Feature


Nature Biotechnology 22, 1365 - 1372 (2004)
doi:10.1038/nbt1104-1365

Biomanufacturing, from bust to boom...to bubble?

Karl A Thiel1


Has a worldwide shortage in biomanufacturing capacity turned to a glut in just 4 years? A building boom and advances in technology threaten to derail adoption of potentially cheaper transgenic manufacturing platforms.


Just 4 years ago, it was common wisdom that the biopharmaceutical industry was facing a worldwide shortage of manufacturing capacity. The poster child for the crisis was Enbrel (etanercept), a recombinant, soluble receptor for tumor necrosis factor developed by Immunex (Seattle, WA, USA, subsequently acquired by Amgen, Thousand Oaks, CA), and first approved to treat rheumatoid arthritis in November 1998. After 2 years on the US market, the drug had proven so popular that Immunex, and then-partner American Home Products, unable to manufacture enough product to meet demand, instituted a waiting list for prospective patients. The shortfalls continued until December 2002, by which time Amgen had acquired Immunex and made enough progress with a new, purpose-built manufacturing facility in West Greenwich, Rhode Island, to start churning out more Enbrel for new patients.

Biomanufacturing, previously an unglamorous, nuts-and-bolts part of the biotech industry, suddenly came into sharp focus for investors, analysts, venture capitalists and governments. A March 2001 report from JP Morgan Securities analyst David Molowa estimated that by 2005, demand would exceed worldwide manufacturing capacity by a factor of four1. Even accounting for expansion projects planned or underway at various facilities, he estimated that demand would still outstrip capacity twofold.

With 2005 now around the corner, things look a little different. In terms of capacity shortfalls for commercial products, Enbrel wasn't the tip of the iceberg—it was an isolated case. Indeed, competing biologics like Centocor's (Malvern, PA, USA, a division of Johnson & Johnson) Remicade (infliximab) were able to steal market share during that period precisely because Centocor did have enough manufacturing capacity to meet new demand. No other companies have been forced to ration biologics due to manufacturing constraints.

Industry insiders now suggest that there is actually some excess manufacturing capacity around the world. The seeming turnaround of the past several years can be attributed in large part to a building boom in manufacturing facilities, but it is not new construction alone that will determine supply in the coming years. Traditional cell-line manufacturing, whether in microbial or mammalian hosts, is advancing in ways that could dramatically change how facilities are built and operated. Potentially revolutionary but commercially unproven transgenic production platforms, meanwhile, may become a tougher sell to industry.

Building boom

“There are still people out there who are saying, 'Boy, this is a good time to get into biomanufacturing,” says Kent Iverson, a consultant in Los Altos, California, who previously worked on the Enbrel transition team. “In my opinion, it's really not a good time to get into it. In another year or two, there will be an article saying 'There's a lot of excess capacity—there's going to be a shakeout in the contract manufacturing realm.'”

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Executives at contract manufacturing organizations (CMOs) differ in some of zthe details but agree that there is at present no real shortage of capacity. Expectations for the future, however, vary a bit more widely. Sandra Fox, president of HighTech Business Decisions (Moraga, CA, USA), a consulting firm that tracks the biomanufacturing industry, doesn't expect the current excess to last for long. “By 2008, if some of these blockbusters make it, there might be a shortage,” she says (Fig. 1). “Still, I'm pretty confident that the contractors will stay on top of these things and be building accordingly.”


Nevertheless, one reason a crisis has been averted at present is clear: a huge expansion of facilities. “It's really incredible,” says Fox. “We had one moment when everything was booked up and everybody panicked and started building—but it's a good thing, because there are lots of biotech drugs coming down the pipeline.” Virtually every significant CMO has added new capacity in the past few years, and several are still building or have plans for more. In addition, a number of new players have entered the field (Table 1).


Boehringer Ingelheim (Ingelheim, Germany), the largest CMO in the world, nearly doubled capacity with a new facility in Biberach, Germany, that opened in September 2003 and gained US Food and Drug Administration (FDA) clearance this past August. Lonza Biologics (Slough, UK), the number 2 CMO in terms of reactor volume, quadrupled capacity at its US facility in Portsmouth, New Hampshire, to include three 20,000-liter bioreactors that have come online this year.

New capacity is still being built, and it is increasingly coming from startups in areas that hope to offer a competitive pricing advantage with cheaper labor and lower land, construction and maintenance costs. Celltrion (Incheon, South Korea), formed in 2002 by VaxGen (Brisbane, CA, USA) and Korean venture investors, plans to have the largest biomanufacturing facility in Asia—and one of the largest in the world—up and running by 2006. The Biopharmaceutical Manufacturing Technology Center (Singapore), part of the Bioprocessing Technology Institute, recently opened a pilot-scale facility to produce materials through phase 2 trials, but intends to expand this to commercial-scale capacity. In Bangalore, India, Biocon has announced that it will do commercial manufacturing of recombinant insulin for Bristol-Myers Squibb (New York, NY, USA). In this regard, Asian biomanufacturers hope to mirror the success of Asian microchip manufacturers, using their relative cost advantage to become a worldwide hub for large-scale production.

Outside the CMO industry, biotech companies continue to build proprietary facilities, too. Genentech (S. San Francisco, CA, USA), for instance, has more manufacturing capacity than any CMO in the world, followed by Biogen Idec (Cambridge, MA, USA). Yet despite new private facilities, the Enbrel shortage did prove the value of third-party contractors.

Even companies with a firm do-it-yourself manufacturing philosophy cannot avoid the fact that a commercial facility carries a price tag of $300 million to $500 million and takes 4–5 years to build, validate and license. Biopharmaceutical companies must plan well in advance for commercial production, yet still face the risk that a product will fail to gain approval. In this context, the appeal of a contract manufacturing industry is obvious. By taking on the capital cost of building infrastructure, they spare young companies an impossible expense. The facilities, instead of being purpose built for one product that might never be approved, can be shared among products and clients, so the success of the CMO doesn't rest on a single FDA decision.

Even Genentech, which has traditionally eschewed all outsourcing, recently contracted Lonza to produce some Rituxan (rituximab), a treatment for non-Hodgkin's lymphoma jointly marketed by Biogen Idec, while it expands its own capacity.

The fact that CMOs are serving not just cash-strapped startups but also winning over some of the staunchest do-it-yourselfers in industry shows how the industry has matured in recent years. It wasn't always so—the first CMOs were formed in the 1980s as a number of entrepreneurs, realizing the tough position young biotech companies faced, saw opportunity. At the time, with the first monoclonal antibody products in late-stage clinical trials, analysts predicted a coming boom in biologics. Yet the forecast explosion of products did not materialize, and many of these nascent CMOs went out of business.

Ironically, in a complete reversal of the intended business strategy, some young biotech companies actually managed to snatch up manufacturing capacity for pennies on the dollar as distressed CMOs that could not find products to fill their bioreactors went on the auction block. A company once called Verax (West Lebabnon, NH, USA) is now the manufacturing facility for Stryker Biotech (Hopkinton, MA, USA). Hana Biologics (Alameda, CA, USA) was acquired by gene therapy company Somatix Therapy Corp. (Alameda) in 1991, which was in turn acquired by Cell Genesys (S. San Francisco, CA, USA) in 1997. Invitron (St. Louis, MO, USA), a CMO spun off from Monsanto (St. Louis), sold its manufacturing facility to Centocor, which subsequently sold it to Wyeth (Madison, NJ, USA). Even Lonza, one of the biggest players in contract manufacturing, got into the business when it acquired Celltech's (Slough, UK) biomanufacturing business in 1996.

Will bigger remain better?

With numerous biologics on the market and more to come, the CMO industry is unlikely to face anything like the shakeout that occurred in the early 1990s. The 1997 FDA Modernization act, which changed how the FDA deals with manufacturers, also favors their continued participation (Box 1). Fox notes that while scaling of production capacity “is never going to be smooth, the fluctuations are getting better. Contractors are getting very sophisticated at understanding what their customers' needs are and building appropriately.”

But CMOs, like their clients, still face 4- to 5-year construction and validation timelines and huge upfront capital expenditures, which means their future success relies on making accurate predictions about future demand. Yet rapid advancements in cell-based manufacturing technologies and strategies make some of these predictions difficult and pose considerable threats to companies hoping to do contract manufacturing in transgenic plants or animals.

The boom in high-liter bioreactors has gone hand-in-hand with the demand for new monoclonal antibody drugs. Whereas recombinant protein drugs like erythropoietin are very potent and require tiny doses for optimal efficacy, monoclonal antibodies must be given in relatively large quantities. That has created a demand for facilities that can produce hundreds of kilograms of antibodies per year, and for now, that means building 10,000- to 20,000-liter bioreactors.

Yet despite the recent building boom, a relatively small number of CMOs have been able to add these very large bioreactors. CMOs are not traditionally backed by venture capitalists, who seek a higher return on investment than CMOs can offer. They are instead either backed by private investors not looking for an exit to the public markets or by deep-pocketed chemical and pharma companies. In the former case, founders seldom have the initial capital to build anything beyond a pilot-scale facility, and must hope to grow organically with their clients. Thus, the major CMOs are linked to large multinational parent companies. Boehringer Ingelheim, for instance, actually got into the CMO business after building a facility to produce Activase (tissue plasminogen activator), which the company had licensed from Genentech for certain territories. Sales, and thus production requirements, did not meet expectations, and Boehringer considered closing the facility until Immunex contacted the company looking for a way to produce Enbrel, pushing Boehringer into the contract manufacturing business1.

Getting more out of cells

But more important than the number of large bioreactors around the world when it comes to judging future volume demands is the improvement in cell-line yields achieved over the last several years (see review, p. 1393). “That's the wild card,” says Fox. “How many kilograms can this capacity produce?”

“The products that are on the market now are getting less than half a gram per liter in terms of productivity,” says Susan Dexter, chief business officer at Xcellerex (Marlborough, MA, USA), a young CMO. “Now people are getting 3–4 grams per liter and some companies are pushing the 5-gram limit.”

“We're at 5-grams per liter,” confirms Michael Chaffee, vice president of Marketing at Lonza Biologics. He acknowledges that such high-yielding cell lines are at present “outliers,” but expects to get consistent yields in the 3–5-gram per liter range in the “not-too-distant future,” adding, “We don't think that's the ceiling yet by a long shot.”

That means that several years from now, yields could be on the order of tenfold higher than they were when Enbrel production was in crisis. In such a situation, a 2,000-liter bioreactor could achieve the same productivity as 20,000-liter bioreactors yielding 300–500 milligrams per liter, and the large tanks may no longer be in high demand for anything but the biggest of blockbusters. (Consider, for instance, that with consistent yields of 5-grams per liter, all the Epogen sold by Amgen in a year could theoretically be manufactured in a single, 1,000-liter batch. Monoclonals will continue to need higher volumes, but would still see volume demands shrink dramatically.)

Nevertheless, Chaffee thinks his company's new 20,000-liter bioreactors will find plenty of use in the near future. “If you're bullish on monoclonals, then there's really going to be a demand for that,” he says. It takes a long time for advances in process development to trickle down into commercial practice. Even if a cell line with a consistent titer of 3-grams per liter were available for a commercial drug, the company that owns that product would have to file a major amendment with FDA and other regulatory agencies to use it. Thus, most companies stick with the processes originally certified for commercial use, even if they are technologically behind the times, and reserve the advances in process development for next-generation or new products in development. “The drug industry moves at a glacial pace,” says Chaffee.

Dexter suggests that other changes will also affect the volumes necessary to meet commercial demand. Conjugated proteins that circulate in the bloodstream longer or deliver an additional therapeutic payload to their targets can reduce dosing, while improving pharmacogenetic tests can limit the number of patients who use products to those most likely to benefit.

And besides advances in molecular biology, new approaches in design may dramatically change the manufacturing facility of the future. A number of companies working on disposable plastic bioreactors hope to eliminate much of the expense and time consumed with cleaning and revalidating steel reactors between batches.

Xcellerex, which in addition to running a CMO business is also developing disposable equipment for third-party use, is prototyping a 1,000-liter disposable reactor and plans to develop a product with a 2,000-liter capacity. Although their first (250-liter) disposable reactor won't be on the market until the second half of next year, Dexter notes that the advantages this approach offers aren't limited to a savings in cleaning and revalidation expense. By avoiding the need to pipe water to new reactors, facilities can actually be built—and expanded—in a completely different way from a conventional site. “A company that needs to expand capacity could roll one of these skids in and add 1,000 liters worth of capacity without even touching the existing system,” she says. “That's huge value. To add that to an existing plant [with a conventional installation] would put it offline for three to six months. Our system is literally on wheels.”

Chaffee concurs that the use of disposable technology “is going to be an integral part of our operations and manufacturing—not only as buffer prep but also as bioreactors and for downstream processing.” It is even possible that large disposable reactors could be daisy-chained together, allowing facilities to flexibly scale up and down significant commercial capacity.

Trouble for transgenics?

When Enbrel's troubles were widely believed to presage a lengthy and perhaps chronic crisis in manufacturing capacity, some industry experts naturally pointed to transgenics as a potential solution (see Tables 2 and 3 for a list of companies using trangenics for biomanufactuirng). After all, once commercial-scale expression is established in transgenic plants or animals, scaling up production is as simple as planting more crops or breeding more animals. Iverson was at the time widely quoted for noting: “If Enbrel were produced in corn, [Immunex] could have just planted more acres, which would have been much less expensive than building new, larger facilities”2. That comment, first appearing in a white paper commissioned by Monsanto, originally came along with some heavy caveats about some of the potential obstacles to transgenic technology, Iverson notes, including potential issues of immunogenicity and plant glycosylation of proteins.



Nevertheless, the arguments favoring transgenic plants and animals in terms of scalability and shorter timelines are as true today as they were then. What may be less clear are the cost advantages. Thomas Newberry, vice president of Corporate Communications at GTC Biotherapeutics (Framingham, MA, USA) suggests that establishing a commercial production herd of the company's transgenic goats could be done at around a tenth of the cost of building a commercial cell-culture facility, with companies able to assess market demand—and scale-up production appropriately—with each new breeding cycle. Proponents of transgenic plants claim even greater potential cost advantages and shorter timelines.

Yet today, biotech companies looking at options for commercial production of biologics see available capacity and a future of increasing efficiency in traditional cell-line production. With the status quo less under threat than it seemed several years ago, there is little immediate pressure for companies to move to alternative platforms that are as yet commercially unproven.

That calculus could change soon. GTC Biotherapeutics has applied for European marketing approval of ATryn (recombinant human antithrombin III), a blood protein that acts as an anticoagulant and anti-inflammatory, for which some people suffer a congenital deficiency. ATryn is expressed in the milk of transgenic goats, and if approved would be the first commercially approved therapeutic in the world produced on a transgenic platform. GTC is planning to begin clinical trials to secure US approval early next year and Newberry believes ATryn could be on the US market 12–18 months behind European approval.

He acknowledges that companies looking at manufacturing alternatives have good reasons to play it safe right now because of lingering concerns about how regula-tory agencies will treat transgenics. “But we believe that the first approval...will start taking that question off the table,” he adds. “Then the 90% savings of capital investment—suddenly that becomes a real issue.”

Yet Chaffee, who recently held a position as senior director of Commercial Development at GTC before returning to Lonza, believes that the cost advantage boasted by transgenics will dwindle as traditional cell culture manufacturing becomes more productive with new, more efficient cell lines. “They need to prove that it is significantly cheaper to do it in transgenics. I'm not so sure if a 10%, 15% or even 20% savings [over conventional methods] is going to be enough. There are a lot of hidden costs in producing transgenics that I'm not sure anyone really understands, and I'm not sure they will until they do it at scale.”

Iverson echoes that sentiment, noting that estimating the true costs of transgenic production is an “angels-dancing-on-the-head-of-a-pin question” because of the unknowns. “The harder you look at the transgenic claims, the more the numbers start rising. I'm not sure that there would be that much of a cost savings” in using a transgenic platform for most protein products, he concludes.

Potential hidden costs include containment to keep crops or animal secure from contamination—although Newberry argues this is a potential advantage for transgenic animals, because cell cultures can be infected by viruses just like animals, yet “a sick goat is easier to recognize than a sick cell,” and can be separated from the herd. Proteins from transgenic plants may require humanization in some cases to alter plant glycosylation patterns that could theoretically affect activity or prove immunogenic. And purification facilities must still be built and validated at considerable expense for would-be transgenic manufacturers.

One significant issue slowing the efficiency of both transgenic and traditional manufacturing is downstream processing. Although transgenics can boast major cost advantages in upstream production, transgenic crops or animal milk, just like cell culture media, must be purified before a final product is achieved. Transgenics don't necessarily have an advantage here and in fact may require additional processing and purification steps in some cases. At the same time, bottlenecks in downstream processing could undercut some of the advances in cell line productivity being achieved through molecular biology.

“Honestly, the whole industry needs improvement on the downstream side,” says Dexter. “Product recovery from any of the technologies, whether it's transgenics or yeast or Escherichia coli or mammalian, it doesn't really matter—the downstream side is still an unresolved bottleneck.” Iverson notes that with current technologies, a five- or tenfold improvement in titer from a cell line won't necessarily lead to a proportional improvement in unit cost of the product. That's because a greater mass of protein coming out of a bioreactor will at some point exceed the practical capacity of chromatography columns used for initial protein capture, forcing multiple cycles of the chromatography step for each bioreactor batch. When the number of needed cycles pushes the overall purification cycle time beyond that of the production bioreactor, he says, throughput of the production line is decreased and the “economic benefit of the higher expression level becomes less than proportional.” Dexter thinks that disposable products will ultimately help here, too, whereas Iverson notes that a recovery system based on something cheaper and more amenable to industrial scale processing than protein A—a cell wall protein derived from Staphylococcus aureus that binds to the constant region of all human IgG antibodies and can thus be used to fish antibody out of media—could make product recovery cheaper and capture more of the efficiencies of improved cell lines. But for now, downstream processing remains an obstacle to optimizing biomanufacturing productivity.

A niche advantage

Transgenics do offer some advantages that go beyond economics. GTC chose to develop antithrombin because it is a complex blood protein that has proven very difficult to express in mammalian cell lines, yet can be produced with efficiency in transgenic goat milk. Newberry says transgenic animals have proven useful for making other complex proteins that stump molecular biologists working with traditional cell lines. Merrimack Pharmaceuticals (Cambridge, MA, USA), for instance, came to GTC for production of a recombinant human alpha fetoprotein, now in phase 1, that proved recalcitrant to other production methods.

By the same token, plants offer some advantages beyond their cost and time efficiency. Biolex (Pittsboro, NC, USA) has used lemna (duckweed) as a system to produce α-interferon (Fig. 2). Although recombinant α-interferon is successfully produced in E. coli, Biolex COO and senior vice president of R&D David Spencer thinks his company's transgenic system will prove to be a much more efficient platform for producing this and other cytokines. “The problem with producing them in bacteria is that these bacteria don't have the same sorts of protein handling capabilities as eukaryotic cells, so the protein frequently comes out misfolded,” says Spencer (but see review, p. 1399). That requires extra steps to try to unfold and refold the product in separate tanks and then select the correctly formed product, he says. On the other hand, mammalian systems, which would probably prove more adept at folding α-interferon, aren't a viable option. In that case, he says, “you're trying to grow something in mammalian cells that have receptors to the very cell regulatory protein that you're asking them to make. So they tend to shut down.” Because plants have eukaryotic cells but no interferon receptors, they form what Biolex believes is a perfect compromise, mated to a cheap upfront production system that can be scaled rapidly and purified with relative ease (Box 2).


Individual transgenic products like these may prove to be highly successful, and it is the fate of such proprietary products that is going to drive transgenics companies to success or failure. If these products prove not only approvable but also more efficient than comparable products manufactured in engineered cell lines, then transgenics companies may also find significant success as CMOs. But for now, expect industry to take a wait-and-see approach.



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References

  1. Molowa, D. Industry Analysis: The State of Biologics Manufacturing (J.P. Morgan Securities, New York, March 12, 2001).
  2. Biotechnology Industry Organization. Advantages of plants to produce therapeutic proteins (BIO, Washington, DC, 2004). http://www.bio.org/healthcare/pharmaceutical/pmp/factsheet3.asp
  3. Fox, S. Maximizing outsourced biopharma production. Contract Pharma, 72–78 (June 2004).
  1. Karl A. Thiel is a freelance writer based in Portland, Oregon, USA.

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