Contract manufacturers are increasingly key players in the development of biotech drugs. However, industry trends are flagging the need for a new business model to serve the CMO/product owner relationship. These trends suggest that the historical, transaction-based business model between biotech product owners and their contract manufacturers is becoming less suitable as the default basis of the relationship.
In its place, there is an increasing need for a journey-based approach, with a clearer understanding of the relative contributions of the parties, the management of risk, and the desired rewards of each party. I prefer to call this a collaborative approach (see Figure on p.12).
This should not be confused with the often-trumpeted and over-played partnership between customer and supplier, which really is not appropriate for relationships where there are clear differences in each partys drivers and expectations.
As with any journey, the travellers need to be clear on their destination, have a good route map, be prepared for inclement weather, and choose their companions wisely! A frequent challenge on journeys in biotech is that the destination can change rapidly and unexpectedly. Clinical trial ambiguity or failure often leads to severe road blocks as a minimum and, more likely, the journeys end.
Funding problems can often lead to the need to change the route map as companies look for alternative roads to move their product to market. A strong collaboration between CMO and product owner is needed to overcome these challenges.
The manufacturing journey is generally considered dull and boringa wearying trek through the Badlandsrelative to the fresh air and excitement of scaling the Rockies to secure financing and deliver positive clinical results.
Consequently, manufacturing development is frequently undervalued and underfunded. It also commands much less attention than it deserves when nonindustry media look at the success stories and challenges in biotech.
However, recent regulatory trends in both the U.S. and Europe toward improved continuity and a more risk-based approach will demand that the route map of process development be better defined, better recorded, and more effectively implemented.
Investors are increasingly attuned to these trends and an in-depth assessment of the supply route and the traveling companions is becoming a regular feature of due diligenceeven for early-stage products.