Biotech CMC 2022 Wrap Up, 2023 Predications

There’s no doubt about it, it’s been a rough time in the CMC space over the last 6 months. Fueled by recession fear and an increase in the cost of capital, the VC money faucet that existed between 2019-2021 has gone from free flowing to a restricted drip.

Most of us are aware that the worldwide macroeconomic situation has seen interest rates rising across the world, cost of goods increase, cost of services increase, resulting in a general loss of investor confidence which has triggered profit maximizing business behaviors as public company C-Suites try to level out share price decline. Very simply, in traditional big pharma expensive unproven concepts are out, tried, and tested money generators are in (GSK, Takeda, Merck).?

It’s not hard to see how these decisions were reached, 2022 has seen the failure of multiple pre-clinical data funded CGT business as they’ve run out of money or experienced failure of core scientific concepts. From a shareholder point of view, many of the core gen-1 CGT businesses and acquisitions continue to be viewed with skepticism as they have yet to produce the profits and pipelines needed to balance the cost of development and or M&A. (Bluebird, Spark, Juno, to a lesser degree Kite).

In a similar vein, the VC community seems to have become more cautious (especially about vector-based CGT) demanding more data from new and existing businesses to balance new /continued investment risk.

The result in pre-commercial biotech c-suites has been a need for CMC optionality and a pivot that has seen many move from a more volume based program approach to an inch wide mile deep data generating program approach that is focused on making sure that they have the most compelling case for further funding.?The net of both of these things has seen both larger and smaller businesses laying off staff deemed as surplus as they’ve adjusted their program volume whilst retaining those that boost business control over the development / management of critical data generating processes and delivery timeline.

So where does this leave us for 2023??

I believe that innovators will continue to hire leaders in the technical domains of Process Development, Analytical Development, Analytical Sciences, especially if those leaders have a track record that demonstrates how they successfully delivered a small, SWAT style team capable of producing multiple INDs whilst reducing the risk and burden of scale via automation.?

We’re also likely to see the demand for relationship-based leaders that can wrangle multiple parties increase: CMC PMs, External Manufacturing, Ext. Quality etc. small teams require better team players.?

Internal manufacturing: Positions at larger innovators will continue to be under threat. As long as share prices are down, we can expect to see OpEx, Automation, and Procurement professionals take center stage as they pursue further cost savings the result will inevitably lead to further cuts.

CDMOs: Demand for tried and tested GMP manufacturing leaders that have successfully driven the clinical to GMP mindset conversion during new facility startup, and those that have operated in multi product high change over environments, will dramatically increase as businesses expand capacity in-line and try to cater to increased innovator demand.

Engineering and capital: Site expansions at CDMOs and demand for high throughput automated lab/manufacturing solutions will increase. However, spiraling material and build costs will put a focus on those PMs and leaders that have brought projects in ahead of time or under budget as businesses try to regain control and mitigate price increases.

Equipment: We may see a resurgence of small - mid size stainless solutions as an alternative to the disposable techniques of the last 5 years as people look to balance the risk of supply chain issues. This also means an increasing demand for cleaning validation experts, expect this particular area to be extremely tight for talent.

High performing multi-hatters and team players: Smaller teams generally mean doing more with less. As a result, those leaders that can deliver across multiple domains will be chased. Soft skills are going to prioritized as these teams are going to be working overtime under huge pressure – technical divas are unlikely to be tolerated, and companies are likely to recognize that a team of highly functioning near experts is better than one absolute SME that can’t communicate.

Likely 2023 industry trends:?

• Culture and community will continue to take a front seat as the struggle to retain talent in technical areas becomes increasingly difficult.?
• 2nd-gen Gene Therapy businesses to continue to develop at rapid pace as new delivery mechanisms utilize known technologies to solve COGs, immunogenicity challenges whilst building on the proven point of concepts from the first vector-based platforms.
• mRNA businesses to expand dramatically across the board?
• Allogenic T-cell therapies to face a strong examination which if successful will see a sudden need to create a production solution - many CDMOs lack capability in this space so expect to see over subscription at those that can and significant movement as their rivals try to cover potential demand.
• Oligonucleotide suppliers to expand capacity and build additional GMP capability due to mRNA sector growth. Robustness/repeatability of solution to be just as important as quantity.
• VCs to support lower risk funding options and back known technologies that have a proven ROI path. Expect a number of new protein-based businesses to emerge as they ride this wave.
• API businesses to struggle as they see key staff pulled into next gen GT and oligo companies that need experienced chemical synthesis talent.
• Gen 1 CGT businesses to see staff enticed away by Gen 2 CGT businesses. Especially true in the technical and downstream manufacturing realms?

Whilst what I’ve outlined above is pure guess work, the common theme that CMC is going to be under more pressure this year than ever, remains. The need to cultivate the right team dynamic, encourage technical collaboration and cohesion between departments, and generate the data that provides investor confidence will prove vital to company survival. Those that focus on this early will have higher survival odds, those that don’t will get changed out as the money runs dry, those leaders that build the reputation for delivering the right data at the right time to the right stakeholders (VC’s) will strengthen their reputations and put themselves on the path to be the CTOs, COOs of 2024 and most likely the CEOs of 2025-26.

Very simply, those leaders that want to conduct the orchestra in front of the biggest audience need a patron to put them on the stage with the best music in the most brilliant of venues. However, you need to make sure that when those lights finally hit you that you have assembled all the players and can harness years of painstaking practice to deliver a performance that leaves your patron, the audience, and the reporters applauding as the music fades from their ears.