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MAY 2013 • VOLUME 15 • NUMBER 4


9th Annual Outsourcing Survey Highlights form our yearly look at sponsor trends Gil Y. Roth • 38

Contract Packaging Update Serialization transforms the business Gil Y. Roth • 52

Selecting a Central Laboratory Algorithms can reduce the role of subjective factors Andrei Karelin, Maxim Belotserkovskiy, Veronika Khokhlova and Akhil Kumar • 58

SPR & Flow Cytometry For Biosimilars Evaluating the pharmacodynamics of biosimilar monoclonal antibodies James Hulse and Chris Cox • 62

Photo courtesy of Almac Cover design by Jessica Carlin Contract Pharma (ISSN #1544-3469) is published monthly except February,August, and December by Contract Pharma, LLC, 70 Hilltop Rd, Ramsey, NJ 07446. Phone: (201) 825-2552, Fax: (201) 825-0553. Periodical Postage Paid at Ramsey, NJ 07446 and additional mailing offices. Publications Mail Agreement No 40028970: Return Undeliverable Canadian Addresses to P.O. Box 1051, Fort Erie, ON L2A 6C7, or Circulation Dept., POSTMASTER: Send address changes to Contract Pharma, 70 Hilltop Rd., Ramsey, NJ 07446-0555 USA. Printed in USA. Free subscriptions to Contract Pharma are available to qualified individuals. Others are as follows: US one year subscription $95.00, Mexico/Canada one year subscription $120.00 (5% GST required on Canadian orders. GST #134451756). Foreign Airmail one year subscription $195.00. Payment must be made in US dollars via US bank or by Visa or Mastercard. Single issues available for $12 each.The publisher reserves the right to determine qualification of free subscriptions. Missing Issues: claims for missing issues must be made within three months of the date of the issue.Authorization to photocopy items in Contract Pharma for internal or personal use, or internal or personal use of specific clients, is granted by Contract Pharma, LLC, provided a base fee of U.S. $1 per page is paid directly to: Copyright Clearance Center, 27 Salem St., Salem, MA 01970 USA. Contract Pharma’s circulation is audited by BPA International.

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MAY 2013 • VOLUME 15 • NUMBER 4


Biosimilar Approaches How to best outsource the development of biosimilars Mario DiPaola • 68

Integrated Providers Vertical integration & turnkey contract manufacturing Byran Cox • 70

Outsourcing Preclinical & Clinical Work Focus on quality! KR Karu • 74

Risk and Compliance Management A painful manual process improves with automation Jeff Schwartz • 76

Labeling on Ferrules & Cap Overseals What drugmakers need to know about the Revised USP General Chapter <1> Injections Standard Carol Mooney • 78

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MAY 2013 • VOLUME 15 • NUMBER 4

COLUMNS 14 From the Editor By Gil Y. Roth

18 FDA Watch More Scrutiny for cMGMP Violations By Heather Bañuelos

21 Financial Analysis More Transparency By Michael Martorelli

22 Managing Your Career On Your Own By Jack Cohen

29 Advanced Degrees Vax Fix By Kevin O’Donnell

30 The Pharma Beat Compounding the Compounding Problem By Ed Silverman





32 The Lowe-Down What Does this Compound Do? By Derek B. Lowe

Merck, Pfizer Form Diabetes Pact


INDUSTRY NEWS Theravance Splits Assets


CRO NEWS BMS Names Quintiles Preferred Provider





34 Bio News & Views Catalent Opens Bio-CoE

36 India Report 3 (d): The Third Dimension By S. Harachand

37 iMak Pharma’s R&D Productivity Engine By Mak Jawadekar

Catalent Appoints China JV Heads


READER SHOWCASE Accelrys Expands LIMS Suite



82 Newsmakers: Josef von Rickenbach CROs and Innovative Leadership By Gil Y. Roth

Your guide to industry events





98 The Back Page What is EXCiPACT? By Iain Moore

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EDITOR Gil Y. Roth ( EDITORIAL DIRECTOR Tom Branna ( ASSOCIATE EDITOR Kristin Brooks ( CONTRIBUTING EDITORS India Report: S. Harachand FDA Watch: Colleen Heisey I, Mak: Makarand Jawadekar Managing Your Career: David G. Jensen The Lowe Down: Derek B. Lowe Financial Analysis: Michael Martorelli Advanced Degrees: Kevin O’Donnell The Pharma Beat: Ed Silverman

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CONTRACT PHARMA Editorial Advisory Board Dr. Ali Afnán

Paul Josephs

Dr. Enrico T. Polastro


Vice President, Sales and Marketing DPT LABORATORIES


Shaukat Ali, Ph.D.

Balaji V. Kadri

Jack Regan


Senior Director of Pharmaceutical Operations PHARMAFORM

Vice President, Contract Manufacturing BIOMARIN PHARMACEUTICAL

Bobby A. Kanuga

Senior Vice President, Business Development DITEBA RESEARCH LABORATORIES INC.

Dr. Jack Aurora Chief Scientific Officer, Generic Drugs HISUN PHARMA (HANG ZHOU) CO. LTD.

Sam Ricchezza Vice President, External Manufacturing MERCK & CO., INC.

James L. Botkin Senior Vice President, Operations ALKERMES PLC

Fred Schulze Dr. Faiz Kermani

Elise Brownell, Ph.D.


Founding partner ZEPHYRBIOTECH

Richard Korsmeyer

Dr. Suggy S. Chrai President CHRAI ASSOCIATES

Head of Business Development Pharmaceutical Sciences PFIZER WORLDWIDE R&D

Vice President, Sales & Marketing COATING PLACE, INC.

James R. Scull, Ph.D. General Manager NSF PHARMALYTICA

Daniel Stehn Director of Biotechnology Packaging SHARP CORPORATION

Michael J. Kosko Joseph Colleluori Senior Vice President of Corporate Development LONZA GROUP LTD.


Dr. Martin Steinman Consultant KURARAY AMERICA

Steve F. Massah Paul D’Angio, RPh Senior Vice President – Global Technical Operations CELGENE CORPORATION

Senior Manager, Strategic Drug Product Outsourcing GILEAD SCIENCES

Paul Titley Managing Director – Formulation Development AESICA

Dr. Tony DeStefano

Dr. Jeffrey Millard

Phillip G. Trager

Vice President of General Chapters U.S. PHARMACOPEIA

Director of Pharmaceutical Development ONCOTHYREON, INC.

Director, Analytical Services CONSUMER PRODUCT TESTING CO.

William Downey

Richard V. Myer

Michael J. Valazza


Vice President, Business Development ARGENTA LIMITED

Vice President, Global Business Development – Oral Solids and Controlled Release Technologies CATALENT PHARMA SOLUTIONS

Thomas Handel

Sudha Nair, Ph.D.

Senior Vice President – Commercial Pharmaceuticals MERIDIAN MEDICAL TECHNOLOGIES, A PFIZER COMPANY

Director, Global Business Development APOTEX FERMENTATION, INC.

Mico Holguin, Jr.

Terence S. Novak


President, Commercial Operations NORWICH PHARMACEUTICALS

Falguni Vaidya Director of External Manufacturing Procurement BRISTOL-MYERS SQUIBB

Dilip M. Parikh Dr. Makarand S. Jawadekar Consultant PFIZER GLOBAL R&D (RET’D.)



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How To Live on $125 a Day Plus: Alzheimer’s R&D – in or out? HE MONTH OF APRIL INCLUDED a stretch of three conferences in 11 days: PDA, BIO and INTERPHEX (sorry, Partnerships in Clinical Trials, maybe next year!). It was a busy run, with lots of scheduled interviews and serendipitous conversations, but I’m hoping the conference schedules are a little more spread out in coming years; it doesn’t do anyone any favors to have to cover multiple overlapping shows or split teams to accommodate them. Still, all three events proved worthwhile (as you’ll see in the months ahead). For the record, my non-event highlights included: • TSA leaving the baggage X-ray machine unstaffed while my publisher and I went through, the morning after the Boston Marathon bombings. • My first visit to the Art Institute in Chicago, on my 800th or trip to the city. Wow. Go there. • Finding a quiet, peaceful hotel in New York City. After my travels, I came home to find a New York Times article with the headline, Doctors Denounce Cancer Drug Prices of $100,000 a Year ( I took a deep breath before diving in, afraid that this would be another “drug companies should only charge the price of manufacturing” article. It’s a bit more nuanced than that, although it does include a doctor questioning how much profit Novartis should be allowed to make from Gleevec; he doesn’t seem to be concerned with the question of how much money doctors, hospitals or oncology clinics should be allowed to make, but maybe that part got edited out. The article covers a protest by oncology doctors focused on chronic myeloid leukemia (CML) treatments like Gleevec, about which . . . well, here’s a quote: “It is a little surprising that their focus is in a cancer where the small-molecule medicines have had the greatest impact on long-term benefit,” said Dr. Harvey J. Berger, chief executive of Ariad Pharmaceuticals, which sells the newest and most expensive of the leukemia drugs, Iclusig. [According to Novartis, the development of Gleevec and other CML drugs has improved the five-year survival rate for patients with that cancer from 30% to 90%.] A few days later, the NYT’s editorial board weighed in on the matter (, and that was much more predictable, since they’re not doctors, scientists or pharma executives (disclaimer: neither am I). The board decried colorectal cancer treatment Zaltrap as “outrageously overpriced” and no more efficacious than a Avastin at half the



price, and anyway, “Neither [drug] did much to extend a patient’s life.” From there, the NYT board returned to CML and conceded that these new treatments are great advances, but argued that “the companies could settle for lower-but-still-substantial profits.” This is from the company that has more than quadrupled the price of its core product — local newsstand price of daily NYT: $2.50, up from 60 cents — since 1999. As we’ve all discussed ad nauseam, drug pricing is utterly out of whack — as are most other healthcare costs — because of lack of transparency, inequality among payers, and many other reasons. But complaining that we shouldn’t pony up because 1.4 months isn’t much of an extension of life? Is that really fit to print?

Gil Roth Editor • /

What I’m Reading Pharma Lilly And Sanofi CEOs Take Two Very Different R&D Paths In Alzheimer's Disease John LaMattina, Forbes blog Comment: Former R&D head for Pfizer and occasional CONTRACT PHARMA contributor and contrasts Sanofi’s decision to get out of Alzheimer’s Disease research with Lilly’s move to double-down on research in that field. It’s an interesting take on how to justify R&D expenditures in areas where disease pathology isn’t clear, but the need for treatment is growing rapidly. Non-Pharma The Other Side of the Tiber: Reflections on Time in Italy Wallis Wilde-Menozzi • Comment: An American poet who has lived in Italy for most of the past 40 years offers this memoir — really a series of essays and remembrances, in beautiful, lyrical prose — about her adopted country. It’s a gorgeous book, and it’ll leave you longing to visit Il Belpaese. Kings of the Roma Jesse Newman, New York Times • Comment: A photo-essay about the llifestyle of wealthy Roma (gypsies) near my dad’s hometown of Bucharest. Words fail me. Go check it out. Why don’t you tell us what you’re reading? Write us at,, or contractpharma — and the first respondent wins a prize!

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Merck, Pfizer Form Diabetes Pact PAREXEL acquires HERON Group

Merck, Pfizer In Diabetes Pact Merck and Pfizer have entered into a worldwide (except Japan) collaboration for the development and commercialization of Pfizer’s ertugliflozin (PF04971729), an investigational oral sodium glucose cotransporter (SGLT2) inhibitor for the treatment of type 2 diabetes. Phase III ertugliflozin trials are expected to begin later this year. Merck, through a subsidiary, and Pfizer will collaborate on the clinical development and commercialization of ertugliflozin and ertugliflozin-containing fixed-dose combinations with metformin and Januvia (sitagliptin) tablets. Merck will retain rights to its existing portfolio of sitagliptin-containing products. Pfizer has received $60 million in an upfront payment and milestones, and will be eligible for additional payments for future clinical, regulatory and commercial milestones. Merck and Pfizer will share potential revenues and certain costs on a 60/40 percent basis. “We are pleased to join forces with Merck in the battle against type 2 diabetes,” said John Young, president and general manager, Pfizer Primary Care. “Through this collaboration, we believe we can build on Merck’s leadership position in diabetes care with the introduction of ertugliflozin, discovered by Pfizer scientists.” Nancy Thornberry, senior vice president and Diabetes and Endocrinology franchise head, Merck Research Labs, said, “We believe ertugliflozin has the potential to complement our strong portfolio of investigational and marketed products, and we look foward to collaborating with Pfizer on its development.”

PAREXEL Acquires HERON PAREXEL has acquired the HERON Group Ltd. for approximately $24 million, with the potential for an additional $14.2 million over 26 months if specific


CenterWatch Study Rates CROs ENTERWATCH HAS CONDUCTED A STUDY of more than 2,000 global investigative sites rating the best CROs to work for. Investigative sites gave the highest ratings to their clinical trial relationships with INC Research, PPD and inVentiv Health Clinical. These CROs received top average ratings across 36 relationship attributes evaluated in CenterWatch’s bi-annual 2013 Global Investigative Site Relationship survey. In the fourth spot was Covance, followed by Quintiles, PRA, PAREXEL and ICON. The survey also asked sites to evaluate CROs on overall reputation; the top ranking went to PPD, followed by Covance, Quintiles, ICON and INC Research. According to the results, overall CRO effectiveness in managing relationships with sites has declined slightly during the past two years, and the average CRO rating has fallen below performance expectations in several areas, including protocol/study design planning and project support. “Sites want to voice their opinions and share insights with sponsors and CROs on areas in which progress has been made, along with areas that may need improvement,” said Joan Chambers, chief operating officer of CenterWatch. “Sponsors and CROs take this feedback very seriously given its importance to successful global clinical trial performance. These insights provide sponsors and CROs the opportunity to work with their internal teams to strengthen and enhance their site relationships.”


financial targets are met. HERON is a life sciences consultancy that provides evidence-based commercialization services to support product lifecycles. Services include strategic market access planning, systematic reviews, economic modeling and evaluation, pricing, reimbursement strategies, global value dossier writing, and working with Health Technology Assessment authorities. HERON is headquartered in Luton, UK, with additional offices in India, Sweden, and the U.S. Josef von Rickenbach, chairman and chief executive officer of PAREXEL, said, “The acquisition further strengthens our ability to offer clients a full spectrum of services that aid in developing products with reimbursement and market access in mind. We are pleased to be able to expand the expertise of our commercialization offering and believe that HERON will help to enhance the portfolio of services.”

Almac Discovery Licenses Cancer Drug Almac Discovery has licensed its novel anti-angiogenic peptide ALM201 to Shin Poong Pharmaceutical Co. Ltd. for clinical development and marketing in South Korea. Almac will receive an undisclosed upfront payment, milestones and royalties. Almac Discovery will pursue its own development program in Europe and is seeking partners for ALM201 in all other territories. ALM201 has completed preclinical trials with a good toxicology profile and is entering Phase I/II trials in the UK. Stephen Barr, president and managing director of Almac Discovery, said, “We are delighted to be partnering with Shin Poong. Their work on ALM201 in South Korea will complement our own program very well and will add significant scientific value.” I

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More Scrutiny for cGMP Violations DOJ to pursue enforcement By Heather Bañuelos Hunton & Williams LLP



DEPARTMENT of Justice (“DOJ”) announced that it will be taking “an especially hard look” at violations of current good manufacturing practices (“cGMPs”) that create an unacceptable risk of harm to consumers and patients.1 This was a clear pronouncement of the 2013 enforcement priorities of the Consumer Protection Branch of the DOJ’s Civil Division, and signals a developing enforcement trend in the pharmaceutical and medical device industries. Where cGMP compliance was once left almost wholly to the U.S. Food and Drug Administration (“FDA”) to enforce under the Federal Food, Drug, and Cosmetic Act (“FDCA” ), the DOJ plans to actively step up enforcement for cGMP violations under authority of the False Claims Act (“FCA”).2

cGMP Enforcement Under the FDCA With limited exceptions, enforcement against cGMP violations has always occurred under the FDCA and FDA’s implementing regulations. Specifically, the FDCA prohibits adulterated drugs and devices in interstate commerce.3 A drug is “adulterated,” in part, “if the methods used in, or the facilities or controls used for, its manufacture, processing, packing or holding do not conform to or are not operated or administered in conformity with [cGMP] to assure that such drug meets the [statutory] requirements as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess.”4 Similarly, a device is “adulterated” if “the methods used in, or the facilities or controls used for, its manufacture, packing, storage, or installation are not in conformity with applicable [laws],” including the Quality System Regulation (“QSR”).5 FDA regulations establish minimum cGMP/QSR requirements for many FDA-regulated products, including drugs and devices.6 These requirements are not prescribed in detail, but were established “to be flexible to allow each manufacturer to decide individually how best to implement the necessary controls by using scientifically sound design, processing methods, and testing procedures.”7 This flexibility allows companies to achieve higher quality through continual improvement, utilizing newer technology and innovation. Failure to comply with these basic standards renders a product adulterated under the FDCA and subject to FDA enforcement action, which may range from a Warning Letter to product seizures, injunctions against manufacturing and distribution, import holds, civil monetary penalties, and criminal liability.


cGMP Enforcement Under the FCA The FCA is the DOJ’s principal authority for fighting fraud against the government. In general terms, the FCA creates liability for different types of conduct — including for any person who knowingly submits or causes the submission of a false claim to the government, or knowingly makes a false record or statement to get a false claim paid by the government. Anyone who is liable under the FCA must pay a civil penalty in the range of $5,000 to $10,000 (as adjusted for inflation) for each false claim, plus three times the amount of the government’s damages.8 For example, if a drug manufacturer causes the submission of false claims amounting to $15 million to the Medicaid program, potential liability for damages could total up to $45 million plus $10,000 for each patient claim submitted for reimbursement. Unlike the FDCA, which is a strict liability statute, the FCA only imposes liability if a person submitted, or caused the submission of, the false claim (or made a false statement or record) with knowledge of the falsity. Such “knowledge” is satisfied by actual knowledge, or deliberate ignorance or reckless disregard of the truth or falsity of the information. Also unlike the FDCA, the FCA allows private persons (known as “relators”) to file suit for violations of the statute on behalf of the government. In these “qui tam” actions, the government must investigate the complaint and notify the court whether it will intervene to take over the action. With certain exceptions, when the DOJ intervenes, the relator is entitled to receive 15-25 percent of any amount recovered; such amount increases to 25-30 percent in cases where the DOJ declines to intervene and the relator proceeds with the case without assistance from the government. Historically, FCA actions targeting pharmaceutical and medical device companies were based on pricing, kickbacks, and misbranding. In recent years, the bulk of these actions have focused primarily on off-label promotion and have resulted in record settlements. It is not clear what specifically prompted the DOJ’s decision to focus on cGMP compliance for 2013; however, this is not the first time the FCA has been used as an enforcement tool for such violations. In 2010, the DOJ settled a FCA case against GlaxoSmithKline (“GSK”) based on multiple cGMP violations that occurred at a GSK subsidiary’s plant.9 The total settlement of $750 million included a criminal fine of $150 million for cGMP violations under the FDCA, and $600 million to resolve FCA allegations. With regard to the FCA charges, the government asserted that

Heather Bañuelos is counsel in the Washington, D.C. office of Hunton & Williams LLP ( and a member of the firm’s Food and Drug practice group. She can be reached by email at

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GSK sold certain batches or lots of drugs whose strength, purity, or quality differed materially from the strength, purity, or quality specified in the drugs’ FDA applications for approval, and GSK knowingly caused false and/or fraudulent claims for such products to be submitted to federal healthcare programs, including Medicaid. The basis of FCA liability is that the U.S. paid, through federal healthcare programs, for substandard drugs due to cGMP violations, which was covered up by the false claims. Since then, only one other FCA case based on cGMP violations has been reported. In that case, the DOJ declined to intervene and it was later dismissed.10 Because qui tam actions remain under seal pending the DOJ’s investigation and decision to intervene, it is likely that FCA cases premised upon cGMP violations are pending but not yet public. Thus, the DOJ’s prioritization of cGMP violations may reflect what is already underway.

Ensuring cGMP/QSR Compliance To avoid liability under the FDCA or FCA for cGMP/QSR violations, it is important to take certain steps to help ensure effective compliance. This includes appropriate policies and procedures, employee training, internal audits and mock inspections to identify any potential issues, as well as ensuring that suppliers and manufacturers maintain cGMP/QSR compliance, among other things. In addition to focusing on plants, production lines, manuals helium


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and policies, the DOJ expressly urges manufacturers to also focus on people. Specifically, in its investigations, the agency is “looking at people to determine responsibility” because “it is the failures of people . . . which result in noncompliance.”11 Accordingly, the DOJ asks the following questions to guide your focus: 1. Do you have the right people — people with the “right training and expertise to recognize problems” in manufacturing? 2. Do your people have the right incentives to see, report, and fix problems? 3. Are your people satisfied and engaged? 4. Are your people and policies in harmony — that is, do the policies acknowledge how real people work and what they are capable of? 5. Do you have personal visibility into what each of your people is actually doing? The high prioritization of cGMP violations this year most likely means that the DOJ will focus its resources on cases involving significant cGMP violations. Anything less will be difficult to challenge under the FCA by virtue of the inherent flexibility — or lack of clarity — in FDA’s cGMP/QSR regulations. Further, most FDA factory inspections result in findings of deficiencies in a manufacturer’s process. Many violations, on their own, would not be the basis of a FCA suit because they are not sufficiently material to the government’s decision to pay for the drugs or devices. Thus, the likelihood of the DOJ pursuing an FCA suit for cGMP violations will be determined by whether the violations result in products that are actually, and not theoretically, unsafe or less effective, and create “an unacceptably high risk of harm” to consumers and patients. I References 1 Justice News, Deputy Assistant General Maame Ewusi-Mensah Frimpong Speaks at the 2013 CBI Pharmaceutical Compliance Congress (Jan. 29, 2013), available at opa/civil/speeches/2013/civ-speech-130129.html. 2 31 U.S.C. §§ 3729 et seq. 3 21 U.S.C. §§ 331 and 351. 4 21 U.S.C. § 331(a)(2)(B). 5 21 U.S.C. § 351(h). 6 See, e.g., 21 C.F.R. Parts 210-211 (drugs); Parts 600-680 (biologics); Part 820 (devices). 7 FDA, Facts About Current Good Manufacturing Practices (last updated June 25, 2009), available at cturing/ucm169105.htm. 8 31 U.S.C. § 3729(a)(1). 9 Justice News, GlaxoSmithKline to Plead Guilty & Pay $750 Million to Resolve Criminal and Civil Liability Regarding Manufacturing Deficiencies at Puerto Rico Plant (Oct. 26, 2010), available at 10 United States ex rel. Rostholder v. Omnicare Inc., D. Md., No. 1:07-cv-01283-CCB; 2012 WL 3399789 (Aug, 14, 2012). 11 Justice News, supra, note 1.


More Transparency Why not in pricing drugs? By Michael A. Martorelli Contributing Editor


JOKE CURRENTLY MAKING THE rounds has God offering to grant a man one wish in thanks for all the good things he has done in his life. The man (let’s make him a California resident) asks God to build a highway across the Pacific Ocean to Hawaii, making it easier for the man to get to his favorite place on earth. God suggests that might not be possible, and asks the man for an alternate wish. The man — let’s make him a healthcare economist — asks God to help him understand how drug companies price their new products. God then asks the man how many lanes he wants in his highway. In a capitalistic society, most companies price most products based on 1) how much it costs to make them, and 2) how much the competitive marketplace will allow. In the Bizarro World of pharmaceutical pricing that exists in the U.S., most companies price their products based on a system that is unidentified, unanalyzable, incoherent, illogical, unknowable, incomprehensible, impenetrable, inexplicable — in other words, completely un-transparent. For most chemical-based products, the costs of manufacturing seem almost totally irrelevant to their pricing. Those costs seem more meaningful for companies making biologics, due to the changing nature of the media, the reactions, and the yields. Yet the differences in the pricing of a patented product compared to its generic equivalent suggests that it is market competition, rather than manufacturing costs, that becomes the main determinant of any particular product’s price. The costs of development are quite relevant to the prices all pharma manufacturers charge for their products. But it’s impossible for outsiders, and probably for insiders too, to calibrate the precise costs of developing any particular drug. Doing so would require allocating to each successfully developed compound its share of the costs of the people and facilities used in conducting all the appropriate laboratory, preclinical, and clinical testing required for approval. That exercise would still ignore the costs of conducting basic research, and conducting the laboratory, preclinical, and clinical testing on potentially druggable compounds that did not become commercial products. Those who suggest ignoring the costs of research that does not lead to a successful product are just not being reasonable. It would be nice if companies could clearly separate their R&D costs into the two buckets of “those involved in developing our successful drugs” and “those involved in basic research activities and on compounds that never became drugs”. That challenge reminds me of retail pioneer John Wanamaker’s famous lament: “Half the money I spend on advertising is wasted; the

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trouble is, I don’t know which half.” Would the drug industry’s critics better understand the rationale for setting prices if the companies published more information about their methods of allocating direct and indirect costs? Companies in other industries provide information about “Operating costs excluding unallocated corporate expenses” for various business segments. Could drug companies do the same, using Therapeutic Categories, Phases of Research, or other relevant categorizations in place of Business Segments?

It’s impossible for outsiders, and probably for insiders too, to calibrate the precise costs of developing any particular drug. Would the companies regain any of their lost respect among the public by disclosing how much of their annual research budgets involve the type of basic or applied research that aims to seek better understanding of a biological process and is not necessarily expected to lead to the development of a drug? The public seems to believe only the National Institutes of Health conducts such research. They might understand that even the smallest amount of such research needs to be embedded into a firm’s total costs of development, and also reflected in the pricing of its products. The cost of prescription drugs represents only about 15% of our country’s healthcare bill. While that number is much higher than it was 30 years ago, it’s undoubtedly true that drugs developed during that period have enabled the reduction of hospital expenses for treating numerous conditions — and helped improve and prolong the lives of patients afflicted with them. I’m not the first person to suggest that the drug industry needs to figure out better ways of communicating the story of its remarkable contributions to improving the nation’s health during the past few decades. But I might be one of the few to ask it to stop shooting itself in the foot by hiding behind a veil of secrecy when pricing its products. I

Michael A. Martorelli is a Director at the investment banking firm Fairmount Partners. For additional commentary on the topics covered in this column contact him at Michael.martorelli@fairmount or at Tel: (610) 260-6232; Fax (610) 260-6285.



On Your Own The successful employee-to-consultant transition By Jack Cohen Guest columnist

1994, I WROTE AN ARTICLE FOR DAVE describing my experiences in transitioning from a large pharma to a small biotechnology company, including expectations and surprises. The change was successful, and it more than met my expectations. In 2002 I transitioned again, starting a career as an independent Quality Management Consultant to the pharma and biotech industries. Now as I’ve passed my 10th anniversary of that shift, I’d like to describe the transition I went through to become a consultant. After 20 years as an employee, specifically as a vice president of Quality, I’ve learned quite a bit about what I can bring to the table. And I’ve learned about managing the business of a consultant. I initially faced some skepticism. Some people considering a change like this doubt their ability to work on their own; people in senior management positions often wonder if they can “work in the trenches again.” Would I remember how to handle activities that I had become accustomed to delegating? Also, many people discover that, as a consultant, they lose their sense of belonging — they don’t like being an outsider, no longer a part of the team. To a few, that’s a deabreaker. I found the negatives balanced by the many positive aspects of consulting. In this issue’s column, I’ll review the process I went through in hopes of encouraging others who may be considering this kind of career move themselves.

had completed my work for the day. As a consultant, I resolved never to miss a deadline, because I do the work unencumbered by strategic planning meetings and all the other “management stuff” that occupied so much of my previous life. I have no company benefits, like health insurance and paid vacations, which takes some getting used to. If I don’t work, I don’t get paid. But I no longer have to squeeze vacations in between performance reviews and budgeting. I designed and furnished my own office at home, within the space available but with no need to conform to corporate norms. (And it’s tax deductible!) One surprise I found was the ease of working at home. Using e-mail, voice mail, scanning and faxing documents, and FedEx, I could be completely productive at home. However, I found that it’s critical to be at the workplace frequently to build and maintain relationships. If you’re consulting, you’ll need to market yourself, probably for the first time in your life. I posted a bio on LinkedIn, alerted my friends to the launch of my consulting career, and waited. Fortunately, I didn’t have to wait too long, because I found that, just as in today’s workplace, my assignments came through networking, from people with whom I had previously worked. I felt that after many years in organizations, I would not develop emotional commitments to clients, imagining that I would go from job to job, spreading my wisdom as needed. But I soon found myself with two long-term clients, feeling almost like an employee, developing the same loyalties I had before. I learned that having something turn out differently than expected doesn’t mean it’s turned out badly. But because consulting can involve working with more than one client at the same time, you need to keep them distinct in your mind, and this can be tricky. For example, at one point I was working with two clients manufacturing tablets for clinical trials, one 25 mg and the second 20 mg, and I confused the dose in a meeting, asking why we had changed the dose since last week. It’s only happened once, but it was embarrassing.

Thoughts about How My Life has Changed

How My Role in Companies Has Changed

I am my own boss, with no corporate norms to which I must conform. I can set policies for my business dictated by my needs, without having to consider if they make sense to others. I set my own rates, and have the flexibility to alter them as circumstances warrant. But I have no admin assistant, so tracking hours and billing accurately can be time consuming. And estimated tax, in the absence of withholding, has become my own responsibility to manage. My hours are relatively flexible, I can work when I want to, as long as I’m meeting my clients’ needs. I found a new sense of freedom, arriving at the job in the morning, leaving when I

I work for start-ups, and often I’m the only QA person at the company. This may meet my needs to teach and develop policy, but I have no QA colleagues to consult with nor to disagree with me. But I have other colleagues; often these are brilliant people who question my opinions enough to keep me grounded. And I do have many old friends to call on, usually fellow

Please allow me to introduce my friend Jack Cohen, our guest this month for a topic that I am asked about regularly. That is, how does one successfully move to an independent consultant role in biopharma? Read Jack’s comments in this month’s column and you’ll come away with some inspiration and a set of rules that should work for anyone considering the same move. Enjoy! — Dave Jensen




Jack Cohen is a quality management consultant. He previously worked at Nektar Therapeutics, Scios, Inc., and Syntex. He can be reached at


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consultants happy to discuss an interesting problem even if they can’t bill for it. Being the only QA person means I’m always on call. My phone is always on, nights and weekends too, because things happen, and I need to see the e-mails moving around, as well as being available for the “we may have a problem” phone call. This doesn’t stop when I’m running errands at home or on vacation. More than once I’ve been on a conference call sitting in my car in a parking lot. If you decide to consult, remember that you’ll be asked to do everything, at all levels, whatever the client needs. You are there to help and participate. I’ve worked with consultants who seem primarily interested in demonstrating their knowledge, but that’s not why we’re there. My job is to be responsible for the QA aspects of moving development programs forward. And I’m very clear on my responsibilities to protect both my clients and the patients in their clinical trials. People depend on you, but be prepared to say, “I don’t know.” You may be an expert with years of experience, and you certainly know what you’re doing, but you are not perfect and will occasionally be stumped or mistaken. Personally, I will occasionally call old friends for advice, or to survey current practice, and I have turned down work if I thought someone with different expertise could do a better job for the client.

I play no role in strategic planning, which can be a difficult adjustment. My wife has asked if I miss being part of a company’s senior management group, and I do miss having a real impact on company progress. Let’s face it: as a consultant, you’ll be a hired hand, there to meet specific needs, and your primary impact will be limited to a specific operating responsibility.

Satisfy the needs of your clients. Do whatever is required, as long as you know how to solve the problem or at least understand the approach to follow. Which leads to the biggest change and my biggest surprise. The consulting life is much easier than being in management. I do the work without the organizational responsibilities. I see and experience people problems, but have no responsibility to solve them, although I provide advice frequently, whether asked or not. I can be remarkably efficient and productive with very few distractions. For example, one morning I arrived at my client’s with a list of nine tasks I wanted to complete that day. I finished eight, missing the last only because I had to leave for the airport. This could not have happened in my management career, where interruptions and scheduled regular meetings alone would have prevented me from getting past task three.

Lessons Learned • Satisfy the needs of your clients. Do whatever is required, as long as you know how to solve the problem or at least understand the approach to follow. Use your experience and expertise to anticipate problems and propose alternatives. • Do, rather than wait for responsibility to be assigned. You’re there to help. The days of building your career and jockeying for position are over. • Offer suggestions and help even if outside your primary area of work, in areas where you know enough to meaningfully contribute. Say, “I don’t know” if you don’t know, but offer ways to find out and offer to pursue those approaches. Enjoy your independence. You’re no longer a part of an organization, you’re now an independent businessman or businesswoman, an entrepreneur, a solo practitioner, with all the freedom that brings to your life. Good luck! I


Contract Pharma magazine announces the 12th Annual Contracting & Outsourcing Conference & Tabletop Exhibition! The premier Pharma/Biopharma outsourcing event, Contracting & Outsourcing, will be held on September 19-20, 2013 at the Hyatt Regency New Brunswick, NJ, located in the heart of New Jersey’s pharmaceutical industry! The tabletop exhibition will be one day only on Thursday, September 19th with additional conference sessions held on Friday, September 20th.

CONFERENCE SPEAKERS INCLUDE: Tom Wilson Sterile Injectables External Supply Unit, Pfizer Jim Miller President, PharmSource Steve Walker Alliance Manager, Eli Lilly & Co. Tom Wilson VP Quality, Synta Pharmaceuticals Kamlesh A. Sheth Sr. Investigator, API Dev., Amicus Therapeutics John Avellanet Founder & Principal, Cerulean Associates Peter Pitts Founder, CMPI Gautam Ranade Research Fellow, Pfizer R&D Karen D'Orazio & Nancy Rolli FDA NJ (INVITED)

TOPICS INCLUDE: GDUFA & CMOs Sterile Injectable Manufacturing Trends Executive Outsourcing Summit Bio-manufacturing Report Managing Virtual Manufacturing Outsourcing Drug Product Development: An R&D Perspective After the Contract: Preserving the Partnership Perspectives on Process Validation Supplier Management Models CMOs, Social Media and Pharma Regs


ONE-DAY TABLETOP EXHIBITION: SEPTEMBER 19! The Contracting & Outsourcing 2013 Conference and Tabletop Exhibition provides a venue for easy, informal discussions among outsourcers and potential contractors for manufacturing, packaging, distribution, laboratory services, and more. Domestic and international contractors will be present. The one-day Tabletop Exhibition on September 19 offers high-quality contact between top decision-makers and contractors. In previous years, exhibitors have said that they made more qualified contacts in one day at Contracting & Outsourcing than in several days at larger exhibitions.

The Venue Hyatt Regency New Brunswick The conference room rate is $197 single/double per night. 2 Albany Street, New Brunswick, NJ 08901 Tel: 732-873-1234; Fax: 732-873-1382 Web: •

ONE-DAY TABLETOP EXHIBITION: SEPTEMBER 19! The Contracting & Outsourcing 2013 Conference and Tabletop Exhibition provides a venue for easy, informal discussions among outsourcers and potential contractors for manufacturing, packaging, distriubtion, laboratory services, and more. Domestic and international contractors will be present. The one-day Tabletop Exhibition on Septebmer 19 offers high-quality contact between top desicionmakers and contractors. In previous years, exhibitors have said that they made more qualified contacts in one day at Contracting & Outsourcing than in serveral days at larger exhibitions.

Exhibitors AAIPharma Services AARTI Industries Limited AbbVie ABC Laboratories ABL, Inc. Activation Laboratories Ltd. (Actlabs) Advanced Analytical Testing Laboratories, Inc. Alkermes Alliance Medical Products Almac Pharma Services Althea technologies AMRI AndersonBrecon Andler South Corporation Apex Graphics Aphena Pharma Solutions Aptar Stelmi Aptuit ARx, LLC ATS Labs AustarPharma, LLC Baxter Healthcare Corporation Bellwyck Packaging Bilcare Research Inc. PPI Bio Pharma Services Inc. Boehringer Ingelheim Biopharmaceuticals GmbH

Boston Analytical Camargo Pharmaceutical Services Cangene bioPharma, Inc. Catalent Pharma Solutions Center for Professional Advancement - CfPA Cenveo Chemic Laboratories, Inc. Chemical Solutions Ltd. CMC Biologics CMIC CMO USA Coating Place Inc. Colanar,Inc Coldstream Laboratories, Inc. Confab Constantia Flexibles Consumer Product Testing Co. Contec, Inc Contract Pharmaceuticals Limited Cook Pharmica CoreRx Cytovance Biologics Dalton Pharma Services Delta Industrial Services Inc. DPT Laboratories DynaLabs

Ei, Inc. EMSL Analytical, Inc. Eurofins Lancaster Laboratories EuTech Scientific Services, Inc. FAREVA USA Federal Equipment Fette Compacting America, Inc. Fresenius Kabi Product Partnering Fujifilm Diosynth Biotechnologies Future Pak Ltd. Gibraltar Laboratories, Inc. Glatt Pharmaceutical Services GlaxoSmithKline Global Pharma Analytics Grand River Aseptic Manufacturing Halo Pharmaceutical Haupt Pharma Horizon Pharmaceuticals, Inc. Hospira One 2 One Howell Packaging Hurley Consulting Associates, Ltd. IGI Laboratories Inc. Impact Analytical Importfab Inc Integral BioSystems LLC INTERPHEX Intertek Irvine Pharmaceutical Services, Inc. Jeiven Pharmaceutical Consulting JH Bertrand, Inc. JHP Pharmaceuticals Jones Contract Packaging Services Jost Chemical Co. Jubilant HollisterStier Contract Manufacturing Kemwell Biopharma Key International, Inc. Label Vision Systems, Inc. LSNE Contract Manufacturing LTS Lohmann Therapy Systems Lyophilization Technology, Inc. Metrics, Inc. Microbiologics Microtest Laboratories Inc. Mikart, Inc. Moorfields Pharmaceuticals Mossberg & Company Multipharma, Inc. NextPharma Norwich Pharmaceuticals O.Berk Company OSO BioPharmaceuticals Manufacturing, LLC

Overlook Industries, Inc Pace Analytical Life Sciences, LLC Padtech Patheon, Inc Penn Pharma Pfizer CentreSource Pharma Packaging Solutions Pharma Spray Drying, Inc. Pharma Tech Industries Pharmaceutics International Inc. Pharmalucence Pharmasol Corporation Pillar5 Pharma Inc. PL Developments Platinum Press Inc. Primera Analytical Solutions ProTecs Q Laboratories, Inc. QS Pharma Quality Chemical Laboratories Quality Packaging Specialists Int'l Recipharm AB Reed-Lane, Inc. REIG JOFRE Group Ropack Inc. Rottendorf Pharma GmbH Rovi Contract Manufacturing Schreiner Group LP SGS Life Science Services Sharp Clinical Services Sharp Corporation Sherpa Clinical Packaging SL Pharma Labs, Inc. Sonar Products Inc Sovereign Pharmaceuticals, LLC Sterling Pharmaceutical Services Suzhou Pharma Services Tapemark Tekni-Plex The Chemistry Research Solution LLC Therapex TraceLink Inc. UPM Pharmaceuticals, Inc. Velesco Pharmaceutical Services WellSpring Pharmaceuticals West Pharmaceutical Services Wockhardt USA WuXi AppTec Xcelience

$395 Attendee Fee includes all Conference & Exhibit Hall session, breakfast, lunch and Networking Reception! Register online at

Conference Attendee Registration Fee: Includes meeting materials, continental breakfasts, lunch, coffee breaks, reception, and entrance to exhibits.



Hotel Room Reservations: Please call the Hyatt Regency New Brunswick at 732-873-1234. Mention the Contract Pharma Conference to receive the Conference room rate of $197 single/double. Please attach business card or type/print (ink only) legibly. Company Name:__________________________________________________________________________________________ The above will appear as is in all Contract Pharma listings. Please provide appropriate capitalization and punctuation.

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This application will become a contract upon receipt of full payment & counter signature of Contract Pharma management.

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Acct #: __________________________ Expiration Date: ___________ Billing Postal Code: _____________________________ Name on card (print or type):_________________________________________________________________________________ Signature: ________________________________________________ Amount Authorized: $____________________________ Send or Fax completed form to: Contract Pharma, 70 Hilltop Rd, Ste 3000, Ramsey, NJ 07446 Attn: Conference Dept • Phone: (201) 825-2552 • Fax: (201) 825-0553 Cancellation Policy: Cancellation on or before 8/20/13 is subject to a 50% cancellation fee. Cancellations must be in writing and received at the Contract Pharma office by 8/16/13. For Contract Pharma Use Only Payment Received __________________________________________ Date Received _________________________ Accepted by _______________________________________________ Date _________________________________ Please note: you will receive an email confirmation once your registration is processed.

Fax this form to register now! Fax: (201) 825-0553 Contract Pharma, 70 Hilltop Rd, Ste 3000, Ramsey, NJ 07446 Phone: (201) 825-2552 • Fax: (201) 825-0553 • Email:


Vax Fix OIG report forces overhaul of states’ child vax programs By Kevin O’Donnell Contributing Editor


HE VACCINES FOR CHILDREN (VFC) Program in the U.S. is a federally funded program that provides vaccines for 16 preventable diseases at no cost to children who might not otherwise be vaccinated because of inability to pay. The program is administered under the direction of the Centers for Disease Control and Prevention (CDC), which buys the vaccines at a discount and distributes them to grantees — i.e., state health departments and certain local and territorial public health agencies — that distribute them at no charge to private physicians' offices and public health clinics registered as VFC providers.1 The network consists of 61 grantees and approximately 44,000 eligible enrolled providers throughout the U.S., Puerto Rico and U.S. territories. In 2010, nearly 82 million VFC vaccine doses were administered to an estimated 40 million children at a cost to taxpayers of $3.6 billion.2 The program has, by and large, been a success. According to CDC, the U.S. has achieved 90% or greater reduction in most vaccine-preventable diseases among babies, young children and adolescents through public and private vaccination efforts. The 44,000 VFC-eligible providers, under the guidance and recommendation of CDC, must meet certain requirements for vaccine management — commonsense stuff like storing them within required temperature ranges, properly rotating stock, and monitoring for expiration dates, to ensure that vaccine potency and efficacy remain high and children are afforded the maximum protection against preventable diseases. These requirements are also intended to decrease VFC program fraud, waste, and abuse. But early in 2012, suspecting vulnerabilities in vaccine management at the provider level within the program, the Office of the Inspector General (OIG) at the Department of Health and Human Services issued a study. Using CDC data, 45 VFC providers were selected from the five grantees with the highest volume of vaccines ordered in 2010. The study was conducted in accordance with the Quality Standards for Inspection and Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. Site visits were arranged and conducted at these 45 providers’ medical practice locations, their vaccine coordinators were interviewed, their vaccine management practices were observed, and their storage facilities monitored for temperature for two consecutive weeks. They also interviewed the five grantees’ VFC program staff regarding their program oversight. What the OIG found as a result of this study ranged from troubling to disastrous, exceeding the worst suspicions that

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management of the vaccine program was out of control and fraught with waste. It sent a shockwave through CDC, its grantees and state health departments nationwide. In a nutshell here is what the OIG found: • 76% percent of the 45 providers whose vaccine storage units (refrigerators and freezers) were independently measured over a two-week period were found to have exposed their vaccine stocks to inappropriate temperatures for at least five cumulative hours during that period, potentially decreasing vaccine potency and efficacy and increasing the risk children are not provided with maximum protection. The most egregious offenders involved freezer storage facilities and improper or inadequate temperature monitoring. • 35.5% of the 45 providers reviewed had expired vaccine in their inventories; 29% stored expired vaccines together with non-expired vaccines, significantly increasing the risk of mistakenly administering expired vaccine. • 84.4% of the 45 providers reviewed did not have proper documentation. Selected providers generally did not meet vaccine management minimum requirements or maintain required documentation such as distinguishing between publicly and privately purchased vaccines, storing them separately or segregating them within freezers and refrigerators, and ensuring that vaccines are properly administered to the corresponding populations. • None of the five selected grantees interviewed met all 10 categories of VFC program oversight requirements, indicating grantee sites were not effective in ensuring that providers met vaccine management requirements over time. • 88% of the 45 provider sites did not meet all the requirements in at least half of the 10 vaccine management categories. The effected vaccines on the days the OIG made their visits to the 45 providers cumulatively put at risk 18,346 doses, worth Continued on page 33

Kevin O’Donnell is senior partner at Exelsius Cold Chain Management Consultancy – U.S. He is the former chair for the International Air Transport Association (IATA) Time & Temperature Task Force, a member of the USP Expert Committee on Packaging, Storage and Distribution, a temporary advisor and certified mentor to the World Health Organization (WHO), co-author of PDA Technical Report No. 39, and a member of the International Safe Transit Association (ISTA) Thermal Council. He blogs at He can be reached at



Compounding the Compounding Problem FDA seeks out high-risk pharmacies By Ed Silverman Contributing Editor



the FDA recently began taking concerted action against compounding pharmacies that may pose a public health risk. And the effort goes beyond seeking compounders that operate like large-scale drug manufacturers by producing large quantities of medicines without requiring individual patient prescriptions or shipping to outof-state customers. FDA officials say they are deliberately seeking out so-called high-risk operators, such as those that mostly make a lot of injectable sterile medicines and, in some cases, have problematic track records that warrant agency attention. Since January 1, the FDA has inspected nearly 50 compounders and issued more than two dozen 483 inspection reports. This is a highly surprising turn of events, given that FDA officials have spent months insisting their bureaucratic hands have largely been tied by judicial rulings that prevented tougher action against compounding pharmacies. FDA commissioner Margaret Hamburg testified before Congress last fall that more authority is needed and, more recently, she told the same thing to the CBS program, 60 Minutes. Of course, the extent to which the FDA can act has become a heated topic in the wake of a nationwide outbreak of fungal meningitis that was traced to the now-infamous New England Compounding Center, which has since filed for bankruptcy. By mid-April, federal health officials had tallied 733 cases of meningitis, including 53 deaths, making this the worst public health crisis in the U.S. in decades. Yet, the NECC scandal, which erupted last fall, has been characterized by missed opportunities. In particular, the FDA sent a warning letter in 2007 to NECC over concerns about marketing anesthetic creams and potential microbial contamination associated with splitting and repackaging the Avastin cancer medication, which some ophthalmologists use to treat wet age-related macular degeneration. Why didn’t the FDA get more aggressive with NECC? The agency has continually pointed to judicial rulings. In 2002, the U.S. Supreme Court struck down a portion of a law that prohibited compounders from advertising their products under free speech concerns. As a result, the FDA decided to defer to states to oversee compounding pharmacies in most cases. Then, a 2008 court ruling confused the issue still more, saying the earlier ruling applied only to the advertising portion of the law. This prompted debate over the ability of the FDA to pursue enforcement actions. But the FDA made things still murkier by indicating it would continue to take action in


response to safety concerns or when the equivalent of mass production takes place. Of course, NECC engaged in the sort of activities that should have prompted the agency to get tough years ago. But only now are FDA officials admitting they could have done more. After all, if the FDA can send inspectors these past few months into dozens of compounders and, in some cases, seek warrants in order to do so, then the same tactic could have been used before the meningitis outbreak. In a recent interview, Howard Sklamberg, who heads the Office of Compliance in the FDA’s Center for Drug Evaluation & Research (CDER), begrudgingly acknowledged that the agency had the same capability at any time over the past few years to aggressively inspect potentially wayward compounders. But there was an obvious reluctance to explain why the FDA failed to do so. Rather than directly address the reasons for regulatory shortcomings in years past, he instead harped on agency hesitancy and uncertainty over the ability to pursue actions against compounders. And Mr. Sklamberg maintained overseeing compounders was relegated to what he called a reactive effort, rather than a cohesive regulatory strategy that could be consistently and easily applied. “We faced this legal environment where we were arguing over the very basic ground rules and the very basic ability to do the inspections,” he told me in an interview that appeared recently on the Pharmalot web site. “We were dealing with a landscape that shifted legally during this period a whole bunch of times. And as we were, in fact, working on those inspections and the oversight of those particular firms, the firms themselves, even aside from warrants, were pushing back on our authority.” Yet so far this year, the FDA has encountered remarkably little pushback from the compounders that have been inspected. In fact, as of early April, just one forced the FDA to go to court for a warrant in order to conduct an inspection. An obvious explanation for that, which Mr. Sklamberg himself cited, is that few compounders want to risk incurring public wrath after the torrid NECC publicity. But this does not absolve the FDA of failing to more aggressively and pursue compounders before this year. In fact, the agency could have been expected to more forcefully eyeball

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for The Star-Ledger of New Jersey, one of the nation’s largest daily newspapers, for more than 12 years. Prior to joining The Star-Ledger, Ed spent six years at New York Newsday and previously worked at Investor’s Business Daily. Ed blogs about the drug industry at Pharmalot, at He can be reached at


Prov ding compounders in the wake of the ongoing shortage of many injectable medicines, which, ironically, some agency critics attribute to overly aggressive inspections of facilities run by generic drugmakers and contract manufacturers. Another reason that was blamed for the spotty inspection record of the past is agency resources. With some 28,000 compounders operating around the U.S., agency officials say the FDA has limited staff to keep tabs. And the problem is compounded — pun intended — by the fact that the law does not require these compounders to sufficiently report their activities. “Sure, we could have out and done more inspections like this and battled each one in court,” said Janet Woodcock, director of CDER. “But . . . we don’t know who’s who, because they don’t send us anything or tell us. So how would you regulate that industry when we go there and have to get a warrant from a judge to walk in the door? You could say we could battle in court and get in the firm, but what about the other 27,999?” Now, Dr. Woodcock and Mr. Sklamberg maintain they are taking a less reactive approach. By using a high-risk model to identify manufacturing problems — which they say Congress mandated in the FDA Safety and Innovation Act (FDASIA) that became law last summer — they are taking a more comprehensive and useful approach to the issue. That may be true. But the effort is clearly a belated response to an unfortunate tragedy and ensuing pressure from a variety of directions. While it also true that playing Monday morning quarterback is a wistful exercise, the FDA did have the needed tools to force NECC, for instance, to acquiesce to agency inspectors years ago, even if it meant going to court to get past the front door. Of course, FDA officials are correct to say Congress must clarify any outstanding uncertainties caused by the various court rulings and also ensure that agency inspectors have the right to demand and obtain paperwork from stubborn compounders, an issue the agency says remains a problematic obstacle. But at this point, FDA officials are fooling no one when they say that pursuing NECC a year ago or at any time in the past was an uphill battle. NECC may have been more recalcitrant than other compounders when confronted with agency inspectors, but the FDA has clearly proven its regulatory powers are not toothless — and Congress has yet to convey additional authority for this purpose. There is no turning back the clock, but FDA commissioner Margaret Hamburg is, in part, throwing up a smokescreen by asking Congress to authorize a third class of compounders, as she did at a hearing last November. The idea is to segregate old-fashioned compounders that cater to individuals from larger players that function like large-scale drugmakers. The idea may have some merit, and if there is justification, then Congress ought to consider the notion. But the excuses trotted out by agency officials over the past weeks and months have worn thin. The FDA could have moved against NECC in the past and simply failed to respnd to the warning lights. What’s done is done, as the saying goes. But FDA officials should no longer offer excuses for unfortunate mistakes or oversights. The time has come to simply admit failings and double down on enforcement efforts. I

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What Does this Compound Do? One question, many answers By Derek B. Lowe Contributing Editor


GOT INTO A DISCUSSION NOT LONG about about the various meanings of what should be a simple question: “What does this compound do?” The answers are many, and to look them over is to take a tour through the thoughts of many people in every part of a drug company. For the chemist who just made the thing, the answer might be, “This compound gets my immediate supervisor off my back, because he’s been on me to get this analog into testing for the last month.” Or perhaps it’s, “This compound will finally tell the modelers that no, that extra basic nitrogen really doesn't pick up that polar interaction, and it’s time to think of something else.” Most of the time, though, I think the answer would be something like, “This compound is the latest in the lead series, and might just be the one that has good enough PK/high enough selectivity/strong enough activity to be the clinical candidate. And I sure could use one of those.” Now, none of those answers may sound very satisfactory, but that’s because these are early days. Most people, when they think of what a compound does, are thinking of some sort of biological effect, and only the chemists get to see these things before they’ve had any such assays run on them. So it’s not surprising that their perspective might be a bit warped, at first. The honest answer to “What does this compound do?” at this point is, “No one knows yet”. Once someone has run the primary assay, asking the question will almost certainly produce a number in return. It might be a full-fledged Ki, or an IC50, or just a per cent activity at some given concentration, but there’s always a ready number to tag each compound with and rate its immediate importance to the project. And while that’s useful, and while human nature probably makes that process inevitable, reducing everything down to one number is actually somewhat dangerous. There’s a lot more to know about a compound other than how potent it is in the primary assay. But unless that number reaches a certain level, no one will pay attention to the others. (The flipside of this effect is that if the compound’s number is wildly impressive, no one will pay enough attention to the other numbers, either.) But if the compound does make it to the cell assays, or especially into animals, “What does it do?” then gets answered by a phenotype. The compound causes A, B, and C to happen. Note that these activities probably have something to do with the numbers in the primary assay, but it’s by no means certain that all of them do. This takes us right into the difference between target-driven molecular biology and old-style pharmacology, and right into two very different worldviews. If we had the biological


pathways mapped out well enough — or if we thought we did — then the potency at the target would be enough to tell us what the phenotype in a real animal is likely to be. But when do we have that level of confidence? So we run the tests, for both good and bad effects. A toxicologist will give still another answer to the question, because they’re focused (quite rightly) on the side effects. You’d prefer the tox people to be at a loss for words when you ask them what a particular compound does, but they rarely are. As Willie Stark, the corrupt governor in All the King’s Men put it, “There is always something.” By this point, the effects are probably completely divorced from all those earlier assay numbers (unless you target has something intrinsically nasty about it). Whole-animal toxicology is a phenotypic screen if ever there was one, and a close study of it will bring home just how little we understand what we’re really doing. If you’re lucky, you’ll be able to say something about what the compound does, but how often will you be able to say why? We’re up to a pretty advanced state of affairs by now, and “What does this compound do?” can be answered in several new ways. “It generates a nasty waste stream in the pilot plant,” is one you don’t want to hear very often, as is, “It calls for a starting material that no supplier seems to be able to deliver reliably,” or, “It forms 14 polymorphs.” To a large extent, the original purpose of the compound — and the actual one, according to many other people — is beside the point to many people at this stage. It could be used for anything, but first you have to get enough of it, and in reliable fashion. And by now, the big question is also starting to be answered by clinicians. We can start, finally, to talk about the answers that everyone was thinking about back when the first compounds were being made. Is Compound X really going to help people with Disease Y? What does it do for them? And that brings us to a very important answer indeed. Because, “What does this compound do?” is exactly the sort of question that the FDA will be asking eventually, and they’ll be going into great detail about all the good and bad answers that have been generated so far. Once they’re all put together, “This compound provides substantial benefit relative to its risks,” is the magic answer that no one ever gets to hear very often. With any luck, the question of what the compound does will be the one that patients will soon be asking their doctors. Past this point, the question will start to be answered by accountants and by rarified parts of upper management dur-

Derek B. Lowe has been employed since 1989 in pharmaceutical drug discovery in several therapeutic areas. His blog, In the Pipeline, is located at and is an awfully good read. He can be reached at


ing press conferences. The “do” part of “What does this compound do?” gets applied to the market share it carves out, the peak sales it will (or might) reach, and the profit that it had better bring in. “This compound fills a slot in our oncology portfolio,” is one possible answer, as is, “This compound will become a first-line agent for Disease X,” or, “This compound will become our biggest seller during the peak of its product cycle.” That last one moves us into investor language, and investors come in several species. The sorts who buy early into smaller, speculative companies tend to be very much into the science behind the coming compounds, even if they turn out, at times, not to understand it very well. But the ones who are buy-

ing the bigger, more established outfits often want to hear about things like inventory levels, quarter-to-quarter prescription trends, and the legal defenses against the case for an early generic switch. What does this compound do? It keeps the institutional investors happy and keeps the company’s bond rating high. Sometimes, it keeps the lights on and the doors unchained. We’re a long way from the days of taking the first NMR spectrum of a new reaction, or getting the first readout in the primary assay. The people who did those experiments have long since moved on to other projects and are asking what some new molecule does, even as the original one starts to pay their salaries. I

ADVANCED DEGREES Continued from page 29

The OIG’s Report — — recommends that CDC continue to work with grantees and providers to ensure that: 1. VFCs vaccines are stored according to requirements 2. Expired vaccines are identified and separated from nonexpired vaccines 3. Grantees better manage providers vaccine inventories 4. Grantees meet oversight requirements

result in better vaccine management, reducing the risk of expired vaccines. CDC will also review its guidance and training materials to ensure that program requirements related to managing expired vaccines are communicated to and understood by VFC providers and grantees.4 With regard to the fourth recommendation, CDC stated that it will work with VFC grantees and provider organizations to ensure that program requirements are necessary for effective program oversight. In addition, CDC will task working groups with reviewing VFC provider site visit procedures and documentation to ensure that site visits are effective in enforcing program requirements.5 At the time of this writing, 23 states are actively evaluating and correcting these vulnerabilities and shortcomings, either internally or through an RFP process involving private and industry consultants, in order to meet the OIG’s list of recommendations. Leading the charge are the states of Massachusetts, Virginia and New Mexico, with others close behind. Both state and federal funding is being provided for the assessments and implementation. It will be a long, hard culture change but such improvements in vaccine management will likely lead to minimizing risk among public and private vaccine providers. Here’s hoping that at least some improvements are in place before your child’s next scheduled vaccination. I

With regard to the first recommendation, CDC stated that it will work with its partners, including state health officials, immunization program managers, and professional organizations, to improve compliance with vaccine storage equipment and temperature-monitoring requirements to ensure proper vaccine storage.3 With regard to the second and third recommendations, CDC said that it is implementing significant changes to the VFC vaccine ordering and provider inventory reporting systems. Improvements to these systems and associated processes will

References 1 Centers for Disease Control and Prevention website, About VFC 2 Levinson, Daniel, R.,Vaccines for Children Program: Vulnerabilities in Vaccine Management, Office of the Inspector General Report, Department of Health and Human Services, June, 2012 3 ibid; 4 ibid; 5 ibid;

an estimated $737,640. The 45 providers represent about onetenth of one percent of the entire VFC Program. The resulting potential harm to children receiving the effected vaccines is incalculable. While these results apply only to the five grantees and 45 providers, and the OIG is careful to mention that the numbers should not be extrapolated out to the total population of 61 VFC grantees or approximately 44,000 providers, it doesn’t take a giant leap of faith to assume the problem is systemic across the VFC program, or that the problem exists in equal measure across the pediatric healthcare spectrum as public and private providers are often one in the same. Think about that.

OIG Recommendations and CDC Response

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Catalent Opens Bio-CoE DSM to open bio-site in Brisbane Catalent Opens Madison Bio-CoE Catalent Pharma Solutions has opened its new biomanufacturing Center of Excellence in Madison, WI. The new facility quadruples current biologics manufacturing capacity and allows the company to extend its offerings as well as enhance the efficiency and output of its GPEx cell line engineering technology and other mammalian cell lines. Catalent has moved its 89 employees to the 100,000-sq.-ft. Madison site, and eventually plans to employ more than 100 people at the site. Also, Catalent recently acquired an exclusive license to market Redwood Bioscience’s SMARTag precision protein-chemical engineering technology for the development of advanced antibody drug conjugates (ADCs). Catalent will combine its GPEx cell line expression system with SMARTag for the rapid development of stable, high-yielding cell lines, and a broad range of analytical and fill-finish services. The facility is designed for flexible cGMP production from 10L up to 1000L, and non-GMP production up to 250L, and features single-use technologies and unidirectional flow. Manufacturing is supported by integrated analytical, formulation development and viral clearance capabilities, small-scale and large-scale process development labs, and separate microbiology and Quality Control functions. “Our new biomanufacturing Center of Excellence has been specifically designed to meet our customers’ needs through improved delivery of integrated services in the areas of biologic development and manufacturing, and we will be pleased to welcome many of them on site at the official opening,” said Barry Littlejohns, president of Catalent’s Biologics business. “The extensive application of single-use technology greatly reduces the risk of cross contamination and gives us huge flexibility and scale, while our on-site capabilities enable us to provide our customers with solutions for even the most difficult to express proteins.”

DSM To Open Brisbane Bio-Mfg. Ops DSM Pharmaceutical Products will open its cGMP custom biopharmaceutical manufacturing facility in Brisbane, Australia in June 2013. The facility was built in cooperation with the Queensland and Commonwealth Governments of Australia. The site will provide cGMP mammalian cell-culture contract manufacturing services from process development through to commercial manufacturing. DSM Biologics operates with all standard technologies and has a portfolio of proprietary technologies for the optimization of bio-manufacturing. The facility has an annual output capability of 500kg and has expansion space available for further capacity utilization. Karen King, president of DSM Biologics, the biopharmaceutical manufacturing business of DSM Pharmaceutical Products, said, “We are thrilled to announce the June opening our of new


cGMP facility in Brisbane. This operation combines DSM’s 25 years of experience and high-quality track record in mammalian cell culture manufacturing with a state-of-the-art commercial and development facility. Our partnership with the Government of Queensland and the Commonwealth of Australia has led to this important addition to the Australian biotechnology industry and will be a key contributor to the entire Asia-Pacific region.”

Fujifilm Diosynth Commissions Cell Banking Facility Fujifilm Diosynth Biotechnologies has commissioned its new mammalian cGMP Cell Banking Facility (CBF) at its Billingham, UK site. The new CBF is available to customers either as part of a larger development and manufacturing program, or as a stand-alone service. The CBF will support manufacturing programs for both the Billingham UK, and Research Triangle Park, NC facilities. The next stage of the company’s expansion is a cGMP manufacturing facility in Billingham, which is scheduled to open in early 4Q13. The facility will primarily utilize single-use technologies and will initially offer 200L and 1000L single-use bioreactors, with 2000L bioreactors planned for 2014. Steve Bagshaw, managing director, Fujifilm Diosynth Biotechnologies UK, said “I am delighted that we have commissioned the Cell Bank Facility within a year of its commencement, and have already started work on our first customer program. This is the next step in our strategy to grow our services in the CDMO field, becoming a world-class player across both microbial and mammalian cell culture platforms, offering a full life cycle support for our customers.”

Goodwin, Coldstream in ADC Alliance Goodwin Biotechnology, Inc. (GBI) and Coldstream Laboratories have entered a collaboration to develop and manufacture high-potency, highly cytotoxic materials, such as small molecules, protein toxins, cytotoxic antibody drug conjugates (ADCs), and other bioconjugates. GBI will collaborate with Coldstream to perform a number of activities using Coldstream’s cGMP platform of services, including analytical testing, formulation, liquid or lyophilized fill and finish, storage and shipment of manufactured highly-potent bioconjugates. Muctarr Sesay, Ph.D., vice president of process development at GBI, remarked, “To address growing market demands for ADCs employing highly potent and cytotoxic therapeutic payloads, it has recently become clear that a collaboration is needed with a company like Coldstream that has high-containment and isolation capabilities relative to the handling, processing, characterization, fill and finish, lyophilization, and storage of these cytotoxic materials.” I



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3 (d): The Third Dimension Limit the verdict to Glivec By S. Harachand Contributing Editor EENLY FOLLOWED BY ALMOST EVERYONE who has a stake in India’s pharma sector, the April 1 verdict on the patent of Novartis’ Glivec by the Supreme Court was the culmination of more than seven years of deliberations. The Swiss drug major touted the high profile litigation as ‘Novartis vs Union of India,’ a legal battle to salvage the commercial rights of innovations in the heartland of generics. The rejection of Novartis’ claims for a new composition of imatinib (Glivec) by SC came as a “sigh of relief” and brought a great deal of jubilation among the home-grown companies. NGOs and health activists, who were looking forward to the Day of Judgment, felt “ecstatic,” as the verdict could facilitate access to cheaper medicines for the vast section of the poor and the needy, patient groups said. Even India’s commerce minister lauded it as historic. On the other side of the fence, Novartis and others protested loudly. The Glivec-maker said India stood the risk of losing investments from innovators until the country ensured a fair and predictable patent ecosystem amid a flurry reports pointing to the verdict as a setback for innovation in a highly promising pharma market. But does the Glivec verdict provide either for such an exalted revelry or sheer disillusionment? Certainly, the ruling has tremendous value as the first major judgment made by India’s top judiciary on the country’s reformed patent law. Also, the judgment goes on to define contours of the patentability criteria for incremental innovations — one of the several clauses still seeking clarity in the revised patent law.


Not a Bolt from the Blue Legal overtones aside, one can’t ignore a few facts about the scope and impact of the Glivec case verdict on Indian as well as global pharma. Firstly, the court’s rejection of Novartis’ plea for patent protection for beta crystalline form of imatinib mesylate is only an affirmation of three previous judgments. Earlier, the appeal got rejected by Indian Patent Office, a regional high court and Intellectual Property Appellate Board — India’s legal authority to settle patentrelated disputes. Neither did Novartis — nor other MNCs, for that matter — appear to have been anticipating a judgment that would be radically different from the previous judicial decisions. In fact, Novartis went on record saying a day before the verdict that it was planning to stop supplies of new medicines to India if the


country’s top court refuses to grant a patent for Glivec. Secondly, there is the script of the verdict itself. The 112page judgment, without veering away into general propositions and macro issues such as affordability etc, goes straight to the contested clause: Section 3 (d) of the Indian Patent Law. The disputed section, which was inducted in the amended Patent Act in 2005, when India started honoring product patents for the first time to conform to WTO, lists the criteria for patenting incremental innovations. It states that a chemical analog can be patented only if it demonstrates significantly enhanced efficacy over and above a known substance. Even after hundreds of hours of debating, the court observed, it was not convinced how the new salt is more beneficial to the patients in terms of efficacy than its predecessor: “No material has been offered to indicate that the beta crystalline form of the imatinib mesylate will provide an enhanced or superior efficacy (therapeutic) on a molecular basis than what could be achieved with imatinib free base.”

A Grave Mistake! While ruling that Novartis’ new version of the drug was “not an invention as understood by the law of patents in India,” the court was quick to add that the judgment did not apply to all improvements in products. It would be a “grave mistake,” the court categorically said, to read the judgment to mean that it prohibited patents for all incremental inventions of chemical and pharmaceutical substances. By narrowing down the scope of the judgment specific to Glivec, the court never raised the issue of affordability by Indians nor claims that the exigencies of poverty trump the rights of innovators. Obviously, the verdict is not the end of the road for innovators, as many branded drugmakers fear. Nor is it an open license for generic-makers to unrestrictedly dole out copycat versions of all patented drugs, banking on the moral highground of affordability, as desi firms hope. “So, the takeaways are clear now. The Indian pharma market, which is forecast to more than double or even triple in the new three to four years, is too important a marketplace to ignore for any serious player,” said an industry analyst with an investment firm. Maybe, Novartis understands this best. The company said it would continue to file for patents in India and would continue to invest here, but with caution. I

S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at


Pharma’s R&D Productivity Engine Enabling technologies for leveraging Big Data By Mak Jawadekar Contributing Editor


BIO-IT WORLD Conference & Expo (April 9-11, 2013) organized by Cambridge Health Tech Institute in Boston. The 3,000 delegates consisted of biotech/pharma representatives in R&D, academic researchers, many CIOs from various bioinformatics groups, and computing contract firms that serve global pharma R&D industry in drug discovery, eclinical trial solutions, cloud computing, and cancer informatics, to name a few. The keynote addresses were delivered by Andrew Hopkins, a former Pfizer researcher, and now a professor at University of Dundee. He gave a commanding presentation on Do Network Pharmacologists need Robot Chemists? He spoke about the genome mapping and its derived value, as well as the slight rise in NMEs approved by the FDA in 2012 over 2011 (39 to 35). Another keynote address was delivered by Stanford bioinformatics professor Atul Butte, who gave an outstanding talk on the current needs of R&D and how one can work through contract labs to get access to existing data and leverage it to assist pharma’s R&D productivity engine. He also spoke about the value of existing data that one can access virtually to build hypotheses, and contracting out research work through use of online R&D labs, which would conduct research work at fraction of costs. At the Bio-IT Expo, I got to speak to many of the contract vendors in this space. Some of the companies took the opportunity to publish whitepapers on data and how it can help Pharma R&D. There were three that captured my attention and I urge you to read these to derive further value. The first is McKinsey & Co.’s April 2013 whitepaper by J. Cattell, S. Chilukuri & M. Levy, How big data can revolutionize Pharma R&D. According to the paper, one of the cures for declining R & D Productivity is use of the “Big Data,” and the analytics that go with it could be a key element to the cure. They discuss how predictive modeling of biological processes and drugs has become significantly more sophisticated and widespread. Using available molecular and clinical data, predictive modeling could help identify new potential-candidate molecules with higher probability of successful drug candidates with action on biological targets safely and effectively. Pharma companies can expand the data they collect and improve their approach to managing and analyzing these data by implementing eight technology-enabled measures. These measures are: 1) Integrate all data; 2) Collaborate internally and externally; 3) Employ IT-enabled portfolio-decision support; 4) Leverage new discovery technologies; 5) Deploy sensors and devices; 6) Raise clinical trial efficiency; 7) Improve safety and risk management; and 8) Sharpen focus on real-world evidence. According to the authors, in order for pharma R&D to sucRECENTLY ATTENDED

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ceed, executives must overcome challenges that include, organizational silos, integrating disparate data and rationalizing and connecting different systems, and improving the existing mindsets. They conclude by stating, “Pharmaceutical companies desperately need to bolster R&D innovation and efficiency. By implementing the above eight technology-enabled ways to benefit from big data, they could gradually turn the tide of declining success rates and stagnant pipelines.” Another whitepaper that caught my attention was by Nick Clarke of Tessella Technology & Consulting, titled, Can you win the Big Data arms race?. The takeaway messages from this paper include: 1) Do smarter analytics and not bigger data; 2) Decisions first, data last; 3) Analytics virtual laboratory; 4) Use scientific approach to commercial data; and 5) Create an intelligence-led organization. According to the author, in analytics labs, optimization is the real key target, followed by predictive modeling, forecasting, and statistical analyses followed by scheduled and ad-hoc reporting. The data does not have to be big to be better. Finally, the analytics skills you need are out there: go ahead and apply those skill-sets! The third White Paper that I enjoyed reviewing was published from Eric Newmark of IDC Health Insights, The next Phase of Industry evolution: Deriving value from Big Data in Life Sciences. The paper describes patent cliff, what has happened to R&D in pharma industry in the last five years, and new legislation on drug pedigrees and serialization adoption by pharma in commercial supply chain and in manufacturing. The paper also describes present changes in sales and marketing engines. The beneficial suggestions include the following points: 1) Create consensus on handling and data ownership to remove data access hurdles; 2) Begin consolidating silos into dynamic data storage infrastructure; 3) Seek out technologies that can search, tier and manage the data lifecycle; 4) Focus on standardizing and automating data capture, storage tiering and analysis; 5) Proactively build effective data sharing with customers, vendors and partners; and 6) Ensure that appropriate data security exists from both organizational and IT standpoint! There was plenty to learn from these most recent whitepapers! We have a way to go on ‘Big Data Management’ and timely application of clever techniques to derive huge value to enhance efficiencies in our pharma R&D engine. I

Makarand (Mak) Jawadekar most recently served as Director, Portfolio Management and Performance at Pfizer Global R&D, until February 2010, when he opted for an early retirement after 28 years at Pfizer Inc. He currently serves on several companies’ advisory boards and also consults with bio/pharmaceutical companies for global outreach in emerging market regions. He can be reached at


Annual Outsourcing Survey W

ELCOME TO OUR 9th Annual CONTRACT PHARMA Outsourcing Survey! More than 200 sponsor-side respondents offered up their opinions on outsourcing trends for this year’s poll. On the following pages, we’ve provided a sample of the findings, focusing mainly on the major outsourcing projections of our respondents, broken out by their business categories. Here’s a breakdown of the respondents:

Company Type Small/Mid-Tier Pharma 20.1% Top 20 Pharma . . . . . .19.0% Generic Pharma . . . . .12.3% Specialty Pharma . . . .12.3% Emerging Biopharma . .8.4% Virtual Pharma . . . . . . .6.5% Consumer/OTC . . . . . .5.2% Top 10 Biopharma . . . .3.9% Other . . . . . . . . . . . . .12.3%

Job Function Corp. Mgmt. . . . . . . .21.4% R&D . . . . . . . . . . . . .20.4% Project Manager . . . . .8.4% Purchasing/Sourcing . .8.4% Prod./Mfg./Pkg. . . . . . .7.8% QA/QC/Validation . . .6.5% Business Development 5.2% Contract Manager . . .5.2% Marketing/Sales . . . . . .4.5% Clinical Research . . . .3.2% Supply Chain Manager 2.6% Regulatory Affairs . . . .1.9% Engineering . . . . . . . . .1.3% Other . . . . . . . . . . . . .3.2%


Plateau? Last year, 48% of respondents believed that they will spend the same or less on outsourcing spending in the coming year; this year, that climbed to 53%. Meanwhile, 49%, told us that they spent the same or less on outsourcing in the previous year, the same as in our 2012 survey. 18% of respondents said that 2012 saw no change in outsourcing spending from 2011. 28% of respondents tell us they had cancelled outsourcing projects in the previous year due to the economy; up from 23% in our 2012 survey. Small/Mid-Tier Pharma respondents had the highest “cancellation rate” of any company type, at 59% (!). 50% of respondents said that more than half of their outsourcing dollars go to preferred providers. 74% of Corporate Management respondents said the same but most other job categories cited lower figures (43% of R&D staff, and 20% QA/QC/Validation staff cited that large a figure).

Look Online for More! Speaking of percentages, the following pages are only a fraction of the story! Head over to and you can download the full-length PDF with dozens of pages on outsourcing attitudes, vendor relationship issues, preferred vendor status, CMO, CRO,API,Analytical and Nonclinical sourcing trends, and more! Thanks to all of you who took the time to respond to this year’s Outsourcing Survey. The winner of our iPad Mini drawing is Bette Monnot-Chase of Viropharma! Congratulations! —GYR

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A full service solution for investigational and commercial products Contained manufacturing operations As an established pharmaceutical services company, Penn Pharma has over thirty years of experience in providing integrated drug development, clinical trial supply and manufacturing services to the international healthcare industry and for several decades Penn has successfully developed and manufactured solid dose potent products to high standards of quality and safety. The number of potent compounds requiring solid dose development and subsequent manufacture at clinical and commercial scale is growing. Pennâ&#x20AC;&#x2122;s significant investment in new resources provides a seamless development and manufacturing service using highly contained equipment trains installed with a purpose-built facility which is ideal to service this increasing demand. Pennâ&#x20AC;&#x2122;s contained manufacturing unit will produce formulations containing potent active pharmaceutical ingredients (APIs). The unit will safely process APIs with a minimum OEL (Occupational Exposure Limit) of 0.01ug.m3 based on an 8-hour time-weighted average. The design concept uses contained processing to minimise the need for PPE (personal protective equipment) for routine operations. We have adopted a clear design-for-manufacture approach, so there will be reproducibility from development scale (1kg) to commercial scale (120kg).

Heritage In addition to expanding our offering in contained manufacturing, we continue to build on our core heritage using our knowledge of pharmaceutical development, clinical trials and commercial manufacturing and packing. We are already a trusted supply partner of many of the top healthcare companies and are rightly proud of our reputation for providing reliable specialist services which have been recognised by our clients in USA, Japan and Europe. Our mission is to become the partner of choice for the development, testing and supply of pharmaceuticals requiring the very best in GMP facilities backed by an enviable team of scientist, engineers and supply chain professionals.

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By the Numbers 48% of all respondents told us they use secondary suppliers for commercial supply (up from 41%), while 34% said they use use secondary suppliers for clinical materials (down from 44%) and 43% said their company use them for API supply (down from 51%). 28% of respndents said they don’t use contract service providers for any secondary supplies (up from 25%).

52% of all respondents who outsource generic manufacturing have ascertained that their dosage form manufacturers and API suppliers have registered with FDA under GDUFA. Which means 48% haven’t.

74% of respondents who outsource more than $1 million in R&D spend believe they will increase outsourcing spending in the coming year. 46% of those who outsource more than $1 million in formulation believe they will increase such spending. 68% of $1 million-plus R&D respondents said their spending increased last year, while 62% of $1 million-plus formulation respondents said their spending increased in that span.

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GO ONLINE FOR MORE! There’s plenty more of the 2013 Outsourcing Survey online! Find out about Outsourcing Attitudes, Vendor Relations, Analysis by Job Function, and more, including our respondents’ answers to the burning question: “What is your biggest complaint about Contract Service Providers you’ve worked with in the past?” Find out more at outsourcing-survey


Photo courtesy of Almac Pharma Services


Contract Packaging Update Serialization transforms the business By Gil Roth CONTRACT PHARMA


contract packaging space. In recent months there’s been a major consolidation, new market entrants, expansion among existing players, and a regulatory push that could change the face of the business. In April, Packaging Coordinators, Inc. (PCI) bought the contract packaging business of AndersonBrecon for more than $300 million. When the deal closes, the combined company will be the top player in the contract pharmaceutical packaging space. Bill Mitchell, PCI’s chief executive officer, told us, “This move was all about creating a global footprint in contract packaging.” When we spoke to Mr. Mitchell for a Newsmakers Q&A in September 2012, he told us, “There’ll definitely be acquisitions” for PCI, but the AndersonBrecon move came up quickly, when parent company AmerisourceBergen put the unit on the block last November. “The opportunity with AndersonBrecon was too good. When [Frazier Healthcare] started with buying back PCI from Catalent last summer, it was never about just bringing back that business. It was about becoming a global supplier. It would’ve been difficult to build out PCI in a reasonable timeframe; this move has accelerated our chance to step forward with the business.” As for further moves, Mr. Mitchell commented, “This is a big acquisition, and it’s not closed yet. We’ll focus on integrating AndersonBrecon, then look around at the marketplace.” Mr. Mitchell considers contract packaging a dynamic market, with growth in the 5-7% range, but noted, “There are IG MOVES ARE AFOOT IN THE


opportunities above that, particularly to penetrate large pharma’s in-sourcing operations.” Some success in that area, he said, could lead to double-digit growth rates. The next largest company in contract packaging, Sharp Corp., also sees the industry as full of promise. Bob Macadangdang, the company’s marketing manager, told CONTRACT PHARMA, “It’s a very busy time for us. We have a healthy business outlook for at least the next year or two.” He added that the industry overall has been in good shape for the past three years. “It’s a cyclical business, of course, but we haven’t seen much ‘in-house over outsource’ activity in the last 18 months.” Sharp Corp.’s growth has led to a significant expansion effort, targeted for validation in late summer. The company plans to add as many as seven suites in a facility in Allentown, PA. “If business continues to grow,” said Mr. Macadangdang, “there’s the possibility for another 50,000 to 60,000 sq. ft. of expansion, in addition to our main facility.” Elsewhere in Pennsylvania, Almac Pharma Services has added a commercial packaging facility in Audubon, PA. The site previously served as the hub for Almac’s U.S. Clinical Trial

Gil Y. Roth has been the editor of CONTRACT PHARMA since its debut in 1999. He can be reached at


Supply operations, before the company built its new North American headquarters in nearby Souderton, PA. Almac has invested around $10 million to reconfigure 100,000 sq. ft. of space to offer commercial primary and secondary packaging of tablets and capsules into bottles, blisters, cartoning, walleting and vial

labeling. The site provides a North American foothold for Almac’s contract packaging efforts, complementing its operations in Craigavon, Northern Ireland, which have handled commercial packaging for more than 30 years. The site was approved by the FDA and DEA in January 2013.

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James McGibbon, director of Business Development for Almac Pharma Services, told us, “Our management realized that contract packaging business has grown substantially, but it could have grown much faster if we had services in the U.S.” Four lines are currently in place, taking up less than half of the available space for operations. Mr. McGibbon remarked, “What you’ll see in Audubon isn’t a massive investment. Rather, it’s a smart investment, and it’s one we’ll build on as we get a return on the initial phase of the investment.” He cited the facility’s Uhlmann UPS4 blistering line as a major opportunity for both U.S. and European customers. “When it came to designing the facility, we listened to our clients, who had been asking when we were going to set up shop in the U.S.” The changeover from clinical to commercial packaging required significant modifications and upgrades, including monitoring systems, air handling and temperature control, as well as taking down walls to accommodate larger equipment lines and transferring quality systems from Northern Island to PA. Mr. McGibbon characterized the U.S. packaging operations as “a startup . . . with 30 years of experience backing us up.”

Supply Side Things are looking up for packaging suppliers, too. Constantia Flexibles recently announced a $12 million expansion of its main U.S. manufacturing facility in Blythewood, SC. The move will add 15,000 sq. ft. of floor space to the factor to accommodate several new pieces of packaging equipment and more than a dozen new employees. The Blythewood facility manufactures custom packaging for the pharma and food industries, including packaging foils for blister packages, child-resistant (CR) packaging, and lids for portion controlled containers. Fred Lutz, sales manager at Constantia Flexibles, told us, “The trend we are seeing is continued customer interest in child resistant materials, needed for many of today’s over-the-counter cough/cold/allergy products. Functionality is always an issue, in that care must be taken in design to maximize the child-

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resistant aspect of the package, while still insuring that adults/seniors can access the medication without great difficulty. It is always a fine line to walk, but design elements can be engineered into the blister (greater land area, good access to peel area, clean perfs, etc.) to meet both objectives.”

Serial? Killer! The key trend cited by contract packagers and suppliers is the onset of serialization and track-and-trace. We’ve written about this for more than a decade, but it seems that 2015 will at last be the year that serialization and e-pedigrees hit the big time. After serveral delays, the state of California has mandated that 50% of all “dangerous” drugs that are distributed in California must be serialized and have an electronic pedigree from their manufacturers by January 1, 2015, and that jumps to 100% by January 1, 2016. (The percentage can be based on unit volume, SKU type, or drug product family.) Wholesalers and repackagers must accept and pass pedigrees by July 2016 and pharmacies and pharmacy warehouses must accept them by July 2017. And given the size of its population, as goes Calilfornia, so goes the country (like it or not). Eric Allen, director of Sales/Marketing at Aphena Pharma Solutions, told us, “The hot topic and getting hotter is the serialization requirements for CA. Packaging companies and manufacturers are focused on this topic right now and will be making decisions very soon on the equipment and software solutions for handling the 2015 requirements. Aphena has a full project team doing nothing but investigating the options and making recommendation so we can be 100% ready by next year.” The company has already been doing serialization on a small scale for about four years in two of its operations, Mr. Allen added. Matt Hicks, chief operating officer at Federal Equipment Co., a re-seller of pharmaceutical equipment, remarked, “Serialization and track-and-trace is the biggest issue in pharma packaging right now. The California Board of Pharmacy’s mandate is well within capital planning fences at most pharmaceutical companies. The question is whether those planned solutions will meet everyone’s needs.” Rather than build out infrastructure to accommodate the serialization and e-pedigree requirements, companies large and small are looking to their contract packagers for guidance. Mr. Hicks added that his firm has also seen strong demand lately for flexible, solid-dose packaging equipment and packaging lines, both blister-packs and bottles. “We have also had spikes in requests for specialty packaging equipment like transdermal packages and blow-fill-seal, and demand for vialfilling equipment has also been robust,” he noted. Richard Wrocklage, director of Package Development at Reed-Lane, Inc., “Serialization is going to be a big shift in the industry. Being a service industry, we have to be ready to serve, so we’re working hard on it.” Joe Luke, vice president, Sales at Reed-Lane, added, “We’re making a significant investment in serialization. As far as our Rx business is concerned, we’re well positioned for it. We’ll be ready for the 2015 deadline. We’re on pace to do pilots for customers in late-2013/early 2014.” Mr. Luke noted that ReedLane has seen growth in demand for bottling services.


Mr. Mitchell at PCI commented, “Serialization is coming on, and there’s no avoiding that fact. We’re heavily invested in making it work for our customers.” At Sharp Corp., Mr. Macadangdang told us, “Serialization is a hot topic and everybody has it on their plate. We’ve had quite a few customers visiting to talk about it in the last few months. When it comes to technology, I believe we’re in the forefront of the serialization part of the industry.”

Finding a Standard Serialization, e-pedigrees and track-and-trace are going to revamp the pharma packaging industry (both in-house and contract) and protect the supply chain for end-users, but how exactly are they going to do that? Chip Meyers, vice president Corporate Public Affairs at UPS, commented, “As companies prepare for serialization, they need to consider a variety of factors. Chief among those is technology. Currently, there isn’t a standard technology in place for all of serialization, so we are advocating for a national solution that will allow companies to implement technologies that preferably can be replicated and/or integrated into a broader, global system. Unless global standards for serialization are adopted, costs will increase and technology expertise will become even more difficult to find. As you create a serialization plan, one of the first considerations should be whether or not you have that expertise in-house, need to hire or if you will engage an outside vendor with that knowledge.” Mr. Meyers added, “Whether you engage a technology partner or choose to build serialization capabilities internally, the current timeline is the biggest concern for implementation; getting to a pilot/test phase — one facility or one line at a time — is most important to develop a broader plan.” Brian Daleiden, vice president – Marketing at TraceLink, which developed a cloud-based platform ‘enabling complete global connectivity, visibility and traceability of pharmaceuticals,’ said, “The current uncertainty in technical/operational requirements to meet track-and-trace compliance deadlines such as California’s 2015 ePedigree creates an investment issue for contract packagers and their customers. Contract packagers want to prepare packaging lines and serialization IT infrastructures for California deadlines, yet certain compliance requirements (such as a final ePedigree model) have yet to be determined. This forces companies either to wait for clarity or to push ahead with serialization projects in isolation from the larger planning requirements. Waiting risks not being ready in time, but pushing ahead risks making technical choices with data formats, aggregation hierarchies, and the like that may cause interoperability issues for the pharmaceutical customer farther down in the supply chain.” UPS’ Mr. Meyers remarked, “While this topic has been debated for years, standards and a uniform federal solution still escape us. With only about one-and-a-half years until implementation begins, the timeline is a source of anxiety for many companies.” With anxiety comes opportunity. Contract packagers see plenty of room to grow, even as consolidation among the top players drives smaller companies to innovate. I

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Selecting a Central Laboratory Algorithms can reduce the role of subjective factors

By Andrei Karelin, Maxim Belotserkovskiy,Veronika Khokhlova and Akhil Kumar PSI CRO AG


CENTRAL LABORATORIES (CLs) is very widespread in clinical trials. There are two main reasons for using CLs in clinical trials (see Table 1): high requirements for the quality of the lab data in trials1-3, and inability to organize required tests in local laboratories. A central laboratory is an institution that is exclusively responsible for laboratory assessments and provides services from conducting laboratory assessments and compiling lab test reports, to contracting courier services for delivering lab kits and biosamples from/to medical institutions where diagnostics and treatment of patients is performed4. Regardless of the important role (and rather high cost) CLs play in clinical trials, it is not so much the objective factors, but rather the subjective ones quite often that influence its selection. Having interviewed more than 50 sponsors we have found the following leading four motives in CL selection: • “Good recommendation from a person we know.” • “One our colleague worked with this laboratory.” • “We know a good specialist in this laboratory.” • “We had positive experience working on a different study some time ago.” HE USE OF

Another common approach is for the sponsor to request a referral for a CL that the CRO had previous positive experience with, as a kind of “preferred provider” concept. The vulnerability of this concept is related to the absence of guarantees that such CL is the optimal choice for that particular study. On top


of this, organizations change over time and, as experience shows, this is not always to the better. We should particularly emphasize a situation when, before the start of a study, the sponsor performs a project-specific audit of its pre-selected CL. This approach is more adequate since it provides an opportunity to obtain the most reliable information about the lab. However, it requires time and additional expenses. Also, to have a truly objective optimization of the CL selection process, it would be necessary to audit several laboratories. Even though some companies offer a selection of CLs for trials, the criteria of objective and competitive selection of CLs are not formulated and are very rarely discussed. Having many years of experience in this area, we have developed an algo-

Veronika Khokhlova, Ph.D. is a senior laboratory specialist at PSI CRO AG and has 15 years experience as a senior research associate. She can be reached at Andrey Karelin, Ph.D., Dr.Sci. is director laboratory support services at PSI CRO AG and a graduate of Moscow State University. He can be reached at Maxim Belotserkovsky, M.D., Ph.D., M.B.A. is the head of medical affairs at PSI CRO AG and a board-certified physician. He can be reached at Akhil Kumar, M.D. is a medical director at PSI CRO AG and board-certified physician in medical oncology and hematology. He can be reached at

Trusted expertise through every phase. Large molecule pharmacokinetic and immunogenicity services. By choosing EMD Millipore as their service partner for immunogenicity and PK studies our clients gain a team of dedicated bioanalytical scientists and the peace of mind knowing that they have access to the experience and capabilities to product quality data they need on time. From pre-clinical to phase 4 studies, using the latest analytical platforms and adhering to the most recent guidelines, we support global studies from our UK and US locations. Contact us today to see how we can work together on your next large molecule bioanalytical project.

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rithm for CL selection. Modern CLs are able to provide laboratory test results of similar quality. There are no laboratories insured from mistakes, but no laboratory worth its salt could be expected to provide incorrect results that would amount to a statistically significant level. The availability of various certificates and licenses that prove the quality of work does not necessarily guarantee high quality. And if the project audit of a lab is performed by auditors who don’t possess professional laboratory knowledge, it does not ensure the high performance of the lab during the study. The general concept of our algorithm for selecting a CL is provided in Fig. 1. Figure 1

For the initial contact (Stage 1), CLs can be pre-selected using your own database, references, and even an internet search. Our experience shows it’s sufficient to contact three to five CLs. The general rule is that, the more complex the tests that are required, then the more labs should be approached. Even assuming that we have a CL in which we trust, it is necessary to collect the info from at least two more labs. On the other hand, more than five such contacts is an excessive laborintensive work and evidence of poor planning. For a preliminary contact, a short request about the available tests — with the indication of the study geomix — and general interest in the study is enough. At this stage, we would not recommend approaching a non-replying CL for the second time; we suggest considering “no reply” as absence of interest in the project. According to our experience, it takes no more than a week to gather initial information from all labs. The second contact (Stage 2) is the most difficult and demanding. The initial readiness to participate in a study may not necessarily prove to be the case later on. It is important to get the CL’s feedback on the following issues: study design and logistics, Quality Systems, and some study specific questions. We recommend developing standard forms for collection of all necessary information in a single step. We use two questionnaires: Project-Specific Pre-qualification questionnaire and General Lab Pre-qualification question-


naire. These questionnaires together contain approximately 30 questions covering all needed aspects. Any laboratory that can act as a CL can provide all requested information pretty fast (in two to three weeks). Selection of a CL requires a cross-functional effort with participation of Quality Assurance, Project Management, and Lab Specialists. Our experience shows that the best way is to appoint a Lab Specialist as responsible for contacting potential CLs. There is no need to say that the Lab Specialist will coordinate all activities with a dedicated Project Manager and Auditor. Thus, all documents and questionnaires are prepared by Lab Specialist and are then reviewed and confirmed by all parties involved. When potential vendors send out the completed questionnaires along with the copies of requested documents and budget, it becomes possible to perform a comparative analysis of the collected information (Stage 3) by creating a Project-Specific Lab Profile for each CL. This form contains the answers of the CL to the questionnaires together with Lab Specialist and (internal) auditor comments. Finally the CL’s capabilities regarding the project are assessed using the simple scale for each aspect of evaluation: Acceptable, Partially Acceptable (corrective actions can be implemented), or Not Acceptable. The key point is that the evaluation of the CL for each aspect is made by Lab Specialist and auditor independently for more objective evaluation. The importance of different aspects of evaluation may change depending on the particular clinical trial. If a standard safety panel is envisaged in the trial, the most important aspect is evaluation of Quality Systems and IT, and the auditor has the leading role. On the other hand, in case of complicated Pharmacodynamic or Pharmacokinetic studies, the main aspect is the professional opinion of Lab Specialist, especially in those cases when assessments are related to the validation of a method or approach that is new for the CL. An essential part of the profile is the lab budget and evaluation of the adequacy of the lab’s costs. When comparing budgets, it should be taken into account that the main elements of the budget can be compiled and calculated in different ways by different CLs, so the transparency of calculations is the major requirement for the budget. While compiling a profile, Lab Specialist may ask additional questions and request clarifications regarding the budget and other provided information. The process of communication between Lab Specialist and the CL representative reflects the ability of a potential vendor to maintain communication with the sponsor at the later stages of CT; this ability is also being evaluated by the Lab Specialist. We have had situations when CLs that provided completed questionnaires on time later demonstrated lack of communication when we sent additional questions. This resulted in their being excluded from the list of potential vendors, because not obtaining answers in a timely manner during a clinical trial almost always has a negative impact on the results. The time of the follow-up communication must take no more than one month, which includes obtaining all possible clarifications, if necessary. As a result, we develop quite a full picture about each potential vendor as well as the results of professional evaluation of their capabilities in reference to each key aspect of the project.


Based on such project-specific lab profiles, we recommend preparing the final document containing comparative evaluation of each CL’s ability to conduct the trial. We outline 10 general sections including the comparative evaluation of budgets: • Quality Systems • Ability to meet protocol specifications • Logistics Services • Data Management and IT Services • Additional services • Budget and Reliability of cost estimates • Willingness to cooperate • Previous experience (if available) • Additional project-specific aspects • General conclusion on lab acceptability Final selection of a CL in this case seems to be adequate and well-grounded. As already mentioned, the quality of lab tests is quite acceptable in any laboratory that positions itself as a CL. Likewise, IT systems, a package of regulatory documents, or quality systems of the CLs are in most cases acceptable. At the same time, logistics, budgets, and organization of the laboratory management system (including project management), especially in terms of communication and collaboration with the client, can vary dramatically. These are frequently the factors that play a key role when making the final decision on vendor selection. For CLs, the “price to quality” criterion generally reflects either the probability to lose a slightly greater number of biosamples than would otherwise be expected due to logistic or managerial inadvertence, or the likelihood of spending more effort or more time solving various organizational and managerial issues. With any CL, a certain percentage of biosamples will be lost for whatever reason (i.e. a percentage of undelivered laboratory data within the clinical trial). According to the data provided (very reluctantly) by CLs themselves, about 2% to 9% of biosamples collected within a CT may not be processed, for a variety of reasons. This factor should be taken into account at the stage of statistical planning, especially when the clinical trial has primary or important secondary endpoints grounded up on the lab test results. In all cases, we recommend selecting a backup CL that can be used in case of any unsolvable problems or conflicting views when negotiating the contract between the client and the primary CL, or any other force majeure. A brief summary justifying the selection is made for both the primary and backup CLs. As far as the importance of CL selection criteria is concerned, it can be almost guaranteed that laboratories offering excessively favorable financial terms will also wind up offering a number of unpleasant surprises. Thus, the financial proposals of laboratories cannot and should not be the only criterion for determining a CL’s appropriateness for a certain project, and the final decision on selecting a laboratory should be made based on the integral assessment of all criteria. The final CL and back-up CL choice is agreed on by the dedicated Lab Specialist and Auditor and then approved by the Project Manager. This way we believe a balance between qualification marks of a potential vendor is reached. According to our experience, the information analysis and selection of primary and back-up CLs takes a week at the most.

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If needed, the CL choice document is approved by the trial sponsor. If the sponsor has questions in regard to how the evaluation scores of the laboratories’ activities have been estimated, complete project-specific profiles may be provided for all reviewed CLs. This practice allows the sponsor not only to familiarize itself with any information content it considers relevant, but also to structure this information with no loss of quality, and with much less expenditure in time and effort. According to our experience, the entire process of the selection and approval of a CL for a trial takes from four to six weeks, depending on the planned scope and complexity of laboratory assessments and the sponsor’s specific requirements. The final CL selection results and the sponsor’s approval of these results is a signal for starting contract negotiations with the selected lab. Our suggested approach to the selection of a CL is in reality a kind of remote audit and is based upon the following principles: 1. Comparative analysis of several potential vendors’ proposals made on a competitive basis; 2. Impartial assessment, achieved through independent expert evaluation of documents performed by qualified Lab Specialist and Auditor; 3. CL selection, based on the best combination of the following factors: a. Capability of a CL to comply with the protocol requirements; b. Availability of a satisfactory quality control system in the laboratory, including a set of regulatory documents (licenses, certificates, etc.); c. Adequacy of the logistic solutions offered by the CL (including terms of transportation of the biosamples and proposed duration of their stability); d. Acceptability of the budget; e. Satisfactory level of laboratory management, also proven by previous cooperation. Based on our experience of cooperation with different laboratories, it seems that our established process allows selection of a CL within limited timelines and at a rather low cost, meeting the requirements of all the selection process parties and minimizing the impact of the subjective factors on the final result. At least, we never had to do such a complex and laborious move as replacing a CL when a trial was in progress. That replacement however has occurred in some trials we conducted in which our sponsors had contracted CLs directly without our assistance. In all those cases, we contend, the main reason for this difficult and stressful procedure was the domination of subjective approaches in selecting a central laboratory. I References 1. Clinical laboratory improvement amendment: Regulations-and-Guidance/Legislation/CLIA/index.html 2. CLIA related Federal Register and Code of Federal Regulation Announcements 3. ISO 15189; 2007 Medical laboratories — Particular requirements for quality and competence 4. F. Leão, Jr.,“The Local Central Lab Model. With globalization of trials comes the difficulties of sample logistics. Enter the central laboratory model,” Applied Clinical Trials Publish date:Apr 1, 2008


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SPR & Flow Cytometry For Biosimilars Evaluating the pharmacodynamics of biosimilar monoclonal antibodies By James Hulse, Ph.D. and Chris Cox, Ph.D. EMD Millipore


market has resulted in a need for new approaches for precise, sensitive and accurate bioanalysis. We shall describe how a combination of the biopharma market, regulatory guidelines and the molecular characteristics of biologics has inspired the application of surface plasmon resonance and flow cytometry-based ligand-binding assays to streamline evaluation of biosimilars. The pressure to contain healthcare costs and the number of first-to-market biologic drugs coming off patent — 30 licensed biological drugs by 2015 — are driving the development of biosimilars. Rituximab (Rituxan - Biogen Idec/Genentech) will lose European patent protection in November 2013. This drug, with $6.8 billion in annual sales, represents the first patent of a monoclonal antibody (mAb) biotherapeutic. This expiration is only the first in a number of looming patent expirations for biotherapeutics, including, but not limited to, trastuzumab (Herceptin – Roche), cetuximab (Erbitux – Lilly/Merck KgA) and natalizumab (Tysabri – Biogen Idec).1 The global market size of the biosimilars industry was estimated at $2.5 billion in 2011, and global demand for biosimilars, and mAb biosimilars in particular, is estimated to grow at 8% and 17%, respectively, between 2012 and 2016.2 Importantly, the advent of biosimilars will bring more affordable drugs to market; estimates indicate that the cost of biosimilars will be between 50% and 75% that of innovator biologics. The European Medicines Agency (EMA), having approved its ROWING PURSUIT OF THE BIOSIMILAR


first biosimilar in 2006, is now reviewing its first application for approval of a biosimilar mAb — a version of infliximab (Remicade – Janssen/J&J). The U.S. Food and Drug Administration (FDA) has received nine biosimilar investigational new drug applications, and some copy biologics have already been approved in China and India.1 Specifically, with several diabetes drug patents expiring in 2015, some insulin copy biologics and insulin analogues are already available in India.1 Investments in the development of biosimilars development can be quite lucrative — in Europe, revenue from the sale of biosimilars reached $172 million in 2010, and may be as high as $4 billion by 2020.3

Regulatory Requirements Unlike small molecule drugs, biologics are extremely complex and no single analytical test or preclinical or clinical study can demonstrate that the biosimilar is sufficiently similar to the reference or the innovator biologic. A biosimilar product cannot be considered an identical copy of the innovator biologic because even very small differences in the cell line or manufac-

James Hulse, Ph.D. is managing scientific director, EMD Millipore, Discovery and Development Solutions, North America. Chris Cox, Ph.D. is a freelance bioanalytical lab consultant. For more information, contact Dr. Hulse at


2013 AAPS Annual Meeting and Exposition November 10–14, 2013 Henry B. Gonzalez Convention Center San Antonio

Mark Your Calendar for the Meeting that Extends Your Boundaries: • Widen Your Personal Network with Scientists from all Fields Related to Pharmaceutical Sciences; • Explore Programming Covering Both Large and Small Pharma; • Find the Latest Advances with over 2,500 Contributed Papers; • Find Your Supplier Solutions in San Antonio


turing process can have a large impact on potential side effects observed during treatment; two similar biologics can potentially trigger very different immunogenic responses. Therefore, substitution of a biologic with a biosimilar may have significant clinical consequences, which creates safety concerns from a regulatory perspective. Although regulatory agencies are considering biosimilars on a case-by-case basis, they have issued some guidelines on what types of in vitro studies should be performed in the evaluation of biosimilarity. Of note is the EMA’s draft guidance, titled Guideline on Similar Biological Medicinal Products Containing Monoclonal Antibodies, published in November 2010.4 The EMA’s guidance recommends measuring, among other parameters, binding to the target antigen and binding to all FcΥreceptors, FcRn and complement. Binding to Fc receptors and complement mediates antibody-dependent cell-mediated cytotoxicity and is an important mechanism of action for mAbs. Thus, assessing differences between binding of innovator and biosimilar drugs to Fc receptors and complement is critical for demonstrating similarity in potency. The recent FDA draft guidance, Scientific Considerations in Demonstrating Biosimilarity to a Reference Product, is less specific in its recommendations, but indicates a strategy for evaluating biosimilarity based on “totality of the evidence.”5 In other words, comparing a biosimilar with an innovator using multiple, orthogonal assays is like matching fingerprints —the more multivariate the fingerprint, the more likely that a match is predictive of clinical biosimilarity. Most recently, the Indian regulatory agencies, the Department of Biotechnology and the Central Drugs Standards Control Organization, issued their own guideline on the development of similar biologics, in part to attract investment from global biopharma companies.6 One limitation of these regulatory guidance documents is that they do not actually specify how similar a biosimilar must be to the innovator product. Demonstration of biosimilarity is left up to the company developing the biosimilar therapeutic.

Confirming Similarity Developing a biosimilar therapeutic can be expensive, with costs potentially reaching 80% of the cost of developing an innovator biologic drug and about 20 times as high as for developing a small molecule generic.3 Each new biosimilar faces the challenge of proving that any differences in potency and safety from the innovator drug are not clinically significant. Especially in the case of mAbs, which are large and complex, chemical differences between biosimilars and innovators may be numerous. Such cases require rigorous demonstration of biosimilarity as a proxy for therapeutic “interchangeability,” the ultimate (though probably unprovable) standard. Therefore, there is a critical need for increasingly accurate and precise nonclinical, in vitro assays for measuring drug potency, as these are the cornerstone of quality control of manufactured therapeutics. A recent survey showed that 32% of drugmakers declared that innovations in assay technology were required to meet the demands of proving biosimilarity.7


Such assays can better determine lot-to-lot variability in the manufactured product, assess the impact of process changes on drug quality, assess drug stability, and more. Therefore, increasing the precision of an assay improves the assay’s statistical power, facilitating the comparison between biosimilars and innovators. Innovations in in vitro assay development are being welcomed by regulatory agencies, which are championing the “risk-based” or “step-wise” approach to evaluating biosimilarity, suggesting that the results of very sensitive, highly predictive nonclinical assays can help shape the direction of further testing [FDA guidance]. For example, appropriate pharmacodynamic (PD) markers can be a very sensitive indication of potential clinical differences between two drugs. Regulatory agencies have identified immunogenicity testing as an area enhanced by in vitro ligand-binding analysis. Regulatory guidance (ICH Q6B, 1999) states: “When an antibody is the desired product, its immunological properties should be fully characterized. Binding assays of the antibody to purified antigens and defined regions of antigens should be performed, as feasible, to determine affinity, avidity and immunoreactivity (including cross-reactivity).” We’ve developed two bioanalytical methods that measure the binding of any therapeutic antibody to any Fc receptor: surface plasma resonance (SPR) measures binding of antibody to recombinant soluble Fc receptor; and flow cytometry measures antibody binding to cells that express the receptor. Both methods have been formatted as parallel line assays and demonstrate high levels of accuracy, precision and linearity, making them valuable for comparability, potency and stability assays. These assays also show greater precision and reproducibility than traditional cell-based assays such as antibody-dependent cell-mediated cytotoxicty (ADCC). Additionally, both are readily able to detect structural differences between two mAbs such as glycosylation that can affect function. Given the high cost of advancing from in vitro assays to preclinical studies, there is high interest in establishing assays that provide valuable preclinical data about the properties of drugs and their physiological interactions without the need for animal experiments. SPR and flow cytometry are ideal techniques to use for this type of study. Below, we describe use of SPR and flow cytometry to quantify the binding between therapeutic mAbs, alemtuzumab (and its variants) and infliximab, to molecules mediating cytotoxicity.

Flow Cytometry Flow cytometry is an essential tool for in-depth cell analysis. In a traditional flow cytometer, cells in a liquid stream pass through a laser beam, which excites any fluorescent molecules on the cell. Emitted fluorescence is then measured by detectors tuned to specific wavelengths. With the capacity to simultaneously measure multiple parameters on hundreds of individual cells per second, flow cytometry is a powerful technology with a wide variety of applications in pharmaceutical development. As shown in Figure 1, flow cytometry can be a sensitive, information-rich method for measuring mAb binding to Fc receptors on the cell surface.


Figure 1: Using a fluorescently labeled detection antibody (black) specific to the mAb of interest, flow cytometry can be used to assess binding of a mAb (blue) to Fc receptors (red) expressed on the surface of a transfected cell.

When developing a flow cytometry assay for PD assessment of a therapeutic, factors to consider include: • Appropriate fluorochromes, dyes and conjugates to get the clearest data from samples • Incubation temperatures and periods most suited to the matrix and/or analytes • Appropriate quality control checks on instrumentation to ensure cytometers are performing reproducibly

Surface Plasmon Resonance Surface plasmon resonance (SPR) is a powerful technique for measuring the binding of any pair of interacting molecules, including drugs and targets, and antibodies and antigens. Interactions are measured in real time, enabling the determination of kinetic parameters. The SPR signal is proportional to the mass of analyte and does not require any type of label. Figure 2 shows the principle by which the SPR signal is generated. SPR is a very versatile platform with many different applications throughout pharma development. The measurement of the kinetics of critical molecular interactions between the drug and its target and other key receptors (e.g., Fc receptors in the case of antibodies) is a precise and accurate means of comparing biosimilars and innovators.

Effect of Differential Glycosylation of Alemtuzumab on Binding to FcΥRIII During the production of mAbs, differences can arise in posttranslational modifications of the protein, leading to various glycoforms. Glycosylation variants can be seen if different cell lines are used in the production of the therapeutic, which may occur in the case of a biosimilar. Importantly, differences in glycosylation can have profound effects on FcR binding and thus mAb therapeutic effect. The production of alemetumab highlights this concern. Although alemtuzumab can be pro-

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Figure 2: Principle of the SPR system. A sensor chip is interrogated by a wide angle laser beam which is internally reflected from the sensor surface. At one particular angle (the resonance angle) light is absorbed at the surface and the signal is relatively dimmed (green line). This angle depends on the refractive index difference at the surface. Drug is attached to the surface, and serum, containing a variety of antibodies, flow across. If an antibody binds to the drug, the refractive index changes slightly, and this causes a change in the resonance angle. The response is nearly proportional to the mass of the substance binding to the chip.

duced in suspension CHO cells with much greater yield than in traditional rat cells, alemtuzumab from CHO cells is improperly glycosylated compared to that from rat and human cells. Glycoengineered alemtuzumab, made in CHO cells transfected with glycosyltransferases to change glycosylation to being more comparable to that of production in rat cells, showed higher antibody-dependent cell-mediated cytotoxicity compared to the wild type drug. In order to determine the mechanism of cytotoxicity, we used SPR and flow cytometry binding assays to measure the binding of alemtuzumab and its glycosylated forms to several Fc receptors. To demonstrate that the assays could detect differences in the measured binding, the SPR assay was first qualified by adjusting the concentration of alemtuzumab to 50%, 70%, 80%, 100%, 120%, 130% and 150% of the reference alemtuzumab concentration8. Determination of the relative potency was performed using a 5-parameter logistic parallel line model using Statlia software. The curves of the different starting concentration samples were all determined to be parallel to the reference curve with p>0.05. The assay had good linearity with a correlation coefficient of 0.993 and measured potencies in the range of 91.4 to 100.6%8. The curves showing binding between the various forms of alemtuzumab and FcΥRIII (CD16a) are shown in Figure 3. A negative control antibody, engineered to have no CD16a binding, showed no response in this assay. The glycoengineered antibodies Glyco1 and Glyco2 showed enhanced CD16a binding compared to the wild type alemtuzumab with relative potencies of 300% and 411% respectively. The glycoengineered forms of alemtuzumab



Figure 3: Binding of glycoengineered and control antibodies to human FcΥRIII (CD16a) measured by SPR. The starting concentration of the test samples was adjusted to simulate samples of different potency. The standard deviations of the triplicate measurements were smaller than the plotted symbols.

Figure 4: Binding of different antibodies to FcΥRIII (CD16a) by SPR.

to the lack of parallelism due to both Glyco1 and Glyco2 reaching a higher plateau of binding than the wild type reference.

Binding of Infliximab to Neonatal Fc Receptor FcRn and Complement Component C1q did exhibit small deviations from strict parallelism [p=0.017 and p=0.038 respectively at p>0.05]. These data correlated with the increased ADCC activity previously observed8. Precision between replicates at each concentration was generally <5%. Similar analyses were performed for CD32a and CD64 although the magnitude of the signal obtained was markedly different, reflecting the strength of binding to the different forms of the receptors. Unlike CD16a, CD32a and CD64 bound to wild type alemtuzumab with higher affinity than to its glycosylated forms (data not shown). The assay was also tested for other therapeutic monoclonals — namely, bevacizumab (Avastin – Roche/Genentech), rituximab (Rituxan) and eculizumab (Soliris – Alexion) (Figure 4). Eculizumab, a monoclonal antibody against C5 which has a hybrid Fc domain of IgG2 and IgG4 and hence no Fc binding, was used as a negative control in the assay. Although no absolute measurements of potency were determined for these therapeutic monoclonals, their relative binding to CD16a was as follows: alemtuzumab bound CD16a with the strongest affinity, followed by rituximab and then bevacizumab. Eculizumab, as expected, exhibited no measurable binding. As with the SPR assays, a flow cytometry-based assay was qualified for alemtuzumab using the same nominal concentrations to mimic different potencies of 50 to 150% of the reference. The assay performance for CD16a was very similar to that observed using the SPR assay. The correlation coefficient was 0.99 with measured potencies in the range of 97.9 to 108.0%. As shown in Figure 5, the glycosylated variants of alemtuzumab exhibited higher binding to CD16a than the wild type alemtuzumab. Relative potency values could not be obtained due


The EMA draft guidance recommends testing biosimilars for their binding to the Fc receptor FcRn. The neonatal, intracellular FcRn receptor is responsible for transport of IgG across the placenta. FcRn binds to IgG and albumin at low pH but not at high pH. This receptor is responsible for “salvage” of internalized IgG or albumin and therefore endows these proteins with a long half life. Structurally, the molecule is similar to Class I MHC and consists of a specific heavy chain combined with β-2 microglobulin. Figure 5: Binding of glycoengineered and control antibodies to human FcΥRIII (CD16a) measured by flow cytometry. The starting concentration of the test samples was adjusted to simulate samples of different potency. The standard deviations of the triplicate measurements were smaller than the plotted symbols.


Although FcRn is not commercially available, we obtained a supply of recombinant dimeric receptor suitable for SPR assays. We coupled the receptor directly to the chip surface and qualified the assay using the same protocol as for the alemtuzumab assays. Although the magnitude of the signal obtained was very low, the data were consistent and reproducible (Figure 6). In the qualification of the assay, the r2 value was 0.96 and the measured potencies were from 81.0 to 110.9%. The final assay that was developed to satisfy the requirements of the EMA biosimilar monoclonal antibody guidance was to measure C1q binding. C1q is the first component of the complement cascade and binds to IgM or IgG which is complexed with antigen. A large hexameric molecule, its binding affinity in solution is extremely low. In fact, it has proved impossible to detect binding of IgG to C1q, which was immobilized on an SPR chip. Although it is possible to measure binding of C1q to immobilized IgG, this assay will be difficult to convert for potency or comparability studies. We developed an ELISA to measure C1q binding. The thera-

cytotoxicity (ADCC) experiments, without the variability due to biological complexity and statistical noise. ADCC experiments testing the effect of Fc receptor binding to alemtuzumab yielded more variable results, with CVs of individual triplicates in the range of 0.2 to 18.6% (mean CV=5.4%).8 Flow cytometry and SPR methods are accurate, robust, reproFigure 7: Qualification of ELISA to measure binding of C1q by infliximab.

Figure 6: Qualification of SPR binding assay to measure affinity of infliximab for FcRn. Assay was qualified by adjusting the concentration of infliximab to 50%, 100%, and 150% of the reference infliximab concentration.

ducible and currently in use within a GMP setting for comparison of biosimilar drug lots with innovator. The assays are sensitive to changes in potency related to glycosylation, aggregation, concentration or protein modification. However, many changes can occur in biologics without affecting a potency readout, so careful physico-chemical characterization is still essential. I

peutic mAbs were serially diluted and coated to microtiter plate surface, C1q was added and, following washing, the bound material detected using anti-C1q-HRP conjugate. The assay qualification data showed a correlation coefficient of 0.98 with measured accuracies of between 100.4 and 114.8% (Figure 7). Our studies of Fc receptor binding by mAbs indicate that binding to soluble or cell-surface Fc receptors can be accurately measured by surface plasmon resonance or by flow cytometry. We observed excellent precision for replicates, typically <5% CV. The data were amenable to potency determination by the parallel line method, and we could easily distinguish variant glycoforms and different antibodies. Results showed high correlation with results of antibody-dependent cell-mediated

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References 1 Mullard A. Can next-generation antibodies offset biosimilar competition? Nat Rev Drug Discov. 2012 Jun 1;11(6):426-8. 2 BCC Research. Biosimilars: Global Markets. Available at: Accessed September 4, 2012. 3 Nair, A. Pharmaceutical Technology. 2011 Feb; 35(2):18. 4 European Medicines Agency. Guideline on Similar Biological Medicinal Products Containing Monoclonal Antibodies. EMA/CHMP/BMWP/403543/2010. Nov 2010. 5 United States FDA. Scientific Considerations in Demonstrating Biosimilarity to a Reference Product. Feb 2012. 6 India launches ‘similar biologics’ guidelines at BIO2012 7 9th Annual Report and Survey of Biopharmaceutical Manufacturing, BioPlan Associates, Inc, April 2012, 8 Harrison A et al. Methods to measure the binding of therapeutic monoclonal antibodies to the human Fc receptor FcΥRIII (CD16) using real time kinetic analysis and flow cytometry. J Pharm Biomed Anal. 2012 Apr 7;63:23-8.



Biosimilar Approaches How to best outsource the development of biosimilars By Mario DiPaola Blue Stream Laboratories


some new and exciting opportunities but could potentially be full of mines. Failure to detect and defuse these mines may result in delay or ultimate failure of a biosimilar development program. The opportunities lie in the fact that there are large market needs both in the industrialized countries — due to the necessity to keep healthcare costs under control — and developing countries, especially in countries such as China, India and Brazil, where there is increasing demand for healthcare coverage. In addition, it is well known that as many as 21 products, some of which represent current top-selling biologics, will be losing patent protection by 2020, creating significant opportunity for developers of biosimilars. It is thus projected that by 2020 the market size for biosimilars will be well in excess of $50 billion. Of course, along with these opportunities lie many challenges. The challenges in the development of biosimilars are presented by a number of factors, including: • Significant technical difficulties due to the complex nature of biologics • Poorly defined (still!) regulatory pathways to get these products to market • Patent obstructions that may be brought about by the product innovators • Ever-increasing global competition • Pricing pressure Furthermore, the estimated costs of developing a biosimilar is in the range of $30 to 100 million or more and will likely take HE FIELD OF BIOSIMILARS PROMISES


as long as five to seven years. Thus, the development risks and costs are significant, and far costlier than is the case for small molecule generics. In developing a biosimilar, one can envision three main potential strategies that a developer can pursue: 1. If available, utilize internal capabilities and capacities; if not available, build necessary capabilities and capacities, but at significant expenditure of capital and time. 2. Outsource the entire development cycle from preclinical to clinical development to a single, large CDMO with diversified and broad capabilities. 3. Outsource different parts of the product development to different service providers such that the program development needs are well matched with the expertise and industry/regulatory track records of the chosen CROs/CMOs. While developers of biosimilars will likely select one or a combination of these approaches based on their unique circumstances, it is our recommendation that the third of these three strategies is likely to result in greater success in bringing a biosimilar to market. The successful development of a biosimilar is comprised of

Mario DiPaola is chief scientific officer and chief operating office at Blue Stream Laboratories, Inc. He can be reached at [xxxx].


a number of discrete steps: • Correct engineering and optimization of a cell line that is stable and highly productive • Development of the appropriate analytics to evaluate the characteristics and quality of the product generated with the selected and optimized cell line in comparison to the commercial (originator) / reference product • Development of a manufacturing process • Continued development of appropriately sophisticated analytics to be able to effectively compare the biosimilar product in development to the reference product • Manufacture small-scale GMP lots to support toxicology studies and more comprehensive comparability study between biosimilar and reference product, encompassing physicochemical, biological and biophysical techniques • Finalize release and stability indicating methods preceded by validation of all supporting analytical methods, manufacturing, and processing activities • Scale-up manufacturing process and produce lots • Use large scale production lots to perform: J PK/PD study J Clinical immunogenicity J Clinical trial J Continued biochemical/biological comparability Based on the recently issued FDA guidance on the development of biosimilars, a comprehensive and deep comparative analytical approach will be key to any biosimilar development program. In fact, it is expected that the availability of highly sophisticated physicochemical and biological capabilities will allow for detailed characterization of the desired product, along with the identification and characterization of product-related substances as well as product and process-related impurities. A well designed analytical program for characterization of a biosimilar molecule in comparison to the reference product will include (minimally) confirmation of the amino acid sequence, determination of post-translational modifications, including both N- and O-linked glycosylation, along with the structural analysis of the glycan moieties, if present, and degree of sialic acid occupancy. In addition, mapping of disulfides, along with quantitation of any free cysteines, should also be performed. Integrity of the N- and C-termini and other modifications, such as deamidation, oxidation, potential glycation, etc. will have to be mapped and quantified. Additional characterization including secondary and tertiary structural characteristics will also have to be assessed by means of various biophysical techniques, including circular dichroism, fourier-transform infrared spectroscopy, intrinsic fluorescence and differential scanning calorimetry to determine melting temperature, an indicator of protein folding. As all proteins undergo some degree of aggregation, it is important to quantify the type and amount of aggregates by techniques other than size-exclusion chromatography. Analytical ultracentrifugation and field-flow fractionation are but two available techniques. A potency assay, preferably reflective of the clinical mechanism of action of the drug, will be used to compare the biosimilar molecule in development to the reference product. Such an

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assay could be simply a binding assay by means of fluorescence polarization or surface plasmon resonance, or a more complex assay may be needed, requiring the use of living cells. As stated in the quality guidance issued by the FDA in February 2012, the greater the certainty of the proposed biosimilar, the more selective of an approach may be taken when implementing follow-up animal and/or clinical studies. The bottom line is that the better the comparability package between the biosimilar in development and the reference product showing similarity between the two molecules, the easier will be the regulatory path to market for the biosimilar. Unlike developing a novel product, which involves a sequence of expanding steps, the development of a biosimilar is exactly the opposite; the sequence of events starts very broadly and narrows as the development evolves with the understanding that, at later stages, efforts are aimed at addressing any residual uncertainty with respect to the similarity of the two products. It is clear that the analytical development of the biosimilar should be entrusted to a contract service provider with strong expertise in protein-based characterization. It is important that such a provider be able to not only perform the standard method development and validation to support product release and stability but also possess strong mass spectroscopy along with biophysical capabilities to ensure a robust and detailed comparison between the proposed biosimilar and the reference product. Indeed it is recommended that a specialized provider with strong molecular and cell biology expertise rather than a conventional CMO be utilized for the development and optimization of the expression system. It should be recognized that while a CMO may often provide the full spectrum of services from an expression system to standard analytics and, of course, process development and manufacturing, these services are typically off-the-shelf approaches that may serve to be inadequate if complex issues arise. In summary, it is our recommendation that if the development of a biosimilar is going to be mostly or fully outsourced, it is best to utilize a combination of contract service providers with tailored expertise. To maximize your chance of success, choose the following: • A CRO/CDMO with true expertise in molecular and cellular biology to develop and optimize the expression system • An expert analytical provider to conduct the analytical development, product characterization and comparison analysis, along with lot release, and stability testing • A strong process-minded CMO to perform process development and manufacturing • A clinically focused CRO for preclinical and clinical work Entrusting the entire biosimilar development to a “OneStop Shop” CRO, while logistically very palatable and (possibly, at first pass) less expensive, can be quite risky and possibly more costly in the long run. Outsourcing the development program to multiple service providers — each with focused and tailored expertise — will reduce the risk. This will require aggressive program management, with tight control of timelines and cross-communication among the various service providers. The sponsor, essentially, must direct the flow of information and keep oversight of the entire program. I


Photo courtesy of Pharma Tech Industries


Integrated Providers Vertical integration & turnkey contract manufacturing By Byran Cox Pharma Tech Industries


N TODAY’S EVER-CHANGING PHARMACEUTICAL contract manufacturing market, drug marketers are becoming increasingly keen on aligning themselves with a contract manufacturing organization (CMO) that offers a complete end-to-end solution for their supply chain. Known more commonly as a “turnkey” relationship, these types of relationships can enhance the partnership between the marketer and the CMO. Two of the key benefits of a turnkey relationship are convenience and customer service. A pure turnkey offering is as carefree as it is rare, allowing the customer simply to provide the CMO with the requirements and, in due time, receive a finished product ready for immediate distribution. To truly become a turnkey provider, a CMO must perform the delicate balancing act of growing its suite of core capabilities without sacrificing quality. For a variety of reasons — changing business relationships, employee attrition — these competencies tend to shuffle over time. A worthwhile CMO is one that has steadily accumulated capabilities without any dropoff in the service level of any one of its offerings. But it isn’t enough merely to possess these capabilities. A CMO claiming to be turnkey must have the wherewithal to apply these competencies to fit the specific needs of a wide range of customers. In other words, without integration, turnkey service is an abstract notion rather than a tangible accomplishment. Both vertical and horizontal integration are necessary to client servicing that is truly turnkey. With vertical integration a


CMO may internalize some or all steps in the manufacturing of a product. For example, a CMO specializing in bottle filling might decide that — for purposes of both economics and client convenience — it will bring bottle making into its portfolio of competencies. This is an example of backwards integration. If the company also decided to internalize logistics, warehousing or shipping for the customer, that would be an example of forward integration. Both backward and forward integration are subcategories of vertical integration. Horizontal, or lateral, integration is used to expand a CMO’s reach into a market with a current technology, skillset, asset, or core competency. Examples of this are plentiful. A CMO may already possess world-class quality systems in order to produce and package over-the-counter (OTC) products. These quality systems, scaled in the appropriate direction, may be very applicable for medical device, or pharma products. Another example of horizontal integration would be when a CMO leverages knowledge of a distinct technology into a product form that utilizes the same distinct technology as well as an additional technology. For example, a CMO may

Bryan Cox is a plant manager at Pharma Tech Industries, a pharmaceutical CMO providing powder-based products to more than a dozen clients in two cGMP facilities located in Royston, GA and Union, MO. He can be reached at


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leverage this competency to horizontally integrate from powders into other technologies, such as tableting. But though the options are seemingly limitless, a CMO can’t be all things to all people. A well-developed strategy and vision for what services a CMO should offer is critical. As a CMO grows into more competencies, it must use discretion and prevent over-commitment of resources. At some point, the quantity of competencies affects the competency of competencies and — to any proud, reputable CMO — this puts its reputation at risk. Because reputation is so critical to CMOs, oftentimes you will find CMOs that specialize in certain technologies and capabilities but not in others. Here’s the hard fact: The contract manufacturing of pharmaceuticals is one of the most quality-controlled and quality-demanded fields of service in the world. Your best bet is to do what you do best and expand outward — but not so far outward that you stray from your true forté. In his popular 2001 book Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, Jim Collins describes the “Hedgehog” concept, which is based on the common-sense argument that there is a limit to what one person or company can be “best” at. A company can be good at a lot of things, but invariably won’t be great at things outside of their true areas of specialty. Factoring in the demands of the pharma industry when compared to other fields, a sober moral is this: Don’t be good at 20 things — be great at three or four. When a potential customer assesses a CMO, he is naturally looking for the hallmark competencies relevant to his particular manufacturing process. These competencies are, of course, weighed against those on a short list of other candidate CMOs or in-house alternatives. A turnkey solution is often desired, but rare is the situation where a 100% turnkey process is possible (or even wanted). Many customers want to internalize some of the project inputs where they themselves possess certain competencies. It is important for the CMO to be able to integrate the customer’s competencies (and, often, make up for customer limitations) into its portfolio efficiently and effectively. The following is a list of competencies most often desired by pharma manufacturing customers. Though by no means exhaustive, this list provides insight into many of the common CMO turnkey competencies.

1. Horizontal Integration (HI) HI was defined earlier. It is a critical competency in the early stages of conversation with a potential customer. However, prior to any discussions, a CMO may not even be noticed or contacted unless a customer sees that the CMO is already at least partially in the business of what the customer is attempting. For example, it is rare that a customer, desiring the launch of an Rx drug, would select a CMO that has no prior history in Rx. The risk in the mind of the customer is oftentimes too great. For example, a substantial barrier for HI would occur when a CMO expands from topical and OTC powders into Rx powders. Such a situation is difficult but not impossible. If the relationship with the customer is strong and the CMO is strategically committed to expanding its offering, other competencies can be integrated that outweigh the potential risks.


Other examples of HI that are feasible from a powder-filling CMO might include production of tablets and capsules. A plastics or molding CMO may horizontally integrate from consumer disposables to class I and class II medical devices. Again, this all depends on the CMO’s strategy, its willingness to take risks, and how well each decision leverages its core competencies.

2. Vertical Integration (VI) VI was defined earlier. It is a critical component when marketing the competencies of a CMO to a potential customer. Packaging is a competency that fits well within VI. A customer in need of powder filling into a bottle is usually delighted to learn the CMO could also produce the bottles itself. Cost structures from multiple CMOs can be consolidated into an improved cost structure at a single CMO, thereby offering the customer price advantages in certain cases. Added benefits include reduced lead times and lower freight charges.

3. Freight Freight cost reduction could be considered a favorable consequence of VI but is separated here to provide some additional detail. To continue the above example of vertically integrating bottle production, there is nothing worse for freight than shipping empty bottles. It is essentially the shipment of air, which is costly and inefficient. Colocation of both bottle production and filling is ideal for eliminating this cost. However, bottle production is a skill not many possess and even fewer pharma CMOs possess. CMOs must realize the risk of acquiring this skillset and making it one of their core competencies.

4. Engineering The other aspect of freight is managing shipment of raw materials, work in process product/components, and finished goods. Customers may not want to handle freight themselves, so part of a turnkey offering is to provide this for the customer. Internal resources are then required at the CMO in order to manage logistics. Almost any example of vertical or horizontal integration requires strong competence in engineering. A customer must be confident that the CMO is capable of manufacturing its product . . . but there is much more in the process leading up to production. If the project scope is a transfer of technology or a new product, there is a significant requirement for competent engineering. A transfer may require a discontinuation of a process and/or equipment and a restart at the new CMO location. A transfer may also require a startup of acquired equipment in which equipment vendors must be managed. The marketability of a CMO’s engineering ability will be much more succinct if the CMO has a previous history of working with the technology or products. If, on the other hand, the technology is new to the CMO, chances are the decision by the customer to proceed will be based on other factors such as availability of capacity and strength of relationship. Specifically, a CMO’s track record for execution, its depth of knowledge across a wide range of technical skills, and its ability to communicate well to the customer are all competencies that make the CMO turnkey approach possible.


5. Warehousing Warehousing can also be a favorable consequence of VI. Requirements for testing of both finished goods and raw materials have expanded over the years. Product must be segregated and held while waiting for test results. This increases the need for warehouse space and warehouse management by the CMO in order to accommodate this customer requirement. Warehousing as a part of the initial marketing plan pitched to the customer is almost essential.

6. Raw Material Management As a CMO grows, it will find itself dealing with more raw materials and more raw material suppliers. At a certain level of production, it may become more efficient for the CMO to manage the customer’s raw materials; for some small companies, management by the CMO is desired from Day 1. The CMO may have better buying power than the customer if the CMO can buy in volume because of its combined business with other customers. This part of a turnkey offering, as with the others, requires CMO resources. Staff with strategic purchasing and negotiating experience are then required to manage suppliers and keep inventories at sufficient levels. For many products, the cost structure can be dominated by materials. Proper management of raw materials is sometimes the only way to address issues of cost.

7. Validation Services If a CMO intends to work in areas governed by the FDA, an expertise in validation is required. A medical or pharmaceutical CMO cannot be competitive without a core competency of validation services. A validation — whether for product, process, equipment, etc. — must be thorough but efficient. This area can be the bottleneck and single greatest contributor to late project delivery. It also can be the source of a regulatory violation such as a 483 or product recall. A CMO could pay the price if an integration move into this area is unsuccessful.

8. Analytical and Micro Lab Services As mentioned before, testing is a major customer requirement that is ever-expanding. As finished goods wait in the warehouse for test results prior to shipping, the costs continue to add up. Time is money. Onsite laboratory capabilities are desired and sometimes required by the customer, as this

reduces lead times for materials, increases turn times in the warehouse, and is often less expensive than outside labs that specialize solely in testing. The supply complexity is reduced and provides the CMO with more overall control of the supply chain. However, the capital and resource investment to obtain onsite lab testing is significant. The marketability is usually there, but a CMO needs to make sure it fits the strategy.

9. Fixed Overhead Absorption One thing is for sure: fixed overhead spread out over a few products is more costly than fixed overhead spread over many products. A potential new customer placing its product with a CMO who has other customers may, in all likelihood, find a better price with that CMO because fixed OH allocation may be more favorable. Vertical and horizontal integration provide for more products and processes across a consolidated cost structure. Resources and fixed overhead can be spread further, providing the best overall cost value for all customers. Some or all of these competencies may be required for a turnkey solution, depending on the CMO’s strategy and what makes sense for specific opportunities. In the end, much may depend on the trust and relationship established between CMO and customer. However, overreaching by obtaining too many competencies too quickly — which is usually an attempt to suit the needs of a specific, highly-desired customer — devalues the meaning of “core” in core competency and can result not only in setback but disaster. A turnkey strategy must be established. In Alice in Wonderland, Alice asks the Cheshire Cat an allimportant question: “Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don't much care where . . .” said Alice. “Then it doesn't matter which way you go,” said the Cat. Market dynamics such as competition, growth in demand of certain products, availability of capacity, and operational risks must all be thoroughly understood before a strategy can be determined. If one doesn’t know where they want to go, they could end up anywhere . . . usually a place where they never wanted to be in the first place. I




Outsourcing Preclinical and Clinical Work Focus on quality!

By KR Karu Sparta Systems


HARMACEUTICAL COMPANIES ARE paying more attention to value than ever before. With budget cutbacks and mergers and acquisition “synergies,” companies are forced to restructure resources and invest in the intangibles such as quality, responsiveness, flexibility and real-time reporting. There’s also a push to develop innovative, quality medicines to support accelerated drug development programs. To meet this demand of doing more with less, many pharma companies are shifting towards outsourcing as part of their business model. Preclinical and clinical outsourcing is a growing trend in the pharmaceutical industry, no matter the size of the company. As a result, Contract Laboratory Organizations (CLOs) and Clinical Research Organizations (CROs) are quickly growing, which makes it even harder for pharma companies to track and manage work outsourced across multiple organizations. Preclinical and clinical testing was once conducted within the same four walls of the company marketing the product. Now it’s more often outsourced to contracted researchers all over the world and conducted in different ways. Today, when a sponsor company decides to outsource research, it gives up control on how the testing results are being recorded. The collected data could be stored in an Excel document, or just written in a notebook, for example. For a long time, North American pharma companies have had an advantage when it came to outsourcing preclinical and clinical work because of relative economic stability, scientific


experience and proximity to the majority of the pharma industry. That advantage gave them a sense of reassurance knowing their outsourcing organizations were familiar with regulations and quality practices. With more CLOs and CROs popping up in regions all over the world, more and more sponsor companies are drawn to the upfront cost savings from shipping research overseas. However, the travel required overseas to audit and qualify labs is time consuming. Once a lab is qualified, the sponsor company may have to tap all of its resources to ensure that proper procedures are being followed throughout the testing process. The sponsor must then ensure that the provider’s data is dependable by confirming that uniformed processes are used to administer, document and manage change throughout all phases of testing, as per FDA regulations and its own requirements. Poor laboratory practices or inexperience in meeting required regulations are often the cause of data being thrown out. If not done correctly, the company outsourcing the work will be held accountable for any potential issues.

KR Karu is an industry solution director at Sparta Systems, a provider of enterprise quality management solutions. KR is responsible for working with pharma companies to identify trends in the global regulatory and business climates. He can be reached at


Whether it is small batch processing, correspondence or audits, it is critical that quality processes are managed throughout R&D in order to optimize time to market of a safe and effective drug. The need for preclinical and clinical quality management technologies to help manage compliance and quality processes using a single, centralized system is imperative, whether outsourced or not. Today’s leading pharma companies rely on enterprise quality management systems (EQMS) to manage the myriad of standard quality processes — both in-house and outsourced — such as audit, corrective and preventive action (CAPA), deviation, and out of specification/out of trend (OOS/OOT). The technology is in place to streamline the oftentimes siloed quality processes of bringing a final product to market and create a holistic and transparent view of a company’s quality data. With an EQMS, pharma companies can plan and execute audits to identify operational and compliance risks, like a trial not being administered the same way throughout the testing period, and help to ensure that findings are resolved in a timely and effective manner. Taking a holistic approach to quality, pharma companies can automate CAPAs precipitated by deviations, complaints, audit findings and laboratory findings and manage the process of carrying out CAPA plans and verification of the plans’ effectiveness on a global scale. Outsourcing organizations have their own processes, procedures and systems that may not translate into complete transparency that the sponsor would require should an issue arise. This could result in falsified documentation and lack of trust in believing these organizations are doing what they say they are doing. Automating preclinical and clinical quality

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processes from A to Z can help sponsors trust the people they work with and provide evidence those proper procedures are being followed. As contractors are held to the same FDA guidelines and requirements as their pharma sponsors, having an EQMS can ensure issues such as deviations, OOS/OOT and complaints are properly and efficiently investigated and brought to resolution through the tracking and managing of the initial report, phased investigation, root cause analysis and any resulting CAPAs and controlled changes, fully closing the quality loop. Many CAPA processes end with requiring changes to trial criteria, documentation, or additional critical areas of the trial or product manufacturing. Most of these changes require a formal change control process. Some work could be spread out among several organizations, making it harder to confirm the trials are conducted in uniformity from the products being used to how the trial is being conducted. Managing these changes is critical, because any change can impact the results of the trial or consistency of the product being tested resulting in a deferred time to market. Having change control as part of an enterprise quality system closes the loop from event discovery, through the investigation to any CAPAs and changes made. Sponsors are ultimately responsible for ensuring all regulations are followed and that the brand and label are a clear representation of what that product intends to treat. When a pharma company gives up any control to contract service providers, it may gain increased flexibility and capital, but if not done correctly, it could become very costly. An enterprise quality management system ensures quality processes are systematically managed throughout drug R&D in order to optimize time to market as well as comply with regulatory requirements. I



Risk and Compliance Management A painful manual process improving with automation By Jeff Schwartz Avior Computing Corp.


OST EXECUTIVES WOULD AGREE that achieving regulatory compliance across a life science company has become nearly impossible. However, strict enforcement of global regulations, the potential of crippling business impact, and the need for brand and patient protection also makes necessary the pursuit of proactive risk management and global compliance. Companies large and small are moving heaven and earth in order to pull together a snapshot-in-time of overall risk and risk priorities for their organizations. Functional groups across an organization have varying degrees of focus and control around their own risk and compliance processes. Departments like corporate compliance, Risk Management, QC/QA, Supply Chain, IT, Clinical, Commercial Operations, R&D, EHS, Safety, and RA are all required to assess risk and compliance against growing and dynamic — and sometimes contradictory — global regulations and internal policies, down to the control level. Visit any of these folks and you will find several complex multi-tab spreadsheets that are used to collect a wide range of assessment data from responders inside and outside the company walls. The spreadsheets are typically e-mailed to responders and, when completed, then returned along with separate supporting documents. This is where existing processes often come apart — when completed assessments and attachments are dropped into a document management system or home-grown risk database


and checked off as complete — because it is a grueling task to actually review answers and map them to compliance requirements, internal policies and the relevant regulations. Often, a key risk indicator is flagged and possibly remediated by one functional area, but many opportunities for improvement and risk mitigation via remediation are missed, and operations are left at risk of facing severe consequences. Pulling together summary reports on key risks and remediation progress from each functional group, so that projects can be prioritized and budgeted, is difficult at best and often left to “gut” decisions. When risk and compliance management remains disjointed and reactive due to bad process and resource constraints, businesses are left with: • Little visibility as to brand, product, and organizational risk and compliance exposure • Functional groups that are unprepared for audits • Continuous exposure to legal action, fines, and revenue loss • Patient safety liabilities The good news is that it doesn’t have to be this hard. There are now solutions that efficiently tie regulations and controls to

Jeff Schwartz is head of Professional Services at Avior Computing Corp. He can be reached at


assessments, and have platforms for managing projects and workflows. Non-conformance gaps and risk can be quickly identified, prioritized, and remediated.

Figure 1: Dynamic Compliance Matrix – Maps regulation and policy controls to each other and to assessments

Establishing a Compliance Framework Highly regulated industries, such as life sciences, must comply with extensive and complex regulations. The requirements imposed by the relevant regulations often have common or overlapping requirements. To make the process more efficient and ensure full compliance, organizations will often rely on a framework comprised of an organized set of controls used to measure compliance against multiple regulations, standards, and best practices in Governance, Risk and Compliance (GRC). Every organization will need to have a framework to measure compliance risk from third parties. An effective framework is built around three key elements: 1. Authoritative Sources: The global regulations, laws, industry standards and policies that apply to an organization. Some of these are mandated. FDA and EMA impose legal regulations for life science companies, and Sarbanes Oxley (SOX) sets requirements for publicly traded firms. State governments have privacy laws to protect against the disclosure of personal information. If you process credit card transactions, the Payment Card Industry Data Security Standard (PCI DSS) is required by the credit card companies. Other sources are at the discretion of the organization. For IT security, the organization may adopt ISO 27002. The organization may have policies that are required as part of their best practices. Some of these authoritative sources are also considered frameworks. The Unified Compliance Framework (UCF) is a framework for IT security. Most companies with common characteristics in a given industry will have the same mandated requirements. 2. Controls: A control is a requirement imposed by the relevant Authoritative Sources. A Control may be a definition of a process to mitigate risks, enforce a mandated policy statement and/or address the directive of an Authoritative Source. The Control may have one or many Control Tests associated, to ensure that the Control is effective and thus ensure continued compliance. Controls can also be directly associated with Authoritative Source content, to allow a mapping of an organization’s internal controls to those mandated by the Authoritative Source. 3. Control Level Associations: This is a process that harmonizes the various regulatory requirements that allow for common requirements from multiple sources to be mapped to a single control. This is also referred to as cross mapping. This process minimizes overlap and resolves conflicting requirements. Obviously as regulations are imposed or changed, this process must be updated. Developing and maintaining associations between specific regulatory requirements, standards, controls, and assessment questions requires significant effort, and is a costly part of the compliance challenge. Automation can help, but solutions vary in sophistication and effectiveness. In addition to the regulato-

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ry mandates, you must also consider your organization policies that should be mapped against the regulatory controls. Many organizations will have company-specific IT policies or corporate ethics standards.

Utilize a Workflow Management Platform Once the compliance framework and assessments have been developed and mapped to the controls within the framework, it’s time to think about putting the process into motion via workflow automation. To do this, a database-driven platform is required to manage the flow of information between risk assessment-requesting and -responding people and organizations. E-mail template management within the system notifies people that there are ‘to-dos’ in the system that require a response. An assessment may need to be completed or a request for a remediation plan may be waiting. SaaS (software as a service) or cloud-based solutions are often preferred, particularly for assessing third party entities such as key suppliers or other affiliates. This is because the hosted or cloud system resides outside the company firewall and allows the exchange of data to be handled in a more secure fashion.

Analytics Drive Risk and Compliance Visibility Now we can understand the significant benefits resulting from a solid compliance framework that is tied to internal and external controls and assessments, and managed with proper workflow architecture. Errors typical in a manual system are eliminated, not to mention the time saved in trying to find that needle in a haystack, time better spent working on closing gaps. It also provides a single system of record and audit trail for corporate compliance across many regulations, controls, and policies. However, powerful analytics are required as part of any platform solution in order to pull everything together for management team visibility and quick decision making. Strong analytics provide the necessary engine to show risk and compliance scoring, Key Risk Indicators (KRIs) and continued on page 81


Photo courtesy of West Pharmaceutical Services


Labeling on Ferrules and Cap Overseals What drugmakers need to know about the Revised USP General Chapter <1> Injections Standard By Carol Mooney West Pharmaceutical Services, Inc.


UNITED STATES PHARMACOPEIAL Convention (USP) is a nonprofit scientific organization dedicated to improving the health of people around the world through standards that enhance the safety and quality of medicines. Those standards also include packaging and labeling requirements for primary pharmaceutical containment systems. In a move intended to “reduce the likelihood of death and disability from misadministration . . . by standardizing the information that may appear on the top (circle) surface of the ferrule and/or cap overseal of a vial containing an injectable product,”1 the USP has revised General Chapter <1> Injections, Section on Labeling on Ferrules and Cap Overseals (USP 34-NF 29 November 1, 2010). Implementation of the revised standard limits what drugmakers can print or otherwise display on the top surface of cap overseals and ferrules (aluminum shells) used to secure injectable drug vials. The new standard will become effective on December 1, 2013, and affects all injectable drug products, human and veterinary, intended for sale in the U.S. As the date for the revised standard moves closer, pharmac companies should assess their current portfolio of injectable products to determine first if there is a need for a change. Any printing on the cap or overseal needs be reviewed. Should it be determined that the statement meets the intent of the revised USP standard, then no change is necessary. For products that currently use non-cautionary printing, changes must be made in time to meet the December 1, 2013, effective date. Drugmakers need to initiate changes with their packaging suppliers now in HE


order to ensure they maintain compliance with this revised standard for all injectable drug products sold in the U.S. Many pharma companies currently print or display information on the surface of the plastic cap or aluminum shell. Printed information often includes the trademark of the drug product, company logos or the company name, dosage or storage directions. Such printing will no longer be allowed after the revision becomes effective. Instead, the revision will limit printing to cautionary statements, which are statements intended to prevent an imminent life-threatening situation, and may include instructional statements that provide potency or other safety-related instructions, if warranted. Examples of approved cautionary statements cited by the USP in the revision include “warning paralyzing agent” or “paralyzing agent” for neuromuscular blocking agents, or “must be diluted” for potassium chloride injections. Again, the cautionary statement indicated in the general chapter are examples only. Embossed information such as Flip-Off®, Flip-Cap and other customizations are also considered prohibited. Further information provided by the revision states the cautionary labeling statements must be simple, concise and devoid of non-essential information. Only cautionary statements may

Carol Mooney is Global Market Segment director at West Pharmaceutical Services. For more information about this article, contact


appear on the top surface of the ferrule and/or cap overseal of a vial containing an injectable product. The statement should be printed in a contrasting color and be clearly visible under ordinary conditions of use. Other statements or features, including but not limited to, identifying numbers or letters, such as code numbers, lot numbers, company names, logos or product names, may appear on the side (skirt) surface of the ferrule but not on the top (circle) surface of the ferrule or cap overseal. According to USP’s Frequently Asked Questions for General Chapter <1> Injections, Section on Labeling on Ferrules and Cap Overseals (August 4, 2010): “For those manufacturers who wish to maintain the information printed on the cap or ferrule, rationale must be provided to the FDA explaining why the instruction addressed in the statement in considered to be life threatening. In addition, the FDA will expect manufacturers to provide data to support that the statement is safe, unambiguous and offers the best message to minimize the life-threatening situation.”2 The revision also limits distinguishing marks, including logos and other markings intended to ensure that a drug is authentic and provided directly from the manufacturer. Many packaging suppliers offer covert solutions that pharma manufacturers may want to consider to ensure the safety of their drug product. Drug companies should discuss these options with their packaging suppliers to determine what will best suit the company and the drug product. Pharma companies should be aware that no printing or information displayed on caps or ferrules is grandfathered by the revised standard. So although the printing or labeling may have been approved in the past, the company must make sure that it is in compliance with the revised standard or that any specific divergences are approved by FDA, moving forward.

What Changes Mean to Supply Chains Many manufacturers have large amounts of unused seals in inventory and it takes time for those goods to be depleted. It is critical for pharma manufacturers to assess their demand needs and determine the appropriate inventory depletion plan to ensure that their supply chain is not interrupted. Drugmakers should contact their component suppliers to request new seal items, determine specifications and acquire drawings. Packaging component manufacturers’ production lead times must also be considered in the transition process. It is our opinion that removing printing or embossing from the seal is cosmetic in nature; the raw materials, forming process, dimensions and functionality of the seals have not been changed, so performance and quality should not be affected. Pharma firms must assess for themselves how they interpret this change and if evaluation or testing is needed. Also, since the standard does not affect products for use outside of the U.S., or products that are not injectables, packagers will continue to produce seals currently in use that have labeling or anti-counterfeiting measures in place. To prepare for the change, pharma companies should consider the following questions: • What is the process and timing for specification and setup of new items within their own systems? • How is the change (if any) being communicated to customers and patients?

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• How much inventory is in place and what is the depletion plan? • Do Instructions for Use need to be updated? • Will there be a need for evaluation or testing of the new seal? • Will the current seal still be used when exporting from U.S.? • What other changes or enhancements might be incorporated into the seal during the change? • What is the strategy (as applicable) for addressing counterfeit product in the market? It may be helpful for companies to establish a transition team to work directly with the packaging manufacturer and within the company to ensure that all fill/finish processes, as well as any specification and validation issues, are handled before the implementation date. While it is reasonable to expect that there will be product in the supply chain with printing for some time after the implementation date, production campaign schedules may dictate that new seals need to be in-house before the implementation date to meet manufacturing needs.

Talk to Your Supplier Whether a pharma company works directly with a packager or with a contract manufacturing organization (CMO), it is important to discuss the revised standards now. Because secondary closures such as seals can be switched out without retesting or any compatibility issues with the drug product itself, CMOs may change seals unbeknownst to the pharma company in order to maintain compliance within its facility. Also, because the revision is not a global change, packaging manufacturers will not force pharma companies to switch from their current closure. Tradenames currently printed on caps, such as Flip-Off® and Flip-Cap, will continue to be produced because they can be used in other markets and applications. Pharma manufacturers must contact their closure suppliers to initiate the change in order to meet the new standard. Suppliers may also help with rationale, if needed, to maintain alignment with the standard for printing on the cap or overseal. A good supplier’s regulatory department may be able to provide a customized Regulatory Technical Package to help present additional information and rationale to assist in maintaining alignment of the ferrule and cap overseal printing with the USP standard. These customized packages should provide the rationale and data denoted in USP Frequently Asked Questions General Chapter <1> Injections, Section on Labeling on Ferrules and Cap Overseals, dated August 4, 2010. USP recommended providing data and information to the FDA for support of their evaluation and determination for retention of the current printing consistent with the revised USP <1> standard. I References 1. USP, “Compendial Notice: General Chapter <1> Injections, Labeling of Ferrules and Cap Overseals Section,”, Accessed on April 8, 2013. 2. Ibid. Flip-Off® is a registered trademark of West Pharmaceutical Services, Inc., in the U.S. and other jurisdictions.


Photo courtesy of PL Developments


Working with CPOs Contract packaging becomes a competitive advantage By Edward Grimm PL Developments


are dealing with the challenges of a tight economy, plant closings and consolidations. In this environment, finding the right packaging partner can make a big difference. Companies need to bring products to market quickly, create packaging that accommodates different customer needs, and keep costs down and quality up. For many companies, these needs have led to outsourcing packaging to Contract Packaging Organizations (CPOs) that offer turnkey solutions, can develop eye-catching packaging designs that boost sales and improve compliance, have invested in the technology to support high speed production, and cultivated a skilled support team that can ensure a quality product. Outsourcing enables clients to launch new products or enter new markets more quickly without being limited to their existing systems. CPOs can help compress the speed to market by managing multiple steps in the process depending on the client’s needs. HARMACEUTICAL COMPANIES TODAY

senior-friendly packaging with gear caps. To succeed, companies need to package their products in many sizes and configurations, which requires the use of multiple types of equipment, tooling, materials and expertise. Pharma companies are also moving toward packaging that encourages or improves compliance of drug therapy. This means more blister packages with multiple products, or packages that put sample vials alongside established products. With so much variation in the market needs, it may be too costly for companies to manage their own packaging operations or they may not have all the skills needed on staff.

Packaging Starts with a Concept

Responding to Customer Needs

Whether you want to launch a new product or re-invigorate an existing brand, packaging is key to increasing consumer awareness and sales. Given the complexity of the packaging process and the need to appeal to such a diverse range of consumers, many companies now look to their CPOs for help in the creative and design process – long before the actual packaging even starts. Packaging includes a wide range of solutions — boxes, blis-

Packaging pharma products today requires the nimbleness to respond to diverse customer needs. On one hand, consumers buy very high-count packages at club or discount stores; on the other customers want small pocket-sized packages to carry with them. Households may need child resistant packaging or

Edward Grimm is vice preisdent of operations at PL Developments. He can be reached at



ter cards, solid-dose bottling, seasonal displays, trade shows, new product launches, and in-store aprons with a full pallet display. Working with CPOs from the very beginning of the product development process allows them to integrate input from multiple perspectives, including marketing, manufacturing, operations and quality control departments.

Equipment Matters The right infrastructure is critical to meeting packaging requirements and deadlines, so CPOs are often early adopters of the most advanced technology systems to support consistent quality, efficient production, multiple packaging options and the ability to handle runs from sample sizes through full production. CPO partners should offer segregated, positive pressure, HEPA-filtered, temperature- and humidity-controlled pharmaceutical packaging suites for regulated drugs or drugs that require special handling. Facilities should be cGMP-compliant and FDA-registered. In addition, companies should outfit their packaging lines with the most recent technological and automation advances, such as Optical Character Recognition to efficiently ensure compliance with date and lot tracking, and vision systems to provide reliable performance in embedded identification and inspection applications. After quality — which is expected — what customers now want is speed, and that is made possible by using the most current equipment and having the systems in place to support production line efficiency and allow runs of any size. Interchangeable tooling provides flexibility and prevents bottlenecks. For example, investing in an all-in-one blister cartoning line fully automates what used to involve several separate processes. This helps expedite customer needs in a timely fashion and keep costs in line by eliminating multiple steps. Many pharma firms simply can’t justify the investment in this type of equipment. Efficiency doesn’t stop with the packaging lines. Modern warehousing must allow efficient and suitable storage utilizing approaches such as very narrow aisle design as well as temperature and humidity controls. Some CPOs also have an auto-

mated distribution system so that clients automatically get the best freight rates from preapproved national freight carriers.

Companies should foster an environment that emphasizes continuous improvement and offers its employees the skills to achieve that. The Human Element The best equipment available is only as good as the people who operate it. A well-trained and engaged workforce is one of the most important keys to success. A sponsor should look for a CPO that has best practices training in place — one that has on-site training, and which has adopted six sigma and lean manufacturing principles. Companies should foster an environment that emphasizes continuous improvement and offers its employees the skills to achieve that. A low turnover rate is a good indicator of both stability and a trained workforce.

Strategic Partnerships Contract packaging has become a strategic advantage to companies who work to bring their products to market in a timely fashion. For their clients to stay competitive, CPOs must too. A good CPO will stick to the mantra of being creative, urgent, flexible and innovative. This is a business where it’s easy to become stagnant or antiquated, and it requires an overriding commitment to continuous improvement and the willingness to invest to remain in contention. Pharmaceutical companies are looking for CPOs that offer the experience, equipment and expertise to bring their products to market in a timely fashion and allow them to focus on the aspects of the product development process that they do best. I

RISK AND COMPLIANCE MANAGEMENT continued from page 77 progress of remediation efforts. Ad hoc reports and dashboards facilitate the monitoring of risk and compliance by authoritative source, business unit, functional group, product, and third party suppliers. Managing cross-functional risk and compliance internally and from partners, vendors, and business affiliates is becom-

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ing a critical success factor for all life science companies. As you build your risk management programs, look for frameworks and best practice models, including technology solutions that provide a quick start on the road to more effective risk and compliance management. Successful automation requires a focused solution that is built with an underlying platform and processes that are able to quickly expand across the enterprise. I



CROs and Innovative Leadership Parexel’s CEO talks about the MassBio award and the digital future By Gil Y. Roth Contract Pharma N MARCH OF THIS YEAR, Josef von Rickenbach, chairman and chief executive officer of PAREXEL International was honored by the Massachusetts Biotechnology Council (MassBio) with the fifth Henri Termeer Innovative Leadership Award. We spoke about the award, the decades-long evolution — and perception — of CROs in the industry, the shift to digital processes and how his company has prepared for it, the benefits of strategic partnerships, and the Godot-like wait for biosimilars in the U.S. Mr. von Rickenbach will also participate in next issue’s CRO Overview, but he offers his “state of the industry” perspective here. —GYR


Contract Pharma: Congratulations on winning the Henri Termeer Innovative Leadership award from the Massachusetts Biotechnology Council! Josef von Rickenbach: Thank you! I was pleased to receive this award from MassBio. Even though I accepted it personally, it's really a testimony to the company we have built. That success has many parents. As you noted, it's an innovation award, and we've brought new thinking to drug development and the pharma/biopharma industry, whether that's through investments in new technology, the systems and approaches that we've brought to the table, the automation of processes, and the way we've driven globalization over many decades. In combination, those were likely the factors that swayed the MassBio committee. CP: I noticed that the previous winners of the award came from pharma and biopharma — EMD Serono, Cubist, Millennium and Vertex — not a CRO. What do you think that says about how these organizations view the future of drug development? JVR: I think it signifies that they feel we — as a company and as an industry — have grown important in the biopharmaceutical development environment. I recently read a quote about the adoption of new ideas: “A new idea in the beginning gets ridiculed, and then fought, and then everybody had it all along.” I think we're now in that third stage. For a lot of the people who are now in drug development, working with CROs is totally normal, and they can't imagine that we went through those first two stages.


CP: What was necessary to get through those early stages? JVR: In some ways, we were making our own market. Of course, there was a confluence of trends that helped us get our message across. For one thing, there was increasing cost pressure on the industry. Prior to 1984's passage of the HatchWaxman bill, there wasn't really much competition (in the traditional sense) in the pharma space. Once that bill came into play and ushered in small molecule generics, things changed. It's not a coincidence that the founding of the major CROs matches almost entirely with that year. Once competition started to bite, people became more concerned with cost of development, productivity and so on. Over time, from our perspective, we contributed credibility and respect for work. In the beginning, there was a lot of concern about CROs. Both domestically and overseas, we had an ambiguous legal status. In the U.S., CROs were not considered in regulations for a long time. In Japan, it was actually illegal (or, at least, you could interpret the statutes that way) to work as a CRO. But regulations adapted and we became embedded as a fact of life. So it was a confluence of market trends among clients, regulatory flexibility, and also our ability to perform. CP: Where is PAREXEL looking to grow? JVR: We believe that our core business — clinical research outsourcing — still has significant legs. We'll continue to vig-

Biographical Note chief executive officer of PAREXEL, Josef von Rickenbach has taken PAREXEL from its pioneering beginnings as one of the first CROs in the early 1980s to its place as one of the top three public biopharma services providers. He led PAREXEL through its IPO, multiple public offerings, and more than 35 mergers and acquisitions during the company’s 30-year history, expanding its portfolio in order to meet changing client needs and market demand. Mr. von Rickenbach is the 2013 chairman of the Association of Clinical Research Organizations (ACRO) and is one of the original members of the ACRO Board of Directors.




orously pursue that opportunity. Over the timeframe that we just talked about, there were two main trends playing out: outsourcing of clinical research, and a move from manual processes to digital processes. That latter trend, digital enablement, is still playing out, and it may be a bit behind the first trend. That provides a growth opportunity for us, through our Perceptive Informatics subsidiary. Also, most of the industry's IP has migrated to small companies. As those small companies are increasingly taking their IP up through the development value chain, they need advice and resources to accomplish their goals. We're very good partners with them. We do a lot of work with large pharma companies, but we set up a specific biopharm unit that works predominantly with these small companies. I think the MassBio council members, who largely constitute that segment, really appreciate that resource. CP: How does that manual-to-digital transition inform PAREXELâ&#x20AC;&#x2122;s acquisition of Liquent late last year? JVR: Liquent was a very good fit for us. They have a system that guides regulatory experts in the filing of documents with various agencies around the world. The regulations are updated on a continuous basis. For an RA professional, this is a great tool. We used the system ourselves in the past, so we had significant familiarity with the company and the system, and saw how it could fit with our existing informatics products and offerings. Liquent was a standalone company, and it can be difficult to cover the world and the various market segments from that position. So it helps them and it helps us. CP: What are your growth regions? JVR: We still see emerging markets as areas of opportunity, notably Asia. China remains a big opportunity for us and the whole industry. At the end of the day, we go where our clients want us to go. Asia may not be growing as rapidly as it was a few years ago, but these economies are still growing rapidly relative to developed markets. It creates opportunities both inter-regionally, and globally. There is not a pharma/biopharma company with products on the market that is not trying to establish a foothold in Asia. We can certainly help with that. Also, domestically in Japan, the penetration of outsourcing is not nearly as high as it is in the west. In some ways, that's a market in which we can develop. CP: Where do you see biosimilars going? From our past conversations, I know PAREXEL historically saw them as a significant market driver, but we're still in a holding pattern in the U.S., waiting for someone to move forward and file. JVR: I think that's just it. Conceptually, it's a big opportunity for everybody, not least the healthcare system, as it would help with costs. At the same time, there's still an ambiguous regulatory situation. As a result, a number of companies have started to move into more of a wait-and-see mode, rather than moving forward aggressively and ambitiously, as they

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planned to do two or three years ago. I think some companies were surprised with the current interpretation of the regulations, in terms of how expensive it will be to get to market with a biosimilar. I really expected that more progress would have been made by now. CP: How are preferred provider CRO relationships working out, now that we're a few years into them? JVR: These partnerships are proving to be a better approach to pharma's development problems than the previous, transactional system. A number of CROs are trying to position themselves to be more attractive as potential partners. The old system was somewhat wasteful. It had a lot of empty runs, so to speak. Five or six companies would bid on a project, and one would get the work while the others fell by the wayside. Every time you bid, it involved a significant effort and expense. Eventually, that expense has to be rolled over. Certainly, there was a learning curve to working so closely with a client. We've specifically built governance models and metrics allowing us to capture what we learn and apply those lessons later in the partnership. It's an environment of continuous improvement. That's an important part of a successful partnership, and not just a preferred provider arrangement. CP: Can you give us your state-of-the-industry perspective? JVR: I think the biopharma industry has a bit of a bounce in its collective step. The number of drug approvals in 2012 was helpful. Many were from small companies and were clinically high-priority products. Is this a new trend or benchmark? Who knows? One year doesn't make a trend, but it was well received and couldn't have come at a better time. If we see another year or two near this level, we might see a re-acceleration of investment in R&D, which would be great. The fortunes of the CRO industry are tied very closely to the biopharma industry. With that in mind, I believe that we have been successful because we offer good, economical solutions to our clients. We expect the broad outsourcing trend to continue, with growth in Asia and other non-U.S. areas. If you look at the CRO industry, a major privately held competitor is planning to go public again, so they've weathered their private equity period reasonably well. You hear mixed stories of other private companies, but I expect that some CROs are going to re-emerge as publicly held, leading players. CP: Do you think we'll see any more major consolidation among CROs? JVR: It's difficult to call. We haven't been particularly acquisitive in terms of buying other CROs similar to ourselves. We feel we have scale, scope and reach. I believe that life has changed for many of the smaller and medium-sized CROs. I wouldn't be surprised if we see some more consolidation over time, although I think the bulk of those moves have already occurred. I

CONTRACT PHARMA â&#x20AC;˘ May 2013 83


Theravance Splits Assets Metrics offers new taste masking technology

Theravance Splits Assets Theravance, Inc. plans to separate its business into two independent publicly traded companies. The goal is to continue its businesses in a new structure designed to unlock potential value, facilitate return of capital and further its strategy to advancing medicines that address unmet medical needs. Royalty Management Co. will manage all development and commercial responsibilities under its collaboration with GlaxoSmithKline and associated respiratory royalty revenues from Relvar or Breo Ellipta (fluticasone furoate/vilanterol: FF/VI), Anoro Ellipta (umeclidinium bromide/vilanterol: UMEC/VI) and VI monotherapy. The other company, Theravance Biopharma, will focus on discovery, development and commercialization of small-molecule medicines in areas of significant unmet medical need. Theravance’s strategy has been to build value in the earlystage discovery and development of small-molecule product candidates and partner with pharmaceutical companies to support late-stage development and commercialization. This has resulted in the discovery, development and regulatory approval of Vibativ (telavancin) and a pipeline of small-molecule product candidates across several therapeutic areas, as well as major late-stage respiratory programs in partnership with GSK. “Following a review of alternatives to maximize the value of our portfolio, we have decided to separate our biopharmaceutical discovery, development and commercialization operations from our late-stage partnered respiratory assets,” said Rick E. Winningham, chief executive officer. “We believe this separation will provide investors with the opportunity to unlock potential value from two disparate sets of assets, better align employee incentives and provide a consistent return of capital to stockholders of Royalty Management Company.”

UPS To Acquire CEMELOG UPS will acquire Hungary-based pharmaceutical logistics company, CEMELOG Zrt, as part of its ongoing global growth and investment strategy. CEMELOG offers healthcare logistics solutions across central and eastern Europe with a regional network, warehousing management systems, and quality assurance services. The acquisition adds three additional facilities of approximately 255,000 sq.-ft. of healthcare distribution space to UPS’s current European network. “This acquisition is a continuation of our ongoing growth strategy across our business units and allows us to create innovative solutions for our customers that leverage UPS’s global network,” said Scott Davis, UPS chairman and chief executive officer. “It will position us well to meet the needs of healthcare


companies in a key geographic location as they strive to regionalize logistics operations as a way to increase efficiencies.” “This is a tremendous development for our company,” said Éva Magyari, CEMELOG chief executive officer. “The sale serves the best interests of our employees and customers as it enables us to join a premier brand and global leader in healthcare logistics.” UPS expects to complete the transaction in 2Q13, subject to customary closing conditions. UBS is acting as financial advisor to UPS.

SCM To Support BTG NDA SCM Pharma will provide scale-up services to BTG for the commercial launch of Varisolve (polidocanol endovenous microfoam (PEM)), a treatment for the appearance and symptoms of varicose veins. SCM has worked with BTG since 2005 assisting with clinical studies, including clinical trial supply for the recent Phase III trial. To date, SCM Pharma has supported BTG with process development, sterile manufacturing, packaging and distribution to trial sites in the U.S. SCM will now be named on the NDA for PEM as a commercial supplier and will further support BTG throughout the NDA review process. Dianne Sharp, managing director at SCM Pharma, said, “We are very proud to be supporting BTG with its NDA for Varisolve, as it is a product that we have helped them develop for many years. The complexities involved in developing, processing and producing this product illustrates the type of work we do here at SCM Pharma. Working with novel products, difficult processes and applications at relatively smaller scale are very much our sweet spot.”

Metrics Offers New Taste Masking Technology Metrics Inc. now offers Cleantaste taste masking technology that enables polymer coating of individual drug crystals to produce fine particles sized 25um to 125um. According to the company, this technology can improve the taste and mouth-feel of drugs and can be used to support stability or deliver sustained release characteristics. Cleantaste technology is suitable for orally dispersible tablets and encapsulated products. Dr. Brad Gold, vice president of pharmaceutical development, said, “If patients don’t take their medications because they taste bad, or they’re difficult to swallow, then that obviously can have serious detrimental effects on treatment plans and health outcomes. We want to help patients comply with prescription regimens by improving the palatability of medications and making them easier to swallow. Cleantaste technology allows us to do that.”


Pfenex Awards Glide Formulation Contract Glide Pharma has been awarded a sub-contract from Pfenex, Inc. to develop a solid formulation of recombinant Protective Antigen (rPA) from Bacillus anthracis expressed in Pfenex Expression Technology for delivery with the Glide SDI (solid dose injector). The goal is to address logistical constraints of the currently available vaccine, namely, long-term stability during storage and ease of administration. The Pfenex project has been funded with Federal funds from the National Institute of Allergy and Infectious Diseases, National Institutes of Health, Department of Health and Human Services. Under an existing Biomedical Advanced Research and Development Authority (BARDA) contract, Pfenex has successfully developed a novel rPA that is highly immunogenic and protective in animal studies, with a scalable production process and robust yields. “We believe that a combination of Pfenex’s proprietary rPAbased anthrax vaccine and Glide Pharma’s novel formulations and delivery technology will provide a product suitable in response to an anthrax biothreat,” said Dr. Mark CarnegieBrown, chief executive officer, Glide Pharma. “Glide Pharma’s novel formulation and delivery technology allows us to expand our anthrax vaccine program,” said Bertrand C. Liang, chief executive officer, Pfenex. “Leveraging the Glide SDI technology to develop an alternative delivery method of the Pfenex anthrax vaccine further supports our efforts to provide a safe, feasible and cost-effective solution to the United States government’s quest to stockpile sufficient vaccine doses to rapidly respond to an anthrax biothreat.”

Ligand Acquires Bio-Portfolio from Selexis Ligand Pharmaceuticals has acquired a portfolio of more than 15 biologic programs from Selexis. The programs have potential future milestone and royalty payments and are fully funded by a development partner. Selexis will apply its technology platform to generate stable and high performing manufacturing mammalian cell lines for biologic therapeutics. The acquired assets include new mechanisms of action of biological drugs and expand Ligand’s presence in growing therapeutic markets such as oncology, inflammation and autoimmune diseases. The acquired programs are in various stages of preclinical and clinical development. “This acquisition significantly expands Ligand’s already robust portfolio to more than 85 fully-funded assets, and diversifies our portfolio beyond small molecule therapeutics into biologics,” said John Higgins, president and chief executive officer of Ligand. “The acquired rights are a great fit with our royalty-based business model, and the deal does not require operational integration or ongoing technical responsibilities from Ligand. We believe this acquisition reinforces the strength of our shots-on-goal strategy and has the potential to provide Ligand with numerous new drivers of long-term growth.”

Evotec Expands East Coast Capabilities Evotec (US) Inc. has entered a multi-year lease on a facility in Branford CT to expand its compound management services on the East Coast. The investment provides leading technologies

specifically aimed at library management and access to incremental space to support pharma and biopharma customers in the coming years. The facility will be fully operational early 3Q13 and will complement the company’s existing facility in South San Francisco. Scott Snyder, executive vice president compound management of Evotec, said, “This is an important strategic expansion of our EVT Execute compound management offering which Evotec first acquired in South San Francisco in 2011. The significant investment will enable Evotec to better compete for East Coast compound management opportunities and continue to provide the very best services and solutions to our partners.”

EMD Serono Expands U.S. R&D Presence EMD Serono, Inc., a subsidiary of Merck KGaA, is continuing the expansion of its U.S. presence with an estimated 20% increase in staff though the end of 2014. The expansion will primarily take place at its site in Billerica, MA, which is being renamed EMD Serono Research & Development Institute. The Billerica site provides early stage drug discovery research through to clinical development and medical. The company has also made appointments within global functional areas at its Rockland and Billerica sites, including the heads of three global Research and Early Development platforms, Immuno-Oncology, Immunology and Neurology. Additionally, heads of global business franchises, and various other strategic leaders within the global operations, are now based in the U.S. “The U.S. represents one of the fastest growing markets for our company,” said Annalisa Jenkins, head of Global Drug Development and Medical. “Strengthening our presence in the U.S. is central to our ability to deliver innovation and value to our patients and customers. By expanding our footprint within the Boston life sciences cluster of technology and talent, we significantly enhance our competitive position in the U.S. and globally.”

Bilcare Research Expands Manufacturing Capabilities Bilcare Research has introduced a new high-speed lamination line for the production of Aclar multilayer films and Triplex PVdC Films at its Bötzingen facility in Germany. This investment, along with the expansion of PVdC coating capacities at its Singapore facility, provides added capabilities to meet increasing demands in the North American market. These investments provide additional manufacturing capacity for Aclar lamination and PVdC coating capabilities with multiple global locations to support North American customers in a more cost-efficient position from its U.S. facility. “This investment in our new laminating line is the latest component of our continued growth strategy to meet the needs of rapidly-evolving business models in the global pharmaceutical industry,” said Thorsten Kühn, chief executive officer of Bilcare Research AG, Switzerland. “We see increased demand across our entire range of Bilcare Aclar laminates, from both innovator and generic pharmaceutical companies.” I



BMS Names Quintiles Preferred Provider Covance expands Singapore Central Lab BMS Names Quintiles, LabCorp Preferred Providers Quintiles has been chosen as a preferred provider by BristolMyers Squibb Company to provide global support for BristolMyers Squibb’s central lab work, biomarker testing and assay development for the next five years. “This agreement deepens the commitment our companies share to providing patients access to effective, safe and affordable treatments,” said Thomas Wollman, senior vice president of Quintiles Global Laboratories. “We look forward to working with Bristol-Myers Squibb to bring personalized medicine into mainstream drug development.” Bristol-Myers Squibb has also selected LabCorp Clinical Trials as a preferred provider for full-service global central lab services and biomarker testing. The five-year agreement builds on a long-standing partnership between the two companies. LabCorp has supported various early and late-stage clinical development programs for BMS. “We are excited to expand our relationship with BristolMyers Squibb to provide a more flexible and integrated approach to laboratory testing services in support of their innovative clinical development pipeline,” said Dr. Mark Brecher, LabCorp’s chief medical officer.

Aptiv Solutions Establishes Adaptive CoE Aptiv Solutions has established an Adaptive Center of Excellence (ACOE) to further the development of the company’s strategic partnerships with three top global pharma companies. These three companies have also agreed to join a consortium organized by Aptiv Solutions to develop and implement new methodologies for adaptive dose-finding trials. The ACOE will focus on defining, developing and implementing new execution models for adaptive clinical trials. The ACOE will be led by Michael McKelvey, Ph.D., chief operating officer, and Reinhard Eisebitt, executive vice president of the Aptiv Solutions Innovation Center and managing director of ADDPLAN, Aptiv’s statistical software subsidiary. The ACOE is comprised of a group of 15 senior-level individuals from various Aptiv departments. The goal of the ACOE is to address trial execution challenges for sophisticated adaptive designs that will have a favorable impact on efficiency and productivity, as well as reduce trial setup time, introduce improved site selection and patient enrollment strategies, and advance data-driven monitoring techniques. “The main challenge we see is to synchronize the design and the execution of adaptive trials which will bring significant productivity benefits to the product development process,” said Patrick Donnelly, chairman and chief executive officer at Aptiv Solutions. “We believe that the ACOE will


provide innovative ways to achieve this and we look forward to working with our valued clients on some very exciting joint projects.”

Covance Expands Singapore Central Lab Covance Inc. has completed the expansion of its central lab facility in Singapore, enhancing service offerings to meet current and future growth of drug development in the Asia Pacific region. The expansion is the latest investment in Singapore, along with recent growth in operations in China and Japan. The 29,000-sq.-ft. lab provides clinical testing services to clients in Asia, including South Korea, Taiwan, Hong Kong, the Philippines, Australia, and India. This expansion doubles the size of Covance’s genomics footprint in Singapore, and adds capabilities in anatomic pathology and nutritional chemistry. The Singapore facility continues to provide services that include chemistry, immunology, hematology, flow cytometry, genomics, anatomic pathology, and microbiology. “For the last 13 years Covance has provided central laboratory testing services in Singapore, where we have seen increasing demand for efficient, high-quality clinical trial data and support,” said Jon Koch, corporate vice president and global general manager, Central Laboratory Services, Covance. “This expansion will help us better serve both our local and multinational customers’ R&D needs in key therapeutic areas like oncology and metabolic diseases while reflecting Covance’s continued commitment to the Asia Pacific region.”

inVentiv, Bell Medical in Strategic Pact inVentiv Health has entered a strategic alliance with Bell Medical Solutions, one of Japan’s largest CROs, to offer comprehensive global drug development services to Japanese and international clients conducting studies in Japan. “This alliance provides Bell Medical Solutions with inVentiv’s significant international reach and the ability to participate in larger, global studies,” said inVentiv Health chief executive officer Paul Meister. “For inVentiv, the alliance bolsters our already significant position in Japan to better support our clients who are capitalizing on exciting opportunities for growth.” “Bell is not just a respected CRO, it is also embedded in the Japanese healthcare and drug approval system,” said Ray Hill, president of inVentiv Health Clinical. “It is a crucial time for our clients operating in Japan and we can now provide all the support they need to succeed.”

ACM Global Appoints Clinical Ops VP Timo Jackle has been appointed to the executive management team as vice president of clinical trials operations at ACM Global Central Lab. Mr. Jackle will be responsible for oversee-


ing project management, data management, study support, specimen management, and logistics activities for all of ACM’s U.S.-based clinical trials, as well as developing and implementing its strategy for operations globally. Mr. Jackle joins the company from Bausch & Lomb (B&L), where he most recently served as executive director of global clinical trials operations, responsible for overseeing multinational pharmaceutical and medical device clinical trials. Prior to that, he was based in Germany, where he served as director of global refractive R&D and R&D site leader for B&L’s refractive surgery subsidiary. “Timo is a highly collaborative leader with extensive experience in clinical trials research, quality assurance, global operations, and business process improvement,” said Angela J. Panzarella, president of ACM Global Central Lab. “His strong focus on customer service and lengthy track record in improving business processes will no doubt be an asset to our clients.”

deep understanding of our businesses since it first approached us about potential ways to work together several years ago,” said Dr. Claus Christiansen, founder and chairman, CCBRSYNARC. “When we reached a point in our development in which we were ready to expand our capabilities and services, we knew Water Street was our ideal partner. Its experience in the pharmaceutical sector, business development expertise and extensive industry relationships will provide our businesses with the intellectual capital and Resources to achieve long-term growth and success.” “We are pleased to build Water Street’s presence in the pharmaceutical sector with our investment in CCBR-SYNARC. The company is highly regarded as a partner that delivers results through its unique combination of scientific acumen, local market knowledge and proprietary technology,” said Peter Strothman, partner, Water Street. “We look forward to working closely with Dr. Christiansen to strategically expand both businesses’ unique capabilities.”

ICON, UCD Launch Business Academy ICON plc and the University College Dublin (UCD) have partnered to launch the ICON Business Academy that will offer several tailored, university-accredited programs to ICON staff. The first program is the Certificate in International Business Management, which focuses on areas of increasing importance for companies operating in global markets, such as managing and motivating teams across international boundaries and promoting a culture of innovation. The ICON Business Academy plans to expand to other locations including Asia Pacific and the U.S. ICON chief executive officer Ciaran Murray said, “As a people business that operates in a global environment, investment in leadership and talent is a key strategic initiative for ICON. Our partnership with UCD is enabling us to develop tailored management development programs that will further enhance the leadership skills within ICON. As our market evolves, these skills will be increasingly important and will help us to continue to deliver excellence in customer service and quality to our global customers.”

Water Street Invests in CCBR-SYNARC Water Street Healthcare Partners, a private equity firm focused on the healthcare industry, has made an undisclosed investment in CCBR-SYNARC, a company comprised of two businesses that specialize in outsourced clinical services. This is the first investment from its new fund, Water Street Healthcare Partners III, L.P., which received $750 million of investor commitments. The SYNARC business, based in Newark, CA, specializes in imaging services, consulting and analysis to track progress throughout a clinical trial’s life cycle. The CCBR business, headquartered in Copenhagen, recruits patients from around the world, and conducts and manages clinical trials in its clinical centers. The two businesses employ more than 500 doctors, nurses and technicians located in 29 research centers across Asia, Europe and the Americas. They currently focus on musculoskeletal, cardiovascular and neurological therapies. “Water Street’s team has consistently demonstrated to us a

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PPD Expands cGMP Assay Lab PPD is expanding its cGMP cell-based assay lab in Middleton, WI to support a greater volume of bioassay development, validation and testing projects and provide a broader range of product testing capabilities. “Biotech and pharmaceutical companies are shifting their strategies to develop high-value, niche therapies utilizing biologics, a trend that is expected to generate significant growth in characterization of biologics, as well as biosimilars,” said Magdalena Mejillano, Ph.D., vice president of cGMP labs for PPD. “Expanding our capabilities to perform additional cellbased assays that establish the potency and stability of these biologics gives clients greater capacity, flexibility and efficiency in testing their products.”

Averica Discovery, WPI In Research Pact Averica Discovery Services has established a research collaboration with the Department of Chemistry and Biochemistry at Worcester Polytechnic Institute (WPI) under which the two organizations will share their respective expertise on a variety of projects. Financial terms were not disclosed. Averica Discovery Services provides a variety of chromatography and analytical services to pharma, biopharma and other life sciences researchers. Averica works with clients to speed lead optimization and early development and provides highly pure assay material for programs requiring milligram to kilogram quantities. “WPI’s emphasis on real world applications of advanced research fits well with Averica’s focus on providing the highest quality analytical services to early stage drug researchers,” said Jeffrey Kiplinger, Ph.D., president of Averica. “WPI’s expertise in solid state chemistry enhances our strengths as we expand our suite of pre-formulation services, and we intend to develop specific research collaborations that will be fruitful for both organizations. In Massachusetts we are fortunate to be located near many world class academic institutions, and we anticipate establishing additional collaborations going forward.” I



DSM, DecImmune In Antibody Pact AMRI, Ono expand drug discovery pact DSM, DecImmune


DSM Pharmaceutical Products has signed an agreement with DecImmune Therapeutics for the initiation of development activities for DecImmune’s lead monoclonal antibody therapeutic designed to reduce tissue damage and improve ventricular function associated with myocardial infarction. Financial terms were not disclosed. The initial development will be performed at DSM Biologics’ Groningen facility in the Netherlands, with the objective of progressing manufacture of clinical trial material to DSM’s new facility in Brisbane, Australia. Karen King, president of DSM Biologics, said, “We are delighted to be working with DecImmune on their exciting project. DSM is committed to delivering our clients around the world the highest quality solutions and services.” “Partnering with DSM for its antibody process development and manufacturing enables DecImmune to move rapidly through late preclinical studies and into clinical development. DSM’s experience, capacity, and technical expertise in Groningen and Brisbane meet the full range of DecImmune’s manufacturing needs. We look forward to working with one of the world’s leading science-based companies as our manufacturing partner,” said Christopher K. Mirabelli, Ph.D., president and chief executive officer of DecImmune and managing director at HealthCare Ventures, DecImmune’s lead investor.

AMRI and Ono Pharmaceutical Co. have entered into a new five-year service agreement that may cover a range of services from early drug discovery to cGMP manufacturing. The two companies have already agreed to medicinal chemistry projects within the new framework, collaborating on hit-to-lead and lead optimization for two new molecules, with the work to take place at AMRI’s medicinal chemistry laboratories in Albany, NY. An early adopter of AMRI’s SMARTSOURCING concept, Ono has utilized AMRI’s integrated global facilities and capabilities for projects ranging from early drug discovery, including high-throughput screening (HTS), biology support and computer-aided drug discovery (CADD), to multiple medicinal chemistry programs and a variety of drug development and cGMP programs. Thomas E. D’Ambra, Ph.D., chairman, president and chief executive officer of AMRI, said, “We are pleased to extend and broaden our service agreement with Ono. During the past few years, Ono has become a very important client for AMRI and we would like to acknowledge the deepening relationship between our companies. Our project management teams and the scientists on all the Ono projects, from Singapore to the U.S., enjoy working with our counterparts at Ono and they are a valuable customer and partner.” Kazuhito Kawabata, Ph.D., Ono executive officer and executive director, Discovery and Research, said, “We appreciate AMRI’s integrated capabilities and global reach, and believe that they are the partner of choice to mutually work toward the best decisions and outcomes for many of our projects. We look forward to continuing our relationship.”

BIND, Pfizer BIND Therapeutics, a biopharma company developing a new class of highly selective targeted and programmable therapeutics called Accurins, has entered into a global collaboration agreement with Pfizer to develop and commercialize Accurins utilizing select small molecule targeted therapies. The collaboration will use BIND’s Medicinal Nanoengineering platform to impart tissue and cellular targeting capabilities to molecularly targeted drugs. Pfizer will have the exclusive option to pursue development and commercialization of selected Accurins. Both companies will work together on preclinical research and Pfizer will have responsibility for further development and commercialization. BIND could receive upfront and development milestones totaling approximately $50 million and $160 million in regulatory and sales milestones, as well as royalties on sales. “Pfizer is an outstanding partner and this agreement demonstrates the potential of our platform to create targeted Accurins with optimized therapeutic properties,” said Scott Minick, resident and chief executive officer of BIND. “This is our second collaboration focused on developing Accurins based on BIND’s platform for targeted and programmable therapeutics and further validates the importance of targeted nanomedicines as a strategic technology for the pharma industry.”


Cyclica, Dalton Cyclica and Dalton have entered a collaboration to identify and develop new drug candidates using advanced computational molecular design with medicinal chemistry and drug development approaches. Cyclica will apply its in silico drug design, optimization services, and extensive databases for a number of lead molecules previously developed by Dalton Medicinal Chemistry, as well as additional compounds. Dalton Pharma Services will synthesize and manufacture quantities of selected drug candidates for analysis and consideration by a global pharmaceutical company’s candidate screening program. Any assets developed will be equally owned by the parties. “It’s exciting to see Cyclica’s advanced computational approach to molecule design paired with decades of medicinal chemistry and manufacturing experience from Dalton. This combination could significantly improve the way new drugs are developed,” said Jason Mitakidis, president and chief executive officer of Cyclica.


“We believe Cyclica’s expertise and innovations in design are world class,” said Dr. Judd Berman, co-founder of Dalton Medicinal Chemistry. “We look forward to working together as a team to accelerate the discovery of new medicines.”

Pieris, Sanofi Pieris AG and The Sanofi Group have expanded their discovery and development partnership to include a novel multi-specific Anticalin program. The new program entitles Pieris to an upfront payment and committed research funding, as well as research, preclinical, regulatory and commercial milestones. Financial terms were not disclosed. “Following more than two years of successful collaboration in this multi-program agreement, the expansion demonstrates that the Anticalin technology can deliver key differentiation over conventional biologic approaches, including the development of multi-specific targeted therapeutics,” said Stephen Yoder, chief executive officer of Pieris. “Sanofi and Pieris will continue to advance both existing and new programs, building on the excellent team chemistry between our organizations.” Anticalin-branded proteins represent a new generation of targeted protein therapeutics derived from human lipocalins, engineered to help solve limitations of both protein- and nonprotein-based drug platforms.

Argenta, Boehringer Argenta, a Galapagos NV company that provides drug discovery services from target validation to development candidate nomination, has signed a collaboration agreement with Boehringer Ingelheim. Argenta will apply its respiratory drug discovery services to an undisclosed target in Boehringer’s respiratory disease portfolio. Dr. John Montana, Argenta’s managing director, said, “We are delighted to have secured this contract with Boehringer Ingelheim, one of the world’s leading companies in the development of drugs for respiratory diseases, and it is testament to the strength and depth of Argenta’s integrated drug discovery capabilities and expertise in this therapeutic area. We look forward to a fruitful collaboration.”

Horizon, AstraZeneca Horizon Discovery and AstraZeneca have entered into an exclusive collaboration and license agreement to explore Horizon’s kinase target program, HD-001, for the development of novel therapies for multiple cancers. Horizon will receive upfront and preclinical milestone payments and is eligible for clinical and approval milestones totaling as much as $75 million, as well as royalties. The HD-001 program, currently in the early stages of drug discovery, has the potential to target a range of cancer types. The target has also been shown to play a key role in K-Ras mutant tumors. K-Ras is mutated in 40% of all cancer types causing resistance to available targeted therapeutics. Dr. Chris Torrance, chief scientific officer and leader of the HD-001 program at Horizon, said, “Targeting cancer cells harboring mutant K-Ras has been a perennial issue for the drug discovery community, with few canonical pathway or ‘gene-

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addiction’ targets showing a clear benefit on this important cancer gene. We are excited to partner with Astra Zeneca on the development of HD-001, as they have shown a firm commitment to the identification of novel K-Ras targets.” Susan Galbraith, head of the Oncology Innovative Medicines Unit at AstraZeneca, said, “Horizon’s novel kinase target program coupled with their target validation technology allows us to broaden our oncology research efforts beyond our own internal capabilities. AstraZeneca has a proven track record of collaborating on early stage discovery projects with innovative organizations like Horizon, partnering their cutting-edge science with our strong oncology expertise to bring new medicines to cancer patients.”

Astellas, Ambrx Astellas Pharma and Ambrx have entered into a collaboration for the discovery and development of novel antibody drug conjugates (ADCs), which allow for the targeted delivery of drugs. Ambrx creates optimized ADCs using its site-specific conjugation technology along with linkers and payloads. Ambrx ADCs have demonstrated high potency and a wide therapeutic index in preclinical studies. Ambrx will receive an upfront payment of $15 million and as much as $285 million in potential research, development, regulatory and sales milestones for an undisclosed number of targets for ADCs in oncology. Astellas will receive worldwide rights to develop and commercialize ADCs for oncology. Additional terms were not disclosed. Lawson Macartney, chief executive officer of Ambrx, said, “We recognize Astellas as a leader in the development of innovative therapeutics for oncology and are proud to initiate this collaboration. We look forward to developing these therapeutics while also advancing our broad pipeline of partnered and wholly owned therapeutic candidates with best-in-class conjugation.”

Hovione, Ligand Hovione has entered a co-promotion and collaboration agreement with Ligand to provide its customers with access to Ligand’s Captisol technology. Captisol, a chemically modified cyclodextrin, improves the solubility and stability of drugs and is currently used in six marketed products. The agreement allows Hovione to use Captisol technology in its solubilization programs, which include amorphous solid dispersions, crystal design and size reduction and control of particle size. “Hovione is delighted to provide access to Captisol. There is no single solution to improving bioavailability and for a customer to access diverse options with a single supplier provides for greater probability of success and speedier outcomes,” said Colin Minchom, Hovione’s vice president of Particle Design. “Hovione has manufactured Captisol for more than a decade, and we are very pleased to expand our partnership. Providing for greater access to Captisol should efficiently enable the successful development of more poorly soluble molecules and further increase our partnership portfolio,” said Mr. Mathew W. Foehr, Ligand’s executive vice president and chief operating officer. I



Catalent Appoints China JV Heads Teva names global BD EVP Catalent Pharma Solutions: The company has made two senior appointments to support its recent joint ventures in China for its Softgel Technologies and Clinical Supply Solutions (CSS) businesses. Dr. Weiyan “Jackson” Zhu will serve as country general manager for China, and Yufeng (Paul) Cao will serve as site operations director for Catalent’s (Shanghai) 31,000-sq.-ft. Clinical Trial Supplies Co. facility, which is currently under construction. Dr. Zhu will focus on business development strategy and government agency interaction. He will also work with Catalent’s local teams to assist with the startup of the new operations. He joins the company following a long tenure at Boehringer Ingelheim, where he held roles of increasing responsibility, including a position based in Germany as the regional business manager of Europe. Most recently, he served as vice president and head of Boehringer’s consumer health care division in China. Mr. Cao will have overall day-today responsibility for Catalent and ShangPharma’s China JV business and will be in charge of establishing the new Shanghai clinical trial operation. He will lead Catalent’s local China CSS team to complete the site construction and launch operations by late summer 2013. He will be in charge of developing the supply chain for the CSS operation and developing a customer service team. Prior to joining the company, Mr. Cao was general manager for Fisher Clinical Services in Beijing. He is experienced with GMP and FDA certification in China and has an extensive background in secondary packaging and cold chain distribution. Prior to Fisher he worked for Zuellig Pharma in drug distribution. Catalent’s president and chief executive officer, John Chiminski, said, “We are pleased to have obtained the services of two such experienced and talented individuals as we expand into this new market. Jackson’s appointment is key to


defining and executing an enterprise approach to driving our growth in China. For our CSS business in China, developing the client base locally, and catering to the trial and logistics needs from international clinical customers will be the most important aspect of Paul’s role. He will work closely with the Catalent CSS network sites and functional staff to drive CSS success in this important market.” Halo Pharmaceutical: Roberto Darienzo has been appointed to the newly created position of chief operating officer. Mr. Darienzo has more than 30 years of industrial experience, with 22 years in technical and international general management roles in the pharmaindustry. He has held positions at SanofiAventis based in Germany, served as vice president Americas Region for ScheringPlough, and subsequently for Merck with responsibility for 13 sites in North and South America. “Halo is growing very rapidly and our international expansion plans strongly support the need for this new position,” said Clive Bennett, Halo’s president and chief executive officer. “In this new role, Roberto will initially be focused on our existing Contract Pharmaceutical Development and Contract Commercial Manufacturing activities in Whippany NJ and Montreal Quebec. We are delighted to have someone of Roberto’s stature in the industry join Halo” Sharp Clinical Services: Eric Bergmann has been named senior director of Global Logistics. Mr. Bergmann has more than 17 years of experience in the pharmaceutical industry. He will be responsible for all clinical logistics and developing and implementing strategies and technology to support continued growth. His diverse background includes serving as vice president of Global Depot

Operations at Yourway Transport Biopharma Services, senior manager of Clinical Supplies Unit and director, head of Logistics and Distribution for Johnson & Johnson Pharmaceutical R&D, director, clinical project manager and director of Global Logistics for Cardinal Health Clinical Supply Services. “Eric’s rich experience working both as a contractor and as a sponsor, provide him with a unique perspective; this broad experience will enable Eric to contribute to the growth and development of our organization,” said Joseph M. Morris, president of Sharp Clinical Services, Inc. in the U.S. Teva Pharmaceutical Industries: Paul J. Sekhri has been appointed group executive vice president, Global Business Development and chief strategy officer, effective June 15, 2013. In his new role, Mr. Sekhri will oversee Teva’s strategy and business development group, reporting directly to Dr. Jeremy Levin, Teva’s president and chief executive officer. Mr. Sekhri has more than 25 years of operational experience in the industry, including business development, business strategy, general management, drug development, and commercial strategy. Mr. Sekhri most recently served as operating partner and head, Biotech Ops Group at TPG Biotech, the life science arm of the global private investment firm TPG, where he was responsible for a portfolio of more than 50 life science firms. Previously, Mr. Sekhri founded and was president and chief executive officer of Cerimon Pharmaceuticals, focused on autoimmune diseases and pain management. Prior to that, he was president and chief business officer of Ariad Pharmaceuticals. He also held senior positions at Novartis Pharma AG, and managerial roles at Millipore Corp. and PerSeptive Biosystems. “Paul brings outstanding business development and operating experience in the life sciences industry, including


with biotechnology, pharmaceutical and generic companies,” said Dr. Levin. “While we remain disciplined in our use of Resources, we are committed to secure significant opportunities in key capabilities, generics and specialty medicines through our Constellation strategy. An appropriately targeted and aggressive business development strategy is central to Teva’s approach to sustainable growth.” Lipo Chemicals: Mike Lotito has been appointed North America sales director. Mr. Lotito has an extensive background in the chemical industry. He joined Ruger Chemical, the pharmaceutical unit of Vantage Specialty Chemicals, in 2007 and took the lead commercial role in Ruger, where he contributed to a notable improvement in profitability and product focus in a short time. Before joining Ruger, he worked in various management positions for major Personal Care ingredient companies such as Lonza, Rhodia and Croda. The domestic sales team for the Personal Care and Pharmaceutical segments will report to Mr. Lotito. He will continue to lead the pharmaceutical commercial efforts. “Mike brings a great deal of experience to the team and I’m confident that he will continue to accelerate the growth of our personal care and pharmaceutical businesses,” said Conrad Kempinska, Lipo’s executive vice president. Sigma-Tau Pharma: Dave Lemus has been promoted to the newly created position of chief executive officer. Mr. Lemus has served as chief operating officer since March 2012, and joined the company as vice president of finance in July 2011. Prior to joining the company, Mr. Lemus was executive vice president and chief financial officer of MorphoSys AG, where he launched Germany’s first biotech IPO in 1999. Before MorphoSys, Mr. Lemus held a variety of senior management positions at HoffmannLa Roche and Lindt Chocolate, in Switzerland. Mr. Lemus presently serves as board chairman of Proteros GmbH in Munich, and as a non-executive board member of Axela Inc. in Toronto.

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Professor Trevor M. Jones CBE, president of Sigma Tau USA Inc., said, “We are delighted to appoint Dave to this new position. His appointment comes at a pivotal time in the development of the company, as it now expands via commercialization of its proprietary internal R&D pipeline, and the pursuit of externally driven growth opportunities. The appointment of the chief executive role reflects the commitment Sigma Tau USA Inc. has to the field of rare diseases, and to the significant impact we expect these medicines will ultimately have on their respective physician and patient communities, alike.” Alexion Pharmaceuticals: The company has expanded its executive leadership team through several appointments and promotions. Stephen Squinto, Ph.D., co-founder of Alexion, is being promoted to the newly created position of executive vice president, chief global operations officer. Martin Mackay, Ph.D. has been named executive vice president, global head of R&D. Saqib Islam, J.D. has been named senior vice president, chief strategy and portfolio officer. All three executives will report directly to Leonard Bell, M.D., Alexion’s chief executive officer. Dr. Mackay and Mr. Islam will help to broaden Alexion’s portfolio of transformative ultra-orphan therapeutic candidates and accelerate the development of candidates into approved products. Dr. Squinto will support these initiatives, and also improve and expand critical processes in manufacturing, quality and corporate project management. “Steve’s deep experience, strong technical background and excellent leadership skills, position him well to lead the critical expansions in our global manufacturing and quality organizations,” said Dr. Bell. “Additionally, Steve’s leadership in the development of a corporate project management organization will serve as a critical underpinning for our global growth across many vital functions and projects.” Most recently, Dr. Mackay was president, R&D at AstraZeneca. Previously, he had been president, head of Pfizer Pharmatherapeutics R&D. Mr. Islam most recently worked at Credit Suisse

Securities as managing director, head of Healthcare and Diversified Industrials Capital Markets. Hospira: Matthew R. Stober has been named senior vice president of operations. Mr. Stober will assume leadership for all of Hospira’s pharmaceutical manufacturing operations, and will have responsibility for the operations functions, including manufacturing science and technology, engineering, competitive strategy, health and safety, supply chain and procurement. Mr. Stober succeeds John B. Elliot, who will provide support until his retirement at the end of the year. Both Mr. Elliot and Mr. Stober will serve as members of the company’s senior leadership team, led by chief executive officer F. Michael Ball. Mr. Stober joined the company in 2011 as corporate vice president, U.S. Pharma Operations, where he has held primary responsibility for Hospira’s Rocky Mount, NC; McPherson, KS; Austin, TX; and Clayton, NC, facilities, along with global engineering and program management. In 2012, he supported Hospira’s efforts to produce and deliver more than half a billion units that were on the U.S. FDA drug shortage list to help alleviate the industry-wide shortage for critical generic injectable drugs. He joined Hospira from Johnson & Johnson, where he served as the vice president and global platform leader for solids, parenterals and vaccines. Mr. Stober has nearly 25 years of industry experience, having held leadership roles at Novartis Vaccines and Diagnostics, GlaxoSmithKline, and Merck. “Matt brings the perfect blend of vision and experience to our operations organization, backed by a proven track record of success at Hospira,” said Mr. Ball. “In his expanded role, we’re confident Matt will continue to successfully advance our dual commitment to remediate and modernize our processes and operations while delivering patient-critical products, and ultimately establish our manufacturing operations as a strategic, competitive advantage. We thank John for his strong counsel and continued support during the transition and look forward to Matt’s many additional contributions.” I



Accelrys Expands LIMS Suite ATMI introduces fill/finish SU platform Accelrys Expands LIMS Accelrys, Inc. has expanded its Process Management and Compliance Suite with the addition of the Accelrys Laboratory Information Management System (LIMS), offering a more unified system aimed at improving product quality, operational effectiveness and accelerating innovation. The Accelrys LIMS has a specific focus on scale-up, manufacturing and compliance and offers a process and execution driven architecture for data management that, according to the company, eliminates the complexities, excessive customization and associated validation requirements inherent to legacy LIMS, resulting in streamlined deployments, a lower total cost of ownership, and rapid time to value. Accelrys offers process execution applications including: Electronic Lab Notebook (ELN), Laboratory Execution System (LES) and Electronic Batch Records (EBR), which have been expanded into the LIMS market. As part of the Suite, Accelrys LIMS leverages this process execution foundation to deliver a process-centric approach to lab operations. According to the company, this enables customers to manage change and organizational complexities in a systemic way to achieve repeatability and consistency of procedures, automatically validate operational changes and maintain a lower total cost of ownership. “The traditional approach to managing operations from development through commercialization is failing organizations today,” said Ken Rapp, managing director of Accelrys Analytical, Development, Quality and Manufacturing solutions. “Innovation is stalling. We must find better ways to accelerate innovation and to improve product quality — and to do so more effectively. The expansion of Accelrys’ Process Management and Compliance Suite with the Accelrys LIMS changes the paradigm with a process-driven architecture capable of solving long-


standing industry problems.” More info:

ATMI Introduces Fill/Finish SU Platform ATMI, Inc. has introduced an all-singleuse fill/finish platform for pharma and biopharma applications that’s cGMP compliant. The platform is designed for bioprocess applications from clinical batch to industrial scale, with fills ranging from 0.2 milliliters to 100 Liters. ATMI is offering the solution through an exclusive agreement with France-based Disposable-Lab, S.A.S., a clinical filling services and CMO. ATMI and Disposable-Lab will jointly commercialize the technology.

The disposable platform is modeled after traditional manufacturing fill/ finish processes, but on a much smaller scale. All of the process equipment used in conjunction with the fill/finish platform is disposable, including the connectors, vials, baskets and caps. According to the company, the platform minimizes maintenance costs and provides a smaller footprint and easier to use format that saves time during setup and operation. “This is the only platform of its kind on the market, and it is an excellent fit for our single-use product portfolio,” said senior vice president and general manager of ATMI LifeSciences Mario Philips. “As innovators ourselves, we saw a great deal of potential in Disposable-Lab’s

Hardy Diagnostics Launches Media-Fill Challenge Kits DIAGNOSTICS, AN FDA LICENSED and ISO certified biomedical manufacturer, has released HardyVal Media-Fill Challenge Kits for USP <797> compliance testing for compounding-sterile preparations (CSPs). HardyVal Kits are a line of ready-to-use media-fill challenge kits designed for use in validating pharmacy compounding personnel in accordance with USP <797> guidelines. Media-fill testing can be used to establish industry best practices and should be designed to mimic the most challenging or stressful conditions encountered during preparation of CSPs. Kits are available in several formats to meet varying degrees of compounding risk: Low-Risk (Cat. no. HVL1); Medium-Risk Comprehensive (Cat. no. HVM1); MediumRisk Basic (Cat. no. HVM2); and High-Risk (Cat. no. HVH1). Each kit is ready-touse and certifies one technician. A log sheet is included to record results for record retention. Hardy also offers a full line of Petri plates and products for environmental testing (surface and air) of sterile compounding areas in compliance with USP <797> guidelines, as well as a variety of prepared culture media for USP <71> Sterility Testing of compounded-sterile preparations. More info:




Cognex Announces VisionView 900 ID System CORP. HAS RELEASED THE VISIONVIEW 900 industrial operator panel for both In-Sight vision systems and Ethernet-ready DataMan barcode readers. The larger nineinch display is designed to allow operators to quickly identify issues on the manufacturing line. The VisionView 900, according to the company offers four times the price performance of previous panels as well as enhanced environmental and software capabilities. The nineinch, IP65-rated touch screen allows users to view images and overlay graphics for as many as nine In-Sight or DataMan systems simultaneously without requiring a PC on the factory floor. Operators can also modify inspection parameters, adjust



technology. Customers can benefit from having access to the disposable fill/finish platform, as well as from our collaboration. When combined with the mixing system, bioreactor and vessel offers we already have in place, this new addition allows us to provide customers with a truly comprehensive range of single-use technology solutions.” “Working with ATMI has allowed us to optimize our complete single-use platform for fill/finish operations and bring it to market with a secure supply chain,” offered Disposable-Lab President JeanPascal Zambaux. “Additionally, their experience has also allowed us to instill industry-leading regulatory compliance into the model. We look forward to continuing to work together to commercialize and build upon this technology for the industry.” More info:

TruTag Debuts Portable Authentication Reader TruTag Technologies has introduced its new portable optical reader that can authenticate solid oral dose medicines marked with the TruTag microtag solution. TruTag’s provides a product security and tracking solution at the dosage level, rather than packaging, so that manufacturers can authenticate medicine directly

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camera focus and load and save jobs previously configured on the vision system, as well as save images for subsequent troubleshooting and process optimization using either the Ethernet network or one of the built-in USB ports. Password protection regulates the operator’s control over regions of interest and vision tool parameters. “The VisionView 900 operator display image update rate now supports lines speeds up to 600 parts per minute,” said Herbert Lade, vice president and business unit manager, Vision Systems, “while the larger nine-inch format increases the operator’s effective span of control.” More info:

on a pill with the ability to confirm the product strength, batch number, site of manufacture and expiration date, among other product information. “With the PCID (physical–chemical identifiers) Guidance and other actions, the FDA has demonstrated that addressing the problem of counterfeit and diverted drugs is one of its highest priorities,” said TruTag chief operating officer Peter Wong. TruTag’s high–purity silica microtags are inert and can be associated with a variety of product information, similar to a traditional bar code. Also, silica (silicon dioxide) has long been used as an excipient in food and medicine, and is well–suited for the PCID Guidance.

Unilife Launches Drug Delivery Platform Unilife Corp. has launched the Unilife Ocu-Ject platform that enables precise and intuitive delivery of microliter-sized doses to the eye. Ocu-Ject devices are designed to help maximize clinical outcomes by significantly reducing the risk of over-dosing or under-dosing, as well as minimize patient pain and enhance compliance with drug labeling. Under lab testing, the Ocu-Ject technology has been demonstrated to deliver a 10 μL dose with a standard deviation of

only 0.2 μL (2% standard deviation) compared to a 1mL tuberculin syringe of 2.9 μL (31% standard deviation). According to the company, this capacity to precisely deliver microliter doses can produce a tenfold increase in compliance with drug labeling requirements. To meet specific customer, drug and patient requirements, each Ocu-Ject device can be customized in a variety of configurations including prefilled, with either an attachable or integrated retractable needle, or for filling at time of use. Unilife Ocu-Ject devices are designed for use by clinicians and can help to minimize patient pain and safety. More info: I

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Industry Events Contract Pharma tells you where to go, what it’s about, when it’s held and whom to contact. May 15 - 17: Stability Program for Pharmaceutical and Biopharmaceutical Manufacturers New Brunswick, NJ Contact: IPA Events Phone: 416-410-7402 May 15 - 17: Stability Program for Pharmaceutical and Biopharmaceutical Manufacturers New Brunswick, NJ Contact: IPA Events Phone: 416-410-7402 May 19 - 21: CenterWatch Forum on Optimizing Clinical Research Boston, MA Contact: CenterWatch Phone: 212-300-2520 May 19 - 21: Optimizing Clinical Research Performance Boston, MA Contact: iiBIG Phone: 212-300-2520


May 20 - 21: Pharmaceutical Packaging: Moisture Permeation Bethesda, MD Contact: Desmond Hugh, Ph.D., at USP May 20 - 22: AAPS 2013 National Biotechnology Conference San Diego, CA Contact: American Association of Pharmaceutical Scientists (AAPS) Phone: 703-243-2800 May 21 - 23: Pharma SFE: Translating Strategy into Action Boston, MA Contact: Gretchen Konrad, Marketing Executive | American Leaders May 23 - 24: Design of Experiments and Statistical Process Control for Process Development and Validation Philadelphia, PA Contact: Global Compliance Panel Phone: 800-447-9407

Major Meetings at a Glance

May 20 - 22: AAPS 2013 National Biotechnology Conference, San Diego, CA. Contact: American Association of Pharmaceutical Scientists (AAPS), Phone: 703243-2800; Web:

May 24: Protocol to Patient: Managing Clinical Supplies in an Evolving Marketplace New Brunswick, NJ Contact: Almac May 29 - 31: Guidelines, Regulation & FDA requirement for exporting Drugs & Biologics to US Shanghai, China Contact: IPA Events Phone: 416-410-7402 June 3: Project Management of CROs Boston, MA Contact: CHI Phone: 781-972-5400 June 4 - 6: 12th Annual World Pharma Congress Philadelphia, PA Contact: CHI Phone: 781-972-5400 June 12 - 13: Validation Conference 2013 - Method, Computer, Process & Cleaning Validation Workshops Montreal, Canada Contact: IPA Events

June 23 - 27: DIA Annual Meeting, Boston, MA. Contact: DIA, Phone: 215442-6162; Web: July 21 - 24: Controlled Release Society Annual Meeting, Honolulu, Hawaii. Contact: Controlled Release Society, Phone: 651-454-7250 Web: September 19 - 20: Contract Pharma’s 12th Annual Contracting & Outsourcing Conference & Exhibition, New Brunswick, NJ. Contact: Kristin Brooks, Phone: 201-880-2226; Web:


For more Industry Events, please visit our Meetings & Events page at contents/list_industry-events



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AAPS Annual Meeting and Expo . . . . . . . . . . . . . . . . .63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Almac Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 . . . . . . . . . . . +44 (0) 2838 332200 . . . . . . . . . . . . . . . . . . . . Catalent Pharma Solutions . . . . . . . . . . . . . . . . . .Cov. 4 . . . . . . . . . . . . . . .866-720-3148 . . . . . . . . . . . . . . . . . . . . . . . . . . Chartwell Pharmaceuticals . . . . . . . . . . . . . . . . . . . . .24 . . . . . . . . . . . . . . .845-268-5000 . . . . . . . . . . . . . . . . . . . Coating Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 . . . . . . . . . . . . . . .608-845-5002 . . . . . . . . . . . . . . . . . . . . . . Confab Labs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 . . . . . . . . . . . . . . .450-443-6666 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cook Pharmica LLC . . . . . . . . . . . . . . . . . . . . . . . . . .35 . . . . . . . . . . . . . .877-312-COOK . . . . . . . . . . . . . . . . . . . . Dow Pharmaceutical Sciences . . . . . . . . . . . . . . . . . .41 . . . . . . . . . . . . . . .707-793-2600 . . . . . . . . . . . . . . . . . . . . . DPT Laboratories, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .7 . . . . . . . . . . . . . .866-CALL-DPT . . . . . . . . . . . . . . . . . . . . . . . . . . Ei, A Pharmaceutical SolutionWorks . . . . . . . . . . . . .20 . . . . . . . . . . . . . . .704-939-4300 . . . . . . . . . . . . . . . . . . . EMD Millipore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 . . . . . . . . . . . . . . .866-441-8400 . . . . . . . . . . . . . . . . . . Federal Equipment Company . . . . . . . . . . . . . . . . . . .57 . . . . . . . . . . . . . . .800-652-2466 . . . . . . . . . . . . . . . . . . . . . . . . . . Georgia Economic Development . . . . . . . . . . . . . . . .23 . . . . . . . . . . . . . . .404-962-4000 . . . . . . . . . . . . . . . . . . . . . . . . . . . Globepharma Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 . . . . . . . . . . . . . . .732-296-9700 . . . . . . . . . . . . . . . . . . . . . . Grand River Aseptic Manufacturing . . . . . . . . . . . . . .17 . . . . . . . . . . . . . . .616-331-6980 . . . . . . . . . . . . . . . .www. Halo Pharma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 . . . . . . . . . . . . . . 973-428-4087 . . . . . . . . . . . . . . . . . . . . . . . Hospira One 2 One . . . . . . . . . . . . . . . . . . . . . . . . . . .9 . . . . . . . . . . . . . . .224-212-2267 . . . . . . . . . . . . . . . . . . . . . . JHP Pharmaceuticals LLC . . . . . . . . . . . . . . . . . . .Cov. 2 . . . . . . . . . . . . . . .877-906-7556 . . . . . . . . . . . . . . . . . . . . . . . . Jubilant HollisterStier Contract Manufacturing & Services . . . . . . . . . . .5 . . . . . . . . . . . . . . .800-655-5329 . . . . . . . . . . . . . . . . . . . . . . . . . . . .www. Metrics, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cov. 3 . . . . . . . . . . . . . . .252-752-3800 . . . . . . . . . . . . . . . . . . . . . . . . Penn Pharma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 . . . . . . . . . . .+44 (0) 1495 711 222 . . . . . . . . . . . . . . . . . . . . Pfizer CentreSource . . . . . . . . . . . . . . . . . . . . . . . . . .39 . . . . . . . . . . . . . . .269-833-5844 . . . . . . . . . . . . . . . . . Pharma Tech Industries (PTI) . . . . . . . . . . . . . . . . . . .47 . . . . . . . . . . . . . . .706-246-3555 . . . . . . . . . . . . . . . . . . . . . . Reed Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 . . . . . . . . . . . . . . .973-709-1090 . . . . . . . . . . . . . . . . . . . . . . . . . Sandoz GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 . . . . . . . . . . . . . .43 5338 200 680 . . . . . . . . . . . . . . . . . . . . . . . . . SGS Life Science Services . . . . . . . . . . . . . . . . . . . . . .19 . . . . . . . . . . . . . . .888-747-8782 . . . . . . . . . . . . . . . . . . . . . SL Pharma Labs, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .6 . . . . . . . . . . . . . . .302-636-0202 . . . . . . . . . . . . . . . . . . . . . . Vetter Pharma International GmbH . . . . . . . . . . . . . .43 . . . . . . . . . . . .0049-751-3700-3700 . . . . . . . . . . . . . . . . . .

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CONTRACT PHARMA â&#x20AC;˘ May 2013 97


What is EXCiPACT? Learn about excipient supplier certification By Iain Moore Croda International, IPEC-Europe What is EXCiPACT™? EXCiPACT™ is a voluntary international scheme to provide independent third-party auditor certification of manufacturers, suppliers and distributors of pharmaceutical excipients. By ensuring the competency of the third-party auditors and the frameworks in which they operate, the scheme will ensure patient safety through supplier quality, while minimizing the audit burden and overall costs for assessing the excipient supply chain, without sacrificing quality. EXCiPACT will soon be an independent, non-profit legal entity. A Global Steering Committee (GSC) and an Executive Operations Team currently forms the EXCiPACT organization, which operates as a project within the IPEC (International Pharmaceutical Excipient Council) Federation. What is IPEC-Americas’ involvement with EXCiPACT? The GSC, which helped with the formation of EXCiPACT, consists of staff or member representatives of the five founding project consortium associations: EFCG, FECC, IPEC-Europe, PQG and IPEC-Americas. Many IPEC-Americas members contributed and continue to contribute to the design of the Scheme, the cGMP and cGDP standards, and to the operation of EXCiPACT as an organization. Which companies can use EXCiPACT Certification? The Scheme is open to all excipient manufacturers and distributors wherever they are located globally. Once they have received the EXCiPACT Certificate and audit report, they will be free to share those with customers who utilize their excipients. How can third-party certification contribute to excipient supplier qualification? Increasingly, regulatory authorities around the world require qualification of excipient suppliers, a responsibility that falls into the hands of the drug product manufacturer. Not only must they demonstrate that the excipient is suitable for their purpose, but they also have to show that the manufacturer produced it to a suitable standard of cGMP, and ideally that it was supplied to them according to the principles of cGDP. These requirements are defined in regional and national legislation. The European Falsified Medicines Directive introduced new requirements for qualification of excipient suppliers, not least including the need to judge whether the cGMP applied in the manufacture is suitable for use in their drug product. As a result, more knowledge about how the excipients are made and supplied will be needed. Recent proposals in Chapter 5 of Part 1 of the EU GMP Guide indicate audits will routinely be


required of “certain excipients” considered to be high risk. The situation is somewhat different in the U.S., with revised and new legislation placing more emphasis on the qualification of excipients. Title VII of the FDA Safety and Innovation Act specifically addresses the drug supply chain, stating that the name and place of business of each manufacturer of an excipient must be given along with a unique facility identifier and a point of contact for each excipient manufacturer used in a drug filing. Can industry cope with the audit burden? Even if there is a regulatory expectation that more audits will be required, can industry afford them? Sending auditors to a global network of suppliers is expensive enough, but can suppliers even cope with the increased numbers? What about suppliers for whom pharmaceutical excipients are an incidental part of the business? We have seen suppliers begin charging fees for audits, as the investment in audits exceed annual revenues from selling the excipient to that customer. What would happen in the future if the supplier flatly refused an audit? This is where a third-party audit scheme like EXCiPACT can come into play and help reduce the overall audit burden. The regulatory position is supportive of such schemes if they meet certain requirements, which are centered on two core principles: auditor competency and certifying body independence and freedom from conflicts of interest. EXCiPACT was developed with the audit burden and these two principles in mind. What do regulators think about schemes like EXCiPACT? The UK Medicines and Healthcare products Regulatory Agency (MHRA) stated at the European launch of EXCiPACT: An on-site audit is the gold standard and manufacturing authorization holders should audit their suppliers. However the potential number of audits to be performed gives rise to a number of constraints in terms of cost and the resource and time required to perform and host the audits. . . Suppliers to the pharmaceutical industry have already introduced schemes to tackle the increasing audit burden, e.g., “open days.” This may tick the box but does it meet the intent? . . . An audit, if done well, by an appropriately trained auditor, for an appropriate length of time, against an agreed standard, can and should be value adding for all parties involved. EXCiPACT Certification meets exactly these requirements.I

Iain Moore is head of Global Quality Assurance at Croda International and a member of IPEC-Europe. For more information about EXCiPACT, contact

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