Specialist
SVP at Sumitovant Biopharma Inc
Agenda
- Recent trends and developments in biologics manufacturing across the US, UK and APAC regions, including supply issues and labour dynamics
- M&A strategies and consolidation trends across CDMOs (contract development manufacturing organisations) such as Thermo Fisher (NYSE: TMO), Lonza (VTX: LONN) and Catalent (NYSE: CTLT)
- CGT (cell and gene therapy) – dynamics, growth expectations, technological advancements and newer entrants such as Charles River (NYSE: CRL)
- Q4 2021 industry outlook and growth dynamics
Questions
1.
Could you give an overview of the biologics industry and cell and gene therapy specifically since we last spoke [see Gene Therapy Manufacturing – 2021 Outlook – Part 1 - 6 October 2020]?
2.
Can you expand on the regulatory landscape and recent changes or changes you expect in the coming months or years across the US, EU and APAC regions?
3.
Demand and supply is a significant dynamic to monitor – a significant portion of our last discussion was around where the industry is falling short in this regard. Where does this stand now vs when we last spoke, especially for the cell and gene therapy portion of biologic manufacturing?
4.
You’re noting that good CDMOs are getting their supply taken care of very quickly, which is leading to about 18-month lead times. How has that number trended for smaller CDMOs? When might it to improve, if at all, do you expect it to increase further in the coming years?
5.
Can you discuss any key top-tier players? In recent Interviews, experts have noted that larger CDMOs being able to cherry-pick biologics projects through brand recognition has opened up a significant opportunity for smaller CDMOs as they give clients openness to go with non-top-tier CDMOs because of lead times. How is this dynamic playing out in cell and gene therapy and how might this trend?
6.
You’re noting that there’s a lot of M&A. How are you assessing the capacity addition strategies of Catalent, Lonza and Thermo Fisher? Do you think any one of those is doing a disproportionately strong job at integrating players or making the most of that capacity add-on?
7.
A previous specialist was less impressed with Lonza’s capacity addition efforts, while more hopeful for Catalent doing this properly, or just overall saw a lot of potential for Catalent [see Biologic Manufacturing – Part 1 – Market Analysis & Post-coronavirus Outlook – 16 November 2021]. Do you have any similar assessment?
8.
Talent significantly impacts CDMOs’ positioning and there is an ongoing labour shortage. Have any players been particularly impacted by this? What price increases might you expect in the next year or so as a result of this developing dynamic?
9.
You’ve noted supply limitations and other dynamics that might be complicating this. Last time you noted that about 90% of cell and gene therapy work is outsourced, but a lack of supply might shift the dynamics significantly. Is there potential increased risk to CDMOs from pharma companies starting to take on more manufacturing of early clinical development or even early commercialised timelines?
10.
Thermo Fisher has a clear goal of having an end-to-end offering and acquired into the contract research segment earlier this year. How would you assess the breadth of its portfolio and the extent to which that might be a draw, considering supply is a significant challenge here? Do you think it is well-positioned to materialise this end-to-end model in the longer-term?
11.
What is your sense for Charles River entering the cell and gene therapy manufacturing segment and
already expanding that footprint? How are you assessing this player?
12.
How should we think about the success of Charles River or any other player that is not traditionally in the cell and gene therapy manufacturing segment? You mentioned labour dynamics and expertise, but what might be the ideal way this plays that you think would be encouraging? What would they need to do to move the needle to being a well-considered player?
13.
What are your expectations for Catalent in the US, particularly given its focus on expanding its biologics footprint and even some recent small-molecule divestments? Do you have any further commentary on the company?
14.
What is your view of APAC-based CDMOs such as Wuxi or Samsung Biologics? Is there a different dynamic between them, or is there a player you’re particularly impressed by?
15.
A significant portion of your assessment of these players seems linked to labour. Might anything else become of greater focus once the labour dynamic normalises? Is there any criteria that might be being overlooked given the greater focus on supply and demand and labour, but that might become of greater importance?
16.
You mentioned potential lead times of 12 months to 18 months for larger CDMOs. Are there any other notable or impressive smaller players, potentially on the 12-month timeline, considering current criteria and the criteria that’s becoming more important? Are you looking forward to what any smaller players accomplish in the longer term?
17.
How have you assessed the supply coming online recently, considering there has been less focus on increasing supply across CDMOs? There are still a lot of delays, but do you find any risk of over-building supply for cell and gene therapy? What are your thoughts on the mid-to-long-term supply-demand balance given all the supply coming online?
18.
Last time we spoke about the limitations of the autologous model and you were quite bearish on the model’s ability to reach economies of scale given how inefficient the supply chain is. Does this still hold true?
19.
Are you aware of any particularly impressive efficiency improvements since we last spoke or do you expect any improvements that that, while not as efficient as they could be, are encouraging?
20.
How does the cost dynamic compare across western CDMOs and traditionally APAC CDMOs? Can you
discuss the extent to which the shift from autologous to allogeneic is changing the cost basis for this
assessment?
21.
To what extent would you need to see significant change, particularly regulatory, to shift that dynamic towards more openness to working with some of these players?
22.
How do you expect the pricing dynamic for outsourced manufacturing work to trend? Is the mindset towards contracts shifting? To what extent can pricing continue to pass through to clients in the longer term?
23.
How are you assessing key players or industry leaders as well as any longer-term challenges that might be overlooked or underestimated in the next five years, especially in cell and gene therapy? Is there anything else you think is key to mention?
24.
Is there anything else you’d like to add before we conclude?
