around the manufacture of high potents are
considerable and not one that many pharma
companies want to take on.
Teeter: I believe that demand for contract manufacturing services will continue
to increase because of (1) price pressure
from insurance carriers, Medicare and user
consortia; ( 2) cost-driven downsizing of big
pharma infrastructure; ( 3) process flexibility
from smaller, process-specific contractors.
Skultety: A bright future is on the horizon
for contract manufacturing. The demand will
continue to grow as more and more pharmaceutical companies want to get out of the
manufacturing side of the business. The cost
of maintaining a quality GMP manufacturing
facility continue to increase particularly if
it is necessary to be able to meet all of the
global regulations so the products can be
exported globally. It makes sense for customers to contract out the work rather than
try to keep it in house. The future also will
be directed by the initiative to develop/man-ufacture under the guidance of Quality by
Design. This has changed how the industry
looks at developing process parameters and
what it means to “validate” the manufacturing of the product. This is an ongoing process and how the principles are applied will
definitely be refined with time.
Downey: From a macro level contract
manufacturing will continue to grow. Each
day the pharmaceutical headlines detail
how “big Pharma” is restructuring to reduce
cost and asset base and innovative biotechs
are appearing with no operational footprint,
i.e. everything is outsourced. This will
continue to fuel the need for outsourcing
In addition, forecasts indicate there will
be a greater focus on targeted therapies/
personalized medicines, with an increase
in the use of companion diagnostic tests
which may have impact on the needs our
clients expect CMOs to service. It is therefore essential we remain flexible and innovative to adequately support these changing
needs into the future.
Differentiation becomes the key to how
CDMO’s will do business in the future. How
are you different from the competition? This
differentiation will drive strategic partnerships, possible risk sharing arrangements
etc. A CDMO’s ability to be flexible and innovative will be a determinate of success.
cently. Our ability to invest both on our own
behalf and with our client partners sets us
apart from much of the competition. Not having institutional external investors means we
have no significant demands on pulling money
out of the business, thus enabling us to invest
heavily in innovation to ensure we can focus
on delivering the needs of our clients.
Last year, Almac’s Pharma Services business unit doubled its pharmaceutical development capacity with the opening of a dedicated
non-GMP formulation development facility
supported by additional GMP analytical laboratories providing our clients greater flexibility and speed when assessing the feasibility
of technical concepts and formulations. This
enables streamlined progression from development to clinic to commercialization.
The same business unit invested over $10
million to expand into the US last year with
the establishment of a new state-of-the-art
commercial packaging facility in Audubon,
PA. The FDA approved facility brings over 30
years commercial packaging experience from
our UK headquarters and provides flexible,
quality driven commercial packaging to the
local US market.
Added to these investments, continuing
to provide sector leading project and client
management ensures our customer satisfaction is achieved in the most straightforward
and effective manner.
What do you see as the future for con-
tract manufacturing services in the phar-
Callanan: Many industry analysts believe
What has been the impact to your business
consolidation will continue as a trend. More
companies will outsource their manufac-
turing requirements, however they may
not all look to the east as their first option.
Being able to supply product reliably and in
good quality will continue to be a trend in
the contract manufacturing business. Also
in the area of high potency manufacturing,
FDA inspections tend to be more driven by
product submissions upon which Almac is
named. Thus, with our growing business
within the US product market, we are in-
spected on a regular basis by FDA.
from overseas competition and what have
you done to remain competitive?
Callanan: Price competition has been
seen to rise, however with significant quality issues evolving in certain territories,
our focus on quality has stood to us well.
Recent commentary by Gabelli & Co analyst
Kevin Kandra has noted that quality and
consistent supply has shifted the focus for
buyers over price. Our Right First Time
(RFT) and On-time-in-full (OTIF) for delivery to our products is over 93%, which
shows we consistently supply quality products for our partners. For us the ability to
supply the market and be consistent in that
supply as well as be in good favor with the
FDA, is important for us and more importantly for our customers.
Teeter: As a contract manufacturer, so
any impact to Anteco is secondary through
our domestic customers. Overseas companies have, in fact, been a significant area of
growth – particularly, those who are looking
for a North American manufacturing site for
regulatory or logistic reasons.
Skultety: A few years back there was a big
push for customers to look at doing things
overseas for both synthesis of the active
substance and manufacture of clinical supplies. What we have observed is that a number of customers have had problems trying
to manage things overseas and have found it
is not as cheap as they originally though and
that it is not easy to manage. Most of our
customers have found it is much faster and
more reliable to have their formulation development and manufacturing done in the US. A
number of customers still like having a person in plant during manufacture so to have
the work done domestically is a big plus for
them. Bottom-line is that we have not seen a
big drop in demand due to customers going
overseas. The best way to keep this trend going is to remain cost conscious and provide
Downey: Almac has consistently grown
year on year with a strong upswing in business interest becoming more pronounced re-
“Being able to supply product reliably and in good quality will continue to be a trend in the contract