COVER STORY SPOT CHECK Hovione technician visually inspects an ongoing reaction at a manufacturing plant in Portugal. cialization. Angiomax had been discovered by Biogen, a Cambridge-based biopharmaceutical company But Biogen at the time was focused on pushing another biopharmaceutical product to commercialization, and Angiomax was shelved, Richards explained. In 1997, M D C O licensed Angiomax from Biogen. M D C O stayed with Biogen's manufacturer of Angiomax, UCB-Bioproducts S.A., "because of their willingness to build a relationship," Richards tells C&EN. "Together we developed a new process for Angiomax." DEVELOPMENT AT MDCO includes work on a biotherapeutic agent called CTV05, a live organism that can be used to help treat bacterial imbalance in the vaginal tract. M D C O licensed it from a small company with no infrastructure and had to find a manufacturer to produce it. Richards couldn't divulge the manufacturer of CTV05. But about MDCO's approach in choosing outsourcing partners, he said, "We want contract manufacturers A. MAUREEN ROUHI, C&EN WASHINGTON that are interested in building a relationship with us." Unlike the big pharmaceutical OUGLAS G. JOHNSON IS THE SENHovione partnership for manufacturing is companies, he continued, "we don't have ior director for manufacturing a success story, but both parties say there a big stick to make contract manufacturat Alios Therapeutics, a Denverhave been rough spots along the way ers want to work with us. A relationship based pharmaceutical company Learning to rninimize those rough spots ensures that we can achieve our goals founded to develop a compound in customer-vendor relationships was one through them." called RSR 13 for therapeutic uses. The of the goals of "Outsourcing Biopharmacompany has no labs, much less large-scale Responsiveness or vendor care is a trait ceutical Manufacturing," a conference orreactors. Its supply of RSR 13 comes from ganized by the Center for Business Intelthat Alios seeks in outsourcing partners. Hovione, a chemical company that man"It's a very subjective characterligence and held last December ufactures the active pharmaceutical inistic," Johnson said. "If you feel in Alexandria, Va. At a precongredient at its facilities in Loures, Portugal, that a vendor will not care about ference workshop, Johnson and on the outskirts of Lisbon. your project, you might as well John D. Richards, vice president leave. You won't even have a of manufacturing and product Thousands of miles and several time honeymoon." quality at Cambridge, Mass.zones separate Denver and Loures. But the based Medicines Co. (MDCO), As an example ofvendor care relationship, which began in April 1997, and responsiveness,Johnson dewhen RSR 13 was only in Phase I clinical shared their experiences working in pharmaceutical companies scribed how Hovione diverted a trials, remains strong and highly valued by without fixed assets—so-called piece of equipment headed for both parties. RSR 13 is now in Phase III virtual companies. Both deanother facility to Loures after clinical trials for the treatment of cancers CUSTOM scribed what they seek in outthey determined—and Alios that have spread to the brain. The manuCHEMICALS sourcing partners. agreed—that it would improve facturing aspects of drug development have the manufacture of RSR 13. "This hapbeen validated and are ready for submission Beyond the right fit for chemistry, techpened just as we were about to start process to the U.S. Food & Drug Administration. nology, regulatory compliance, and other validations," he said. 'At [Hovione's] own As the pace of drug discovery continspecial expertise, a vendor's readiness to initiative, they found a critical piece of ues to quicken, more and more promising collaborate ranks high with companies equipment, installed it immediately, valileads will fall by the wayside if the discovlike MDCO, which specializes in taking dated it, and got that all done in four weeks erers rely only on established pharmaceudrugs in advanced stages of development so that we could still do our process valitical companies for development. With to full commercialization. Without any indation in time. And they didn't charge us custom service providers for every conhouse labs or manufacturing, analytical, or for it." ceivable aspect of drug development, anydevelopment facilities, it took over the de'As a company we would have been very one can develop a lead to a commercial velopment of the anticoagulant Angiomax foolish not to have done that for Alios," product with minimal capital. The Allosfrom Phase III clinical trials to commer-
OUTSOURCING 101
Outsourcing is about relationships; when managed properly, both clients and vendors win
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David Hoffman, president of Hovione's U.S. operations, tells C&EN. With worldwide annual sales of about $60 million, Hovione finds companies like Alios Therapeutics to be ideal clients. "That they were interested in the manufacture of an active pharmaceutical ingredient rather than just an intermediate put them on the front for us," Hoffman says. Alios also was willing to gjve Hovione a long-term commitment. "SOME CUSTOMERS prefer to be onesided, wanting all the services, as well as the flexibility to take the project in-house or to retain manufacturing rights," Hoffman explains. Such customers are not there for the long haul. Finally, Alios "values our services and recognizes and appreciates our value," Hoffman says. "With large pharmaceutical companies, we are just a provider of goods. With Alios, we are an active participant. It doesn't mean that we don't work with big pharma. We do. But the relationship is different." At the conference proper, speakers addressed the nitty-gritty of outsourcing. Sean Sullivan, manager for Good Manu-
facturing Practices Quality Assurance at Alexion Pharmaceuticals, Cheshire, Conn., was one of the attendees. Alexion has biopharmaceutical products in clinical trials and currently contracts all the manufacturing for these trials. "My job has become primarily about interacting with these contractors," he told C&EN. "I was very interested in how other people are managing those relationships." Although many speakers came from a biopharmaceutical manufacturing perspective, the principles they emphasized could be applied to any work to be outsourced. For example, before any work can be outsourced, a company must first evaluate the soundness of such a decision. Susan Dexter, vice president of business development for biopharmaceutical contract manufacturing services at Dow Chemical, noted that biopharmaceutical manufacturing is more complex than chemical manufacturing. Therefore, scaling up biopharmaceutical production is a bigger undertaking. Nevertheless, the same steps for decision-making apply: Evaluate the resources needed to scale up inhouse versus outsourcing production, car-
ry out cost-benefit analysis, and compare the scenarios. ONCE THE DECISION to outsource is made, the next step is to find the right partner. On this subject, James A. Wilkins, president of BioLogic LLC, a consulting firm based in Woodbridge, Conn., emphasized that the right partner depends on the development stage of the product. At the preclinical stage, the manufacture is open to a lot of flexibility But as the product moves along in development, regulatory restrictions and production costs kick in. Close to launch, the ability of the contract manufacturer to produce the projected demand becomes critical. "Virtual" pharmaceutical companies maybe best served by full-service providers, Wilkins said. But companies with more in-house capabilities might be better off picking and choosing specific partners for specific projects. On top of these considerations, the customer must carefully consider other issues that come up with outsourcing. For example, David E. Shuey CEO and president of Willis of Maryland, a provider of insurance and risk management services, point-
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MANNERS
When You Depend On Others, Be Good
B
eing a good client is a win-win situation, says Douglas G. Johnson, senior director of manufacturing for Alios Therapeutics, Denver. Good clients ensure that their work is more likely to get done by making the vendor's life easy. At a conference last December, Johnson offered the
following tips for being a good client: • Recognize and respect your vendor's expertise. • Compliment people when they do a good job. • Make decisions based on the data and not on your biases about how experiments should turn out.
ed out that outsourcing creates new exposure to risks to a company's human, financial, operational, integrity, and intellectual capital, and he suggested ways to protect these assets. And of course, there's the manufacturing contract. Full conferences are held on this topic alone. Joseph E. Tyler, vice president for operations at Salix Pharmaceuticals, Raleigh, N.C., emphasized the need for any contract to stand the test of time
• Send tokens of appreciation, such as cookies during holidays. • Keep people posted on the project's status. • Pay your bills. • Prioritize your concerns appropriately; not every issue is of high importance. • Understand the workload of your vendor.
and to be flexible enough to accommodate changes. The contract should clearly indicate how the process will be managed, he said. For any contract manufacturing arrangement, be sure to have a quality-control agreement, said Martin VanTrieste, vice president for quality assurance at Abbott Laboratories Hospital Products Division. Among other points, the agreement includes a list of key contacts and defines who
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