligned with your business and committed to long term partnerships to guarantee your ongoing success.
- SEO Powered Content & PR Distribution. Get Amplified Today.
- PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
- PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
- PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
- PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
- Source: https://www.biopharmadive.com/spons/partnering-for-success-choosing-the-right-cdmo-in-pharma-outsourcing/715631/