Plant-made pharma specialist faces challenges of outsourcing to grow business

Outsourcing, contracting out, offshoring, nearshoring. By whatever name you call it, the practice of using a third-party (either onsite, offsite, or a continent away from your business) is being used by almost any company, in any industry, in any country.

For Canadian biotech firms, especially mid-sized companies and promising start-ups, outsourcing provides the opportunity to cut production cost, obtain manufacturing scale, save on labour cost, or access key expertise. For many businesses in the industry, it could spell the difference between getting by and getting to the next level.

“Outsourcing provides a lot of advantages for many companies. It can help free-up cash, time and other resources,” says Dr. Don Stewart president and CEO of the early-stage biosimilar manufacturer PlantForm Corp. “When used effectively, an outsourcing strategy also allows companies to focus their attention on what they do best and devote their resources to honing their competitiveness.”

Founded in 2008, PlantForm continues to advance the vivoXPRESS platform developed at the University of Guelph by a team led by Dr. J. Christopher Hall, a founder of PlantForm and the company’s Chief Scientific Officer.

PlantForm uses the technology to genetically modify tobacco plants to manufacture biopharmaceuticals. This is what differentiates PlantForm from other biosimilar manufacturers that typically use mammalian cells.

Creating a biologic from mammalian cells is inherently expensive. It requires a larger facility to house huge fermentation equipment. The process requires complex technical systems to control factors such as water, oxygen levels, steam, and temperature.

By contrast, a plant-based facility is simpler, according to Stewart. The manufacturing system costs roughly one-tenth of that of one designed for mammalian cell manufacturing. What’s more development time is shorter.

The company is able to grow plants for four weeks before that can be infiltrated with an Agrobacterium solution which contain the gene needed to create the desired protein product. It takes another week for the Agrobacterium to infect the plant and make its produce the desired protein.

PlantForm has used tobacco plants to develop monoclonal antibodies and proteins that are used to treat Ebola, cancer, HIV/AIDS, and other diseases.

PlantForm’s lead product is a biosimilar version of Roche’s age-related macular degeneration (AMD) drug Lucentis, the brand name for ranibizumab. PlantForm is advancing a plant produced trastuzumab for a novel indication, which has been licensed by the company (nerve regeneration after acute trauma).

Taking it to the next level

Apart from this project, PlantForm is also involved in developing bio antidotes for bioterrorism agents. In 2013, PlantForm completed a contract with the United States Defence Advanced Research Projects Agency or DARPA for research and development of Butyrylcholinesterase (BuChE) is an enzyme used to provide prophylactic protection against nerve agents, such as sarin gas. PlantForm remains involved in a BuChE program under contract with Defence Research and Development Canada.

PlantForm is using outsourcing to take the company to “the next level.”

Esther Lo, project manager at PlantForm, works in the company’s drug development department and is the main point of contact between the company and its partners or clients. She says one of the company’s long-term goals is to have its own facility to manufacture their own products so that they won’t need a CMO to make biomass and purify product.

Lo said PlantForm needs CROs for all non-manufacturing work such as animal safety and toxicology studies, clinical trials management, and some niche analytical testing.

“…being relatively small, we don’t have the facilities to manufacture large quantities that may be needed,” she explains. “Outsourcing is critical to move different projects…Not every organization has the capability to everything in-house.”

For instance, PlantForm does not have the scale to supply large clinical studies, says Craig Binnie, vice-president of the company.

“We can make only so much,” according to Binnie. “We also need to outsource the non-manufacturing part of the drug development process.”

“Small companies like PlantForm don’t have animal facilities or sophisticated analytical equipment, so we have to outsource these tasks to other labs,” he says.

Other tasks that are outsourced include:

– Global Laboratory Practices (GLP)-compliant animal safety studies

-Physico-kinetic and Bioanalytical work

-Management of early and late-stage human clinical studies

Binnie clarifies that PlantForm conducts two-thirds of its analytical work in-house and has the rest done if possible by specialized providers in Ontario. Preclinical and Clinical CRO services are sourced mostly from within Canada. However much of the manufacturing has been done out of the country. The goal of manufacturing at large-scale to standards is part of PlantForm’s plans.

“There are only so many facilities available in the world that can manufacture in plants to current standards,” says Binnie. “No one in Canada does the manufacturing we need. We hope we can do this in the future.”

The use of outsourcing is typical to many biotech firms in the country, according to Perry Niro, president of Pharmed Canada.

Pharmed Canada is an association of manufacturers and subcontractors in Canada’s pharmaceutical and medical services industries. As a non-profit organization its aims to promote business development for its members both in Canada and abroad.

“For instance, manufacturing is an important part of the supply chain,” he says. “However, not many companies have the capability to produce at scale, so they need to turn to a competent third-party.”

In 2015, he says, the world outsourcing market was worth US$71 billion. It has been growing by as much as six per cent each year. Contract manufacturing in the Canadian pharma industry is expected to reach $9 billion/year, according to Niro.

Niro sees an increase in M&A activity in the global biotech outsourcing market as well as a trend among customers to look for “one-stop-shop” capability in providers.

Making the most out of outsourcing

As a company that uses outsource providers, PlantForm has learned a few valuable lessons in how to use outsource providers effectively.

Companies tend to rely on outsource providers to fulfill either a capability or capacity gap, or a combination of the two, says Lo.

According to Binnie, one of the key pain points that biotech firms face when dealing with providers occur in the area of tech transfer.

“We want manufacturers to be able to replicate our technology. However, there are times when the yield and expression levels are below that of what you expect,” he says. “This could be a huge problem if you have not budgeted for the discrepancy.”

He suggests that companies maintain good channels of communication with providers. This will help ensure that providers and the company are working on the same page. The strategy will also help companies manage expectations and head-off potential trouble before it occurs.

Here are other points to consider:

-Before seeking a contractor, thoroughly and honestly evaluate what processes need to be outsourced. Make sure the outsourcing task is in-line with your business plan.

-In choosing an outsource service provider, carefully evaluate their capabilities against the things you are looking for. Consider things such as capability, reliability, expertise, and compliance.

-Audit the provider. For instance, before deciding on a CRO, have a pre-meeting with the provider. Inspect the track record of the provider when it comes to compliance and delivering on projects. Make sure the company has no negative notices from regulatory agencies. Seek out client references. Do a physical inspection of facilities.

When working with manufacturers located in a different jurisdiction or another country make sure you are familiar with the regulations and laws in that place as they pertain to your operation, Stewart points out.

He says cultivating a good relation with third-party companies is important.

“Understand the environment you are going into,” he says. “It’s important to be sensitive to the culture or the country as well. This will go a long way in smoothing out things when challenges arise.”

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