Thursday, November 7, 2013

Les Propheties Pharmaceuticale : Prophesying on where the pharmaceutical outsourcing is headed

It is either an after-effect of all that powwow with the old-worldly Chippewa (the ‘real-Indians’, who aren’t Indian really ;-)) in the round house OR, it’s the paradoxical audacity stemming from my ironic inability to predict my own future!! - Either way…….,

......I have this compelling urge to play an oracle for once & mouth some prophecies!

My prophesying though is limited to pharmaceutical manufacture, outsourcing & is inspired by what’s going on right now all around in the pharmaceutical industry. While on first-look most of the recent happenings appear to be standalone in nature, there is a tangible pattern that isn’t too tough to decipher. My attempt is merely to speculate on what this pattern means for pharmaceutical manufacturing scenario, a few years from now, albeit a little prophetically.

Listed below are a some of my observations, statements & surmises (not still prophecies....), in no particular order, based on a handful but trend-indicative news alerts that I received over the past two weeks;
  • Big pharma shutting-down small molecule manufacturing sites but investing in Biologics facilities - Merck, Pfizer, Novartis, AstraZeneca etc in shutting-down mode & Roche, Genzyme (Sanofi) et al in investment spree
  • CMOs & Pharma companies scramble to strengthen ADC manufacturing capabilities in an apparent response to the visible thrust by drug developers to biologify (sic) unsuccessful small molecule candidates as ADCs & reposition them as targeted therapy candidates - SAFC, Lonza & Roche strengthening ADC capacities
  • Indications that compulsory license issuance in developing countries is driven more by ‘access to cost-effective first-line therapies’ than ‘access to later-generation therapies’  - Indian Patent office Upholding CL for Imatinib & rejecting CL application for Dasatinib
  • Federal complicity (vis-à-vis’ regulatory) with the innovator belief that biosimilar is an Oxymoron – The recent passage of SB-598 bill constraining use of biosimilars by State of California
  • Regulators mellowing, but playing-safe with approval of biosimilars? - The first ever biosimilar approval by EMEA is for Remicade (infliximab) indicated in the ‘relatively non-fatal” auto-immune disorders
  • Geographical re-alignment and consolidation of biosimilar manufacturing assets - Dr. Reddy’s  signing a deal for getting it’s biosimilars manufactured & marketed within the USA by Merck-Serono; Lonza’s scrapping of biosimilar venture with Teva and it’s going slow on India expansion; DSM launching a large-scale biosimilar facility in Australia et al
  • The increased focus of Big-pharma on having a lean & integrated supply chain for their off-patent assets – As indicated by the on-going race of backward-integration by formulation CMOs & forward integration by API CMOs
  • Drug Discovery & Development (primarily chemistry, biology & clinical) service providers progressively getting consolidated within NA, EU with clinical development centers in low-cost countries – As indicated by the flurry of activity each passing day
  • Clinical API synthesis tending to be retained within the shores by the partly to de-risk late-stage regulatory risks & mostly to engage residual in-house R&D facilities – As indicated by the outsourcing strategy adopted by most Big & Mid-sized pharma
  • Spurred-on by increasing regulatory wariness, high focus by the outsourcer' on ensuring supply chain integrity for key Intermediates and starting material for both marketed as well as developmental drugs – As indicated by the uncharacteristically massive press-coverage of  WuXi successfully facing a FDA pre-approval inspection for the ‘Intermediate’ of a new drug under review for approval

While the observations tell a story of their own, here’s my promised prophecy in the form of three quatrains, which very unlike the good old Nos’, I went about decoding myself – so much for my quest to be understood in my lifetime!

Quatrain 1

The Indian &/or Chinese CMO/ CDMO/ CROs will see the outsourcing getting limited to;
·        Manufacture of generic, low-tech (applicable to DP) small molecule, high volume & predominantly disease-maintenance/ management therapeutics (as against curative therapeutics)
·        Manufacture of (ideally integrated) potent, cytotoxic therapeutics    
·        Non-GMP/ GMP manufacture of key intermediates requiring large capacities/ ~ economies of scale of both patent-case & generic APIs for big/ mid-sized pharma
·        Large-scale manufacture of OTCs & Medicinal Products (components of med devices)
·        Early development (preclinical through PIII) of investigational drugs belonging to small/ mid & big-pharma (since this stage demands a lean-cost model)
·        Late-stage development (leading to NDA) of investigational drugs for small/ virtual biotechs
Quatrain 2

The North American, European CMO/ CDMO/ CROs will see the consolidation of the following opportunities in their favor;
·        Manufacture of Biologics, Biosimilars(authorized?)  
·        Manufacture of high-tech, specialty small-molecule APIs (ADCs, PDCs et al); formulations & devices
·        Late-stage development (leading to NDA) of investigational drugs for Mid & Large-sized pharma
·        Integrated Drug-discovery, development for Big pharma
Quatrain 3

Finally & a tad controversially – the Indian pharmaceutical players (& probably Chinese too) in general will aggressively pursue;
·        Compulsory licensing opportunities for the first-line therapies of small-molecule drugs for the NON-orphan disease segments
·        Biosimilar/ biogeneric development (for potential global alliances) and for eventual direct commercialization (with likely alliances again..) within India – with emphasis on curative biologics for non-fatal disease segments not addressed by small-molecule therapeutics    

As is evident, this list of predictions is by no means exhaustive & is only a brief compilation based on some core-opportunity types focused on within the outsourcing domain.

I know Nostradamus has more detractors than believers, so go ahead and flame me, I’m all game! ............ Only, make sure your rebuttals are in Quatrains too…., Just kidding :-)