Key trends in biotech: including more consolidation and the need to file INDs

Key trends in biotech: including more consolidation and the need to file INDs

By Deb Minor

Consolidation will continue

Consolidation is driven by larger pharma companies snapping up smaller players to access new therapies recently approved by the FDA or in clinical development. The good news is the acquiring company will be able to provide additional funding to move the asset from clinical development to commercialization. But be aware! In some cases, new ownership could mean a change in the current supply chain to include the new owner’s preferred manufacturers. Keeping this in mind, always do your research to avoid costly delays and unplanned expenses.

Increased urgency to file INDs

Private equity firms are taking a stake in ownership while also funding biotech and emerging pharmaceutical companies. Many are requiring multiple INDs to be filed in less than a year. Once sufficient data supports significant valuation of the therapeutic programs, the companies are quickly sold (often to major pharmaceutical companies). The winners will be those who understand that outsourcing isn’t a commodity business.

     In order for companies to ensure their small molecule Chemistry, Manufacturing and Controls (CMC) programs have every opportunity to be successful, it is important to: 

     1. Leverage Contract Research Organizations (CROs) and Contract Manufacturing Organizations (CMOs) that have good scientific alignment regarding the project at hand. In other words, always make sure they have extensive experience with the technical requirements specific to your project.

     2. When it comes to timelines and pricing, make sure all proposals are realistic. Again, do your research. Take time to understand why each contractor believes what they have outlined is a realistic projection. Also, be sure that each step is analyzed thoroughly to ensure every challenge has been addressed up front.

     3. Know that, even though you’ve done due diligence with your contractor, there can always be challenges along the way regarding projected budgets and timelines. Always include a ‘fudge factor’ in every budget to account for delays in timelines and budgetary overruns. Until the prospective contractor has experience running your project, there is always an element of uncertainty with every project.

     4. As part of due diligence, evaluate the contractor for good communication and project management skills.

     5. Always be sure to evaluate the prospective contractor’s regulatory track record for FDA compliance in late-stage clinical manufacturing.

     6. Establish weekly updates with your prospective contractor (either written or video conferences, or both). This should be a requirement that is contractually agreed upon early in the contract discussions. 

     7. Leverage relationships with external or internal colleagues when possible (i.e., ask if they have worked with a particular manufacturer in the past). As well, seek out colleagues internal to a CMO to leverage those relationships.

One-stop shops in contract manufacturing space multiply but may not be the right answer

Consolidation has also been ongoing at an accelerated rate among CMOs. Larger CMOs have been on a quest to acquire smaller drug product manufacturers. They want to expand their technology offerings with microbial transformations, antibody drug conjugates, antibody manufacturing, RNA manufacturing, and flow chemistry (among others) to provide a “one-stop shop,” spanning the entire research and development continuum. Unfortunately, in some cases, the sheer size and breadth of these larger manufacturers has resulted in slower response times due to multi-decision makers and limited capacity.

When possible, establish individual relationships within the organization to efficiently begin the process of CDAs and technical discussions regarding the project.

Deb Minor, Ph.D., is CEO of Drug Discovery Alliances.

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