by: Terence Davidovits (tdavidovitsbptccom)
Most consumer goods are manufactured in developing countries where labor rates are relatively low. These lower labor rates provide a cost of goods advantage even though labor represents ~5% for a smart phone and ~10-15% for an automobile. What is the implication for global biopharmaceutical manufacturing where labor contributes ~20-50% to the cost of goods?
The lure of low cost labor may change the global footprint of biopharmaceutical manufacturing, given the high contribution of labor to COGS. Currently this footprint is heavily focused in the developed world – US, Europe, Japan and South Korea. We are seeing expansion in places like China by domestic companies such as Innovent and multinationals like Boehringer Ingleheim, which is building capacity in China. For the time being, unlike consumer electronics, drugs made in low cost regions are consumed in low cost regions and not exported to high cost regions.
Concerns surrounding human safety and product quality are contributing factors to the labor intense nature of biopharmaceutical manufacturing. Interestingly, these same concerns have played a role in constraining the footprint of biologics manufacturing to a limited number of countries where the regulatory and quality environments are suitable. The difficulty of working in regions without suitable quality and regulatory environments, along with difficulties with IP protection and finding suitable staff, place additional indirect costs on manufacturing.
These indirect costs should be considered alongside the trend of rising wages in low cost regions. If the indirect costs mentioned above fall as quality, labor and regulatory environments improve, while at the same time wages rise, it is likely to impede a large shift of biologics manufacturing out of the developed world. However, given experience with other industries where labor is not as large a portion of the cost, there is, and will be, a large driving force to do more biologics manufacturing in low cost regions.For information on BPTC’s COGS modeling services, go to our COGS modeling page.
by: Dawn M. Ecker
Antibody related products have been a staple in the biopharmaceutical landscape for over 10 years. In preparing a chapter for a soon to be published road map for developing therapeutic monoclonal antibody products, the reality became clear that antibody related products are the cornerstone of the biopharmaceutical market. Representing over a third (35%) of all approved and currently marketed recombinant products (73 of 208), antibody products generated just over $89B of the $154B in sales of biopharmaceuticals for 2015.
Since recombinant products entered the market in 1982, 88 antibody related products have been approved over the last 34 years. If we take a closer look at the number of antibody related products approved every year, since the approval the first therapeutic monoclonal antibody Orthoclone OKT3 in 1986, the number of antibody products have steadily increased over the last few years with 2016 recording an unprecedented approval of 11 antibody products by the FDA and the EMA (see Figure 1 below). Of the 2016 approved products, seven are full length monoclonal antibodies: Anthim, Cinqair/Cinqaero, Lartruvo, Taltz, Tecentriq, Zinbryta and Zinplava, two are biosimilar antibodies: Amjevita and Flixabi, while the remaining two products are biosimilar Fc-fusion proteins: Erelzi and Benepali.
Surveying the overall recombinant biopharmaceutical pipeline, it is clear from our bioTRAK® database that antibody products continue to dominate the development pipeline. Of the over 400 products in late stage development (Phase 2 through BLA/MAA/NDA application), approximately 70% are antibody related products. The majority of these antibody products (90%) are produced in mammalian systems.
As we enter 2017, there is significant potential for another strong year for antibody product approvals. There are currently 27 products awaiting FDA or EMA approval, 14 of which are mammalian-based antibody products. Eight of the products are full length monoclonal antibodies: an anti-IL-1a Ab, avelumab, brodalumab, dupilumab, guselkumab, ocrelizumab, sarilumab and sirukumab, and five are biosimilars including an adalimumab biosimilar, a bevacizumab biosimilar, a rituximab biosimilar, and two trastuzumab biosimilars.
If we look even further back into the pipeline, there are nearly mammalian-based 260 antibody related products in development, with nearly a quarter in Phase 3. Although many of these products are still in active clinical trials, we expect that some of these products may possibly file for review and be approved before the end of 2017.
As the development and commercialization of antibody products continue to forge ahead with no slowdown in sight, antibodies will remain the cornerstone of the biopharmaceutical market for the foreseeable future.
 We consider antibody products to include full length monoclonal antibodies, antibody fragments (Fab fragments), Fc-fusion proteins, antibody-drug conjugates, and other conjugated antibody products for therapeutic or diagnostic use in humans.
 Sales data for biopharmaceuticals sold in 2016 have not yet been released. Please check back for a new blog revealing 2016 sales in April of 2017.
 Fifteen antibody products have been since withdrawn from the market.
Our article entitled: “Biopharmaceutical Manufacturing Process Validation and Quality Risk Management”, authored by Francisco C. Castello, Ph.D., Brendan Cooney and Howard L. Levine, Ph.D. of BioProcess Technology Consultants, has been chosen as a top five contribution by ISBE for 2016. The article appeared in the May/June 2016 edition of Pharmaceutical Engineering® Magazine. The piece describes process validation today as a continual, risk-based, quality-focused exercise that encompasses the entire product life cycle. If you are an ISPE member, we at BPTC hope you will consider our article when voting for the 2016 best paper award.
Pharmaceutical Engineering has established an “Article of the Year” award to recognize the contribution of authors. Articles are evaluated by a panel of volunteer reviewers according to a number of criteria, concentrating on the importance and timeliness of the subject matter and the quality of the presentation.
At the upcoming BioProcess International West Conference (Feb 27-Mar 2, 2017, San Francisco), Tom Ransohoff, Vice President and Principal Consultant at BioProcess Technology Consultants, will present a paper entitled “Challenges in Forecasting Biopharmaceutical Demand and the Value of Flexibility.” In this talk, Mr. Ransohoff will review the sources of uncertainty in forecasting demand for biopharmaceutical capacity and will describe how this uncertainty is linked to the value of flexibility in manufacturing facilities and strategy.
Frank Riske, Ph.D., Senior Consultant at BioProcess Technology Consultants will be delivering the Keynote Address entitled: Biopharmaceuticals: Past, Present & Future at the 8th Annual PEGS Europe Conference in Lisbon, Portugal. His presentation will cover the evolution of bioprocessing starting with the production of molecules such as insulin, HGH and alpha-interferon and bringing us up to today; a market dominated by monoclonal antibodies but where gene and cell therapy have become increasingly commonplace, biogenerics have made their mark and a number of new therapies are in the works.