Production of a number of drugs are likely to remain in lower cost production hubs, such as China and India. But biologics may tell a different story: with different dynamics for small volume, high margin treatments.
There’s an opportunity for the US to lead in advanced biologicals; as well as manufacturing in viral vectors and cell and gene therapies, according to CPhI’s insight’s report ‘US Pharma Market 2022 and Beyond’, prepared for this year’s CPhI’s event.
But first, the country must overcome current capacity restraints through increased efficiencies and investments.
mRNA vaccines and therapeutics
A chunky boost of capital from Operation Warp Speed was designated to increasing development and manufacturing capacity in the US.
Now, this investment is expected to provide the stimulus to advanced therapy medicinal products (ATMPs) while the approval of two mRNA vaccines has validated an entirely new approach to vaccine delivery.
“We expect to see the approval of mRNA-based cancer therapies in the next few years," notes Peter Shapiro, Senior Director of Drugs and Business Fundamentals at GlobalData, in the report.
"Furthermore, these mRNA therapies will be able to use the same manufacturing equipment as mRNA vaccines now that the industry has shelled out the high CapEx cost for this equipment, and trained more staff in sophisticated pharma manufacturing.”
Moderna, for example, has wasted no time in setting out a host of mRNA opportunities for the coming years. A mRNA quadrivalent flu vaccine has already started a Phase 1/2 clinical trial – dosing its first participants last month; with an HIV vaccine set to follow into the clinic later this year. Other programs include mRNA vaccines for CMV and RSV.
A key advantage of the platform is not only its speed and flexibility in capacity for COVID-19 vaccine production: but also that the same tech could be applied to mRNA therapeutics.
Viral vector demand
Viral vectors – already in short supply pre-pandemic for gene therapies and gene-modified therapies – are now also required for viral vector vaccines (namely AstraZeneca and J&J).
As of May, there were 14 therapies/vaccines that use a viral vector marketed in the EU, Japan, US and UK, according to GlobalData – who predicts this number will soar over the next six years to more than 100 (and with more than 3,000 in the longer term development pipeline).
Meanwhile, there are only 87 viral vector contract manufacturing facilities available worldwide.
“Adding to the shortage of supply is the current inefficiency in manufacturing – including low titres and complexity – with both biopharma innovators and contract manufacturers working on both upstream and downstream process innovations," notes the CPhI report. "One suggestion from our experts is for [regulatory] agencies to approve standardized viral platforms that could be used interchangeably by therapy developers, potentially speeding up cell and gene therapies’ development, approval, and technology transfer to CMOs.”
With pressure on viral vector manufacturing coming from both COVID-19 vaccines and the increased number of gene therapies, manufacturing in this sector will have to increase through scaling up facilities, developing more efficient processes both upstream and downstream, and more investment from contract manufacturing organisations.
Cell and gene therapies
Biologics and cell and gene manufacturing are ‘potentially entering a hugely profitable period’, notes the report. But for this to be realised, greater capacity is needed.
The dynamics of this market are different to others. There is willingness, for example, to accept higher production costs in the most advanced therapies with higher margin. In particular, there is high demand for biologicals, cell and gene therapy capacity, and highly potent drug therapies in the US.
"In fact, the pandemic has further aggravated capacity constraints as priority is given to COVID vaccines. Anyone with available capacity in the US is likely to be booked up well in advance and able to charge a premium. For the CDMO space, this presents huge opportunities with a large number of acquisitions in the last year as well as increased capital coming in from VCs," notes the CPhI report.
And technological advances will have a particularly important role to play.
“Our experts predict that the US is going to play a key role in the development of advanced manufacturing technologies improving the technology base in general and potentially lowering costs. While the country cannot compete on labour costs, it has the scope to bring new efficiencies to advanced biologics manufacturing,” notes the report.
Cell and gene therapy, API manufacturing and injectable dose manufacturing are the best immediate opportunities for reshoring in the US, notes the report.
“There are opportunities for the US to lead in particular for advanced biologicals. But there are also medium- and long-term opportunities for manufacturers capable of manufacturing mRNA-based vaccines and therapies and vector manufacturing for recombinant vector vaccines, gene therapy and gene modified cell therapy."
Peter Shapiro, Senior Director of Drugs and Business Fundamentals at GlobalData.
Much to gain from new innovations in manufacturing
Across the biologics space, the industry is continually looking for new innovations in upstream and downstream processing, with organisations like the National Institute for Innovation in Manufacturing Biopharmaceuticals (NIMBL) pushing continuous bioprocessing.
This is potentially an even bigger breakthrough than in the small molecule space as production costs are significantly higher and any innovation that lowers this will potentially make US manufacturers more competitive domestically and internationally.
“Innovation in manufacturing will be required for the production volumes necessary for the widespread use of advanced biologics, as well as the reduction in price of these therapies; just as innovation was previously involved in the popularization of monoclonal antibodies. There are already large market-based incentives for success in increasing the efficiency and volumes of advanced biologic production,” commented Shapiro.
The full report can be found here.