Drug developers large and small are increasingly partnering with contract service providers to help overcome critical challenges and achieve greater efficiencies across the research and development continuum. More and more, sponsors consider the capabilities of CDMOs and CROs to address the complexity of today’s targeted therapies, from small molecules to biologics, that require highly specific drug technologies and expertise to handle, for example, immunotherapies, cell and gene therapies, cytotoxic/highly potent active pharmaceutical ingredients (HPAPIs), and mRNA-based therapies and vaccines. Additionally, sponsors seek solutions in the areas of data management and compliance, particularly as decentralized clinical trials (DCTs), an innovation just a short time ago, have become more mainstream.

The following offers perspectives from CDMOs and CROs on today’s R&D outsourcing trends across drug development, clinical trial services and manufacturing. 

Contract Pharma: What are the pharma/biopharma trends impacting R&D outsourcing?
 
Mike Gibson, Chief Technical Officer, Sterling Pharma Solutions: There have been a number of areas where the COVID-19 pandemic has impacted outsourcing, not least pharmaceutical companies’ wariness of offshoring drug production. We are now seeing large pharma companies spending time assessing the capabilities of domestic CDMOs in terms of the services and science that can be offered for projects.

We have also witnessed a greater emphasis from customers on data integrity and the role this plays in documentation and the capture of R&D data, as well as on environmental sustainability. Companies are looking to outsourcing partners to provide greater transparency of processes from origin, as well as evidence of energy efficiencies, waste reduction and more sustainable manufacturing.

Elliott Berger, Chief Marketing Officer, Catalent:  Increased funding from private equity and venture capital firms has seen an increase in the number of emerging pharmaceutical companies. These companies typically do not have in-house resources, concentrating instead on key, core functions and outsourcing development work, specialized areas, and manufacturing.

Obviously, COVID-19 and the related emergence of mRNA-based therapies, next generation vaccines and new anti-viral treatment, and their related demands on supply chains, rare talent and needed capacity is substantially affecting our industry’s landscape.

Furthermore, the increased growth of advanced modalities has led to more companies seeking partners that can provide the sophisticated manufacturing practices and specialist expertise and technologies necessary to progress therapies towards commercialization.

Dr. Nicholas Lakin, Senior Managing Director, Consulting, Syneos Health Consulting:  In terms of therapy area focus, many pharmaceutical companies have changed their strategies to target immuno-oncology. For those with vaccine portfolios, COVID-19 has placed a massive emphasis on next generation treatments. As a result, for outsourcers, therapy area expertise has become even more in demand across these areas, and it has become increasingly important for sponsors to make sure they are getting access to CROs who can serve as a strategic partner in these efforts.

Lastly, the industry has experienced an overlap between outsourcing and new platform investments, specifically between CROs and technology platform providers who continue to provide overlapping business cases for programs to transform clinical, regulatory and safety operational productivity. Alignments between CROs and technology vendors, as well as the move by many large CROs to invest in their own platforms, makes this an area of shifting sands where sponsors need to make strategic choices.

Solomon Babani, SVP and General Partner, Biotech and Small/Mid-Size Pharma, ICON plc:  The biopharma industry is changing, and it has to do not only with the scientific innovation and technologies that are advancing at a rapid pace, but also because of the current business environment and financial climate. Not only is outsourced R&D a specific need, but so is solution specialization. Biotech sponsors are looking for the basic CRO support, of course, but also two other really important pieces – programs are purpose-built based on clients’ specific end goals as well as access or connections to development partners and funding.

At ICON, we know it is in our best interest to completely and holistically support our biotech clients – if they need clinical trial support, we do it. If they need a connection to discuss funding or other advantageous partnerships, we will play the role of matchmaker. If they need particular development advice or thought leaders to be involved, we make introductions and our teams give them hands-on support.

Contract Pharma: What are some of the R&D challenges the industry faces? What areas are being outsourced?

Elliott Berger, Chief Marketing Officer, Catalent: In advanced therapeutics, such as cell and gene therapy, innovation and understanding has progressed rapidly. However, as was seen with other biotherapeutics when in the relatively early stages of their development, there are challenges that need to be overcome, such as developing robust processes at larger scale, optimizing analytical methods, improving the manufacturing yields and integrating both upstream and downstream processing with supply chains of raw materials to increase efficiency and assure supply.

The emergence of multiple modalities has resulted in a record level of pipelines and investments, however the available talent and resources across development, analytical and manufacturing platforms cannot adequately grow to keep pace, so finding partners with the expertise and capacity is challenging to meet the demands. Researchers cannot afford to have to wait on resources, as the field is evolving so quickly, and as a result, are having to seek out collaborative partners earlier in the development process to ensure capacity is available when necessary.

Mike Gibson, Chief Technical Officer, Sterling Pharma Solutions: Perhaps the largest short-term challenge at the moment is recruiting scientists. There is increased demand for scientists across the sector, so competition among employers is greater, and coupled with the academic interruption that has been experienced, there are some Ph.D. students yet to complete their studies.

While we are seeing an increase in onshoring of manufacturing to ensure security of supply, the pressure on price has not changed, so there is greater need for R&D teams to develop cost-effective processes using intensification methods and innovative science to keep costs down.

Additionally, as the pharma landscape changes, the biggest challenge for manufacturing companies is to continue to deliver greater depth in capabilities and technologies, so that the needs of the current market can be met; but also looking forward and understanding what the market will demand in the future.

Dr. Nicholas Lakin, Senior Managing Director, Consulting, Syneos Health Consulting: The industry is also trying to maintain compliance during this time of operating in both hybrid and virtual models. To date, we’ve seen several regulations move toward becoming mandates in 2022 (e.g., EU CTR). Pharma companies need to continue the pace of their own internal initiatives to ensure compliance, while working remotely. The next phase for many will be the shift from readiness to performing compliant operations; this will likely result in adjustments to outsourcing strategies. In parallel, compliance in a virtual model has become a critical R&D objective over the last two years, with an increased focus in areas such as data integrity.

We’re also seeing new resource demands emerge. For example, DCTs are creating a demand for project managers who have the capability to advise study groups on the right combination of DCT capabilities to assemble for a study. These roles are being sourced both internally and externally by sponsors.

Sy Pretorius, President, Clinical Development & Chief Medical Officer, Parexel: An additional challenge is the lack of industry-wide data standards and how best to manage more and more data from disparate and diverse sources across multiple platforms while ensuring quality. Ideally, we need to establish regulatory structures and guidance that protect patients but are also flexible enough to allow for research innovations.

Contract Pharma: What are the motivating factors for outsourcing these areas?

Elliott Berger, Chief Marketing Officer, Catalent: The nature of outsourcing depends primarily on the type and size of customer, and the sophistication of the process required. Big pharmaceutical companies are looking either to supplement core capabilities with strategic partnerships on advanced technologies or manufacturing capabilities; or ones that can take over large parts of their supply chains for lower priority products. Occasionally, they will also look to outsource critical elements, such as chemistry, manufacturing and controls (CMC), or to rapidly scale production in preparation for commercial launch, or provide additional capacity.

For smaller companies, the business strategy is based around outsourcing of services where in-house capacity or expertise does not exist. Traditionally, these smaller innovators would have looked to take programs to a stage where they could be sold or out-licensed, but can now access the funding to continue development through to commercialization, and are evolving their business models to work with partners with integrated capabilities and experience in later-stage disciplines and product launches.

Mike Gibson, Chief Technical Officer, Sterling Pharma Solutions: As they become more personalized and targeted, the rising complexity of therapies and drugs, coupled with novel technologies to develop previously hard to administer drugs, means that the need for specialist expertise and equipment is increasing. Outsourcing to suitable companies, rather than investing internally, is often the most cost-effective approach for pharma organizations.

For virtual and emerging pharma, outsourcing is integral to their business strategy, and such companies continue to require a full service offering from preclinical development through to CMC and commercial manufacturing. This is in contrast to large pharma, which predominantly outsources starting materials and intermediate manufacturing, retaining the API stages in-house, except for more complex projects.

Solomon Babani, SVP and General Partner, Biotech and Small/Mid-Size Pharma, ICON plc: Biotechs and small and mid-cap companies (SMIDs) are outsourcing more and more while they try to keep their internal teams as lean as possible. Some sponsors opt for full-service outsourcing while others outsource on a functional basis. There is not right or wrong way to do it: companies have to pick the strategic approach that best aligns with their corporate and development goals. Some sponsors want to develop an asset to a certain clinical milestone and then divest, while other sponsors want to take the asset all the way through to approval and build a fully functional commercial stage biopharma company. Again, there is no right or wrong way, just many great options, all of which can be supported by a top tier CRO like ICON.

Also, biotech leaders are usually scientists who are great at development and innovative at their core, but they may need an extra hand on the business side to get access to funding or to help build relationships or development partnerships. They may also need support from a regulatory standpoint or even filling seats within their C-suite. That’s where ICON comes in. Yes, we do the research and development, but we can also be strategic advisors and play the role of management from the earliest stages of the company’s inception – in essence, we are true strategic partners.

Contract Pharma: What services are you seeing an increased demand from sponsors?

Elliott Berger, Chief Marketing Officer, Catalent: We are witnessing growth in areas such as the advanced modalities in cell and gene therapies, and biopharmaceuticals, fueled by the increase in emerging biotech companies, and more sophisticated small molecule technologies that enable increasing numbers of fast-tracked treatments to come to market. We estimate the outsourced rate for cell and gene therapies to be approximately two-thirds, with demand far exceeding current and anticipated future supply.

The R&D pipeline is robust, primarily driven by biologics, particularly new modalities, and is expected to drive more than half of future pharma growth. However, we are still under the specter of COVID-19, and the therapies and vaccines, both under development and commercialized, will play a critical role in capacity utilization in terms of drug substance manufacturing and fill/finish capabilities for the foreseeable future. CDMOs will be under pressure more than ever to ensure efficient operations and the availability of “right-scale” manufacturing going forward to meet all the industry’s demands.

Mike Gibson, Chief Technical Officer, Sterling Pharma Solutions: We are seeing an increased demand for flow/continuous chemistry manufacturing to overcome existing inefficiencies, as well as harnessing the environmental benefits that this technology brings. This demand has seen Sterling make significant investments in capabilities and resources, as well as develop partnerships with a number of academic institutions in this field.

Additionally, Sterling has invested in areas to complement API manufacturing, including highly potent API (HPAPI) handling capabilities, solid state chemistry and particle engineering facilities, and expertise in specialized analytical and R&D capabilities due to an increased awareness in the impact of potential genotoxic impurities. Recent customer success and developments in antibody-drug conjugates have also brought about a growing interest in bioconjugation services, particularly in parallel with the expertise we have in handling HPAPIs.

Solomon Babani, SVP and General Partner, Biotech and Small/Mid-Size Pharma, ICON plc: In the wake of the COVID-19 pandemic there has been a surge of interest in our mobile health technology and how we can fully or partially run DCTs. Historically, there was the belief that only certain therapeutic areas and indications would lend themselves well to “decentralization” – but what’s very exciting for us is that we are finding innovative ways to apply hybrid and decentralized models to many more areas than originally thought possible. In addition, with longitudinal patient data becoming more and more accessible, we are finding many sponsors interested in using cutting edge tokenization technology to perform long term patient tracking.

Sy Pretorius, President, Clinical Development & Chief Medical Officer, Parexel: One area where we are seeing outsourcing is DCTs. Given the rapid speed of adoption and the evolving vendor and regulatory landscape, CROs are particularity well-placed to deploy DCT strategies because of the breadth of experience obtained across multiple sponsors. For sponsors, they can partner with CROs who have been active in this space since 2011. This enables them to leverage the significant learnings and expertise available without necessarily having to dedicate significant resource themselves.  

Patient insights programs are also being outsourced as CROs have had a strong focus on patient engagement in trial planning for a number of years (eight at Parexel) and partner with networks of patient advisory groups, patient communities, site nurses and trusted vendor partners to meet the depth and breadth of requirements to be successful in this space.

Parexel is also seeing increased demand particularly in the sensors space, where sponsors are becoming emboldened to try new ways of collecting critical data directly from patients, particularly due to site access challenges around the world in the last 18 months.