Q1 2018 VOLUME 4 NUMBER 1 THE EXECUTIVE EDITION M&A STRATEGY: STRUCTURING AND ALLIANCE

WUXI APPTEC AVARA PHARMACEUTICAL FEDERAL EQUIPMENT SAMSUNG BIOLOGICS Creating Comprehensive SERVICES COMPANY Fully Supporting Customer Needs Solutions through Laboratory Uniting the Industry for the Microbial and Biological for Biologics Development and Testing p10 Prevention of Pharmageddon p48 Decontamination of Equipment Manufacturing p64 Bring Peace of Mind p52 > TABLE OF CONTENTS Pharma’s Almanac With over 1,000 pages Refreshingly Adaptable CDMO published in just one year, Pharma’s Almanac is now online. www.PharmasAlmanac.com THE EXECUTIVE EDITION M&A STRATEGY: STRUCTURING AND ALLIANCE

A Note from the Editor 04 Cynthia A. Challener, Ph.D., Nice Insight

Pharma’s Almanac Publisher’s Page M&A Feature 05 The Pharma’s Almanac Team Nice Insight Overview: An Industry Stacked 06 Enhancing Competitiveness Nigel Walker, That’s Nice LLC/Nice Insight Mergers & Acquisitions in Creating Comprehensive Solutions 10 Through Laboratory Testing Discovery, Manufacturing BioVectra Inc. is a CDMO that serves global A rare provider who is an expert in both Xin Zhang, Ph.D. , WuXi AppTec and Fill/Finish Page 40 Artificial Intelligence in pharmaceutical and biotech companies with and , we offer Cynthia Challener, Ph.D.,Guy Tiene, chemistry biologics 15 Biopharmaceutical Manufacturing Emilie Branch, Nice Insight full-service, cGMP outsourcing. fast-moving development companies Constantin Loghinov, MILS Group LLC

significant opportunity to streamline their Ensuring Confidence in 16 Viral Vector Manufacturing With over 45 years of experience, we offer: supply! Christopher Murphy and Michael Wourms, Brammer Bio

To learn more about our capabilities, send us Expanding US Supply Options for Scaled, distinct facilities for Biologics 20 Large-Volume Parenterals and Small Molecules a message at [email protected] or meet Marga Viñes, Grifols Partnership with us at an upcoming tradeshow! 24 Overcoming Challenges in the 52 Microbial and Biological 66 Meeting the Need for Small-Volume Large scale, cGMP Microbial Fermentation Complex Market for Clinical Trials Decontamination of Equipment API Manufacturing and Clinical Logistics Brings Peace of Mind Jim Scandura, Avara Pharmaceutical & Purification Wes Wheeler, Marken Matt Hicks, Federal Equipment Company Services 28 Facilitating Implementation 56 Investing in New Technologies for 68 Focused on Fermentation Complex Chemistry and Customer Service with Innovative Pharma Solutions Elise Mous and Thomas De Maria, Offline Serialization Sarath Chandar, SPI Pharma Capua BioServices DCAT Week BPI West Tyler Ewald and Joseph Quales, UPM Process & Analytical Development March19-22nd 2018 March 19-22nd 2018 59 Supporting Parenteral 70 Leveraging Lyophilization New York City San Francisco Driving Change in the Pharma Industry Development and Manufacturing Development Expertise for 32 and Biotech One Relationship at a Time with End-to-End Services Clinical Manufacturing Syed T. Husain and Catherine Hanley, Oskar Gold, Vetter Pharma Jeff Schwegman, Ph.D., Alcami Corporation International GmbH AB Biotechnologies, Inc.

Why Business Continuity Death to Cleanrooms in Connecting Buyers & Suppliers 36 Management is Important for CDMOs 60 Biopharmaceutical Manufacturing 71 Bridging Capacity & Demand Mayeul Cauvin, Servier Marc Pelletier, CRB Nice Match InformEx Proteins & Antibodies Congress April 24-26th 2018 April 16-17th 2018 Overcoming Formulation Challenges Meet Chemo CMO: Preferred Partner Company Profiles, Nice Insight 39 with Liquid-fill Capsules 63 for Injectables Manufacturing 72 Philadelphia London Eli Elias, CapsCanada Masha Kononov, Chemo Trending Live: Real-Time Data with 75 Full Transparency 48 Uniting the Industry for the Prevention 64 Fully Supporting Customer Needs Nice Insight BioVectra Inc. of “Pharmageddon” for Biologics Development and Timothy C. Tyson, Avara Pharmaceutical Manufacturing 76 Roundtable: M&A, Operational Services James Park, Samsung BioLogics Excellence, Nice Insight 11 Aviation Avenue 866-883-2872 Charlottetown, PE 902-566-9116 www.biovectra.com C1E 0A1 902-628-2045 PHARMASALMANAC.COM 3 > A NOTE FROM THE EDITOR MARKET IN MOTION: LARGE TRENDS CONTINUE TOWARD Q1 2018 VOLUME 4 NUMBER 1 NICE INSIGHT LLC/THAT’S NICE Pharma’s Almanac 89 Fifth Avenue – 5th Floor – NY 10003 – USA Telephone: + 1 212 366 4455 CREATING OUR NEW INDUSTRY Publisher’s Page New York – Philadelphia – Raleigh San Diego – San Francisco – Dallas > BY CYNTHIA A. CHALLENER, Ph.D., NICE INSIGHT Frankfurt – Shanghai – Shenzhen WWW.NICEINSIGHT.COM Outsourcing solution providers PUBLISHING MANAGING DIRECTOR Nigel Walker | [email protected] contributing to the global supply STRATEGIC CONTENT DIRECTOR chain dialogue with compelling Guy Tiene | [email protected] elcome to the first Phar- potent APIs (HPAPIs), as well as cell and SCIENTIFIC CONTENT DIRECTOR ma’s Almanac edition of gene therapies, specialty knowledge and and insightful content. Cynthia Challener, Ph.D. | [email protected] 2018, in which we take a capabilities are critical. STRATEGIC CONTENT MANAGER Emilie Branch | [email protected] look at the mergers and When it comes to contract research SCIENTIFIC CONTRIBUTORS acquisitions, consolidation and special- organizations (CROs), the top ten handle Carrie Cao, Ph.D. | [email protected] ization taking place in contract services, much of the market — and much of the David Torrone | [email protected] and the entire pharma-biotech industry. North American market. Specialization Dear Pharma’s Almanac Reader: CONTENT EDITORS This is in the face of a surge in demand in this sector is occurring around early- Mark Allen | [email protected] Maria Gordon | [email protected] and mandated improvements in process- stage development services, late-phase MARKET RESEARCH DIRECTOR es, efficiency and security of supply — clinical trials and central laboratory You are receiving this print edition of Pharma’s Almanac at the Govindra Singh | [email protected] we’re talking “Pharmageddon.” services. request of one of our contributors, based on your organization, SCIENTIFIC RESEARCH MANAGER We are excited to deliver this first edi- We invite you to enjoy this, our “Execu- Kshitij Ladage | [email protected] or your active role in the industry. tion of the year to you, our print read- tive Edition,” with a feature article cov- SCIENTIFIC RESEARCH ASSOCIATES ership comprising a select group of ering M&A activity at the research and Saakshi Gupta | [email protected] Maurice Spicer | [email protected] pharma-biotech professionals. Our new discovery, contract manufacturing and BY THE NUMBERS 2017 Nice Insight’s Pharma’s Almanac has grown into a premier PUBLISHING ACCOUNT DIRECTOR content marketing approach brings you finished drug-product levels. This topic content universe, recognized for offering in-depth analysis of Wei Gao | [email protected] valuable and insightful commentary is also addressed in our Roundtable, with pharma-biotech research and discovery, manufacturing, supply PUBLISHING DESIGN DIRECTOR from a variety of contributors. both CDMO and CRO perspectives. 83,708 Young Tae | [email protected] chain, regulatory and future technologies. This content universe This edition includes fantastic con- Welcome to the issue! P # of returning visitors tributions from a great group of thought includes a robust and highly active web portal that delivers leaders at some of the best solution pro- content and data, as well as archives of all past issues. viders around the world, covering top- ics from viral vector manufacturing and 1,192+ Nice Insight is the market research division of In 2017, PharmasAlmanac.com had over 80,000 visits, with That’s Nice LLC, A Science Agency, leading marketing parenterals to customer partnerships # of articles, blogs, videos & news in the life sciences. thousands of views of more than 1000 articles, blogs, videos and clinical trial logistics, with more on The print version of Pharma’s Almanac is delivered to and news pieces posted. To reach our audience, we send out a targeted group of 20,000 leaders from all sectors of serialization. the industry who are implementing new strategies and The pharma-biotechs are simplify- “Trending Now,” a tri-weekly e-mail newsletter that extends the technologies creating collaboration models with drug 68,299 developers to deliver on the global mission to provide ing their supply chains, attempting to reach and consumption of Pharma’s Almanac content, which the reliable supply of safe effective pharmaceuticals work with fewer contract service provid- # of e-newsletter readers and therapeutic agents worldwide. The custom print is sent to over 62,000 readers. distribution includes individuals across big pharma, the ers, such as contract development and biotechs, mid-sized and specialty pharma, virtual pharma- manufacturing organizations (CDMOs), biotechs as well as regulatory, governmental agencies, We invite you to visit www.pharmasalmanac.com to read academia, and consumer patient touch points. and doing so in more strategic and cost- 938+ effective ways. # of supplier company profiles more, examine our research section, review over 900 supplier The utilization of pathways for accel- company profiles, and sign up for Trending Now. erated drug approvals requires agility Pharma’s Almanac Online and scalability from outsource partners. Nice Insight’s Content Community With the continued growth of antibody- 112,800 Sincerely, www.PharmasAlmanac.com drug conjugates (ADC) and other highly # of print copies mailed The Pharma’s Almanac Team

PHARMASALMANAC.COM 5 - - - - 7 In North 1 76 16.2 12% 67% 20% 2016 At the same time, the same At time, 1 PHARMASALMANAC.COM North America Europe Asia-Paci‡c 93 10.9 11% 2015 23% 65% Overall in the CDMO segment, Overall from 2 Private companies (or their assets) ac Private More activity has taken place in NorthMore activity has taken The one-stop-shop concept The one-stop-shop concept some for around has been of clearly a number time, and adopted CDMOs have leading this model. sector of transactions in the rosevalue in billion in 2014 to $12 billion from $5.5 2016. 2012 to 2016, the number an of publicly nounced deals M&A increased approx by imately 12% per year. dealsof worth billion $23 over America, 43%with completedwere 2012-2016, from domesticof buyers and the bulk of the Nota remaining purchases from Europe. place most of the deals in Asia take bly, betweencompanies samethe in country. to be growing however, There appears, Europeanin interestbuyers Asian among targets. and North American counted 56% of all CDMO deals from for 2012 to 2016. Sales PE firms accounted by implied acquisition of enterprise values resulting increasedtargets 35% per year, triplingmore than CDMO dealin values period. the over Asia than in Europe. and America 89 ------11.8 31% 33% 36% 2014 77 8.5 6% 31% 63% 2013 Many smaller service Many 5

4 Cumulative deal value (sum of EVs, US$b) EVs, (sum of deal value Cumulative M&A deals publicly announced (only covering and 2016 2012 between and volume CDMO deal value has been acquired). than 51% more where Number of CDMA transactions (global) CDMA transactions of Number 65 4.9 51% 21% 28% 2012 Ernst & Young Ernst SOURCE 0 10 70 20 50 30 80 90 Furthermore, it is worth noting that in it is worth Furthermore, The need so to implement serialization 40 60 100 CDMO M&A Volume and Value CDMO M&A Volume medicines cell such as gene therapies, and are also creating the need ser contract for with specializedvice providers expertise. small-moleculeEven drugs pose challeng percentage as the of compounds that es, are poorly soluble with low bioavailability continues to increase. are often initially de therapies novative veloped emerging pharma companies by acquiredget established by eventually that biopharma firms oncetechnologies their sup — which requires extensive are proven port from service offer that can providers a breadth from discovery of capabilities late-stagethrough someand trials clinical times beyond. also belutions may driving consolidation in the CDMO space. the resources to do not have providers regulatory require meettrack-and-trace incorpo while larger firms can ments, these costsrate across numerous supply Someagreements. smaller CDMOs are expected to look to be acquired in order to compliance. achieve History A Bit of These are leading drivers to measurable One report estimates the M&A activity. small-molecule is consoli CMO market 10%; the above rate dating at an annual

------2 2 In addition, 4 CDMOs continue to 1, 2 3 It has also been reported that the 1 he pharmaceutical contract devel he pharmaceutical contract market manufacturing opment and is highly divided. According to one recent & Young, report Ernst by At the same time, pharmaceutical cus the sameAt time, Some CDMOs are expanding in order toSome CDMOs are expanding technologies in that enable them to offer in vertical course, Of solutions. novative tegration — or the one-stop-shop strategy, which is evidenced of in the conversion to CDMOs — con manufacturers contract tinues to be a driver. across capabilities phasestheir all expand in and commercialization of development needeliminate the order to technologyfor which increases both the time transfer, and cost of projects. tomers are simplifying their supply chains part strategic forming to reduce costs, nerships CDMOs. with fewer more drug developers are looking to re and/ from FDA acceleratedceive approvals which require or focusing on orphan drugs, responsive manufacturing more flexible, of antibody-drug The advent capabilities. (ADC)conjugates and other highly potent as well as next-generation APIs (HPAPIs), there are at leastthere are at 600 CD active different orga international including many MOs, some and that servefirms localnizations markets. each in the CDMO market major players just 2%-4%have share. market Consolidation of Drivers Several signifi fragmentation, With such extensive merger and acquisitioncant (M&A) activity would be required measur result to in any able consolidation. trans notable Several occurredactions have in recent years, of the current ma leading the formation to which begs the question: what jor players, consolidation desirethis driving is for among CDMOs? Outsourcing to CDMOs is increasing as biopharmaceutical com panies look to cut costs while accelerat Sponsor firms are also con ing timelines. cerned with rebuilding pipelines as many blockbuster drugs lose protection, patent focusing on drug discovery relying on and and manufactur development CDMOs for ing activities. Increas more financial stability. achieve equity a role inis playing (PE) private ingly, helping M&A activity in the CDMO sector, this goal. smaller companies to achieve their globalOthers are looking to improve reach and specialized add advanced or

VERTICAL INTEGRATION their competitiveness through inorganic inorganic through their competitiveness also in facilities Investment growth. continues apace. DRUG has been a slowdown there While in M&A industry, in the pharmaceutical and particularly among pharma services market the contract companies, and players fragmented highly remains enhance to and small continue large DISCOVERY Q1 2018

NEXTGENERATION MEDICINES Enhancing Competitiveness Enhancing Nice Insight Nice

SERIALIZATION / SOLUTIONS GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS LLC Nice , That’s

Nigel Walker Nigel

PHARMA’S ALMANAC

NICE INSIGHT OVERVIEW: OVERVIEW: INSIGHT NICE By

6 CDMO MARKET

IN A FRAGMENTED IN A FRAGMENTED M&A ACTIVITY ACTIVITY M&A for just 22% of the transactions during Carlyle Group and GTCR for $922 million. unit QS Pharma and UK-based CDMO Phar- Country League Table – Targets of M&A grated services may provide a competitive 1 this period, but represented 50% of the AMRI sees the move as offering “a compel- materials Internal Cross-border advantage to developers of biosimilars. total value of all CDMO deals. The result ling opportunity to accelerate our growth + Italy-based CDMO Olon S.p.A. gained US It should be noted that with the increas- Number of deals EV (US$b) of the recent M&A activity has led to a re- and enhance delivery of world-class solu- operations through the acquisition of the ing pace of innovation in the pharmaceuti- Rank M&A Number of Deals Per Country Rank M&A Number of Deals Per Country structuring of the CDMO market.1 Prior to tions to our customers.”6 Chemical Division of Ricerca Biosciences Target HQ Target HQ cal industry — consider the rapid advance 2012, 57% of the assets involved in deals + China-based CDMO Porton Fine Chemicals 1 US 134 1 US 21.1 of ADCs, bispecific antibodies and cell were privately held; today 47% of remain- Many More Small- and acquired US-based J-STAR Research 2 India 31 2 China 7.1 and gene therapies — there will always be a 3 China 31 3 India 3.5 ing assets are under private ownership. Mid-sized Transactions + Chinese biopharmaceutical company 3SBio need for third-party services based on the 4 France 23 4 Germany 2.8 In addition, PE firms now own just 12% of Many of the companies that participate in latest state-of-the-art, novel technologies. acquired Canadian biologics CDMO Thera- 5 United Kingdom 22 5 Japan 2.5 all assets, down from 22%. Overall, there mega deals do so only after building their pure Biopharma 6 Germany 19 6 Canada 2.4 As a result, CDMOs that have adopted the has been a concentration of CDMOs into organizations through numerous smaller + CMC Biologics was sold by PE firms Monitor 7 Canada 14 7 Italy 2.0 specialist model will continue to be an im- large, publicly traded strategic players. transactions. Patheon, AMRI and Capsu- Clipper Partners, European Equity Partners 8 Spain 14 8 United Kingdom 1.1 portant component of the CDMO market. 9 Italy 11 9 France 1.0 According to Ernst & Young, only three gel are all examples. These smaller deals and Innoven Partenaires to Japanese glass, There is one conclusion that can be 10 Australia 11 10 Switzerland 1.0 of 10 top players (Aenova, Amatsigroup collectively often have a greater impact chemicals and high-tech materials manufac- drawn: M&A activity in the CDMO sector — 11 Sweden 11 11 Norway 0.9 and WuXi PharmaTech) are currently pri- than the few large deals that take place turers AGC Asahi Glass 12 Japan 10 12 Poland 0.9 by PE firms, large and small privately held vately owned.1 each year. + Corden Pharma acquired an HPAPI manu- 13 Belgium 9 13 Turkey 0.7 strategic buyers and large publicly traded facturing plant previously owned by Pfizer 14 Ireland 8 14 Spain 0.6 companies — will continue. Each of these 15 Switzerland 7 15 Denmark 0.6 Several Big Deals in 2017 In 2017, for instance: + Celonic, a specialist in perfusion types of players seeks to achieve differ- The big deals that took place in 2017 re- + Lonza acquired cell and gene therapy CDMO biomanufacturing, acquired Glycotope’s Top 15 target countries for CDMO M&A transactions based on number of deals and EV involved in deals, 2012-16. entiation and gain competitive advantage flect the variety of deal types that have PharmaCell B.V and micronization services production facility in Heidelberg, Germany, SOURCE Ernst & Young in the eyes of drug developers looking for been occurring in the CDMO segment, provider Micro-Macinazione gaining its complementary GEX human cell partnerships with high-quality, innovative, often resulting in companies with a + Germany-based drug discovery and devel- line platform cost-effective service providers that accel- greater breadth of capabilities. With its opment company Evotec finalized the acqui- + CDMO Avara Pharmaceutical Services pur- drug substance (proteins, antibodies, cell ment cycle with elimination of the need for erate the development of novel, safe and $5.5-billion acquisition of Capsugel from sition of US-based CDMO Aptuit to enhance chased Pfizer’s sterile manufacturing facility therapies, viral vectors, etc.) process de- technology transfers from one partner to efficacious drugs. P PE firm KKR, Lonza, which had capabili- its capabilities as an integrated provider of in Liscate, Italy, the fifth plant purchased in velopment and manufacturing, bioconju- another. On the flip side, CDMOs benefit ties in small-molecule and biologic API drug discovery and development services the last two years. gation and highly potent manufacturing, from the need to manage fewer custom- manufacturing, gained a position in drug + Biopharma testing services company formulation development, drug delivery, ers with whom stronger relationships are ABOUT THE AUTHOR product services. Thermo Fisher Scien- Eurofins Scientific expanded into the CDMO Many of the key drivers of consolida- analytical testing and drug product man- established. tific, through its complementary $7.2 bil- space (multi-step syntheses, development tion in the CDMO sector are elaborated ufacturing capabilities and capacities At this point, while many CDMOs have lion purchase of Patheon, added drug of cytotoxic and high potency APIs) with the in these examples. The first four repre- around the world.Examples include Al- moved to build integrated offerings, evi- substance development and manufactur- acquisition of Alphora Research sent deals intended to expand services to cami, Almac, Boehringer-Ingelheim Bio- dence for the preference of this model ing, formulation development and drug- + Ireland-based CDMO Almac Group acquired implement a vertical integration or one- Xcellence™, Brammer Bio, Capsugel, Cam- among pharmaceutical industry custom- product manufacturing capabilities to its Ireland-based contract research organiza- stop-shop model. Lonza is clearly willing brex, Catalent, Cobra Biologics, Flamma, ers has not yet surfaced. It is too early to products and services businesses. On a tion (CRO) BioClin Laboratories to expand to make large and bolt-on acquisitions to Fujifilm Diosynth Biotechnologies, Gran- draw any conclusions, however. The costs slightly smaller scale, Catalent acquired its analytical capacity and better serve its realize its strategy. Eurofins Scientific ules India, Grifols, KBI Biopharma, Lubr- and time involved in switching projects are CDMO Cook Pharmica for $950 million, global customers needs and Almac are branching out beyond their izol, Novasep, Pfizer CentreOne, Piramal enormous, so use of integrated services gaining capabilities for the development + Catalent completed the acquisition of original sectors to expand capabilities — Pharma Solutions, Recipharm, Vetter and will likely occur over time as new projects Nigel Walker and manufacture of biologic-based drug Canadian softgel manufacturer Accucaps CRO into the CDMO space and vice versa. WuXi AppTec.7 are implemented.1 Managing Director, That’s Nice LLC / Nice Insight substances and parenteral drug products. Industries Limited Companies like Quotient Sciences and It is also possible that larger pharma- Mr. Walker is the founder and managing director Albany Molecular Research (AMRI), mean- + UK-based Quotient Sciences acquired the Olon furthered their capabilities in their Will Vertical Integration or Specialization ceutical companies will be more likely to of That’s Nice LLC, a research-driven marketing while, agreed to a buyout by PE firms The US-based Charles River Laboratories CDMO areas of specialization. Others are build- Dominate the Future CDMO Market? use integrated CDMOs than smaller spon- agency with 20 years dedicated to life sciences. ing capabilities through the acquisition The one-stop-shop concept has been sor firms. Smaller firms may be concerned Nigel harnesses the strategic capabilities of Nice of sponsor facilities, which does not lead around for some time, and clearly a num- that their projects will receive low prior- Insight, the research arm of That’s Nice, to help to consolidation but does reduce in-house ber of leading CDMOs have adopted this ity compared to larger firms with multiple companies communicate science-based visions capacity. The two acquisitions of North model. Customers can theoretically ben- projects at multiple phases.1 For smaller to grow their businesses. Mr. Walker earned a bachelor’s degree in graphic design with honors Targets of CDMO M&A Activity American operations by Chinese compa- efit from reduced sourcing costs due to North American and European pharma from London College. nies reflect the growing interest of Asian simplification of the value chain and ac- companies, lower-cost options in Asia may Number of deals Target ownership EV (US$b) firms in expanding their global presence celerated development timelines due to also remain attractive. On the other hand, LinkedIn www.linkedin.com/in/walkernigel as their technical capabilities improve. simplified movement through the develop- it has been suggested that access to inte- Email [email protected] 115 Private strategic 8.2

5 Public strategic 3.6 Lots of Investment Activity

Asset of private strategic M&A deals are not the only way that CD- 108 6.6 REFERENCES MOs are looking to increase their com- 80 Asset of public strategic 6.3 petitiveness. Investments in new facilities 1. Jörn Leewe, Matthias Groh. “The Pharmaceutical CDMO 3. Catherine Wagner. “CMOs: The New Netflix?”QAD Blog. Strategic Sponsor-CRO Partnerships: The International Element 86 Asset of investment rm 25.7 and technologies are occurring at a rapid Industry Is Consolidating: Opportunities For Current Players 2 May 2017. Web. Changing Clinical Trials.” Pharma’s Almanac. Sept. 2017. Web. And New Entrants.” Ernst & Young. Sep. 2017. Web. 4. Flora Southey. “Low Budgets Drive Consolidation Trend, Say 6. AMRI Bought for $922M. Contract Pharma. 7 Jun. 2017. Web. pace, regardless of company size, location Number of deals and EVs of publicly announced CDMO deals between 2012 and 2016. 2. Louis Garguilo. “M&A Crucible In Contract Drug Serialization Experts.” In-Pharma Technologist. 24 Sep. 2017. 7. Patricia Van Arnum. “CDMOs and CMOs: A M&A and or areas of specialization. CDMOs are ex- Development And Manufacturing.” Outsourced Pharma. 6 Web. Expansion Roundup.” DCAT Value Chain Insights. 12 Jul. 2017. SOURCE Ernst & Young panding both small-molecule and biologic March 2017. Web. 5. Emilie Branch, Cynthia Challener, Carrie Cao. “Building Web.

8 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 9 INDUSTRY LEADER INSIGHT

WuXi AppTec has continued to build a comprehensive offering through organic growth and acquisition. Its Laboratory Testing Division is poised to play a key role in propelling the open-access capability and technology platform company forward with a full range of integrated testing services. As an organization, WuXi AppTec provides a broad and integrated portfolio of services to help our worldwide customers and partners shorten the discovery and development time and lower the cost of drug and medical device R&D through cost-effective and efficient solutions.

PRECLINICAL, CLINICAL, MEDICAL DEVICE TESTING CREATING COMPREHENSIVE

THE LABORATORY TESTING DIVISION The Laboratory Testing Division covers nearly all testing capabili- SOLUTIONS THROUGH ties involved in drug and medical device development, from ear- ly-stage R&D to clinical diagnostics. It was formed in December 2013, when all of WuXi’s testing capabilities were combined into one powerhouse unit, adding a full range of DMPK, toxicology, bio- analytical, analytical and clinical diagnostics services to create a LABORATORY TESTING vast portfolio of IND- and NDA-enabling services. Our progress since then has remained constant. Over the last four years, the Laboratory Testing Division has evolved to become a fully-integrated testing platform supporting customers across > BY XIN ZHANG, Ph.D., WUXI APPTEC the full scope of drug discovery and development. We are continu- ously evolving to meet the ever-changing needs of our clients and global patient populations.

10 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 11 Acquisition is a key component of our COMPLETE CLINICAL DEVELOPMENT expansion strategy. One of the most recent The transition from preclinical to clinical LABORATORY TESTING DIVISION changes to our division has been the addi- WUXI LTD AT A GLANCE studies should be seamless. As we pro- tion of the Medical Device Testing Unit, vide support at all levels and across all formerly referred to as AppTec. The com- phases, our goal is to ensure that regard- pany, which specialized in medical device R&D Sites in the US less of when we take on a project, we are testing, was acquired by WuXi in January 7 and China able to successfully progress it though 2008. At the time of its acquisition, it was each development stage, leveraging our one of the top three medical device test- Employees Globally vast range of technical capabilities. Our ing companies in the US. In October 2017, 2,500+ clinical development services include, WuXi AppTec acquired ResearchPoint Global IND Packages but are not limited to: small molecule and Global, a US-based CRO, in order to con- 450+ Completed biologics quantitation, generic/biosimilar tinue to build a more robust clinical CRO and innovator study support, biomarker offering. Global NDA Packages testing, PK Met ID, mass balance (hot & Completed 100+ cold), CYP, Phase II enzyme and trans- PLATFORM TO PATIENT Clinical Centers porter substrate phenotyping, chronic At its core, WuXi is a platform company 30 in China and subchronic toxicology, Seg I-III DART that is committed to enabling innovative studies, carcinogenicity studies, juvenile therapies to benefit patients. The Labora- Validated Methods toxicology, four-week batch impurity test- for Bioanalysis tory Testing Division offers comprehensive 430+ ing, late-phase commercial analytical de- solutions that stem from this commitment, velopment, stability studies, regulatory enabling customers to take their projects CMC and project management. from lab to patient on an accelerated time- line. Our “Platform to Patient” philosophy PARTNERING THROUGH MEDICAL DEVICE ANALYTICAL SERVICE UNIT : speaks to the many layers that comprise TESTING the organization’s vision, as it emphasizes TRACK RECORD OF SUCCESS When customers work with us, they are the value of consistently delivering high- working with a partner fully committed quality study data from early through late to the success of their project. We un- Customers for Discovery phases of development, while also serving derstand the challenges associated with 330 Chemistry & Separation, to connect the Laboratory Testing Division API & Clinical Trial getting a medical device to market, and to the other areas of the WuXi business. Material Manufacturing our scientists have the expertise and As an integrated testing platform, the experience to proactively support this Stability Programs Laboratory Testing Division is uniquely po- endeavor within an ever-changing regu- 1,000 Conducted for 1,000 sitioned to aid our customers in all of their Batches of API & Drug latory environment. testing and development needs. Our goal Products What definitively sets us apart — as is to ensure our clients are able to deliver an organization, business unit and test- INDs / NDAs innovative medicines faster and more cost- ing platform — is our people. Our medical 25 Submitted to FDA effectively. To best address any request, device testing experts not only serve on ANALYTICAL & the Laboratory Testing Division is divided CTDs / CTAs Submitted international standards committees as ac- into three key platforms—preclinical drug 20 to CFDA tive participants, but as leaders. In addi- REGULATORY development, clinical drug development tion to keeping us in tune with the shifting and medical device testing. regulatory environment, our leading chem- ists work alongside our toxicologists to CMC SERVICES WUXI PLUS IND FORM WIND to submission. Our IND-enabling services provide comprehensive toxicological risk Our preclinical drug development services include CMC and analytical development, assessments. We not only provide guid- support the testing, document preparation bioanalytical solutions, full-scale in vitro ance but adopt a customized strategy for and regulatory submission for Investiga- and in vivo ADME and PK/PD, as well as each individual program. The vast number FULL RANGE FROM EARLY OR LATE tional New Drug (IND) applications. Our preclinical and clinical toxicology safety of diverse products that our experts have PHASE THROUGH COMMERCIALIZATION commitment to meeting all goals within assessments. tested makes us an unquestionable author- – State-of-the-art technologies & proven expertise an accelerated timeline and hands-on pro- WIND combines our open-access capa- ity in this space. gram management, coupled with extensive bility and technology platform, program – Extensive capacity, serving 200+ customers expertise in both US and China-specific management and regulatory support ser- A FORWARD LOOKING JOINT VENTURE: – Stability programs >2,000 batches of API & drug product regulations, makes us fully equipped to vices to facilitate our customers’ global WUXI AND THE MAYO CLINIC SCHEDULE A MEETING WITH US FOR – Data has supported 13 NDA / MAA approvals support the full scope of any drug develop- IND applications, designing customized As part of our commitment to delivering DCAT Week – 25 IND / NDA, 20 CTD / CTA, and 7 IMPO filings ment program. WuXi and IND combine to- solutions that fit the needs of each individ- value to patients worldwide and our vi- March 19-22, 2018, New York, NY – One of the largest analytical platforms in Asia gether to form our “WIND” program, which ual project. Our team of regulatory experts sion that ‘every drug can be made and takes customers from the initial steps of support IND submissions to global regula- every disease can be treated’, in January CONTACT US AT tory bodies, including the CFDA and FDA. document preparation all the way through 2018 WuXi AppTec Group formed a joint Anthony Genovese [email protected] WORLD-CLASS, FULLY INTEGRATED TESTING SOLUTION +1 240 694 5669 LABTESTING.WUXIAPPTEC.COM 12 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 13 WHEN CUSTOMERS > MACHINE INTELLIGENCE an internal mindset and business process WORK WITH US, THEY WUXI LTD changes around data collection, analysis, Analytical Capability/Services and use are necessary. There are, however, ARE WORKING WITH some quicker Band-Aid solutions that can A PARTNER FULLY ARTIFICIAL INTELLIGENCE be initially deployed. Machine-learning automation tools, COMMITTED TO THE ANALYTICAL SERVICES for instance, perform reasonably well the SUCCESS OF THEIR • Early & Late-Phase Analytical activities of data cleaning, feature engi- Development IN BIOPHARMACEUTICAL neering, model/algorithm selection and • Stability Studies PROJECT. hyper-parameter optimization. In-resi- • Impurity Control dence drug development and manufactur- • Highly Potent Compound Analysis DMPK SERVICES • Large Molecule Analysis • in vitro ADME MANUFACTURING ing scientists, who might not have deep • Microbial Testing • in vivo PK / PD machine-learning expertise but surely • Preformulation Study • in vivo ADME possess robust statistical analysis experi- • Physiochemical Characterization ence, can use these tools to take an initial Constantin Loghinov & Excipient Release TOXICOLOGY SERVICES dive into the data to determine if any prac- • Regulatory CMC • General Toxicology Managing Director, Machine Intelligence for Life Sciences, MILS Group LLC tical insight can be gained. • Safety Pharmacology An interesting AI approach for the bio- BIOANALYTICAL SERVICES • Genetic Toxicology LinkedIn www.linkedin.com/in/constantinloghinov/ • Discovery Bioanalysis • Developmental & Email [email protected] pharmaceutical industry, that requires • Preclinical Bioanalysis Reproductive Toxicology less structural change in data collection venture with the Mayo Clinic to introduce • Clinical Bioanalysis • Ocular Toxicology routine, might be the application of Inter- testing capabilities and clinical diagnos- rtificial Intelligence (AI) has sig- predictable, high-quality, flexible, low-cost net-of-Things (IoT) sensors, depth cameras tic services to the Chinese market. This nificant potential to change the manufacturing process, we first need to for collecting and analyzing visual object venture will bring novel esoteric tests to healthcare industry, from the look at the two integral components: the movements, sound and speech recogni- market faster, benefiting patients in both way patients receive treatments data and the data scientists. tion systems — all of the tools that allow China and the US. to the ways in which drugs are discovered Too often we collect manufacturing data shifting data collection in the background The partnership with the Mayo Clinic OVERCOMING THE CHALLENGES OF capable of — our testing capabilities are and manufactured. In the first of a four-part with the hope of never seeing it again, i.e., for of manufacturing operations. In addition, elevates our portfolio of diagnostic ser- A RAPIDLY PROGRESSING ORGANIZATION limitless. Regardless of whether a client series exploring the use of AI in biophar- regulatory compliance purposes. The struc- new developments in deep neural network vices and will serve to accelerate re- Although our organization’s growth is comes to us with one single compound, maceutical manufacturing, we look at the ture and content of this data is typically not science, specifically Capsule Nets, have search in the lab. The outcome will be the overwhelmingly positive, one of the chal- or hundreds of thousands of compounds, challenges and opportunities facing early designed for manufacturing optimization. significantly improved the effectiveness of transformation of discovery tests and the lenges of growing so rapidly is addressing LTD can do the testing, evaluate that the adopters of this game-changing technology. As a result, the data generally does not help object visual recognition and classification diagnostic landscape, as well as preci- any doubts concerning where everyone targets are druggable, go through all the data scientists to clearly see how machine from different angles. These neural nets sion medicine — not only in China but also fits, and how we can all work together necessary preclinical testing and even- FROM HYPE TO APPLICATION learning classification and predictive mod- can be trained using much smaller data worldwide. Through the collaboration to accomplish one overarching goal. Of tually conduct testing in clinical trials. It As the hype around artificial intelligence els can produce practical improvements. sets, which is critical for environments with with Mayo, we're committed to building course, our evolution is an ongoing pro- has been tremendously exciting to watch (AI) has been growing, its promise to Mixed paper-electronic formats are an- unique manufacturing processes. a leading diagnostic services operation cess. Internally, we are relying on program our Laboratory Testing Division’s growth change healthcare has started to mate- other obvious issue. Even if the API and in China and co-developing in ways that management to play a key role in how our over the last four years into the integrated rialize: medical imaging classification finished dose batch records, exception re- EXCITING FUTURE FOR AI IN will benefit our patients, doctors, and in- divisions are perceived. testing powerhouse it is today, and we are algorithms have bettered a panel of ex- ports and development and QC analytical BIOPHARMACEUTICAL MANUFACTURING novative collaborators in all corners of Ultimately, the Laboratory Testing Divi- wholeheartedly looking forward to what perienced radiologists; new in-silico de- testing results are all in electronic form, The abovementioned solutions, although the world. sion — or LTD — stands for just what we are lies ahead in the coming years. P veloped drugs are moving through clini- there is a lot of semantic/relational data- lacking the effectiveness of data-driven cal trials; wearables and smart phones base preparatory work needed before Nat- re-engineering that “smart manufacturing” LIFE, TECHNOLOGY, AND DISCOVERY produce data helping with mental disease ural Language Processing (NLP) algorithms might eventually require, are not disruptive The Laboratory Testing Division is com- treatment; and medical decision-support can produce actionable insights. to a high-quality cGMP-compliant manufac- ABOUT THE AUTHOR monly referred to as “LTD” for short. We Xin Zhang, Ph.D. systems pave the way to revolutionize the Great value would come from combin- turing organization. They should be most have made use of this internal acronym, Vice President & Global Head of DMPK, Bioanalysis entire healthcare provider model. ing data sets from different manufacturing interesting to those companies that see developing it into the meaningful slogan: & Abgent, WuXi AppTec In biopharmaceutical manufacturing, organizations within a larger biopharma manufacturing as an important value-cre- “Life, Technology and Discovery” − an however, we need to search deeper to rec- company, but business unit and facility- ating activity, such as contract manufactur- all-embracing reflection of our capabili- Dr. Xin Zhang joined WuXi AppTec in September 2013. Prior to joining ognize the victorious arrival of AI. level data silos and the lack of clear data ing organizations, generic drug producers, WuXi, Dr. Zhang worked for Charles River Laboratories, LabCorp (Tandem ties as a testing platform. We stand for ownership do not make this job an easy and biologic drug substance manufacturers Labs) and Agilux Laboratories. After earning a degree in physical chemistry these three tenets, which truly summa- INTEGRAL COMPONENTS one. The lack (or complete absence) of data with high costs of goods. from Peking University and working in China for a few years, Dr. Zhang rize where we see our company in the fu- traveled to the US to pursue his graduate career and obtained his Ph.D. in Some low-hanging AI, or rather Machine scientists with dedicated machine-learning Over the next year, MILS-Group will dive ture. Our focus is strongly on the US and organic chemistry from the University of Iowa. Dr. Zhang completed his Learning, fruit are ripe enough to fall in training within ops/manufacturing groups deeper into the most practical cost-cutting, China, and we have expansion plans for postdoc training at Northeastern University, where he focused on new the hands of COOs and Directors of Manu- is another challenge, but one that is at least quality-enhancing, predictability-improv- both. Specifically, the expansion of our mass spectrometry applications including oligonucleotides, DNA adducts, facturing; machine learning-backed visual easy to explain. ing applications of AI in biopharmaceutical New Jersey facility for DMPK and Bioana- and proteomics. inspection and bacterial culture yield opti- manufacturing. We will explore applica- lytical services, with the opening of a new mization are good examples. As with many SOME BAND-AID SOLUTIONS tions being pursued by Big Pharma, analy- LinkedIn www.linkedin.com/in/xin-zhang-898b1a10 building in Cranbury, is taking place in Email [email protected] other potential opportunities for the ap- To make machine learning effective in bio- sis of data generated by automated produc- early 2018. plication of machine learning to achieve a pharmaceutical manufacturing, gargantu- tion systems and much, much more. P

14 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 15

PA_Q118_15_MILSGroup_F_S.indd 15 2/27/18 3:45 PM > CELL AND GENE THERAPY FILL/FINISH RAPIDLY GROWING MARKETS IN NEED and commercial biologics manufacturing. suite sanitization. A fully automated ver- OF VIRAL VECTORS In September 2017, Brammer completed sion of the filling system at the Florida Most gene and cell therapies, like the first the expansion of clinical capacity at the site that leverages similar isolator tech- two chimeric antigen receptor (CAR)-T cell Florida site, doubling the site’s GMP man- nology was also installed with capacity therapies (KymriahTM and YescartaTM), and ufacturing capacity supporting clients’ for nearly 10,000 vials per day to support the first in vivo gene therapy (LuxturnaTM) clinical cell and gene therapy trials. In late-stage and commercial gene therapy approved by the FDA in late 2017, utilize addition to increasing capacity for adher- drug products. viral vectors for transduction. Given the ent and suspension cell culture using mam- Brammer’s Cambridge facility also large number of cell and gene therapies in malian and insect cell host systems up to houses manufacturing science laborato- late-stage development/nearing commer- the 1000L scale, additional unidirectional ries where processes can be run outside cialization, it is not surprising that demand flow manufacturing suites were built and a of GMP conditions, at or close to scale, in for viral vectors is growing rapidly. Accord- state-of-the-art isolator and integrated fill order to test them before moving to GMP ing to Allied Market Research, the global line were installed for drug product manu- production. In addition, it is important to viral vector and plasmid DNA manufactur- facturing in a range of formats, including note that beyond fill/finish operations, ing market (including viral and nonviral up to 2000 vials per day. Brammer offers visual inspection and pack- vectors and plasmid DNA) was valued at Isolators are the most robust barrier aging and labeling services. The Somerville $262 million in 2016 and is expanding at a systems available and provide a high level distribution center, which is located within compound annual growth rate of 22.6% to of assurance and reliability with respect one mile of the commercial manufacturing reach $1.090 billion in 2023.1 Viral vectors to contamination control. Fill/finish is the operations in Cambridge, is equipped for accounted for the largest segment. last step in the manufacturing process, the storage of cell banks and viral banks, The rapid growth in demand for viral and the use of an isolator provides a high and labeling, storage and distribution of vectors is challenging the sector, however.2 degree of safety for the drugs being pro- products as client needs dictate. In a sepa- The production of viral vectors requires duced. The new isolator system also meets rate project, Brammer plans to renovate advanced manufacturing facilities and tightening global regulatory requirements. a facility in Lexington, MA, increasing equipment, and highly skilled and experi- capacity to support late-stage clinical and enced operators. There are a limited num- INVESTING IN COMMERCIAL commercial viral vector production. Con- ber of biopharmaceutical companies and MANUFACTURING struction is expected to start in early 2018 contract development and manufacturing The second step in the establishment of with capacity coming on line by year end. organizations (CDMOs) with the resources Brammer as a full-service cell and gene in place across all stages of the drug devel- therapy CDMO was the acquisition on Jan- FOCUS ON FLEXIBILITY, TRANSFER- opment cycle. Both academic laboratories uary 1, 2017, of Biogen’s biologics manufac- ABILITY, QUALITY AND CONFIDENCE IN providing early phase support, and most turing and distribution facilities in Cam- PATIENT SAFETY CDMOs providing clinical and commercial bridge and Somerville, Massachusetts, Cell and gene therapies are next-genera- development and manufacturing services including the on-boarding of an experi- tion medicines that require novel manufac- ENSURING CONFIDENCE IN are running at full capacity, typically with enced team of 100 employees. The Cam- turing technologies. As with any new field, wait lists that extend months to years. bridge facility was licensed by regulatory needs and capabilities are evolving rapidly. authorities to manufacture four commer- Flexibility in both drug substance and drug EXPANDING TO MEET DEVELOPMENT- cial protein therapeutics. product manufacturing is essential for SCALE NEEDS Following a FDA Type-C meeting to effective support of client projects. Effi- VIRAL VECTOR MANUFACTURING Recognizing the growing need for viral review the design plans for the Cambridge cient and simplified scale-up and transfer vector production services on the devel- facility, Brammer began renovations to from early- to late-stage clinical and com- opment and commercial scale, Brammer support late-stage development and com- mercial manufacturing allow for shorter > BY CHRISTOPHER MURPHY AND MICHAEL WOURMS, BRAMMER BIO Bio was formed as a highly specialized mercial launch of gene therapy products. time to market for enhanced competitive- contract development manufacturing The project was completed in late Novem- ness. Ensuring quality and patient safety service organization focused solely on ber 2017, and the facility now houses state- are absolute requirements and standards. Cell and gene therapies are rapidly advancing to late-stage meeting the needs of the cell- and gene- of-the-art equipment in cleanroom suites The expansion projects in Florida and therapy markets. specially designed to accommodate a Massachusetts have enabled Brammer clinical trials and commercialization. Brammer Bio has expanded In March 2016, Brammer merged with broad range of gene therapy manufactur- to evaluate state-of-the-art development its capabilities to meet the growing need for flexible, high-quality Florida Biologix, an Ampersand Capital ing process technologies. and production systems. For instance, Partners’ portfolio company based in Ala- Multiple drug substance suites able to the Ambr® mini-bioreactor system from advanced viral vector development and manufacturing services chua, Florida that had a decade of expe- support small- to large-scale (up to 2000L) Sartorius, with the option for 24 or 48 with an emphasis on providing the highest level of patient rience and specialized expertise in the adherent and stirred-tank production, single-use mini-bioreactors, allows high development and early clinical supply of quality control laboratories and process throughput scale-down modeling for safety and reliability. all of the major viral gene transfer vector establishment space were installed. The efficient process characterization. Dis- systems (Adeno-associated viral, Adenovi- facility is also designed with an HVAC posable technology has also been imple- ral, Herpesviral, Lentiviral and Retroviral). system for grade C clean rooms and uni- mented at large scale in partnership with Brammer management had a strong track directional flow. A centralized vaporized Pall Life Sciences. In addition to the new record of success supporting late-stage hydrogen peroxide (VHP) system ensures isolator systems, the implementation of

16 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 17 single-use product flow paths and the a unique “L” flange design that enables standing of the technical aspects associ- use of disposable technologies for drug rapid change out of different filling config- ated with the production of many different product manufacturing provides signifi- urations (cartridges, syringes, closed vials, vectors using a variety of manufacturing cant flexibility with respect to the types etc.) and the Florida site offers the same platforms. At the Cambridge facility, Bram- of projects that can be completed and flexibility at clinical scales. mer’s team has successfully commercial- project scheduling, all while ensuring Furthermore, with the ability to per- ized several biologic products, manufac- product quality. form development, process scale-up and tured hundreds of product lots, and hosted Brammer also purposely incorporated establishment, clinical and commercial numerous regulatory inspections. manufacturing capabilities for both large- drug substance manufacturing, fill/finish, CELL & GENE THERAPY and small-volume production of viral vec- visual inspection, labeling and packaging, AN INCREDIBLY IMPORTANT ROLE tors. For instance, at both the Florida storage and final product distribution, The cell- and gene-therapy sectors are TM and Cambridge facilities, Brammer can Brammer is an end to end service provider booming, and demand for viral vec- Helping to Cure accommodate filling volumes down to 250 for companies in this specialized field. tors has only increased as a result. With microliters with a high degree of accuracy Brammer’s differentiating expertise in — also leveraging single-use technologies. UNIQUE COMBINATION developing processes and analytics, and Given the fill/finish operation is the Two key elements make Brammer unique manufacturing of both drug substance last step before the product reaches the as a cell and gene therapy CDMO. First is and drug product, Brammer is positioned patient, we made a significant invest- the deep level of expertise and experience to catalyze the growth of the market. ment into technology that provides con- we have in the development and produc- Brammer expects to rapidly fill our exist- fidence in the environmental control for tion of viral vectors. Brammer’s process ing capacity and increase our staff; and drug product manufacturing. In addition, and analytics development capabilities we are already planning for additional because similar fill/finish equipment is and manufacturing track record are based expansions, as represented by the build- installed at the Florida and Cambridge on our team’s 11-plus years of experience out of our Lexington facility. sites, scale-up and transfer of projects gained through the successful execution Brammer’s Florida location is a center between the sites can occur rapidly and of over 100 projects which have delivered of excellence for process and analyti- seamlessly, Notably, the isolator system over 150 clinical lots, many for first-in- cal development and early-phase clini- at the Cambridge facility is equipped with human trials. Second is Brammer’s under- cal manufacturing. It is fast becoming an industry hub for the development and qualification of products, processes and ABOUT THE AUTHORS methods, and early-phase clinical manu- facturing. Smooth transfer to Cambridge Christopher Murphy (or Lexington in the future) allows for Chief Manufacturing Officer, Brammer Bio rapid scale-up and commercial produc- tion. Final drug products are further sup- Christopher Murphy is Brammer Bio’s chief manufacturing officer. Christopher has 30 years of operational experience in biopharmaceutical ported by the capabilities at the Somer- product development, process engineering, facility design and ville distribution center. manufacturing. He has held various biopharmaceutical roles including Perhaps most importantly, we recognize general manager and vice president at Sanofi, and director of contract that the products we make at Brammer Bio manufacturing at BioReliance. He earned his MSc in biochemistry at New are highly complex. We have great respect York Medical College, and his BSc in biology at Rutgers University. and humility for the fact that we are mak- ing viruses that are used to create unique LinkedIn www.linkedin.com/in/chriskmurphy and life-changing therapies. Our strategy Email [email protected] is, in fact, underpinned by the recognition that we play an increasingly important role in advancing these new medicines Michael Wourms with the goal of helping people. P Associate Director of Fill Finish, Brammer Bio

Michael Wourms is Brammer Bio’s Associate Director of Fill Finish, a role REFERENCES he formerly held at Florida Biologix (now part of Brammer Bio). Prior to BEST-IN-CLASS CONTRACT MANUFACTURING joining Florida Biologix, Michael held a position at the Cincinnati Children’s 1. Onkar Sumant & Sohail Shaikh. “Viral Vector and Plasmid Hospital Medical Center where he performed gene and cell therapy DNA Manufacturing Market by Product (Viral Vectors, Brammer Bio is dedicated to providing process development, clinical and commercial research and development for a variety of clinical indications. He received Plasmid DNA, and Non-Viral Vectors) and Application supply of viral vector and cell and gene therapy products, enabling the delivery of novel an MS in pharmacology and toxicology, and a BS in microbiology and (Cancer, Inherited Disorders, Viral Infections, and Others) medicines and improving patient health. We have a highly skilled team of scientists with immunology from Wright State University. - Global Opportunity Analysis and Industry Forecast, 2017- 2023.” Allied Market Research the development, manufacturing and analytical expertise from over 100 client projects 2. Gina Kolata. “Gene Therapy Hits a Peculiar Roadblock: that is required to tackle the challenges posed by these novel technologies and help LinkedIn www.linkedin.com/in/michael-wourms A Virus Shortage.” The New York Times, 27 Nov. 2017, accelerate their transition from the clinic to patients, while focusing on meeting cGMP Email [email protected] www.nytimes.com/2017/11/27/health/gene-therapy-virus- shortage.html. standards. Brammer Bio has the expertise to support your gene and cell therapy projects from inception to commercialization. www.brammerbio.com 18 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 > LARGE-VOLUME PARENTERALS

Grifols has been manufacturing paren- teral products, including LVPs such as sodium chloride 0.9% solutions, for more than 50 years. To ensure the highest qual- ity, the company has adopted a vertical integration model for control of the entire manufacturing process and implemented automation technologies (robotics) and EXPANDING U.S. advanced process controls (e.g., artificial vision) to reduce human interactions with injectable products and thus further mini- mize the potential for contamination. SUPPLY OPTIONS Grifols' pharmaceutical production plants, processes and machinery are de- signed by Grifols Engineering, which — be- cause it is a Grifols company — is knowl- edgeable about the quality and compliance FOR LARGE-VOLUME requirements for parenteral manufactur- ing. The bag molding process, often a source of particle generation, has been integrated into Grifols' filling operations through the adoption of Form-Fill-Seal technol- PARENTERALS ogy. This approach allows Grifols to ensure complete control of this critical process. This vertical integration philosophy > BY MARGA VIÑES, GRIFOLS PARTNERSHIP is being extended to the production of LVPs for the US market. Grifols is one of the top three players in the plasma- derived proteins market. The company operates blood/plasma donor centers across the US. Each blood donor receives With limited numbers of producers supplying large-volume THE IMPORTANCE OF LARGE-VOLUME provide a faster method for administering discontinuations accounted for more 500 mL of sodium chloride 0.9% solution, PARENTERALS (LVPs) drugs to patients during surgery and when than 80% of the drug shortages in 2014 which currently is provided by another parenterals (LVPs) to the US market, shortages can result Drugs administered as parenteral solu- in the hospital. A growing preference by and 2015.3 supplier. The shortage for several years of when natural disasters or manufacturing problems interrupt tions are prepared as either small-volume patients for single-dose administration of Currently, there are shortages of so- this important LVP has presented Grifols production operations. Grifols has implemented its vertical or large-volume products. Large-volume vaccines and drugs to treat chronic dis- dium chloride (saline) and dextrose so- with an untenable situation. The compa- parenterals (LVPs) include intravenous so- eases is also driving demand for LVPs. lutions sold in large-volume bags for in- ny’s blood donor centers, which are part integration philosophy to ensure the consistent supply of high- lutions sold in bags or bottles containing jection.2 These shortages began in early of its core business, are at risk of being quality sodium chloride 0.9% solution to its blood/plasma donor 100 mL or greater (250 mL, 500 mL, 1 L). THE CHALLENGES OF LVP SHORTAGES 2014 and at the time were expected to be without this essential product. Vertical in- 4 centers. The product will also be available to hospitals and They are packaged in these large volumes Despite the growing interest in LVPs, only resolved by the summer. According to an tegration through the internal production because larger quantities are typically re- a few manufacturers produce these impor- Infusion Nurse blog post in March 2014, and supply of LVP saline solutions elimi- compounding centers. quired. Common LVPs include solutions tant products for the US market. In fact, “Not having IV Saline solution available nates this risk. needed to correct electrolyte and fluid increased demand in combination with is like not have bread and milk at the gro- imbalances, provide important nutrients manufacturing delays and other problems cery stores.”4 BACKED BY DEMONSTRATED QUALITY or act as a vehicle for the delivery of other has led to shortages of key LVPs in the AND EXPERTISE drugs. The most common examples in- United States.2 Some manufacturers have A VERTICAL INTEGRATION STRATEGY Grifols has successfully manufactured so- clude sodium chloride solution, dextrose also discontinued production of products Production of sterile injectable drugs dium chloride solutions for the European solution, Ringer's solution, and lactated in certain packaging or withdrawn from must occur in highly controlled environ- market at its Spanish manufacturing fa- Ringer's solution, as well as combinations the market altogether. In its second report ments in accordance with current good cilities for more than fifty years. Both its of dextrose and sodium chloride. on national drug shortages in the US, the manufacturing practices. Extensive pro- plasma-derived proteins and parenteral The market for LVPs is expanding due to Council of Science and Public Health cess understanding is required to ensure manufacturing businesses, and in fact all an increase in the numbers of surgeries per- stated that quality problems, manufactur- the consistent manufacture of high-quality activities from non-biological injectable formed and the growing numbers of patients ing delays, limited production capacity — products. Advanced quality programs products to reagents and instrumentation with chronic and other lifestyle-related particularly for generic sterile injectable combined with state-of-the-art automated for clinical diagnosis, are operated within diseases requiring hospitalizations.1 LVPs products including LVPs — and product aseptic processing systems are essential. a quality culture founded on a commitment

20 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 21 to continuous improvement and ongoing achievement of the highest quality levels. Minibags are Coming Too PARENTERAL As a result, the company has never ex- perienced any quality problems with its blood derivative products due to virus con- CDMO tamination or any recalls of its parenteral products due to particulate contamination. In addition to shortages of LVPs offered overseas, including minibags of sodium chlo- in large plastic bags, there are shortages ride 0.9% injection bags, dextrose 5% injection An FDA audit in June 2015 generated zero of smaller “minibags” in volumes of 50 mL, 100 bags, and metronidazole injection.5 The agen- 483 observations. In addition, Grifols was mL and 250 mL. The hurricanes that devas- cy is also expediting the review of any new one of the first companies in Europe to tated Puerto Rico earlier this fall have affected product applications that will help resolve the obtain approval for the parametric release production of these products.5 Such short- shortages. 75 years’ experience in ages are having an impact on hospitals, home — which requires historical demonstration Grifols will submit the approval of its saline infusion pharmacies and infusion centers. The of excellent sterility test results and highly solution in 50 mL, 100 mL, 250 mL and 1000 sterile and lipid solutions greatest shortages exist for 50- and 100-mil- mL to the FDA. In addition to hospitals and consistent quality system performance — liliter minibags of sodium chloride 0.9%, dex- pharmacies, compounding centers use saline of parenteral solutions in glass and flex- trose 5%, and IV nutritional products, accord- solutions in minibags to reconstitute lyophi- ing to the American Hospital Association.5 ible containers from its EMA- and FDA- lized antibiotic and oncology therapies. The certified production plants in Barcelona To address the shortage, FDA is allowing the company will be marketing the minibags to all and Murcia, Spain. temporary importation of products from users throughout this year.

ENTERING THE US MARKET To implement its vertical integration phi- losophy for large-volume solutions used at marketed in the US. Natural disasters, ters in the US. Minibags (50 mL, 100 mL its blood donor centers in the US, Grifols quality issues and other manufacturing and 250 mL) will be available soon. required FDA approval. An application for problems have resulted in shortages of If the US market responds in the way a 500-mL product was submitted to the saline, dextrose and other widely used so- Grifols expects, the company plans to sub- Center for Biologics Evaluation and Re- lutions that are offered as LVPs. mit additional applications to FDA for 5% search (CBER) within the FDA, with which With its long history of LVP production dextrose IV solutions in volumes of 100 Grifols has a long-standing relationship. for the European market, Grifols has dem- mL, 250 mL and 500 mL. P FDA approval was received in May 2017. onstrated its ability to implement cost- Production of sodium chloride 0.9% so- effective processes for the consistent lution for the US market in 500-mL bags production of high-quality LVP solutions. REFERENCES was initiated at the Grifols manufacturing The company has determined that inter- plant in Murcia, Spain in late 2017, and ex- nal supply of LVPs is essential for reduc- 1. Large Volume Parenteral (LVP) Market — Global Industry port of the product began in early 2018. ing the risk to its US blood/plasma donor Analysis, Trends and Forecast 2016-2024. Transparency Market Research. A fourth, completely automated Form- centers posed by ongoing shortages of 2. “Current Drug Shortages.” Drugs.com. Web. Fill-Seal line will be operative in the com- important LVPs. 3. "National Drug Shortages: Update." Council on Science and ing months to guarantee that it has suf- The company will supply these centers Public Health. Feb. 2015. Web. ficient production capacity to supply to with 500 mL solutions during 2018. Grifols 4. “Large Volume IV Solution Shortages.” Infusion Nurse Blog. 27 Mar. 2014. blood donor centers, hospitals and com- is also offering this important LVP to hos- 5. “Drug shortages loom from hurricane-impaired manufacturing pounding centers. With these automated pitals, pharmacies and compounding cen- in Puerto Rico.” American Pharmacists Association. 14 Nov. 2017 lines, the operator uploads the polypropyl- ene rolls and the bags are formed, filled and sealed and then sent for overwrap- ABOUT THE AUTHOR ping; interactions between the operator Marga Viñes and the process are avoided, minimizing Business Development Manager, Contract Manufacturing, any risk of contamination and human er- Grifols Partnership ror. Inspection of injectable products for particulates is also automated using artifi- Marga Viñes holds a degree in pharmacy and an MBA in cial vision systems developed in collabora- pharmaceutical management from the University of Barcelona. She has more than 16years’ sales and marketing experience in tion with Diagnostic Grifols. the pharmaceutical industry and healthcare business, defining and implementing marketing strategies for international and Visit us at: Contact us: CONCLUSION domestic markets. In addition, she has more than 10 years of DCAT Week (March 19-22) Intercontinental New York Barclay Hotel. Suite 507 [email protected] Production of high-quality, sterile paren- experience in the field of strategic marketing and business CPhI North America (April 24-26) Philadelphia Convention Center. Philadelphia. Booth 1437 www.partnership.grifols.com teral products involves complex process- development in the contract manufacturing business on an es. There are few manufacturers willing international level. to take on the challenges associated with LinkedIn www.linkedin.com/in/marga-viñes-a9aa748 parenteral manufacturing for inexpensive, Email [email protected] basic generic parenteral solutions to be Grifols International, S.A. Parc empresarial Can Sant Joan Av. de la Generalitat, 152-158 08174 Sant Cugat del Vallès, Barcelona - SPAIN 22 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 Tel. (34) 935 712 199 www.grifols.com

AD Pharma Almanac_March_01.indd 1 14/12/17 12:39 > SUPPLY CHAIN SOLUTIONS

EVOLVING TREATMENT STRATEGIES clinical trials. These new POC devices can As clinical trials have become increasingly be potentially designed to analyze blood AT MARKEN, WE ARE complex and expensive, drug developers from a finger prick and transmit the data COMMITTED AS AN are relying on external service provid- over the internet. If (or when) this happens, ers to source clinical trial materials and our market will be revolutionized. Central INTEGRATED CLINICAL deliver them to investigator sites and to labs will rely less on blood collection, and TRIAL LOGISTICS the patient. Further reliance on outsourc- will specialize in high-end esoteric analy- ing of all clinical trial supply and logistics sis. The manner in which clinical data is PROVIDER, TO SUPPORT tasks will drive strong growth in the mar- collected will clearly be disrupted. OUR CUSTOMERS ket, which encompasses logistics, storage On the outbound side, the value of our WITH VALUE-ADDED and transport of clinical trial materials — shipments has increased dramatically as including investigational drugs, ancillary the number of expensive biologic drugs SERVICES. supplies and biological specimens — to in development has grown. Some of these and from clinical trial sites or patients’ drugs can take up to two years to produce homes directly. and are very difficult to replace. A single Cell and gene therapies, immunothera- shipment of sterile vials can be valued at menting best practices is achieved when pies and other personalized medicines more than $10 million. Effective manage- manufacturers of clinical drug products have brought new hope to patients fighting ment of these shipments has, therefore, work closely with supply chain solutions cancer and other previously untreatable become more crucial than ever. providers. diseases. However, they present signifi- Advances in smart packaging solu- We are now required to validate and cant challenges for the clinical trial supply tions, including active and passive document the mapping of shipping lanes setup, as transit times are stringent and thermo-regulated products, ensure ship- and develop contingency plans. Addi- patient identification, visit scheduling and ments remain within proper temperature tional scrutiny is also being given to the full end-to-end visibility at all times are ranges while en route and in storage to temperature-controlled supply chains for critical to the success of these trials. safeguard the shipment’s contents. GPS- clinical drug distribution. Supply chain In addition, patient recruitment for enabled devices, including SENTRY, per- safety, shipment integrity, and risk man- clinical trials has become increasingly form real-time tracking of a shipment’s agement/contingency planning are other challenging in recent years.1 Drug devel- location and condition, including motion, important factors to be considered. opers racing to market with the first shock, battery life, and light exposure, all compound in a therapeutic class must while sending SMS messages of any excur- PATIENT CENTRICITY recruit the statistically required number sions or deviations. SENTRY is accepted on Patient centricity continues to be a real OVERCOMING CHALLENGES IN THE of patients as quickly as possible, particu- over 95% of commercial airlines with tech- factor in designing trial protocols, with larly if other pharmaceutical companies nical acceptance by Civil Aviation Authori- a focus on maintaining patient conve- are conducting competitive trials. As the ties in all regions. Our Global Control Cen- nience. Patient surveys, patient groups, industry has shifted its focus to orphan ter (GCC) in Mumbai monitors shipments opinion leaders and enhanced tools to and other specialized drugs targeting nar- to all of our regions across the globe. The collect data will drive clinical trial re- COMPLEX MARKET FOR CLINICAL TRIALS row indications, finding patients in the Center transmits data through its propri- porting design, feedback, and ongoing US and Europe that meet trial criteria has etary MAESTRO operating system. data collection that is multi-directional become quite difficult. There has, as a Because of our SENTRY technology and and allows the definition of new end- result, been tremendous growth in patient GCC, we have, on numerous occasions, points at any given moment. The rapid AND CLINICAL LOGISTICS recruitment in places such as Mexico, saved shipments that were misplaced acceleration of patient-centric home Russia, Ukraine and South Korea. or lost by commercial airlines. When a care is also presenting new challenges, sample is lost or a patient misses a dose as growing numbers of clinical trials in- > BY WES WHEELER, MARKEN ADVANCING TECHNOLOGIES because a drug is not delivered in time, clude in-home patient visits. Mobile ap- Technological developments are also im- that patient may be removed from the trial. plications are common, and devices such pacting clinical trial logistics, both on Marken’s advanced monitoring and track- as Apple Health are revolutionizing the Increasing complexity, evolving treatment strategies, advancing technologies, the inbound and outbound sides. As more and-trace technologies have therefore had way patients access their health records. data security challenges and the growing focus on patient centricity are all Point of Care (POC) diagnostic technolo- a significant impact on patient retention The complexities of a global direct- impacting the way in which clinical trials are conducted. One outcome of this has gies are developed, there will be a shift in and trial success rates. to-patient (DTP) program, particularly in the future towards performing more and Sponsor companies are also expecting the last mile, require a supply chain solu- been the expanded outsourcing of clinical trial supply and logistics. These trends more local analyses and transporting less third-party logistics providers to imple- tions provider with the ability to antici- are expected to continue for the next several years. As a dedicated, one-stop, blood, tissue, urine and other samples to ment good distribution practices (GDP). pate potential points of risk, that has full-service clinical supply chain solution provider, Marken provides insights to help a central location for analysis. Data trans- In Europe, supply chain solutions must proven contingency plans in place, and fer and management of the devices will be aligned with requirements outlined in offers complete tracking transparency customers overcome numerous and interconnected supply chain challenges. become critical factors to the success of Annex 15, Chapter 6 regulations. Imple- to monitor shipments in real time as

24 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 25 and the pickup of their biological speci- idly spreading Petya ransomware in 2017. PATIENT CENTRICITY mens via their mobile devices or personal Several other attacks throughout the CONTINUES TO BE A REAL computers. year impacted manufacturing and for- THE LIFEBLOOD With a simple click, patients can view mulation operations, shipment tracking, FACTOR IN DESIGNING the driver’s name and follow his/her prog- data collection and time-sensitive ser- TRIAL PROTOCOLS, ress right up to their front door. A photo vices, and even just this month, another OF YOUR CLINICAL of the driver shows exactly who will ring global logistics company was impacted WITH A FOCUS ON the doorbell with the Marken delivery or by a significant data breach. In this MAINTAINING PATIENT pickup. The on-screen rating option after instance, we were able to rescue hun- SUPPLY CHAIN delivery provides direct and immediate dreds of shipments from that provider’s MARKEN’S INTEGRATED OFFERING CONVENIENCE. feedback on the service and experience warehouse. Our ATA transmission and IT of the patient. This type of real-time driver infrastructure are designed to withstand MEANS RELIABILITY AND FLEXIBILITY traceability can translate into improved such attacks. ACROSS YOUR SUPPLY CHAIN patient expectations and confidence with part of an end-to-end visibility solution, DTP or DFP trials and reduce the number MARKEN IS MAKING A DIFFERENCE while respecting all applicable patient of rescheduled deliveries and delays. At Marken, we are committed as an in- privacy laws. tegrated clinical trial logistics provider TRADE COMPLIANCE Because of the sensitivity and value of MAINTAINING DATA SECURITY to supporting our customers with value- PATIENT clinical drug products, end-to-end visibili- Compliance with data protection laws added services. For instance, as the in- ty is extremely important, particularly for is another challenge. The General Data dependent, wholly-owned Clinical Sup- CENTRAL DTP services, to ensure that the adminis- Protection Regulation (GDPR) goes into ply Chain subsidiary of UPS, we have LAB tered drug is safe for the patient. We have effect in the EU on May 25, 2018. The launched a hybrid service in 2017 that GMP DEPOT plans for further technology development regulation has strict rules about how per- combines our expertise and capabilities NETWORK to ensure tighter control and end–to-end sonal data may be used and how it must in managing deliveries over the last mile visibility, variations of GPS trackers and be protected and sets a 4% administra- with UPS airline and ground operations. smart packaging solutions. tive fine, up to the greater of €20 million The hybrid service enables the booking We have experience with thousands of or 4% of global annual turnover in the of shipments in Marken’s proprietary DTP shipments since starting this service prior year for noncompliance. Many or- MAESTRO operating system, managing SECURITY in 2012. We are currently managing and ganizations will need to make significant them from origin to destination while us- coordinating DTP/Direct from Patient investments in basic tools to comply with ing the UPS network in a seamless and (DFP) services for over 80 clients around GDPR requirements. We have actively effective manner. the world. In addition to our Patient Com- ensured that all of our data protection, We also continue to further develop munication Center — a 24-hour, 7-day-a- privacy, and IT infrastructure are in full our position as the dedicated one-stop, week call center based in Philadelphia compliance with not only the GDPR regu- full-service clinical supply chain solu- (USA) dedicated to the logistics needs of lations but all patient privacy rules and tion provider for the pharmaceutical TRACK & TRACE patients who participate in home-based guidelines worldwide. industry. Just recently, we announced SPECIALTY LAB clinical trials — Marken recently intro- Recent ransomware attacks show a the opening of an additional kit-building CRO duced an online interface, Viseo, which increasingly important threat to pharma facility in Shanghai, China and a new offers patients the ability to track their and logistics companies. A leading phar- operational hub in Stuttgart, Germany. CMO home deliveries of clinical trial materials maceutical company was hit by the rap- In December 2017, Marken announced DRUG INNOVATOR the opening of our 6th location in India (Ahmedabad). We continue to expand, grow and extend the services and addi- INVESTIGATOR MEDICAL DEVICE REGULATORY SITE MANUFACTURER ABOUT THE AUTHOR tional value that we provide to our cli- Wes Wheeler ents and the clinical supply chain. The Chief Executive Officer, Marken next step in our DTP journey will be the development of our own nurse network. Wes Wheeler joined Marken in 2011 to transform the company, We are also investigating the possible which has grown to 47 locations in 26 countries throughout the future application of autonomous vehi- world. Wes joined the pharmaceutical industry in 1989 with Glaxo (now GlaxoSmithKline) and has served as CEO/President at four cles, drones and block chain technology different companies for the last 15 years. Prior to 1989, he worked to continue on our innovative path. P Marken’s market-leading breadth of services is stronger than ever, for 12 years as an engineer for Exxon (now ExxonMobil). Wes holds delivering the core specialty clinical trials solutions our clients have a bachelor of science degree in mechanical engineering from come to rely on, now with standard and hybrid offerings that leverage Worcester Polytechnic Institute and a masters in business a global transportation network. As the clinical subsidiary of UPS, administration with an emphasis in finance. Marken continues to be fully committed to serving the clinical trials REFERENCES community with exceptional quality and optimized efficiency. LinkedIn www.linkedin.com/in/wes-wheeler-504b815 Email [email protected] 1. A Cancer Conundrum: Too Many Drug Trials, Too Few Patients. New York Times, August 2017. Talk To Us About Your Logistics Challenges [email protected] | www.marken.com

26 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 27

PAQ417_Marken.indd 1 10/13/17 5:27 PM > SERIALIZATION

RISING INCIDENCE OF to unit data to establish chain-of-owner- link them to larger groups of unit packag- FRAUDULENT MEDICINES ship throughout the drug supply chain es, such as boxes and pallets (parent/child IN THE US, BETWEEN Drug counterfeiting is a global and grow- from the manufacturer to the patient was relationships) and to orders, shipments, 2010 AND MAY 2016, FACILITATING ing problem. In 2010, the World Health Or- initially set for 2023. etc. A system for handling other issues ganization (WHO) estimated that the inci- —­ repackaging, rework, returns, etc. — is CLOSE TO 1,400 ADVERSE dence of counterfeit drugs is less than 1% TRACK-AND-TRACE MORE COMPLEX THAN also necessary. REACTIONS RELATED TO in developed countries and much higher ANTICIPATED Implementing an effective serialization in developing countries.1 As of November Most large pharmaceutical companies solution is, therefore, challenging for any COUNTERFEIT DRUGS WERE IMPLEMENTATION AND 2017, the WHO estimate that 1 in 10 medi- and a select few CDMOs have taken an type of drug manufacturer. In addition to REPORTED TO FDA. cal products in low- and middle-income aggressive approach to implementing being quite costly, serialization impacts countries is substandard or falsified.2 Its comprehensive internal serialization so- many different company operations and Global Surveillance and Monitoring Sys- lutions.4 Many companies, particularly thus requires input from representatives CUSTOMER SERVICE tem, founded in 2013, had issued 20 global smaller and medium-sized firms with lim- of many different groups. Labels must medical product alerts and numerous re- ited resources, have adopted a “just-in- be redesigned, and large quantities of without disruption of production while gional warnings and provided technical time” approach, implementing only those new data must be properly managed and maximizing the capacity on each of our support in over 100 cases. elements of the system needed to meet shared with appropriate partners in the packaging lines. In the US, between 2010 and May 2016, specific deadlines in different countries.5 supply chain. The new system must be Our solution was to adopt an offline se- WITH OFFLINE close to 1,400 adverse reactions related to There are still a large number of smaller implemented without negatively effecting rialization strategy. At UPM, our serializa- counterfeit drugs were reported to FDA.3 companies that are just beginning to ini- production operations. Serialization can- tion workstations are not associated with This data does not include incidences of tiate internal track-and-trace programs. not result in reduced efficiencies. a packaging line. This approach provides counterfeit or compromised medications Others have elected to forego any internal Contract manufacturers have the added the greatest amount of flexibility to serve that do not lead to any adverse reactions efforts, preferring to rely on outsourcing challenge of needing to serialize differ- our three packaging lines. Rather than SERIALIZATION or have no effect. As a result, the true ex- partners. A few companies also remain ent drug substances and/or drug products having to set up the packaging equipment tent of the problem is unknown. that have not taken any action with regard for many different clients, each with its for printing, verifying and applying labels to serialization. own understanding of serialization and that will be serialized during packaging, we > BY TYLER EWALD AND JOSEPH QUALES, UPM PHARMACEUTICALS SERIALIZATION EXPECTED TO HELP Implementing serialization solutions related set of expectations. In addition, preprint the serialized labels/cartons in ad- Governments around the world have re- has, in fact, proven to be more complex contract manufacturers do not control the vance, electronically grading and verifying sponded to the increasing presence of and challenging than many pharmaceuti- labels that they must use, but have to work the information offline, and then apply the fake medicines in the drug supply chain by cal producers — both sponsor firms and within the capabilities of their serializa- labels or fill the cartons during production. Even though the FDA has extended the deadline passing regulations requiring that phar- contract development and manufacturing tion equipment. It is essential for CDMOs Serialization offline affords us the flex- maceutical manufacturers implement organizations (CDMOs) — expected. Com- to make sure their customers understand ibility to rapidly respond to customer re- for compliance with unit serialization requirements, systems that allow for the track-and-trace panies must establish bi-directional data those printing limits to ensure that man- quests for trial serialization runs. Often UPM Pharmaceuticals serialized its first commercial of drug products throughout the supply exchange connections with a wide range dated information is appropriately includ- smaller customers aren’t confident their product in May 2017, well ahead of time. The use chain. Compliance is already required in of suppliers and other partners (includ- ed on product labels. labels will have sufficient space. Rather some countries, while deadlines are fast ing clients and distributors for CDMOs), than needing to wait for time to be avail- of an offline serialization system facilitated approaching in others. The detailed ex- grapple with a dramatic increase in the FLEXIBLE STRATEGY AT UPM able on a packaging line, we can conduct implementation and provides numerous benefits pectations vary from country to country, quantity of data that must be generated UPM has always had strict procedures and trial runs on our offline workstation to to our company and our clients. and even over time within individual coun- and managed, stay up-to-date with evolv- specifications in place for labeling of drug determine if a label is ready. Offline se- tries. They are also constantly evolving. ing regulations in numerous countries, products. We work closely with our clients rialization also provides the ability to In the US, serialization requirements and implement their solutions without and their product management teams troubleshoot problems without tying up were established in the Drug Quality and any disruption in the supply of their drug to ensure that all labeling is correct and a packaging line. As a result, we are able Security Act (DQSA), which became law in products.5 The FDA responded by extend- products are branded and otherwise la- to maintain production efficiencies and November 2013. The law applies to manu- ing the deadline for compliance with the beled as they are supposed to be. We also maximize capacities. facturers, repackagers, wholesale distrib- establishment of unit serialization by one have an extensive vendor approval process In addition, while UPM selected Trace- utors, dispensers and third-party logistics full year, to November 2018. to ensure there are no mix-ups with labels Link — the world’s largest cloud-based providers. Title II of the DQSA outlines or diversion of artwork to people trying to provider of serial codes — as our serial- the requirements for supply chain mem- ADDITIONAL CONSIDERATIONS FOR produce counterfeit versions. ization software partner, TraceLink is bers with respect to the implementation CONTRACT MANUFACTURERS When embarking upon our serializa- capable of working with whichever seri- of track-and-trace systems for prescrip- For any serialization system, definitions tion project, we recognized the need to alization codes are used by our clients tion drugs in three phases over 10 years. and formats for serial numbers must be maintain this high level of security while with an interface built between other The sharing of lot-level information was determined. Sufficient space must be implementing a flexible track-and-trace serial code providers and TraceLink. The completed in 2015. The serialization of all available on the product packaging to ap- solution that allows for tailored customer transmission of data with TraceLink has product units and the sharing of this data ply the serial number and other relevant service combined with robust and reli- proceeded without any issues. Since the were to be completed by November 2017; data. A management system must be in able performance. We wanted to be able link was established, we have consis- and the sharing of aggregate data linked place to allocate the serial numbers and to serialize bottles, cartons and cases, tently received codes and sent them back

28 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 29 to TraceLink for commissioning. All lot ized labeling, and reconciling completed statuses can be verified on TraceLink’s web- batches once production is finished. THE FIRST COMMERCIAL site once code transmission is complete. BATCHES SERIALIZED STAYING AHEAD OF SCHEDULE CROSS-FUNCTIONAL EFFORT The goal at UPM was to be six months BY UPM WERE PRODUCED A core cross-functional team was in- ahead of the regulated implementation IN MAY 2017 – WELL volved in establishing UPM’s serializa- date for serialization, allowing for enough AHEAD OF THE ORIGINAL tion strategy and bringing the project time to ensure a seamless serialization FROM CONCEPT to fruition. Representatives from our process. UPM management was commit- NOVEMBER 2017 DEADLINE information technology, technical ser- ted to making sure the capital was avail- FOR UNIT SERIALIZATION. vice, manufacturing and quality groups able to acquire and install the necessary TO COMMERCIAL formed this core team. The IT depart- system components ahead of the curve. ment worked closely with the equipment We also benefited from partnership with a manufacturer and TraceLink to under- client that used UPM as a beta site before FOR SOLID DOSE stand all of the system specifications as bringing a similar serialization system well as hardware and software require- into its own facility. CONCLUSION ments needed to manage and maintain The first commercial batches serial- Serialization, when used in conjunction & SEMI-SOLIDS our serialization operation. ized by UPM were produced in May 2017 with tamper-resistant packaging and Label control is an essential compo- — well ahead of the original November other fraud-prevention methods, is ex- nent of pharmaceutical packaging. The 2017 deadline for unit serialization. De- pected to provide greatly increased secu- addition of a serialization component spite the one-year extensions granted by rity for the pharmaceutical supply chain. added another layer of complexity to la- FDA, we have remained committed to our The transparency provided by the ability bel control. It was thus determined that timeline for serialization of all batches. to trace the movement of a product unit a labeling department would be created We currently meet the requirements that throughout the supply chain, from the to control all serialization activities and will go into force in November 2018. In ad- manufacturer to the distributor — and on manage new clients. This department dition, we have procedures and processes to the patient, should provide a mecha- is within the quality assurance group in place for on-boarding new clients and nism for the identification of both authen- and is responsible for generation of se- new products from existing clients, 75% tic and questionable medicines. rial codes, generating and issuing serial- of which we are currently serializing. We are also building a base of under- standing and preparing to respond to the unexpected when it happens. For instance, we have established complaint procedures ABOUT THE AUTHOR and validated communications between UPM and our clients. In addition, we are Tyler Ewald evaluating current solution providers as UPM Pharmaceuticals is an independent, award-winning Associate Director, Manufacturing, UPM Pharmaceuticals we look to the next phase of serialization CDMO. We offer development and manufacturing of tablets, — aggregation. Labeling, including print- Mr. Ewald serves as UPM’s Associate Director of Manufacturing. He brings capsules and semi-solid dosage forms – including DEA a broad knowledge of the pharmaceutical industry, having managed ing, application, verification and aggrega- controlled substances (CII–CV) and a controlled humidity operations from intravenous to solid dose products. He served as the tion will be required to be done online. We suite. At our 476,000 sq ft facility in Bristol, Tennessee, our packaging department lead for UPM’s procedural development and are already preparing for this next level experienced personnel can advance your project from lab implementation of serialization. Mr. Ewald holds a Bachelor of Science in by considering the lessons learned during scale to commercialization in a single location. pharmaceutical sciences from Campbell University and a Masters of the first phase of serialization implemen- Business Administration from East Carolina University tation at UPM. P To learn more, visit www.upm-inc.com LinkedIn www.linkedin.com/in/tyler-ewald-mba-35b55736/ or call +1 423 989 8000 Email [email protected] email [email protected] REFERENCE Schedule a Meeting with us at DCAT Week, 1. “Medicines: Counterfeit Medicines,” Fact sheet. World Health InterContinental New York Barclay Suite #537 Joseph Quales Organization, Jan. 2010. Web. 2. “Substandard and Falsified Medical Products.” Fact Sheet. Supervisor, Label Control, UPM Pharmaceuticals World Health Organization. Nov. 2017. Web. Visit us at CPhI North America booth #1519 3. Joe Eaton. “Counterfeit Drugs are Flooding the Nation’s Mr. Quales serves as UPM’s Label Control Supervisor. He has 26 years of Pharmacies and Hospitals,” AARP Bulletin. May 2016. Web. pharmaceutical manufacturing and quality experience, including 12 years 4. Caroline Hroncich. “Serialization Challenges Facing Pharma Manufacturers.” PTSM: Pharmaceutical Technology Sourcing of label control operations. He holds a Bachelor of Theology from VBC and Management. 12(5). 18 Apr. 2017. Web. Processing Capabilities Tablets & Capsules Creams & Ointments Bible Institute in Roan Mountain, Tennessee, and is a six-year veteran of 5. Agnes Shanley. “Tracking Pharma’s Serialization Efforts,” • Dry blending • Capacity for 3.5 billion tablets and • Capacity for 138,000 kg units the United States Navy. PTSM: Pharmaceutical Technology Sourcing and Management. 11(5). 04 May. 2016. Web. • Wet & dry granulation 680 million capsules per year per year 6. Gary Lerner, Todd Applebaum, Jim Dougherty. • Fluid bed processing/drying • Sophisticated tableting and • Automated packaging lines for Email [email protected] “Serialization in a CMO Environment,” Contract Pharma, June • Controlled substances (CII-CV) encapsulation technology tubes and jars 2012. Web. • Clinical & commercial packaging • Multi-layer tableting • Full analytical support

30 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 > CONNECTED AT EVERY LEVEL DCAT Week 2018

SMALLER FIRMS ARE DRIVING GROWTH The second aspect of our commercial DCAT Week, the annual event held by the Historically, growth in the pharmaceu- strategy is to provide companies that Drug, Chemical & Associated Technologies tical industry has been driven by large aren’t familiar with the drug development Association, is different than most other pharmaceutical shows in that it provides pharmaceutical companies developing and approval process with the information DRIVING CHANGE IN opportunities to bridge the large and small blockbuster drugs. That is no longer they need to be successful. Through vari- pharma worlds. Startups and virtual compa- the case. Many companies today are fo- ous physical and digital events, we bring nies are given a platform for communicating cused on the development of treatments crucial knowledge about everything, from their ideas to potential investors and service for diseases that afflict much smaller what data is needed to meet CMC require- providers. For that reason, Alcami continues pharmaceutical manufacturing value chain THE PHARMA INDUSTRY patient populations. A majority of these ments, to submitting regulatory applica- to expand its participation in the association, together with customers of all sizes. The which is a 501(c)6, not-for-profit, member- firms are founded by academic research- tions, to ensuring robust process develop- event includes the presentation of solution- supported, global business development as- based practical insights from leading indus- ers that have discovered new molecules ment, scale-up and supply chain solutions sociation with members comprising branded try experts, round-table discussions with with desirable biological activities. In- to support clinical trials and launch. and generic drug makers and their suppliers. notable thought leaders, specialized educa- deed, the success rates of smaller firms Alcami's President, Chairman and CEO, Dr. tional forums for buyers and suppliers, and AND BIOTECH are often higher; the Tufts Center for the ROLE OF CDMOs Stephan Kutzer, was first elected to the DCAT networking opportunities. Importantly, this Study of Drug Development reports that Why would a CDMO want to take on this Board of Directors in November 2016 as the event enables communication between in- smaller firms developing small-molecule role? Small and emerging pharmaceutical Third Vice President and is currently serving novator companies performing development a second term as the Second Vice President. drugs have higher clinical approval suc- firms rely extensively on third-party ser- and large pharmaceutical companies that are Chief Commercial Officer Syed T. Husain was more focused on commercialization. It also cess rates than large companies.1 vices across the entire drug development ONE RELATIONSHIP also appointed to the DCAT Advisory Council serves as an important venue for suppliers and commercialization cycle. CDMOs and has held previous leadership positions as to share industry knowledge and learn from WHY RELATIONSHIPS MATTER that can provide integrated, end-to-end Chair of the Education Committee and Task one another. There are nearly 3000 pharmaceuti- solutions and support these companies Force lead for the DCAT Sharp Sourcing forum. cal companies in the US with revenues throughout the entire process can con- To meet Alcami at DCAT Week, contact Catherine Hanley, Brand Development and of $500 million or less. Despite the fact tribute to their success. As importantly, [email protected] or find us in AT A TIME Awareness Leader at Alcami, serves on the the DCAT member lounge at The Palace that these firms often have very limited CDMOs with knowledge about the poten- planning task force for the DCAT Sharp Sourcing Hotel, and Pre-Annual Dinner reception at resources and sometimes little knowl- tial range of indications for a new drug forum, which brings suppliers engaged in the The Hilton. > BY SYED T. HUSAIN AND CATHERINE H. HANLEY, ALCAMI CORPORATION edge of the regulatory approval process, substance, possible synthetic routes, effi- approximately half can be found in loca- cient approaches to process optimization tions with minimal outsourcing support. and regulatory pathways — and how to pull This presents a challenge for innovators. all of these components together — can Although small and medium-sized pharma and This significant sector has, until recently, provide the best possible service. largely been neglected by the rest of the At Alcami, we believe that the success conferences and workshops. Regional ers get to know the people behind Alcami. biotech companies are driving the growth of the CDMO industry. of small and medium-sized pharmaceuti- associations, in particular, provide local industry, they often don’t receive the attention Alcami, through the establishment of cal companies is essential for continued forums where CDMOs like Alcami can EDUCATIONAL EFFORTS AND EVENTS and assistance that are essential to their success. many different types of relationships, is growth of the industry. We have estab- learn more about small and medium-sized As smaller pharmaceutical firms have lim- seeking to address this issue. The compa- lished integrated capabilities, combined pharmaceutical developers and the local ited resources, it is often not possible for Changing the industry’s mindset is critical. Alcami ny was built to serve thriving new drug in- with educational programs, specifically markets in which they operate. They pro- them to attend valuable events. Alcami, as is establishing many different relationships novators also known as “two persons and to meet the needs of these important cus- vide a means for showcasing new ideas part of its educational approach, has devel- a patent.” Given the unique needs of this tomers. In addition, we treat every cus- and reveal to the rest of the pharmaceu- oped alternative outreach efforts to ensure intended to facilitate and accelerate just that. segment of the industry, Alcami has im- tomer — whether a first-time, emerging tical community which universities and that all firms seeking to learn about the plemented a commercial strategy guided pharmaceutical firm preparing for clinical startups are driving innovation. drug development and approval process by an educational approach that seeks to trials or a small/midsize pharma company At larger trade shows, however, small- have access to the information they need. address the needs of these smaller firms. gearing up for launch and commercializa- er firms have found it difficult to garner Quarterly educational events are held at One element involves investment in in- tion with multiple projects — equally. Each attention from pharmaceutical compa- our sales offices globally, in order to bring dustry trade associations. In many cases, and every customer deserves the same nies and larger service providers. With the CDMO concept to the customer — a key these industry groups still place a heavy amount of respect and attention — deliver- the launch of our first-to-market Alcami step in the educational process of turn- emphasis on large pharma. However, Al- ing on project objectives is important for After-Hours™ networking events at con- ing their concepts into medicines. These cami is serving as the voice for small and all projects, regardless of size. ferences including BIO International and educational forums and other custom emerging pharmaceutical and biotech CPhI Worldwide, Alcami is alleviating this events will focus on critical topics related companies to drive change and posi- ASSOCIATION CONNECTIONS problem. These networking sessions are to the development and launch of drugs tively impact the industry, and creating Associations are an integral part of the specifically designed to foster personal within the US. Educational opportuni- forums for this. Driving these efforts is pharmaceutical industry. On the global, connections between Alcami experts and ties range from structured workshops to the recognition that small and medium- national and regional levels, these organi- the scientists and executives (often the informal discussions on what is needed sized firms are the innovation engine of zations bring members of the entire value same people) from small and medium- to take a drug through the development the pharmaceutical industry and repre- chain together using a variety of mecha- sized pharmaceutical companies. We process. They include participation by sent its future. nisms, from trade shows to educational want to make sure that potential custom- both Alcami scientists and external

32 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 33 experts and are intended to provide ex- LISTENING TO THE CUSTOMER First-to-Market isting and potential customers with the Effective relationships can make a dif- Initiatives information they are seeking. ference. Industry-related partnerships, relationships with consultants, collabo- SCIENTIFIC PARTNERSHIP rations with universities, internal rela- Providing small and medium-sized In the US, Alcami is involved in an academ- tionships that enable truly integrated drug developers with knowledge is not the only way Alcami is helping this im- ic partnership with the University of North customer support, educational relation- portant sector of the industry. We are also Carolina Wilmington (UNCW). Since July ships with potential customers and stra- committed to introducing first-to-market 2016, we have collaborated to develop tegic partnerships with existing clients initiatives designed to enhance the cus- two courses designed to enhance work- are all crucial. Anticipating customer tomer experience, particularly for smaller force education and prepare students for needs is the ultimate driver of business clients with limited resources. a career in pharmaceutical sciences. In growth. The relationships we establish For companies that lack full-scale labora- Spring 2017, an elective course designed across the pharmaceutical community tories, Alcami offers the Extended Work- to provide students with an overview of are designed to connect us to clients at bench Program, a full-time equivalent the drug development process from con- every level and facilitate the implemen- (FTE) program tailored to each client’s needs. The program includes dedicated cept to commercialization, focusing spe- tation of our “customer are a privilege, lab space and scientists along with dedi- not a right” approach. In addition, our cifically on current good manufacturing cated project management and technical practices (cGMP), was co-taught by the company size and culture, end-to-end leadership, 24/7 digital access and flexible Alcami team, while a laboratory-based offerings and commitment to education resources. The goal is to provide custom- course was offered in the fall. We are also contribute to our responsiveness and ers with a seamless solution integrated involved in co-research with UNCW at the ability to deliver on time, every time. P with their own operations. Marine Biology Center (MARBIONC) in Alcami has also developed a customer por- Wilmington, North Carolina. This partner- tal, Alcami OnDemand™ that serves as a ship reflects our commitment to building single source for customer project and or- der management with shared views to man- and maintaining strong relationships with REFERENCES age orders, libraries of compounds, test re- the communities in which we operate. We 1. Joseph A. DiMasi. “Pharmaceutical R&D performance by sults and accounting information. It meets feel privileged to be able to share our ex- firm size: approval success rates and economic returns.” the market need for a simplified sample pertise with the university’s students. American Journal of Therapeutics 21.1 (2014): 26-34. Web. submission process, real-time tracking of sample submissions and projects, custom- er access to historical data and transpar- ency. Alcami OnDemand™ gives our clients ABOUT THE AUTHORS and prospects rapid access and visualiza- Syed T. Husain tion into ongoing projects. Chief Commercial Officer, Alcami Corporation In 2017, Alcami launched a fully interactive virtual tour experience for clients and po- Syed Husain, the commercial leader for Alcami, leverages in-depth tential customers to see our sites before experience in sales, business development, marketing and operations visiting them. Alcami’s Virtual Lab addresses for the development and manufacture of small molecules, antibody our prospects’ needs to save time and re- drug conjugates, peptides and large molecules covering drug sources when deciding on a partner. The substance and drug product. Syed earned a BS in chemical engineering virtual experience is available online at www. from New Jersey Institute of Technology in 2003 and an MBA from alcaminow.com/virtual-lab, linked from our Cornell University in 2009. website, and has been featured at industry events throughout the year, with our Igloo LinkedIn www.linkedin.com/in/syedthusain Vision Ltd. viewing theater. We are now ex- Email [email protected] panding the experience into virtual glasses so we can take the experience on the road to our clients and into our sales offices. Catherine H. Hanley Those companies looking to implement Head of Marketing & Corporate Communications, Alcami Corporation a dual sourcing strategy but who lack the Catherine Hanley, Alcami's brand development and awareness leader, resources to secure a permanent second has 13 years of commercial and operational experience. Integral to sourcing option can turn to Alcami’s in- her function are the continuing efforts toward expanding Alcami’s dustry leading offerings like Protect Your global presence, thought leadership, customer experience, first-to- Brand. Subscribers to this program can market initiatives, and the implementation of the Inbound Marketing quickly bridge unexpected gaps in supply & Sales strategy along with service launch design to ensure Alcami without the need to commit to a long-term stays connected with its clients at every level. Catherine holds a BA supply agreement. Alcami will validate a from Franklin & Marshall College and an MBA from the University of product, maintain the required capacity Maryland, Robert H. Smith School of Business. and be ready to rapidly begin production in accordance with US and international regu- LinkedIn www.linkedin.com/in/catherinehanley latory compliance requirements if needed. Email [email protected] Three options are available to prevent dis- ruptions during the concept phase through post-commercialization.

34 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 > BUSINESS CONTINUITY MANAGEMENT UNDERSTANDING BUSINESS CONTINUITY BCM AND THE PHARMACEUTICAL MANAGEMENT (BCM) INDUSTRY BUSINESS CONTINUITY Business continuity refers to the ability Business continuity planning can be partic- REFERS TO THE ABILITY of a company to continue to perform criti- ularly challenging for pharmaceutical man- cal business functions in the case of dis- ufacturers. It is not often feasible to move OF A COMPANY TO ruptions such as natural disasters, fires, regulatory-approved, GMP manufacturing CONTINUE TO PERFORM computer system crashes and geopolitical operations to another site in the event of a events. Business continuity management physical disaster. Ensuring a secure supply CRITICAL BUSINESS (BCM) involves the development and im- chain can also be difficult given that each FUNCTIONS IN THE CASE plementation of a management strategy to supplier must be audited and validated, ensure that the necessary infrastructure which often results in the use of a limited OF DISRUPTIONS SUCH and procedures are in place and person- number of suppliers for even critical raw AS NATURAL DISASTERS, nel are prepared to appropriately respond materials. On the other hand, the conse- FIRES, COMPUTER when incidents do occur. A business conti- quence of disruptions — such as shortages nuity plan includes elements of emergen- in the supply of crucial medicines, for in- SYSTEM CRASHES AND cy response, crisis management, disaster stance — can be life-threatening. GEOPOLITICAL EVENTS. recovery, supply chain security and orga- Pharmaceutical manufacturers, includ- nizational/operational relocation.1 ing contract development and manufactur- BCM matters because it impacts a busi- ing organizations (CDMOs), have a social ness’ competitiveness and provides assur- and patient responsibility to ensure that ances to the buyers of contract services. the production of drug substances and Six-Sigma program, continuous improve- Companies that are recognized as resilient final drug products are not disrupted. ment activities applied to equipment and to potential disasters will be able to attract Beyond the need to ensure the ongo- processes, mitigation of operational risk new customers and those that continue ing supply of important medicines, drug through our “Safety-First” approach, and operating in the event of a disruption will companies have a responsibly to mitigate a quality culture that has supported more retain their existing customers. Having threats to their business operations and than 50 commercial launches. an effective BCM strategy also ensures a assets in order to protect their employees, company can continue operating — and the environment and the local community. SERVIER’S COMMITMENT TO BCM thus keep its employees working. Business continuity management is an Overall, we have two main goals: [1] to re- BCM activities typically fall under the effective structured approach to meet duce the probability, as much as possible, aegis of quality and risk management these obligations. It is also an effec- that a disruption of our operations will oc- departments, but also involve gover- tive method for achieving competitive cur, and, [2] in the event of an incident, to nance, information security and compli- advantage for contract service providers. reduce the impact. ance groups. Commitment from top man- CDMOs with a successful BCM strategy We recognize that not all incidents can WHY BUSINESS CONTINUITY agement is essential to implementation can demonstrate to potential customers be prevented. But with a BCM plan in place, of an effective BCM strategy. The effort the long-term sustainability of their busi- we are prepared with equipment, proce- begins with performance of a business ness. Clients have greater confidence in dures and strategies designed to reduce impact analysis (BIA) to identify the criti- manufacturing partners that have organi- any impact and ensure continuity or at cal operations, facilities and equipment zation and resources in place to rapidly least rapid resumption of operations. The MANAGEMENT IS IMPORTANT that may be vulnerable to disruptions, respond to potential threats to their opera- result is the protection of our people, the determine what the potential impacts are, tions. Projects are more likely to be suc- environment and Servier’s business. This and reveal gaps in the ability to overcome cessful and stay on schedule even if unex- commitment to business continuity sets these losses.2 pected incidents occur. us apart from other CDMOs, underscores FOR CDMOs There are global, regional and country- our acceptance of our responsibility to the based business continuity standards that BCM AND THE EMBEDDED CDMO patients, our employees and clients, and can be used to guide the development As an embedded CDMO within a large, makes Servier CDMO an excellent strate- > BY MAYEUL CAUVIN, SERVIER of BCM strategies and programs. For global pharmaceutical company, Servier gic partner. instance, ISO 22301:2012, “Societal secu- has over six decades of know-how and a rity — Business continuity management strong record in quality, combined with PROJECT MANAGEMENT STRATEGY Members of the pharmaceutical industry have a responsibility to systems — Requirements”3 and related empathy with our innovative customers. Our approach to business continuity man- guarantee both the supply of high-quality medicines and the safety ISO 22313:2012, “Societal security — Busi- Our long-tenured, deeply experienced agement at Servier is very much a project of their personnel. Servier has implemented a global business ness continuity management systems — leadership team has an understanding of management strategy. All of the busi- Guidance”4 support the development of the needs of our clients and recognizes the ness units within the Servier group are continuity management strategy to reduce the likelihood of formal BCM strategies. importance of business continuity man- involved. An overall coordinator ensures incidents and minimize any consequent impact on its operations. There are also over 100 regulations agement. that all business units work together to as- relating to numerous industries including Our BCM strategy has been developed sess the risks — taking an operational ap- the healthcare sector1 that demand some and implemented to complement other key proach and considering the key drivers for level of Business Continuity Management. company initiatives, including our Lean the company.

36 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 37 are equally important, for instance. It site fund its own activities. The decision- > LQ-CAPS® LIQUID FORMULATION CAPSULES JOINING TOGETHER SERVIER’S is essential to ensure that suppliers in making process and prioritization of proj- The connecting of two-piece hard-shell MANAGEMENT HAS diverse locations (i.e., North America and ects takes place at the corporate level. capsules containing liquid formulations is COMMITTED TO FUNDING Asia) with exposure to different risks are advantageous over forced sealing methods validated for all aspects of the production EMBEDDED BUSINESS CONTINUITY using sprays to fuse the two halves togeth- BUSINESS CONTINUITY process to mitigate risk. This goal can be Successful BCM is not static — rather, it OVERCOMING FORMULATION er. With the latter approach, it is possible to EFFORTS THROUGH A achieved by using two sources of supply constantly evolves to meet changing mar- compromise the integrity of the shell, which for materials, or by using one supplier ket and customer needs. Servier CDMO is may lead to leakage of the contents — some- GLOBAL FUND RATHER with multiple facilities. no exception. Each year, we not only have CHALLENGES WITH thing that is unacceptable for HPAPIs. THAN HAVING EACH new projects, new customers and new In the banding process, on the other RESOURCE CHALLENGES suppliers, but new equipment and tech- hand, the material used for banding is cus- SITE FUND ITS OWN Companies typically face three key chal- nologies as well. Business continuity man- tomized to work with the composition of ACTIVITIES. lenges when developing and implement- agement at Servier is, therefore, also a con- LIQUID-FILL CAPSULES the hard shell used to produce the two parts ing business continuity plans: [1] finding stantly evolving process. Each year the BIA of the capsule. The band material seeps the time to conduct evaluations and gen- is updated and this could result in a new into the inseams of the capsule, drying and erate actions plans, [2] gaining access to BCM strategy, including the generation of Eli Elias hardening at the same time, which allows the appropriate resources, and [3] appro- a new action plan. Director of Business Development, CapsCanada for complete unibody fusion. priation of the necessary funds. Ser- We focus on the implementation of LinkedIn www.linkedin.com/in/eli-elias-35853616/ vier’s management made a commitment backup solutions for key pieces of equip- Email [email protected] CUSTOMIZING AND OPTIMIZING to ensure that all three of these issues ment and processes, protection of our At CapsCanada, we specialize in liquid- The first step of the project is to iden- are continually addressed. The business equipment and facilities, and extensive filled hard capsules (LFHCs). Over the last tify the key products driving the turnover continuity team has the ability to access auditing and management of our suppli- three decades, we have perfected the tech- and margins. In the second stage, product external resources when needed. The ers. The overall goal is to ensure the qual- nology to optimize LQ-CAPS® Liquid For- mapping is performed using innovative area of fire protection is an important ity, safety and security of our manufactur- olid oral dosage forms remain sensitivity to degradation from light and mulation Capsules for our customers. In methodology; this allows us to follow the example. While our internal experts can ing operations. the preferred route of adminis- heat — encapsulation of a liquid in hard- addition to standard capsule compositions, volumes and costs of materials that flow identify the need for improved building Notably, our BCM strategy often drives tration for many reasons. Many shell capsules is an attractive alternative we develop customized capsule solutions through the buildings and equipment at protection, they might not have the abil- our operational strategy. Process map- drug candidates today, how- that still allows formulation as an oral solid to address the formulation needs of highly our 15 global facilities. Based on this infor- ity to determine the best specific protec- ping is performed whenever moving or ever, cannot be formulated as tablets due dosage drug. complex APIs with the goal of optimizing mation, at the third stage, we are able to tive measures to implement. changing equipment is proposed or when to their poor solubility, high potency or Formulation as a liquid can overcome their performance. We are continually in- model several loss scenarios and evaluate External resources and suppliers are taking on a new project. This approach sensitivity to processing conditions. For many troubling physicochemical properties novating to develop proprietary polymer the impact (in terms of disruption time, used to bring in the best knowledge and allows us to determine the choice that these complex APIs, liquid-filled hard- for APIs, giving formulators much greater formulations that provide the most stable financial impact, etc.) for any situation. skills, ensuring that the investments being provides the least risk for the entire Ser- shell capsules enable formulators to over- flexibility. In fact, liquid-fill capsules can capsules and hold the greatest quantities Finally, at the fourth step, we identify miti- made are appropriate and adequate to vier group — anytime risk is reduced, per- come these issues while also achieving provide drug manufacturers with the oppor- of API possible. gation solutions to reduce our exposure. address the identified risks. In this case, formance is improved. improved efficacy and safety. tunity to create formulations not previously These special capsule polymer formu- Wherever possible, multiple suppliers these resources include engineering firms, Finally, having a business continuity possible. Both the drug formulation and the lations require custom banding solutions are approved. The supply chain not only prevention specialists from insurance strategy has provided our employees with COMPLEX MOLECULES MAKE FOR polymer composition of the capsule can that ensure protection of highly potent and includes raw materials for API synthesis, partners and other such experts. Servi- more transparency regarding risk within DIFFICULT ORAL SOLID DOSE FORMULATIONS be customized to accommodate APIs with otherwise sensitive APIs. CapsCanada’s but all elements involved in the manu- er’s management has committed to fund- the company. While there was some resis- Increasingly complex small-molecule many different properties and desired dis- custom banding technologies create a cus- facture of products — whether APIs or ing business continuity efforts through tance initially due to the additional effort APIs are presenting a new set of challeng- solution profiles. tom seal, made with the raw material used formulated drugs. Packaging suppliers a global fund rather than having each required when first implementing the es to drug formulators. Approximately As importantly, the dissolution of liquid- to form the capsule (gelatin, HPMC, etc.), BCM strategy, today the thorough mitiga- 40% of current market drugs and 80% filled capsules is generally superior to that creating a secure seal that is both leak- and tion of risk is embedded within Servier’s of pipeline candidates meet the Biophar- of other oral solid dosage forms. For two- tamper-resistant. culture. Every employee recognizes his/ maceutical Classification System (BCS) part hard capsules, dissolution can start in Faster and more consistent dissolution ABOUT THE AUTHOR her responsibility to protect the patient, definition of poorly soluble (classes II and as little as five minutes and be completed inevitably improves the bioavailability of Mayeul Cauvin the business, our customers and the IV).1 In addition, the percentage of drug within 15 — and is often more consistent liquid-filled capsules, which provides en- Risk Management Department, Corporate Loss Prevention Manager broader community. P candidates that are classified as highly when compared to other solid dosage hanced efficacy overall. When combined Mayeul Cauvin is in charge of Loss Prevention and Protection for all potent (highly potent active pharmaceu- forms. Hard-shell capsules can also be de- with the greater security of hard-shell cap- Servier’s sites located in the world. He joined Servier in 2016, with tical ingredients, HPAPIs) is expanding. signed to dissolve under different pH con- sules, the result is better products that ben- more than 15 years of experience in Loss Control. Mayeul developed REFERENCES The global HPAPI market is expected to ditions, allowing controlled drug delivery in efit manufacturers and patients alike. P his expertise in Supply Chain Risk Evaluation, Business Continuity reach $34.8 billion by 2025, according to the gastric fluids or intestine, for instance. Management and Property Damage and Business Interruption 1. “What is Business Continuity Management?” DRI Grand View Research.2 Furthermore, the use of lipid-based so- evaluation and mitigation. Mayeul has encountered many different loss International. Web. lutions as liquid carriers increases the prevention approaches & requirements with different industry types, 2. Kim Lindros, Ed Tittel. “How to Create an Effective Business and with such experience, he is able to propose comprehensive and Continuity Plan.” CIO. 18 Jul. 2017. Web. LIQUID-FILL CAPSULES OFFER bioavailability of liquid-filled capsules REFERENCES optimized solutions to reduce risk exposure. 3. “Societal Security — Business Continuity Management MANY BENEFITS compared to solid oral dosage forms. Lipid Systems — Requirements.” International Organization for For APIs that cannot be formulated as carriers are readily metabolized and pro- 1. “Low Solubility Concern in the Pharma Industry Drives the Standardization. Jun. 2012. Web. Solubility Enhancement Excipients Market, Finds Kline.” powders into traditional oral solid dosage vide for optimized absorption of the API. It is LinkedIn wwww.linkedin.com/in/mayeul-cauvin-75128026/ 4. “Societal Security — Business Continuity Management Kline & Company. 15 Apr. 2015. Web. Email [email protected] Systems — Guidance.” International Organization for forms — either due to toxicity concerns, is- also easier to achieve homogeneity across 2. “High Potency API/HPAPI Market Size Worth $34.8 Billion Standardization. Dec. 2012. Web. sues with abrasiveness, hygroscopicity or low- and high-potency API formulations. By 2025. Grand View Research. Jul. 2017. Web.

38 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COMNICEINSIGHT.COM 39 39

PA_Q118_39_CapsCanada_F_S.indd 39 2/27/18 3:47 PM M&A Feature Part 1 An Industry Stacked

Mergers & Acquisitions in Contract Research Organization Mergers and Acquisitions Discovery, Manufacturing A New Landscape: and Fill/Finish M&A in the Discovery

As the supply chain shrinks, it has grown far denser. There & Research Sector 2 cording to the survey. 2017 was unprec- is no segment of the industry that has been untouched by the edented in terms of mergers and acquisi- The CRO market is condensing while tions in the discovery phase — here are deep internal layering caused by M&A activity. In this Executive some of the most high-profile unions in the experiencing rapid growth. industry, and what they mean for the future Issue feature, we explore how research, manufacturing and of pharma.

packaging have shifted with consolidation. IMS Research and Quintiles Becomes IQVIA ergers and Acquisi- is expected to grow to $59.42 billion by As CRO companies condense and we re- tions have served to 2020, with a predicted CAGR (compound flect on the trends going forward in CROs, both shrink and ex- annual growth rate) of 9.8% in the latter it’s interesting to note that some of the pand the landscape half of the decade.2 most influential mergers have included a of the pharmaceutical The United States is currently leading global element. Global expansion seems industry. The industry in the market; North America captured to be a reoccurring theme when analyzing is more powerful with a 50% market share in 2014.2 In spite of the effects of past mergers and predict- more merger and acquisition activity, as this, there is a growing global segment ing what is sure to come. To this point, the supply chain inevitably becomes more in research organizations, especially in one of the most headline-grabbing merg- robust. A set of standards and internal or- developing nations. Emerging countries ers over the past 18 months was that of ganization takes over after a merger and in the Asian Pacific, Latin American, and Quintiles and IMS. Quintiles, a CRO based permeates the company, so it is in align- Eastern European regions have proven in North America, expanded into Europe- ment with the umbrella organization. Per- attractive for a number or reasons, in- an territory by merging with information Cynthia Challener, Ph.D., Guy Tiene, haps this is most imperative in the drug cluding a large patient pool, low labor and technology consultancy group IMS Emilie Branch, Nice Insight discovery and research stage of drug de- and manufacturing costs, and a skilled Health.1 velopment, when the groundwork is being workforce.2 After briefly becoming Quintiles IMS Page 41 laid in support of the next blockbuster. The contract research market is further Holdings Inc., the firm became IQVIA — The contract research organization segmented based on stage of drug devel- The Human Data Science Company.3 IQVIA A New Landscape: Mergers (CRO) space has been one of the most opment, from early-stage development is now a player in real-world data and has and Acquisitions in the active for mergers and acquisitions over services primarily focused on discovery, the potential to alter the way clinical trials Discovery & Research Sector the last several years and especially this to late- and last-stage development ser- are conducted. The company describes Page 43 past year. In the current arena of phar- vices, which include phase II-IV clinical itself as “exploring a new discipline — Hu- What’s Driving M&A Amongst maceuticals, strong players are becom- trials and central laboratory services. Also man Data Science — to unleash the power Pharma Sponsors? ing ever stronger. As of now, the top ten according to Zion Market Research, later of data science and human science to im- dominant CROs capture more than half stage development services are the great- prove health outcomes.”3 In mergers in Page 46 of the total research market.1 This market est segment for the end-user in the CRO general, there is usually a need or a gap in Getting to the Finish Line is highly valued, with predictions show- market. As such, this segment accounted the market that the merger fulfills. As with ing a clear upward trend for research for over 70% of the total market share in IQVIA, the applied data is the key to pro- organizations. According to Zion Market 2014; growth is expected to be especially gression in clinical trials, and for extend- Research, the contract research market present in this area for years to come, ac- ing life outcomes for patients, and in all

40 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 41 major therapeutic areas. This particular tion focused on Phase I-IV — merged with and the implementation of Big Data in merger paid off for both organizations; the inVentiv Health, Inc., which was a privately clinical trials, ICON is making the move to- company predicts to generate $200 million held global CRO and Contract Commer- ward useful implementation in trials at all M&A Feature Part 2 in 2019 and sustain 1%-2% annual growth.1 cial Organization (COO), to form Syneos phases.1 Health. The combined entities are val- LabCorp Expands with Covance ued at about $7.4 billion.7 Penetration of Enter Private Equity and Chiltern the global market was a byproduct of the In June of 2017, private equity (PE) firm In 2015, CRO conglomerate Covance was merger, similarly to LabCorp. Syneos has Pamplona Capital Management agreed to acquired by LabCorp, a testing laboratories over 22,000 employees in 60 countries, acquire Parexel, which was ranked as a company. The merger followed LabCorp’s and reach over 110 countries.7 Alistair top ten CRO, for $5 billion.1 The company acquisition of Covance’s genomic lab.4 The Macdonald, Chief Executive Officer of focused on drug development, clinical lo- Contract Development and Manufacturing Organization Mergers and Acquisitions acquisition was valued at $6.1 billion. The Syneos Health, commented on the global gistics, regulatory consulting and commer- acquisition was meant to improve trial ef- expansion, stressing the worldwide reach cialization for life sciences at the time of ficiency and patient recruitment, as well of the new conglomerate: “Customers are the acquisition. In a statement on the ac- as deliver data faster to all parties — from increasingly seeking simultaneous ap- quisition, CEO Josef von Rickenbach noted What’s Driving M&A drug sponsors to physicians and patients.1 provals and product launches in multiple that “Pamplona is an ideal partner, with Commenting on the merger and the add- markets worldwide. The combination of deep healthcare expertise and a strong ed value of both firms together, LabCorp INC Research and inVentiv will expand our track record of investing in market-leading Among Pharma Sponsors? Chairman and CEO David King explained global scale and add capabilities to grow companies in the healthcare sector.” The that the merger was leading the charge of our addressable market.” buyout suggests that private equity is the the industry to consolidate for the better. As demonstrated, global opportunities third variable to consider; not only are at- M&A activity among pharmaceutical companies reached “As a combined company, we will be well- are a tremendous motivator for contract tractive firms being taken over by other, positioned to respond to and benefit from research and contract development orga- larger firms seeking their capabilities, a peak in 2014-2015. It has slowed somewhat in 2016 the fundamental forces of change in our nizations to edge into a merger. Directly but that the PE sector views outsourcing business, including payment for outcomes, correlated to this is the growing commer- as a prime space for investment. This was and 2017, but companies remain active. They are seeking pharmaceutical outsourcing, global trial cial trend of outsourcing; demand for out- echoed in the same month, when Albany access to new technologies, looking to expand their support, trends in pharmaceutical R&D sourcing is nowhere near slowing, demand Molecular Research agreed to be sold to spending, personalized medicine, and big will only increase — as will the need for the Carlyle Group LP and GTCR LLC for pipelines and therapeutic expertise and reach both new data and informatics,” King stated.5 specialized knowledge and expertise. An $922 million.9 Shortly following this decision, LabCorp additional driver of merging is the acquisi- The movement of CROs over the last patient populations and geographies. set out to further solidify their position by tion of a company that bolsters, enhances few years suggests that this is the trend of acquiring Chiltern in a deal valued at $1.2 or adds capability. Buying a company is the industry; we anticipate the CRO land- billion in cash.6 In the press release for perhaps the easiest way to acquire ex- scape will shrink further as CROs give way the acquisition, which took place on July pertise without having to build it up. As to each other and as private equity gets a Many Reasons for M&A 31, 2017, it was announced that the merger for INC Research and inVentiv, both were firmer grasp on the industry (and its major Merger and acquisition activity is, overall, driven by would yield a CRO with “significant global leaders in oncology and the central ner- players). With that in mind, the early/drug a need to improve competitiveness.1 For public com- scale” as well as an expanded workforce of vous system, which netted a total com- discovery area is ripe for growth. Well into panies, shareholders expect a certain level of growth. more than 20,000 employees. The merger bined revenue of $1.2 billion in 2016; the the next five years, continuous growth is For some, achieving those levels of growth organically also provided LabCorp with Chiltern’s ex- proficiency in these areas makes Syneos predicted with no sign of slowing down.2 P is a challenge, leading to growth through acquisition. tensive oncology expertise, as well as ex- an attractive outsourcing candidate, as Many blockbuster drugs have lost or are soon to lose panded functional service provider (FSP) buyers are looking for proven skill before patent protection. At the same time, investment in References solutions.6 Again, Chairman and CEO taking on a contract.7 R&D has decreased at large biopharmaceutical com-

David King spoke on the expanded capa- 1. Monique Ellis. Top CRO Mergers And Acquisitions Of 2017. panies and they are faced with shrinking pipelines. bilities that accompanied the merger. “Our Icon Meets MAPI ProClinical Life Sciences Recruitment Blog. 13 Sep. 2017. Web. The majority of new drug candidates have, in fact, acquisition of Covance has demonstrated Mergers work to accelerate growth. When 2. “Global Contract Research Organization (CRO) Market Will been developed by small and emerging specialty Reach $59.42 Billion by 2020.” Globe Newswire. 5 Jun. 2017. Web. the value of combining diagnostic and CRO ICON, a top global CRO in its own right, 3. “Human Data Science Has Arrived.” Iqivia. Web. pharma and biotech companies in recent years. Con- capabilities, expertise, data and leader- acquired MAPI in July of 2017, a consul- 4. “Labcorp to Acquire Covance for 6.1B” Genome Web. 3 Nov. sequently, these innovative organizations are being ship. The addition of Chiltern furthers our tancy specialized in late-phase research, 2014. Web. acquired by big pharma and biotech firms to expand 5. “Labcorp To Acquire Covance For Approximately $5.6 Billion, strategy and will provide us with enhanced the CRO became the second-largest CRO their portfolios with next-generation technologies. Creating World’s Leading Healthcare Diagnostics Company.” capabilities across a broader client base as to specialize in late-phase research on a Business Wire. 3 Nov. 2014. Web. In addition, those numerous patent expirations, we continue to innovate and grow.”6 After global scale.1 This includes post-approval 6. “Labcorp To Acquire Chiltern For Approximately $1.2 Billion combined with increasing pricing pressures from the dual mergers, LabCorp’s global reach research, language services, consultancy, In Cash, Advancing Its Leadership In Drug Development.” governments and insurance companies have led to Chiltern. 31 Jul. 2017. Web. has been greatly magnified, a key element and pricing & market access.8 With the 7. INC Research and inVentiv Health to Merge. INC Research. reduced revenues for many large biopharmaceutical in mergers and acquisitions. acquisition of MAPI, ICON gained the com- 10 May 2017. Web. companies. Acquisitions can provide access to new pany’s access to Mapi Research Trust, the 8. ICON Acquires Health Outcomes Research Firm Mapi Group. revenue streams, particularly for companies with sig- RTE. 27 Jul. 2017. Web. INC Research Joins with inVentiv Health industry’s most subscribed library of clini- nificant cash reserves.2 9. Divya Grover. “GTCR And Carlyle Group Are Buying Albany On August 1st, 2017, INC Research Hold- cal outcome assessments. Engaging in the Molecular Research For $922 Million.” Business Insider. 6 Jun. ings, Inc. — a global research organiza- growing trend of a move toward real-time 2017. Web.

42 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 43 Financial factors can come into play as fi’s acquisition of Aventis in 2004, for 2016 were for companies with approved Rather than acquire THE 10 LARGEST TRANSACTIONSTHE  LARGEST TRANSACTIONSIN THE PHARMA IN INDUSTRY THE PHARMA INDUSTRY well, such as access to cheap financing instance took place earlier, large deals products or products close to commer- 3 and potential tax savings, although so- continue to take place. Teva Pharmaceuti- an early-stage cialization, suggesting that the biggest Year Buyer Seller Deal size ($ / billion) called tax inversion deals are no longer cal’s purchase of Allergan’s generics divi- biopharma companies have a reduced 1999 P
zer Warner Lambert 84.3 on the table for US companies. There is, sion in 2015, Shire’s acquisition of Baxalta company and take on tolerance for risk-taking.5 It could also however, under the current Trump admin- and Bayer’s purchase of Monsanto in 2016 the further development reflect lower valuations. It is worth not- 2000 Glaxo Wellcome Smithkline Beecham 71.3 istration, potential for US corporations to and Johnson & Johnson’s takeover of Ac- ing that “option-to-acquire” deals became 2002 P
zer Phamacia 63.8 pay reduced taxes on money they repatri- telion in 2017 are more recent examples. of unproven candidates, more common in 2016. In this case, rather ate into the country. Reduction of costs Deals made by generic drug manufac- big biopharma companies than acquire an early-stage company and 2004 Sano
Sano
-Aventis 58.6 through achievement of synergies and the turers accounted for 9.3% of the value take on the further development of un- acquisition of new technologies (instead of all pharmaceutical M&A activity from form collaborations that proven candidates, big biopharma com- 2016 Bayer Monsato 58.2 of making internal R&D investments) is 1996 to 2016 (345 deals valued a total of panies form collaborations that include include the option to 2014 Actavis Allergan 52.2 also an important driver. In some cases, $160.3 billion).4 The vast majority of deals the option to acquire the target molecule companies divest only part of their port- took place from 2014-2016 (2014: 22 worth acquire the target if performance milestones are achieved.3 2009 P
zer Wyeth 48.9 folio in order to streamline operations, $1.86 billion; 2015: 34 worth $33.56 bil- 2011 Shareholders Abbvie 43.1 leading to improved bottom lines for both lion; 2016: 42 worth $44 billion). Notably, molecule Continued Slowdown in 2017 deal partners. in 2015 and 2016 many of these deals oc- if performance Through October 2nd, the total value of 2009 Merck & Co. Schering-Plough 37.3 curred in the US, accounting for nearly deals in the pharma, medical and biotech 2015 Teva Pharmaceutical Allergan-divisie 35.6 Historical Perspective 90% of the value of generic deals in those milestones sector was $207.6 billion, representing a Mergers and acquisitions have been an two years. In addition, it is worth noting decline of 9.9% in value (and 106 fewer are achieved. Source: Consultancy.uk analysis, Bloomberg data important activity in the pharmaceutical that both the number and value of M&A deals) compared to the same period in industry for many years. Over the past de- deals involving generics companies in- 2016.7 Private equity deals were also no- cade, the industry spent over $2.4 trillion creased.4 tably lower than expected.8 Pharma deals vous system meds, some respiratory drug increased rate at which the FDA is approv- on M&A deals, accounting for on average have been the main culprit; biopharma rights and potentially its Alcon eye drugs ing drugs — 46 in November 201715 com- 9% of total global M&A activity, according Changing Headwinds in 2016 transactions have remained fairly healthy. business.13 pared to just 22 in 201616 — is also likely to Mergermarket.3 The highest value for Despite the increase in M&A deals by ge- A slowdown in biotech IPOs may be part For emerging and smaller pharmaceuti- contributing to the improved stock prices. M&A deals in the pharma industry in those neric pharmaceutical firms, the overall of the reason for the higher M&A activity cal companies, initial public offerings can Some predict a return to higher M&A lev- 10 years — $392.4 billion — was reached in M&A activity among pharmaceutical man- $2.9 to $7.3 billion in Japan. In the latter in this segment of the biopharma indus- serve as an effective alternative to M&A els as a result.14 2015, with North America accounting for ufacturers declined in 2016 compared case, the purchase of Toshiba Medical t r y. 9 The overall slowdown is attributed by for achieving growth.11 M&A activity in 2018 could also pick nearly $300 billion of the total. to 2014 and 2015. In 2016, the value of Systems Corporation by Canon accounted some analysts to the uncertainty created up. According to one report, there is $1.3 While most of the truly megadeals — pharmaceutical M&A activity fell to $274 for $5.9 billion.3 by the presidential administration.8 What’s on Tap for 2018? trillion in overseas cash that could be Pfizer’s acquisitions of Warner Lambert billion from $392.4 billion in 2015.3 Inter- Top deals in 2016 included Shire’s ac- Notable deals have included J&J’s take- With much uncertainty continuing, it is brought back to the US and used by phar- in 1999, Pharmacia in 2002 and Wyeth estingly, deal activity increased in Europe quisition of Baxter spinoff Baxalta, Pfiz- over of Actelion, Gilead’s buyout of Kite difficult to predict what level of M&A ac- maceutical companies to pay for deals.17 in 2009, Glaxo Wellcome’s purchase of and Japan in 2016, with total value growing er’s buyout of Medivation and purchase Pharma (which recently received FDA ap- tivity will take place in 2018. Following the Despite continued uncertainty, it appears SmithKline Beecham in 2000 and Sano- from $33 to $57 billion in Europe and from of Anacor Pharmaceuticals, AbbVie’s ac- proval for the second CAR T-cell therapy failure to repeal the Affordable Care Act, that M&A activity in the pharmaceutical quisition of Stemcentrx and Mylan’s pur- in the US) and the merger of Impax Labs however, biopharmaceutical stocks did industry will remain reasonably strong chase of Meda.5 The nature of deals also and Amneal Pharmaceuticals (to make the begin to increase in value again.14 Earn- and could potentially increase to the high- changed in 2016. Rather than being driven 5th largest generics firm in the US).10 ings per share are also on the rise. The er levels in 2018. P VALUE OF M&A IN THE GLOBAL PHARMA INDUSTRY ($ / BILLION) VALUE OF M&A IN THE GLOBAL PHARMA INDUSTRY   BILLION largely by specialty pharmaceutical firms Other companies looked to divest, not (e.g., Allergan, Valeant Pharmaceuticals acquire, as a way to focus on core busi- $2.36 billion Deal value 2007-2016: % of total International and Endo International), big nesses and provide opportunities for References 400 392 17 pharma and biotech companies started growth for the divested operations.11 One 380 16 to lead the way again. Compared to 2014, example is Biogen, which spun off its he- 1. Giordano Righi. “Drivers Of Mergers And Acquisitions (M&A) In Life Sciences.” LinkedIn. 31 Oct. 2016. Web. 350 15 valuations of specialty pharma companies mophilia business in 2017 as Bioverativ. 2. Seemal Patel. “Strong Outlook For Pharma And Biotech M&A In 2017.” Deal Law Wire. 6 Apr. 2017. Web. 14 3. “Ten Year Deal Activity In Pharmaceuticals Industry Stands At $2.4 Trillion.” Consultancy.UK. 6 Mar. 2017. Web. 13% declined by 34% in 2016, limiting their Teva sold its intrauterine copper contra- 300 4. Marc-André Gagnon, Karena D. Volesky. “Merger Mania: Mergers And Acquisitions In The Generic Drug Sector From 1995 To 274 13 6 12% ability to make deals. ceptive ParaGard to CooperSurgical and 2016.” Globalization and Health 13.62 (2017). Web. 250 12 There has also been a shift in interest its contraception, fertility, menopause 5. Sy Mukherjee. “These Were The 10 Biggest Pharmaceutical Deals Of 2016.” Fortune. 24 Feb. 2017. Web. 228 221 11 6. Jessica Merrill. “Big Pharma Is Back In The M&A Driver’s Seat For 2017.” Scrip. 9 Jan. 2017. Web. 208 10% away from companies with approved prod- and osteoporosis products to CVC Capital 7. Carly Helfand. “Without Tax Reform, Pharma M&A’s Still Sluggish—But Biotech’s Red-Hot.” Fierce Pharma. 20 Oct. 2017. Web. 200 185 10 3 181 ucts to early-stage development firms. Partners Fund VI to pay down debt in the 174 8. Jared S. Hopkins. “Biotech M&A Falls Off as Trump Dashes Hopes of a New Pharma Boom.”Bloomberg . 21 Apr. 2017. Web. 9 In 2016, just under 20% of the compa- face of significant price declines for many 9. Peter Young. “Pharma M&A Market: Latest Challenges and Opportunities.” Pharmaceutical Executive. 3 Jan. 2017. Web. 150 9% 8% 8 9% nies acquired offered approved products, of its generic products.12 The company 10. Carly Helfand. “Bisaro Steers Impax to $6.4B Amneal Merger, Creating Fifth-Largest U.S. Generics Company.” Fierce Pharma. {~120} 7 17 Oct. 2017. Web. 8% 8% down from 49% in 2011. Possible reasons continues to seek a buyer for its European 100 11. Lydia Ramsey. “The CEO Of A $50 Billion Company Explains Why Big-Ticket Dealmaking Has Dropped.” 17 Jul. 2017. Web. 6 6% include reduced competition and thus oncology and pain assets. Novartis had its 12. Eric Sagonowsky. “Teva Finishes Women’s Health Sale with Deals Worth $1.38B.” Fierce Pharma. 18 Sep. 2017. Web. 5 50 valuations/prices, a desire to expand one-third share of Roche on the block for 13. Tracy Staton. “No Sale For Novartis’ $14B Roche Stake, But The Revamp’s Not Done.” Fierce Pharma. 12 Oct. 2017. Web. 5% 4 technologies and drug options for specific more than a year, but decided to keep it 14. Anthony Mirhaydari. “M&A In Biotech & Pharma To Heat Up After Fall Of ‘Trumpcare’.” Pitch Book. 14 Sep. 2017. Web. 15. “Novel Drug Approvals For 2017.” U.S. Food and Drug Administration. Dec. 2017. Web. 0 0 diseases, and the desire to bring next-gen- given a lack of interest. It has also been 16. “Novel Drug Approvals for 2016.” U.S. Food and Drug Administration. Nov. 2017. Web. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 eration technologies in-house. However, reported that the company is looking to 17. Michael S. Ringel, Michael K. Choy. “A New Wave Of Pharma Mergers Could Put Innovative Drugs In The Pipeline.” Stat Source: Consultancy.uk analysis, Mergermarket data eight of the largest 10 deals completed in sell a $496 million portfolio of central ner- News. 24 Jul. 2017. Web.

44 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 45 fill/finish line through which it must trav- months. Alcami not only made strategic als, prefilled syringes, and cartridges.”9 the purchase of Daiichi Sankyo’s 146,000 el,” noted Mougin, who explained that to and critical acquisitions to add capac- In 2016, Vetter articulated its manufac- square-foot pharmaceutical packag- M&A Feature Part 3 assure biopharmaceuticals and parenter- ity and depth, but also moved fast to add turing strategy, announcing continued in- ing facility in Bethlehem, Pennsylvania, al quality remains high and product purity new lines and focus on prefilled syringes. vestments to expand fill/finish — including for $14 million, including all equipment is maintained throughout processing, an At the end of 2016, Grifols announced a $320 million investment over 10 years in and employees.15 Vetter also announced aseptic fill-finish process is critical. construction of a new plasma fraction- its Des Plaines, Illinois site and plans to a major expansion of its secondary pack- Noting that requirements of the Drug ation plant in Clayton, North Carolina, expand packaging operations.10 aging capacities — in response, said the Supply Chain Security Act (DSCSA) and adding some 6 million liters of annual frac- company, “to rising customer needs and the larger Drug Quality and Security Act tionation capacity. Construction began in Outsourcing Continues market demands for complex packag- (DQSA) are ramping up, Mougin points out early 2017 and the facility is scheduled to Outsourcing pharma packaging is logical ing solutions.” The expansion will add it is now an “opportune time” for CDMOs start production by 2022.6 due to complex nature of pharmaceuti- approximately 32,000 square feet of new Fill/Finish and Packaging Mergers & Acquisitions to implement fill-finish improvements Pfizer’s CMO Pfizer CentreOne an- cal packaging operations. In the report packaging capacity and include new fully- globally.3 nounced in February 2017 the success- “Pharmaceutical Contract Packaging automated packaging lines, space for ful expansion of its fill/finish services at Market: Global Industry Trends, Share, manual and semi-automated packaging Investments in Capability, Capacity the company’s Kalamazoo, Michigan site. Size, Growth, Opportunity and Forecast processes, and assembly equipment for a Getting to the and Quality Along with vial-filling of small molecules 2017-2022,” management strategy ana- wide variety of formats.16 Sterile fill/finish services providers are and biologics, the new Michigan opera- lysts from IMARC Group found the global For 2018 and beyond, the prospects for clearly responding to the demand for tions expand Pfizer CentreOne’s service pharmaceutical contract packaging mar- fill/finish and packaging market players capacity and technical ability. It is likely portfolio and provide new capacity for ket reached a value of approximately $9 will remain robust. The overall demand for Finish Line that investment and capital allocation filling sterile suspensions.7 In August billion in 2016, and that it maintained drugs and the rise of parental-form bio- strategies will be ongoing, supporting those 2017, Ajinomoto Althea announced it was a CAGR of more than 7% during 2009- pharmaceuticals/biosimilars ensures the goals through a variety of means. These launching a high-performance sterile vial 2016.11 The contract packaging market is industry will see growth. P include acquisition and capacity addi- filling line. According to the CDMO, the expected to reach a value of nearly $15 tions, geographic positioning of assets, new line strengthens its product manu- billion by 2022.11 This rise can be attrib- he industry’s accelerating de- contract services providers is “access to and strong moves technologically to facturing capabilities and supports a uted to rapid and sustained growth in velopment of biopharmaceuti- specialized technologies.”2 achieve market niche or “no molecule broader range of drug substance APIs, as the pharmaceutical industry. Pharma- References cals, as well as the demand for Similarly, respondents said they also barred” goals and other advantageous well as enabling larger batch sizes and a ceutical contract packagers, explained 1. World Preview 2016, Outlook to 2022. Rep. EvaluatePharma. 8 other parenterally delivered seek improving quality and gaining exper- operational synergies. broader range of filling volumes. analysts, invest tremendously in R&D to Sep. 2016. Web. formulations, has put tremen- tise in areas their organizations lack. Nice Cenexi, for example, integrated exten- ensure innovation and introduce technol- 2. CDMO - 2017 Nice Insight Contract Development and dous pressure on the entire Insight CDMO study data revealed that sive experience in sterile drug products, Thinking Big ogies that ensure product quality. Manufacturing Survey. 3. Phillippe Mougin. “Harnessing CDMO Expertise for Fill- supply chain to focus organi- more than half (54%) engage contract pro- One of the biggest announcements of the expanding into needle-free injection sys- Finish and Inspection of Sterile Pharmaceuticals.” American zational and financial strategies to improve viders for liquid dose form clinical-scale tems, galenical drug forms and cytotoxic year came in September 2017, when Catal- Expansion and Capital Spending Activity Pharmaceutical Review. 29 Jul. 2016. Web. and modernize fill/finish operations. and commercial-scale drug product manu- (including antibody drug conjugates, or ent announced the acquisition of Cook A report by packaging industry group 4. Home. (n.d.). Retrieved December 28, 2017, from http://www. cenexi.com/ facturing services. Further, roughly a quar- ADCs) and lyophilization capabilities. In Pharmica for $950 million. The company PMMI issued at the end of 2016 explained 5. Feliza Mirasol. “CDMO/CMO Expansion in Parenteral Drug Demand for Fill/Finish Soaring ter of respondents engaged CDMOs for 2017, Cenexi gained its fourth manufactur- explained the move was intended to bol- that, faced with the regulatory challenges Development and Manufacturing.” DCAT Value Chain Insights. The major driving force behind the demand clinical-scale and commercial-scale filling ing site, a sterile operations facility locat- ster its biologics capability and extend its of serialization, unique device identifica- 14 Mar. 2017. Web. for operationally excellent sterile fill/finish of prefilled syringe and injectable dose de- ed in Hérouville-Saint-Clair, France.4 “capabilities in sterile formulation and tion (UDI), as well as pressures to produce 6. Grifols Will Invest USD 360M To Expand Its Manufacturing Capacities for Plasma-Derived Therapies. Grifols. 3 Aug. 2016. operations is the accelerating pace behind livery forms. fill/finish across liquid and lyophilized vi- at low cost, healthcare and life sciences Web. biopharmaceutical development and the Expansion and Development manufacturers are looking at purchasing 7. Contract Manufacturer Pfizer CentreOne Expands Fill-Finish rise of biosimilars. Regardless of category, Innovation’s Impact Building momentum through 2017, several new equipment to replace outdated pro- Services to Its Kalamazoo, Michigan, Facility. Pfizer. 16 Feb. outsourcing the complexity and risk of It’s obvious that this segment of the phar- companies announced plans to expand, duction lines. Nearly half of healthcare 2017. Web. The major driving force 8. “Ajinomoto Althea, Inc. Announces New Aseptic Fill Finish aseptic sterile filling tasks to experts is the ma contract services supply chain has be- acquire or collaborate in an effort to de- manufacturers interviewed “continue to Line.” PR Newswire. 24 Aug. 2017. Web. real trend in the fill/finish story. come increasingly dynamic, partially be- velop their fill/finish operations in order behind the demand for replace legacy equipment and buy new 9. Eric Palmer. “Catalent Doubles Down on Biologics with Researchers at Evaluate Pharma project cause of advances in integrated enterprise to fulfill their business goals. Feliza Mira- equipment, while two-thirds of participat- $950M Deal for Cook Pharmica.” Fierce Pharma. 19 Sep. 2017. operationally excellent Web. the global market for drugs will continue to IT, barrier technologies, environmental sol highlighted the energy and growth the ing companies predict spending more on 10. Vetter Embarks on a 300 Million Euro Investment Strategy 12 expand at a compound annual growth rate conditioning systems, robotics and auto- sector is generating in a report for DCAT sterile fill/finish operations capital equipment in the next two years.” for Further Development to Its Manufacturing Sites. Vetter. 30 of 6.3% until about 2022, with biologics mation, and control strategies. Value Chain Insights, noting that CDMOs For example, PCI Pharma Services Sep. 2015. Web. accounting for 50% of the top 100 prod- According to Philippe Mougin, founder and CMOs were very active, growing or- is the accelerating made two significant announcements: 11. Pharmaceutical Contract Packaging Market – Global Industry Analysis, Share, Size, Growth, Trends, And Forecast ucts by the end of the study period.1 Based and Chairman of Cenexi Group, a CDMO ganically and “expanding operations to one covering the acquisition of Millmount pace behind Report 2017 – 2022. BioPharma Dive. 29 Jun. 2017. Web. on input from more than 700 pharmaceu- specializing in injectables, patient safety support the development and manufactur- Healthcare, near Dublin, which before the 12. U.S. Remains Largest Market For Pharmaceuticals and tical industry professionals, representing relies heavily on error-free fill/finish op- ing of parenteral drugs.” Mirasol reported biopharmaceutical acquisition opened a new, state-of-the-art Medical Devices. PMMI. 6 Nov. 2016. Web. 13. Acquisition of Millmount Healthcare. PCI Services. 2 Oct. all tiers and segments of the pharma busi- erations. Citing inherent complexity of that by March 2017, 18 companies across high-potent, high-containment packag- development and 2017. Web. ness (41% large, 36% medium-sized, 20% manufacture and finish, biopharmaceuti- the sector had announced enhancements ing facility; and the other announcing sig- 14. PCI Pharma Services Announces Significant Expansion in small and 3% emerging) from around the cals are propelling the use of parenterals, to parenteral operations.5 the rise of nificant expansion to its global serializa- Serialization Technology. PCI Services. 8 Mar. 2017. Web. world (Europe 38%, North America 33%, which Mougin explained are expected to AB Bio Technologies, Alcami and AMRI tion capabilities.13,14 15. Sharp Packaging Services, a division of UDG Healthcare biosimilars. plc, announces capacity expansion in the US and UK. UDG Asia 29%), results of the 2017 Nice Insight make up approximately 17% of the packag- all announced their plans to investors for UK–based Sharp Packaging Services Healthcare plc. 3 Apr. 2017. Web. 3 CDMO Survey revealed the top reason ing market in the coming years. adding aseptic filling and lyophilization announced capacity expansion projects 16. Vetter to Expand its Secondary Packaging Service Capacity survey participants engage CDMOs and “A sterile product is only as good as the lines and systems during the past 18 to 24 in the US and the UK in 2017, announcing to Meet Rising Demands. Vetter. 19 Oct. 2017. Web.

46 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 47 > PHARMAGEDDON

industry is running at approximately 30% capacity utilization, with the generics sector around 50%. The consumer goods industry operates at 85%-90% capacity utilization due to lower profit margins. The pharmaceutical industry must adopt this same mentality and deal with the excess capacity. UNITING THE INDUSTRY Though it may be difficult to accept, that means that some manufacturing and R&D facilities must be closed. The industry has not really tackled this problem previously FOR THE PREVENTION because it is very difficult to do. Closing facilities creates job losses and infrastruc- ture rationalization, which are strongly opposed by governments that often push hard for implementation delays. Moving OF “PHARMAGEDDON” drug production is also costly, and risky for the supply chain. Change requires a review of regulatory dossiers, which once opened > BY TIMOTHY C. TYSON, AVARA PHARMACEUTICAL SERVICES up can be reevaluated entirely. There is a potential risk that additional work will need to be done, potentially threatening a product’s survival in the marketplace. It is, however, no longer an option for companies to sidestep and ignore over- capacity issues, inefficiencies and lack of productivity. Both branded and generic drug manufacturers and their contract manufacturing partners must dramatically Revolutionary change is occurring in the pharmaceutical he industry must respond by de- to contend with the impact that the loss tive and solve these significant challenges. increase efficiencies and better utilize veloping a win-win-win approach of patents, the reduction in R&D produc- Our traditional operational model, which in capacity. Rationalization of facilities and industry. The old model of discovering and delivering that allows investors, pharma tivity, the increased regulatory oversight the past was all too comfortable, is being firms is essential. The number of contract pharmaceuticals is under attack. The rising cost of companies and their suppli- and the rapidly rising cost of developing challenged from every direction. The manufacturers must be reduced from the medicines, the reduced productivity and the increased ers to collaborate to continue a new drug are having. All of these rea- answer is revolutionary change; we need approximately 500 that exist today to 50 to deliver life-saving and life- sons have driven the industry to revolu- a new model that will drive the industry or 100. It will take 10-15 years for these regulatory requirements have driven companies to seek improving medicines to patients tionary change in all sectors to overcome towards the necessary outcomes. We must changes to occur, but they must. And they alternative means. Significant efforts to reduce operating Tin need and to share in fair and reasonable these market dynamics. This has caused take the initiative, rather than sit back and will have a major effect on everyone. Those profits. Otherwise, a time will come when the realization that Pharmageddon isn’t wait for someone else to do it. who understand the dynamics of today’s expenses, to share in the risks/costs of failure and to new life-saving and life-improving medi- coming at an abstract date — it is here. As professionals, it is our responsibility market and adjust will end up winners. provide reasonable returns to investors are leading to cines will no longer be developed. Although it may seem dramatic, if no to stand up and face these current pres- the destruction of the industry as we have known it. This actions are taken to change this current sures. We must address the concerns of the A WIN-WIN-WIN SOLUTION DESTRUCTION ON THE HORIZON landscape, the pharmaceutical industry public — and eliminate financial and eco- Winners post-reformation of the industry “Pharmageddon” isn’t going to happen sometime in the Revolutionary changes are occurring in is at risk of destruction — meaning that we nomic waste so that we can deliver medi- will be winners a different context; they future – we are currently in its midst. the pharmaceutical industry. The public will no longer have the ability to develop cines at fair prices. As an industry, we need will be winners in an industry where every- perception of drug companies has reached and produce life-saving medicines. When to conduct business in a fair and transpar- one wins. If the industry is to survive Phar- an all-time low. And it’s not just concerns the next pandemic occurs, hundreds of ent manner so that we can charge reason- mageddon, we need to create a mindset of about drug pricing. Drug manufacturers, millions of people could die because the able prices and still make fair returns for generating value across the entire supply distributors and pharmacies are also under needed new medicines and innovations investors and everyone in the industry. chain — we can no longer think that win- scrutiny due to the escalating opioid crisis. will not be available to treat them. The first step is to take control of our ning must occur at the cost of others los- States are suing drug companies based on processes to increase productivity and effi- ing. We must seek new ways to fund inno- the costs associated with responding to THE NEED FOR RESPONSIBILITY ciency. We need to optimize all of our activ- vation, continue to seek productivity and this serious health issue. If the pharmaceutical industry is to survive ities to provide the best value. Second, the efficiency improvements, and price the In addition to these challenges of pub- this impending Pharmageddon, the indus- industry needs to address the overcapac- drugs of the future fairly so that society can lic perception, the industry is struggling try must step up to be positive, be produc- ity situation. The branded pharmaceutical afford them. Pharmaceutical companies

48 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 49 will continue to challenge what their core occur at an accelerated pace. These mar- competencies are and will increase their ket forces are creating a positive environ- IF THE INDUSTRY IS TO reliance on partnerships with valued ment and more opportunities for contract SURVIVE PHARMAGEDDON, suppliers. Rather than look to pressure development and manufacturing organiza- suppliers to achieve cost savings, drug tions (CDMOs) supporting both APIs and WE NEED TO CREATE A companies must work with their suppli- drug products to contribute positively to MINDSET OF GENERATING ers to create a system in which everyone these market changes. — patients, pharma companies, suppliers The greatest opportunities exist for VALUE ACROSS THE ENTIRE and investors — benefits. CDMOs who seek to become true partners SUPPLY CHAIN — WE CAN Partnerships amongst all of the players with their customers. CDMOs must under- EXPERIENCE must be created, in which everyone invests stand the cost pressures facing the indus- NO LONGER THINK THAT together to deliver valuable life-saving and try and recognize what they can do to play WINNING MUST OCCUR life-improving medicines to patients at fair a role in improving customers’ cost struc- AT ANOTHER’S EXPENSE. AT YOUR SIDE and reasonable prices. In spite of pricing tures by finding new ways to drive efficien- concessions, pharma companies and sup- cies, providing security of supply, enhanc- pliers will still be able to make a reasonable ing regulatory compliance and building profit and investors will be able to make a long-term confidence by delivering on reasonable return. We must all work togeth- commitments to customers. er to get the current system — which is a sys- The consolidation occurring in the tem out of control — into control to estab- industry is not only fundamental to its suc- lish a long-term win-win-win approach, cess but will lead to an entirely new indus- in which everyone has a vested interest try structure where CDMOs, as a part of and from which all parties can assure a a strategic partnership, deliver technical that maximizes efficiency, productivity sustainable, profitable growth business. expertise and support to their customers and quality. to assist in drug development, offer new Forming long-term strategic partner- NEED FOR GREATER EFFICIENCY technologies and deliver more efficient ships with our customers is an equally Creating these win-win-win relationships and cost-effective manufacturing support. important component of our strategy. We will require dramatic improvements in want to help our customers succeed by efficiency and productivity. The time to TAKING ACTION AT AVARA providing security of supply and meeting discover, develop and deliver medicines in Avara’s strategy, first and foremost, is to regulatory compliance requirements at a the future must be reduced. There is also a deliver on our commitments to our cus- fair price. We commit to certain guaran- need to continue to assure product quality. tomers. We do that by focusing on, and teed long-term benefits to our customers There are many opportunities to improve caring for, our people. They really are as a means of sharing the leverage that efficiency, reduce costs and enhance sup- our greatest asset. Each and every one of we realize from increased volumes or ply chain security, as well as regulatory them realizes that what we do will impact improved efficiencies. compliance, across all phases of the drug the lives of people we may never know. As an integrated supplier of API and lifecycle for branded, generic and over- Our people have passion and always focus drug product services, Avara also helps the-counter medicines. on meeting or exceeding customer expec- simplify the supply chain. We reduce the tations and regulatory requirements — number of handoffs needed to get a drug WHAT CDMOs CAN DO they understand the consequences are from development to commercialization Simplification of the supply chain is occur- extreme if they do not. They also recog- and into the hands of patients. Avara ring as both outsourcing and consolidation nize the need for an operational approach brings a wealth of process and indus- try knowledge and expertise in supply chain management, process and formu- lation development, commercialization, ABOUT THE AUTHOR Tim Tyson product launch and technical transfer to EXPERIENCE A CDMO THAT bear on customer projects, facilitating Chairman and CEO, Avara Pharmaceutical Services DELIVERS ON ITS COMMITMENTS the rapid, cost-effective development of SCHEDULE A MEETING Tim Tyson, Chairman and CEO of Avara Pharmaceutical Services, is advanced medicines. As a result, our cus- Avara is a rapidly expanding CDMO led by some of the industry’s most Chairman and previously CEO of Aptuit. Prior to that, he was President WITH US FOR tomers receive significant benefits. and CEO of Valeant Pharmaceuticals and served as President of Glaxo- DCAT Week experienced veterans. With seven world-class facilities offering proven The foundation of Avara is accelerating SmithKline Global Manufacturing & Supply, where he had responsibility March 19-22, 2018 quality in APIs, liquid sterile and oral solid dose drug product, and packaging, the delivery of drugs to the marketplace for over 100 manufacturing sites and outsourced manufacturing New York, NY we also bring flexibility and a seasoned understanding of how to optimize worldwide. Mr. Tyson holds a bachelor’s degree in engineering from while facilitating the changes that must the customer experience. In fact, the Avara promise is a differentiating the United States Military Academy at West Point, and MBA and MPA happen in the industry. Those changes MEET US AT degrees from Jacksonville State University (USA). can only happen if there is a mutual CPhI North America commitment to delivering on time, in full, and at a fair price. April 24-26, 2018 understanding and participation by all LinkedIn www.linkedin.com/in/tim-tyson-89543a39 Philadelphia, PA Email [email protected] in the market, including contract service Booth #1307 www.avara.com | [email protected] | +1 203 918 1659 providers and their customers. P

APIs | OSD DRUG PRODUCT | STERILE DRUG PRODUCT | POTENT COMPOUNDS | PACKAGING 50 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 51 > DECONTAMINATION

A THREE-STEP DECONTAMINATION MICROBIAL AND PROCESS WILL ENSURE THAT USED EQUIPMENT IS FREE FROM BETA-LACTAM BIOLOGICAL ANTIBIOTICS AS WELL AS DESTROY UP TO 99.9999% OF HARMFUL DECONTAMINATION OF PATHOGENS AND EQUIPMENT BRINGS CONTAMINATES. PEACE OF MIND

> BY MATT HICKS, FEDERAL EQUIPMENT COMPANY

The ramifications of an adverse biological occurrence are o keep pace with an aging popu- A VALUE-ADDED SERVICE residues or organisms are properly re- facture the same product. β-lactam testing lation, an increase in chronic Microbial testing and equipment decon- moved to predetermined safety levels.2 A provides additional assurance to custom- higher in the pharmaceutical industry than in any other. and infectious diseases, and tamination can be offered as a value- three-step decontamination process will ers with heightened concerns of the ma- Cross contamination has unintended consequences of the ever-growing need to com- added service by an NIH-credentialed ensure that used equipment is free from chinery’s prior use. product recalls, regulatory non-compliance, ruined brand ply with various government bio-decontamination company, providing beta-lactam antibiotics as well as destroy To confirm that critical β-lactam com- regulations, the pharmaceutical value by saving manufacturers time and up to 99.9999% of harmful pathogens and pounds are absent from product contact reputation and, in extreme cases, even death. industry is investing more heav- money. While some drug makers may have contaminates. surfaces of the equipment, the following Tily in processing equipment.1 For many a decontamination program, the process steps are taken: companies, purchasing used manufactur- of decontamination usually occurs in a 1. β-lactam (beta-lactam) Antibiotic Testing ing equipment presents an excellent op- dedicated area. It is often not practical to In pharmaceutical manufacturing, β-lactam ++ Swab equipment in several hard-to-reach portunity to implement necessary technol- bring a used piece of machinery into that and non- β-lactam production must be areas. ogy in a more cost-effective manner and area, as it poses the risk of contamination. segregated due to the concern that a ++ Analyze swabs using mass spectrometry with shorter lead times (it can sometimes The decontamination company will per- portion of the population is sensitive to equipment. take upwards of a year to manufacture new form microbial testing and biological de- broad-spectrum antibiotics like Penicil- ++ Develop a report confirming the absence equipment). contamination prior to shipping the used lin G and Ampicillin, with serious health of Penicillin G and Ampicillin-lactam. Customers purchasing used equipment equipment — along with all of the support- consequences if cross contamination oc- need complete assurance that the machin- ing validation documentation. curs. It is important to note that a used 2. Equipment Decontamination Exceeds ery presents no risk of cross contamina- equipment seller should not even accept Bioburden Standards tion. Conducting microbial testing and DECONTAMINATION IN THREE STEPS pharmaceutical equipment into its facil- Bioburden standards are established in biological decontamination of used equip- While a company should have Good Manu- ity without validation of what it had pre- USP Chapter <1072> “Disinfectants and ment — before it is placed into service — facturing Practices (GMPs) unique to itself viously been used to manufacture. Any Antiseptics.” There are several options offers peace of mind to customers who are and/or dictated by FDA regulations or USP equipment that was used for β-lactam pro- that provide bioburden reduction ranging worried about bringing an outside system guidelines, manufacturers of biopharma- duction should not be bought and resold from Log3 (99.9%) to Log6 (99.9999%). Two into existing aseptic or controlled manu- ceutical and pharmaceutical finished unless the buyer is aware of the prior use of the most popular methods are standard facturing conditions. products must demonstrate that harmful and intends to use the equipment to manu- and advanced.

52 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 53 ++ Standard Treatment: Appropriate for most and biological performance is issued to the Common Equipment situations, this involves performing dry pharmaceutical manufacturer. The valida- Contaminants vapor fogging with pharmaceutical-grade tion should be placed in a file in the event equipment and EPA-registered peracetic of an internal or FDA audit.3 The report acid/hydrogen peroxide cold sterilant. is consistent with GMP compliance stan- • Bacterial spores ++ Advanced Treatment: This can be used for dards and follows the guidelines mandated • Fungi, mold and biofilms challenging or high-risk applications, or for by the associated decontamination equip- • Gram-positive bacteria equipment with complex geometries. The ment manufacturer. • Enveloped viruses process achieves sterilization results using chlorine dioxide gas with an EPA-registered ++ Biological Performance Validation: • Myco bacteria chemical sterilant and treatment protocol. Biological indicators inoculated with Log6 • Non-enveloped viruses Gas is used because vapor may not be as Geobacillus stearothermophilus bacterial • Gram-negative bacteria effective for reaching all of the hard-to- spores (ATCC 12980) are used to validate the • β-lactam (beta-lactam) reach areas. efficacy of the decontamination treatment. The biological indicators contain some of the most difficult to kill microorganisms and far exceed USP pharmaceutical requirements. Decontamination services can be sched- While decontamination can be performed uled on a pre-determined or emergency CUSTOMERS in less than one day, biological validation basis. The frequency becomes more pro- PURCHASING USED requires that samples be incubated for up nounced in the case of a Contract Devel- EQUIPMENT NEED to seven days. opment and Manufacturing Organization ++ Mechanical Process Validation: All process (CDMO) that works for multiple clients COMPLETE ASSURANCE steps are documented, including the proper and makes multiple changes in what it THAT THE MACHINERY chemical diffusion within the entire decon- produces. CDMOs have to ensure the item tamination zone. produced prior doesn’t cross contaminate When you PRESENTS NO ++ Chemical Process Validation: Specific the next batch, which may be a different RISK OF CROSS chemical strength levels and airborne vapor product altogether. In these cases, decon- think equipment, levels as measured in parts per million are tamination between batches of different CONTAMINATION. monitored and documented. products is essential. think Federal Equipment ++ Beta-lactam Validation: Mass spectrometry analysis is conducted by an internationally THREE POINTS TO CONSIDER renowned expert on beta-lactam contamina- 1. World-class equipment and facility bio- THINI tion, identification and remediation. decontamination services are a value- added service offered by a used equip- The bio-decontamination company will ON-SITE DECONTAMINATION ment reseller like Federal Equipment SHORTER assist the client in determining which In addition to decontaminating used Company. process is most appropriate. The goal is equipment prior to shipping, a decontami- 2. Pharmaceutical manufacturers with po- to select the least expensive option that nation company can go to a customer’s site tential cross contamination concerns LEAD TIME will achieve the desired consequence. to decontaminate equipment or complete can have them addressed by a certified facilities. This alleviates the customers’ bio-decontamination company and re- Federal Equipment Company has on-hand inventory in more than 200 3. Validation Performance Compliance burden or expense of having to purchase ceive validated compliance reports. categories, enabling you to source reliable processing and packaging Upon completion of the equipment decon- decontamination equipment, maintain it 3. Pharmaceutical manufacturers can save tamination process, and after receipt of and train people to use it. Instead, they can time and money by having a contractor equipment that’s housed in clean, climate-controlled warehouses. the β-lactam lab analysis, an extensive re- subcontract the process, saving both time decontaminate their used equipment We obtain much of our inventory by providing asset management port validating the mechanical, chemical and money. purchase before it enters their facility. P programs to large, multinational companies. This gives you a wide range of options to get the leading OEM-brand equipment you need from reputable sources installed and operating in your facility as fast as possible. No matter what your equipment needs are, make Federal ABOUT THE AUTHOR REFERENCES Equipment your first call. Matt Hicks Chief Operating Officer & Counsel, Federal Equipment Company 1. “Pharmaceutical Processing & Packaging Equipment Market: Global Opportunity Analysis and Industry Visit us at: Forecasts to 2022,” Meticulous Market Research Pvt. Ltd., Matt Hicks, Chief Operating Officer & Counsel at Federal Equipment Interphex 2018, Booth# 3110 Company, is a pharmaceutical industry veteran with more than July 2017. Web. 2. Asheesh Singh. et al., “Guideline For Establishing the Javits Center, New York, NY April 17-19 15 years of experience helping companies get the most value and Maximum Allowable Effectiveness and Sufficient Contact utility out of their manufacturing and process equipment assets. CPhI North America, Booth# 513 Time Period for Used as Disinfectant and Sanitization Pennsylvania Convention Center, Philadelphia, PA April 24-26 Solution,” Int. J. Pharm. Sci. Rev. Res., 45(2), July -August LinkedIn www.linkedin.com/in/matthicks/ 2017; Web. Email [email protected] 3. Brett Davis. Facility Sterilization & Bio-Decontamination, at The Ecosense Company, Interview. February 2018

+1 877 536 1509 > www.fedequip.com

54 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2017 > TOOL KIT FOR PATIENT-FRIENDLY DOSAGES

SPI PLANS TO WORK ON NPD INITIATIVES TO DEVELOP INNOVATIVE IDEAS AND TECHNOLOGIES TO INVESTING IN NEW EXPAND THE RANGE OF HIGHLY FUNCTIONAL EXCIPIENT SYSTEMS. TECHNOLOGIES FOR THIS IS ACCOMPLISHED BY LEVERAGING THE SYNERGIES OF EXCIPIENT INNOVATIVE FUNCTIONAL COMBINATIONS THROUGH VARIOUS COPROCESSING TECHNOLOGIES TO DELIVER COMPENDIAL MATERIALS SOLUTIONS (LOOKING FOR 1+1=3).

> BY SARATH CHANDAR, SPI PHARMA

Associated British Foods (ABF) and its Ingredients COMMITMENT TO GROWTH expertise. Products and technologies in- experts and customer-facing commercial different excipients are simply dry-mixed In January 2017, ABFI brought Jeanne clude excipients, microencapsulation folks. Market-relevant new ideas are dis- together in a formulation. The NPD group division (ABFI) are committed to growing their global Thoma on board as President and CEO of technologies for taste masking and con- cussed and prioritized, facilitating rapid also focuses on safely enhancing the per- pharmaceutical footprint. Included in this initiative are SPI and immediately embarked on the de- trolled-release applications, drug delivery product development. formance of APIs through microencap- significant investments in their pharma subsidiaries — velopment of a new strategic direction for platforms, fast-dissolve systems, efferves- sulation techniques to mask taste as well our company. Based on external market cent products, vaccine adjuvants based on R&D as adjust the release profile of the active one such subsidiary of ABFI is SPI Pharma (SPI), data, voice of customers, and input from Al2(OH)3 chemistry, and a variety of other The R&D group within AIG is responsible using aqueous media instead of a solvent- headquartered in the US. Following a reorganization across the organization, two strategic busi- creative offerings focused on building for new product/material development based system. ness units (SBUs) were created with dedi- patient-friendly dosage forms (PFDFs). (NPD), applications development/techni- All of the products in the SPI portfo- and finalization of its new growth strategy, SPI is cated business teams, and our global tech- cal support (ARTS), and drug develop- lio are characterized for functionality by re-engaging in innovation. As a result, SPI has created nical resources were consolidated into one FOCUSING ON APPLIED INNOVATION ment in patient-friendly dosage forms ARTS. They focus on understanding the a new team called the Applied Innovation Group (AIG). group — AIG. At SPI, applied innovation means market- (Pharmasolutions). cause-effect relationship in excipient The two business units are Antacids & relevant innovations that deliver solutions Given the number of excipients and oth- functionality. They also provide technical AIG is entrusted with developing innovative technologies Catalysts and Excipients & Drug Delivery to enhance convenience, compliance, and er materials approved for use in drug for- support to our customers that are using and drug formulations that will create new opportunities Systems (EDDS). SPI is one of the largest efficacy to patients (see Figure 1). To ac- mulations is finite and limited, SPI plans to our excipients and platforms in their drug for pharmaceutical and nutraceutical customers suppliers of immediate relief antacids, complish this, the AIG team is comprised work on NPD initiatives to develop innova- formulations. offering aluminum-, magnesium- and cal- of 3 distinct functions: R&D, strategic busi- tive ideas and technologies to expand the Pharmasolutions covers dossier develop- worldwide, while ultimately benefiting patients. cium-based actives. Several major brands ness development (BD), and technical busi- range of highly functional excipient sys- ment for out-licensing as well as custom- across the globe use SPI’s antacid actives. ness development. R&D works on material tems. This is accomplished by leveraging ized drug development service to meet The market drivers and innovation needs and drug development, while BD explores the synergies of excipient combinations customers’ specific needs. Our custom- for antacids and catalysts are quite differ- partnerships and licensing, and Techni- through various coprocessing technolo- ers benefit from the ability to market spe- ent from those of the products and servic- cal Development Managers (TDM) interact gies to deliver compendial materials (look- cialty drug products that are highly dif- es in the EDDS segment. directly with drug formulators in pharma ing for 1+1=3). Co-processing (co-drying, ferentiated in the marketplace. Pediatric The EDDS business offers a broad ar- companies. This new organization enables co-granulating, co-congealing, etc.) has and geriatric formulations developed and ray of products and technologies com- valuable cross-pollination and coordina- the potential to provide additional func- tested by SPI support our customers’ prod- bined with customized drug formulation tion amongst subject matter technical tional benefits that aren’t realized when uct lifecycle management, reducing risk

56 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 57 Figure 1 SPI’s Applied Innovation treatment of opiate addiction. The main > PARENTERAL DEVELOPMENT & MANUFACTURING those at our commercial production facili- focus of this agreement will be the devel- ties, enabling seamless product transfer to opment of unique products for treating Vetter Commercial Manufacturing, which opioid addiction by leveraging Noramco’s provides Phase III manufacturing through SPI’s Applied Innovation will enable experience with APIs and our expertise in to a global market supply. patient-centric formulations that provide functional excipient platforms and spe- SUPPORTING PARENTERAL At this level, Vetter offers a full range the following benefits and lead to improved cialized drug development capabilities. of services to deliver quality across the patient outcomes: In addition, Noramco and SPI will be de- supply chain, including fill & finish, ana- CONVENIENCE veloping drugs for the treatment of CNS DEVELOPMENT AND lytical services, regulatory support and • Innovative excipients and platforms conditions like migraines, epilepsy and product lifecycle management activities. that make drug dosage forms easy to pain management, using our drug deliv- These efforts are backed by measures manufacture, transport, and store. ery technologies and Noramco’s patented taken both downstream and upstream to They can be made small, robust, orally fast-dispersing with or without water, synthetic cannabinoid APIs. These APIs MANUFACTURING WITH strengthen security of supply, including and are easy to take. are expected to provide the therapeutic regular quality reviews of all suppliers benefits of cannabis without any of the and cross-linked IT systems to monitor COMPLIANCE EFFICACY problems or negative hallucinogenic side manufacturing processes. • Microencapsulation of APIs achieving • Examples of SPI’s excipient systems have END-TO-END SERVICES effects associated with consumption of For final packaging, Vetter Packaging So- taste-masking and extended release, led to faster/better absorption, resulting lutions matches client products with appro- when combined with innovative platforms, in lower quantity of active required to tetrahydrocannabinol (THC) in cannabis. results in PFDFs that are palatable and easy achieve similar therapeutic benefit, thus Oskar Gold priate drug-delivery systems (primary pack- to swallow, resulting in adherence to the reducing unwanted side effects. INVESTING FOR THE FUTURE Senior Vice President of Key Account Management and Marketing/ aging); and provides secondary packaging, dosage regimen. eg, Zolpidem tartrate, ED Drug SPI Pharma, backed by ABFI and ABF’s Corporate Communications, Vetter Pharma International GmbH such as cartoning or blister packing, and strong commitment to investment and other packaging services, including pen- LinkedIn www.linkedin.com/company/vetter-pharma growth, is focused on the development Email [email protected] system assembly, printing and labeling, and of innovative technologies, products and serialization. Our capabilities include cus- of failure while achieving speed to mar- plans. Once fully developed, the technolo- services that deliver functional value to tomized packaging development, special- ket. The business model is structured on a gies and products, whether developed in- our customers. Following the changes ized technologies, platform technologies, milestone-based fee for service. Since the ternally or in-licensed, are transferred to made during 2017, SPI Pharma is well LEVERAGING END-TO-END SUPPORT for different phases of the development and packaging and logistics services. inception of this service, SPI has estab- the SBU’s commercial team. positioned to meet the complex chal- The manufacture of biologic drug prod- and commercialization cycle can increase Clinical manufacturing is performed at lished a strong track record of helping lenges faced by our pharma customers. ucts, particularly those that require aseptic both cost and risk due to the need for tech- a dedicated facility in Chicago, USA and in customers successfully launch commer- STRATEGIC BUSINESS DEVELOPMENT We are developing new products using a processing, is quite complex and requires nology transfer activities. In addition, with Ravensburg, Germany, where Vetter also cial drug products for treating migraine, BD is responsible for partnerships and stage-gate process and actively exploring specialized expertise. Early and careful an end-to-end CDMO, knowledge gained operates three commercial facilities, a sec- Parkinson’s, schizophrenia, nausea, aller- licensing (in- and out-). They explore potential partnership opportunities. Our planning for the future can significantly during early development work is retained ondary packaging facility and a center for gy, erectile dysfunction, diarrhea, smok- partnerships with companies that offer mission is to deliver tangible benefits to contribute to the success of a develop- and can be applied during late-stage pro- visual inspection and logistics. P ing cessation and others in patient-centric unique/specialty ingredients/actives that, our customers, who have the same com- ment project. The involvement of an expe- cess development. formulations. A partial list of such prod- when combined with SPI’s products and mitment to bringing value to the ultimate rienced solution provider with end-to-end ucts with APIs and dosage forms is avail- technologies as well as drug development consumer: patients. These combined ef- capabilities contributes to the monetary PILLARS OF SERVICE able on our website: www.spipharma.com. A knowledge, will enable the development of forts will enable improved quality of life value of drug substances and formulated Vetter has long-term experience offering An Example of Vetter Innovation fully equipped drug development labora- unique solutions for our customers. for patients and ease the burden of care- products. These CDMOs can support drug services ranging from early development tory in India, staffed with scientists from The most recent example is the signing givers in terms of compliant administra- candidates from the development phase support including clinical manufacturing, major pharma companies, supports the of a Letter of Intent in October 2017 with tion and accurate dosage, while enabling through late development, market launch to commercial supply and various packag- At their core, aseptic processes and tech- Pharmasolutions initiative. Noramco, one of the largest producers of the growth of SPI, our customers, and our and subsequent commercial manufactur- ing solutions — to small, midsize and large nologies are designed to minimize any opioid agonists and antagonists for the partners. P ing, as well as lifecycle management activi- pharmaceutical and biotech companies. contact between a drug product and the outside TDM ties, maximizing the value of the complete We specialize in the aseptic manufactur- environment, thereby minimizing any chance for contamination. Historically, cleanrooms have The technical development managers are drug package. ing of prefilled syringes, cartridges and vi- employed either isolators or restricted access regionally focused and responsible for Smaller and virtual biotech companies als and have experience with monoclonal ABOUT THE AUTHOR barrier systems (RABS). Isolators are generally supporting pharma customers in the US, Sarath Chandar that lack the resources to focus on the com- antibodies, peptides, interferons, vaccines considered to provide the highest level of steril- Latin America, Europe, Middle East/Afri- Chief Scientific Officer, Applied Innovation Group plete drug package sometimes may fail to and other complex compounds. Our state- ity, but RABS offer greater flexibility and thus are ca, and Asia-Pacific regions. Each of these SPI Pharma achieve optimized outcomes. Partnering of-the-art technologies and innovative pro- suitable for realizing numerous filling projects in a single cleanroom. technical development experts provides with a trusted, full-service CDMO early in cesses are able to improve product quality Sarath Chandar is the Chief Scientific Officer, Applied Innovation Group, technical support for existing projects as the process offers a greater likelihood of and maximize API yields. In response to changing market needs and to of SPI Pharma. He has more than 30 years’ experience in the business meet the competing demands for the highest well as promoting innovative ideas devel- success. In addition, startups that pursue Vetter Development Service partners development of specialty ingredients for the consumer products and levels of quality and flexibility in aseptic process- oped by the AIG. They work closely with the pharmaceutical industries. Mr. Chandar earned multiple degrees, projects from the very start with the end with clients from preclinical development ing, Vetter has developed the Vetter CleanRoom commercial team, reaching out to senior including a BS in engineering from the Indian Institute of Technology, an goals (packaged final products) in mind of- through Phase III, planning for commercial Technology V-CRT®, an innovation that combines formulators around the world to identify MS in operations research from the University of Pittsburgh, and an MBA ten attract the financial assistance of large production from a product’s earliest stag- the advantages of isolators and RABS, bringing areas in which SPI’s capabilities connect from Case Western Reserve University in Cleveland. companies, relationships that can lead to es. Services include formulation support, together the safety and quality standards of iso- lator performance with the flexibility offered by with our customers’ drug product strate- out-licensing deals or even acquisitions. process development, clinical trial manu- LinkedIn www.linkedin.com/in/sarath-chandar-26989b36/ RABS. The company will implement this decon- gies. The AIG works closely with the SBUs Email [email protected] For both small and large drug develop- facturing and analytical and regulatory tamination concept in all of its cleanrooms within to ensure alignment with the business ers, using different outsourcing providers support. We develop processes that mirror the coming years.

58 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 59

PA_Q118_59_Vetter_S.indd 59 2/27/18 3:39 PM > CLOSED BIOPROCESSING WHY CLEANROOMS ANYWAY? improve, it became possible to detect even to another will have little impact on the At the inception of the biopharmaceuti- minute levels of contamination in biopro- quality of the drug when manufactured cal industry, with the production of anti- cess fluids. in a closed system. Our regulatory agen- biotics via fermentation, bioreactors Equipment, raw materials, airborne cies have recognized this, and for this were often located outside, with plumb- particles, clothing, packaging, etc., are reason, they are now inviting the manufac- ing inside in locations that experienced all sources of contamination of the envi- turers of biological APIs to perform these colder weather. Contamination of these ronment. However, personnel represent functions in unclassified environments processes was seldom an issue during the greatest source of contamination in (or “outdoors” as stated in the 2017 PIC/S fermentation, given that the cultures in cleanroom environments. Unless humans regulations1). question were of a short duration and the are removed from the bioprocessing organisms used produced antibiotics that environment, cleanrooms will always CLOSED AND FUNCTIONALLY inhibited the potential invasion of other represent a risk of contamination to an CLOSED EQUIPMENT contaminating species. In addition, the open bioprocess. Because of personnel The solution of removing bioprocesses analytical tools available at the time often and the bioprocess itself, the level and from classified cleanrooms can be could not detect traces of contaminating type of environmental contamination in achieved with closed or functionally organisms or chemicals. a cleanroom is ever-changing and thus closed equipment as defined in the Inter- Things changed with the introduction of impossible to control. As a result, clean- national Society of Pharmaceutical Engi- mammalian cell-culture-based processes rooms will never be more than moder- neers (ISPE) Baseline Guideline.2 A closed in the 1980s. The longer duration of the cell ately effective in mitigating the risk of system is validated to show that there are culture (from 24 hours to 12-180 days) and contamination of an open system except sufficient layers of protection to mitigate the lack of natural antibiotics produced by by reducing the level of contamination. the risk of contamination from the environ- mammalian cells resulted in a higher fre- ment. Importantly, the environment hous- quency of detected contamination rates of ing the system is not a critical aspect of up to 50%. Detected contamination rates THE KEY TO SUCCESSFUL the process, because the product is never of less than 5% were often considered exposed to the outside environment. Thus acceptable or even “ideal” given the limi- IMPLEMENTATION OF the risk of contamination in a closed sys- tations of the industry’s capabilities for CLOSED OR FUNCTIONALLY tem cannot be mitigated by housing the DEATH TO CLEANROOMS effective SIP, sanitary design and mainte- process in a bioburden-free environment, nance of an aseptic state. Today we know CLOSED SYSTEMS IS GOOD so why put it there? that the failures were largely due to the DESIGN. A functionally closed system is a system fact that the equipment was not appropri- that is routinely opened, but then returned ately designed for aseptic operations. The to a closed state via cleaning, sanitization IN BIOPHARMACEUTICAL biopharmaceutical industry’s response to or sterilization prior to product contact. this deficiency was to move bioprocesses The only real solution to prevent con- The process, when run in a closed manner, into cleanrooms, where the levels of bio- tamination is through the use of closed does not expose the raw materials, in-pro- burden were lower, thus reducing the level equipment. Closed equipment is equip- cess materials or bioprocessing fluid to the of bioburden to which our process streams ment or systems designed to be cleaned operators or environment. The cleaning MANUFACTURING were exposed. This solution was success- and/or sanitized to a point where the risk and/or sanitization/sterilization process ful at reducing the frequency of detectable of contamination from environmental must be validated to confirm the return of contamination rates to 5%-10%, so the sources during product contact is fully the system to a functionally closed state. > MARC PELLETIER, Ph.D., CRB strategy of moving bioprocesses into clean- mitigated. This includes single-use equip- The American Society of Mechani- rooms was adopted. The irony is that actual ment and equipment designed to be CIP’d cal Engineers (ASME) Bioprocessing contamination rates likely remained the and SIP’d between operations. With such Equipment Standards Committee (BPE) same. Only by improving the integrity of the an approach, a process will only fail if there is charged with developing a standard equipment used can one truly mitigate the is an unusual event or malfunction of the covering the design, materials, construc- For as long as most of us can remember, the manufacture and purification risk of contaminating a bioprocess from equipment. An effectively closed process tion, inspection and testing of bioprocess- environmental elements. Unless one works cannot be contaminated because of com- ing equipment such as vessels, piping of biologic drug substances has mostly been performed in cleanrooms. in a bioburden-free environment (Grade A/ mon human failures such as a torn glove, and related accessories, such as pumps, Recently, advances in the design, form, function and operation of bioprocessing ISO 5), the risk of contamination of an open insufficient or inappropriate gowning, a valves and fittings, for use in the biophar- equipment has made it possible to close — or functionally close — biological operation cannot be totally eradicated. cleanroom suite door that was improperly maceutical industry. The ASME BPE stan- (or untimely) opened or closed, or because dard3 establishes requirements for the active ingredient (API) manufacturing operations. As expressed in the most CLEANROOMS WILL NEVER BE too many personnel were present in the design of bioprocessing equipment and recent regulatory guidelines (PIC/S 2017, Annex II), closed bioprocessing can be CLEAN ENOUGH suite during critical operations. If good addresses the design features required for The observed contamination rates were science and process analytical technology effective cleaning and sanitization of that moved into simpler, unclassified environments and even outdoors! This strong achieved because existing analytical capa- are implemented, equipment can be appro- equipment. The BPE is working to estab- endorsement of closed processing provides enormous opportunity and cost bilities were limited, and therefore could priately closed by CIP and/or SIP and veri- lish design standards for equipment for all not detect the lower levels of bioburden. fied as closed. Personnel errors in gowning biopharmaceutical unit operations that are benefits to drug manufacturers. As analytical detection limits continued to or transitions from one cleanroom zone single use or can be cleaned and sterilized/

60 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 61 sanitized for the purpose of effectively open processes that can be readily cleaned stated above, the regulators are helping > STERILE INJECTABLES PREFERRED PARTNER FOR closing the system in which this equipment and sanitized. paint a clearer picture of what the real INJECTABLES MANUFACTURING is used. With current technology available, standards should be for the manufacture The newest dosage form for Chemo CMO it is possible to eliminate the environment SOCIETIES/STANDARDS/GUIDELINES/ of biopharmaceuticals. is sterile injectables. There is growing de- as a factor for the contamination or adul- TECHNICAL REPORTS AND THE mand for these products, but quality and teration of virtually all bioprocesses. REGULATORY AGENCIES DEATH TO CLEANROOMS MEET CHEMO CMO: capacity remain significant issues. Drug Unfortunately, some unit operations that Among the challenges facing biopharma- Biologics manufacturers should be invest- developers looking for CMO partners with have always traditionally been performed ceutical manufacturers are the numerous ing in process closure in lieu of investing sterile injectable capabilities are, for that in open systems continue to be performed regulations, standards and guidelines in outdated, heavily customized, non-sus- PREFERRED PARTNER FOR reason, willing to look outside North Amer- in this manner. Today, most — if not all — applicable to bioprocessing. In addition tainable cleanrooms. The transition of our ica for manufacturing partners with state- of these processes can be performed in to the ISPE Baseline Guidelines and the biopharmaceutical industry from open of-the-art facilities and the assurance of closed or functionally closed systems. If ASME BPE standard, the Parenteral Drug processing in cleanrooms and into closed high reliability and quality. the goal of 100% closed processing can be Association (PDA) has issued a series of processing is encouraged by regulators INJECTABLES MANUFACTURING Chemo Industrial CMO is one of those achieved, the need for cleanrooms can be technical reports with guidance on how to as well as other organizations responsible partners. Our Universal Farma (Madrid eliminated completely. Doing so is not only clean, sanitize and sterilize systems. And for publishing key bioprocessing guide- area) and Farmalan (León) sites are new safer for the operators, the manufacturing a consortium of biopharmaceutical manu- lines. This strong endorsement of closed Masha Kononov, MS production facilities focused on sterile in- process and ultimately for the patient, it facturers called the BioPhorum Opera- processing provides enormous opportu- Sr. Commercial Manager, Chemo jectable manufacturing, with the Farmalan can also significantly reduce the cost of a tions Group is testing and challenging nity and cost benefits to drug manufac- facility dedicated to hormonal products. LinkedIn www.linkedin.com/in/mashakononov/ unit operation from both OPEX and CAPEX some of the former legacy paradigms and turers. Simplifying the design and con- Email [email protected] Aqueous solutions, oily formulations, sus- perspectives. A cleanroom typically car- approaches (many of which have become struction of a biopharmaceutical facility pensions and lyophilized products can be ries a capital cost of approximately $2000- folklore) and presenting new concepts to and the operation of an unclassified man- produced at these plants in single- and $3000 per square foot, compared to $200- be considered in a series of white papers. ufacturing environment results in huge multi-dose vials and prefilled syringes. $400 per square foot for a high-quality Current good manufacturing practices capital and operational cost savings, and Aseptic filling and freeze-drying services unclassified environment suitable for issued by the USFDA (laid out in the Code therefore fewer deviations and failures. are provided at both facilities. Universal housing a closed operation. of Federal Regulations, CFR) and the Euro- The use of closed integral equipment also Farma also has capabilities in terminal Closed processing can be achieved pean Medicines Agency (EMA, laid out in results in lower risks to the patient. May sterilization, and unique and much-needed either by designing closed equipment or the Eudralex in Annex I for drug products the next five years lead to improvements capability for API sterilization. placing the open process inside a closed and Annex II for drug substances), as well in equipment design, and ultimately to tarted in 1977 as an API trading Chemo also manufactures OTC and ani- API sterilization is, in fact, a unique system such as an isolator. Whether using as similar regulations in Japan, China and the death of cleanrooms in ”Back to the business focused on supplying mal health products. capability, and particularly important traditional stainless-steel tanks that are many other countries, must be complied Future Facilities™” for biopharmaceuti- high-quality drug substances Our comprehensive integrated quality for products formulated as suspensions. functionally closed by CIP and SIP or using with by producers of biologic APIs and for- cal manufacturing. P to the pharmaceutical market, and safety management system ensures This capability is offered both to clients single-use (SU) systems that are closed by mulated products. Insud Pharma (including Chemo, Exeltis manufacturing in accordance with cGMP that come to Chemo CMO with fill/finish gamma irradiation or by housing a process The Pharmaceutical Inspection Con- and mAbxience) is today a global enter- requirements and international pharma- projects that require sterile APIs and as within a properly conditioned isolator, vention (PIC) is working to address this prise manufacturing generic APIs and ceutical industry standards across our a standalone service. API sterilization is these options all represent a more cost- issue through the development of harmo- REFERENCES Finished Dosage Forms — and offering entire manufacturing network, which com- obtained using aseptic filtration, with two effective strategy that represents much nized regulations. The PIC consists of 52 comprehensive contract services for drug prises eight state-of-the-art manufactur- possibilities — either micronization for 1. Pharmaceutical Inspection Convention / Scheme (PIC/S). lower risk to the patient. participating authorities from all over the Guide to Good Manufacturing Practice for Medicinal Products products manufacturing. Chemo CMO re- ing facilities and eight R&D centers that particle size reduction or bead milling to world. The group has created a new series Part II. January 2017. Web. cently expanded its capabilities with the are inspected regularly by FDA, EMA and create suspension dispersion. This area is RISK ASSESSMENT AND VALIDATION of guidelines based on the European regu- 2. Baseline Guideline Volume 6: Biopharmaceutical addition of state-of-the art sterile inject- local regulatory authorities. segregated from the rest of the plant and Manufacturing Facilities. Bethesda, MD: International Society OF DESIGN able manufacturing facilities. Innovation and technology is the driving serviced by a dedicated CIP/SIP system. lations but updated in more user-friendly for Pharmaceutical Egineering, 2013. Print. The key to successful implementation of language. Together with the societies 3. ASME BPE Standard force of our business and is the backbone The new facilities are state-of-the-art closed or functionally closed systems is TURNKEY SOLUTIONS FOR THE FULL of our operations. We regularly invest in and designed to be flexible. They were good overall design. Good design includes PHARMACEUTICAL VALUE CHAIN R&D to develop complex dosage forms, constructed so that the unique require- the use of connectors that are designed, ABOUT THE AUTHOR Chemo is part of the Spanish multina- optimize manufacturing processes, and ments of each sterile injectable manufac- installed and used correctly, effective ster- Marc Pelletier, Ph.D. tional, Insud Pharma, a large, diversified ensure a dynamic and useful portfolio of turing project can be accommodated. Vial ilization/sanitization procedures, appro- Director, CRB pharmaceutical company with an entre- capabilities. Chemo’s strong commitment and syringe filling line work under grade priate validation, effective monitoring preneurial spirit and commitment to con- to continual growth is reflected by the re- A (in RABS), and grade B and grade C for- and compliant documentation. Until all of Marc Pelletier, Ph.D., is an internationally recognized biopharmaceutical tinued investment in infrastructure and cent construction of two new manufactur- mulation and filling areas are present at process specialist. An industry leader in the area of fermentation and these criteria are met, a system should not expertise to support its ever-widening ac- ing facilities in León, Spain dedicated to both sites. cell-culture-based bioprocesses, Marc has helped to revolutionize closed be considered closed. tivities. Chemo CMO is the latest division sterile hormonal products and in Madrid As a dynamic company with a truly bioprocessing in the biopharmaceutical industry. He was main contributor CRB has developed a risk-assessment for the ISPE Baseline Guideline on Biopharmaceutical Manufacturing to be added to the group. for sterile injectable manufacturing using entrepreneurial spirit, yet with long- tool that helps its clients assess the poten- Facilities. He also continues to serve on the ASME BPE Standards Chemo produces over 100 molecules state-of-the-art technology and the highest standing expertise in pharmaceutical de- tial for ingress of environmental con- Committee after two decades. While his primary expertise is in upstream (steroids, hormones, prostaglandins, quality standards. velopment and manufacturing, we are ea- taminants into their processes. We have and downstream unit operations, Marc also has extensive experience prazols and antibiotics) and 50 formulat- Chemo CMO’s manufacturing exper- ger to expand into new activities and have also created methodologies to mitigate in the area of plasma fractionation. ed products in a variety of dosage forms tise and flexible capacity provide a fast much to offer our customers. Clients can these risks. As part of the ASME BPE, (tablets, capsules, granules, inhalers, path to client drug approvals, making us benefit from co-development opportuni- LinkedIn www.linkedin.com/in/mppelletier/ we are actively involved in the design of Email [email protected] topicals, injectables and suspensions) the preferred CMO partner across all ma- ties and the greater freedom for creativity functionally closed solutions for existing covering all major therapeutic areas. jor dosage forms. at Chemo CMO. P

62 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMSALMANAC.COM 63

PA_Q118_63_Chemo_S.indd 63 2/27/18 3:37 PM > BIOLOGICS Development Services

he biopharmaceutical market located in Incheon, South Korea, custom- continues to grow at a healthy ers receive truly integrated services while DEVELOPMENT pace, though intensive capital minimizing unnecessary costs. FULLY SUPPORTING and expertise requirements Analytical capabilities include analytical • Cell Line Development often pose barriers to develop- method development, qualification/valida- • Upstream/Downstream Process ment. At Samsung BioLogics, tion, comparability studies, release test- Development we believe that a quality-driven ing, and stability testing. For clients look- • Scale-up Studies contract development and manufactur- ing only for analytical support, Samsung T • Process Characterization CUSTOMER NEEDS FOR ing organization (CDMO) that is designed BioLogics provides Standalone Analytical SUPPORT SERVICES to be flexible and multi-product focused Testing services. Regulatory experts also • Analytical Method Development can operate more efficiently and cost-ef- provide support to clients throughout a • Bioassay Development • Project Management fectively than internal biopharmaceutical project, including assistance with the fil- • Lyophilization Development and • Technology Transfer manufacturing organizations. Given the ing of biologics license applications (BLAs). Optimization BIOLOGICS DEVELOPMENT • QA/QC — Analytics unified focus of a CDMO, Samsung Bio- • Stability Testing Logics can maintain a high level of quality WORLD-CLASS CAPABILITY IN QUALITY cGMP CONTRACT MANUFACTURING • Regulatory Support and compliance, while reducing the cost of AND PRODUCTION SCALE • Mammalian Cell Culture (Clinical & new biologic drugs and accelerating their In just seven years, Samsung developed Commercial) • Raw Material Management development and commercialization. world-leading single-site production ca- AND MANUFACTURING • Fill & Finish (Liquid/Lyophilization) • Product Release Testing pacity with the construction of three plants. INTEGRATED DEVELOPMENT SERVICES – Plant #1 began production in May 2011 with > BY JAMES PARK, SAMSUNG BIOLOGICS CLINICAL TO COMMERCIAL a capacity of 30,000 liters, followed by Given the dramatic success achieved in Plant #2 in September 2013, which added commercial-scale biologics manufacturing an additional 152,000 liters. Plant 2 was in just six years, Samsung has expanded cGMP-ready for drug substance produc- core categories: overall quality, reliability, is a highly talented and committed work- services to include the production of non- tion as of February 2016. FDA and EMA ap- capabilities, expertise, compatibility, and force dedicated to client satisfaction clinical and clinical trial materials. provals for production of its first monoclo- development. Samsung BioLogics also and integrity. In its DNA is an insatiable Customers can receive support for cell- nal antibody were received in October and received recognition at the Asia-Pacific focus on operational excellence in every Over the past seven years, Samsung BioLogics has line development, upstream/downstream December 2017, respectively. Bioprocessing Excellence Awards 2017 aspect from process development, to tech constructed three state-of-the-art production facilities process development and optimization, Groundbreaking for Plant #3, adding an in Singapore (in quality and manufactur- transfer, to manufacturing execution. and analytical development. Leveraging additional 180,000-liter capacity, was held ing speed), and Best CMO in Korea Award Ultimately, Samsung BioLogics under- offering end-to-end integrated services to support the rapidly new 50 L and 200 L bioreactors in the de- in November 2015. Construction of this fa- 2017 and in 2018 “Best CMO to Watch Out stands that on the other side of every expanding clinical and commercial needs of customers. velopment lab and 2 x 1000 L bioreactors cility — one of the world’s largest biologi- For in 2018” by Korea & Company. product it produces is a patient who is Building on successful FDA, EMA, and PDMA approvals in for clinical manufacturing, every step is cal drug production facilities — was com- Samsung has rapidly built a strong depending on the quality and efficacy of geared toward developing a fully compliant pleted at the end of 2017. When this plant track record in the biologic manufactur- that product. At Samsung, we never lose Plants 1 and 2, Samsung BioLogics increased capacity with and efficiently scaled-up manufacturing is cGMP ready in Q4 of 2018, Samsung Bio- ing industry on the foundation of world- sight of our responsibility to deliver for Plant 3 (12 x 15,000 L bioreactors) and offered expansion process to 15,000 L bioreactors. Samsung Logics will have a total production capac- class quality and compliance. At its core our clients and their patients. P BioLogics’ experts use scientifically sound ity of 362,000 liters and will be the world’s of developmental capabilities, including Analytical Testing techniques and statistically meaningful largest biopharmaceutical CDMO. Lab, Process and Product Development, and Cell-Line analysis methods to reach optimal titer With the completion of the third bio- Development Laboratory services to further support a values and improved yields to fully support manufacturing facility, Samsung BioLog- ABOUT THE AUTHOR production of drug substances for use in ics has the ability to reliably supply large James Park growing customer base. clinical studies. volumes of biologic APIs and formulated Senior Vice President and Global Head, Business Development Center The development services complement products to the global biopharmaceuti- Samsung BioLogics existing capabilities in cGMP mamma- cal market at the most competitive cost. James Park is the Senior Vice President responsible for the Business lian cell-culture manufacturing and down- In six years, Samsung BioLogics has re- Development Center of the Samsung BioLogics. Prior to joining SBL in 2015, stream processing (centrifugation, depth ceived 11 manufacturing approvals from Mr. Park held technical and operational positions in biopharmaceutical filtration, chromatography, virus removal regulatory authorities (US, Europe, Japan, companies in the US. From 2004-2015, Mr. Park participated, led, and and ultrafiltration/diafiltration). Drug prod- and Korea) and won over 16 product manu- directed CMC due diligence on assets ranging from pre-clinical to uct services include aseptic fill and finish facturing orders. commercial products and managed BD activities including Licensing, Outsourcing and M&A at Bristol-Myers Squibb. Mr. Park holds a BS in (lyophilization development, aseptic vial Samsung has earned a reputation for Chemical Engineering from University of California, Davis and an MS in filling for liquid or lyophilized products) reliable, high-quality services. In 2017, the Industrial Engineering & Operations Research from Columbia University. and full visual inspection and warehous- organization was recognized by Life Sci- ing. Since Samsung BioLogics can produce ence Leader Magazine as a CMO Leader- LinkedIn www.linkedin.com/in/park73/ both high-quality bulk drug substances and ship Award winner for the fourth consecu- Email [email protected] drug products in multi-product facilities tive year, winning awards in all of the six

64 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 65 > API MANUFACTURING and optimization, and GMP manufacturing as a flexible asset with the ability to accom- BuLi, which also suffered from high levels at the kilogram-scale can accelerate devel- modate additional specialized equipment of impurities. ALL AVARA SITES opment timelines and help their customers as needed by individual processes. The Avlon also implemented a program of ARE COMMITTED TO more rapidly get into the clinic. reactors are designed to handle flammable improvements that drove down manufac- solvents and have varying temperature ca- turing costs by 38% and improved the yield DELIVERING RELIABLY, TO INTEGRATED OFFERING: AVARA pabilities ranging from -80°C to 200°C. Au- from 70% to 95% through reduction of the THE HIGHEST-QUALITY PHARMACEUTICAL SERVICES tomation software provides temperature use of expensive starting materials. Manu- At Avara, our API services are provided by and agitation control, process monitoring facturing productivity increased plant out- STANDARDS, WHILE sites in Avlon, UK and Shannon, Ireland. and data recording. put 6-fold with the same assets and staff- USING OUR SKILLS Both sites have a proven track record and ing through application of Lean Principles. vast experience in developing optimized EXPERIENCE WITH GMP MANUFACTURING Operational efficiency projects, chem- AND EXPERIENCE TO routes to complex molecules, including The Avara Process Development Groups istry improvements and process safety REDUCE COSTS AND hazardous processes. We have strong tech- have a proven track record of developing improvements were achieved over sev- MANAGE SUPPLY nology transfer records and cGMP manu- API processes from Phase I/II to Phase III/ eral years. Processes have been simpli- facturing environments supported by the commercial scale, as well as in process fied, variability significantly reduced, and CHAIN ISSUES. latest processing and finishing technolo- scale-up and optimization, process valida- many manual interventions removed. For gies and excellent FDA and MHRA inspec- tion and technical transfer, and analytical instance, process concentrations were tion records. method development/validation. Experts increased through the application of Fac- MEETING THE NEED FOR Shannon adds value with different mill- at both Shannon and Avlon have developed torial Experimental Design. In addition, recognition for our performance in all ing and blending technologies, while Av- processes and analytical methods for new many process steps were optimized in the six Core Award Categories: Capabilities, lon is a top-tier Control of Major Accident chemical entities from lab to commercial plant through lab development work, in- Compatibility, Expertise, Quality, Reli- Hazards (COMAH) site. For kilogram-scale scale and demonstrated their technology cluding the improvement of temperature ability and Service. This award reflects manufacturing, the capabilities of the two transfer capabilities. In one example, sig- ranges, optimization of reaction times the success we have achieved by mak- SMALL-VOLUME sites are complementary and support pre- nificant cost savings were achieved intro- and drying and wash cycles, and enhance- ing a total commitment to our customers clinical through Phase III projects. Togeth- ducing novel hydrogenation enantiomeric ment of automated controls for reduction and delivering on our promises for scope, er these two sites leverage their capacities resolution and salt exchange steps; and of wait times in the plant. schedule, quality/regulatory compliance and experience to serve as key compo- re-engineering the crystallization process and price. P nents of our strategic global manufactur- using Optimax modeling software and ON-TIME, IN-FULL DELIVERY API MANUFACTURING ing model. FBRM particle size analysis technology. All Avara sites are committed to delivering Special Thanks to Gary Butler, Vice President & Avlon Site Director and Werner Kunz, Vice President & Shannon Site In another example, process step improve- reliably, to the highest-quality standards, Director for their contribution to this article. > BY JIM SCANDURA, AVARA PHARMACEUTICAL SERVICES FLEXIBLE SMALL-SCALE MANUFACTURING ments were made, and overall yield was in- while using our skills and experience to CAPABILITIES creased through numerous enhancements, reduce costs and manage supply chain The Shannon multipurpose, flexible GMP- including modification of the crystalliza- issues. Shannon and Avlon exemplify this REFERENCES approved kilo plant has two reactors (65 tion process, which allowed for elimina- approach as both sites have established

and 70 L glass-lined and stainless-steel) tion of a micronization step. Commercial impressive records. In 2017, each site had 1. Number of Registered Studies Over Time, ClinicalTrials.gov. and advanced isolation/purification equip- processes were also developed involving an OTIF KPI greater than 99%. 12 Feb. 2018. Web. ment (Hastelloy centrifuge and inline Cu- a patented alternative o-methylation pro- As a testament to this, Avara has won 2. Jim Miller. “Small-Molecule API CMOs are Thriving.” BioPharm International. 1 Oct. 2015. Web. s the pharmaceutical industry clinical trials are increasing at a dramatic noi filter). A Jet Pharma MC-150 is available cess that replaced a process requiring a a 2018 CMO Leadership Award from Life 3. Novel Drugs 2017 Summary. Rep. U.S. Food and Drug shifts its focus from blockbusters rate. On ClinicalTrials.gov, the number of for pilot-scale milling. The kilo plant is sup- phase-transfer catalyst and pyrophoric Science Leader magazine, receiving Administration. Jan 2018. Web. to targeted therapies and advanc- studies listed based on the first submitted ported by fully equipped cGMP analytical es rapidly expanding numbers of date has increased from 5,627 on January 1, laboratories, a material staging area and ABOUT THE AUTHOR increasingly complex molecules 2001, to 263,689 on January 1, 2018. In just waste-management capabilities. Hydroge- Selected Capabilities into clinical trials, the demand for active over one month, the latter number rose to nations can be performed in the facility, as Jim Scandura pharmaceutical ingredient (API) manufac- 265,793 (February 11, 2018).1 can reactions at -30°C to 160°C. Executive Vice President, Chief Operating Officer, turing capabilities at the kilogram scale is Many of these candidates — approxi- Avlon is in the process of reopening an Avara Pharmaceutical Services Small-volume GMP manufacturing capa- increasing. CDMOs with broad chemistry mately two-thirds — are based on small- existing GMP small-scale manufacturing bilities at Avara encompass a broad array capabilities, extensive experience, a track molecule active pharmaceutical ingredi- facility suitable for the production of APIs Jim Scandura has a wealth of pharmaceutical industry experience of chemistries and technologies. In addition to through projects with i-Solutions — a Life Sciences specialty consulting record of performance and the flexibility ents (APIs).2 In 2017, 33 of 46 novel drugs and intermediates on the kilogram-scale. performing all traditional reactions, we are par- company. He has managed three major pharmaceutical manufacturing to offer both non-GMP and GMP services approved by the FDA’s Center for Drug The systems and equipment are being mod- ticularly adept at hazardous chemistry, such as network change programs, three consent decree recovery efforts, over at the large-laboratory/small-volume pro- Evaluation and Research (CDER) were for- ernized to facilitate many types of complex nitrations, hydrogenations and organometal- 30 manufacturing-site audit and operational improvement efforts, duction scale are ideally positioned to mulated using small-molecule APIs.3 Effi- chemistries and include six reactors (20- lic transformations. We can conduct cryogenic integration of a large R&D center, and the direct management and meet the needs of the marketplace. cient and economic synthetic routes must 100 L) and various equipment for the isola- chemistry, milling and crystallization at the lab integration of several manufacturing sites. Mr. Scandura has experience to kilogram-scale. We have expertise in chiral be developed for the production of APIs tion (vacuum Nutsche filters, Buchi rotary working for Bristol-Myers Squibb, GSK, Roche, Valeant, Patheon, Aptuit chemistry and both chemo- and biocatalysis, and many other pharmaceutical companies. Previously, he was Senior FLEXIBLE GMP SMALL-VOLUME API that will ultimately be formulated into clini- evaporator, vacuum/pressure filter, centri- too. Avara also has the necessary licenses and Vice President at Johnson Controls Inc. and, prior to that, served in the MANUFACTURING cal trial materials. Contract development fuge) and drying (oven tray dryers) of solid permits for the manufacture of scheduled drugs US Navy Nuclear Submarine Service. Innovation in the pharmaceutical indus- and manufacturing organizations (CDMOs) compounds under GMP conditions. (controlled substances). try has never been greater. The numbers that have extensive experience and capa- To increase capabilities, the GMP small- LinkedIn www.linkedin.com/in/jimscandura of novel therapies entering all stages of bilities in both API process development scale manufacturing facility was designed

66 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 67 > MICROBIAL FERMENTATION WHY FERMENTATION? The addition of the new lab increases and solvent screening, process parameter are designed to handle multiple projects Biologic drug substances can be produced Capua’s flexibility and enables us to pro- optimization, scale-up and cGMP spray in parallel from lab scale to pilot scale using cell-culture or microbial fermenta- vide a more complete on-site offering and drying, stability testing and QA release. to commercial scale. Our development, tion processes. For many larger biomol- support seamless technology transfer. optimization and commercial production ecules, cell culture is the method of choice. The new facility includes upstream, down- CAPACITY AND FLEXIBILITY activities are supported by an on-site Microbial expression using bacteria, yeast stream and basic in-process control areas. In order to best support our customers, GMP-qualified QC laboratory where or fungi is generally preferred for smaller Upstream equipment includes shaker-in- Capua BioServices has designed its facility biological and chemical assays are per- biologics. The microbes used in pharma- cubators, autoclave, biohazard hood, sev- to be very flexible and developed exper- formed for raw material, in-process con- ceutical manufacturing are genetically eral autoclavable (2L) and in situ steriliz- tise in a broad diversity of process types trol and final product release testing. engineered to produce large quantities of able (15L) fermenters with control system, and processing technologies that can be biologically active substances, including while downstream includes large-capacity applied at development to commercial UNIQUE POSITION peptides, proteins, cytokines, growth fac- bench centrifuge, high-pressure homog- scale. Our site in Capua contains dedicat- Product development, applications and tors, plasmid DNA, single-domain antibod- enizer, multiple configurable automatic ed manufacturing areas for pharmaceuti- regulations in the pharmaceutical and ies, peptibodies and antibody fragments. skids for microfiltration and ultrafiltration, cal products and is regularly audited by food industries are getting closer and For these compounds, microbial fermen- GE AKTA pure chromatography system up the US FDA, EMA and specific European closer. More often, it may be unclear tation offers several advantages over cell to 150 mL/min with 16 to 100 mm diameter country authorities. With a total fermen- whether a particular product is a medici- culture. The processes are typically much columns, and several process vessels and tation capacity of about 1400 m3 spread nal product, food product/supplement, shorter, less complex and generally more pumps. Basic in-process control is pres- over two separate fermentation areas, it cosmetic, medical device or biocide. economically attractive. Media compo- ent directly inside the facility with UV-VIS, is one of the largest independent beta- With quality systems and certifications nents applied are often free from animal- HPLC, pH, conductivity, refractometry, lactam-free microbial contract manufac- in place to manufacture medicinal prod- derived components, and associated costs multiple scales, etc. The lab is served by turing facilities in Western Europe. The ucts as well as food-grade products, we are much lower as compared to cell culture. HVAC, filtered industrial steam, deionized site also houses comprehensive down- are perfectly experienced and set up water, brine and oil-free compressed air. stream processing, formulation and final to support clients navigating through FERMENTATION FOCUS product filling and packaging areas. the landscape of these so-called “bor- Capua BioServices (formerly known as Capua’s seven (soon to be eight) distinct derline products.” Capua BioServices is Patheon Capua and DSM BioSolutions) recovery/purification plants include a GMP FDA approved since 1970 and FSSC is an independent, global provider of mi- MICROBIAL large diversity of unit operations, which 22.000 certified since 2016. P crobial custom development and manu- facturing services. Located in Capua, EXPRESSION USING near Naples, Italy, we began operating as BACTERIA, YEAST OR Capua BioServices in July 2015. We have ABOUT THE AUTHORS Elise Mous more than 50 years of experience apply- FUNGI IS GENERALLY Director Sales & Marketing/Business Development, Capua BioServices ing bacterial, yeast and fungal systems for PREFERRED FOR the production of proteins, enzymes and Elise Mous joined Capua BioServices in 2015 as Director Sales small molecules at the lab, pilot and com- SMALLER BIOLOGICS. & Marketing / Business Development to further strengthen and mercial scales. develop Capua BioServices’ positioning as a microbial CDMO. She FOCUSED ON We have an extensive track record of started her career at DSM in 2004, followed by Patheon in 2014, developing and optimizing robust, cost- and during the past 8 years built up her international business development experience in the field of custom research, development effective, high-quality microbial fermen- and manufacturing services. Mrs. Mous holds an MSc degree in tation processes for the pharmaceutical EXPANDED SPRAY DRYING FACILITY managerial sciences next to a BSc degree in chemistry/biotechnology. FERMENTATION and food markets, as well other specialty In 2017, Capua BioServices opened a new applications. Some of the microbes with spray drying facility to provide our cus- LinkedIn www.linkedin.com/in/elisemous/ which we have expertise include Esch- tomers with a technical and economically Email [email protected] > BY ELISE MOUS AND THOMAS DE MARIA, CAPUA BIOSERVICES erichia coli and Bacillus spp, Saccharomy- attractive alternative to lyophilization, ces spp, Klyveromyces lactis, Pichia pas- crystallization and micronization. Spray toris and Aspergillus spp. We also have the drying allows the production of stable Thomas De Maria Business Development Manager, Capua BioServices Microbial fermentation continues to be an important requisite permits and capability to work formulations of dry powder proteins, with GMO strains. peptides, monoclonal antibodies and upstream bioprocess for the production of conventional Thomas De Maria joined Capua BioServices in 2017 as Business vaccines and can often enhance the bio- Development Manager to further Capua BioService’s market and next-generation biologics. Capua BioServices LABORATORY INVESTMENTS availability of poorly soluble compounds. development in North America. Prior to Capua BioServices, Mr. continues to invest in the latest laboratory and process- Recently, Capua opened a new laboratory It also enables precise engineering of De Maria was the founder of Avventura Consulting, supporting start- facility that further strengthens our abil- particle size and the embedding of mi- up life science companies seeking to develop business and market scale equipment and analytical capabilities to support ity to conduct lab and pilot-scale activi- croencapsulation technology. The facil- opportunities for their inventions. Prior to consulting, he worked for Saltigo GmbH, a small molecule CMO. Mr. De Maria has completed ties. The investment is intended to better ity includes pilot-scale equipment and a modern fermentation. MBA studies at University of Washington and holds a B.S. in biology. support the onboarding of new projects cGMP spray drying suite with evaporation and facilitate the development of pro- capacities of approximately 3-5kg and LinkedIn www.linkedin.com/in/tdemariaseattle/ cesses from the start that will be practical 100kg of water/hour, respectively. Our Email [email protected] for sustainable, large-scale manufacturing. spray drying services include excipient

68 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 69 CONNECT YOUR > LYOPHILIZATION mized lyophilization cycles are developed NICE MATCH: CONNECTING BUYERS WITH SUPPLIERS PROJECT WITH at the bench to client specifications, then THE RIGHT scaled-up to manufacturing levels. Thermal characterization and analytical develop- PARTNER AND ment are available as stand-alone projects Matching Buyers & Suppliers CAPACITY LEVERAGING LYOPHILIZATION or integrated into larger projects. AB BioTechnologies also offers Good Bridging Capacity & Demand Laboratory Practice (GLP) manufacturing DEVELOPMENT EXPERTISE FOR services. We can perform your early-stage development work and produce material for your pre-clinical/toxicity studies at one Nice Match is Launching at DCAT facility, streamlining the path to the clinic. CONTACT NICE MATCH CLINICAL MANUFACTURING Nice Match introduces opportunities from buyers to the relevant CONFIDENTIALLY AT FROM DEVELOPMENT TO MANUFACTURING member of an exclusive group of contract service suppliers known to We are taking another step to further +1 212 366 4455 or visit have the right technology, expertise and available capacity. After an Jeff Schwegman, Ph.D. streamline the path to the clinic by add- www.NiceMatch.com Founder & CEO, AB BioTechnologies, Inc ing small-volume production capabilities 18-month beta test, Nice Match will be launching at DCAT 2018. Visit to learn more in compliance with current Good Manu- LinkedIn www.linkedin.com/in/jeff-schwegman-95b79514/ www.NiceMatch.com to learnBUYERS more about this exciting new offering. facturing Practice (cGMPs). With this $12 BUYERS Email [email protected] million expansion, AB BioTechnologies is eliminating the need for tech-transfer proj-

INVITATION ONLY ects outside of our facility. We will have the PHARMA CO. SERVICE CONTRACTPHARMA CO. SERVICE CONTRACT Connecting REGULATORYthe Pharma Community ability to produce cGMP material for Phase REGULATORY CDMOs CDMOs I, II, and III clinical trials and small-scale Nice Match is an invitation-only service that matches the specialty needs of innovator and generics companies with ounded as a teaching and consult- didates and approved products has in- commercial sale. INVITATIONVALIDATION ONLY VALIDATION ing firm in 2008, AB BioTechnolo- creased. The percentage of new injectable The new, state-of-the-art, 23,000-square contract service providers that have the right technology, gies, Inc. has steadily expanded or infusible drugs that were lyophilized -foot pharmaceutical manufacturing fa- expertise, equipment and capacity to meet the requirements NICE MATCH INVITATION ONLY SUPPLIERS of a given project. DesignedINVITATION primarily ONLY for the CDMO/CMOSUPPLIERS its services to include pre-formu- grew from just under 12% in 1998 to ap- cility includes a manufacturing area for NICE MATCH F 2 PHASE PHASE lation, formulation, analytical and process proximately 50% in 2015. formulating, filling, lyophilizing and pack- market, Nice Match addresses the industry-wide need to development capabilities, as well as cGLP Lyophilization is highly complicated, aging drugs. Our current warehouse and match up pharmaceutical supply and demand to accelerate production of small-molecule and bio- however, involving complex heat and mass development laboratory are being relo- development timelines, create reliable supply chains and free logic parenteral and diagnostics products, transfer processes.3 Customized lyophili- cated there. Once the plant is completed, up business leaders to fully focus on getting much needed with particular expertise in lyophilization zation cycles must be developed for each AB BioTechnologies will be able to help our drugs to market — instead of searching for capable suppliers. (freeze-drying). By late 2018, the company drug and the associated container clo- clients advance their drugs from concept will be providing cGMP manufacturing of sure system used. The drug formulation to clinic under one roof. www.NiceMatch.com Phase I-III clinical trial material and small- and lyophilization equipment both impact BUYERS volume commercial products. freeze-drying performance, which can also NIMBLE AND FLEXIBLE contribute to scale-up difficulties. AB BioTechnologies is a nimble, flexible EXPANDING LYOPHILIZATION SERVICES Biopharmaceutical companies are, company with the express ability to fa- How it Works PHARMA CO.

SERVICE CONTRACT MARKET therefore, increasingly relying on con- cilitate the development and small-scale Nice Match leverages an exclusive network fostered through REGULATORY Therapeutic proteins, antibodies and other tract service providers with specialized manufacturing of parenteral drug prod- a combination of Nice Insight market intelligence and CDMOs biologics formulated in solution typically lyophilization expertise and equipment. ucts. We can accommodate most types organic, long-established industry relationships to match INVITATIONVALIDATION ONLY require refrigeration or freezing to retain Roots Analysis expects the lyophilization of injectable formulations and welcome pharmaceutical buyers with relevant outsourcing partners. stability. Maintaining the cold-chain for services market for biopharmaceuticals to projects that require production of 500 to Opportunities are brought into Nice Match through this these drugs can be challenging in many grow at an annualized growth rate of 9.5% 25,000 vials. Our goal is to help clients get network, qualified using Nice Insight market data, then INVITATION ONLY parts of the world. Lyophilization enables between 2017 and 2027.1 Many contract their parenteral medicines into the clinic presented to a supplier with the complementary capabilities NICE MATCH PHASE SUPPLIERS the preparation of stable formulations of manufacturers offer lyophilization servic- as quickly as possible, while maintaining to complete the project. drug substances that are unstable in aque- es, but only a limited number specialize in exceptional quality. P ous solutions or suspensions; sensitive to this technology. If you are struggling with your supply chain, heat, oxygen and/or humidity, or formulat- you may be a perfect match. ed at very low or high concentrations, mak- LYOPHILIZATION EXPERTISE ing exact dosing difficult.1 The generated Bloomington, Indiana–based AB BioTech- REFERENCES

lyophilized powders are shelf-stable and do nologies, is one. Our foundation lies in our 1. “Lyophilization Services for Biopharmaceuticals, 2017-2027.” not require low temperatures for shipping industry-recognized subject matter ex- Roots Analysis. 18 Apr. 2017. Web. 2. M. Arduini. “Freeze Drying Market Analysis,” Presentation and storage. pertise in lyophilization and formulation Nigel Walker Kristine Senft Guy Tiene at IMA Aseptic Processing Symposium, Amherst, NY, While both small- and large-molecule development for chemical APIs, pharma- Business Director, Partner September 2016. Managing Director Nice Consulting Director, Partner drugs are lyophilized, lyophilization has ceuticals, biologics, devices, and tissue- 3. Agnes Shanley. “Modernizing Lyophilization.” BioPharm [email protected] kristine @thatsnice.com [email protected] increased as the number of biologic can- derived products. Formulations and opti- International 30 .12 (2017). Web.

70 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 71

PA_Q118_71_NiceMatch_S.indd 71 2/27/18 3:30 PM COMPANY PROFILES

Alcami is a world-class supplier of AB BioTechnologies, Inc is a Capua BioServices is a global provider Insud Pharma integrates our three areas For over 30 years, CRB has specialized Nice Insight and the Pharma’s comprehensive pharmaceutical contract service provider located in of high-quality services in the field of of business and well-known brands: Chemo in delivering high-quality bioprocess Almanac editorial team would like development and manufacturing Bloomington, Indiana with a small custom microbial process development Industrial, Exeltis and mAbxience. Chemo facilities that are safe, reliable and to thank all the companies participating services. With seven sites across the dedicated staff of full-time employees and manufacturing. We offer dedicated is the Group’s pharmaceutical division, sustainable. CRB provides services in this quarter’s edition. The following globe, Alcami’s combined capabilities with an analytical contractor. solutions for proteins, (high-value) small and a leader in research, development and across the entire project life cycle, from the manufacture of value-added finished are the profiles of the industry-leading include API development and The lab is full of various types of molecules and microorganisms for conceptual design through preliminary dosage forms and active pharmaceutical companies that have appeared in this manufacturing, solid-state chemistry, instrumentation and analytical applications in pharma, food, feed and and detailed design, construction, ingredients for the main therapeutic areas. issue. These are companies that make formulation development, analytical equipment for the formulation and other bio-industrial markets. commissioning and validation. The Exeltis is engaged in the areas of sales it their business to energize pharma’s development and testing services, process development of injectable We are one of the largest independent company has more than 900 employees and marketing, with a strong portfolio of increasingly complex supply chain, clinical and commercial finished drug products, diagnostics, and tissue microbial contract manufacturing facilities across 14 offices and hundreds of brand-name generic drugs, in particular and pursue excellence every day in dosage-form manufacturing (oral solid products. The eventual goal, as part of located in Western Europe, with a total project locations around the world. for women’s health and dermatology. support of the industry’s overall quality, dose and parenteral), packaging the next phase of expansion, is to have fermentation capacity of about 1400 m3. CRB offers a range of services from mAbxience is our international biotechnical health and safety goals. and stability services. facilities, staff, and licenses from the Our company is headquartered in Capua packaging solutions, fill/finish design company, specializing in the development, FDA to manufacture injectable drugs (Italy) with approximately 190 employees. and aseptic processing to operations manufacturing and global marketing for human and animal toxicology and Over the past 50 years, we have built improvement solutions. of biosimilars for the treatment and Phase I clinical trials. a track record based on our extensive prevention of diseases in various experience in working with a variety of therapeutic areas. bacterial, yeast and fungal systems. www.alcaminow.com www.ab-biotech.com www.capuabioservices.com www.insudpharma.com www.crbusa.com +1 910 254 7000 +1 812 287 8493 +39 0823 628111 + 34 93 330 62 12 +1 816 880 9800 2320 Scientific Park Drive 3701 W. Jonathan Dr. Strada Statale Appia 46/48 | 81043 Gran Vía Carlos III, 98 7ª planta 1251 NW Briarcliff Parkway, Suite 500 Wilmington, NC 28405 Bloomington, IN 47404 Capua (Caserta), Italy 08028 Barcelona, Spain Kansas City, MO 64116

Avara Pharmaceutical Services was Brammer Biopharmaceuticals LLC CapsCanada is a leading innovator For more than 50 years, Federal Grifols is a global healthcare company Marken maintains the leading position founded by a team of industry veterans is a contract development and of empty hard capsules and capsule Equipment Company has been a with a legacy of improving people’s health for direct-to-patient services and who, through personal experience, manufacturing organization dedicated technologies for the pharmaceutical and trusted equipment supplier to the and well-being through the development biological sample shipments, and offers understand both sides of the contract to cell and gene therapy. The company nutraceutical markets. With 30 years of pharmaceutical, chemical and plastics of life-saving plasma medicines, hospital a state-of-the-art GMP-compliant depot manufacturing market. A state-of- specializes in in-depth biologics experience manufacturing high-quality industries. With thousands of pieces of pharmacy products and diagnostic network and logistic hubs in 45 locations the-art contract development and manufacturing, which enables large capsules for medicines and supplements, inventory in stock, Federal Equipment technology for clinical use. The company worldwide. Marken’s 683 staff members manufacturing organization, Avara pharma and biotech clients to accelerate CapsCanada serves global markets from is dedicated to providing customers is present in more than 100 countries manage 50,000 drug and biological provides API and bulk drug formulation the delivery of novel medicines. Founded facilities in Windsor, Ontario, Canada and with immediate access to quality used worldwide, with headquarters in Barcelona, shipments every month at all temperature and manufacturing as well as primary by Mark Bamforth (CEO) and Steven Barranquilla, Colombia. CapsCanada’s equipment at competitive prices. Spain. Grifols Partnership is a business- ranges in more than 150 countries. and secondary packaging services Kasok (CFO), previously cofounders K-CAPS® vegetarian HPMC capsules are Additionally, Federal Equipment offers a to-business contract development and Additional services such as biological kit for solid dose drugs, including highly of Gallus Biopharmaceuticals, the preferred among pharmaceutical and complete array of investment recovery manufacturing platform for sterile solutions production, ancillary material sourcing, potent compounds. The company’s company is positioned to accelerate supplement makers in over 60 countries, and asset disposition services, including and lipid emulsions with over 75 years’ storage and distribution, and shipment manufacturing technologies include the development of these emerging and its vertically-integrated gelatin supply appraisals, auctions and liquidations, experience in producing intravenous lane qualifications — as well as GDP, granulation, coating, blending, technologies. Brammer Biologics is chain guarantees the integrity of its equipment purchase and removal, as solutions for the pharmaceutical industry. regulatory and compliance consultancy encapsulation, compression and drying building a facility in Lexington, MA. gelatin from sourcing to distribution. well as consignment sales to dispose of — add to Marken’s unique position in the of tablets and capsules. idle and surplus equipment. pharma and logistics industry. www.grifols.com +1 34 93 05712200 www.avara.com www.brammerbio.com www.capscanada.com www.fedequip.com Avinguda de la Generalitat, 152 www.marken.com +1 734 282 3370 +1 386 418 8199 +1 866 788 2888 +1 800 652 2466 Parc empresarial Can Sant Joan +1 800 627 5361 101 Merritt 7 45 Hartwell Avenue 456 Silver Creek Industrial Drive, 8200 Bessemer Avenue 08174 Sant Cugat del Vallès, 4307 Emperor Boulevard, Suite 210 Norwalk, CT 06851 Lexington, MA 02421 Windsor, ON N8N 4Y3, Canada Cleveland, OH 44127 Barcelona, Spain Durham, NC 27703

72 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 73 SEE WHAT YOUR PHARMA'S ALMANAC: TRENDING LIVE CUSTOMERS ARE SEARCHING FOR! Trending Live: Real-Time Samsung BioLogics is a full-service Servier CDMO provides fully integrated SPI Pharma serves over 55 countries CDMO focused on the development manufacturing and supply chain services with formulation innovation, technical Data with Full Transparency and manufacture of biologics for the for small molecules & drug product, assistance and troubleshooting support. FIND OUT WHAT'S improvement of global healthcare. from development and clinical supply SPI Pharma’s products include antacid Established in 2011, Samsung BioLogics up to commercial launch. Servier actives, excipients, taste-masking TRENDING LIVE AT offers a full range of solutions for the CDMO includes a worldwide footprint technology, drug delivery systems www.PharmasAlmanac.com/ biopharmaceutical industry, including with eleven state-of-the-art facilities, for tablets, fast-dissolve technologies trending-live cell line process and analytical method a proven track record in chemical and a variety of other creative offers for development, analytical services, and bulk synthesis, pharmaceutical formulation, patient-friendly dosage formats. They www.PharmasAlmanac.com/trending-live cGMP manufacturing of drug substance and development and manufacturing, and focus solely on the pharmaceutical drug product from clinical to commercial a complete range of services offering full market, ensuring their best-in-class scale. Based in Incheon, South Korea, flexibility. Services include process and products provide exceptional Samsung BioLogics’ three manufacturing analytical development, pilot production quality by meeting or exceeding facilities are optimized for the production and industrial scale production, and global regulatory requirements. Market Segments of monoclonal and recombinant drug regulatory dossier, in collaboration with Focusing on the six key segments substance and drug product. the Servier network. Trending Live within the pharmaceutical The data below is tracked on this website and provides insights to each of the six industry outsourcing market, Trending Live segments including most viewed services, content, supplier companies and authors. provides a snapshot of not just www.samsungbiologics.com www.servier-cmo.com www.spipharma.com what is trending in the industry, but +82 2 3782 7862 +33 1 55 72 60 00 +1 800 789 9755 the actions that are driving these trends — in real time. 300 Songdo Bio Way (Daero) 50 Rue Carnot 503 Carr Road, Suite 210 Nice Insight Industry Leaders Yeonsu-gu, Incheon 21987, Korea 92284 Suresnes, France Wilmington, DE 19809 Within the selected timeframe, these are the companies with the most views of content, their Nice Insight Live Data profile, service searches and sponsorship. Trending Live is a continuous data feed pulling from our Nice ALL TIME LAST 30 DAYS LAST 7 DAYS Note: Data as of October 5, 2017 Insight research database and Pharma’s Almanac content platform Overall Top 20 Companies Tracked to provide near-instant insight on what the industry is seeking in 01 Last Month: 1 Peak Position: 1 02 Last Month: 2 Peak Position: 1 contract service providers, as well

COMPANY NAME PERFORMANCE BREAKDOWN COMPANY NAME PERFORMANCE BREAKDOWN as the thought leadership content UPM Pharmaceuticals is a Bristol, Vetter is a global contract development WuXi AppTec is a leading global Avara Pharmaceutical Federal Equipment in which they are most interested. Tennessee–based, independent and manufacturing organization (CDMO) pharmaceutical, biopharmaceutical, Services Company drug-development and contract man- headquartered in Ravensburg, Germany, and medical device open-access Research & Content Enterprise INDUSTRY INDUSTRY with production facilities in Germany and ufacturer serving the pharmaceutical capability and technology platform CDMO Pharma Equipment Nice Insight has been providing and biotechnology industries. The the United States. The company has long- company with global operations. With decision-supporting market company provides pharmaceutical term experience offering services ranging its industry-leading capabilities such as research and analysis for the past Article Views 53% Article Views 59% from early development support including TOTAL IMPRESSIONS TOTAL IMPRESSIONS drug development services — including small molecule R&D and manufacturing, Company Profile Activities 37% Company Profile Activities 34% eight years, accumulating this formulation development, cGMP clinical manufacturing, to commercial cell therapy and gene therapy R&D and Service Searches 8% Service Searches 2% information to form what has manufacturing, analytical methods supply and various packaging solutions manufacturing, and medical device 79,009 Sponsorship 1% 77,232 Sponsorship 6% become the industry’s most robust development and stability testing — for vials, syringes and cartridges. Vetter’s testing, the WuXi platform is enabling Top 100 Articles information repository and content from concept to commercialization. customers range from small and midsize over 3,000 innovative collaborators platform. UPM’s focus is on drug development to the world’s top 20 pharmaceutical from more than 30 countries to bring Last Month: 3 Peak Position: 1 Last Month: 4 Peak Position: 3 for dosages with oral routes of and biotech companies. As a leading innovative healthcare products to 03 04 Make Informed Decisions solution provider, the CDMO recognizes administration, in solid dosage forms patients, and to fulfill WuXi’s dream COMPANY NAME PERFORMANCE BREAKDOWN COMPANY NAME PERFORMANCE BREAKDOWN Trending Live was conceptualized such as capsules and tablets, and its responsibility in supporting the needs that “every drug can be made and every Servier CDMO Marken as a way to provide this information semisolid creams and ointments. of its customers in developing devices disease can be treated.” immediately and transparently, that contribute to increased patient safety, INDUSTRY INDUSTRY empowering key personnel with the CDMO CDMO convenience, and enhanced compliance. means to make informed, strategic www.upm-inc.com www.vetter-pharma.com www.wuxiapptec.com decisions to benefit their business. TOTAL IMPRESSIONS TOTAL IMPRESSIONS +1 423 989 8000 +49 (0)751 3700 0 +1 609 799 2295 Article Views 64% Article Views 64% Company Profile Activities 25% Company Profile Activities 25% 501 5th St. Eywiesenstrasse 5 107 Morgan Lane 59,391 Service Searches 10% 58,666 Service Searches 10% Sponsorship 1% Sponsorship 1% Bristol, TN 37620 88212 Ravensburg, Germany Plainsboro, NJ 08536

74 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 75

PA_Q118_Trending_Live_S.indd 75 3/1/18 1:08 PM ROUNDTABLE

etween 1993 and 2015, drug companies MERGERS & ACQUISITIONS spent an estimated $1.7 trillion on M&A activity, with 74% of this activity B attributed to only 20 companies. 2014 What Role has M&A alone saw 185 deals, of which 22 were valued at Almac Sciences, a business unit within the more than $1 billion. This trend continues today Almac Group, has grown organically since Played in your with nearly $34 billion being spent on M&A in the first quarter of 2017, and is likely to continue 2004 with a very respectable growth of more and perhaps even escalate. In particular, QQ Company’s Growth? the political climate in the USA, advocating than 20% per year over 10 successive years. lower corporate tax rates and supporting repatriation of overseas revenue, may provide pharmaceutical companies even more incentive Recently, Almac Sciences has made some well-targeted acquisitions, with to pursue acquisitions to augment their growth. the first being completed in November 2015 of Arran Chemical Company This trend in M&A has been primarily driven located in Athlone, Ireland. This focused on combining our strength, scale and M&A has been a significant by a need to compensate for reductions in technology. The impact on our business has been tremendous; the perfect part of our growth strategy growth as a result of investment in early phase combination of large-scale intermediates manufacture (Arran asset) and pipeline development, aptly demonstrated by biocatalysis (Almac technology platform) has successfully given us the right for a number of years. As the very recent, $11.9 billion acquisition of Kite route-to-market for many of our clients’ development projects. an organization, we believe For Catalent, acquisitions have been Pharmaceuticals by Gilead. that growth is an integral transformative for the growth and diversification The second acquisition, again in Athlone, Ireland, was completed on November part of being an industry Interestingly, the CRO/CMO service industry 1st, 2017 and builds on our complementarity and extended resource services. of the company’s technologies and services has also undergone a similar trend with Though too early to discuss impacts on long-term business, we can already say leader. M&A provides us increasing M&A activity. For example, the that this is broadening our service offerings and addressing our global clients’ the opportunity to be more offering, and in the last fifteen months alone estimated global deal value in 2015 is estimated growing demands for high-quality, integrated, relevant to our customers — Catalent has made three significant at $12 billion. A major driver for this comes efficient offerings. we don’t grow for the sake from increased competition as a result of acquisitions in distinct parts of its business, active outsourcing partner consolidation of growth, or to move into by the pharmaceutical industry, to ensure Mike Cannarsa, Ph.D. US Business Development Director, to address different strategic business needs. better efficiency and consistency, particularly areas we don’t understand; Almac Sciences we grow to strategically following acquisition. Larger service providers The most recent acquisition of Cook Pharmica, completed in October 2017 for such as SGS have been able to take advantage improve our portfolio. We’ve 950 million dollars, strengthened Catalent’s growing presence in biologic-based of such strategy by providing a full range of acquired more than 35 drug development. When integrated, Catalent’s offering in biologics will cover analytical services across the globe. M&A in the companies over the past 15 development and analytical services, manufacturing and finished product supply, CRO/CMO sector has been sought primarily and of course its manufacturing capabilities and technology portfolio of GPEx® years, including six in the to improve the global footprint, acquire higher cell-line expression at its Madison, Wisconsin facility and SMARTag® antibody-drug levels of technology and provide a broader Recipharm has a clear merger and acquisition (M&A) strategy past three years alone. Each conjugate development in Emeryville, California. portfolio of services. There seems to be little which is focused on expanding our capabilities as a full of those acquisitions has evidence that M&A in the pharmaceutical Early in 2017, Catalent acquired Accucaps, bolstering its OTC and prescription service CDMO, as well as our geographic presence. industry has resulted in any significant loss of been the result of extensive pharmaceutical softgel capabilities and manufacturing capacity in North America. business, particularly for the larger CRO/CMO due diligence, both into This increased Catalent’s portfolio of products supplied to pharmaceutical providers, but rather has been grounds for companies as well as adding two state-of-the-art facilities offering integrated the companies we look at scope change and perhaps some downsizing. In recent years we have established a strategic presence in both the emerging softgel development, manufacturing and packaging into its global network. acquiring, and into our own to Despite the magnitude of the M&A activities, Indian market and the innovative US market. Our geographic footprint is now unique in the CDMO industry, and allows us to offer a local-level service to determine what areas make The addition of Pharmatek Laboratories in 2016 expanded Catalent’s early-phase the fundamental and primary demands on our customers. In addition, by bolstering our development and manufacturing drug development capabilities and added spray drying technology to the company’s the pharmaceutical industries’ outsourcing the most sense to grow. expertise through our M&A activity, we are able to handle complexity for our portfolio of drug formulation and delivery technologies aimed at overcoming partners for quality and on-time delivery will customers, helping to simplify the supply chain by taking products from proof solubility and bioavailability issues. Additionally, the San Diego facility gives continue to dominate, regardless of the size or of concept to commercial reality. Catalent a geographical presence on the US West Coast. activity of the pharmaceutical business. William D. Barbo Corporate Executive Vice President & Chief Commercial Mike Grippo Mark Rogers Mark Quick Officer, Charles River Vice President of Corporate Development, Global Technical Director, Executive Vice President, Laboratories Catalent Pharma Solutions SGS Life Sciences Corporate Development, Recipharm

76 PHARMA’S ALMANAC GLOBAL PHARMACEUTICAL SUPPLY CHAIN TRENDS Q1 2018 PHARMASALMANAC.COM 77 ROUNDTABLE

Almac’s commitment to the following five values is unparalleled and equips the company to ensure operational excellence is unsurpassed, ensuring our OPERATIONAL EXCELLENCE mission to partner to advance human health is fulfilled:

How do you Address or almost fifty years,the Almac Outstanding Quality We ensure exceptional and reliable quality in all aspects of our work Group has established CDMO Operational Excellence and recognize that quality determines the extent of our success. F relationships to extend our range of services to the top pharmaceutical/ Exceptional Innovation QQ as an Institution? We promote an environment where extending the boundaries of biotech companies. With over twelve knowledge, technology and creativity is encouraged. facilities, sixty service depots, and close Superlative Customer Focus to five thousand employees around the We are committed to understanding and exceeding our customers’ needs world, we adhere to a strict ethical and build relationships based on integrity, responsiveness and excellent communication. At every step, we strive to optimize resources and As a large, global organization, statement and have crafted a unique maximize efficiency by implementing lean methods we have two overarching culture of accountability and integrity Inspirational People People are Almac’s core asset. Individually and collectively, people are priorities: to provide an to be delivered in every product/service throughout the organization. critical to the success of our vision. exceptional experience to our offering as a result of implementing This means we can offer first-rate services that provide good value for money. As we customers and to make Charles Financial Performance and enforcing effective operational continue to grow as an organization, with decentralized operations and relatively small River an engaging, rewarding We will drive excellent, sustainable financial central functions, we are highly dependent on talented people at key posts throughout systems and controls. performance. workplace for our employees. the organization. Through attracting, developing and retaining talented people, we are able to drive operational excellence across our organization. The key to making this Mike Cannarsa, Ph.D. approach work, however, is shared learning, and we focus our efforts on On the customer side, we want them US Business Development Director, ensuring that the good things which are being done in, say, Portugal, to reap the benefits of working with Almac Sciences can be transferred effectively to, say, Germany. an end-to-end provider throughout the preclinical drug discovery process, without ever feeling like our process Mark Quick Executive Vice President, is too slow or cumbersome. We highly Corporate Development, Recipharm value responsiveness and flexibility The single most critical factor is “focused within our organization, and use Continuous Improvement (CI) is best described execution,” working on just 2 or 3 things at any those pillars for both training and as a journey toward excellence. Fundamentally, given time and NOT trying to solve everything recognition. For employees, we realize it starts with the leaders setting the right tone at once! that providing growth opportunities, for the organization, and embedding excellence recognizing employee contributions, Building a strong CI culture, which focuses supporting our local communities, in the company’s values. At every level, it is people on process improvements and and allowing fun and flexibility in the important to: Operational excellence is a strategic priority across Intertek automation, will ensure sustainable and workplace is critically important to predictable results. Group and plays a key role in our ‘5x5’ differentiated strategy operational excellence. Our employees • Set clear expectations for growth with focus on continuous improvement to drive are the backbone of our organization, • Align ALL activities or actions to company’s World-class companies have frequent and our success depends on their productivity and best-in-class management. Examples include business processes/operating mechanisms commitment. vision and business strategies the adoption at each Intertek facility of operational excellence in place to support and monitor the progress • Define the measure of success — using simple tools such as Kaizen and structured simplification. Each of transformation towards excellence. The language that is consistent and standardized positive impact felt by patients and customers laboratory has a Kaizen champion and team empowered by across the company cannot be achieved without a culture of the local management to drive and deliver change to processes organization and employees to be better • Engage and empower every employee to improve efficiency whilst improving the quality every 30 days! and timeliness of delivery to our clients. William D. Barbo • Expect that leaders create an environment Corporate Executive Vice President & to succeed Sridhar Krishnan Ben Cliff Chief Commercial • Drive accountability and responsibility VP of Business Laboratory Director, Officer, Charles Analytics & Excellence, Intertek Pharmaceutical Services River Laboratories where it resides Catalent Pharma Solutions

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