Biopharmaceuticals are the most rapidly growing segment of the pharmaceuticals market. Developing and marketing biopharmaceuticals are huge roles in almost every major pharmaceutical company's strategy. However, they are extremely complex molecules and are highly sensitive to the manufacturing processes used to produce them. These processes require exquisite control of living production systems, making, without a doubt, biopharmaceuticals one of the most challenging products of any type to manufacture.

This article reviews how today's contract biomanufacturing industry has developed to overcome the technical and commercial challenges of the past 20 years within the framework of capacity, capital, cost and capability (Figure 1). It also examines how the same forces will shape the industry through continued growth in future decades.

Capability

The first biopharmaceuticals on the market in the 1980s were manufactured by the companies that developed them. Because of the effort expended to overcome the technical challenges, the capability to manufacture these complex products became viewed as a core value driver for the companies that succeeded, and biomanufacturing quickly became viewed as a critical capability strategically important in its own right.

The importance of biomanufacturing capabilities has been demonstrated on many occasions during the past 20 years, both in terms of limits and advantages for individual companies, as well as impacting on the industry as a whole. One example is the development of biosimilar versions of off patent biopharmaceuticals, which has been severely hampered by the inability to easily reproduce the originator companies' manufacturing processes to deliver 'equivalent' products.

Capital

The growth of the contract manufacturing industry during the 1980s and early 1990s was restrained further by the regulatory framework within which biopharmaceuticals could be developed. The general regulatory approach was that "the manufacturing process defines the product", which made sense because the analytical methods used were insufficient to fully define and test the macromolecular structures of biopharmaceuticals. This made the transfer of manufacturing processes between companies far from straight forward, as there was no way to ensure products from different manufacturing sites were comparable.

Additionally, prior to 1996, companies were required by FDA to submit two licence applications to commercialize a new biologic product: a product licence application (PLA) and an establishment licence application (ELA; Figure 2). Regulations were specific about who held the PLA and ELA, the products to which the licence applications applied, and how and where the product was manufactured. Changes to any of these criteria necessitated submission of a new licence application and re-approval of the licence. Companies that didn't plan to manufacture their own biopharmaceuticals risked significant loss of product control because any change to a facility meant a reapproval for the license.

Figure 1 The CMO market environment.

As a result, the late 1980s and early 1990s witnessed the development of fully integrated biopharma companies, such as Amgen, Genentech and Biogen, that were investing large amounts of capital to develop processes and build highly expensive manufacturing facilities. However, the need to spend huge amounts of money to commission and build facilities to make drugs long before they could be registered resulted in some huge losses. One high-profile example was the failure of Synergen's (CO, USA) Antril (anakinra), which failed to demonstrate efficacy in treating sepsis in a Phase III trial in 1994, after the company had made a major investment in a manufacturing facility. The resulting financial distress was one factor that led to the sale of Synergen to Amgen.¹