CMOs – Considerations in Evaluation

By Andrea Wagner, PhD, SVP Business Development

 

 

Recently, Phil Burns wrote an article in Contract Pharma about utilizing contract manufacturing organizations (CMOs) to assist companies in reducing their stress in production requirements.  He stated that CMOs can help companies with immediate and distant manufacturing needs, but they need to consider several areas prior to choosing a CMO.  A summary of the considerations presented in his article are given below.  The full article can be found here.

 

Assessing CMO capabilities

Smaller CMOs can provide multi-level support to the development and clinical phases of a drug product’s development. Larger CMOs have bigger operations that are typically compliant with US, EU, JP and other countries regulatory framework.  They may also manufacture in different areas of the world which might assist with distribution of commercial products.

 

Equipment 

If a company requires special equipment they might be able to piggyback on another company that has invested in a CMO for similar equipment.  CMOs can also have a variety of equipment that may set them apart from other CMOs. This may work for a company that is looking for something more unique.  It is advisable to utilize as much disposable equipment as possible to reduce the risk for cross contamination, excessive storage fees for equipment, and cleaning validations.

If the need is short-term then a CMO may perform activities on a manual basis prior to investing in equipment that may or may not be used. CMOs are better able to dedicate and train staff quickly for a specific activity because their entire business plan is centered on change.

If equipment is required there are several ways to structure its purchase with a CMO. There may be an upfront payment or a premium put on batch cost until the investment is paid.  As well, both of these scenarios can occur in parallel.

 

Space

Space, not the real frontier, but an important consideration when assessing a CMO.  Assessing the ability of a CMO to expand as growth occurs, because if the CMO is good at what they do, they will grow, and they will need to have the ability to expand their footprint at their existing location. This can be a critical factor in your long-term relationship.  If a CMO has too much going on at a site that is too small with no ability to expand mix-ups, environmental control, and pricing will be impacted.

 

Time and knowledge

“The people within the CMO can make all the difference”, is a saying that is broadcasted by most that assess CMOs. Assessing this may not be that easy. It is critical that your CMO “knows” what they are doing for your project and that the management supports you as a customer. Understanding the strengths and weakness of personnel within the CMO can assist you in your efforts to best utilize them.

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