What Should Companies Concentrate On When Partnering with CMOs and CDMOs?
The CDMO and CMO relationships and the whole kind of business dynamic is critically important to the life sciences space. And particularly now with what I what I see, and I think we’ve discussed, an explosion in the biopharmaceutical space. So, there’s a lot of amazing science that’s going on in the bio, the biologic space, the biopharmaceutical space, cell and gene therapy, there’s an explosion of science. The challenge is that, and I’ve said this before, is science is not a product. So, this you can have a great concept, you can have a great understanding of how the body reacts, and how you can reduce disease likelihood, or will reduce a disease state, but that’s entirely different from getting that conceptual science into a product. So, CDMOs are an essential component of a lot of these early-stage companies that are trying to commercialize this great science. So, that relationship is critically important.
The real reason that relationship is so important is because the sponsors, the companies who, you know, the science founders, the smaller companies, who have been creating this innovation, and the larger companies. By the way, there’s a lot of larger companies that use this. They need to own the intellectual property, they need to own the process going forward, they need to have knowledge. And so when you’re working with a partner so closely that is actually working on the development, working on the tech transfer, working on the manufacturing, there tends to be a lot of knowledge that is actually created but also flows into the CMO of CDMO.
So one of the things that is really one of the most important governing documents is what is typically called the “Quality Agreement.” And the Quality Agreement is really where they talk about you know “quality things.” They’re often negotiated separately. I’m not a big fan of that. Being an attorney, I look at agreements kind of in an integrated fashion. But, there are certainly reasons to look at commercial terms, and kind of scopes of work, separately from responsibilities for regulatory compliance, compliance generally, and some of the intellectual property considerations. Regardless, that agreement, you know, the portion that talks about roles and responsibilities, data information, oversight, governance, is critically important. And one of the things that we talk to companies about often is what I call operationalizing the Quality Agreement. So the agreement is a document. It’s a static document you kind of exists you know on its own. But how do you operationalize that? How do you create integration between the Sponsor and the CMO or CDMO? Because you really need the integration in a kind of a reciprocal information flow context, right? So the Sponsor needs to understand, and kind of be aligned, with what the CMO CDMO organization is doing with their development, with their you know, tech transfer, with their commercial production… and the company needs to keep the CDMO informed of any changes that are occurring from their perspective. You know, if it’s a commercial feedback loops from complaints, or MDRS, or whatever the case may be. So there needs to be a very tight integration. I call it an integration of the quality systems between the Sponsor companies and the CMOs CDMO’s. And I don’t think that’s often really done well. And I think that that is probably one of the things that I would recommend to companies if they if they don’t have an understanding how they how to do that, to get some help. Because the more tightly you can integrate the better.
Now, also, there are there is a lot going on with SaaS software. So, the digitization of information in the regulated space has created both opportunities and risks. So, let’s say we’re using a SaaS software, meaning cloud based software and you’ve got a CDMO that’s actually working on your product. Who owns that data? Do you own that data? Do they own that data? How do you do data transfers? How do you take that back in house? There are some real complicated situations that need to be thought through not only just from an intellectual property standpoint, but from a regulatory compliance standpoint, from a business standpoint. So, the leverage that CDMOs and CMOs give to companies is really important in this fast-moving industry when we’re trying to commercialize these great scientific breakthroughs, but there are definite risks, and a real focus needs to be put on that relationship definition, and the relationship governance, the integration points between the CDMO CMO and the Sponsor, it is critical. So, I that’s actually what I would say is a key area of concern, and companies really need to spend a lot of time on.
Taken from Executive Platforms 2022 Pharma Manufacturing World Summit. Click here to see the entire interview.