Selkirk Pharma is a Spokane-based contract manufacturing organization (CMO) recently formed in 2018. Patrick Haffey, CEO of Selkirk, said the company was founded simply because the healthcare system needs more and better fill/finish capacity. 

The CMO is currently building out a new state-of-the-art aseptic fill/finish facility scheduled to be completed in March 2022, including construction and equipment installation. Initially, the 145,000 square foot facility will run three lines—Selkirk owns an adjacent 8-acre parcel for a second plant if demand calls for future construction.

Haffey spoke with Contract Pharma recently about the experience of entering the fill/finish space as a start-up and provided details of the new facility, which he said was designed from the ground up to be the most reliable fill/finish facility in the world.

Contract Pharma: Please provide a brief background on Selkirk’s beginnings and how you came into the role as chief executive from where you were previously in your pharma career?

Patrick Haffey: One of my favorite things about working in contract manufacturing is you get to see a lot of different products, different manufacturing technologies and different quality systems. I was fortunate to be around people who saw all these different approaches and were asking questions like: “If you had a blank slate, what would you build? How would you combine best practices from across our industry? Where has ‘best practice’ not yet been realized? What do our customers really want?”

We felt these conversations held so much potential for our customers and their patients, that the personal and professional risks of starting a business were worth it. The first investors to get interested in what we were doing were healthcare providers—an ER doc, a surgeon, a pharmacist, a hospital administrator, and several others. They saw our objective was to improve the reliability of drug product supply, an issue they were battling on a daily basis. 

CP: It’s rare to see start-ups enter the CMO market. What was the motive to do so? Did you see gaps in the market that needed to be filled?

PH: It’s especially rare in the commercial fill/finish space. The barriers to entry are significant. Our motivation was simply that the healthcare system needed more and better fill/finish capacity, and that happened to be the very thing we were good at and enjoyed doing. The notion of adding domestic fill/finish capacity of course resonates today, but back in 2018 when we were raising capital, I put a lot of investors to sleep talking about manufacturing.

As far as gaps in the market, I think the addition of modern, more advanced fill/finish capacity at any scale is a good thing for our healthcare system. But Selkirk chose to focus on small batch, high-value, late stage clinical and commercial products; the customers for whom quality really matters, yield really matters, a highly engaged customer service model really matters. Our read of the industry is that those are the bio/pharma companies having the hardest time finding the right fill/finish partner.

CP: What obstacles did you have to overcome as a start-up entering a mature market with established players in the field?

PH: Our employees average more than 20 years in the industry, much of it building new facilities, so I was confident in our ability to execute the project. But we did not know how or where to raise that much capital. It seemed to me the world was flush with capital but finding investors and capital partners who wholeheartedly believed in the mission of improving drug product supply was challenging. 

In terms of the established CMOs, we really haven’t spent much time thinking about how to compete with them. Our industry is not a zero-sum game; we don’t need another CMO to lose for Selkirk to win. We actually collaborated with many of those established players on facility design, equipment selection, and other decisions along the way.

CP: What makes Selkirk unique as an injectable drug manufacturing partner?

PH: By the time we’re done, I think this may be the most technologically advanced fill/finish CMO in the country, but I’d still say what makes us special is our team. This is a group of people who, before financing was in place, before corporate partnerships were in place, joined Selkirk because they believed they could make an impact in patients’ lives by building this company. If you partner with us to fill your drug product, those are the people you’ll be working with every day. 

CP: What are some of Selkirk’s business highlights over the past 12 months?

PH: We broke ground on our facility last September. Around that time, we also launched all of the digital systems required to support a paperless operation, including QMS, eBR, ERP/MRP, etc. We completed the FAT for our SKAN isolators, and we are performing the FAT for our Bausch + Stroebel Variosys filler this month. And, our team has grown to 26 full-time employees.

CP: What are some of the new facility’s standout features?

PH: After launching Selkirk in 2018, we spent 9 months just doing conceptual design and talking to both CMOs and product sponsors all over the world about best practices. This is not a re-purposed building; it was designed from the ground up to be the most reliable fill/finish facility in the world. We have true unidirectional flow throughout manufacturing. The filler is a fully-integrated Variosys in SKAN isolators.

Everything is electronic and automated. We also have space within our manufacturing footprint to build out two additional fill lines, which will offer our customers rapid capacity expansion opportunities. I think visitors who know this industry will also be surprised to see the amount of natural light in the facility. We invested heavily in building a safe, comfortable facility that employees and customers will actually want to go to every day.

CP: How have you had to change to adapt to the COVID-19 pandemic?

PH: We’ve been almost entirely virtual since March of last year, which made reviewing drawings, auditing vendors, onboarding new employees, and pitching investors pretty difficult. But the way this team took care of each other during the personal and family hardships—that’s what I’ll remember about 2020. When you launch a company the way we did, you end up with only the most passionate, most resilient people at your side. So, in some ways I suppose we were more prepared for that kind of disruption and uncertainty than even some of the more established companies.

CP: How do you see the injectable drug manufacturing market evolving over the next five years?

PH: Prior to the pandemic, I think the clear answer was this trend toward more injectables, more large molecules, higher value products, small bio/pharma companies holding assets longer, etc. I think that is still the future of our industry, but it will be interesting to see how broad disruptions in healthcare shape clinical trials, drug development activities, early-stage bio/pharma investments, etc. 

CP: What are the key trends driving the market?

PH: So many trends are outside Selkirk’s control: government actions, regulatory actions, healthcare disruptions from the pandemic, early-stage bio/pharma investment. But whatever happens in the world, we believe bio/pharma companies (and patients) will always benefit from more and better fill/finish capacity with a focus on quality and service.

CP: What are the greatest challenges service providers like Selkirk face in today’s outsourcing market?

PH: From a strategic level, I think just staying disciplined is a challenge for CMOs. Are you willing to stick to your core competencies? Are you willing to tell a customer no if you have to? Are you really committed to training and preventative maintenance in your production schedule, or do you sell that line time? I’ve seen lack of discipline and growth for the sake of growth ruin good CMOs.

At a technical level, the long-overdue transition to automated, electronic records is an important challenge our industry has to face. Even with no legacy systems holding Selkirk back, deploying a fully-digital platform has not been easy. But the level of quality you get from automated data acquisition, real-time quality oversight, and full integration of every system in your factory is way beyond even the best paper-based operations.         

CP: What are your goals for Selkirk over the next 12 months and beyond?

PH: We’ll finish construction of the facility, install all of our equipment, and start our validation activities. We also plan to hire about 20 more employees in that timeframe. In addition, we’ll finish building out our digital systems like eBR and ERP/MRP and get that to not only a validated state, but a user-friendly and customer-friendly state.

To date we have been focused solely on executing this project, but soon we’ll need to decide what customers to work with and which products to make. We believe our success is closely tied to having an engaged first customer who really wants to be an active partner in what we’re building.