Contract manufacturing organizations (CMOs) are at the heart of the biopharmaceutical industry. They are tasked with conducting much of the “heavy-lifting” involved in the complex research, development, and treatment that biopharmaceutical companies are known for. Given their responsibility to produce and develop groundbreaking innovations aimed towards solving the world’s most pressing public health concerns, it is worth noting what it takes to become a successful contract manufacturing organization in today’s economy.
Promoting Economies of Scale: A Case Study of China and India
Contract manufacturing organizations promote economies of scale within the biopharmaceutical industry. This focus on efficiency keeps CMOs at the core of the market’s function. An example of how economies of scale work in a contract manufacturing organization includes the biopharmaceutical industries in both China and India. Both suggest a future positive outlook for contract manufacturing, especially China. For example, China’s CMO sector was virtually non-existent ten years ago because the government prohibited its operation. The government eased regulations once it became clear that the international and domestic markets need CMOs to keep biopharmaceutical companies up-and-running.
One example of economies of scale in China’s CMO market includes the collaboration between Boehringer Ingelheim (BI) and Mabplex, a domestic biologics CMO in Shandong. In ten months, this CMO generated $15 million in revenue. WuXi Biologics, an international contract manufacturing service firm, opened in 2008. Five years ago, the company began construction on a $150 million biologics manufacturing facility in WuXi City. This plant will be the largest mammalian cell culture manufacturing facility using disposable bioreactors in the world. By opening this plant for international interest, biopharmaceutical companies will be able to outsource their production at a cheaper price than if they were to produce their products internally. This, in return, allows biopharmaceutical companies access to record-breaking production capabilities at a fraction of the possible production cost.
Alternatively, India, which was previously seen as China’s main competitor in foreign investment contract manufacturing, is declining. While China continues to build more contract manufacturing organization plants within their own borders, some of the largest biopharmaceutical players in India are building huge new biopharmaceutical manufacturing facilities in other Asian countries. India’s pivot to global investment patterns is not limited to Asia, however, as they also are prioritizing generic drug manufacturing and distribution networks in North America. While the regional patterns differ, the concept is the same. A successful contract manufacturing organization capitalizes on economies of scale by encouraging biopharma companies to outsource their production for a relatively cheaper cost compared to internal production.
Asia’s Growing CMO Market
Upon an assessment of the trends within China and India, it can be concluded that Asia will begin to take up a greater share of the CMO market. For example, 40% of the market share exists in North America. While their annual growth rate stands at around 6%, the Asia-Pacific market is expected to grow at 12%. We see this rate in action with the growing number of production facilities popping up across Asia. These facilities are operated by contract marketing organizations such as Aldevron, Bachem, BioReliance, Kaneka Eurogentec, Meridian Life Science Vetter Pharma, and Samsung Biologics.
Over the past thirty years, more contract marketing organizations have begun to classify themselves as a contract development and manufacturing organization (CDMO). This highlights the organization’s full-service offerings to fully-integrate their operations into their client’s operations. Asian CDMOs are able to contribute to the region’s projected annual 12% growth by taking advantage of fewer legal restrictions and access to cheaper labor. As demonstrated by India’s growing regulatory pressure due to the United States’ Federal Drug and Administration (FDA) quality concerns, we can anticipate that Asian CMOs will need to balance the quality of their products with the quantity they are able to advantageously release to the market.
How Samsung Biologics Became Successful
With the launch of their third biologics manufacturing plant in Songdo, South Korea, Samsung Biologics ascended as one of the world’s largest biologics contract manufacturing organizations in the world. On April 5th, the company announced that they partnered with PharmAbcine to develop and manufacture a next-generation therapeutic antibody candidate. PharmAbcine is a clinical-stage biotech company specializing in human therapeutic antibodies that treat cancer and neovascular diseases. The antibody candidate (PMC-402) to be produced by Samsung Biologics, improves immune cell delivery to treat tumor cells. The therapy would successfully treat oncology and neovascular disorders, with hopes of expanding the treatment to eye diseases such as wet age-related macular degeneration and diabetic retinopathy.
Digging deeper into Samsung Biologics shows more of a classification as a contract development and manufacturing (CDMO). Their contributions to the global pharma landscape reflect a commitment to a global scale bio-ecosystem for their biotech companies. Not only has the company pivoted with its third manufacturing plant, but Samsung Biologics also announced its opening of a Research and Development center in San Francisco in late 2020. Their development services promote a seamless one-stop service for their clients. This center is expected to support its growing number of clients in the West and uphold its reputation for maximum client satisfaction.
How does Samsung Biologics continue to succeed? First, their fully integrated development and manufacturing service techniques are known to offer state-of-the-art contract development, laboratory testing, and manufacturing services. Their approach is tried-and-true; the business upholds a proven regulatory approvals record and a fast throughput. These approaches specifically include cell line development, DS, DP Manufacturing, and IND filing.
Samsung Biologics’ competitive pricing, coupled with a commitment to quality, establishes Samsung Biologics as an attractive, highly-flexible organization that consistently achieves customer satisfaction. When beginning to collaborate with Samsung Biologics, clients will notice that the CDMO provides a dedicated project management team to oversee each project. In fact, Samsung Biologics has won the CMO Leadership Award for seven consecutive years. Regulatory support with strong intellectual property protection and on-time full delivery also set Samsung Biologics ahead in guaranteeing their success.