CPHI: Mid-sized US CDMOs Should Act Now to Capitalize on the Expected Increase in Contract Funding by 2025
Important areas to consider for investment are manufacturing process improvements, quality management, and AI.
With CPHI North America just around the corner, taking place at the Pennsylvania Convention Centre from May 7-9, 2024, industry experts are advising US-based contract development and manufacturing organizations (CDMOs), particularly those that are small to mid-sized, to make strategic investments throughout 2024. This will allow them to fully capitalize on the projected increase in funding for contract services in 2025. Additional noteworthy trends for 2024 involve the investigation of pilot-scale manufacturing for emerging technologies, enhancing the resilience of supply chains, and the concept of 'friend shoring'.
Brian Scanlan, an operating partner at Edgewater Capital Partners and a CPHI expert, predicts that 2024 will be a year of stability in the biotech industry, with funding gradually resuming, according to a press release from CPHI. He mentioned that he is already observing this trend affecting the outsourcing community. However, for smaller and medium-sized contract research organizations (CROs) and CDMOs based in the US, simply waiting for the market to bounce back in 2025 will not be enough to reap the benefits. It is important for them to prioritize operational efficiencies and commercial effectiveness at this time.
This involves making investments in manufacturing process improvements, such as continuous and titer reductions, as well as other aspects of the business that can enhance overall efficiencies. These could include enhancing quality management and exploring the use of AI (artificial intelligence) to expedite process development and analyze quality trends.
Scalan stressed the importance of these companies seizing every opportunity to invest. Exploring ways to improve efficiency in CDMO operations and enhance effectiveness in new business development through the use of AI-enabled tools is a valuable pursuit. So, this year will focus on achieving high productivity and cost containment in preparation for a potential increase in outsourcing in 2025," Scalan said. CPHI North America intends to address one of these potential applications by utilizing generative AI to analyze upcoming requirements for pharmaceutical drug manufacturers and distributors. This will be particularly relevant as the Drug Supply Chain Security Act is set to take effect in November 2024.
Chatterjee mentioned that over the next six months, numerous companies will be seeking to get ready for 2025. They will be placing a strong emphasis on meticulous supply chain planning to enhance resilience. Additionally, there will be a greater emphasis on exploring options for "near" or "friend shoring" instead of relying solely on domestic US sites. According to him, these countries are currently more equipped to gather resources and establish networks for ingredients and starting materials. An increasing number of North American manufacturers are expanding their ingredient sourcing strategies, considering alternatives to Chinese suppliers by exploring options worldwide, including within Europe and South America.
Source: Clinical Research News
