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CMO 2016

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EVALUATING A CMO ANALYTICS LIFESCIENCELEADER.COM THE CMO LEADERSHIP AWARDS 2016 32 By L. Garguilo DON'T OVERLOOK INTANGIBLE METRICS WHEN EVALUATING A CMO Don't Overlook Intangible Metrics When Evaluating A CMO L O U I S G A R G U I L O Executive Editor, Outsourced Pharma @Louis_Garguilo omething Denise McDade of Capricor Therapeutics said during a session at Outsourced Pharma West in San Diego last year stuck in my mind: "Metrics are fun- damentally important in measuring and managing any relationship, but there's a paradox when it comes to outsourcing." That paradox stems from an awareness that while there is a rising criticality to establishing a tangible set of metrics for your outsourcing partners, those increas- ingly important metrics still don't offer as complete a picture as many would believe. Even with more sophisticated performance measurements for items like cycle time, throughput, deviations per batch, time to resolve deviations, on-time delivery, surpassing quality or quantity goals … these results may lead a sponsor astray at times. According to McDade, VP of quality, and whose career has spanned various positions at Genentech, Novartis, Amgen, and other biopharmas before joining Capricor, there are equally critical ele- ments — such as trust and the spirit of the supplier relationship — that defy even today's finer metrics. Here's a closer look at what McDade and others are saying. DO YOU KNOW YOUR CMO EVEN IF YOU MEASURE? McDade made her initial comments as a panelist at on OPW session titled, "How do you know you're on target if you don't measure your CRO/CMO?" Other panelists included Michele Johnson, director, supplier relationship manage- ment, Sandoz; Sylvie Sakata, sr. director, external research solutions west, Pfizer; and Nicholas Virca, president & CEO, HedgePath Pharmaceuticals, Inc. John Newsam, CEO, Tioga Research, was the moderator. No panelist or member of the audience was advocating less measurement of CMOs. The pendulum has certainly swung to the side of "the more measurement, the merrier," away from a substantially less vigorous approach of even a few years ago. A separate panel at OPW dealt specifically with new FDA statements exploring the need to measure "culture" as a function of reliably deriving a quality product. This panel also included discussion on the FDA's plan to receive quality data directly from CMOs. But back to McDade. She has arrived at her convictions during a career that spans more than 25 years. During about half that time she has been focused on the outsourced world, while the other half she has been on the manufacturing owner-operator side. "I've worked with CMOs where we had a robust and healthy management process, ample performance feedback, and a lot of measurement," she explains. "However, there was still little trust in the supplier relationships. Ultimately, those types of relationships were not successful or healthy in an overall business sense. It's difficult to measure exactly what the issue was with trust, but it was crucially important for the CMOs to try to main- tain — or salvage — it as a part of their relationship management efforts with us. Therefore, I've seen that both sides — the measurable and the more intangible components — are equally important. In my experience, you can't be successful unless you have both." THE 5 A.M. CALL BUILDS TRUST At the conference, and in a follow-up discussion, McDade walked me through an example that draws out her feelings. At one point in her career, she was outsourcing the same product to a CMO in the U.K. and one in the U.S. There were similar quality agreements in place stipulating that within 24 or 48 hours the CMOs inform McDade, as head of quality, of different levels of deviation that might occur at the facilities during the manufacture of the products. "The U.K.-based CMO had a facility contamina- tion issue in an area of their facility that ultimately didn't impact our product," McDade explains. "However, I got a call at 5 a.m. my time from their QP [Qualified Person, as referred to in Europe] so I could be informed as soon as they found out. There were other times as well where the QP would pick up the phone to let me know immediately of anything that he thought I should know." There was also an issue at the U.S.-based CMO, this time a critical contamination in S On paper, performance can look similar, but from a relationship standpoint, performance can turn out to be completely different. D E N I S E M c D A D E VP of Quality, Capricor Therapeutics

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