Over the past decades novel drugs for the treatment of human disease have become more complex. According to the Global Business Reports and CPhI joint Industry Explorations report (United States Pharmaceuticals 2015), the result of this rise in complexity as well as the growing number and expanding range of new drugs available, is that pharmaceutical companies, traditionally vertical integrated to maintain efficiency, are now looking to outsource operations in an attempt to reduce costs. According to James Hogan the author of one of the chapters in the reports, “…outsourcing is the preferred and often necessary strategy. Depending on the kind of operation – big pharma or a biotech startup – Contract (Development) and Manufacturing Organizations (CDMO’s) are increasingly becoming more specialized, focusing their expertise in niche areas to maintain an advantage in an increasingly complex environment.”
Such is, for example, the case with Piramal Enterprises’ Pharma Solutions division, a contract development and manufacturing organization or CDMO, which has set a target of becoming the global leader in the contract commercialization of antibody-drug conjugates or ADCs over the next five years.
Focused investment strategy
Commenting on the company’s strategy involving its focused investments in its current site in Grangemouth, UK, and its recent acquisition of Coldstream Laboratories, a specialised ADC fill/finish site, in Lexington, Kentucky, USA, Vivek Sharma, CEO – Pharma Solutions, Piramal Enterprises, notes: “We recently acquired Coldstream in Kentucky, USA to enhance our sterile injectables service offering. We expect that over the next few years there will be further acquisitions by both generic and big pharma players as companies look to gain a foothold in the growing sterile injectables space. In particular, we see this access to manufacturing infrastructure as a key driver for future consolidations.”
The company expects that, based on a recent review, the market of commercially and approved antibody-drug conjugates will be rapidly accelerating over the next few years. The expectations are confirmed by a steady increase in number of potential drug and drug targets entering into the clinical phase.
According a industry review by Piramal, the company expects about eight antibody-drug conjugates to move into its commercial production by 2020 which is a significant jump considering it only manufactures one commercial product today. The CDMO further suggests that despite the increase in development targets for antibody-drug conjugates, the global contract manufacturing sector still remains significantly under resourced with only a handful of players with experience and even less with the required regulatory accreditations .
Piramal is now in its fifth year of commercial production on the first ever commercial antibody-drug conjugates in the market and is using this landmark to look ahead five-years to cement its position as a leader in manufacturing of antibody-drug conjugates. Over the last decade, Piramal has gradually expanded its internal teams and has nearly 150 antibody-drug conjugates specialists across its global sites.
Mirroring monoclonal antibody commercialization
There are currently two commercialized antibody-drug conjugates on the market (brentuximab vedotin, marketed as Adcetris® by Seattle Genetics and ado-trastuzumab emtansine, marketed by Genentech/Roche as Kadcyla®). Commenting on the availability of these drugs as well as recent announcements by a number of big pharma and biotech companies about their ADC programs, Vivek Sharma, CEO of Primal Enterprises’ Pharma Solutions, noted: “The situation with ADCs mirrors what happened when monoclonal antibodies (mAbs) first started to commercialize. At present, very few CMOs have the facilities or, just as crucially, the experience to develop them. At the moment there are only two CMOs, including ourselves, which are leading the charge in the commercial manufacturing of ADCs. Piramal is targeting winning at least one in every two commercial contracts coming to market over the next few years”.
Rapid growth in injectables
The United States remains the primary outsourcing destination, particularly for high value and biological formulations. However, in the longer term, it is predicted that lower cost firms in India and China may try to enter with generic injectables. Over the next few years, CMOs focussed on pre-filled syringes and those with high potent handling capabilities are expected to be the biggest beneficiaries of market growth.
“Outsourcing in the sterile injectable segment is still focused on the US, followed by the European Union. We anticipate this market to continue growing at around 10% annually for the next 5 years, with US remaining the most preferred outsourcing destination,” Sharma said.
Small molecules injectables are likely to expand at a faster rate than steriles – albeit from a lower base – with oncology and anti-infectives representing just over 50% of the total market. In biologics, monoclonal antibodies account for the largest market share, followed by vaccines and insulin. “Demand for cutting edge injectable capabilities should grow as antibody-drug conjugates and other high value products dominate the “potent” development space. Nevertheless, the primary driver behind the growth in injectables is the generic market. Growth in the generic injectables is outpacing growth on the innovator side. By the year 2020, we expect this market to double to circa US $70 billion,” Sharma added.
High capital and operational costs
Technology is also a key component in companies’ prospects, and drug delivery systems such as Liposomes, PEGlyation and Depot Injections will play an important role. The use of these technologies should see a spurt in growth – especially in therapeutic segments that require efficient targeting of drugs.
Conditions are expected to remain positive, but there could be challenges for some smaller firms due to high capital and operational costs along with the complex compliance requirements for approval. This potential reduction in competition may also be augmented by consolidation. Piramal’s management suggests that there may be more collaborative partnerships between larger and newer players, to overcome any in-house technology gaps.
Overall, Sharma remains bullish on global sterile sales and anticipates a significant expansion – around 10% per year – in this market over the next 5-years. “The drivers for growth in outsourcing are primarily a need for big pharma to de-risk its supply chain, using secondary manufacturing sites. Firms that have experience and an attractive track record of taking injectable products through commercialization, will become partners of choice, as clients focus on quality, and on time deliveries,” he concludes.
Piramal views the acquisition of Coldstream’s fill finish site as the final piece in the jigsaw puzzle and is now bullish about its prospects in the market.