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European Biopharmaceutical Review

The Big Squeeze

Commercial biomanufacturing has enjoyed balanced capacity usage, but a new survey indicates that constraints are likely to resurface

Although fewer biomanufacturers are experiencing immediate capacity constraints this year, some facilities are expecting problems over the next five years. According to preliminary data from a 2013 survey of biopharma manufacturing and production capacity, constraints are now experienced by 57 per cent of respondents, down from 63 per cent last year (1). This trend is well documented, and the result of improved productivity in upstream processes, streamlined downstream process, and better process management. However, when responses are sorted by stage of production, the picture becomes less straightforward.

Commercial Manufacturing
On the surface, capacity constraints for commercial manufacturing do not appear to have changed much from last year. The 63 per cent of respondents experiencing production capacity constraints today is a marginal increase from 60 per cent in 2012. What is more interesting is the degree to which those constraints are being felt. The data reveal some positive trends in this regard. Noting that the percentage of respondents experiencing no constraints or minor constraints has barely changed (62 per cent compared to 64 per cent last year), we see a big decrease in the proportion who are experiencing significant constraints, down from 15 per cent in 2012 to eight per cent this year.

The positive aspect of this change is that the global industry, at commercial-scale, appears to have moved from experiencing significant to more moderate capacity constraints. The percentage of respondents indicating moderate constraints rose from 16 per cent to 23 per cent, while there was a less substantial increase in those experiencing severe constraints (two per cent compared to seven per cent).

Clinical Manufacturing
At earlier stages of the manufacturing process, the data more clearly signal an easing of constraints. Some of this could be due to the introduction of flexible facilities and single-use technologies. At early-stage clinical manufacturing (Phases 1-2), the data tell us that only 51 per cent of facilities are experiencing constraints this year, which is a substantial drop from last year’s 62.9 per cent. In general, the degree to which facilities are experiencing constraints has also fallen. That is, of the 51 per cent, more than half (54 per cent) report experiencing only minor constraints. Last year, slightly less than half (49 per cent) of respondents experiencing constraints said they were minor ones.

All told, at the earliest stages of manufacturing, only 24 per cent of facilities this year are reporting ‘moderate,’ ‘significant,’ or ‘severe’ constraints, down from 35 per cent last year. Again, this is likely due to earlier adoption of new manufacturing processes such as single-use or disposable devices, and the expectation among early-stage manufacturers that singleuse solutions may help ensure adequate capacity in the long term.

A similar picture emerges when analysing the data for later-stage clinical manufacturing (Phase 3). According to preliminary data, 57 per cent of respondents are experiencing some level of capacity constraint at this stage, a significant (10 per cent) drop from last year. In later-stage clinical manufacturing, however, it seems the increase in those reporting no constraints comes almost entirely from last year’s ‘minor constraints’ column. In other words, some facilities that were experiencing minor capacity constraints last year are no longer feeling those effects, but the percentage experiencing higher degrees of constraint remains fairly constant.

Present Optimism
Overall, the data suggest that capacity constraint problems are easing this year, even if there has been an uptick in overall constraints reported at the commercial stage of manufacturing. Adoption of single-use technology at commercial production scale is not typical. This is because existing (stainless steel) processes are very difficult and expensive to displace for regulatory and operational reasons. Even when there may be a clear cost or operations advantage to implementing a flexibly facility or single-use device, most bioprocessing executives avoid operational changes at these later stages.

In the future, as disposable devices are increasingly implemented at commercialscale operations, infrastructure needs will be reduced, likely resulting in more capacity. However, in the short term, capacity issues at commercial scale are likely to continue.

While these data generally highlight an optimistic outlook regarding future capacity issues, there are other factors at play. Indeed, there have been some interesting advance indicators that capacity may once again be restrained in some sectors of this industry. In particular, partnerships and contract manufacturing organisation (CMO) activity to produce biogenerics is using some of the excess capacity held by some facilities. Many other facilities are planning in advance for retrofits to increase either raw processing capacity, or flexibility to accommodate new products with higher titers or different purification requirements. Such trends suggest that biotech is currently making the investments it can afford to maximise utilisation and flexibility. What that also means is that companies recognise that once such changes are complete, the capacity landscape might look very different.

Capacity Crunch
Data show that even though constraints have eased this year, biomanufacturers have a less rosy fi ve-year outlook. This may be related to large biomanufacturers looking ahead to big increases in approvals of new indications or new blockbuster therapeutics over the next three to five years.

Indeed, when industry personnel were asked to indicate their expected capacity constraints in 2018, more than seven in ten (72 per cent) of respondents predicted at least some level of constraint. That stands in contrast to the 57 per cent who are currently experiencing some capacity constraints. Comparing projections to current reported constraints, the survey found that:

● 27 per cent project they will see ‘minor’ constraints in 2018, versus 25 per cent currently experiencing them
● 27 per cent expect ‘moderate’ constraints in five years, compared to 20 per cent experiencing them today
● 17 per cent predict ‘significant’ or ‘severe’ constraints in 2018, versus 12 per cent reporting those levels today

Pessimistic Outlook
There are a few trends that could be colouring respondents’ outlooks. It is possible, for example, that they might be expecting the disparity between upstream titres and downstream processing capacity to continue to grow indefi nitely. This gap is a big concern in the industry that must be dealt with through technology.

The industry may be pessimistic that technological innovation in this area is on the immediate horizon. Findings from the previous year’s survey showed that 58 per cent believed the most important area to be addressed to avoid future capacity constraints was the development of better downstream purification technologies. Yet when new product development areas of interest were evaluated industry-wide, only one in four respondents pointed to downstream process development services.

Separate data show a similar gap between need and want. While more than threequarters of last year’s respondents said that chromatography steps were creating some degree of capacity constraint at their facilities, preliminary data show that interest in chromatography product innovation has fallen off among end users. Moreover, fewer vendors indicated that they were working on disposable chromatography or chromatography alternatives to protein A. The seemingly downward trend in interest may be a reflection of scepticism on the part of the industry than of an actual lack of need. Possible solutions, such as continuous processing technologies, are still some distance from being considered commercially viable.

Another factor might – counter-intuitively – be the rise of single-use systems. While these provide more fl exibility and could be related to an overall drop in constraints at the industry level, on an individual facility basis, the focus on disposables may prove counterproductive, as available disposable technology is not well suited to addressing constraints whose correction requires signifi cantly larger columns, buffer prep and hold space that is capital-intensive.

Operational Improvements
Expectations may also be coloured by forecasts for production capacity expansions. Although budgets are rising across the board, outlays for new facility construction will remain fl at after rising two per cent last year, which is concerning as most respondents blame their constraint problems on facility constraints.

Rather than build new facilities, biotherapeutic developers and CMOs may instead be focusing on operational improvements of existing capacity. While recognising the importance of bulk manufacturing facilities, their large capital investments and long construction timelines mean that biomanufacturers with existing facilities may be looking at ways to retrofi t such facilities both cheaply and quickly – possibly using modular skid-based or disposables approaches – in order to maximise their investment in these valuable resources. Compared with a four- to six- year construction timeline, such retrofits can provide additional flexibility and incremental capacity in months rather than years. Yet such incremental capacity obviously cannot match a new facility.

It will be interesting to track the new facility budgets and compare them to perceptions of capacity constraints. Another trend that will be worth looking at will be how drug companies balance risks with multiple sites, diversifi cation and/or regulatory strategy. It may be that they decide to build more plants in more locations: instead of a large, single plant to product the world’s supply, a network of smaller regional, flexible facilities might be established, each licensed with regional regulatory authorities.

Regional Capacity Differences
When we separate data by region, last year demonstrated markedly different perceptions of capacity constraints on a regional basis. For example, 23 per cent of US respondents perceived ‘severe’ or ‘significant’ constraints, significantly up from six per cent in 2011 (1). At the same time, only 10 per cent of Western European respondents shared that assessment, down from 12 per cent in 2011. Moreover, only 18 per cent of US respondents saw no capacity constraints, way down from 57 per cent in 2011 and 47 per cent in 2010. At the same time, 42 per cent of Western European respondents saw no constraints.

The shift in focus on constraints from Europe to the US market is primarily a result of two factors. Firstly, recently approved new therapeutics (as well as those in late stages of clinical trials) have, for the most part, favoured US capacity centres. Most of the capacity ‘glut’ in the industry has been focused on the US, so it makes sense that these under-utilised facilities would be targeted first for new products. On the whole, capacity in the US also tends to be more fl exible and able to accommodate a larger range of titres and product sizes.

Secondly, many companies (both industry leaders and new players) are investing heavily in biogenerics manufacturing for clinical trial material. While much of the investment in new capacity has been in India and China, some companies have been utilising existing facilities to manufacture biogenerics. This is a smart decision, as it leverages existing wellunderstood facilities which are currently under-utilised and can rapidly produce the required clinical material. Most of this CMO-based material has been produced in the US, and may be a reason for the unweighted assessment of capacity between US and European players. Capacity Utilisation Trends It is informative to look at the apparent easing of capacity constraint concerns this year against levels of capacity utilisation and there is a general trend in each of the major production systems (mammalian, microbial, insect and plant cells). For mammalian cell culture, capacity use is at an average of 65 per cent, slightly above the 61-63 per cent range that has held steady over the past five years. Capacity utilisation information is important for planners and investors as they determine whether capacity will be available for the production of pipeline drugs that may be reaching approval. The year 2003 was a crunchtime for the biopharmaceutical industry and utilisation rates peaked at 76 per cent for mammalian systems. The resulting expanded capacity brought the utilisation rate down so that, by 2006, it appeared that a stable capacity utilisation rate would be around 63 per cent.

Biopharmaceutical manufacturers attempt to avoid unanticipated high production demands that can create a capacity crunch. This can result in an excess, ‘flex’ or buffer capacity that is important in this business segment because the opportunity costs associated with not getting a company’s product to market can be devastating. On the other hand, the cost of an idle biomanufacturing facility and costly excess capacity is also actively avoided. The status of around 60 per cent overall utilisation (for mammalian cell culture) has seemed to be a healthy equilibrium for the industry, which makes it somewhat noteworthy that constraint concerns have slightly eased as capacity utilisation rates have inched up.

Utilisation rates have also increased for microbial fermentation (62 per cent this year versus 49 per cent last year) and yeast culture (48 per cent versus 36 per cent), while remaining relatively steady for plant (54 per cent) and insect (52 per cent) cells.

Conclusion
The industry appears slightly less concerned with capacity constraint issues this year – and more concerned about the future – but this topic may actually have less relevance in years to come. Capacity and utilisation rates will become increasingly difficult to estimate and, in biomanufacturing, may even become irrelevant in coming years, particularly as single-use equipment becomes adopted for commercial product manufacture. How does one calculate existing and underutilised capacity, when users order and rapidly install single-use systems on an as-needed basis? Is an empty room that has been used or has been set aside for installation of single-use bioprocessing systems un- or underutilised capacity? Similarly, how does one consider, say, the next year’s planned needed supply of single-use systems sitting in in-house storage? Is this considered utilised or unutilised capacity? Will capacity utilisation even be a concern in the future as single-use systems improve and are increasingly used for commercialscale manufacture? What happens, for example, when a new expression system doubles the output from a bioreactor, thus effectively enabling manufacturing to halve its current capacity?

While output and productivity may be measured differently in the future, one thing seems clear – as titres continue to increase and as new production technologies, improved cell lines and expression levels are introduced, bottlenecks will continue to shift downstream in years to come. And until the industry and its suppliers come up with new products and technologies that can handle the increased downstream pressure, concerns over future capacity constraints will remain.

Survey Methodology

The 2013 survey (1) outlined in this article yields a composite view and trend analysis from nearly 300 responsible individuals at biopharmaceutical manufacturers and CMOs in 29 countries. The methodology also included over 185 direct suppliers of materials, services and equipment to this industry.

The survey covers such issues as: new product needs; facility budget changes; current capacity; future capacity constraints; expansions; use of disposables; trends and budgets in disposables; trends in downstream purification; quality management and control; hiring issues; and employment. The quantitative trend analysis provides details and comparisons of production by biotherapeutic developers and CMOs. It also evaluates trends over time, and assesses differences in the world's major markets in the US and Europe.

References

1. 10th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, Preliminary Data, 2013. Visit: www.bioplanassociates.com


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Eric S Langer is President and Managing Partner at BioPlan Associates Inc, a biotechnology and life sciences marketing research and publishing fi rm. He is editor of numerous studies, including Biopharmaceutical Technology in China, Advances in Large-Scale Biopharmaceutical Manufacturing, and many other industry reports.
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