Contract Fermentation Update, Market Continues to Tighten
by Mark Warner (Warner Advisors LLC) … Contract manufacturing options are diminishing and the facilities currently operating are looking for more favorable commercial terms. If you are planning to scale a fermentation process through contract fermentation facilities, it is going to be a good time to bring your “A” game to the search effort.
It is worth a refresher on what a CMO is and is not. In the world of biotechnology, a CMO is a manufacturing facility with aseptic fermentation and downstream recovery to make a range of products from microbes. Implied in the name is that these are primarily manufacturing facilities that have long term agreements to make products (commonly pharmaceuticals) from processes with an operational history and have successfully been scaled-up. By contrast, most emerging biotechnology companies looking to do scale-up work, are seeking shorter term arrangements (as low as just a few fermentation runs) to prove their technology and produce samples for potential clients. While CMOs can successfully support scale-up work, it is usually a small subset of the CMO world and finding the right partner is a complicated and time-consuming journey. Updated perspectives follow:
Read the fine print – with the market tightening, CMOs are pushing more favorable terms like reservation fees and other terms that have not been typical in recent years.
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Hand-me downs – … Antibiotic and pharmaceutical sites that get to a certain age find it more difficult to meet the more stringent pharma GMP requirements, but the sites are often very suitable for industrial biotechnology (foods, fuels and chemicals).
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Shotgun marriage – as outlined above, most contract fermentation sites do not grow up wanting to be a CMO, but rather end up there based on an economic downturn of their primary business. This creates a situation where not all are as well set up to operate as a CMO as others. Running one single organism month after month in a large building full of fermenters is much different that running 5 different organisms in fermenters within the same building at the same time.
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You still really need a passport – while I mentioned this in previous articles, the need has only increased. In the last year, CMO options within the US have diminished but have expanded in Europe. READ MORE
