Looking for a needle in a haystack

It shouldn't be...

Small Molecules European CDMOs offering commercial batches of finished dosage forms

Hi George, I have a quick question for you: “do you know what level of CDMO capability exists within Europe for Ampoules and PFS manufacture of hormonal products?”

This was the question I received from one of our partners some time ago, worried that the options might be limited in this area, and she would struggle to identify a suitable CDMO in case a change of source would be required in the future.

I don’t think that my reply was very reassuring since there are not so many European CDMOs that are able to manufacture high potent steriles. There are around 30 of them mentioning that they can offer this kind of technology, but if you look deeper, you will see that most of them can fill glass vials only. For amps and PFS the number should be around 10-20. And if you look even deeper, you will see that most of them can go up to OEB 4. So, depending on the toxicity level, the annual volumes required, and the timelines for a tech transfer for such a product, options can be indeed limited. Let alone pricing.

Therefore, my reply was that it will not be a walk in the park to identify a CDMO for this, but for sure finally someone will be able to do it.

There are around 330 European CDMOs offering commercial batches of finished dosage forms and they operate around 540 manufacturing sites in the continent. Some of them are pure CDMOs and some are what we call integrated ones. The difference is that integrated CDMOs market their own products while pure offer only contract development and manufacturing services to their customers without a product portfolio of their own.

According to our research, 42% are pure and 58% integrated CDMOs.

It does not come as a surprise I think that most of the CDMOs can offer OSD forms like tablets and capsules. Of course, within OSD there are more technologies other than tablets and capsules and if someone is looking for a CDMO able to produce pellets for example then they should have to restrict their search a lot. The options get even more limited if someone is looking for niche OSD technologies like spray drying or hot melt extrusion. So, although in total there are 227 European CDMOs offering OSD forms, just a small portion of them can offer technologies that separate the best from the rest.

And the same more or less goes for Steriles. Although there are 156 European CDMOs offering sterile products like amps and vials, if someone is looking for sterile bags then immediately their options go down to 18! Let alone if a combination of parameters is needed like high potent steriles filled in bags. Then this is one figure number…

This kind of information is important in my eyes not only to pharma companies looking for suppliers, but also for CDMOs that want to understand their competition. There are many external manufacturing departments in different organizations that don’t have the time to spend in analyzing the CDMO market. And there are very few CDMOs that spend time in understanding the competitive environment in which they operate. In both cases, this lack of understanding can result in missed opportunities. Pharma Companies with big product portfolios, end up with huge complexity in terms of the number of suppliers they work with and CDMOs don’t know what kind of competition their offering faces. And this can have an impact on their pricing decisions resulting either in loosing business or leaving value on the table.

Another area that is interesting to shed some light on, is this of specialization. In which technologies (if any) different manufacturing sites in Europe focus on. Do the majority of sites focus on one technology or they are what we call multipurposed? This can be considered important in some cases, and it has to do with the type of products a pharma company has in its portfolio. A generic pharma company with various product types, may find as a strong point the fact that its suppliers (CDMOs) have multipurposed sites, since they will be able to allocate to such sites various products of different technologies, reducing as a result complexity in their supply chain.

On the other hand, a pharma company offering only sterile injectables to their customers, may find it reassuring that their suppliers (CDMOs) have manufacturing sites focusing only on such products. This might be because a high degree of expertise as well as higher cost efficiency can be expected from such sites on the specific technology.

External manufacturing network departments of different pharma companies may be happy to know that there is enough of both types of CDMOs. 56% of CDMOs specialize in one technology and 44% can offer two or more.

The question is those CDMOs who focus on something, where they focus on? The answer is that the majority focus on OSD (18%), and then Steriles (14%) and Liquids/semi solids (10%) follow. But here there is a catch!

If we take a closer look and we take into consideration the European region where different sites operate, we will see that different regions have different patterns when it comes to specialization. Multipurposed sites are much more common in South and Eastern Europe compared to Central Europe and UK/Ireland. So, if a pharma company is looking for a CDMO with multipurposed facilities in UK or Germany, it will have a much harder time to identify one compared to someone looking in Poland or Greece for example.

There must be a reason behind this discrepancy between European regions when it comes to specialization, but we can analyze this in future articles.

For the moment, lets keep in mind that there are many CDMOs in Europe, some of them big, some of them mid-size but most of them small and relatively unknown. But they are unknown because very few external manufacturing departments spend time to get to know their suppliers and their capabilities, let alone build a strategy behind their external manufacturing network optimization. And this is a pity because without a proper strategy in this area, managing external partners becomes more and more expensive.

And while CFOs and Supply chains will argue forever how a preferred supplier looks like, it is for the best of the company to get to know the CDMO market and then decide how to build its strategy.

After all identifying the right CDMO should not be like looking for a needle in a haystack…