Contract Manufacturing in Biopharmaceuticals John Machulski - Lonza Biologics - PowerPoint PPT Presentation

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    1. Contract Manufacturing in Biopharmaceuticals John Machulski - Lonza Biologics Boston University Next Generation Manufacturing Challenges 14 November 2003

    2. Slide 2

    3. Slide 3 Biomanufacturing Process Flow

    4. Slide 4 Biologics Market Total of 133 compounds approved as of 2002 Represents 10-15% of all approved drug products Additional 200 compounds in late stage trials $22B sales in 2001 ? $50B by 2008 Promising research in the areas of cancer, AIDS and other previously elusive therapeutic areas Example Products- Biogens Avonex - MS Lillys Xigris - Sepsis Genentech/IDEC Rituxan NH Lymphoma Amgen/Wyeths Enbrel RhArthritis

    5. Slide 5 Capacity Crunch? Dire predictions in 2001/2002 5-fold shortage in supply thru 2006 $5B required capital spend to close gap Small guys pushed out Difficult equation Product titer/yield Product dosage % of PhII and III making it to market Success in Market

    6. Slide 6 Capacity Picture Today From 2002 2006, threefold increase in capacity 500K liters to 1.5M liters Who has it? 75% belongs to the big biopharm companies 25% belongs to the contract manufacturers Who will have access to it? Those who strike the strategic deals now Getting shut out could be costly

    7. Slide 7 Manufacture of Biopharmaceuticals Production required to supply clinical trial material Production required for long term commercial supply Dilemma Where do these companies get this product Do you invest in clinical scale mfg facilities Do you subsequently invest in commercial scale capacity

    8. Slide 8 Why is this a Problem? Time Timeline to design, construct, validate and gain approval to mfg in a new biopharm facility is 3-5 years Need to commit to capacity during clinical timeline This is very risky Money Costs of constructing these facilities is currently ranging in the $150Mio to $1Bio+ range

    9. Slide 9 The Enbrel Story Developed by Immunex and approved in 1998 for Rheumatoid Arthritis Co-market and mfg with Wyeth Shortfall of supply limits revenue and causes drug to go on a lottery basis Scramble after the fact to bring capacity on line Mfg at two different contract mfg sites as well as an Amgen facility in RI Currently two facilities under construction by Amgen/Wyeth at a capital cost of over $2.5Bio

    10. Slide 10 Make vs. Buy Two schools of thought: Focus on Drug Discovery (the science) and leave manufacturing (risk, expertise, investment) to others Integrate all operations under control of the operating company. Balance of risk, capital allocation and control. Dictated by business plan/vision/philosophy

    11. Slide 11 Contract Manufacturing Services Generic facilities for production of biologics. Small scale to supply early phase clinical material - Intermediate scale to supply late phase clinical and early launch Large scale to supply commercial in market supply Your product doesnt succeed, cont.mfg. makes capacity available to someone else Bio Co. is not stuck with a non-performing asset. Monthly depreciation in the millions

    12. Slide 12 Does One Size Fit All? Process Variability Number of Days in the reactors (8-14) Number of Column steps in downstream Media/Buffer types Final Product concentrations Final formulation Cold vs. Frozen For new Lonza plant, we had to spend an additional 4% of capital for customer specific mods

    13. Slide 13 Manufacturing Services Agreements Contracted batches on an rolling basis, with min/max requirements Dedicated facilities on a time based suite fee Price per gram arrangements Negotiable Raw material costs, capital contribution, customer involvement Pitfalls Predicting capacity and balancing with drop-in time Cancellation fees Take or Pay arrangements

    14. Slide 14 Typical Contract Evolution Initial discussions on requirements and suitability of the product Is capacity there? Does Process fit? Is company comfortable with team/plant? Process Development services agreement May want to do PD work to improve manufacturability of the process ex. Increase cell line titer, improve purification yield Tech Transfer agreement What is done to get product from current state Supply Agreement Terms and Conditions of Manufacture

    15. Slide 15 Who are these Contract Manufacturers? Diversified chemical manufacturers Companies formed from spin off of mfg assets Large pharma/bio with excess capacity This group controls most of the manufacturing capacity worldwide. Big Players Straight Contract - Lonza, Diosynth, DSM, Avecia, Dow Operating Cos. - BI, GSK, Biogen, Genentech (These guys often want product rights)

    16. Slide 16 Capacity as a Strategic Asset Recent trend to use mfg. capacity to attract collaboration Large pharm/bio uses their plant to attract JV Capacity initially intended for their own products Excess is attractive to small bio w/o capital This model typically results in product rights/royalties Example IDEC and Genetech on Rituxan Biogen and Elan on Antegren

    17. Slide 17 Advances in Technology Increase Cell line yields Most products currently in 0.25g/L 1 g/L titer We are seeing +3g/L in the labs Transgenics Animals (goats) and plants (corn and tobacco) Environmental and political hurdles Still need to purify it Novel technologies Centrifugal bioreactor

    18. Slide 18 Lonza Large Scale Expansion Large scale in-market supply of MAbs and Protiens 3 x 20K Reactors w/Single Harvest Designed for 65-75 batches/year Multiple room DSP w/ 0.5 2.5 g/l titer basis Utilities, QC Labs, Logistics and Admin Space Funded Fall of 2000 Start Engineering Design to Pilot Batches 42 mos Capital Cost - $210Mio

    19. Slide 19 Photos of the Facility These are recent photos of the Portsmouth facility

    20. Slide 20 Rear of the Facility

    21. Slide 21 High Purity Water System

    22. Slide 22 Media Prep 3,500 and 1,000 L Tanks

    23. Slide 23 Buffer Hold Tank Farm

    24. Slide 24 Upper Level of Cell Culture Area

    25. Slide 25 Centrifuge

    26. Slide 26 Purification Columns