Bio-outsourcing holds
promise for India
An increasing number of
global biopharmaceutical companies are outsourcing biomanufacturing
(bio-outsourcing) to bring their products to market in a
cost-effective and timely fashion
This article explores the pros and cons of bio-outsourcing and provides
some insight into the prospects for future growth of this newly
emerging industry both globally and from an Indian perspective.
During the past 25 years, the biopharmaceutical industry has
transformed itself from a research and development enterprise into a
robust, product-driven sector of the global economy, with worldwide
sales of biopharmaceutical products topping $80 billion (about Rs 3.76
lakh crore), an estimated 174 approved products, and 800 plus
products in various stages of clinical development.
Historically, biopharmaceutical companies have chosen to bring
biomanufacturing ‘in-house’ to retain control over
personnel, production schedules, intellectual property (IP), and
regulatory and quality concerns. However, many smaller
companies do not possess the internal expertise or the financial
resources to manufacture their own products and they turn to contract
manufacturing organizations (CMOs) for clinical or commercial
production of their products. This helps those companies that are not
equipped with expensive facilities.
Outsourcing of bio-manufacturing globally grew at annual rate
of 20 percent for the last decade, and is expected to cross $4 billion
(about Rs 18,837 crore) by 2011 from $2.8 billion (Rs 13,191
crore) in 2008.
What is Getting
Outsourced?
Two distinct philosophies have been seen to be at work. One trend has
seen large companies outsource their clinical manufacturing, which
requires flexible manufacturing facilities, uncertain quantities, and
less focus on cost of goods, while they retained commercial
manufacturing, where they could maintain control over cost of goods,
consistent quality and reliability of supply. The growth of large,
specialized CMOs has also seen a reverse trend, where the product
companies retain their clinical manufacturing, which is tied into their
core business of research and development, and outsource the routine
job of commercial manufacturing, which they no longer see as their core
competence.
Biologics CRAMS in India
India, with more than 80 US FDA-approved manufacturing facilities and
efficient, low-cost production models resulting from the highly
competitive domestic generic pharmaceuticals market, is one of the most
preferred locations for outsourcing manufacturing by global
pharmaceutical companies. The Indian pharmaceutical contract
manufacturing market stood at $1.21 billion (about Rs 5,697 crore) in
2007, and is estimated to reach $3.16 billion (about Rs 14,878 crore)
by 2010.
Last year, India’s Biotechnology Industry grossed revenues of
$2 billion (about Rs 9,420 crore) and is amongst the top countries in
the Asia Pacific region. Some of the active players in the
biologics development and manufacturing space are Syngene, Biocon,
Intas Biopharmaceuticals and Avesthagen. Other
product companies such as Reliance Biopharma, Shantha Biotech, Panacea
Biotec, Wockhardt and Dr Reddy’s are also eyeing contract
manufacturing as the scales of operation become bigger and facility
utilization and operational cost control become critical.
As an industry we in India are moving from the ‘hundreds of
litres’ to the ‘thousand-litre’ scale on
the mammalian side and these scales become a good entry point for such
bio-manufacturing opportunity. With the increasing titres of
today’s expression systems, scales of a 1,000L are likely to
be adequate for a great proportion of clinical as well as commercial
requirements of future products.
The size of the overall biologicals market in India will remain small
due to the high cost of therapy as well as the changes in the IPR
landscape, with the introduction of product patent regime. As a result,
unlike the traditional pharmaceutical sector, the contract
manufacturing business in biologicals may not piggyback only on the
generic manufacturing capacity, but may develop as an independent
business segment. The biosimilars (biogenerics) sector still has an
important role to play, as it will demonstrate that high quality
biologics can be manufactured in India, and it goes a long way towards
establishing a critical mass of scientific, technical and engineering
talent.
Intas Biopharmaceuticals
in the CMO business
Intas Biopharmaceuticals Limited (IBPL) is bullish on the opportunity
for contract development and manufacturing in India and has a dedicated
business segment for pursuing this business. IBPL is India’s
first and only biotechnology manufacturing facility EU-GMP certified by
a European regulatory authority. It has the capability to meet
requirements of small to medium scale GMP production microbial-as well
as mammalian-derived products, including fill-finish of liquid and
lyophilized products in syringes and vials. The company has expanded
its Contract Research and Manufacturing Services (CRAMS) business with
the acquisition of US-based biotechnology company, Biologics Process
Development Inc., which is fulfilling the requirements of its clients
in North America and Europe. A new facility under construction, meeting
both US FDA and EMEA GMP requirements, will add 5000L of cell culture
capacity for monoclonal antibody production.
Contract Manufacturing in
India: beating the slowdown
There are ‘push’ and ‘pull’
factors that make outsourcing a prudent option. The
‘push’ factors are pressure on the company to
reduce cost, time-to-market, and the ‘pull’ factors
are proven track record of the CRAMS company to handle product
development and comply with GMP as per international requirements.
These are challenging times where the global financial crisis has
affected many smaller biotech’s that may be forced to license
out earlier than they would have liked to, while larger companies will
be constrained in their ability to pursue the entire
pipeline. These ‘push’ factors combined
with the ‘pull’ factor of companies such as Intas
Biopharmaceuticals with demonstrated capabilities and the required
scale could create significant opportunity to bring such development
and manufacturing business to India.