Biotherapeutics is a family of innovative therapeutic strategies based on molecule or system so complex that it requires a living system to be produced, or the living system itself is the treatment. These therapeutics include therefore, antibody-based treatments, peptides or protein-based treatments, vaccines, gene therapies or cell therapies. The firstly marketed biologics was the recombinant growing hormone in 2006. Today, more than 3000 biologics are marketed with Humira (aka, adalimumab, an anti-TNF alpha monoclonal antibody) being the most sold in 2017.
Biotherapeutics market is growing faster than classical drugs market
Biotherapeutics is the fastest-growing sector in the pharmaceutical industry, with total revenues reaching up to $231.2 billion in 2017. Its annual growth is estimated to more than 10%, whereas conventional pharmaceuticals reach 7%. This specific growth can be explained by at least two reasons. The first is that for several diseases, the classical small molecules failed to improve significantly the patient state. This is for example the case of several cancers or neurodegenerative diseases. Therefore, in this context biotherapeutics are a new potential solution to explore for these diseases. The second reason is that in the specific case of cancers, immune based treatments brought a highly efficient way to target specifically tumoral cells, even metastasis often hard to target by other methods. A trend in oncology is now the production of Antibody Drug Conjugates (ADC) associating the specificity of an antibody to the cytotoxicity of the drug.
As classical drugs, biologics are also facing competition of generics named biosimilars. The share of biosimilar in the whole market of biologic is clearly growing due to a lower regulatory risk associated with such treatments. McKinsey recently published an article claiming that biosimilar sales will potentially triple in size to $15 billion by 2020.
CDMOs, a key player in the future of biotherapeutics
CDMOs are companies fully or partly dedicated to the development and production of treatments for third parties. They are used to deal with multiple projects in parallel and developed an expertise in specific area needing highly skilled people. The multiplicity of projects using a same type of material allows these companies to make margins even if the process is associated to a high cost burden. The bioproduction is therefore naturally an area in which the outsourcing is present. Based on results of the Nice Insight CDMO Outsourcing survey 2017, the share of companies who will outsource biologics production in coming years should be of about 21%. Moreover, the trend should increase with an increasing need in personalized medicines. Indeed, this type of medicines needs to be adapted to smaller and smaller number of patients and is not compatible with classical massive production of treatments such as those used for “blockbusters”. CDMOs by their flexibility and habits in managing multiple projects in parallel should be best positioned players to produce these new treatments.
In France, based on the recent LEEM report, 32 bioproduction sites were listed with 17 offering services to third parties as CDMOs.
Positioning of biotherapeutics specialized CDMO, a strategic issue
With the increasing market, comes the increase in competition between CDMOs in the field. Consequently, CDMOs need to define precisely their positioning in terms of offer to be able to differentiate from competitors. In this way a good strategy to adopt seems to be the “one-stop-shop” strategy, meaning offering all services from the cell line design to the final commercialized drug production. Indeed, this strategy allows to reinsure customers who know that cell line produced and cultivated for first development phases will be also used for the commercialization step. It would help them to avoid bad surprises when switching supplier. However, this strategy needs large investments as observed for Polpharma, one of the rare true one-stop-shop, who invested in 2016 to acquire Bioceros (acquired one year before by Epirus for $14.1 million). By this investment, the company was able to design and produce GMP-cell lines and increased their capacity in monoclonal antibodies production. Another investment is the building of a new manufacturing site which is ongoing in Duchnice for the commercial drug substance manufacturing and aseptic Fill & Finish.
The key issue now for most of CDMOs involved in the bioproduction and not in capacity to integrate all steps in their process is therefore to understand clearly what the minimal expectations of pharmaceutical companies are. Then CDMOs will be able to adapt their offers to the more valuable needs differentiating from competitors thanks to proprietary process and tools. By this way the companies will be in capacity firstly, to accumulate specific and highly valuable expertise, and secondly, to conserve their competitive advantages by making limited and targeted investments to improve the quality of their offers. Then to offer full service from cell line production to Fill & Finish services, CDMOs will have to organized consortia integrating all these specific know-hows to reinsure potential clients.
 Tranparency and market, 2018 – https://www.transparencymarketresearch.com/pressrelease/global-biologics-market.htm
 Changes in the Wind for the CDMO market, 2017 – Pharma’s Alamanac – https://www.pharmasalmanac.com/articles/changes-in-the-wind-for-the-cdmo-market
 Interview of Vincent Touraille, director of the French Union of biochesmistry profesionnals, 2017 – https://www.industriepharma.fr/l-evolution-du-marche-beneficie-pleinement-au-developpement-des-cdmo,88511
 Building a One-Stop Shop CDMO for Biopharmaceuticals, 2017 – Pharma’s Almanac – https://www.pharmasalmanac.com/articles/building-a-one-stop-shop-cdmo-for-biopharmaceuticals