CDMOs benefit from COVID-19 impacts

CPhI’s annual report also indicates that mega-cap pharma innovation is slowing outsourcing

The global contact services sector is benefiting from a switch towards COVID-19 manufacturing (vaccine and therapy) and clinical stage contracts, but mega-cap innovator drug approvals are reducing commercial demand according to the CPhI Annual Report contract services findings.

Adam Bradbury, Analyst and Fiona Barry, Associate Editor at PharmSource GlobalData provided a review of the trends, challenges and opportunities in the global contract manufacturing space.

Adam Bradbury highlighted mega cap companies accounted for a particularly high percentage of NDA approvals in 2019 – but this trend is potentially detrimental to CMOs’ prospects in 2020 and beyond, as such companies with their own internal manufacturing capabilities have less need to outsource manufacturing work. However, there remain good opportunities for CDMOs in clinical trial manufacturing with a large pipeline of drugs and both mega and small cap companies utilising partners to advance pipelines.

Bradbury did point to increased opportunities for outsourcing of niche technologies – particularly solubility enhancement – as well as a surge in demand for CMOs with viral vector manufacturing capabilities should a number of cell & gene therapies gain regulatory approval over the coming years.

There are extremely few mRNA outsourcing agreements relative to the number of mRNA candidates because of the novelty of this unproven technology

Bradbury commented: “There are a large number of cell & gene therapies in development, which will form a future wave of marketed therapies requiring larger scale manufacturing. We may therefore see manufacturing bottlenecks in the future, especially in viral vector manufacturing and slow processing, and as such there will be a significant demand for related services.”

COVID-19 is also having a transformative effect on pharma, and Fiona Barry explored the direct and indirect benefits to the CDMO sector. She highlighted that COVID-19 vaccine developers are signing ‘outsourcing agreements with CMOs at an unprecedented rate’ in response to the global demand for billions of vaccine doses. Consequently, infectious disease has displaced oncology as the leading therapeutic area for contract manufacturing service agreements. In fact, according to the GlobalData Pharma Intelligence Center pharma companies have publicly disclosed 42 contract manufacturing service agreements for 26 pipeline COVID-19 vaccines.

Barry stated that most of these service agreements are for recombinant vector vaccines, followed by subunit vaccines. This is despite the fact that mRNA vaccines are the most prevalent among the top COVID-19 vaccines.

“There are extremely few mRNA outsourcing agreements relative to the number of mRNA candidates because of the novelty of this unproven technology. Few CMOs have the capability to produce APIs for mRNA vaccines, and many COVID-19 mRNA dose manufacturing sponsors are opting to partner with big pharma rather than outsource this work to CMOs,” commented Barry.

Operation Warp Speed, the $10bn initiative funded by the US federal government scheme, and the European Commission’s Emergency Support Instrument (ESI) are two chief drivers of advanced vaccine manufacturing. Both initiatives have selected a number of promising vaccine candidates to manufacture in the hundreds of millions of doses scale.

However, Barry added: “The timelines for vaccine production are still extremely optimistic as many of these candidates are only in Phase I or II trials, and also taking into account that vaccine developments have taken a minimum of five years in the past.”

Finally, an indirect effect of the pandemic is the drive to free up internal capacity at big pharma, with outsourcing of some existing products. For example, Pfizer is outsourcing many internally manufactured drugs to CMOs.

Orhan Caglayan, Brand Director at CPhI, added: “These results highlight just how crucial the contract services sector is to pharma. This year in particular we must commend the flexibility and adaptability shown by CDMOs and CMOs in response to COVID-19, with vaccine development and drug manufacturing scaled up at speed. We are also seeing huge macro changes in pharma thanks to the rapid development of cell & gene therapies, which will undoubtedly be a huge driver for the contract services space, particularly once these medicines start to gain regulatory approval. It is why events such as CPhI Worldwide – and more specifically, our ICSE contract services exhibition in 2021 – are so pivotal to pharma, as we are able to bring together innovators and service providers to accelerate positive change in healthcare and bring products, more quickly, to patients.”

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