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OUTSOURCING INSIGHTS REPORT LIFESCIENCELEADER.COM FEBRUARY 2015 16 If you want to learn more about the report, please go to niceinsight.com Larger companies tended to take advantage of outsourced development assistance with greater frequency than smaller companies. K A T E H A M M E K E Director of Marketing Intelligence Nice Insight By K. Hammeke THE CDMO MODEL AND OUTSOURCING DEVELOPMENT The CDMO Model And Outsourcing Development In 2014, the biopharmaceutical industry witnessed more and more contract suppliers take on the CDMO (contract development and manufacturing organization) acronym to identify their ability to assist at the development stage of drug manufacturing. These businesses can provide comprehensive services, from drug development through to manufacturing commercial supply, and are interested in differentiating their abilities from CMOs focused solely on large-scale manufacturing projects. heoretically, the CDMO is positioned for a strategic partnership, with expertise in areas the drug innova- tor seeks, whereas the CMO may be viewed as a tactical provider that has the available capacity to compete for the project. This perception has influ- enced many contract manufacturers to embrace the CDMO term as an addi- tional advantage in the effort to develop long-term partnerships. Utilizing a CRO or CMO for early-stage analytical, stability, preformulation, for- mulation development, and drug deliv- ery method has become more common in the pharmaceutical industry and is anticipated to increase as the strategic partnerships between drug innovators and contract suppliers mature. This cre- ates more opportunities to secure busi- ness from drug innovators across the drug's life cycle. In 2014, Nice Insight began tracking the development offering separately from commercial-scale pro- duction in order to keep abreast of buyer activities at the development stage and to identify whether CMOs offering devel- opment-stage services would have an advantage over the competition when it comes to strategic partnerships. The results from the 2015 study (released Jan. 1) show that 10 per- cent of respondents stated their com- pany will engage a CMO for small molecule API development, and 10 percent would outsource solid/semi- solid or liquid dosage form development. Thirteen percent stated they would engage a CMO for large molecule API development and 12 percent for inject- able product development. In comparing the overall data for 2014 and 2015, there was little change in the percentage of respondents who anticipated engaging a CMO for assistance with API or dos- age form development — only 1 and 2 percentage point increases. However, regarding the activities within the vari- ous buyer categories, the data showed more variances. Interestingly, larger companies tended to take advantage of outsourced develop- ment assistance with greater frequency than smaller companies. While this results from a variety of factors, from larger outsourcing expenditures, to using CMOs and CROs for a higher number of services in general, and to having a larger pipe- line for potential therapeutics, it conflicts with the notion that Big Pharma and Big Biotech have in-house development T